Oral statement to Parliament

Rail investment: 25 November 2010

Oral statement on the government's plans for investment in rail infrastructure and rolling stock.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Rt Hon Philip Hammond MP

With permission, Mr Speaker, I wish to make a statement on the government’s plans for investment in rail infrastructure and rolling stock. These plans build on the announcement by my Right Honourable friend the Chancellor of the Exchequer of the outcome of the spending review.

As we have consistently said, tackling the deficit is our top priority.

And by taking the tough decisions on current spending, we are able to secure our future growth by making vital infrastructure investments.

Over the next 4 years we will provide £14 billion of funding to Network Rail to support capital maintenance and infrastructure investment; and £750 million for high speed rail. We will also fund the Crossrail project, the tube upgrade programme, light rail projects in Birmingham, Tyneside, Nottingham and Sheffield; and provide additional funding to franchisees for extra rolling stock.

I can also confirm today (25 November 2010) that we will fund and deliver the Thameslink programme in its entirety, virtually doubling the number of north-south trains running through central London at peak times. This huge investment will link Sussex, Kent and Surrey, through central London, with Hertfordshire, Bedfordshire and Cambridgeshire.

But the original programme for the rebuilding of London Bridge station to increase through-running as part of this project was always ambitious, with substantial risks around delivery, and operation of existing services, during construction. To reduce these risks, we have re-profiled the delivery of the programme to achieve completion in 2018. This will enable Network Rail to make the further efficiencies in the design and delivery of the programme, that we require to ensure value for money. Passengers will start to benefit from incremental improvements on Thameslink routes from the end of 2011.

As part of the Thameslink programme, we will procure a new fleet of trains - up to 1,200 new carriages. This is in addition to around 600 new carriages which will be provided for the Crossrail project.

Together with the tube upgrades, these projects represent a step change in rail capacity in London, providing a significant boost to economic growth potential in the capital.

New Thameslink and Crossrail rolling stock will enable the redeployment of hundreds of serviceable electric carriages currently used on the Thameslink services. These carriages belong to rolling-stock leasing companies, but we expect that they will be available at competitive leasing prices for re-use elsewhere, thus justifying further electrification of the network.

As a first step, I can announce today that Network Rail will electrify the commuter services on the Great Western Main Line from London to Didcot, Oxford and Newbury over the next 6 years. Electric trains will speed up journeys, improve reliability and reduce the impact on the environment on these busy routes.

The Chancellor also announced on 20 October 2010 the electrification of the lines between Liverpool, Manchester, Preston and Blackpool - an investment of up to £300 million. I expect work in the north west to begin next year and to be completed at around the same time as the work on the Thames Valley Commuter Lines in 2016. Some sections will be completed well ahead of this, notably Manchester to Newton-le-Willows in late 2013, allowing new electric trains to operate from Manchester to Scotland. As with Thameslink, we will require Network Rail to keep a tight rein on costs.

The redeployment of electric rolling stock to these routes will, in turn, free up hundreds of diesel units which will be available to train operators to lease as they become available in the period after 2015.

This will all be welcome news to passengers. The Public Accounts Committee recently found that many services are unacceptably overcrowded, and I understand the frustrations of rail travellers who have to travel on packed trains. More investment is clearly needed. That is why I argued for additional rail investment in the spending review, and it is also why I have taken the difficult decision to allow regulated fares to rise by 3% above inflation for the 3 years from 2012 - to help us to pay for these investments.

Mr Speaker, in January 2008 the previous government published a plan to bring 1,300 additional carriages into service by March 2014. This plan was never deliverable. In total, only 206 of those 1,300 carriages had entered service by May this year.

My predecessors quoted a grand total of rail carriages, but never referred publicly to the fact that delivery of that total was subject to so many caveats and qualifications as to render it effectively meaningless. According to their published plan Mr Speaker, the 1,300 was not final and subject to - “value for money, affordability, …linkages with other interventions or with other rail projects, …infrastructure constraints, …supply chain constraints” and “credibility”. It went on to say in the document that “the final outcome could well be different”.

In other words, not so much a plan as a press release.

So let me set the record straight: I can today confirm that an additional 650 carriages will have been delivered to the network between 6 May 2010 and March 2014.

This is in addition to the Thameslink and Crossrail carriages I have already mentioned.

But it isn’t just about rolling stock. Network Rail have already started work on station improvements, with funding confirmed for developments at Reading, Birmingham, London Kings Cross and Gatwick Airport.

Investments on the East Coast Main Line and Midland Main Line and improvements in Yorkshire, on transpennine routes, around Manchester and in south Wales will improve line speed, reliability and capacity of services.

Beyond these investments, there are far-reaching decisions to be made about intercity services.

In February 2009 the Intercity Express Programme, launched by the previous government, identified the Agility Trains consortium as preferred bidder to build a new fleet of intercity trains.

Then, this February, my predecessor invited Sir Andrew Foster, the former head of the Audit Commission, to provide an independent assessment of the programme. Sir Andrew presented his report to me at the end of June, recommending further work on the Agility Trains proposal and a detailed study of the alternatives.

I can now tell the House that we have narrowed down the options from the 4 Sir Andrew identified, to 2.

I have ruled out the option of requiring passengers to change from electric to diesel trains at a point in their journeys, recognising the value to passengers of preserving through-journeys. I have also ruled out the option of a wholesale refurbishment of the existing diesel ‘Intercity 125’ fleet, some of which dates back to the 1970s.

The remaining options are, on the one hand a revised, lower cost proposal received from Agility Trains, which envisages a mixed fleet: some all-electric trains, and some electric trains which are also equipped with underfloor diesel electric generators. And on the other, a fleet of new all-electric trains which could be coupled to new diesel locomotives where the overhead electric power lines end.

Both these options would allow us to preserve through-journeys between London and parts of the rail network which are not electrified.

Both of them would deliver faster journey times. For example, we expect to see time savings of at least 15 minutes for the journey between Cardiff and London, bringing it below 2 hours.

This is a major decision which will affect intercity rail travel for decades to come, and we must get it right. To address the outstanding issues on choice of train type and further electrification on the Great Western Main Line, additional work will be required within the department, with Agility Trains, and with the Welsh Assembly government on the business case for electrification into Wales.

When this work, and discussions with the Welsh Assembly government and my Rt Hon friend the Secretary of State for Wales, have concluded, I expect to announce a final decision on IEP, and on further Great Western electrification, in the New Year.

Mr Speaker, the package I have confirmed today has only been possible because this government has been prepared to take the tough decisions to protect investment in Britain’s future.

This is a commitment to our railways which will benefit Britain for generations to come and I commend this statement to the House.

Published 25 November 2010