§ 9.24 p.m.
§ Lord Marlesford rose to ask Her Majesty's Government, in the context of their desire to reverse the decline in rail's share of the freight market as stated in Transport—The Way Fonvard (Cm. 3234), whether the rail links to and from the Port of Felixstowe are adequate for the purpose of carrying freight and to respond to the growth of container traffic on Britain's trunk roads.
§ The noble Lord said: My Lords, I should first like to thank my noble friend Lord Goschen for being with us tonight. I know that it is at some inconvenience to him personally and so I particularly appreciate it. I am delighted that the noble Lord, Lord Gladwyn, is going to make his maiden speech tonight. He is an old and very dear friend of my family, as indeed was his remarkable father.
§ Ports are a crucial part of our economic infrastructure. To understand the situation which I wish to draw to the attention of the House and the Government tonight, I should briefly set out the historical context.
§ The history of industrial relations in British ports is tragic. In the 19th century and the first part of the 20th century, there were some callous and sometimes brutal port employers and the consequence was the 1946 dock labour scheme which was intended to replace the undoubted evils of casual employment, but which itself became an obstacle to containerisation and other1022
§ modernisations. It was rather like the print workers who later resisted computer typesetting. Eventually the scheme cost many dockers their jobs.
§ Felixstowe is a product of the frustration of shippers in those days. Effectively, it is a greenfield site. Indeed, Felixstowe is sometimes known as "the port without a city"—a rare phenomenon—and that is one of the reasons for its problems with inadequate rail links. Its first container terminal opened in 1967. It is all based on what had been a tiny provincial port and seaside resort whose main claim to fame was to be the sunniest place in Britain. In 1957 I started my working life in Felixstowe with Fisons, the chemical company, which then had its head office in the old Felix Hotel where, amazingly, before the First World War, the Kaiser apparently used to spend part of his summer holidays. I went back to Felixstowe on Monday and, frankly the port is totally unrecognisable from what it was 40 years ago.
By 1975, Felixstowe was taking 200,000 containers a year. It and the other independent ports were beginning to threaten the security of dockers in the big labour scheme ports. By that time, there had been two major dock strikes—in 1970 and 1972—with further strife in 1975. By then we had a Labour Government whose priority was industrial peace at any price rather than an efficient port system. To buy that peace, the then Secretary of State for Employment, Mr. Michael Foot, in February 1976 introduced his notorious Dock Work Regulation Bill, which sought to give registered dock workers a monopoly on all cargo handling at every port and at any installation within five miles of the sea or any major inland waterway. Yesterday I read the Second Reading debate on that Bill in another place when Mr. Foot admitted that,
the introduction of the scheme could cause problems at some non-scheme ports".—[Official Report, Commons, 10/2/76; col. 263.]
That must have been the understatement of the year. It would have killed Felixstowe stone dead! Fortunately, even Labour MPs of the time found the proposals too much to stomach and the five-mile provision never reached the statute book. The whole wretched cabouche was finally repealed by the Dock Work Act 1989 and since then our ports, and Felixstowe in particular, have never looked back.
§ Today Felixstowe is Britain's biggest container port. In 1996 it handled 2 million containers (or to use the jargon TEUs which are equivalent to 20ft containers) so the total number of actual boxes was about 1.5 million. It is the fourth biggest port in Europe (after Rotterdam, Hamburg and Antwerp). It is the 12th biggest in the world.
§ Since 1991 the Port of Felixstowe has belonged to the giant Hutchison Wampoa group of Hong Kong, the home of the biggest container port in the world. So there is first-class management, state of the art technology, plenty of overseas capital for expansion and excellent labour relations. Indeed, it is one of the great success stories of the restructuring of Britain over the past 20 years.1023
§ So what is the problem? Why are we debating this triumph at this late hour on practically the last day of this Parliament?
§ Lord Marlesford
Wait a moment, and I shall try to explain.
My Lords, the answer is that a port is only a part of a nation's transport system. The problem is in the rest of that system. The simple fact is that at present of the million containers which arrive at or depart from Felixstowe each year by land the great majority, over 80 per cent., do so by road. The basic link to Felixstowe is the recently completed A.14 which provides links to the M.1 and the M.6 and, through the A.12, to the M.25. However, already the A.14 is becoming hopelessly congested with Felixstowe's container traffic.
I have been involved with transport policy since 1963 when as a very junior fonctionnaire for the Conservative Party I carried the bag for Ernest Marples, who was probably the most innovative and certainly the most entrepreneurial Minister of Transport that this country has ever had. It was what I learned from him that put me on the track that led to my having the very great privilege of being a Member of your Lordships' House. Since then all governments have expressed a desire to move freight from road to rail. Usually this is no more than a pious hope. Yet in 1997 the rail link between Felixstowe and the outside world is still a single track with (literally) a 19th century physical token system to allow trains to use that line. There are two junctions on it: Trimley and Westerfield Junction. I have travelled on the Lowestoft line that goes through Westerfield all my life. An outsider viewing them would believe that he was on the stage set of an early Western movie.
How can it be that our greatest container port is so constrained and handicapped? One answer is that until very recently our railways were a nationalised industry with all that that meant. First, there was never sufficient capital for investment. All of it had to come from the Treasury and therefore it had to compete with other social priorities. Secondly, and partly consequently, there was a remarkably low standard of management. I speak from experience, since from 1988 to 1992 I was on the board of British Rail Anglia. Frankly, it was one of the most frustrating and unsatisfactory experiences of my life. In the four years that I was associated with BR I met only one senior executive who I would myself have unhesitatingly employed. That was Mr. Peter Trewin, the secretary of the British Rail main board.
Another answer is that the Department of Transport failed in its duty to recognise and deal with the problem of the rail link. When at a meeting last year with the Secretary of State I asked a group of his senior officials why they had allowed this situation to develop. They shuffled their feet and eventually one replied, "We had not realised that Felixstowe would be such a success". Need I say more?
