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Below is the text of the speech made by Patrick McLoughlin, the Secretary of State for Transport, on 16th June 2014.

Good morning.

I’m delighted to have been invited to the Institute of Directors this morning (18 June 2014).

You might have noticed that the World Cup has started.

We are just a short distance from where the foundations of the global game were laid. The FA was formed in 1863.

At the time British entrepreneurs and engineers crossed the world. Building railways and bringing the beautiful game wherever they went.

For decades, England and Scotland, were the preeminent footballing nations. But the FA’s focus was on its own committees not keeping up with the competition.

Instead of investing in training coaches and improving pitches we relied on the legacy that had been left by previous generations.

So when the time came to compete on the global stage in 1950 we fell at the first hurdle.

I’m sure you can see what I mean.

To compete internationally, we can’t rest on our laurels, we need to keep innovating and pushing forward.

And we need to invest in the infrastructure that’s needed for that to happen.

Long Term Economic Plan

Thanks to our long term economic plan the economy is recovering from the years of borrowing beyond our means.

Our growth rate has been the fastest in the G7 over the last year.

You have created a record number of jobs.

And we are on course to cut the huge deficit we inherited by half.

But as the tide of the financial crisis recedes the sands of the global economy have shifted.

Brazil, Russia, India and China more than tripled their share of world trade over the first decade of this century. While the European Union’s declined by around 10% over the same period.

That rapid growth of emerging markets is set to continue. Over the next two decades, the global middle class is expected to expand by another 3 billion.

I believe that presents a fantastic opportunity. Britain has enormous entrepreneurial spirit and energy. And I think British businesses can compete in those new markets.

Just yesterday we signed a Memorandum of Understanding with the Chinese to promote further co-operation on rail projects in both countries.

This will ensure British firms have a fair opportunity to compete for business in the massive development of High Speed Rail in China.

To help you succeed, we need a competitive domestic business environment.

First, we need lower taxes and to cut unnecessary regulation. That’s why we have already cut corporation tax from 28% to 21%.

And from next year it will be just 20% – the joint lowest in the G20.

Building better infrastructure

The second thing we need to do is improve Britain’s essential transport infrastructure.

Two-thirds of IoD members say that transport is poor value for money.

That is the result of years of short term thinking.

Investment was lower than in 1998 in every year until 2011.

So it is no surprise that our roads and railways are among the most congested in Europe.

That’s why we are prioritising improving our national infrastructure.

In total, £24 billion will be invested in the strategic road network in this Parliament and the next. That’s enough to resurface 80% of the strategic road network. And by 2021 we will be spending £3 billion each year on improvements and maintenance.

This is the most significant upgrade of our roads ever.

We have also reformed the CAA to deliver better airport facilities and cut costs.

We are improving land access to our airports – including major investments at Gatwick and Manchester.

And we have established the independent Airports Commission to look at what capacity is required in the south-east over the short, medium and long term.

The Office of Rail Regulation confirmed recently that more passengers are using our railways that at any point in history.

That’s why we will also be investing £38 billion to improve and expand our railways.

Improvements include an extra 140,000 seats on peak services by the end of the decade, a major electrification programme, Crossrail, Thameslink, the Northern Hub and a multi-billion pound deal to replace intercity rolling stock.

But even that investment will not be sufficient to meet the projected demand.

That is why we need High Speed 2.

HS2

HS2 will be the first north-south railway for a century.

It will be the most significant upgrade in the links between London, Birmingham, Manchester and Leeds since the construction of the motorways and it will return over £2 worth of benefit for every £1 invested.

As I travel around the country, people’s questions about HS2 fall into three broad areas.

The first is whether it is actually needed.

The second is whether HS2 will simply suck more economic activity into London and the South East.

And the third is whether, when budgets are tight, we can afford to build it.

Let me take each in turn.

Everyone agrees that Britain’s railways are reaching capacity but people quite rightly ask whether the money we are spending on HS2 would be better spent elsewhere.

The first thing to remember is, as I have said, we will be spending £38 billion upgrading Britain’s railways over the next 5 years.

So this isn’t an either or question.

But even that record investment will not provide the capacity needed.

