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Sue Essex, Minister for Environment

The Strategic Rail Authority has announced some decisions covering the whole of the UK. My statement will address how these decisions will affect Wales. It is based on public information, but also on the discussions that the First Minister and I had with Richard Bowker at a meeting that we initiated last week. I will also outline the Welsh Assembly Government’s response.

There are two aspects to the decisions communicated by the SRA. For each I will outline their impact on Wales. First, a number of reductions in services were announced on 16 January to improve reliability by easing timetable congestion across Great Britain. The impact on south Wales is the reduction from May of the newly-introduced Virgin cross-country services from south Wales to Birmingham, the north-east and Scotland from seven to two, including the withdrawal of one service a day from Swansea. In addition, the SRA has confirmed today that, for north Wales, the introduction by Virgin of seven services each way between London and north Wales will be reduced. The current assumption by the SRA is that, from autumn 2004, there will be three or four new 125 mph trains each way, operating on a faster schedule than the current service. The reductions to both Virgin services are extremely disappointing. Although there had been problems of reliability in south Wales, there have been real benefits from additional modern regular cross-country services to the Midlands and northwards. It is particularly regrettable that Swansea has lost its one direct service. Colleagues representing north Wales, both here and at Westminster, have campaigned hard to bring about improvements. I am disappointed that their efforts have been undermined by today’s announcement by the SRA.

On the second aspect of the SRA’s decisions, it is adjusting its programme in the coming year to meet budget controls. This is being delivered primarily by curtailing discretionary grants, such as the rail passenger partnership scheme, the rail performance fund, funds for freight facilities in England and track access grants. The SRA is now only proceeding with contractualised schemes. The rail passenger partnership is the most significant of these grants for Wales. It has been a key instrument for enhancing rail services in Wales. We have been particularly successful in obtaining both capital and revenue funding from the SRA, which has been identified as a means of meeting the aspirations set out in our transport framework. There are two schemes in particular where RPP funding is currently crucial. We are well advanced on the infrastructure for the re-opening of the Vale of Glamorgan line and consider that the SRA is committed to supporting the introduction of passenger services on this line. In addition, completion of works at Mountain Ash allows an increased frequency of services to be introduced to Aberdare from October. Officials are in discussion with the SRA on these schemes, which we regard as high priorities, and expect the situation to be resolved soon. RPP funding was also being sought for the Ebbw valley railway scheme. Although this will not be needed until 2005, it will be difficult for the SRA to commit to approving this bid. In view of this uncertainty, and the need for everyone involved in the regeneration of Ebbw Vale to have confidence in delivering this rail service as quickly as possible, I have agreed with the Finance Minister that the Welsh Assembly Government will provide the additional funding sought under this RPP bid. Our approach to this situation, which was unexpected, clearly shows that the Welsh Assembly Government is absolutely committed to making these projects happen. They are vital to important objectives, especially the development of our public transport policy, reducing our dependency on the car, regenerating communities and opening up opportunities for people to seek jobs while still living in their present communities.
We expect an announcement from the SRA on the Wales and borders franchise in May. As you may recall, the SRA asked the bidders for all the outstanding franchises to produce bids requiring 10 and 20 per cent less subsidy alongside proposals for enhancement. The First Minister and I were assured that this exercise is to improve the value for money from the operation of the railways. We recognise that costs are escalating in the rail industry, and that the SRA is under pressure to contain them. However, the Wales and borders franchise provides us with the opportunity to establish a long-term future for railways in Wales.

3:10 p.m.
As everyone knows, I am strongly in favour of increasing the Assembly’s powers over public transport and rail, and we have proposed a transport Bill to cover this. The Environment, Planning and Transport Committee, and, most recently, the Select Committee on Welsh Affairs, has supported the Welsh Assembly Government’s bid. These announcements reaffirm our commitment to obtain powers of direction over the SRA and enable us to protect Welsh rail interests.

The Welsh Assembly Government is not prepared to let our rail system go backward in Wales. I remain committed to an efficient and reliable rail system in Wales, and there is considerable public backing for this. To this end, the Welsh Assembly Government has already demonstrated its determination with a significant level of investment underway and planned: for example, the funding of the north-south rail service, and the support for the Ebbw Vale service. We will continue to do all that we can with our partners to secure our realistic ambitions for the Welsh rail network.