Now, of course, our railways are privatised, although not perhaps in the way that I would have wished. I would have preferred to keep track and services 1024 together. The divided responsibility between the two is, I believe, one of the causes of the problems at Felixstowe, but at least it now has access to the world's capital markets. However, I have felt it necessary to press for this debate because I have been much concerned by the suggestion of the Government that somehow now the railways are privatised they have no responsibility. There are two reasons why this is simply not true. First, the Government are responsible for seeing that we have a first class transport system, and by that I mean one that is both economically efficient and environmentally sustainable. The Government still have to make decisions on, for example, road building and truck licensing, which have a most direct impact on our transport system and the road/rail equation. The Government state their wish in the Green Paper, to which my Question specifically refers, for a shift of freight from road to rail. Secondly, the Government have a regulatory role. As a Tory I believe passionately that a crucial role of the state is to protect employees, consumers, investors and the environment from abuse or exploitation. I believe that it can do so much more effectively when it does not also own what it has to regulate; otherwise, legitimate regulation becomes convenient tinkering. We all remember the endless interference with purchasing, pricing, investment, employment and the other activities of the nationalised industries—interference which made it so hard for such industries to attract and keep good management.
At this point I highlight the threat to the rail freight industry which would result from an increase in lorry weights to 44 tonnes. This would certainly cause a shift from rail to road which is not only contrary to the Government's aspirations but would be environmentally damaging. There is no requirement under European legislation to do so. There is no way that such giant vehicles could be kept off small roads, and the quality of life, especially of those whose communities are already bisected by trunk roads, would be made even more intolerable than it already is. The Government slashed nearly 100 motorway and trunk road projects from their road programme on 26th November last year. It is therefore most unlikely that any government over the next decade would be able to afford to build roads to cope with these monsters. Nor do I believe they should do so. How much more cost effective and environmentally sustainable to encourage, indeed require, the railways to provide adequate freight facilities.
Finally, I must of course say that I welcome the limited investment programme of £6 million announced last month by Railtrack for upgrading the Felixstowe line. It is of course too little (the Port of Felixstowe has just completed a £45 million Trinity III terminal which will provide for forecast container growth at least until 2001 and Trinity IV (for which Parliament has given authority) is already at an advanced stage of operational evaluation, and it is too late. Only some 5 per cent. of Felixstowe's container traffic is local, some 60 per cent. is to the Midlands and Scotland and 30 per cent. to the south east and Greater London.
1025 The Felixstowe/Ipswich passenger services, which are little shunter trains, are given priority over the freight trains. There is a lack of understanding that with a modern, large-scale container operation it is crucial that container trains have priority to minimise the length of time needed for loading and unloading at the ports. That is an important point.
Ipswich itself is still a bottleneck. Only some 20 trains per day can enter and leave Felixstowe, most of which have to be routed through the North London Line to get onto the West Coast Main Line. Felixstowe knows from its client studies that by the year 2005 there will be a need for at least 500,000 containers to move by rail. That is nearly three times the 1996 total of 176,000. The situation is archaic.
Finally, I remember the first time I went to the Port of London. It was in 1964. I watched with amazement the dockers loading a ship's cargo hold with cardboard boxes containing 24 tins of Heinz baked beans, and wedging them with motor car tyres. Shipping and port operations have moved a long way since then. So it is crucial that we have a proper rail freight system for Britain.
My only regret is that I have to temper my tribute to 18 years of Conservative Government for creating the right economic conditions for the success of the Port of Felixstowe with a warning of the gravity of the matter I have raised. I trust my noble friend will accept both the tribute and the warning.
§ 9.38 p.m.
§ Lord Gladwyn
My Lords, I thank the noble Lord, Lord Marlesford, for initiating the debate. In making what I take to be the last of the maiden speeches of this Parliament at this very late hour, I now perceive the truth of the heraldic motto of my noble kinsman the noble Lord, Lord Thomas of Swynnerton, which is, "Late but in time".
In extending my thanks to all those Members and officials who have treated me with the courtesy for which your Lordships' House is so universally renowned, I pay tribute also to the memory of my father who so regularly attended this Chamber for 35 years—a span which would not in itself be remarkable were it not that he began it only after his retirement from the Foreign Service at the age of 60.
My peripheral qualifications for speaking in this debate are that for many years I worked in air transport—at one time specifically in the development of air freight—and I have also written extensively about the English countryside, including the County of Suffolk where I live.
As a historian of Suffolk, I am struck by the similarity of the issues today with the situation 500 years ago. At that time, trade with the continent was also thriving and Ipswich was second only to London as the major English port. And the great industry of Suffolk was the manufacture of woollen clothing, organised by wool brokers known as clothiers, who had broken free from the restrictive practices of the town craft guilds and had set up a sort of cottage industry in which the processing of the wool in separate stages involved constant carriage 1026 by pack horse. What we are faced with today is a realignment of trade with Europe, and a diversification of manufacture and distribution away from the old factories and the wharfs, in which Suffolk has come into its own again, having fallen, like the Sleeping Beauty, into a deep slumber in between.
One of the many unusual features of the Felixstowe container port is that it is so far from our major national conurbations; Ipswich, its home town, is comparatively irrelevant to its trade. So it relies all the more on the quality of the transport infrastructure which links it to the industrial areas of the Midlands and the north. The A.14 serves its purpose, even though it is not a motorway. But the rail link is woefully inadequate. It is good news that Railtrack is about to improve the line from the port to Ipswich. But use of the line that leads on from Ipswich to the Midlands via Peterborough involves an awkward switch of direction at Ipswich, and the whole route anyway needs signalling upgrading. As the noble Lord said, of the 20 trains each working day which now enter or leave the Port of Felixstowe only four go by this route, and the rest have to deviate via the North London Line, which is itself severely constricted. The operators of the port have made it clear that the modest percentage of containers carried by rail could be almost doubled within five years if the rail system were improved, which might be done in the context of a trans-European route across to the Irish Sea ports. Meanwhile, an alarming flow of lorries drives in and out of Felixstowe, like ants scurrying on complex travel patterns. Most of them convey container loads, others are trailers, but together I calculate that on working days there are nearly two of them rushing across the Orwell Bridge in each direction each minute of the day and night, and rising.
