§ 8.24 p.m.
§ Lord Bradshaw rose to ask Her Majesty's Government whether the possibility of a world shortage of oil should influence strategic plans for the electrification of a greater part of the railway system.
§ The noble Lord said: My Lords, before speaking I must declare my interests as a member of the Strategic Rail Authority and of the Commission for Integrated Transport. Neither body has been involved in any way in preparing what I have to say. As my membership of those bodies and my membership of your Lordships' House has from time to time been a matter of contention with officials, I have informed the Minister and the chairmen of both bodies of my intention not to seek reappointment to the SRA in June when my appointment expires, and to resign from the Commission for Integrated Transport at the same time. I have always observed the Addison rules assiduously and I do not want to embarrass either chairman for whom I have the greatest respect.
§ I put forward tonight's Unstarred Question for debate at the time of the fuel crisis last year. At that time, it became evident that if oil fell into short supply, industry, commerce and personal journeys would quickly become adversely affected.388
§ I do not intend to revisit the fuel crisis. It may be that the Government, through robust action, would have been able to stabilise the situation at least by directing available oil supplies to priority users so that the country would not have ground to a halt. I sincerely hope that that would have been the case because I have no desire to see the government of the country subverted by those who would use non-democratic means to achieve their ends.
§ The fuel crisis gave us the opportunity to consider how dependent our transport systems—road, rail and air—are upon oil. It also called to mind a conference that I attended in the late 1970s which included representatives of major oil companies, where the possibility of what they called a geo-political accident in a major oil producing area—presumably the Middle East—would destabilise world oil supplies. We have since experienced the Iraqi invasion of Kuwait. The Middle East remains vulnerable to political destabilisation, as do other oil-producing areas, and OPEC has the potential of any cartel to exert great pressure upon dependent consumers.
§ My object tonight is to consider, and to invite the Government to consider, the strategic implications of a sustained world shortage of oil and particularly the implications of that for Britain. I want to focus on the part that an electrified railway system might have in mitigating those effects.
§ Only 38 per cent of the British railway network is electrified. In the 1999 Network Management Statement, Railtrack forecast that that is likely to grow by very little over the next 10 years. Meanwhile in Europe, where we face great competitive pressure, France has 45 per cent of the network wired up, Germany 49 per cent, Italy 65 per cent, Holland 73 per cent, Belgium 74 per cent and Switzerland 100 per cent.
§ Apart from the fact that a small part of our railway network is electrified, we have seen a tendency for new investment not to use the potential of that part of the system which is so equipped. Almost all new freight locomotives are diesels. The Virgin hid for the East Coast Main Line franchise includes the use of powerful diesel trains. New trains used by Anglia Railways between London and Norwich—a wholly electrified line—are diesels. So in considering whether an electrified railway has a significant role to play in providing an alternative to the use of oil as a fuel, we must consider the provision of new rolling stock as well as the infrastructure.
§ In 1980, when I worked for the British Railways Board, the Department of Transport and the board published a review of the case for main line electrification. That concluded that a substantial programme of main line electrification would be financially worth while, with all the larger options showing an internal rate of return of about 11 per cent. Those forecasts were based on traffic predictions well below those considered likely at the time.
§ That review proposed that a large fast option be adopted to be completed over 20 years. It included the East Coast Main Line as far as Edinburgh and 389 Aberdeen; a trans-Pennine route, a cross-country route between York and Bristol and to Reading and most of the Great Western Main Line. Of that only the East Coast Main Line has been completed as far as Edinburgh.
§ In addition, small extensions to electrification have been made around Birmingham and Leeds. The review suggested that up to 80 per cent of passenger and 70 per cent of freight would be electrically hauled. Part of the proposition was that three or four teams should be assembled to carry out a continuing work programme over 20 years. Industry would equip itself and train people to carry out the work.
That programme was not adopted, and very recently Roger Ford, a pre-eminent commentator on railway affairs, wrote in Modern Railways,
Electrification is off the SRA's agenda".
He went on:
In 21st century Britain, extension of railway electrification is both difficult to implement and hard to pay for and in no one's commercial interest".
He goes on to explain the fact that Railtrack would have to pay compensation for the disruption caused while the work progressed and that rolling stock leasing companies would rather build versatile "go anywhere" diesel trains than electric trains, which are more limited in their deployment capability.
Roger Ford goes on to quote from the reply to a letter sent to the SRA asking about the prospects for electrification. The reply states that,
future electrification is likely to depend on comparative prices of energy and maintenance costs".
In that case, Mr Ford concludes, that the strategic case for the extension of electrification is weak.
§ Investors, be they private investors or those spending public money, work within the constraint of earning a return on their investment over a relatively short time-scale. They use financial discount rates which place great emphasis on the short term. Where social benefits are involved, these must be clearly identified and costed. Where the benefit is uncertain and strategic in nature, such as defending the nation from the effects of an oil crisis, the benefits are such that they cannot be accommodated within our present systems of financial appraisal.
