Speech to Rail Freight Group christmas lunch

Speech by the Rt Hon Theresa Villiers MP, Minister of State for Transport.

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

The Rt Hon Theresa Villiers

Thanks, in no small part to the RFG and your excellent chairman, there was one thing I learnt very quickly on taking on the transport brief 3 years ago - that getting it right for passengers isn’t enough. Rail freight matters too.

It matters economically, socially and environmentally.

And no government should under-estimate the importance of getting the balance right between freight and passenger services.

As everyone here will know, the country would quickly grind to a halt without the logistics industry to pump the life blood of modern ‘just-in-time’ capitalism round the veins and arteries of the nation.

Without the rail freight industry and your competitors in road haulage there’d be no food on our tables and no fuel at our power stations.

Yes, the interest of the travelling public is served by improving passenger rail.

But those same passengers receive crucially important benefits with a transfer of goods from road to rail - benefits like taking lorries off our congested motorways, improving air quality and saving lives on the roads.

The rail freight industry has been one of the real success stories of privatisation with substantial private sector investment.

And I’m pleased too that the MSRS modal shift grants have survived the CSR. I know how valuable they are to the industry in encouraging mode shift from road to rail.

Even when the pressing need to tackle the deficit we’ve inherited places severe pressure on spending right across government, we have tried to safeguard programmes which will support our commitments on climate change.

And I firmly believe that helping rail freight compete with road haulage can play a valuable role in our efforts to cut carbon and address congestion.

Rail freight investment

Acknowledging good deeds by your predecessors is not always a fashionable thing for politicians to do - but I have always tried to give the last administration real credit for the quality of the work they did on the strategic freight network.

They engaged well with industry to identify the improvements that can do most to improve the climate for rail freight and open up more opportunities for to grow the sector.

And during the long weeks of negotiations on the CSR I’m certain I bored my colleagues to death by going on and on about the importance of the Felixstowe-Nuneaton and Southampton to the West Coast Mainline upgrade programmes. It was a huge relief when the chancellor confirmed that these vital projects would continue.

The reality is that George Osborne decided to place a priority on transport capital spending in the CSR because the coalition accepts that transport infrastructure projects can be some of the best value investments that the taxpayer can make - providing economic benefits many times their cost.

So rail has emerged from the spending review in a far stronger position than most people expected, far stronger than I expected.

We all know that the recurrent pattern of spending squeezes in years past was to cancel capital projects, with rail and roads often the first to suffer.

Well that hasn’t happened this time round. In opposition, we promised to focus on the long term national interest not short term politics.


As important as they are, building a successful future for our railways isn’t only about big infrastructure projects.

It is also about delivering effective reform.

Reform is essential if we’re to deliver a financially sustainable future for the railways.

The interim report published this week by Sir Roy McNulty confirms that railways in the UK are more costly to build, less efficient to maintain and more expensive to use than many of their continental counterparts.

If we are to deliver the capacity upgrades and service improvements that rail users want then costs simply have to come down.

And let me make it very clear - an essential component of a successful reform is delivering an infrastructure provider that’s responsive to its customers, both freight and passenger operators.

The Mcnulty study indicates that better alignment of incentives between train operators and Network Rail could deliver significant savings.

I fully agree that getting those responsible for managing track and train working more closely together - and ensuring they have a shared interest in reducing costs - could form an important part of a successful reform.

But let me make it clear as I conclude my remarks today, in taking forward work to align of incentives in the rail industry in the way the McNulty report recommends, we will have full regard to the interests of the freight sector.

The RFG will see to that!

Tony Berkeley is my rail freight conscience!

In his statement to parliament responding to the interim study, the Secretary of State explicitly stated that the changes we are proposing must protect the interests of freight users.

We want to build on Sir Roy’s study - to deliver better value for money for passengers, for taxpayers and for freight operators and their customers.

And I look forward to working with your industry to take forward that shared goal.

So, without further ado, it simply remains for me to thank you for listening to my speech today and to wish you all a very merry christmas.

And, if precedent is anything to go by, this lunch will provide an extremely merry start to the festive season!

Thank you.

Published 8 December 2010