Turning to the second part of the subject of this debate, asking the Government to respond to the growth of container traffic on Britain's trunk roads, the broader questions of transport policy are raised. Everyone agrees that in the carriage of long-distance freight, the trunk roads are used too much, and the railways too little. The decline in the rail share has been dramatic. The Government believe that the newly privatised rail industry will of itself be able at least to reverse this trend, assisted by special grants. But it is hard to see how any significant shift can be achieved within the present rules of the game, other than by ever more severe congestion on the trunk roads, with traffic chronically seized up over long stretches. But no one wishes to see such a catastrophic solution, and so one suspects that a future government may be impelled to introduce further inducements towards the use of rail for containers, such as stiffer vehicle taxes, or journey taxes, or motorway charges, as well as assistance in much improved intermodal transfer facilities.
In conclusion, I feel it is appropriate that I should refer to my distinguished ancestors, the engineers Brunel. Marc Isambard Brunel, my great great grandfather, constructed the original Thames Tunnel, the specific purpose of which was to relieve the traffic congestion around the then busy port of London. I suppose that one could call it the Felixstowe of its day. As it so happens, next week I shall be attending a 1027 dinner inside that famous tunnel to celebrate its concrete relining by Taylor Woodrow on behalf of London Transport, which I am happy to say reflects sensitively the original architecture.
His son, Isambard Kingdom Brunel, built the Great Western Railway in order to provide rapid and efficient transport between the metropolis and the Port of Bristol. I regret to say that Brunel was altogether unconcerned about the pollution caused by the filthy emissions of soot which gushed from his steam engines or, indeed, by the fumes of his ostentatious cigar. But I think that he can qualify as an environmentalist due to his experimental "atmospheric railway" in Devon by which the trains were hauled by a fixed line vacuum, anticipating in some ways the as yet undiscovered power of electric currents. Indeed, unforeseen inventions have often proved to be the answer to seemingly intractable problems.
It is a sobering thought but as a mode of transport, the magnificent roads of the 20th century are in danger of choking to death and we should turn once again for help to that great backbone of the 19th century—the railway.
§ 9.46 p.m.
§ Lord Astor of Hever
My Lords, on behalf of the whole House, I congratulate the noble Lord, Lord Gladwyn, on an excellent maiden speech. I also have very happy memories of his very distinguished father, and if ever there was an example of someone making an immensely worthwhile contribution in his ninth decade, he was one.
While making inquiries about his son, the present noble Lord, everyone I spoke to gave me the same answer: such a nice man. I feel that that is a great compliment. He is an environmental author of great distinction and clearly is a great lover of the countryside and particularly Suffolk, where he lives. I enjoyed the noble Lord's speech enormously and look forward to his regular contributions in your Lordships' House.
At this late hour, I fear that I should follow the advice of President Teddy Roosevelt, to his son, on speech making: be sincere; be brief; be seated.
I congratulate my noble friend Lord Marlesford on giving us an opportunity to discuss this important subject. I enjoyed his speech and agreed with most of what he said. However, I cannot agree that the Government feel that they have no responsibility for ensuring that the railways provide adequate freight links with Felixstowe or, indeed, elsewhere. Certainly the Government should be congratulated on putting in place the framework for a successful privatised railway and particularly in the context of this debate, a successful rail freight business.
Talking to Railfreight, Freightliner and English, Welsh and Scottish Railway, I have been struck by their enthusiasm and commitment to invest in the future. Their "can do" attitude is a breath of fresh air after the frustrations associated with British Rail and its inflexible bureaucracy.
1028 Railtrack has been in existence for less than a year but already there have been enormous improvements to the rail infrastructure. From my discussions with Railtrack, I believe that it is committed to getting freight on to rail. The Government are continuing to encourage that switch through grants and have increased the lorry mileage rate from 5p to 20p per lorry mile avoided on motorways in order to attract further freight on to the railways. In total, the Government have awarded 160 rail freight grants since 1979, securing the transfer of traffic to rail of more than 300 lorry journeys per year. In 1994, about 12 per cent. of all freight moved by rail in the United Kingdom had, at some time, received assistance from the Government freight grant.
The sale of BR's rail freight business is a major boost to that process since those businesses will be able to develop new ways of encouraging freight to use rail. The decision by EWS Railway to buy 250 new locomotives at £1 million each over the next 10 years demonstrates its belief in the future of rail freight. The company plans to treble its rail freight business in the next 10 years. It has plans in place, using the port of Felixstowe, to develop the onward movement by train of huge amounts of timber from Scandinavia and Russia; at present, that is done by lorries only. It also has plans to move heavy fuel oil and car components by rail.
The announcement by Railtrack that it is to invest in upgrading the Ipswich to Felixstowe branch is welcomed by the Port of Felixstowe, the largest freight generator in the country, and the local community, particularly bearing in mind speed restrictions on the A.14 as a result of road works to correct wear and tear due to heavy use. The port has been a long-term proponent of increasing the percentage of cargo moving to and from Felixstowe by rail. In tandem with the train operator, Freightliner, it plans to increase rail volumes by 50 per cent. over the next five years, as my noble friend Lord Marlesford, said. It is believed that that could rise to over half a million units annually during the next decade. However, that will only be achieved if the rail option can match the road alternative in terms of speed, price and efficiency.