The West Coast mainline is one of the busiest stretches of mixed use railway in the world.

We’ve spent £9 billion upgrading it over recent years. But it still twists and turns too much to be efficient because it was never a dedicated north-south railway. It was the result of stitching together a patchwork of Victorian tracks in the 1920s. And as well as high speed intercity services, it carries stopping commuter services and huge amounts of slow moving freight.

That’s why even on moderate forecasts it will be full by the mid-2020s.

Adding further capacity would be difficult, expensive and result in years of disruption. So instead of spending more money upgrading the existing railway and getting diminishing returns, we are better off building a new dedicated north-south link.

As well as faster, more frequent high speed connections between our major cities, HS2 also frees up the existing railway for new uses.

We can run far more commuter services to fast growing towns like Milton Keynes or between Birmingham and the Trent Valley.

It means we can run more services across the Pennines.

It means that towns that don’t currently have direct links could do so with the capital.

And it means we can carry much more freight than is possible today.

The next question I’m asked is whether building HS2 instead of helping rebalance the economy will simply increase the dominance of London and the South-East.

It was William Cobbett who first described London as the Great Wen in the 1820s. Some still see the capital as a scar on the landscape.

I don’t.

We’re lucky London is one of the true global cities. McKinsey estimate that, by 2025, London will be one of the four largest city economies in the world.

So while some argue we need to restrict London’s growth to rebalance the economy between north and south, I think that would be a grave error.

When we talk about rebalancing the economy the aim shouldn’t be to make London and the South East worse off.

It should be to harness the potential of London as a motor for Britain’s economy. At the moment businesses locate in the capital because they want to be closer to their competitors and markets. That supports a thriving economy. But it also means that London and the south east are also increasingly full up. They are caught in a circle of rising house prices, some of the most expensive commercial rents in the world and transport congestion.

Transport infrastructure is among the most important things overseas business leaders look for when deciding where to invest. Great cities like Birmingham, Manchester, Sheffield, Leeds, Liverpool want to grow. So we can help by improving their connections with the capital and, perhaps more importantly, their connections with one another.

Finally, there is the question as to whether HS2 is affordable. Taxpayers want to know that we will be spending their money wisely.

Over two decades, the cost of HS2 works out at around £2 billion a year – around the same amount we are spending on Crossrail.

Crossrail is already demonstrating that we can build major infrastructure on time and on budget.

Thanks to Sir David Higgins’ leadership, I am confident the same will be true of HS2.

David has made clear that the best way to help him do so is to reduce any remaining uncertainty surrounding the project. That is why I am pleased there was a consensus on all sides of the House at Second Reading and we are on track for the Bill to be in Committee shortly.

So to sum up, I think we have a choice to make.

Our economy is growing again. But the world we live in is changing.

We could choose gentle, but steady, relative decline.

Or we can have the confidence to go for growth.

Personally, I am an optimist.

Britain has the incredible ideas, entrepreneurs and engineers and the world class businesses we need to compete.

We want to back you by providing the infrastructure you need.

That includes HS2.

I look forward to working with you to help that to happen.

Thank you for listening.

Below is the text of the speech made by Patrick McLoughlin, the Secretary of State for Transport, at the Rail Industry Day on 9th April 2014.

Ladies and gentlemen – welcome to the QEII centre and Rail Industry Day 2014.

I’d particularly like to extend a warm welcome to colleagues who have joined us from overseas.

You will be hearing a lot of the detail behind our plans for improving and expanding Britain’s railways over the next few hours.

So I thought I would start with the big picture.

We are here today (9 April 2014) because we are ambitious for Britain’s railways and the rail industry.

Over the past 20 years they’ve been a major success story.

But we all know our railways can and must improve further.

They will need carry more people and more freight.

They will need to become more punctual and reliable.

And they will need to continue to build on their excellent safety record.

Doing so requires a long term commitment to investment.

That’s why we are backing Britain’s railways with £38 billion through control period 5.

It will fund projects across the whole of the UK to give us the modern, efficient railways that we need to compete.

We are also going to build High Speed 2.

The first north-south line for a century.