§ We now come to the nub of the argument and the reason for tonight's debate. If as a country we are prepared to spend large sums of money under our military budget to secure our oil supplies, surely there is an argument for spending a very small proportion of this money in providing for a largely electric railway which would offer an alternative means of transport to many people and to freight users if oil suddenly became short.
§ If the Strategic Rail Authority were told to prepare with Railtrack, the train operators, and the rolling stock companies a 20-year programme of electrification and to build that into the franchise programme, the issue to be addressed is the cost that 390 would be added to the modernisation which is in prospect already. To put that clearly: what costs would arise over and above those of a mainly diesel railway?
§ This extra money is, in effect, a strategic supplement. We ought to know what it is and whether it is a premium we are prepared as a country to pay to defend ourselves—in part—from the effect of an oil shortage.
§ My purpose tonight is to ask the Government to ask the SRA what amount of money is involved and to ask themselves, in a strategic sense, whether this premium would be worth paying. I do not know whether it is, but I am sure that it would be a fraction of our defence budget. In preparing for tonight's debate, I tried hard to discover the cost of maintaining the no-fly zones in Iraq. I can assure your Lordships that it is very high, but several Questions tabled by honourable Members in another place have failed to produce a figure to put before the House tonight.
§ I believe that it would cost little to find out the answer to my question from within the railways. I believe that government, as they are responsible for the defence of the realm, ought to know and ought to give serious consideration to the issue.
§ 8.35 p.m.
§ Lord Faulkner of Worcester
My Lords, I congratulate the noble Lord, Lord Bradshaw, on securing tonight's debate. I agree with a great deal of what he said. He comes to the subject with a distinguished record of having run a substantial part of the publicly owned railway in the 1980s at the same time as I had a modest role as an adviser to the British Railways Board. Therefore, it is not surprising that he and I are at one on the issue of railway electrification.
Railway electrification and the way in which it has been handled by successive governments is a topic which demonstrates more clearly than any other what were first the weaknesses of public ownership and are now the failures of privatisation. The reason for that is because of the refusal to look beyond the very short term. The noble Lord, Lord Bradshaw, referred to the review of main line electrification, which was produced jointly by the Department of Transport and the British Railways Board and submitted to Sir Norman Fowler, then Secretary of State for Transport, and to Peter Parker, chairman of BR, in 1981.
Had the review's conclusions been accepted then, and the work started in 1981, we could by last year have had 7,710 track miles and 3,410 route miles electrified, with all the principal main lines in England, Wales and Scotland served by electric trains. Towns and cities as far apart as Penzance, Swansea, Holyhead, Hull and Aberdeen would have benefited from being on an electrified InterCity network.
Furthermore, even on the most cautious assumptions about passenger and freight growth, such a programme would have produced an internal rate of return of 11.1 per cent and a net present value surplus of £255 million on 1978 money values and a 7 per cent discount rate.
391 The noble Lord, Lord Bradshaw, rightly drew attention to the dangers of the economy being heavily dependent on oil and the joint review calculated that with 80 per cent of passenger and 70 per cent of freight trains electrically hauled, 120 million gallons of oil a year would be saved.
In addition, an electrified railway is cleaner, quieter and safer. It is cheaper to maintain. Had the programme proceeded through the 1980s and 1990s, we would also have retained an indigenous railway manufacturing industry in the UK, with substantial orders for suppliers in both the private and public sectors, and the prospect of competing successfully for overseas electrification work. As it is, virtually no industry of that kind remains.
So why did it not happen? The answer is because the British Railways Board was unable to get anything that resembled long-term planning agreed by the Treasury. The mandarins looked at the electrification review and saw that the pay-back years were well into the future—20 years or more after the programme started.
That kind of consideration did not deter the great railway pioneers of the 19th century who were willing to plan a generation ahead. Nor did it apply to the state railways of continental Europe, such as those in France, Germany and Italy, all of which electrified in the 1950s and 1960s and have invested significantly in the decades subsequently, while our investment has stagnated.
All we got in the 1980s was piece-meal electrification, such as the East Coast Main Line as far as Edinburgh, plus some suburban commuter services, to which the noble Lord, Lord Bradshaw, referred. Virtually nothing happened in the 1990s as the industry was being prepared for privatisation and when six months ahead seemed a dangerously long time to plan.
So the wires have not gone beyond Bedford on the Midland Main Line; there are no electric services out of Paddington, except the Heathrow Express; and there are numerous gaps in the network where either it is necessary to change from electric traction to diesel and back to electric again, or—and this is happening increasingly—running diesel trains under the electric wires.
Short-termism has bedevilled railway planning for as long as I was associated with the industry and it really must not go on any longer. But with privatisation it has become much worse. No company with a franchise of seven years or less will be interested in an investment whose payback cannot be achieved until long after the franchise has expired.
