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Rail Links (Teesport)

I congratulate my hon. Friend the Member for Middlesbrough, South and East Cleveland (Dr. Kumar) on securing this debate and providing an opportunity for the House to debate rail links to Teesport. He finished his speech by appealing for a positive response from me. In recent weeks I have been referred to as the Minister for Westminster Hall, and more latterly, as the Minister for ““No””. However, I will do everything I can to offer my hon. Friend some comfort, and if he has raised any points that I am unable to answer today, I would be more than happy to meet him and any relevant constituent interest he might wish to bring along at the Department for Transport. Rod Eddington’s review of the long-term impact of transport decisions on the UK’s productivity, stability and growth has highlighted the role of freight and the fact that reliable freight journeys are key to enable the economy to function effectively as an increasing volume of imports supports the shift towards a service economy. As prosperity and the demand for goods grow, efficient freight transport is increasingly vital to the UK economy. Rail freight is a competitive private sector industry, and since privatisation in 1995, the levels of freight moved have increased by 66 per cent. in net tonnes per kilometre. Rail freight’s market share also increased over the same period from 8.5 per cent. to 11.7 per cent. The Government welcome that growth and wish to see it continue. Our rail freight policy statement to Parliament in July 2005 outlined our clear policy aim to see goods being moved in a sustainable way, which maximises benefits to the economy and to society. Rail and water freight can bring substantial benefits as they generally have less impact on society than road transport. In 2005-06, the rail freight industry moved the equivalent of 1.22 billion lorry kilometres, saving 6.74 million lorry journeys, and delivering significant reductions in pollution and congestion. We believe, therefore, that rail has a crucial role to play in goods transport alongside other modes, and we wish to see freight travelling by rail instead of road wherever this makes the most sense. I apologise to you, Mr. Martlew. I am trying to shake off a cold, which probably explains why I turned a particularly unattractive shade of puce on the Front Bench yesterday while I tried to contain my coughing. I shall try to keep it under control. We recognise that, compared with road freight, rail and water freight can reduce accidents and congestion on our roads, and can cut pollution and carbon emissions. To support the movement of freight traffic by rail and water instead of by road, we operate two grant schemes that are administered through the sustainable distribution fund. The two schemes are the freight facility grants scheme and the rail environmental benefit procurement scheme. The latter starts in April and will replace and build upon the successful track access grants and company neutral revenue support schemes that have been in place for some years. To support the rail freight market we have previously announced that a resource budget of £18.5 million a year has been allocated for the sustainable distribution fund until 2009-10. That is designed to give industry certainty that the grants will be available for the duration of their normal contracts with customers. Some of those grants are used to support flows from Teesport. In particular, two significant flows of intermodal containers out of Teesport by rail continue to be supported under the company neutral revenue support scheme. The support, which amounts to about £250,000 a year, removes about 8,000 containers a year from the roads of the Tees valley. In addition, the Department awarded a track access grant for the movement of chemical products from Teesport to Workington in 2005, removing about 14,000 lorry journeys from the roads over a two-year period. Of course, rail links are simply part of the logistics chain. Teesport is the second largest port in the UK by tonnage, and as such represents a crucial node in the UK supply network. Recent growth confirms it as a thriving port, especially in the bulk sectors. Teesport has ambitious plans to foster growth in its container traffic, as my hon. Friend said, and has prepared plans for development accordingly. As the port’s applications in this respect are either under active consideration or soon will be, I cannot comment further on the proposals. We are currently conducting the ports policy review, which we intend to conclude this summer. As part of the review, we will consider the many and varied responses to the consultation process, including those of the operators of Teesport. We will also consider the recommendations of the Select Committee on Transport, whose report on the ports industry in England and Wales was published at the end of January. Among other things, the review is looking at the policy frameworks that support port development and surface access. We are looking at the various modes on this issue, and have sought views in the consultation on encouraging modal shift. The review has already shown that rail access is an important issue for UK ports. I am pleased to see how the rail freight industry has worked together to formulate the forecasts that have been used in the freight route utilisation strategy—the rail industry never uses one word when six will do—and Network Rail’s