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2013-10-30 DfT-001
Department for Transport


Proposal for a Council decision on the approval of the Luxembourg rail protocol

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Department for Transport

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Department for Transport

Proposal for a Council decision on the approval of the Luxembourg rail protocol

30 October 2013
source Department for Transport
type Written statement

note Robert Goodwill

The government is opting in to a proposed Council decision on the approval of the Luxembourg rail protocol.

My noble friend, the Minister of State for Transport, (Baroness Kramer), has made the following written ministerial statement:

The government has decided to opt in to the proposed Council decision on the approval on behalf of the European Union, of the Luxembourg protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Rolling Stock, adopted in Luxembourg on 23 February 2007.

The Luxembourg rail protocol is intended to facilitate the financing of high-value railway rolling stock by seeking to ensure protection, for example of a leasing company’s rights against defaulters, by a method of central registration, priority and common contractual terms. One of the purposes of this is to reduce the costs of leasing contracts for rolling stock. The rail protocol does this by providing an international mechanism whereby financial interests in railway rolling stock may be registered in a central database. Where an interest is registered a rule of priority would operate in favour of that interest, so protecting the investment where the operator of the rolling stock defaults on his obligations. The financial interest is protected and recoverable except when those financial interests rest in public service rolling stock in respect of which an appropriate declaration has been made. Protecting an investment in this way increases the confidence of leasing companies, and could thereby lead to a reduction in costs for industry.

The proposal has been published with a legal base falling within Title V of Part 3 of the Treaty on the functioning of the European Union (TFEU) – Justice and Home Affairs (JHA) matters. The citation of a Title V (JHA) legal base would usually mean that there would be universal acceptance that the UK’s JHA opt-in protocol applies and that the UK would therefore be free to choose whether to participate. However, the EU Institutions do not accept that the JHA opt-in protocol applies when the relevant JHA provisions fall in an area of exclusive external competence – as is the case here. The government believes that the UK opt in under the protocol to Title V of the Treaty on the functioning of the European Union applies and it has therefore asserted its right to choose whether to opt in; it has decided it is in the UK’s best interests to do so.

The government considers that the protocol is clearly advantageous to the UK and European rail industry, would provide greater security for the leasing companies of rolling stock, and would be beneficial both to borrowers, by stimulating increased flows of capital at lower cost, and to equipment suppliers.

There’s no better city in which to make that point.

Not far from here, at the Museum of Science and Industry, you can visit the oldest passenger railway station in the world.

It opened in 1831 and it transformed the journey between Liverpool and Manchester.

Not far from here you can also visit a different site which in a few years time will serve one of the most modern lines in the world.

Our new north to south railway, HS2.

Two centuries and a couple of miles separate these Manchester stations.

But they are joined by a shared great task.

To bring Britain together. To support growth. To back jobs.

To lead the world in change - not chase it.

Strategic case
And today is the right time to say this.

Because this morning, we published what’s called The strategic case for the new line.

Put simply, it’s the big argument.

Lot of pages. Many numbers.

But sum it up in 3 words and it goes like this:

“Room For Growth”.

That’s what the new line will provide.

That’s why we need to build it.

That’s why it is a better plan for our future than any alternative.

Since 2008 we’ve learnt some tough lessons as a country.

That we have to make ourselves more resilient as an economy, and more competitive too.

And that this won’t just happen if we don’t make big long-term decisions about investment - and stick to them.

Last week, I was in China.

It’s hard to describe if you haven’t seen it.

A brand new station in Beijing the size of an airport - but already almost full.

A high speed network that’s meant to reach 25,000 kilometers by the end of this decade.

Seven years ago, China didn’t have any high speed rail lines.

By next year, its high speed rail network will carry more passengers than all America’s domestic airlines combined.

And it’s still growing.

We don’t need to copy China.

And I don’t want to.

In fact in some ways, such as environmental management, China is keen to learn from us.

But on one point I am absolutely certain.

We can’t just ignore what is happening in places like Asia and Latin America.

Much as some people might like to.

We are competing in a global economy that’s in constant flux.

Our society is changing.

Our population is going up.

And we’re travelling more and more.

We have to address these issues if we want to grow.

There just isn’t a choice.

No one thinks we can protect our countryside, enhance our cities, fund our healthcare, or build our schools by falling behind the best in the world.

This is the big thinking behind the new north-south line and it is the one the strategic case supports today.

Cross-party support
I know there is a lively debate.

I respect that.

I respect the fact that not everyone will agree and that some people are concerned about the impact on the places they live.

I respect those with serious proposals for improvements which we can take on board.

But I also respect what Sir John Armitt said in his recent report for Labour on infrastructure.

That big projects need “broad political consensus” as well as “resolution” from political leaders.

That’s right.

That’s why the new north to south railway must be a national project with broad support across parties, or in the end it will be nothing.

I am proud to be at this conference today with Sir Richard Leese, this city’s leader - and a strong supporter of the new north to south line.

In Liverpool Joe Andersen backs it too.

As does Albert Bore in Birmingham.

Leeds. Sheffield. I could go on.

Labour leaders in our great cities who know this project is right.

They know that any threat to the new line is also a threat to the future of the north and the Midlands.

To the Britain beyond London where I grew up - and live today.