The noble Lord, Lord Bradshaw, quoted Roger Ford's article in the current edition of Modern Railways. Sadly, I must agree that both he and Mr Ford are correct. I should like to think that if the Strategic Rail Authority plans to offer franchises of 20 years or more, electrification can go back on the agenda. But is the SRA promoting electrification? According to Mr Ford, no. He relates what happened when one of his friends asked the SRA about the 392 prospects. The noble Lord, Lord Bradshaw, referred to that. Perhaps I may refer to a further passage. Roger Ford states:The SRA claims that diesel trains have recently proved more reliable than electric".Mr Ford says,Good grief",and then explains in some detail how much more reliable are electric than diesel trains, pointing out as an example that the Heathrow Express runs an average of 80,000 miles per breakdown compared with 4,500 to 5,000 miles for a diesel Turbostar.
I hope that the SRA will study the report of this debate and come to the view that if it is to make a reality of the word "Strategic" in its title electrification must be part of that strategy.
§ 8.41 p.m.
§ The Earl of Mar and Kellie
My Lords, I am also grateful to my noble friend for tabling this Question which I believe to be of strategic importance to the enhancement and sustainable development of our railway network and its preparation for the future. As usual, I shall speak from a Scottish perspective and a lifelong interest in railway operation. Scotland has electrified railways in the south: the East and West Coast Main Lines. These enable one to travel from Carlisle to Berwick via Glasgow, Carstairs and Edinburgh. There are also the former Blue Train routes within the area of the Strathclyde Passenger Transport Executive. Nor should one forget the North Berwick branch line.
It is clear that electrification is an expensive process and that prioritisation is necessary. With that in mind, I hope that the DETR and the noble Lord, Lord Whitty, agree that the order of priority for electrification in Scotland is to begin with the Aberdeen line, which has always been a long and hard route. GNER, Scotrail Sleepers and Virgin run very long distance diesel trains of increasing age, from the south of England to Aberdeen. Those services are subject to late arrivals due to the length of route.
Follow that with the Edinburgh to Glasgow route via Falkirk High. That route, which is run by Scotrail National Express, now enjoys a quarter-hourly service using a mixture of new class 170 Turbostars and more elderly class 158s. I believe that that appropriately intensive service over the 44 miles between the two cities is well within the threshold for electrification on the grounds of diesel fuel use alone. To maintain the quarter-hourly service requires at least eight trains to be in motion at any one time. As each carriage is self-propelled the fuel consumption must be unacceptably very high.
After those two, I recommend the electrification of the Glasgow-Perth-Dundee route. I recognise that electrification, with all its momentary disruption and cost, will be unattractive in a free market setting at any one moment. It is unlikely to be attractive until the price differential between electricity and diesel fuel has widened substantially. Surely, that is the point of government taking upon themselves the opportunity 393 to intervene in the privatised rail industry. The Strategic Rail Authority should be instructed to develop a presumption in favour of electrification and to follow that by making available investment plans to fulfil that strategic objective. It would mean that for Scotland all the principal Anglo-Scottish services would be modernised and the intensive intercity service in the central belt would be more environmentally sustainable.
I conclude by acknowledging that I have ignored the Highland main line. The railway to Inverness must be prioritised, albeit lower down the list. There are but two Anglo-Scottish trains on that line, one day and one sleeper. But I draw attention to the oil and gas exploration which is beginning to develop in the Atlantic around the Hebrides and west of Orkney and Shetland. I am impressed by the efforts of the Scrabster Harbour Board, chaired admirably by Viscount Thurso, to prepare its harbour to serve the future eastern Atlantic oil and gas fields.
I believe that the Highland main line and the far north line, albeit unwired, must be ready to handle the freight traffic in this connection. It would be tragic if one experienced something similar to the loss of the Buchan line, which denied Peterhead what should have been a very strategic rail link. To go back to my noble friend's Question, such potential traffic must not be threatened by a shortage of traction fuel. An electrified railway must be as complete a network as possible. The recent loss of the East Coast Main Line at Selby has caused a diversion via the Leeds line, which is not electrified. A complete network is one in which there is no need to change trains or mode of traction and through working is as available as practical.
§ 8.46 p.m.
My Lords, I congratulate the noble Lord, Lord Bradshaw, on tabling this debate which is a fitting end (if I may say so) to his period with the Strategic Rail Authority, encouraging that body to look strategically. Listening to that speech and to that of my noble friend Lord Faulkner, one begins to believe that if they had been running the railways for the past 20 years, the railways would not be in their present state. But we are where we are. I believe that the argument for electrification advanced by the noble Lord, Lord Bradshaw, is very persuasive, provided there is a secure supply. That is the subject on which I want to focus.
I welcome electrification for passenger services. In declaring an interest as chairman of the Rail Freight Group, I also welcome it for freight if there is 100 per cent coverage, as in Switzerland, as the noble Lord pointed out. Half and half is not a very good thing. The problem is whether, if an oil crisis arises, electricity will be in plentiful supply. Sadly, the days when we burnt British coal to keep our electric trains running are over.
