Crispin Blunt

Conservative Party | Reigate

Central Railway

Mr. Crispin Blunt (Reigate): I am delighted to have been able to secure this debate. The subject is of great interest to the Opposition, and I am grateful for the support of my hon. Friends. If it comes about, the Central Railway scheme would have as great an impact on my constituency as anywhere else. Not only would an area of outstanding natural beauty have to play host to a 14 km tunnel that would take five years to construct, but the railway's operations would have a disastrous impact on the quality of life of thousands of my constituents in Merstham, where the route is proposed to run overground.

Since being elected in 1997, I have spent some time making home visits in order to listen to the noise of trains in tunnels. I and my hon. Friend the Member for Mole Valley (Sir Paul Beresford) have no confidence that the tunnel would insulate those unfortunate enough to live above it. It is therefore unsurprising that, following the scheme's resurrection after its decisive defeat in Parliament in 1996, I have been taking a keen interest in Central Railway's proposals. I note that the Under-Secretary of State for Transport, the hon. Member for Plymouth, Devonport (Mr. Jamieson), is the fourth Minister to reply to debates on Central Railway. I hope that he will be the last.

The scheme's proponents claim that it will meet 75 per cent. of the Government's objectives in moving freight from road to rail, but that it will be done at no cost to the taxpayer. That superficial level of analysis seems too good to be true. Indeed, on the available evidence, one must conclude that the scheme is too good to be true at national level, as well as being too awful to contemplate at constituency level.

When the subject was last debated here—it was in a debate initiated by my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond), who is in his place today—the then Minister, the hon. Member for Coventry, North-East (Mr. Ainsworth), was unable to answer my hon. Friend's two simple questions. He had asked whether the Government supported the scheme and, if so, whether they would use the company's proposed vehicle of a hybrid Bill to enable it to escape the usual scrutiny of a planning inquiry. The Minister said that it would be impossible for the Government to take a position until the Strategic Rail Authority had completed its review of Central Railway's proposals.

That evidence was made available to the Government last year, but still no decision has been taken. Indeed, yet more work has been commissioned from the SRA. I regret that, as do my blighted constituents, but I understand the Government's reluctance to give up their pursuit of the crock of gold at the end of the Central Railway rainbow. However, enough is enough. My primary objective today is to invite the Government to state their opposition or their support for the scheme at the completion of the latest analysis.

I want to summarise why the Government should not support the scheme. In the last debate on the subject, the Minister helpfully recited the terms of reference that the Government had given the SRA, and they are listed at column 54 of the Westminster Hall debate of 6 March 2001. Because of time constraints, I do not intend to repeat them, but any analysis based on the Government's terms of reference will show that the scheme should fail.

First, on volume, market share, revenue and operating forecasts, the conclusions of chapter 3 of the consultants' report, "Market and Revenue Forecasts", are devastating for the Central Railway proposal. Central Railway claims that within three years it will win a 35 per cent. market share of all freight currently transported by lorry or container between the United Kingdom and the continent via all French, Belgian, and Dutch ports and through the channel tunnel. It is claimed that that market share will generate revenue of £1.4 billion in 2011. That is based on the market continuing to grow at historic rates of 6 per cent. per annum. Central Railway claims that that figure is conservative, but I regard it as heroic. However, from what we know so far, the SRA is in no position to advise the Minister that those market share assumptions are valid. The SRA's report states:

"Central Railway's investigation of the price elasticity of demand in the UK showed that a 10 per cent. reduction in tariffs would generate a 27 per cent. increase in volume. The consultants were not told whether a 10 per cent. increase in tariffs results in a 27 per cent. reduction in volume."

The consultants went on to say:

"The traffic forecasts are highly dependent on the assessment of price elasticity and customer mode switching behaviour, however demand is very price sensitive. The model does not assume any competitor reaction to Central Railway, it is almost certain that improvements would be made to the competitor offer . . . MDST concludes that a 40 per cent. market share is unattainable"

and that

"the haulage rates used are totally unrealistic."

Yesterday, I asked Chris Savage, the director of government affairs at Central Railway—I am grateful to him for taking the time to come and brief me—whether any further work had been carried out on the economic forecasts. He told me that it had not. That updates the SRA's consultants' statement that

"Central Railway has not yet carried out any further market research to test specific service/price propositions and provide a validation of its initial assessment of buying behaviour."

The whole scheme rests on one survey of 200 road hauliers conducted by the proponents of the scheme. In a paper exercise, the hauliers responded overwhelmingly to a question about price. In the real world, it will not work like that, even if the price data are reliable. For example, Central Railway states that the scheme

"assumes that Transport firms would use the unaccompanied service if the cost saving justified it."

At the moment, Central Railway is proposing that lorries will go on trains without their drivers. Quite apart from the inherent inflexibility of rail compared with road, Central Railway appears to have taken no account of the fact that a significant percentage of the road haulage industry is represented by owner-drivers who are unlikely to want to put their lorry unaccompanied on a railway. There is no discount factor in its calculations for that section of the road haulage industry. Its calculation is based solely on its price claims.

