HC Deb 31 July 1978 vol 955 cc144-64

Lords amendment: No. 12, in page 11, line 17. at end insert new Clause D— ("D. It shall be the duty of the British Railways Board to run all sections of its business in such a way so as to improve the service to its customers, reduce its costs, improve its productivity, increase its efficiency and reduce its reliance upon subsidies or grants whether under this Act or any other measure.")

Mr. Horam

I beg to move, That this House doth disagree with the Lords in the said amendment.

It is impossible not to regard this amendment without a surge of sympathy. No one who praises virtue could be against the sentiments expressed in it. Anything that is desirable in any public transport enterprise, except possibly lower fares, is contained within it. It appears to be a distillation of the Government's policy for the railways, culled from our White Paper on transport policy and dressed up as legislation.

However, the drafting clearly implies that the duties placed on the British Railways Board by the Transport Acts of 1962 and 1968 no longer apply. That is not so. The existence of these statutes, one brought in by a Conservative Government and the other by a Labour Government, could give rise to serious difficulties if the amendment in its present form were to reach the statute book.

For example, Section 3(1) of the Transport Act 1962 still applies to the British Railways Board. It provides that it is the duty of the Board to provide railway services in Great Britain … and to have due regard … to efficiency, economy and safety of operation. It is not clear how the duties that would be imposed by this amendment would stand in relation to the duties imposed by the 1962 Act. For example, would the new duty to reduce costs override the existing duty to have regard to safety of operation?

Section 41(2) of the Transport Act 1968 still applies to the British Railways Board. It imposes the normal duty to break even, taking one year with another, over all its activities. It is not clear how the new duties would relate to this existing one either. Would the new duty to improve services in all sections of the business override the duty to break even?

The Railways Act 1974 makes the Secretary of State the competent authority for giving directions to the Board, imposing on it obligations of a general nature for the operation of the railway passenger system. He then has to pay it compensation provided for under the EEC regulations. It is plain that in principle the Board could be given a direction which would conflict with the new duty to reduce its reliance upon subsidies or grants—a very important part of the amendment.

The amendment shows a very praiseworthy concern to promote virtue in railway administration, but a somewhat confused notion of the effects and purposes of the existing legislation. It would place new statutory duties on the Railways Board, but let us look at what the Board has achieved without the benefit of these rather vague new duties. For example, it has, with the co-operation of the railway unions, reduced manpower by more than 12,000 since the beginning of 1975. Although no one can pretend that further progress on productivity will be at all easy, it is from increased productivity that the other virtues in this amendment—lower costs, increased efficiency and reduced reliance on subsidy—will flow.

Another achievement is that the Board has kept within the cash limits on passenger transport support, set in 1976 and 1977, and shows every sign of being able to do so in 1978. It has driven down the freight deficit and now seems likely to break even on its non-passenger business. Within the constraints of limited Government support, and an investment ceiling, it has continued to invest in modern rolling stock and better track and signalling, and continues to improve the service to its customers in terms of greater comfort and reduced journey times. It has taken note of the general pressure for increased accountability and has published more information this year in the annual report and accounts and elsewhere than ever before.

Today my right hon. Friend the Secretary of State has announced that the Board will publish additional statistical information on the lines proposed in recommendations 44 to 47 of the Select Committee on Nationalised Industries in its report on British Railways, with which this House is familiar. Hon. Members will agree that this is ample evidence that the Board is aware of the need to achieve the objectives of the amendment, and to demonstrate that it has done so. It is doing this without the benefit of statutory duties which the other place would impose upon it. Therefore, we should disagree with the Lords in their amendment.

Mr. Norman Fowler

The first point I wish to make about the amendment is that basically in transport policy there are many real divisions between the two sides of the House, and we rehearsed one or two of them earlier today, but I hope that on railways policy there is a substantial amount of common ground between the two sides. I am not pretending that we agree in every detail, but it has become clear in the past two and a half years that there is developing common ground on railways policy, and that is something that the House will welcome.

I had hoped that the sentiments expressed in this amendment would receive support from all those interested in the future of the railways industry. Whether this goes into the Bill is rather less important than ensuring that the aims set out should be accepted by the House and by the railway industry. There is no great issue at stake here.

We should remind ourselves that the Bill is making grants of up to £3,000 million to British Rail. That is the kind of commitment that is being made, and it is right to remind the industry of that. In all conscience, I do not believe that the industry can complain that not enough is being done in this respect. The annual operating subsidy of passenger services alone is more than £360 million. Given that kind of investment, the passenger and the taxpayer have a right to demand that all the aims set out in the amendment are achieved.

I wish to pick out two of these aims. The first is that of improving the services to the customer. It is right to put that at the start. Transport policy is essentially about seeking to meet the needs of the customer—the passenger or the freight customer with goods to move. If the railways fail to achieve this, they fail in everything.