The 22nd report of the Royal Commission on Environmental Pollution, entitled Energy—The Changing Climate, provides some interesting forecasts 394 about the UK's energy consumption and resources in 2010. I give them in ascending percentages: renewables, 4 per cent; nuclear, 6 per cent; coal, 10 per cent; oil, 30 per cent; and natural gas, 40 per cent. Let us consider how much of these sources of energy are imported and from where. Obviously, renewables and nuclear are UK-based. Some coal still comes from the UK, but not very much. A good deal of coal is imported, but often from politically stable countries. Most of our oil is imported from countries that are not very stable. Not much of the 40 per cent of natural gas is imported, but that will increase in future.
Paragraph 377 of the report, Electricity from Renewables, from the Select Committee on the European Communities states that there is evidence from Climate Network Europe to suggest that by 2020 70 per cent of the EU's energy requirements will be imported. Much of that will be gas from Algeria and from east of the Black Sea which is supplied by Russia. If one wished, one could comment on the political stability of those countries.
Electricity is being generated in increasing volume from gas, much of which in future will come from abroad. I am concerned about whether the supply of fuel for electricity for trains will be much more reliable than that of oil fuel for trains. If there was a secure electricity supply the position could be different. Noble Lords will recall that for many years London Underground generated its own electricity at Lotts Road. I do not believe that it still does so. Could the railways themselves do it today?
In the past few weeks Questions have been asked in your Lordships' House about renewables. Government policy is very much to encourage renewables. One wonders whether Railtrack can take a lead in encouraging the development of renewable energy, be it windmills offshore, solar energy or other sources, to assist in providing a stable supply. It could even mean encouragement of local production and delivery. I do not suggest that 100 per cent would need to come from there, but it would encourage renewables and give some long-term strategic thinking to the electrification programme. It might cost a little more, but it would certainly be a useful element in two long-term government strategies: first, to ensure transport in this country in the event of an emergency, lack of oil supplies and possibly lack of gas supplies; and, secondly, to encourage the development of renewables.
Given such a secure supply, a wide network of electrification would be highly desirable. As the noble Lord, Lord Bradshaw, said, if it took 20 years to complete, that would fit in quite well with some of the longer passenger franchises that one understands the Strategic Rail Authority is thinking of awarding. I agree with the noble Lord, Lord Bradshaw. I support the noble Lord's idea that the SRA should be asked to start work on this now. I should like to see it linked to a renewables programme so that when the railways are electrified, we have a secure supply of electricity, at least for the trains.
§ 8.51 p.m.
§ Lord Shutt of Greetland
My Lords, I, too, am grateful to my noble friend Lord Bradshaw for initiating the debate. He started the debate on the basis of the oil shortage. Other noble Lords have referred to cleanliness and reliability. Reference has been made to the different position in other countries and to the 100 per cent electrification in Switzerland.
My noble friend Lord Bradshaw asks for strategic plans. I wonder whether the Strategic Rail Authority is able to he strategic in these matters when we have the particular way in which passenger rail was privatised, with the leasing of rolling stock in a certain set of hands, operating companies in another and the almighty Railtrack as another pair of hands. How can there be a strategic intervention? I hope that the Government, after four years in office, can find a way through that because I do not believe that there has been an initiative on electrification in that period.
Being strategic is one matter. The electrification of the main line from Paddington to the West Country and South Wales, the Midland line north of Bedford to the East Midlands and to Sheffield and beyond and the electrification between York and Bristol, the cross-country route, is certainly strategic.
Operating by stealth is another way forward. It occurs to me—a matter mentioned by my noble friend Lord Mar and Kellie—that the electrification between Glasgow and Edinburgh would mean an alternative electrified route. We have the electrified route between Liverpool Street and Norwich. Were that to be extended by stealth to Great Yarmouth there would be fewer trains under the wire. It would be the same position between Preston and Blackpool. To electrify the line from Manchester to Liverpool by stealth would be another short line that would increase the amount of railway with electrified wires.
If one could electrify between Liverpool and Manchester, one could soon electrify and link up over the Pennines, and similarly to Hull. One would then have a trans-Pennines route.
One of the most interesting matters of late is that we have learned of the village of Heck. Most people had not heard of that village until a few days ago. We find that twice this year in that area—first, through floods and, secondly, through the tragic accident—trains have not been able to operate between Doncaster and York. Indeed, as we speak, there are buses flying around between Doncaster and York.
There would still be through trains between King's Cross and Newcastle and Edinburgh if the line between Leeds and York—a short 20 miles or so—were electrified. That would make a huge difference. I am in favour—yes, I am in favour—of a strategic plan of electrification. But if we cannot have that, can we have electrification by stealth so that there is still forward movement and the whole technique and possibility of how electrification is done is not lost? Furthermore, teams of people who know how to electrify a railway will be kept together.