Rail's competitiveness overroad inherently improves with distance and the trains from Felixstowe serve the longer-distance locations, such as the north west, the north east and Scotland. While door-stop improvements by Railtrack are beneficial, it is vital that the rail infrastructure across the network can cope with increasing demand and match road's speed and flexibility. Currently, 80 per cent. of Felixstowe's trains are routed via London to gain access to the West Coast main line and inland depots in the north west, the Midlands and Scotland. That means using the North London line to traverse the capital. I am told that that route is already congested and likely to become more so as Eurostar Channel Tunnel business grows.
I am delighted to hear from Railtrack that, in the short term, it has plans to eliminate potential bottlenecks on that route to allow the freight business to grow. It is also seriously considering a more direct route from Felixstowe to the Midlands and the north. Although at the feasibility stage only, the head of freight at Railtrack has confirmed to me the importance that is attached to 1029 this, especially given the expectations of growth in rail freight. That might entail routing Felixstowe's rail business across country to join the West Coast main line, via Peterborough and Nuneaton. This would not only free up capacity on the North London line, but speed up transit times, given the shorter distances involved, to the new freight terminals being built in the Midlands.
I understand that Jaguar is looking seriously at Felixstowe for US component imports for the new X200 to be built at Castle Bromwich. It is considering the feasibility of rail linking Felixstowe with Castle Bromwich, to move freight from point of entry by train; volumes would be high—up to 230 containers each week. Grants would be available in principle towards the capital cost of freight facilities and the Government might also assist through the track access grant which, from Felixstowe to the Midlands, would be worth about £28 per container. Even allowing for those grants, the cost will be high and I know that the Government will give Jaguar every encouragement. The alternative is movement by road—an environmental and congestion disaster.
Interestingly, in the light of what my noble friend Lord Marlesford said about the dock labour scheme, Ford imports components from the USA to Felixstowe and then takes them by train to Halewood. Halewood is near Liverpool. But for the dock labour scheme, these imports might well have been going through Liverpool docks with its excellent rail links. But, sadly, its appalling reputation for labour relations still scares off most businesses.
Rail's share of the freight market has been in decline since the 1920s. Privatisation has laid the foundation for the future success of the freight market. I am confident the new private sector owners have the incentives and freedom to find out what services customers want, and to provide them at prices which can tempt business away from road haulage.
§ 9.55 p.m.
§ Lord Bridges
My Lords, I should like to begin by picking up a point made in the excellent maiden speech of my noble friend Lord Gladwyn when he referred to the origins of the foreign trade in Ipswich and the surrounding country in the Middle Ages in wool. The underlying factor which makes this subject so difficult is that we have seen in our lifetimes a complete change in the direction of the foreign trade of this country. When I was at school all our exports—or the large majority of them—went from the west coast ports of Liverpool, Glasgow and Bristol, across the oceans of the world to the world markets which took such a large percentage of our production.
Now, as a result of our membership of the European Community, 60 per cent. of our trade goes to Europe, and much of that goes from east coast ports. Although we have built the A.14 to carry road traffic from the Midlands to our number one container port, we have not made the necessary investment in upgrading the rail connection. I do not think it is the fault of Her Majesty's present Government that this should have happened. 1030 However, it was a failure on the part of the country to see that we needed to match the switch in our foreign trade with all the transport facilities which were required to back it. That, I think, is the origin of the difficulty we are facing today.
Since this matter was last discussed in the House we have read the important announcement by Railtrack of its decision to make a significant investment in the single track railway between Felixstowe and Ipswich by installing modern signalling and by extending an existing passing loop. Together these will undoubtedly increase the capacity of the line and enable it to carry a higher percentage of the containers passing through the port of Felixstowe. It is welcome news. But I am grateful to the noble Lord, Lord Marlesford, for his persistence in asking this Question because the announcement leaves some important questions unanswered. Like him, I, too, am grateful to the noble Viscount for his presence here this evening, given his responsibility for these matters in the Department of Transport.
The first question is whether the increase in capacity will enable the railway to carry all the traffic on offer in transit to and from the port. We know that the number of containers in transit at Felixstowe is expected to rise considerably over the next few years, and that a growing number of shippers have indicated their preference for carriage to and from the port by rail. The question is whether the rail link as extended—it will be in the next two years—will have the necessary capacity to carry this increase in the number of containers on offer. I believe that the port of Felixstowe has already circulated estimates of the number of containers that it expects will arise. Clearly the railway will be able to carry more, but the question is, will it be able to carry all the containers which the shippers wish to send, and for how long?
The subsequent question is, can the rail operators transport the containers to the desired destination beyond Ipswich? The investment announced by Railtrack will facilitate the movement along perhaps the first 20 miles of the railway as far as Ipswich goods yard. However, as has been pointed out, at present most of these inward bound containers are destined for the Midlands and the North and they are dispatched from Ipswich to Stratford, and thence on the North London line, before moving onto the northbound trunk routes from the main London termini. As has been pointed out—I have heard the same—the North London line is nearing its capacity. Are there any plans for upgrading the capacity of alternative routes before this difficulty is reached on the North London line?
One plan to deal with that difficulty has been identified by the European Community in its proposal to improve selected European key rail routes through the scheme known as Trans European Rail Networks (TENs). The TENs include a proposal for a through freight route from Felixstowe to ports on the Irish Sea—Holyhead and Stranraer. Last year as a representative of your Lordships' Select Committee on the EC I attended a meeting of the Transport Committee of the European Parliament in Brussels where the matter was discussed. It was obvious that there was widespread support in the Parliament and its Transport Committee for the TENs 1031 and I believe that the proposal has now been adopted by the European Community. It would provide financial support for the railways covered from Community funds provided that matching funding is contributed by member states. Our own Government have said that the available funds are already fully committed to building the Channel Tunnel link and improving the West Coast Main Line. Perhaps the noble Viscount could tell us how the matter stands after the creation of Railtrack and the transfer of many departmental responsibilities to it.
