[Check Against Delivery]

1. Britain now has the fastest growing railway in Europe.   It’s a fact that we can be rightly proud of.

2. Last month I gave the go ahead for over £60 million to be invested in fitting out the new Thameslink station at Kings Cross / St Pancras.

3. It will allow passengers to get direct access to the refurbished St Pancras International and Eurostar services to the continent from late next year.

4. The Channel Tunnel Rail Link will link London to the continent by its first high speed line. More than that, it will allow rail links from London to the Midlands, to the North of England and to Scotland. 

5. And in 2009 commuters will be able to travel from east Kent and the Medway towns at vastly improved journey times on a new generation of high speed trains.

6. And during the Olympic Games to be held in London in six years time, spectators using the station to travel to and from the games will see a world class transport interchange in the heart of London. 

7. St Pancras will have undergone a complete modernisation, the Underground station at Kings Cross will have been rebuilt and Network Rail's plans to redevelop the Western Concourse at Kings Cross station and increase capacity will have been completed.  Transport we can be proud of.

8. I have visited St Pancras and seen at first hand the scale of the work.  It is an excellent example of the benefits substantial investment in transport can bring - and the real improvements to journey times and reliability that can be made. It is also an important investment in Railway Heritage. It has taken time to deliver, but it is worth it.

9. Spending has doubled over the last few years making up for decades of underinvestment. And we are seeing the results. Rigorous cost control remains essential as it will in the future. But let's be clear - we do have a growing railway.

10. We want to see more passengers and more freight carried by rail. That doesn’t mean that there won't be timetable changes, or that when people don’t use services then we shouldn’t look at them closely.

11. I have said before that we cannot be in the business of carting fresh air round the country. Any healthy, confident business should be prepared to look at the services it provides and consider where there is demand, and how best to meet it.

12. That’s not Beeching - its common sense. And it frees up trains and resources for where they are needed to meet the real demands of a growing network. So let's be confident about Britain's Railways.

13. For much of the last four years I have spent most of the time asking the industry to concentrate on one thing above all - reliability. That's the way to build confidence. And that’s been happening.

14. And steadily over the last four years the railways have got better and a lot of this is down to the determination of those who work in the industry to sort out the problems of the past.

15. We were right last year to put a new structure in place to allow the industry to develop. Train and track are working more closely together - the introduction of joint control centres is a good example. Network Rail has reduced delays by nearly a third since it took over.

16. There have been real improvements in performance and reliability since 2001. On many lines 90% of passenger trains are now running on time. New rolling stock is coming into service, about 40% has been replaced in the last 10 years. And costs are slowly but surely being brought under control. Network Rail has regained a lot of the ground lost by Railtrack's incompetence.

17. And investment is beginning to deliver real results. The power supply south of the river Thames, or the improvements to the West Coast Main Line for example. Last December, I travelled on one of the new Pendolino trains from Glasgow to London where the journey time has been reduced by almost 50 minutes.

18. Passenger numbers from the North West in particular have substantially increased. They are taking passengers from airlines and from the roads. That’s good for the environment and helps cut congestion on the roads.

19. And the Trans-Pennine Express Franchise is delivering over £250m investment between Manchester and Hull linking towns and cities, including an entire new fleet of over 50 trains with, improved service quality and increased capacity.

20. Improving reliability needs constant attention, now and in the future. But now - we need to plan ahead for a growing railway. Not just for the next five or ten years, but for the next thirty.

21. We have done that in relation to airports, where we set out what was needed over the next three decades in the White Paper we published in 2003 .

22. We are doing the same on roads, for example looking at the benefits that road pricing might bring.

23. For the first time in nearly 50 years this is now a billion passenger railway. Within 20 years it will grow to about 1.3 billion passengers. The industry predicts similar growth for freight.

24. So it is essential now that we plan ahead for this growth and today I would like to set out how we intend to approach that challenge.

25. Now, it is for Government to set the strategic direction of the railway because only Government can decide how much to spend. The decisions that we take now will shape the railway for generations to come. We have a once and for all chance to get this right, to stop playing catch up and to plan ahead like any other business.

26. Next year we will set out firm plans on what we want to buy over the next five years to achieve the capacity, performance and safety we need, as well as the critical major projects, in what is called the High Level Output Specification

27. But that is only one part of what is needed. we also need to set out the future shape of rail for the longer term - over the next 20 - 30 years. A credible long term rail strategy that will provide a sense of direction and continuity for the industry and a clear positive message about the prospects for passengers and freight.

28. So alongside the High Level Output Specification, we will publish our long term strategy.

29. This will allow the railway to play its part in our plans for productivity and long term economic growth. And the strategy will be informed by the work being done by Rod Eddington on the UK's long term transport needs.

30. This will be the long term plan for the industry. I want to mention three important areas it will cover.

31. First capacity. Nearly ¾ of all railway journeys are into or within the South East, where space is at a premium. And across the country, passenger growth has risen by up to 70%, putting real pressures on the system.

32. As part of this, we have already started the process of procuring the next generation of high speed trains to replace the existing fleet. The new trains will be in service for the next 30 plus years. I will say a bit more on this shortly.

33. Second - and linked to this, our environmental objectives. Railways will play an important part in meeting our environmental obligations in the future - and there are big issues here that need to be addressed.

34. And third - how to meet the changing and rightly   increasing expectations of passengers. All of us expect more in terms of customer service and reliability when we choose how to travel. Rail travel should be as easy as possible.

35. But the biggest challenge we face in the future - managing capacity to meet the expected growth in passenger and freight numbers.

36. There are two main pressure points.

37. First - increased demand. As the economy grows more and more people will need and want to travel and travel further. Demand for goods will grow across the world.