§ 8.56 p.m.
§ Baroness Scott of Needham Market
My Lords, this particular journey started off almost an hour late. The noble Lords dealing with the International Criminal Court Bill are queuing up behind us, but we have kept to time.
It is in the nature of all governments to find that long, medium and short-term all actually kaleidoscope into "When is the next election?" Even that relatively short horizon tends to be blurred much of the time by unforeseen events and even crises from time to time.
One matter that I much appreciate as a new Member of your Lordships' House is the opportunity sometimes to step back from that kind of political fray and take a look into the longer horizon.
I congratulate my noble friend Lord Bradshaw on initiating the debate today. I join other noble Lords in paying tribute to his work on the Strategic: Rail Authority. I have enjoyed other noble Lords' contributions. I have learned a great deal from noble Lords who have spent many years in the rail industry and have much practical experience.
At this early stage, I wish to record my support for the 10-year plan approach adopted by the Government. Ten years represents the medium term in transport planning. It is a marked improvement on the kind of short-termism of which the noble Lord, Lord Faulkner of Worcester, spoke with such passion. Along with the multi-modal studies and the development of regional transport strategies, we begin to get a feeling of some significant improvement in our long-term strategic planning. However, as the noble Lord, Lord Bradshaw, said, we really should be looking at a 20-year strategy for the railway—to look at what new financial mechanisms are needed, to appraise what is required and to work out how the costs can be met.
The fuel crisis last autumn took us all by surprise: first, because we have got out of the habit of having our lives disrupted by that kind of industrial reaction; and, secondly, because the resultant fuel shortages showed us how we have become so dependent on readily available supplies of petrol and diesel. We cannot rule out such an event happening again; neither can we entirely discount the possibility of geo-political upheaval in the Middle East. That might create world shortages of oil. We all know that oil is a finite resource and should not be regarded in the long term as the underpinning source of energy in our economy. The noble Lord, Lord Berkeley, reminded us of the extremely complex way in which our energy needs are met. Indeed, he reminded us about the need for a more robust strategy in relation to renewable energy.
During the mercifully short fuel crisis, there was some evidence of changing behaviour on the part of motorists, not least a rapid rise in the number of people travelling by rail. Unfortunately, the terrible accident at Hatfield a few weeks later led to a rapid reversal in that trend, as services descended into chaos. But worse in the long term was the loss of confidence in the railway system on the part of the travelling public.
397 There are many reasons why people choose to travel other than by rail, but safety should not be one of them. Despite the terrible events at Ladbroke Grove, Hatfield and now Selby, rail travel is still far safer than road travel. The tragedies of recent years will be much compounded if people use them as a reason to switch to a more unsafe way of travelling.
It is beyond the scope of this debate to talk about what needs to be done to rebuild confidence and how the railway industry might be structured in the future. My noble friend Lord Shutt of Greetland has shown us how investment in rail infrastructure has in some ways been damaged by the fragmentation of the rail industry in recent years.
I want to speak briefly about my own home region of East Anglia and the rail network that we have at present. Anyone who visits East Anglia will know that at the moment our rail links run almost entirely north/south. That is possibly on the assumption that London would be the only place that anyone would want to go to or get away from. Part of the debate on English regionalism should centre on the need for transport links between regions that are not dependent on travel through London. A more equitable and sustainable pattern of jobs and wealth creation depends on strengthening regions beyond London and the South East.
The noble Lord, Lord Faulkner, referred to places across the country that might have benefited from an earlier investment in electrified lines. My noble friend Lord Mar and Kellie enlightened us—he rather tested our geography—on the needs of the rail network in Scotland. In Suffolk we are fortunate to be the home of the Port of Felixstowe, one of the world's largest container ports and a major employer in the area. It currently handles some 2.7 million units, of which 22 per cent travel by rail. The port has impressive plans for expansion and is keen to increase rail use as part of that process. The current levels of congestion on the A.14 at Cambridge and the A.12 at Chelmsford make it difficult to imagine how that increase might take place on the roads. Significant investment in the rail infrastructure is needed to relieve the congestion on the trunk roads and to take some of the pressure off the rail lines to the north and east of London. In February the SRA announced plans to upgrade the route from Felixstowe to the West Coast Main Line via Peterborough and Leicester. That will provide an alternative route to the West Midlands, the North West and Scotland.
As far as concerns passenger travel, many of the same issues apply. We urgently need investment in the east/west link, which would recreate the link between Bedford and Sandy, and link into the East Coast Main Line. That would mean that people from the east of England could travel to Oxford and beyond, to the West Midlands or to Scotland without having to travel to London. We are also looking forward to the CrossRail links across London to prevent the current situation where it can take as long to transfer between stations in London as the original journey from 398 Suffolk. The completion of the Channel Tunnel rail link, with an interchange at Stratford, would provide us with useful rail links.