This raises the broad question which puzzles me. Who is now responsible for policy decisions in this area? From what the Minister has told us in the past, it appears that Railtrack will have the prime responsibility—perhaps the sole responsibility—in deciding how to invest the resources now available to it. But I would hope that there is some mechanism between Railtrack and the department to address policy decisions of that kind. I should be reluctant to believe that the Government have simply transferred the whole responsibility to Railtrack since they will doubtless wish to ensure that the policy statements which the Government have made—they have been referred to in the text of the Question—about transferring freight movement from road to rail are rendered possible by appropriate and timely investment.
It is a matter on which we shall await the Minister's response with much interest and some apprehension.
§ 10.2 p.m.
§ Lord Cochrane of Cults
My Lords, I am deeply grateful to my noble friend for raising this interesting point and for giving a most authoritative survey of the problem in Felixstowe and further afield based on personal experience over many years. There is little more that needs to be said on that front. I must also congratulate the noble Lord, Lord Gladwyn, on his speech. Due to the lateness of the hour, I shall confine my remarks to one word: "illuminating", and well spoken.
It used to be said that East Anglia was surrounded on three sides by the North Sea and cut off from the rest of England by the Great Eastern Railway. Noble Lords may recall that that was built by that famous crook, George Hudson, who invented the branch line trick for swindling shareholders. He subsequently went to prison and, I understand, committed suicide. There is nothing new in that. It was perpetrated 20 years ago in Fife by the Royal Victoria Sausage Company—but that is by the way.
As we have heard, Felixstowe is the largest container port in the UK because, as my noble friend said, it is not a scheme port. Its rail infrastructure is purely that which was originally intended in George Hudson's day to provide for holiday traffic. The branch is single track. The distance has been mentioned, but I thought it might be useful to attempt to describe its length. Thirteen miles, or thereabouts, is a difficult distance to visualise even if one walks it. If one sets out from King's Cross on a stopping train, one has travelled about 13 miles when one reaches Potters Bar. I am unable to illustrate 1032 what happens in Potters Bar; the Library was defeated. However, I understand that there was a battle nearby in 1472.
If one imagines 13 miles of single track, with a single passing loop which is not long enough to take a full size freightliner train, one can imagine the difficulties. Couple that with archaic signalling. The token system, with respect to my noble friend, is extremely safe but it is not quick. One can understand the difficulties which face the importers and exporters of goods who wish to use the rail link to Felixstowe. It is high time that it was modernised, and modernised thoroughly. The noble Lord, Lord Bridges, asked whether the single track plus modernised signalling will be sufficient. My guess is that it probably will not be, but that may well give rise to considerable difficulties in the shorter and medium term over land acquisition. However, that must be faced.
The point that really needs to be explored is: how on earth did we get into this mess? I suppose one has to blame that well-known whipping boy, which I have assailed in this House before your Lordships from time to time—the Treasury—for mismanagement inflicted on British Rail over a period of some 48 years since it was nationalised until mercifully, by privatisation we released it from such bondage. The Treasury did not see the need to take opportunities. It is perhaps worth recalling that when the late Lord Wilson of Rievaulx was at the Board of Trade it was considered that the entire container traffic in Great Britain could be handled by four container cranes. Perhaps someone will tell me at some point how many there are at Felixstowe: I should think it is a great many more than that.
That shows the essential failure of imagination when need is not driven by the opportunity of profit. I use that word deliberately. "Gain" is inadequate in that context. Railtrack will, I believe, seek to maximise its profits, though it must have a remit which balances that essential driving force—tempers it perhaps—with social responsibilities which have long been recognised as part of the transport system in this country, and a very necessary part too.
I am very glad that Railtrack, Freightliner and the Felixstowe Dock and Railway Company are now co-operating to improve matters. It is perhaps a pity that it has taken about 24 months. That is slower than one would otherwise have wished. Certainly problems on the North London Railway are extremely severe and it, in turn, may need to be made into four-track—a very considerable operation—if it is to carry the Eurostar routes; otherwise there is nothing for it but to modernise the cross-country routes towards Peterborough and avoid that notorious bottleneck.
The noble Lord, Lord Gladwyn, interested me greatly by referring to the Brunels, father and son, who were the most famous and ingenious of engineers. Perhaps it may interest him to know that my grandmother, who was born in 1850, described to me in graphic detail how Brunel's atmospheric railway did not work terribly well because the rats ate all the sealing leather and so it leaked and, no matter how much they huffed and puffed, it did not actually go. Curiously, the only one that ever worked properly was in Ireland, but I do not know why that was.
1033 We have passed on from the awful situation of stagnation—"the time is not right" and all that kind of thing—with which the Treasury for 48 years maladministered our railways. I always thought that the one conversation stopper for the Minister of Transport, when he complained about the inefficiency of the railways, was to say, "Well, who has been running them for the last so many years?"—to which there is no convincing answer which does not leave one standing perhaps a little on one leg. I am sure that things are now set up so that they can get better. They need to get better, and 1 look forward to seeing things get better.
§ 10.9 p.m.
§ Viscount Bridgeman
My Lords, I crave your Lordships' indulgence for this very short intervention. I worked in the shipping industry in the 1960s and had first-hand experience of the Dock Labour Scheme ports of London, Liverpool and elsewhere. Even in those days the port of Felixstowe stood out as a beacon of efficient working practices and flexible labour relations.
This problem of success is not new, as it would appear that the British Rail staff told my noble friend Lord Marlesford. Over the past 30 years the problem has been ducked by successive governments, I fear. I very much hope that this Government in the next Parliament will take a very close interest, especially in the post-privatisation era so eloquently referred to by the noble Lord, Lord Bridges.
May I now just turn to the maiden speech of the noble Lord, Lord Gladwyn. It was informative, lucid and, if I may say so, polished. He has brought his knowledge of transportation together with a deep affection and knowledge of East Anglia, and Suffolk in particular. I hope that we shall hear many more of his contributions in your Lordships' House.