Our ambition for Britain to have world-class railways.

Will generate huge opportunities for your businesses to grow further.

To compete both here and overseas.

And to create and sustain thousands of jobs.

All of which will boost the economy.

We’re not just investing in the infrastructure.

We’re also investing to help people get the skills the industry needs.

For example, Crossrail’s Tunnelling and Underground Construction Academy is already training people like Rudy Nieddu.

He’d previously been self-employed as an electrical labourer.

But there were times when the work just wasn’t there and he didn’t get paid.

He’s now undertaking his apprenticeship with BBMV building Whitechapel station.

Providing Rudy with a secure income and a skilled job.

And BBMV with an enthusiastic and highly skilled employee.

HS2 will see the creation of the first new further education college for 2 decades.

Supplying the additional skilled professionals required to make HS2 a success.

Our ambitious rail programme is also attracting new inward investment.

From companies like Hitachi, which is moving their global rail business to the UK.

Joining big manufacturers like Alstom, Bombardier and the many others who are already based in Great Britain.

Hitachi plan to double the size of their business and to sell more here and export abroad.

It’s a real vote of confidence in engineering and manufacturing in Britain.

The investment along will create almost 2000 jobs in the north-east.

But it also means there are even more opportunities for the UK supply chain.

So our rail programme is not only good for people who use the railway, it’s good for the health of the economy too.

Finally, I’d just like to say a brief word about the new Rail Executive.

Because it’s not just about the size of the investment we are making in Britain’s railways.

It’s also about getting much better value-for-money.

So we are changing the way we operate. Clare will provide more of the detail.

But the headline is this change will help strengthen our focus on passengers.

It will build commercial expertise and innovation.

It will ensure greater coordination of improvements to track and trains.

And it will increase the department’s capability and the commercial experience of the management team.

In conclusion, we are putting record amounts of government funding into our railways over the next 5 years.

And we are building High Speed Two.

They are an investment that is central to our long term economic plan.

Because faster journeys, greater comfort and better punctuality for passengers generates growth, creates jobs and boosts business.

You have a great day ahead of you.

I hope you enjoy it.

And thank you all for coming.

Below is the text of the speech made by Patrick McLoughlin, the Secretary of State for Transport, at Derbyshire Cricket Club on 10th April 2014.

Thanks for that welcome.

And thanks for inviting me today (10th April 2014).

It’s an absolute pleasure to be at Derbyshire County Cricket Club once again for the Rail Forum conference.

A year ago I stood here and talked about some of the challenges, and opportunities, we face. First, as a government. Second, as an industry.

I explained how it’s our job in government to create the right environment for your businesses to grow. And how it’s your job to compete and take advantage of opportunities as the economy recovers.

Well 12 months on from that speech, we’ve made excellent progress.

The economic outlook is considerably brighter.

By sticking to the Chancellor’s plans, Britain is recovering far faster than anyone expected.

Faster than Germany.

Faster than Japan or the US.

And three times faster than the independent Office of Budget Responsibility predicted at last year’s budget.

We’ve helped build the right conditions for growth by cutting corporation tax and reducing regulation.

Manufacturing is up.

Unemployment claims have fallen by almost a quarter.

And over the coming year, we expect to reach a key milestone – by cutting the deficit to half the level we inherited.

But we didn’t just inherit a fiscal deficit.

We inherited an infrastructure deficit too.

And a crowded and congested transport network that was holding back our economy.

So we’ve made a very significant commitment to prioritise infrastructure spending, particularly on the railway.

And now we’re seeing tangible evidence of that investment benefiting Derby’s rail cluster, with many companies stepping up to the plate, innovating and competing for new business, and by doing so, further strengthening Derby’s reputation as a world class centre for rail expertise.

Just last week, the Derby Telegraph reported on hundreds of new rail jobs that are being created in and around the city.

With companies like Interfleet Technology and Van Elle expanding and gearing up for the electrification of the Midland Main Line.

It quoted the Derby and Derbyshire Rail Forum, saying that the upgraded link to Sheffield and London would see “enormous opportunities” for the local supply chain.

Of course that’s not the only piece of good news the local rail industry’s had recently.