38. Second - to ensure good transport links between towns and cities, and between ports - both sea and air. Road and rail need to be improved both for passengers and for freight. This is essential for a growing economy like ours.

39. In London, with the development of Thameslink and Crossrail, we will have the backbone of a robust network in the future.

40. But we will face significant growth - perhaps 30% or more over the next 20 years. And we need to accommodate much of that growth within the present infrastructure. So we need to get the most out of what we have.

41. There are many ways to increase capacity. We need to consider them all. From train layout and length, timetabling efficiency and turnarounds, particularly at mainline stations, to the re-examination of gauge and looking at double decker trains. What works will vary across the country.

42. We need to ask what passengers need from the service. But we also need to be tough on identifying the real cost benefits. In this industry you can spend a lot very easily. People expect us to be tough on costs and we will be.

43. Britain's towns and cities will drive our economic success in the future. Birmingham, Leeds, Manchester - and they will all face growing pressures. That is why we need to act now, both on road and rail.

44. The capacity problems they face are different to London, because people's travel patterns are different. The peaks are much shorter and more pronounced. But if we want our towns and cities to grow we need to support them - and so these problems need to be addressed.

45. As part of setting the strategic direction, we need to be clear about how we can expect rail demand to evolve over the next 20 to 30 years and how we intend to respond to that. And that includes how we intend to work with changing structures of local governance, such as the proposed city regions.

46. And as I said earlier this year, decisions on road, rail, bus and tram need to be looked at together by the same people, so that sensible choices can be made and priorities decided on. The present structures don’t help to do that in many places.

47. It does happen in London with Transport for London and now throughout Scotland. We can learn from the experience and build on it - and this is one of the areas being currently looked at through the work of City Summits.

48. Delivering the replacement of the High Speed Train Fleet - the Inter City 125's is one of the key projects being led by the Department. It is an important part of expanding capacity. The existing fleet has served passengers well for almost thirty years, and we want to make sure the new fleet matches its success, but meets the needs of the next generation.

49. The process for design and procurement of the new High Speed Trains is already underway. The department and the industry are working together to look at he technical, commercial and financial issues in detail and I expect to be issuing invitations to tender by Spring next year.

50.   Already we can see the positive effects of closer working between Government and the industry on this project. Experienced passenger operators are working closely with Network Rail engineers to think about what will work best for the whole system.

51. The Rail Industry Association is involved to ensure the design is deliverable. And Passenger Focus, representing the passengers, are closely involved to ensure we get a design that will work for passengers.

52. But we are also looking for a design that will meet our environmental requirements - and this brings me to my second point.

53. We will come under more and more pressure to meet out environmental obligations in transport – and rightly so.

1. Some would think this is obvious. Rail is considered to be one of the greener ways to travel. It is, but only up to a point. When we look towards the next 20 to 30 years the picture is not as straightforward. Twenty cars today now produce fewer emissions than one car built in the 1980's. Rail, in comparison, has not done as well as it could.

1. Things are changing. For example the High Speed Train fleet on Great Western and on the East Coast Main Line will soon be re-engined with new, low-emission engines, which deliver an 18-20% reduction in fuel use.

1. But elsewhere the picture isn’t so good. European rolling stock has been getting heavier. The weight of a Pendolino for example is equivalent to half a Landrover Discovery for every seat on the train. This causes a lot of wear and tear on the track. In comparison Japanese trains are down to under 500kg per passenger and falling,

57. So when we look at the design of the new High Speed Trains and their impact on the environment, we need to consider the whole working life of the train - from the emissions across the system, and the possible technological advances over the whole life of the vehicle, as well as noise and materials and disposal.

58. And in the future the environmental challenges will be much broader.

59. Noise pollution. Land Contamination. Climate change. Land-take and biodiversity. And we need to measure the environmental footprint of the whole industry – including infrastructure work, maintenance and construction – and not just the impacts of the trains that run on it. This will play an important part and we need to get it right.

60. And with the continued improvements to the service through the Channel Tunnel Rail Link, we need to consider whether we should extend the high speed railway line to the North out of London.

61. No decisions have been made but as I have said before, we need to rigorously examine the merits of High Speed Lines in this country.

62. A high speed line could improve journey times and bring potential economic benefits such as the billions of pounds worth of regeneration that has happened in the Kings Cross area and the Thames Gateway as a result of CTRL for example.

63. It could, provided we get it right, bring environmental benefits by getting more people out of their cars and off aeroplanes. But this would be a massive project and we would need to be sure that we achieve the right solution.

64. We face a complex number of challenges - capacity, supporting economic growth, regeneration and increasingly the environment. These trains use a lot of energy.

65. A High Speed Line could be the answer, but we understand the complexities of the problem. Which is why this is one of the key areas I have asked Rod Eddington to look at as part of the work he is doing on transport in the long term. This is a big decision and we need to get it right.

66. Thirdly, lets remember the passenger experience. People want more. We need to remember that passengers ultimately have choice about how and when they travel. You are in competition every day with other forms of travel. The pace of change is rapid.

67. Passengers are becoming better off. They are used to using smartcards and e:money to pay for journeys, they access the internet for travel information, or their mobile phones.

68. They will want more and better facilities. This is not going to happen overnight, but over time, rail must respond. It must be where its passengers are (in 24 hour cities) and give them what they want (information, integration of travel, smartcards, etc).

69. These are all huge questions – and they will present massive challenges in the future.

70. So, for the first time in a generation, we have created the conditions of stability, in organisation, structure and funding from which to build a railway which will meet the needs of the future.

71. And this stability is matched by a commitment from Government to publish a strategy next year that looks to the long term. The opportunity is there, and I am confident that if we work together we can deliver what is needed.