§ 10.10 p.m.
§ Lord Carmichael of Kelvingrove
My Lords, I am now in a quandary. I was told that there was very little time for this debate but fortunately many noble Lords spoke well within the time that was allowed. Noble Lords will notice that my name is not on the list of speakers. That was entirely an internal mistake. These things will happen.
The Minister and other noble Lords will remember that on 4th February a Question was asked on this very subject. As has been said, the main problem at Felixstowe is that the route is bad. Railtrack wants passenger trains on it rather than goods trains—whether they pay better, I do not know. I was given advice and made a modest suggestion that at least for a period it would alleviate congestion to put in loops and a new signalling system. That would have allowed for higher use of the line. That suggestion was pooh-poohed by Railtrack. However, at the time, it did not put up any better scheme. Things were just allowed to drag on.
I become concerned about people who make too many criticisms of the old system. Of course the old system was bad and there were a lot of faults. But I should not dare to suggest that I know more about the Dock Labour Scheme than the noble Viscount, Lord 1034 Bridgeman, who knows all about it. But I knew the Glasgow Docks and the conditions there were appalling. Men had to fight to get a card for a ship which would give them the chance to earn two or three days' wages a week. Such bitterness cannot be wiped out overnight. People are suspicious. I know that the noble Viscount has experienced such problems himself and knows all about the things of which I am speaking. Perhaps he would like to come in at this point. I was thinking of the Govan Docks and the Anderson, the Prince's and the Queen's Dock. The corruption among the stevedores was also extremely high. But we are talking as though things were going so much better because of privatisation. Certainly, I shall not say that everything on the railways was good before that; indeed, a great many things were not.
But the Government's record of getting more freight onto rail is quite shameful. Rail accounts for only 6 per cent of freight traffic in the United Kingdom. That is down from 11 per cent. less than 20 years ago. All the people to whom I have spoken who are involved in trying to get better conditions for running the railways—the rail companies themselves, such as the English, Welsh and Scottish Railway—say that Railtrack charges notoriously high track access charges for freight and do nothing to encourage more freight to go by rail. Railtrack charges 30 per cent. of English, Welsh and Scottish's revenues in track access charges. I understand that that is twice as much as many of the American companies are paying for access to their railtrack. Therefore, one cannot just say that it is the operators who are having difficulties. In some cases, track access charges are up to 60 per cent. of the revenues of some of the companies who are running the freight. Those are figures that I have been given. English, Welsh and Scottish pays Railtrack £120 million a year in track access charges.
The National Audit Office report on the Freight Facilities Grant showed that the Department of Transport had only given £32 million of the budgeted £70 million of grant between April 1985 and March 1996. Last year freight operators were allotted only £4 million out of a total £14 million budget for that grant. Private freight operators have slammed Railtrack's excessive track access charges and the bureaucratic hurdles which stand in the way of getting more freight on to the railways.
The chairman of English, Welsh and Scottish—Mr. Ed Burkhardt—which transports more than 80 per cent. of UK freight, complained of,delays and excessive pricing levels",for allowing freight trains access to railway lines. He said,We have lost customers since we bought the freight business here. The major thing that has stood in the way has been Railtrack being very slow to give a quote and then wanting to charge a new high".David Mann is the property manager of Powergen, which tried to build freight terminals but was almost prevented by Railtrack's "intransigent" treatment, demanding large sums just to bridge a line. As a good and responsible industrialist, he considered the delays 1035 and the type of treatment they received to be quite ridiculous. Mr. Mann said that such treatment from Railtrack would,stop future rail terminals being constructed [and make] it more and more difficult [for projects to get under way]. People will revert to road".We have had many problems on the railways, but we shall have many more on the roads with the up to 44-tonne vehicles that are planned. They will cause chaos on the roads. Nevertheless, this has been an interesting debate, not least because of the informative speech of the noble Lord, Lord Gladwyn. The speech was not only well constructed, it was also extremely elegant—of which I am most envious. I was also impressed by the great knowledge that people had of the transport industry.
It must be remembered that we are still paying big subsidies to Railtrack. Some of the suggestions being put forward for new improvements were always tied up with the amount of subsidy to be given for the new improvements. We were always told that when an entity went into the private sector, that is when the money would flow. It would go into the market and be able to do all kinds of fancy things. We learnt a great deal from the difficulties experienced with the big nationalised industries. It is not just a matter of saying what the privatised industries can do. We must stop looking at the bottom line and seriously take into consideration the environment. The environment has only one chance of improvement. An example of the chaos is when I tried to drive through London the other day. There was an accident at Westminster and a burst water main, and it took about one hour to get from Waterloo Bridge to Hammersmith Bridge and to the House of Commons, chugging along. That situation can only get worse.
I am keen to use the railways much more. We have a unique railway network, if only we could get it into the right shape. That can only be done by a combination of private enterprise and a great deal of government help. Private enterprise is not all that keen on taking too many risks and the situation will need a combination of both public and private money. If that is done, within the next 10 or 20 years we may begin to see a railway system that is a lot better than it is at present. And perhaps we shall obtain a bit more peace on the roads as well.
§ 10.19 p.m.
§ The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen)
My Lords, I wish to thank all noble Lords who have contributed to this interesting debate at this late stage in the Parliament. I thank my noble friend Lord Marlesford for giving us the opportunity to discuss rail freight issues. My noble friend has been a persistent questioner on this important subject. Since he originally asked some of his Unstarred Questions with regard to rail freight issues and Felixstowe in particular, the situation has changed considerably.