I was delighted to announce a few weeks ago that Bombardier had successfully landed the rolling stock contract for Crossrail.

The benefits of this contract will be felt across the sector – and across Derby.

Because Bombardier will channel at least a quarter of the contract value through small and medium sized companies.

The challenge now is to build on these achievements.

Because we’re entering a period of historic opportunity for Britain’s rail industry.

And with the biggest conglomeration of rail firms in the country, it’s certainly a huge opportunity for Derby.

Already, rail passenger journeys have doubled in just 20 years.

And passenger and freight demand is going to continue climbing for the foreseeable future.

We have to be ready for that growth.

So Network Rail will spend £38 billion over the next 5 years on maintenance and improvements.

Providing more trains, more seats, and better stations.

Improving reliability and performance.

But even this substantial figure won’t provide all the capacity we need.

Busy arteries like the West Coast Main Line will be overwhelmed if we don’t take action.

That’s why we need High Speed 2. To boost capacity on north-south routes by almost 20,000 seats an hour, and free up space on the existing railway for more commuter services.

The construction of HS2 will also ensure a long-term pipeline of rail investment.

To sustain thousands of engineering jobs across the country.

This will be the biggest transport infrastructure project in Britain since the coming of the motorways.

To equip the industry for the challenges ahead, we’re investing in training and skills.

The Crossrail Tunnelling and Underground Construction Academy is teaching a new generation of engineers.

And we’ve begun the search for a place to host the new High Speed Rail College.

From 2017, the college will teach some of the brightest engineering and construction students in Britain.

Providing them with the specialised training and qualifications they need to work on HS2 and other future infrastructure projects.

As part of the bidding process, we want cities like Derby to tell us why they are best placed to shape and develop these young talents.

And how their long established links with industry will help students find the right job.

In the long term, we want to export British rail expertise gained with HS2 to other countries developing their own high speed rail networks.

So the High Speed Rail College has an exciting future – as will the town or city which successfully bids to host it.

Our ambition is to develop a world class railway for Britain once again.

Managing such an ambitious plan brings its own challenges.

So, as you’ve heard from Clare Moriarty earlier today (10 April 2014), we’re making some changes to the way we operate at the DfT, with the launch of our new Rail Executive.

The Rail Executive is tasked with managing the relationships between different parts of the railway, getting better value for money for both the farepayer and the taxpayer, and focusing more strongly on the customer.

Now that the investment for the network has been secured, the Rail Executive’s priority will be effective and efficient delivery.

We’ve seen fantastic growth, for example in the King’s Cross and St Pancras area, which has become a destination in its own right; but also at Nottingham, and the Northern Hub. All of which means that the prospects for this industry are looking up.

We’ve set out a programme to revitalise the railways.

What we have to do now is put it into practice.

And in doing so, help your businesses to grow.

It’s fitting, perhaps, that 2014 marks the 175th anniversary of the railway coming to Derby.

Because I think our Victorian rail pioneers, like Derby’s own Sir Charles Fox, can help inspire a new rail renaissance in this country, including the first new north-south railway line to be built for more than a century.

The lesson we can learn from them is that we have to think big.

We have to be ambitious.

And we have to grasp opportunities while they’re available.

So on that note, can I thank you for listening – and wish you all the best for the next year.

Below is the text of the speech made by Patrick McLoughlin, the Secretary of State for Transport, in Manchester on 24th January 2014.

I’d like to thank John Kershaw, Chairman, Manchester Civic Society, for inviting me here to speak today (24th January 2014).

And it’s a great place to do it.

This is a city built by transport – canals, railways, roads.

After all, it was in this hotel, the Midland, in 1906 that Rolls first met Royce.

And not far from here you can still visit the station of the world’s first passenger railway.

Though, come to think of it, the day it opened a Cabinet Minister stepped in front of a train and was mown down. Not a precedent I want to see repeated!

The fact is Manchester’s pioneering business leaders were powerful voices constantly and consistently advocating for the new railway’s construction. Because they knew it would transform commerce and open new markets.

I’m sure you can see where I am going here.

But before I get on to High Speed 2, I’d like to say a few words about why we are making a record investment in transport.

