Lord Grayling (Con)

I have three amendments in this group, one of which, Amendment 106A, follows on from what my noble friend Lord Lansley said. Before I start, I should declare my interests as an advisor to Hutchison Ports and a member of the UK and Ireland leadership team of AtkinsRéalis. I tabled Amendment 106A as a bit of a challenge to the Minister because I am well aware of the issues around the statutory meeting of targets and so forth, but the Government’s announcement that they have a 40% target by 2040 has to have some meat to it. You cannot just say, “Here’s our target”. The Minister is, of course, far too experienced a railwayman to have taken such an approach, so I want to probe him today about how we are going to get to that point because this is by no means easy. My noble friend Lord Lansley rightly referred to Haughley junction and Ely junction, the corridor from Peterborough to Leicester and the constraints going through Oxford. The reality is that significant problems are holding back freight traffic on the network today. For a variety of reasons, the projects that I put into the system as the Secretary of State were gobbled by the budgets that were taken by HS2. This Government have come in and frozen rail fares, which benefits passengers but it is a financial decision for the railways, and they are taking other decisions about public spending. In my understanding, it is very unlikely that there will be new money for enhancements to the network for the next 10 years, pretty much. Any realistic prospect of spending money has already been committed. I know that issue and I am sure that my noble friend Lord Harper knows it, too—he and I became Secretary of State and discovered that, basically, all the money had already been committed and we did not have much opportunity to put new projects in place. I am sure that that is the issue for the Minister and the Secretary of State, but you cannot then pluck a 40% growth target out of the air and hope that it will just happen. This is also coming at a time when the sector is under different kinds of pressure. DB Cargo, one of the three major operators, is up for a fire sale at the moment, with big question marks about its future. GB Railfreight is doing okay, with a new chief executive coming in, but it none the less has some challenges ahead of it. Freightliner has just been broken in half. Half of it—the intermodal business—has been sold to CMA, a big shipping company; the rest has been left as heavy haul to do bulk haulage around the country for Network Rail and others. I would not say that any of those three businesses is at the moment in the most organised shape to drive growth. In fact, frankly, most observers of this sector would say that you have three businesses chasing the same clients and the same volumes of business, and it is not clear where the growth is coming from. If you talked to most of those companies, they would say that what we need is disincentives to carry freight by road and more incentives to carry freight on the rail. That is a separate debate, but that is what they would say. It is not entirely clear to me where the growth will come from. I have a number of concerns about this, not the least of which is an issue that I have discussed with the Minister before: will it lead to Great British Railways trying to take on freight itself? I know that that is not the Government’s current intention, but the way the Bill is structured would allow that to happen in the future. If that happens, you could end up with the big guys squeezing out the smaller operators, and would we be certain that Great British Railways would do a decent job anyway? One of the constraints around Ely is that the last time we had a nationalised railway, British Rail, it took up the tracks between Soham and Ely and, as a result, constrained capacity for rail freight through to the Midlands. It was expedient to do so because it wanted to spend money on passenger services at a time of tight budgets. Of course, we are now in a situation where we could very well have a national rail operator wanting to spend money on passenger services at a time of tight budgets. Not only is there a risk of lack of new investment but even sustaining the existing services might be a challenge. My challenge to the Minister is this. He is a man we all respect, who has deep knowledge of the industry, but he must stand up in front of this Committee and explain how a 40% target for 2040 is viable. What will the Government do to facilitate that? It is a private sector job to drive the business, but the Government, by definition, will create part of the environment, having nationalised the passenger railway and taken Network Rail and the passenger railway together under one roof in the way that existed under British Rail. How will he do that? What will he instruct Great British Railways to do? The purpose of Amendments 108 and 109 is to say clearly from this Committee that we expect Great British Railways to have a focus on freight as well and not to simply ignore it and concentrate on passenger services, because passengers vote and rail freight wagons do not. I want to hear the Minister explain in detail where that 2040 target has come from, how it will be achieved and, to make that happen, what necessary changes he and his colleagues in the Department for Transport will commit to.