I wish to start my remarks by warmly welcoming the maiden speech of the noble Lord, Lord Gladwyn. I thoroughly enjoyed it. I was not aware of his descent from the great engineering family. That was one of the 1036 important facts I learnt this evening. I also learnt that the grandmother of my noble friend Lord Cochrane of Cults was born in 1850. That fact was not included in my brief and so I shall be chastising my officials accordingly for not including that information. I was also not aware that my noble friend Lord Marlesford had been so closely associated with British Rail Anglia. I scoured his entry in Dod and I failed to discover that. I was very interested to hear from him about that experience of his career. I understood very well the frustration he felt with the old-style British Rail, with the old-style management and with the inflexibility of the funding arrangements. I am sure that has contributed to his interest in this important subject.
The wide-ranging nature of the debate has led to a variety of issues being raised. We have moved from just the freight issues into a number of other areas. The Question relates to two specific points: first, the position at Felixstowe, the line that takes us to Felixstowe and the capacity of that line to take additional traffic. The second point concerns a more wide-ranging analysis of the effect of government policy on the railways in terms of our ability to get more freight on to the railways. That is an aim which all parties share. I believe that the bold initiative of privatising the railways and of liberating more investment has already proved to be successful—we have seen the bold investment plans of Railtrack—and will continue to be so. We must recall that Railtrack as a private enterprise has been in existence for less than a year. Already it has contributed to addressing one of the problems mentioned by my noble friend—the line to Felixstowe.
I certainly welcome my noble friend's recognition of the importance of the port of Felixstowe not only to the ports and shipping industry but to the economy of the United Kingdom as a whole. It has been a considerable success. Our policies for the commercial ports have reflected our policy of pursuing efficiency by encouraging choice and competition. As far as possible, we have allowed ports to operate in an unrestricted market with intervention limited to issues of safety and the environment. We have encouraged privatisation and abolished the restrictive practices of the former dock labour scheme, leading to increased productivity and investment.
I listened with great care to the remarks of the noble Lord, Lord Carmichael of Kelvingrove, in his recollections of the port industry as it used to be, with the inefficiencies and difficulties which restrictive labour practices caused. When I travel in Europe now and talk to fellow shipping Ministers across the Community I find that the efficiencies of our industry have been recognised. The achievements of ports like Felixstowe in competing on a very efficient basis in comparison with sometimes heavily subsidised ports on the Continent are impressive indeed. I had the opportunity to visit Felixstowe and to climb to the top of one of its immensely tall cranes. It was certainly an edifying and indeed terrifying experience to be up there in a high wind. One certainly got an impression of the scale of the operation, of the number of boxes that are being moved around at the port and of the efficiency with which that is done.
1037 I should like to address the fundamental point that has been raised in the debate by underlining at the outset that, while the development of the railway network is in the first instance a commercial matter for Railtrack, the Government retain a clear strategic responsibility for ensuring that the rail network meets Britain's transport needs. For example, the Government continue to provide grant to OPRAF in support of socially necessary passenger services and we operate a freight grant scheme which helps to secure freight to rail, which would otherwise go by road. We have seen the new operators of what were formerly publicly-owned utilities, particularly in the transport sector, doing very well indeed, building on the efficiencies that they have managed to produce. The Government do not seek to tell them how best to invest their money; nor do we do that within the rail network. We attempt to put a partnership in place using such devices as the freight facilities grant to bridge the gap where there might not be a commercial case for a particular level of investment. We firmly believe that that is the correct approach.
Perhaps I may go on to address the specific situation with regard to this railway line. As my noble friend Lord Cochrane of Cults said, the Felixstowe branch line currently suffers from out-dated signalling equipment which is prone to failure and is time-consuming to maintain. Moreover, the branch line is predominantly single-track with restricted passing facilities which do not allow two freight trains to pass each other. Consequently, at present Railtrack believes that there is capacity on the route for 11 container freight trains a day in each direction via the port.
The capacity of the branch line has not so far been the principal factor determining the use of rail for freight traffic via the port. I understand that Freightliners, the rail freight company which operates services to the port, moved 176,000 containers through Felixstowe in 1996 compared with 133,000 in 1991. That equates to a growth in rail freight traffic on this branch of around one-third in just five years. I am sure that we would all be happy if such a trend could be repeated on the rest of the rail network.
Nevertheless, I certainly acknowledge the point made by a number of noble Lords around the Chamber this evening that rail has just a 17 per cent. market share of containers moved by land via Felixstowe. Therefore, the port, freight operators and Railtrack believe that there is scope for a further increase in rail's share of Felixstowe container traffic. To move the current volumes, Freightliners currently operates nine trains a day in each direction on the branch line and is looking to operate more trains in order to move yet more traffic through the port.
My noble friend Lord Cochrane of Cults, asked me whether I could visualise a distance of 13 miles. He wanted to put that into the context of Potters Bar. I am not able to do that, but I was going to tell him that 13 miles was about half a marathon. As a responsible Minister of the Crown standing at the Dispatch Box, I thought that I should take advice from the Table on 1038 that point. I am very pleased that I did because I was advised that I was incorrect and that in fact a marathon consists of 26 miles 385 yards.
§ Viscount Goschen
My Lords, I also understand that it was 26 miles until the London Olympics in 1908 when the 385 yards were added so that the finish could be in front of the Royal Box. That illustrates the importance of taking accurate advice; otherwise personal statements are required to correct any misleading of the House, which would be quite inappropriate.
In Railtrack's view, the existing network could accommodate an extra two trains a day in each direction, and there is almost certainly scope, if necessary, to operate more trains at weekends. Indeed, my eye was caught by a recent article in Lloyd's List, the shipping paper, which reported that, in the first two months of 1997, rail traffic via the port has increased by 30 per cent. compared to the same period last year. This clearly shows that there is capacity in the railway network for growth, and that the port, Railtrack and Freightliners are co-operating effectively to maximise the potential of rail freight. Nonetheless, to answer the point made by the noble Lord, Lord Bridges, Freightliners would clearly have difficulty in the longer term if the port of Felixstowe's forecasts for ever-increasing numbers of containers are accurate.