The Minister said in the previous debate on 6 March 2001 that operating costs were part of the SRA's remit. The SRA states:

"As part of our review, we sought back-up for the operating cost assumptions. Central Railway told us that these had been provided based on advice from France (SNCF)."

It is, at the very least, inconsistent for what is supposed to be an entirely commercial scheme to rely on advice about operating costs from a nationalised and highly subsidised business. The Minister will have noticed that the SRA's consultants dryly report:

"The costs do not appear to have been benchmarked against any current UK experience or supply market tested."

On capital costs, at the time that the consultants' report for the SRA was completed, Central Railway did not have a comprehensive costed schedule of all the work that is required to be undertaken for the total route. According to the information that I received from Central Railway yesterday, that remains the case. Even the most superficial examination of the capital costs, related solely to the work in my constituency, suggests that the ballpark estimate of £4 billion for the construction costs must be way off the mark. Central Railway claims that the 14 km tunnel that will end in an unspecified place in my constituency between junction 8 of the M25 and the A23 will represent 10 per cent. of the cost. It does not know where the tunnel will go, which is a comment on the quality of its proposals. In 1999, my hon. Friend the Member for Epsom and Ewell (Chris Grayling), his predecessor, Sir Archie Hamilton, and I met the chairman of Central Railway. We had to point out that the company's paper exercise on where the line would run showed that one end of the tunnel would come up in the middle of a housing estate in what was then Sir Archie Hamilton's constituency. On the basis of that information, the tunnel's planned route was changed, but there is still an almost total lack of detail about this important matter.

Mr. John Randall (Uxbridge): I do not want to stop my hon. Friend in mid flow, but I am sure that he agrees that all our constituents face a big problem because their properties will suffer blight as long as the plans and the route remain uncertain. Admittedly, that blight has been masked by the rise in house prices, but it is blight all the same. Something must be done quickly, which is why I am sure that my hon. Friend will urge the Government to say no to the plan as soon as possible.

Mr. Blunt : I am grateful to my hon. Friend. One can see from the presence of so many hon. Members today that there is concern among constituents, who are experiencing real hurt because of the loss of asset value of their properties. The Central Railway proposition has been kicking around for seven years, and anyone living near the proposed route or routes has suffered property blight. The Government owe it to our constituents to end that uncertainty, and the primary objective of today's debate is to enable the Minister to give an undertaking to do so.

Mrs. Cheryl Gillan (Chesham and Amersham): My hon. Friend will see that several Opposition Members from Buckinghamshire are here to support him. Do the figures that he received recently from Central Railway include estimates by Chiltern Railways of the costs involved? Chiltern Railways recently received a new 20-year franchise, and is probably the best train-operating company in the country. It says that the wide gauge of the Central Railway trains would require every station on the Chiltern line to be rebuilt and new tracks to be installed. It also notes that Central Railway's ill-thought-out proposals could be achieved only by constructing two entirely separate tracks along the Chiltern line. Has my hon. Friend received any estimate of the vast costs and disruption to our constituents and the local economy?

Mr. Blunt : The answer is, of course, no. Indeed, I do not think that Central Railway has any idea of the costs that would be incurred, which is part of the difficulty with the scheme. As the Strategic Rail Authority's consultants told the Government, there is still a complete vacuum as regards details of how the scheme will operate alongside existing railways, such as the Chiltern line. My hon. Friend has given a classic example of the risk factors involved in such schemes. As she said, they have not been quantified at all in this case.

Mr. Humfrey Malins (Woking): I congratulate my hon. Friend on his approach to the matter, and I strongly agree with him and with my hon. Friend the Member for Uxbridge (Mr. Randall) on the question of uncertainty. Does he accept that people up and down the M25—I refer particularly to constituents in Byfleet and West Byfleet—have faced blight for years? That uncertainty is damaging, and it is vital to reach a conclusion quickly and to oppose the proposal.

Mr. Blunt : I am grateful for my hon. Friend's support for my central proposition, which is that the Government must make a decision at the end of the period of analysis. I hope that the Minister will give us and our constituents comfort on the matter later in the debate.

Central Railway claims that the tunnel, one end of which will be in my constituency, will take up about 10 per cent. of the construction costs of the whole railway—£400 million. Nearly two decades ago the channel tunnel cost £100 million per kilometre, four times the price that Central Railway claims for the proposed tunnel under the North Downs. It proposes that the railway will exit the tunnel and run alongside the M25 and M23 past the Merstham estate in my constituency. Any examination of the substantial cuttings and embankments that make up the boundary of the motorways at that point will demonstrate what a huge civil engineering undertaking that 3 km stretch alone would be, let alone what the Highways Agency would have to say; I am not even sure that it has been consulted. On the evidence of my eyes, I cannot believe Central Railway's capital cost forecast for the scheme.