I have spoken about the East Anglian links, but those points could apply equally apply to any of the regions of our country. The case has been made, and certainly the transport Mafia of your Lordships' House is in agreement. So I think that now we should be looking forward to the action.
§ 9.2 p.m.
§ Earl Attlee
My Lords, I am grateful to the noble Lord, Lord Bradshaw, for introducing this Unstarred Question. In response to the noble Baroness, Lady Scott, regarding the timing of the debate, I think that the noble Baroness the Government Whip passed a signal at danger. I am sad that the noble Lord, Lord Bradshaw, has relinquished some of his responsibilities.
With the experience on display in your Lordships' House, I hesitate to contribute to the debate. One asks: what is the motivation for electrification of the railways? Electric traction is simple, reliable and enjoys low maintenance. Therefore, it is very attractive. The disadvantage is the high initial infrastructure cost and possibly the risk of electrocution of rail workers, trespassers and suicides. The past difficulty has been with the Treasury. The noble Lord, Lord Faulkner, raised that point during his interesting speech. I have some fears for the 10-year plan. If we hit a recession, the 10-year plan might experience some difficulties.
I was surprised by what the noble Lord, Lord Bradshaw, said about the new build of diesel-powered passenger rolling stock. He went on to explain some of the reasons for that. The noble Lord and others mentioned the flexibility of diesel traction. One of the difficulties of electric traction is that we have two systems. We have the low-voltage third rail system, which is particularly used on the Brighton line, and the high-voltage overhead line system. Therefore, we have something of a flexibility problem with the electric traction system.
Privatisation has meant that these decisions are much more a matter for the rail industry and the SRA. We have moved a little away from the influence of the Treasury. I hope that the industry will take a long-term view of the strategic advantages of electric traction and take note of the suggestions made by noble Lords in the debate today. However, we must recognise that many remote and regional lines have only light traffic and low revenues. Diesel traction will always be better for them in the long-run.
The noble Lord, Lord Bradshaw, made a wider point. At some time in the future, fossil fuels will run out and liquid and gaseous fuels will run out earlier. When that occurs the cost of the fuel will increase. However, in terms of supply, I suggest that the railway industry will be insulated. It will be the last to feel the pinch. The Government also have the necessary powers to make sure that the railway industry has fuel.
399 It is clear that electric traction is best for the environment but it is not always possible. We must remember that the electricity has to be generated. We know that coal is dirty. If it is deep-mined in the UK, it is recovered at great personal risk. Gas is clean but there are limited supplies and, unfortunately, gas-powered generation has been limited by the Government's moratorium. More importantly, as was pointed out by the noble Lord, Lord Berkeley, there are worries about the security of supply.
Renewables also have their problems. We are experiencing difficulty in meeting our existing targets for renewables. Most importantly, the absolute capacity of renewables is limited. Renewables are very nice but they are not the answer. One source of power remains. The noble Lord, Lord Berkeley, momentarily and carefully touched on it. I refer to nuclear power. There are obvious difficulties. There is the problem of safety of operation and the potentially greater problem of the disposal of the nuclear waste. The Government are not addressing that problem.
Noble Lords will be aware that the Science and Technology Select Committee of your Lordships' House produced a report, The Management of Nuclear Waste, which was published in March 1999. The Government responded in October 1999. That response is best described as a holding document. Indeed, some noble Lords have described it as a non-response. We were told that a Green Paper would be published, but we have not yet seen it. I believe that this is another example of the Government's failure to deliver. When shall we see that Green Paper? Will the Minister be publishing the Green Paper on the management of nuclear waste before or after the general election?
Does the Minister agree that already we have a considerable amount of nuclear waste that needs to be stored for the long term, and that the industry needs to know what the policy will be? It needs to know the way ahead. Why is the Minister unable to reach a decision and to promulgate it?
Does the Minister believe that we can meet our Kyoto targets and keep to those limits in the future without new build of nuclear power? In asking that question, I am being careful not to advocate whether we should or should not do so. The question merely addresses whether we can meet and keep to our Kyoto targets.
In conclusion, the availability of fuel for our transport is an important issue which will not go away. It will get worse. There are practical difficulties and limits on how much of the railway can be electrified. I believe this to be principally, but not exclusively, a matter for the SRA and the industry. They should pursue the best option.
§ 9.9 p.m.
§ The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty)
My Lords, I thank the noble Lord, Lord Bradshaw, for initiating this interesting debate. I appreciate all his work on behalf of the 400 Strategic Rail Authority and in serving on the Commission for Integrated Transport, along with his continuing contribution in this House to issues such as the one before us tonight.
I have to say that, until the latest remarks that we have just heard from the noble Baroness, Lady Scott, I had regarded the noble Earl, Lord Attlee, and myself as part of the transport mafia in the House of Lords. However, I believe that he and I dissent slightly from what is the overwhelming view of most of the other contributors to the debate. My task tonight is to introduce an element of caution to the widely expressed enthusiasm for electrification.