Over the last few years rail services have improved. The new chairman, Sir Peter Parker, deserves great credit for that, as does his predecessor, Sir Richard Marsh, whom we are pleased to welcome to our camp, as I see from the Sunday Express. But, above all, credit goes to the thousands of people who work on British Rail.

Nevertheless, improving services is a continual process. There is an important part to be played by the transport users' committees representing the passengers' interests. They were set up essentially to put the passengers' case, or the customers' case, and I will not repeat the criticisms that I have already made of their present composition. Suffice to say that an incoming Conservative Government will want to review their work and will seek to give the passenger an independent and, above all, a strong voice.

The second point I emphasise is the aim of improving the productivity of British Rail. This is absolutely central and of the utmost importance. To call for high productivity is not to launch an attack on those who are working for British Rail. It is one of the major ways in which the other aim of meeting the needs of the customer can be achieved. The customer wants an efficient service at the lowest possible cost. Two-thirds of the operating costs are wages and salaries and it must follow that high productivity is the goal.

Sir Peter Parker said that productivity was the rock on which to build the future of the railways. That is not to understate the achievements of the vast. A substantial improvement in productivity has been achieved in the past 15 years, and the railway unions deserve credit for that advance. However, no industry can afford to reduce its effort in this respect.

The question that remains is how we should handle the relationship between Government and British Rail and between the taxpayer and British Rail. There is, in my view, no doubt about what our approach should be. I very much welcome what the Under-Secretary of State said in his brief remarks. I believe that the approach should be based on the maximum of open government and that the maximum information must be provided in respect of government, this House and the public.

Sir Peter Parker has spoken of the contract between the Government and British Rail. By that he means that British Rail enters into an agreement with the Government to provide services that cannot be met out of the fare box. There are other ways in which that concept can be expressed, but the central idea is acceptable—provided, and only provided, that the contract is as specific as possible. What is not acceptable is a system of total blanket support which does not distinguish between the costs of the different services provided by British Rail or between the costs of commuter services and the costs of, for example, Inter-City.

The reasons for separate accounts are not just reasons of public policy, important as they are. They also vitally affect rail passengers. The rail passengers also have a right to know the cost of the services which they are using and for which they are paying dearly. This applies particularly to the commuter who needs to use the railways to get to work.

This point was made strongly by the Price Commission in its report on British Rail. That report mentioned the discrimination in fares policy and took the view that any further discrimination against London and the south-east in subsequent fare increases would be difficult to justify until improved cost analysis enabled a clearer view to be taken on appropriate objectives on the balance of revenue as between London and the south-east and the rest of the system. That was the point which the Opposition have been putting consistently. We have emphasised that more information is necessary and that the passenger has a right to have that information to allow him to evaluate the service and the value for money he is receiving.

The question is how such a system of separate accounts can be devised. We in the Opposition have consistently put forward the case for such a step. Initially this was resisted by the predecessors of the present Labour Minister. The argument then advanced was that the network was the thing and that the whole system was indivisible. That is no longer the case because it is accepted by the Government that the accounts of British Rail can be broken down in a division between the major businesses—between Inter-City and London and the south-east, the PTE services and other country services as well as freight and parcels.

These matters are now common ground between the two sides of the House. The only dispute relates to the way in which such accounts should be presented. Previously British Rail used a system of cost allocation similar to that used, broadly speaking, by every other railway system in the world. British Rail criticised that as being unrealistic and not meeting its purpose. I believe that the criticisms were overstated, but in the past few years another system—the avoidable costs system—has been developed and great reliance is placed on that. I believe that the difficulties of the original cost allocation were overrated, but what is important is not so much the exact system, although we have argued about that, but that there should be a yardstick and that it should be produced as soon as possible so that Parliament, the public and passengers know exactly where they stand.

We do not intend to divide on the amendment. What the Under-Secretary said was fair and met the objectives of the amendment which are accepted by virtually every hon. Member. There is a great deal of common ground on policy towards the railways, and I hope that this will be recognised inside the House and outside and, above all, I hope that that position will be preserved.

9.15 p.m.

Mr. Anderson

The hon. Member for Sutton Coldfield (Mr. Fowler) used the amendment to make a number of unexceptionable comments about rail policy. I think that he will agree that many of the points that he put in a non-partisan way indicate that he is pushing at an open door in respect of, for example, greater information. The degree of statistical information available to hon. Members has increased in the past few years and the trend is very much in the direction that he suggested.

It was pleasing to note the non-partisan way in which the hon. Member for Sutton Coldfield spoke. Both sides of the House seem to agree that the amendment serves no useful purpose. Indeed, it is difficult to see what purpose was intended because it is not a comprehensive list of the various duties that should fall on British Rail. For example, there is no reference to safety or to good industrial relations. It is a selective list and is self-contradictory. It suggests that services should be improved and costs should be reduced, and there could conceivably be a conflict between those duties.