other route utilisation strategies, as well as other parts of the rail industry planning process, including the high level output specification. The forecasts cover the period until 2015 and indicate that rail freight growth will both continue and be concentrated on specific sectors, such as electricity supply, industry, coal and intermodal traffic to and from the UK’s deep sea ports and in the construction market. In the next few years, the Government will complete a number of major projects aimed at enhancing the capacity and capability on the current network. These include the west coast project where enhancements such as the Trent valley four-tracking scheme will increase capacity for passenger and freight services and additional capability is being provided to accommodate further growth. That is just one of several schemes being taken forward by the Government and the industry to improve capacity. However, despite record levels of investment, we recognise that capacity in some areas remains an issue. We remain convinced that in the short term significant benefits can be gained through making maximum use of the capacity available within the current railway network. Network Rail is taking forward a series of route utilisation strategies that will help achieve this objective, which aim to ensure that capacity is used as efficiently as possible and that demand and supply are as closely matched as they can be, while ensuring better performance and reliability. The route utilisation strategy process also highlights areas where small-scale investments will enhance capacity and capability, some of which may be funded by the Network Rail discretionary fund and some of which may be incorporated into the high level output specification. Teesport falls within the area of the east coast main line route utilisation strategy, which has been the subject of a year’s work by the rail industry and for which a consultation draft is expected in the next few months. Although the majority of these route utilisation strategies cover passengers and freight in specific geographical areas, the specific network-wide needs of freight have also been recognised in the work undertaken for the freight RUS—the final version of which Network Rail plans to publish in March this year following consultation on the draft. The freight RUS consultation document shows the important role of both Tees and Hartlepool, and Redcar, as ports—centres of industrial and commercial activity. They are also the origin of rail freight flows to locations across the UK including power stations, inland rail terminals, metal processing and production facilities and, locally, the potash mines at Boulby and steel production facilities close to the docks. The document also recommends further work on the evaluation of options for rail gauge enhancements on the route from Teesport to the east coast main line. During the next 18 months, the proposal will be taken forward by Network Rail, with support from the ports and the regional developments agencies, as part of a gauge evaluation package for the key northern rail routes. Each Network Rail route utilisation strategy covers a period of about 10 years. In the longer term, the Government will continue to take forward a number of projects to enhance capacity, including the Thameslink project, for which we have recently received planning permission, and to whose further development we have allocated £30 million in advance of the outcome of this year’s comprehensive spending review. This year, our strategy on the high level output specification programme will set out our long-term expectations for rail. I should mention at this point that the high level output specification will not specify outputs for freight because the Government are not actually customers of the freight industry, but it will specify clearly what it expects from passenger rail during the next control period—from 2009 to 2014. One of the main considerations will be the capacity of the network and how to respond to the inevitable increases in demand. The document will specify passenger outputs and also draw on work done by the industry in the freight route utilisation strategy. That will take into account the reasonable requirements of freight to inform directly our demand models so that we can plan for passenger growth while keeping an informed eye on the needs of freight as well. Given that rail projects can take a number of years to come to fruition, the Department will also consider the strategic direction for the railways over a longer period so that in the shaping of the first high level output specification we will be aware of the likely pressures and requirements in subsequent years. That will ensure that we do not carry out abortive works and that any renewals that occur are designed with the longer-term requirements in mind, which will save time and money when schemes are implemented in later years. We recognise the importance of Teesport to the immediate locality and to the UK as a whole, and the strategic importance of its rail freight links to the east coast main line and beyond. We also welcome rail freight growth and wish it to continue across the country, including north-east England. The challenge for the future will be to develop the rail network to cater for such growth. I pay tribute once again to my hon. Friend the Member for Middlesbrough, South and East Cleveland, and thank him for raising the matter today. Question put and agreed to.