First, the premise of this debate relates to the possibility of a world shortage of oil. The International Energy Agency produces an energy outlook, the latest of which forecasts the position until 2025. That may not be quite as far as the noble Lord, Lord Bradshaw, wishes us to look, but nevertheless that is a fair way ahead. The agency does not envisage any shortages in reserves of crude oil over that period.
However, I recognise that there are geo-political accidents, to which the noble Lord referred. That includes political decisions and other forms of disruption and, of course, uncertainty about future prices. The objective of the Government is to try to ensure a balance of fuel supplies in order to offset such future eventualities. However, as my noble friend Lord Berkeley pointed out, other sources of energy in terms of electricity generation are also vulnerable to potential disruption. If we consider gas supplies which, by 2025, will certainly come from Russia, Iran and Algeria, they could well be subject to a degree of instability. Oil supplies from the Middle East could equally be subject to instability. That may not be the same for oil supplies corning from Aberdeen, but we shall see.
The noble Earl, Lord Attlee, referred to nuclear generation. There are, of course, deep uncertainties as regards world attitudes towards nuclear energy. The noble Earl has pressed me to reply to his questions. I understand the anxieties felt in certain parts of this House as regards the Select Committee and decisions to be reached on the publication of the Green Paper on the disposal of nuclear waste. I respect those concerns, but we are dealing with a decision which relates to the problems surrounding disposal of nuclear waste which will become acute in around 50 years' time. Furthermore, the material concerned has a half life of several million years. In that context, I think that a delay of the odd month or two in a response to the concerns of noble Lords—
§ Earl Attlee
My Lords, I am referring to delays amounting to the odd year or two rather than the odd month or two.
§ Lord Whitty
My Lords, I believe that I have made my point. Whether the Green Paper will be published before or after a putative election, of which the noble Earl seems to know more than I do, is not for me tonight.
401 We must address the strategic problems of the future of the rail industry. The noble Lord rightly referred to the shambolic structure of the rail industry that we inherited and to the need to tighten it. The Strategic Rail Authority is central to that role. As part of its objectives, it must focus on the achievement of sustainable development. Having said that, it is not a necessary consequence that it should adopt a doctrinaire position on electrification in the way suggested by the noble Lord, Lord Bradshaw, and my noble friend Lord Faulkner.
Electric traction has some clear benefits, such as cleanliness, acceleration and maximum speed. It also has downsides, such as visual intrusion, the environmental impacts of the sources of electricity generation and, of course, cost-effectiveness, which feeds back into fuel efficiency. Ultimately, our concern is that we have the right mix of fuels all the way down the production line.
In regard to environmental issues, if we look, as of now, at the relative benefits of diesel traction as against electric traction, there is relatively little to choose between the most up-to-date and latest diesel trains and the electricity traction's share of power station emissions in terms of the current mixer fuels and the potential mixer fuels over the next 20 years. Improved technology and design mean that the new generation of diesel engines is significantly cleaner and quieter than the stock being replaced. Diesel traction does not face the huge fixed costs of gantries and electrical power supply.
Nevertheless, the Government recognise that there are environmental issues to be addressed in the same way as for other modes of transport. How we move to a low carbon economy in the long term will involve serious decisions on our transport system. Later this year we will issue a consultation paper, Powering Future Vehicles. This will focus on advanced battery technologies, hybrid vehicles and fuel cells. It will be mainly concerned with road transport, but these technologies will have a broader applicability across the transport sector in terms of rail and beyond. The Chancellor's statement yesterday on the green fuels challenge will provide the context for encouraging pilot projects to develop future fuels.
In this context, the environmental balance between electric traction and diesel traction is not self-evidently in favour of electricity in all circumstances. It is not the case, as my noble friend Lord Faulkner suggested, that we should always opt for electricity wherever we can. That does not mean that we are adopting a short-termism approach. The creation of the SRA, longer franchises and the 10-year plan for transport are designed to avoid short-term decisions. However, electrification proposals would need to be assessed in a way which reflected the long-term life of the assets and would need to take into account long-term environmental sustainability issues. The framework is 402 there for the SRA to take such decisions, but it has to take a view on electrification proposals in the same way as on anything else.
§ Lord Bradshaw
My Lords, does the Minister accept that issues such as residual value have to be taken into account? That would require the Government giving consent, as they have to, for the SRA to allow residual values to be taken into account in letting franchises. As demonstrated in Switzerland, the benefit of electric assets lasts for about 60 years. That is much, much longer than diesel.
§ Lord Whitty
My Lords, without necessarily accepting those figures, clearly, as I said earlier, we should consider whole life value, whole life carbon content and whole life sustainability in the approach we adopt. I accept that.