There is no guidance on which duty would prevail if a duty included in the amendment conflicted with, for example. the general duty under section 3(1) of the Transport Act 1972. There is also a conflict between section 41(2) of the Transport Act 1968, which provides that British Rail should break even on its activities as a whole, and the section of the amendment relating to the duty to run all sections of the business in such a way as to improve them. That presumably means that profitability is to be sought in each section.

In addition, there is no reference to a duty to obey Government policies on pay or cash limits. The suggestion is that the British Railways Board should serve many masters. It would be given many different orders. The amendment is a recipe for chaos.

It has also been suggested to me that the provisions of the amendment might be enforceable by any aggrieved individual member of the public and, taking the ACAS precedent, it might not be too fanciful to suppose that a member of the public could sue the Board if there were a continued failure of trains to arrive on time. I am not convinced by that suggestion, but it is at least a danger which has been mooted.

Clearly, this is a bad amendment. It is self-contradictory and contradicts British Rail's existing commitments. I am glad that both sides of the House agree that it should be resisted.

Mr. Nigel Forman (Carshalton)

I am glad to be able to take up the remarks of the hon. Member for Swansea, East (Mr. Anderson) as he and I share more interests than merely a common interest in the future of the railways and an interest in the well-being of the British-German parliamentary group.

We are discussing an important if unexceptional amendment that comes to us from another place. I entirely agree with the admirable sentiments expressed by my hon. Friend the hon. Member for Sutton Coldfield (Mr. Fowler). My hon. Friend said that in dealing with the railways the Government now seem to be getting on to the right track. That is long overdue.

Many of my constituents are hard-pressed commuters. I have about 4,000 commuting constituents, not to mention their families. They would be pleased to find the principles contained in the amend- ment pinned above every station master's door, in Sir Peter Parker's office and throughout the union headquarters of ASLEF and the NUR.

My constituents believe that they are supporting the railway system by patronising it heavily morning and evening, by using the service, by paying what are now steep fares and by contributing towards the public service obligation in the form of their taxes. They feel that they should be getting the best possible value for money from the railway system.

I turn briefly to the various subheadings in the amendment. It is right to stress that British Rail's prime duty is to the customer. I pay tribute to the way in which British Rail has recently drawn much more attention to that duty in its marketing efforts and in other ways. The indications that British Rail is trying to reduce its costs involve a more double-edged consideration. A more realistic view would be that British Rail should at least try to contain its costs and to contain any unavoidable rising costs.

We are all aware from the position on the Continent of the difficulties of running any public railway system, especially in areas where it cannot be economic because of the rush hour and the under-utilisation of the rolling stock for many hours of the day.

As my hon. Friend the Member for Sutton Coldfield has already observed, the key to the amendment is productivity. I need not weary the House by repeating what he said. Suffice it to say that my constituents regard the need for increased productivity in British Rail not as an empty slogan. It is an issue about which they care passionately. They are having to use the system day in and day out to get to work. They have to find the money to pay their fares and to buy their season tickets from post-tax income or disposable income. That is not easy for anyone these days. It used to be thought that those who commuted to London were extremely rich. That view is totally belied by the evidence.

One of the keys to increased productivity is not the negative approach to which the Minister referred, such as the decline in manpower, but the need to get a larger, more efficient and more thriving railway system. If we can boost passenger miles and if the manpower element does not increase disproportionately, costs not only may be controlled but should be reduced as a proportion of total costs. I should like to see increased efficiency come about through a larger and more effective railway system running services tailored to the needs of the customers, especially commuters.

The amendment refers to reducing the reliance on subsidies or grants. I merely say to the House that we have to pay for a railway system somehow. In so far as the necessary finance cannot be obtained from subsidies or grants, it has to come from increased efficiency, increased productivity and fares.

I very much hope that the Minister, the Government and the management of British Rail have taken fully on board the salutary warning in paragraph 5.4 of the Price Commission's report. 'Those of us who represent people who commute into London know that these groups have tended to be discriminated against in recent years in the fares policy because they are regarded as a captive commuter market. That has been part of British Rail's marketing strategy. Therefore, we hope that the balance may be redressed more in their favour in future.

With those few provisos, I welcome the sentiment that lies behind the amendment. I wish British Rail every good fortune in future, because its success will be to the benefit of my constituents.

Mr. Ronald Atkins

The trouble is that the amendment puts together two incompatible objectives, and the danger is that it clouds the issue. People will fail to see the real problem. The amendment might have been acceptable to Herbert Morrison about 40 years ago when many industries were nationalised and he was saying "We must provide better services, but they should pay their way by making a profit."