Freightliners, Railtrack, the port and the local authority have been discussing this issue for some time, and when my noble friend Lord Marlesford first asked a Starred Question with regard to this issue, discussions had been underway for some time. Towards the end of February, Railtrack decided that a commercial case existed for a programme of improvements to the Felixstowe branch line. The company announced towards the end of February that it is to upgrade the line, investing around £6 million in a modern signalling system and a track extension. I welcome the sentiments expressed by my noble friend Lord Astor of Hever in a very concise speech about the rail freight industry when he said that that investment will be of considerable importance and will produce considerable benefits for the track and for the amount of container traffic that will be able to utilise it.
§ Lord Carmichael of Kelvingrove
My Lords, the Minister may not come to this, but I referred to a number of complaints from Railtrack's users about high prices, inefficiency and delays due to "improvements". I wonder whether the Minister had heard any such complaints; or have I been misinformed?
§ Viscount Goschen
My Lords, it is of great importance to get the balance of the charging structure right. We want to ensure that we have a framework whereby Railtrack makes a return. Track access charges are clearly a major part of that. The independent regulator has a strong role to play in this and I firmly believe that in a privatised monopoly, such as Railtrack, 1039 the importance of independent regulation cannot be over-estimated, particularly with regard to the important issue of track access charges.
The new signalling system will use the latest fibre-optic technology and will be designed greatly to improve service reliability. This work will be carried out in conjunction with an extension to a passing loop on the route which will enable freight trains to pass each other on the branch.
§ Lord Marlesford
My Lords, before my noble friend, in his most helpful and encouraging speech, leaves the point, I mentioned one matter with which he has not yet dealt, although perhaps he was about to come to it. I refer to the question of the 44-tonne lorries. There is a danger that, if the Government gave permission for 44-tonne lorries, that would totally unbalance the equation between rail freight and road freight.
Frankly, I cannot envisage that any government, whether this Government—this Government having been re-elected as obviously I hope will happen—or another government (should there be a change) will find it possible to provide the expenditure on roads that will be necessary to accommodate 44-tonne lorries. I know that the Government still have the matter under consideration, so it may well be premature and unreasonable to ask my noble friend to reveal the Government's thinking on this, but I believe that this is a serious point which is very relevant to the equation between road freight and rail freight.
§ Viscount Goschen
My Lords, my noble friend was quite right to raise the issue of 44-tonne lorries, to which I will turn. There has been a consultation exercise but no decision has yet been reached. I understand the point that he makes. My noble friend will be aware that in the consultation document the various arguments for and against any such move are carefully weighed. We have no doubt that his comments are relevant to this important issue, particularly when we have an interest in getting the balance right.
My Lords, it appears that the argument for the adoption of 44-tonne lorries is unsurmountable in environmental terms. If it is assumed that eventually 44-tonners will be adopted, is it not a good idea to maintain the differential in aid of intermodal operation so that there is always an advantage to rail freight in having an even higher gross train weight for such operations?
§ Viscount Goschen
My Lords, I certainly recognise my noble friend's experience in the field of heavy transport. I believe that his words carry considerable weight in your Lordships' House. I recognise that there are environmental arguments both for and against such a move. I do not believe that it is appropriate for me to comment further on that issue.
Perhaps I may detail the design work that will begin imminently. Railtrack expects to begin work in the spring of 1998, with the work taking about 12 months 1040 to complete. Having said that, Railtrack believes that there may be scope for accelerating the works if Freightliners wish, although this will be a matter for discussion between the two companies.
On the wider question of investment in rail infrastructure, Railtrack has recently published its network management statement outlining its spending plans over the next 10 years. Railtrack plans to spend some £10 billion on the maintenance, renewal and development of the rail network between 1995 and 2001, which I understand represents a very considerable investment.
Looking forward, Railtrack's spending on the rail network, excluding day-to-day maintenance, is expected to average some £1 billion a year over the next 10 years. This includes more than £1.5 billion on renewing and upgrading the West Coast Main Line, allowing the introduction of high speed tilting trains and £600 million on Thameslink 2000.
The Government have consistently provided carefully targeted support for the rail freight industry through the freight grants regime. The scheme was introduced in 1974. Since then the Government have continually renewed its effectiveness and have introduced enhancements to the regime on several occasions since 1979, as my noble friend Lord Astor of Hever correctly noted. In particular, recent changes have made the scheme more accessible for intermodal freight, culminating in a track access grant to Freightliners that may be worth up to £75 million over five years.
Since 1979 over 150 grants have helped to secure the movement of freight by rail which would otherwise have moved by road. It is estimated that freight carried using facilities funded by grants amounts to about 12 per cent. by volume of all rail freight in Britain. All told, we believe that the freight grants scheme is responsible for removing about three million lorry movements from our roads every year.
It is important to provide the necessary conditions to allow the rail freight business to flourish. However, in the case of Felixstowe rail links, it is particularly pleasing to see that Railtrack is taking appropriate steps to improve the infrastructure.
A particular point was raised in relation to EWS and Railtrack. I understand that they are talking about negotiating a new track access charging deal which may attract freight to rail. However, any new deal would have to be approved by the rail regulator, as I said in response to a question from the noble Lord, Lord Carmichael of Kelvingrove. So I cannot comment in definitive detail in advance about such an arrangement, save to say that any such arrangement would have to be agreed by the independent regulator.
During the course of this Parliament we have had the most vigorous political debate on the issue of rail privatisation. The noble Lord, Lord Carmichael of Kelvingrove, and his noble friend Lord Clinton-Davis and I have clashed swords on a number of occasions since the introduction of the Railways Bill in 1993. Those debates engendered considerable heat, but I believe that we have seen considerable progress. That 1041 bold policy which represents the biggest structural change in the railways for decades has already been shown to work, and will prove to be the saviour of that vital transport mode. I leave the last word to the editorial in The Times of 12th February last, which was headed, "The Right Track". It was subtitled simply: 1042Privatisation has made the trains run on time".