What that means for Manchester and the north west.

And later I’d like to take some time for your questions.

In 2010 we inherited an economy that was heading for the rocks. According to the IMF, by 2007 Britain had the largest structural deficit of any G7 nation.

And for too long growth was concentrated in London and the south east. Between 1997 and 2010 London’s economy grew a third faster than that of the north.

We want to build a stronger, more balanced British economy. One that delivers long-term growth across the country.

There are signs that the tough decisions we have taken are working.

The deficit is already down by a third. By the end of last year business activity was growing fastest in the north west and we entered 2014 with the fastest growing economy in the western world.

There was more positive news this week. The fastest quarterly growth in employment since records began and the IMF predicted that the economy will grow by 2.4 percent in the coming year.

But we didn’t just inherit a fiscal deficit. We inherited an infrastructure deficit too.

Demand for long distance rail travel has doubled, our roads have got busier and growth in demand will continue.

But investment hadn’t kept pace.

We were falling behind our competitors.

By 2010 the World Economic Forum ranked the UK 33rd for the quality of our overall infrastructure. That’s well below the EU average.

Already 4 out of 10 drivers on the M60 are delayed and Manchester has the most crowded evening peak time trains outside of London.

Congestion alone is expected to cost business £10 billon a year by 2025. So we need to improve our infrastructure or the economy will grind to a halt.

That’s why we will be investing more over this decade than over the whole period of the last government.

We are making a significant investment in Manchester’s transport infrastructure and ensuring you can take the decisions needed to help business compete.

We are investing £267 million to improve the M60, reducing congestion on that vital road artery.

Demand for international travel is growing rapidly and we want to help you get the best from the new Enterprise Zone. So we are improving links with the airport. By extending Metrolink and building the long-needed link road east to the A6.

We will also deliver the £530 million Northern Hub rail programme. It will unlock capacity between Manchester, Glasgow, Leeds and Sheffield and finally bring back non-stop services to Liverpool from May this year.

The Northern Hub will deliver more trains and faster journeys on transpennine services, cutting ten minutes off journeys from Manchester to Leeds and more, quicker services to Bradford and Sheffield.

In total 700 more trains will run between the major towns and cities in the North every day.

We are also investing almost £50 million rebuilding Manchester Victoria station.

From a station the public rated Britain’s worst, to a modern gateway the city can be proud of.

I’d like to take this opportunity to thank the engineers from Network Rail and its suppliers who worked so hard over Christmas and New Year at Manchester Victoria – and across the network. They did a fantastic job in tough circumstances.

But it’s just one of those investments – High Speed Two – that I want to focus on because improving our existing infrastructure will only get us so far.

The West Coast Mainline serves half of the ten largest cities in Britain and at some point carries almost half of rail freight.

And that combination of long distance, local and freight traffic means the line is filling up. And like any system run at near capacity, the West Coast mainline is vulnerable to snarl ups and delays.

Of course, some people say we don’t need HS2 to provide the additional capacity that is needed. For example, we could lengthen some trains and encourage people to travel at different times.

And where we can, we will do all this. But quick fixes will not solve the long term problem.

We’ve already spent £9 billion upgrading the existing West Coast mainline.

Twenty years ago there were fewer than 20 trains from Manchester to London each day. Now there are more than 45.

The cuttings, tunnels and viaducts that remain are Victorian masterpieces. But they’re not simple to extend. Widening the existing line would be like trying to drive the M6 down the Wilmslow Road.

Longer trains alone will not create the additional capacity we need to move more freight. That means around half a million truck journeys on the roads that could be carried by rail.

And it doesn’t create the additional capacity required for new routes. That will leave Lancashire towns like Blackpool without direct mainline services.

So we need a new north-south rail line.

More capacity will benefit inter-city, commuter and freight services, links that will support enterprise and change the UK’s economic geography.

But I know that capacity isn’t the only thing that matters about HS2. We need to build it within or under budget. We will.

The budget for HS2 is £42.6 billion. Not £80 billion. That is an upper limit including £14.4 billion contingency and we will reduce costs where possible. I have also asked the new Chair, Sir David Higgins to look at where we can speed up construction.

