Q61 Dr Pugh: So if a train operator were to look round for a different sort of rolling stock they would find, until you have commissioned and these trains have been produced they have very little choice.
Dr Mitchell: They have very little choice, yes, and there are very few vehicles which are not actually in use.
Q62 Mr Mitchell: You have to recognise that this is essentially a good Report; you are here like the figure in the Japanese workhouses where workers are allowed to come in and bang it to bits and take out the grievances that have accumulated against the companies that bring us here, so a lot of the knock about stuff deals with that. I have to say, Chairman, there has been an improvement on the East Coast Main Line-the problems were mainly caused by Geordies whipping the cabling from the signal system and people from Nottingham as well seemed to be in on the game, not problems of the new National Express. However, we have a problem which is common to a lot of lines of overcrowding; the trains are getting increasingly overcrowded. I have had a couple of occasions now where I have had to stand in First Class-and you are charged extra to stand in First Class-all the way to Doncaster. That is a crazy system; you cannot have bargained for enough increase in capacity to cope with the increasing demand.
Dr Mitchell: As I have said on a number of occasions our biggest challenge is dealing with capacity increase and how we match it with demand; that is our single biggest problem and it is the one that we tried to address in the White Paper last year.
Q63 Mr Mitchell: The Report says that you anticipated a 7% increase (which is not much) in fleet capacity over the terms of the new contracts, but Table 11 on page 20 actually says the totally planned increase in capacity is going to be around 22%. What are you going to do, put them in like cattle?
Dr Mitchell: Yes. Can I correct an earlier answer, Chairman?
Q64 Mr Mitchell: You just said "Yes".
Dr Mitchell: The 22% is a 22% increase in total seating in trains provided, so in other words if you take all the seating of all the additional trains-
Q65 Mr Mitchell: I cannot see that it is possible to have that increase, particularly given the fact that the number of journeys is going to increase and has been increased.
Dr Mitchell: Can I make two points? First of all, this is only the eight franchises which the NAO investigated, so that is 22% of those franchises. The second point is that a particular set of rolling stock will obviously do more than one journey in a particular day so the 22% increase in seats will generate an improvement in the overcrowding levels. I am sorry if I misled the Members before on that answer.
Q66 Mr Mitchell: Why can you not increase the capacity more quickly, why can we not get more rolling stock in on the contract and why do the leasecos have such a monopoly on the system?
Dr Mitchell: It is largely a question of how long it takes to manufacture the trains.
Q67 Mr Mitchell: It cannot take seven years.
Dr Mitchell: No, it is two years. Two years is the average, but then of course we have to negotiate with the manufacturer or, rather, in most cases the train company negotiates with the manufacturer. That might take up to, perhaps, six months. They then take two years to build them, so we are talking of, at a minimum, about two a half to three years; it takes that length of time to actually get the supply chain going. As I said before we are not waiting until the start of the next control period to get this process going and we have actually ordered 423 of the 1300 vehicles.
Q68 Mr Mitchell: The Report indicates, and you must have indicated to the National Audit Office, an end of subsidy, in other words it is going to die away, you will be subsidising the track provider but not the companies. This is like a mirage, it is not going to happen, I just do not believe it in fact; do you?
Dr Mitchell: That we are going to?
Q69 Mr Mitchell: That there will be an end to subsidies at the end of the contract period.
Dr Mitchell: The predictions we have indicate that, but of course that depends on a number of underlying assumptions and there is no doubt that the railway network as a whole, including the payments to Network Rail, will continue as a subsidised service; I do not think there is any doubt about that.
Q70 Mr Mitchell: Does that allow for a recession. I see paragraph 18, "Value for Money" on page 7 says that "the bids assume continued high passenger growth. Slower growth would lead to subsidies falling by less than projected." We are now in a slower growth scenario, are we not, so will there be an end to subsidy?
Dr Mitchell: I would not necessarily agree we are in a low growth situation. As I said, the most recent figures from the train companies still indicate quite substantial growth of, in many cases, towards 8% or 9%, which is still spectacular growth in the number of people travelling. These are the most recent figures we have got and they are not as high as they were, but we are certainly not in a position yet where they are declining or hardly increasing at all. We have to assume for the purposes of planning that growth will continue at something approaching the levels we have predicted.