So let me say something very direct to those in the opposition who have learnt nothing from the past.

You can’t say one day you back better infrastructure only the next threaten to stop it being built.

You can’t go on claiming to want one nation if you won’t back the things that will bring it together.

You can’t play politics with our prosperity.

The new north to south line is a multi-billion, multi-year investment in the future of Britain.

And to those who say there’s no blank cheque, I just say: that’s obvious.

Did anyone ever claim there was?

Britain has shown it can build great infrastructure like HS1 or the Olympics on time and on budget.

The business case – including cost-benefit figures – is still strong.

More than 2 pounds return for every 1 pound invested.

And with Sir David Higgins in charge - the man who built the Olympics and who by the way was appointed by the last government - we will do that for the north to south line too.

Now I also read in the papers that some are dreaming up quick fix alternatives.

Well let me tell you the truth about them.

They don’t work.

No one seriously thinks you can just rely on air travel or more long-distance motorways.

No one seriously thinks our current rail network can just carry on for the next 20, 50, 100 years.

Since 1970, the total distance we travel in Britain has more or less doubled.

And it’s going to continue rising in the years ahead.

The railway industry has done a great job accommodating growth over the past 20 years.

But what about the future? We’re already stretched.

We need to invest in the classic network - and we are.

Network Rail will spend £35 billion in its next five-year control period.

And the government has a £73 billion budget for transport investment over the next parliament.

Of which - by the way - the north to south line accounts for less than a third.

Our roads will benefit from a big increase in spending including a tripling of the national budget.

But even with all this investment we’ll need the capacity that the new north to south line will provide.

We need new rail capacity.

And if you accept that then there isn’t a choice about how to provide it.

A new north to south line is the right way.

One built to modern standards, which goes right into cities like Manchester.

One which serves London to ease the strain on commuters.

One which makes travel quicker - not slower .

Today’s strategic case makes that clear.

As its new research shows, none of the alternatives provides anything like the benefits.

You just can’t build for the future by ripping the present network to bits like a DIY bodger on a nationwide spree with a hammer.

Let me give an example.

In the last decade Britain spent about £9 billion upgrading the West Coast Mainline, a project that didn’t provide the capacity it promised, and which proved so difficult that most of the work stopped south of Rugby.

As a result, next year Network Rail must do work on a 12-mile section of the West Coast line around Watford Junction just to keep it running.

Network Rail has chosen the least disruptive option.

But it still means 5 separate periods of line closure between May 2014 and early 2015, including a 16-day shutdown next August which will hit the West Coast line.

The alternative was to close the line - shutting this city among others off from London - for 54 weekends in row.

That’s the so-called alternative people talk about.

New work we are publishing today shows that if instead of HS2, we tried to create the necessary capacity on the 3 main lines, we’d face up to 3,200 weekends of closures.

Think about it.

Not to mention the impact of widening current tracks and building work on the tens of thousands of people who live close to the existing mainlines, or the loss of local services to cram more fast trains in. And the inevitability of a less reliable service as those lines get older while we try to squeeze more out of them.

That’s not an alternative to the new north to south line.

It’s an impossibility.

Of course with anything this big, this complex, this far-seeing, there will always be uncertainties.

Today, the strategic case we are publishing reflects that.

As part of this much wider strategic case, the updated the narrow economic model we use - as we promised we would.

The numbers remain strong.

Like for like, the BCR for the whole Y-route has changed only slightly to 2.3.

And if you include the obvious fact that demand for the line won’t stop growing three years after it opens, as the model insists we calculate, then the figure could be as high as 4.5 - though in the spirit of openness it could be lower too.

But by the way while we are being open, that calculation does include the cost of periodically replacing the track, replacing the rolling stock after 30 years and employing train drivers.

But frankly, the BCR shouldn’t be the important thing whether you back the line or not.

It simply can’t take account of so many factors which are hard to predict.

That was true of the Jubilee Line extension in London, for instance, whose cost benefit was negative, and didn’t include the 100,000 jobs that it now supports at Canary Wharf.

Just as the case for High Speed One didn’t include the massive gains from redevelopment at King’s Cross and St Pancras.

Now in London we are spending £15 billion on Crossrail and £6 billion on Thameslink.

The business case for those projects is similar to HS2.

But somehow you don’t hear commentators from the south complaining.

Even though transport investment over the last two decades in London has been around four times greater than the whole of the north put together.

So this new line - it’s something we’ve got to do together.

I’m not aiming to force this through by parliamentary diktat or expect every MP from whatever party to support it in the votes which lie ahead.

And as a former whip - I know they won’t.

Though as a former whip and current transport secretary I often wish they would.

But I do believe that the force of reasoned argument points just one way.

Towards getting on with this project, getting it right and getting it built.

And to those who say no, my response is that we should also be honest about the consequences.

It’s our chance as a country to get ahead and build the best. Not patch up and mend only to spend far more later when it turns out we should have invested properly at the start.

Ducking the challenge now will simply make life tomorrow more difficult for us and our children.

Because I know we’re right when we talk about growth.

We’re right when we talk about ambition.

We’re right when we talk about the capacity this line will provide.

It is time to make the journey.

It is time to get on board.

Let’s come together and get on with the job.

Railhub Archive ::: 2013-10-30 DfT-001


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