Because I am absolutely determined High Speed 2 will be delivered on time and on budget and get the benefits to the Midlands and the north as soon as possible.

That’s one reason why I was disappointed that we were taken to the Supreme Court this week – though not disappointed by the outcome.

It was seeking Judicial Review on a technicality. They had already lost at the High Court and then lost again at the Appeal Court. But still they appealed to the Supreme Court. It was a waste of their time, of your time and of taxpayers money. I’m pleased the Supreme Court has now found in our favour so we can get on.

HS2 will generate approximately 20,000 additional jobs for Greater Manchester and add £1.2 billion to the regional economy over the long term. This is an investment we can’t afford not to make.

We are proposing 2 stations in Greater Manchester, one in the city centre and the other at the airport. And we are nearly at an end of the consultation on the second stage of the route.

You are the experts at what Manchester needs to thrive.

If you have not done so, I want to encourage you to respond to the consultation. It closes at the end of the month (January 2014). It is your knowledge and expertise that will help ensure Manchester gets the best from HS2.

In conclusion, for Britain to succeed, Manchester has to prosper. I believe this great city will be as much of a powerhouse in twenty-first century as it was in the last. That’s why we are investing in Manchester’s success.

We are building HS2 so even more people can see Manchester’s past and become part of its future growth. Manchester’s Victorian leaders left us a lasting legacy in the shape of Britain’s railways.

I hope you can continue to be just as powerful advocates for the benefits of HS2 – advocates for its importance to this city and to our country’s future.

Below is the text of the speech made by the Secretary of State for Transport, Patrick McLoughlin, on rail privatisation. The speech was made on 12th November 2013 at the European Rail Congress.

Thanks for that introduction.

It’s a pleasure to join you today.

This is an industry with an increasingly international – indeed global – outlook.

So it’s great to welcome delegates and speakers from across Europe to London for this inaugural European Rail Congress.

It is fitting that the subject of my speech this afternoon is “rail growth through competition.”

Because the UK railway was privatised almost exactly 20 years ago.

In fact the Railways Act came into effect on November 5 1993, breaking up the state-run British Rail, and transforming the face of our railway for ever.

Nobody back then could have predicted the extraordinary changes that have taken place over the subsequent 2 decades.

So today I want to reflect on the UK’s experience of privatisation.

On the many benefits that it’s brought to us as a country.

But I also want to talk about the challenges we’ve faced.

And the lessons we’ve learnt along the way.

Let me start by taking you back to the late 1980s.

I was a junior transport minister in Margaret Thatcher’s last government.

And I remember what our railway was like under a single, publicly-owned operator.

Rail was an industry in decline.

In fact it had been declining since the motorways were built in the 1950s and ‘60s.

The infrastructure was in need of urgent attention.

Reliability was poor.

And like other monolithic state institutions, British Rail had a culture that hampered rather than encouraged innovation.

It’s true that public subsidy under British Rail was comparatively low, but that reflected underinvestment in tracks and trains, rather than an efficient and sustainable business model.

We knew things could be better.

Because we’d already successfully sold off other utilities, like British Aerospace, British Gas, and Rolls-Royce.

Introducing competition.

Improving performance.

Widening share-holding.

And reducing the burden on the taxpayer.

It was against this background that we privatised the railway.

But expectations weren’t high.

Rail travel had dwindled to such an extent that most people thought the private train operators would manage a decline in both passenger and freight traffic.

How wrong they were.

Privatisation sparked a railway renaissance.

Since 1993, passenger journeys have doubled in the UK to a level not seen since the 1920s.

On a network roughly the same size as 15 years ago, today our railway is running 4,000 more services a day.

And rail freight has grown by 60%.

Revenue is up more than £3 billion since privatisation, almost all of it due to higher passenger numbers rather than fare rises

Safety levels are at an all time high.

Punctuality is at near record levels.

And passenger satisfaction is up by 10% over the past decade.

None of this would have happened without privatisation.

Without competition.

Without franchises investing in better services.

Without an industry structure promoting accountability and incentivising growth.

Yet the job is far from over.