My noble friend Lord Faulkner also referred to particular places—Penzance, North Wales and so on—which would have benefited from BR's electrification plans had they gone forward in the 1980s and beyond. I accept some of that, but we must not overlook the improvements which are shortly to be delivered, for example, on Virgin's cross-country routes, where new diesel trains will improve journey times substantially.
Of course there is concern about the reliability of some new trains, both diesel and electric. The disruption which can be caused in a particular place—whether by a tragic accident or anything else—is a real problem. However, electrifying lines does not increase the flexibility for dealing with such disruptions because electric stock can be used only on electrified lines. There is a difficulty caused by having a half and half situation, which is bound to prevail for at least a substantial period ahead even were we to adopt the noble Lord's preference for electrification over the longer term.
The noble Baroness, Lady Scott, referred to access to Felixstowe. We are committed to improving access to Felixstowe. The noble Lord, Lord Shutt, referred to electrification more generally by stealth. It is quite difficult to do anything by stealth in the railway industry. He referred to the lines from Manchester to Liverpool and from Leeds to York. My noble friend Lady Farrington was particularly interested in the Preston to Blackpool line, for which she expressed some enthusiasm. I agree that access to Blackpool should definitely be improved. Whether electrification in those circumstances is appropriate would need to be considered on a case-by-case basis. It is important that some of those lines are upgraded, both for their own traffic and as alternatives to other main line routes.
The noble Earl, Lord Mar and Kellie, referred to the situation in Scotland, in particular to the routes between Edinburgh and Aberdeen and the Edinburgh to Glasgow line.
The Government—and this is also reflected in Scotland—believe that passengers are more concerned about punctual, reliable, clean and comfortable trains than about the form of traction that is actually pulling 403 them. That is illustrated by the recent introduction of turbo-style trains between Glasgow and Edinburgh, which has significantly increased demand. In the not too distant future, the replacement for the Scottish passenger franchise will provide an opportunity for delivering further reduced journey times, increased reliability and frequencies, as well as wider journey opportunities. Whether some of those bids include electrification will be a matter that the SRA and the franchise director will have to consider at that point.
Tonight's debate has shown that, although there is some enthusiasm for electrification—electrification, even in my position, will undoubtedly represent value for money in particular cases—the case for large-scale, general electrification is not self-evidently clear. I accept that the noble Lord, Lord Bradshaw, is right in that had we gone forward with electrification in 1980, we would he reaping the benefits now. However, as my noble friend Lord Berkeley said, "We are where we are". I cannot argue with that.
If we take a look ahead from this point, it is not necessarily the case that in all circumstances electrification is a sensible measure. In many cases, in any assessment regarding the environment and costs, diesel traction with the improved environmental effects of diesel trains and improved fuel efficiency will continue to be better. We need to consider these cases on their merits. I welcome the interest shown by noble Lords in this debate, which will undoubtedly be conveyed one way or another to the SRA for its consideration.
§ Earl Attlee
My Lords, using that well-developed art called "hindsight", can the noble Lord say whether the previous government were, therefore, correct not to spend all the money required to electrify the western region?
§ Lord Whitty
No, my Lords. As I said, had we gone forward with electrification in 1980, as advocated by the noble Lord, Lord Bradshaw, we would undoubtedly be reaping the benefits now. The stock and the infrastructure would be in place, and further forward investment in electrification would, therefore, be achieved at relatively marginal cost. At that point, the environmental benefit of electricity was dramatically better than the environmental impact of diesel. The situation is much more marginal now. The decisions to be taken now are different in cost terms, because the relativity has improved in favour of diesel by about 25 per cent over those 20 years. If we had that infrastructure in place, we would not have to engage in a substantial infrastructure investment to produce an electric railway, and we would clearly be benefiting from it now.
Therefore, the Strategic Rail Authority has to take a view on what is the most beneficial form of investment as from now, given the infrastructure and the rolling stock that we inherited. Those decisions are now more finely balanced between diesel and electric. In many cases, the immediate decision will be in favour of diesel. However, we need to look at these matters on a case-by-case basis, especially for short stretches of 404 line of the kind to which the noble Lord, Lord Shutt, referred. We also need to consider areas where electric traction can provide a more flexible approach. I give way.
§ Lord Faulkner of Worcester
My Lords, I am most grateful to my noble friend for giving way. If we are to adopt a piecemeal line-by-line approach, can he explain to us why other European railways have decided that a network approach, and a strategic decision to electrify large parts of their network, is the right way forward? For example, all the main lines in France are now almost entirely electrified, and more electrification is planned. Is it a case of them getting it wrong, while we are getting it right? Alternatively, are they getting it right and we are getting it wrong?
§ Lord Whitty
My Lords, the SRA still has to make some very key decisions that will become more evident within the next few months, as it produces its strategic plan. It is not self-evidently clear that, starting from now, electrification of itself is a positive benefit. Over 50 per cent of France's railways and the whole of its high-speed lines are already electrified. Therefore, that system could be improved at relatively small marginal cost. However, we are not in the same situation.