Cross Country Rail Franchise (Hansard, 13 October 2004)

§ Lord Davies of Oldham
My Lords, recent negotiations surrounding Virgin Rail Group's cross country franchise are related to the financial terms on which the franchise is operated, not on the formal scope of the franchise. Those terms are currently set out in a "letter agreement" signed in July 2002. The SRA has informed Virgin that it reserves the right to terminate the franchise, but no decision has yet been taken on how to proceed.

§ Lord Bradshaw
My Lords, I thank the Minister for his reply, as far as it goes. However, he must be aware of the widespread talk in the specialist press that. led by the Treasury, there are going to be attempts to curtail the cross country services at York and Bristol and force people from Scotland or the west of England to change trains twice, at Bristol and Newcastle. Does that hold out any reasonable prospect of an accessible transport service for families or people heavily encumbered with luggage?

§ Lord Davies of Oldham
My Lords, the noble Lord has introduced an important point in consideration of the future of rail services. However, he is somewhat jumping the gun; he alludes to what appeared in the specialist press, but under no authority from the Government. We are not in a position at this stage to 267 confirm or deny those comments in the press, but it is clear that services should provide for the maximum possible convenience of passengers. Therefore, the considerations mentioned by the noble Lord should be introduced into the issues—and that will certainly be done.

§ Lord Faulkner of Worcester
My Lords, does my noble friend agree that the improvement in the quality of the service provided by Virgin on the cross country services, after a very shaky start, is quite a strong reason for this franchise not to be broken up? Indeed, the other discussion in the specialist press at the moment is that the cross country franchise might absorb Central Trains. Would that not be a much better way in which to provide the sort of service to which the noble Lord, Lord Bradshaw, referred?

§ Lord Davies of Oldham
My Lords, I hear what my noble friend says, but I reiterate that the issue with regard to the Virgin franchise at present relates to the financial terms on which the franchise operates. That is the basis of discussion. Certainly, my noble friend has introduced a concept for how cross country services might be improved, but at this point no decision has been taken. At present, no new franchise exists—which is the issue referred to in the original Question.

§ Earl Attlee
My Lords, can the Minister explain why within less than five years the Government have set up the SRA and then abolished it?

§ Lord Davies of Oldham
My Lords, because the Government inherited a rail service system in this country that let the people down very badly indeed, including the taxpayer, the fare-paying public and everyone concerned with the railways. The result was that one aspect of the service which the previous Conservative government established—Railtrack—went bankrupt after the Hatfield rail disaster. So we have been faced with a crisis situation with regard to the rail. It is not an issue that could be resolved in a matter of months. It is taking us time to get in place the correct structure for the development of the railways, but we are on the brink of doing so.

§ Lord Hunt of Kings Heath
My Lords, is my noble friend aware that there is real concern that if Central Railways merges with the cross country franchise, many local services in the West Midlands will deteriorate and be removed to make way for the cross country services? Can he ensure that there is a balance between local services and other services, in any change in the franchise system?

§ Lord Davies of Oldham
My Lords, I assure the House that I had absolutely no notice of that question, but that indicates why I was so guarded in response to the question of my noble friend Lord Faulkner about 268 the extension of the cross country franchise. Many issues must be considered with regard to the issue of any new franchises, and we are not in a position at present to take decisions on the matter. But I repeat that the issue with regard to the Virgin cross country franchise relates not to the provision of the services but to the actual cost and the financial arrangements. That is the only issue subject to direct discussion at present.

§ The Earl of Mar and Kellie
My Lords, the Minister is obviously aware that several of the Virgin cross country services start and finish at stations in Scotland—precisely, Glasgow, Edinburgh, Dundee and Aberdeen. Could the Government really be considering taking off those long-distance trains? They are used to the tune of up to 40 per cent by advanced purchase ticket holders—that is, people looking for pre-planned and seamless leisure travel. At a time when we are trying to encourage rail/air substitution, is it wise to take off the long-distance trains that would allow that rail/air substitution?

§ Lord Davies of Oldham
My Lords, we have no intention of taking off the long-distance trains. In fact, we take great solace from the fact that after so many years, the West Coast Main Line is subject to a new and substantial improvement with regard to its timetable, and improved services.
What remains is the question of the inter-relationship between long-distance services, serving our main cities, and the question of cross country franchises, and the local rail services as well, which my noble friend Lord Hunt introduced into the discussion. Those complex issues require a clear perspective on them. I merely indicate to the House that at present we are not in a position to make an announcement, but I can allay the noble Lord's particular anxieties.

Lord Berkeley
My Lords, notwithstanding the need for long-distance services, will my noble friend agree to consider whether there is really a need for four InterCity services every hour between York and Newcastle, three north of Preston and quite a few west of Exeter, many of them running nearly empty? Given the overcrowding in many other parts of the network, including local services, is there not a case for a bit of rebalancing of resources?

§ Lord Davies of Oldham
My Lords, there is always a case for analysis of the best form of service to be provided. It will be recognised that we are involved in a clear analysis of the overall position at present. My noble friend may have a case, but I reiterate the point: all these issues are subject to franchise, for which companies have bid. They are running those services on the basis of the franchises that they hold at present. We are not considering a new franchise for cross country at present. The other franchises fall into place in due course, as their term falls due. Considerations such as the one introduced by my noble friend will be taken account of at that time.