We still face some considerable challenges – challenges that must be met if we’re to build on the achievements of the past 20 years.

The first is: how to meet rising demand.

Because we didn’t just inherit a record public deficit in 2010 – we also inherited an infrastructure deficit.

Our main intercity network was built to serve a Victorian economy, not a 21st century one.

Historic underinvestment left the railway ill-prepared to meet soaring demand – which was triggered not just by privatisation, but also by 15 years of subsequent economic growth.

By 2010, the railway was in need of urgent investment, both in the short term, and in the longer term, to achieve a step change in capacity.

We therefore embarked on an unprecedented rail modernisation programme.

Between 2014 and 2019, infrastructure operator Network Rail will spend over £38 billion running and expanding our railway.

Improvements include an extra 140,000 seats on peak services by the end of the decade.

A major electrification programme.

A multi-billion pound deal to replace intercity rolling stock.

And a new high capacity railway for London and the south east called Crossrail.

But even this ambitious package of improvements will not provide us with the space we need to grow.

Major routes like the West Coast line will be overwhelmed by 2025 if we fail to act.

So we are currently taking a Bill through Parliament to deliver HS2 – a new high speed rail network for the UK.

With construction due to start in 2017, HS2 will connect London with Birmingham, Manchester and Leeds.

It will boost capacity by almost 20,000 seats an hour.

And it will slash journey times between 8 of our 10 biggest cities.

HS2 will free up space on the existing network for more commuter services and freight.

It will give customers more choice about how to travel.

And it will make our railway more competitive.

And that brings me onto the second major challenge.

Getting down costs.

By 2010, our railway was the most expensive in Europe.

At a time when we faced the largest public deficit in UK history, and when we made a commitment to tackle waste and profligacy across government, reducing the cost of the railway became an urgent priority.

We’ve made good progress.

The rail subsidy for England and Wales fell from £4 billion in 2009 to 2010 to £3.2 billion in 2011 to 2012.

We’ve tasked the industry to make savings of £3.5 billion a year.

And we’ve put a lid on expensive fare rises.

This is just the start.

There is still a long way to go before we hit our cost saving targets, and before we can achieve our goal of ending above-inflation fare increases.

Turning round the performance of such a huge industry is a big job.

But it’s one we are determined to finish.

The final big challenge is modernising the railway for the customer.

Fares and ticketing, for example, is still complex and impenetrable.

So we’ve recently completed a major review of the fares and ticketing system.

By making it simpler and more user-friendly, more people will travel by rail, and they’ll also have a much better experience.

So we’re trialling a flexible ticketing system which will meet the needs of individual travellers.

Ultimately, we would like to see passengers use smartcards for use across the network, and on different types of transport.

Operators are investing in better stations, better trains and better facilities.

But to improve the railway for passengers, we’re also encouraging them to collaborate more closely with Network Rail.

One operator, South West Trains, has joined with Network Rail to create a single management team responsible for both trains and track.

This kind of joined-up working isn’t bad for competition.

Neither is it an end to the market.

It’s an example of how to make things work.

And how to respond to the needs of passengers.

There are enormous gains to be made from aligning objectives, so that different parts of the industry do what they do best for the benefit of passengers – whether it’s selling tickets, running signals or fixing track.

So 20 years on, what have we learnt from privatisation?

Well, we’ve learnt that it can transform the fortunes of the railway.

Turning decline into growth.

Boosting revenue, and passenger satisfaction.

But we’ve also learnt that growth must be managed in a sustainable and responsible way.

We failed as a country to plan for growth.

To look beyond our immediate needs and build for the future.

And to keep a close control of costs.

Now we’re sorting out these problems, our railway is in a better position than it has been for decades.

Franchising might still be criticised by those who want to turn backwards.

Who haven’t learnt any lessons from the past.

But now we’ve got a structure that’s working.

Encouraging innovation through competition.

Allowing the private sector to do what it does best.

But also collaborating for the benefit of the customer.

And building the capacity we need to grow.

Rail privatisation has made Britain a better country.

But if we heed the lessons I’ve talked about today, then we can look forward to an even brighter future.

Thank you.