The Minister will also know that the chapter on technical feasibility and deliverability of the scheme in the SRA consultants' report is far from a robust endorsement. The consultants said that to clarify feasibility further,

"There will be a need to communicate and operate the route with interfaces with Railtrack as the UK's prime infrastructure owner. Each interface constitutes a risk to the operation of the networks. These risks have yet to be quantified which can only occur when the dialogue with Railtrack, the TOCs and the SRA has been undertaken on a more focused basis."

That is the point that my hon. Friend the Member for Chesham and Amersham (Mrs. Gillan) made and it is reinforced in the report that is before Ministers. If the Minister does not get satisfaction on those points, it will be a serious indicator that the Government should reject the request for a hybrid Bill.

Central Railway has been around for over seven years; longer than Railtrack or the train operating companies. The fact that it has been unable to address the issues with them in a serious way, and to find solutions, must give us cause to doubt the robustness of the proposal, which throws up a myriad of serious planning concerns, not least in my constituency, as some of my hon. Friends have mentioned. One can understand why the company wants a hybrid Bill. The Government should not give their weight to any scheme that poses as many serious planning issues the length of the country as this one does, if that enables the issues to escape proper public scrutiny.

Mr. Dominic Grieve (Beaconsfield): I hope to say more later, but I should like to highlight the inclusion in the scheme of terminals for trans-shipment from road to rail. One is proposed in my constituency in an area that is already saturated with traffic, and to which it is intended to attract lorries from a 200 km radius. Such issues and their implications seem to be totally unaddressed by Central Railway.

Mr. Blunt : My hon. Friend makes the point extremely well and I agree with him. I am glad that I do not appear to be getting a terminal as well as a tunnel. The point about planning is central. A hybrid Bill would be the most inappropriate vehicle for this scheme. Planning blight is well documented and has already been mentioned—many of our constituents have been badly affected. After seven years, those constituents and other people who have suffered damage as a result of the scheme are now owed certainty from their Government.

Mr. Ian Taylor (Esher and Walton): My hon. Friend has kindly raised the question of certainty. That is much in the minds of my constituents, as they still have hanging over them the possibility of a service station at Downside. This morning's papers report that consultants now say that the M25 should be widened further. That will undoubtedly affect my constituents and his, and it means that the Central Railway plans will be subject to many other considerations that the Government will have to take into account. We will not know the outcome for some time unless the Government are decisive and reject at least that element of uncertainty.

Mr. Blunt : I am grateful to my hon. Friend, as I had not been aware of the precise points that he made. The M25 has recently undergone an extension, not least through Reigate. The junction of the M25 and M23 is a central point, and no doubt the motorways will be developed beyond the present four lanes. To put a railway line bang alongside the M25 and M23 would be unacceptable to the Highways Agency, I imagine, as it would preclude expansion of the motorway network in decades to come. Consultation has not taken place on such issues, which is another nail in the coffin of the Central Railway scheme.

Mr. Peter Ainsworth (East Surrey): I have a question on blight. My hon. Friend will be aware that Central Railway maintains that it has an innovative compensation scheme for people who are likely to be affected. Has it suggested how many people might benefit from that scheme? Does not the firm retain control over who is offered the compensation package?

Mr. Blunt : My hon. Friend is right. On superficial reading, the compensation scheme seems excellent, but one then has to read the small print. In the end, Central Railway decides who has access to the scheme. As there is no one else to adjudicate on access, the decision will be taken by Central Railway.

Mr. Kelvin Hopkins (Luton, North): Will the hon. Gentleman give way?

Mr. Blunt : In a moment.

However good the compensation scheme looks at first, I regret to say that it is not robust enough to survive analysis. Perhaps the hon. Member for Luton, North (Mr. Hopkins) will suggest that the scheme has changed since it was last presented to me, but that is currently its fatal flaw.

Mr. Hopkins : Does the hon. Gentleman not accept that the scheme proposed by Central Railway was praised by the then Department of the Environment, Transport and the Regions? The essence of it is that it will pay enough to compensate people. There have been examples of negotiations with possible trackside homeowners in which they have agreed to accept compensation under that scheme.

Mr. Blunt : I am grateful to the hon. Gentleman, because he makes the point that the scheme is superficially generous and sounds good. However, in preparation for the debate, I asked Central Railway in a letter whether entry to the property owners' compensation scheme was a matter for the company's discretion. Central Railway replied that the provisions of the property protection scheme were at the discretion of the company, and pointed out that they were more generous than the statutory arrangements. It also said that people would continue to have their statutory rights under the scheme. The scheme sounds very nice, like the whole Central Railway proposition, but the detail is lacking. It is in the detail that the scheme fails.

Mr. Hammond : The essence of the compensation scheme as I understand it, is to underwrite the value of a property, and thus make it tradable while the blight continues. Is not the real weakness of the scheme that the guarantee is only as strong as the company that makes it? That company is thinly capitalised and likely to go belly-up if the scheme itself does not proceed.

Mr. Blunt : Quite.

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