To suggest that we must, on the one hand, improve the service and, on the other hand, cut down the grant is to provide two incompatible objectives. We all know that if the grants were sufficient the lot of the commuter, especially in London, would be greatly improved. If there were enough grants, irrespective of costing, we would get better carriages, better signalling and better attendance to the needs of the commuter.

The railways have been given strict financial limits and have in many ways been forced to cut down on vital expenditure. There are other ways in which productivity could be improved. For instance more could be made of the advanced passenger and high-speed train if the track were improved. Freight services would be better if we had more air-brake vans. Productivity, comfort and efficiency could be improved if grants were as readily available here as they are on the Continent and in Japan and America.

Mr. Forman

Is there not a legitimate distinction between the operating subsidy of £350 million a year and the Government's support of British Rail's ongoing capital investment programme? I entirely agree that the time has come to switch to the forms of capital investment that can best meet the needs of the customers, particularly mass travel customers such as my constituents who commute into London.

Mr. Atkins

I agree with the hon. Gentleman. However, I should emphasise that for the time being and perhaps for many years to come it will be necessary to have grants for social responsibilities. That applies particularly to commuters. We must recognise that commuting services are very expensive.

Let us not be contradictory in our speeches. For instance, we cannot say that free market forces should operate and at the same time not charge the commuter what the market will bear. British Rail has nothing against the commuter. However, commuters are a captive market. In the free operation of market forces, that is the kind of thing that happens. It is ruthless and I do not like it. The Price Commission was right to complain about discrimination, but it is the discrimination of the market. We are trying to force British Rail, as we have always done, to provide a social service for commuters, for instance, but at the same time to pay its way. These are incompatible objectives. Therefore, we are in a difficulty. I believe that commuters should not be discriminated against.

9.30 p.m.

Season tickets cut deeply into post-tax income. I hope that the Chancellor will agree to give tax remission on season tickets. I hope that more firms will buy season tickets for secretaries and others and get tax relief on them. I read about that in the evening newspaper tonight.

The hon. Member for Sutton Coldfield (Mr. Fowler) rightly said that salaries and wages constitute about two-thirds of the cost of running the railways and that we should use labour efficiently. But the hon. Member does not recognise that much of the wages and salaries are paid on fixed labour costs that must be paid in order to operate the railways. The easiest way to increase productivity is to use the services of the fixed assets more productively. We must use more trains and carry more on them. In that way, the productivity of employees would jump overnight.

I hope that the House will bear that argument in mind. I am glad that there is a bipartisan attitude in the debate and that hon. Members understand British Rail's difficulties.

Mr. Michael McNair-Wilson

I shall not detain the House long but I wish to raise one matter which involves British Rail's reliance on subsidies and grants under the Bill or any other measure. This year we have perhaps allowed ourselves to believe that British Rail requires less money from the taxpayer than before. That idea has come about because of the statements made by the chairman of British Rail and others that it has met its financial objectives.

In one sense that is true. Such statements are accurate to the extent that a subsidy figure has been worked out to enable British Rail to break even and it has more than met the amount. But that can give a misleading picture. It gives the impression that British Rail is breaking even when it is relying on £350 million, at least, in passenger traffic subsidy. That is a large sum of money.

Even that figure disguises the total amount of grant which British Rail receives. In 1977 total Government grants to British Rail amounted to £493.3 million. I imagine that the sum will be higher in 1978. Any industry that is using up £1½ billion of taxpayers' money each year must pay attention to its costs and be aware that at some stage the subsidy can be too great for any Government to underwrite.

I do not necessarily believe that the amendment is profitable in itself. But we must not fall into public relations jargon which gives the impression that British Rail has turned the corner in financial terms and that the amount of subsidy and grant will fall drastically. Indeed, I fear that the opposite will be true.

British Rail is keen to say how difficult it is to cost out its services. But it is also positive that it knows that the south-eastern services are making huge losses. I do not think that it can have it both ways. If it is sure that commuter services are making big losses, why is it unable to tell us the true figures for running its system overall?

If a yardstick can be applied that shows that a big loss is being made in one area, clearly the same yardstick can be used in other directions. Thus, these little booklets that come out telling me how difficult it is to account for British Rail services do not really convince me. They make me suspect a smokescreen that we have to break through and force from British Rail more accurate figures until we can fairly say that we know how it is spending every pound of the money that it is getting in subsidies and grants.

Having uttered those few words, I shall. delay the House no longer.

Mr. Harry Cowans (Newcastle upon Tyne, Central)

I regard this as a thoroughly bad amendment. One could possibly agree with the individual items mentioned in it, but if they are taken together a different story unfolds. I believe that the amendment was drawn in the misbelief that many of the duties imposed on the British Railways Board under the 1962 and 1968 Acts were mysteriously removed by the 1974 Act. That is not the case, and I think that there will be wide agreement about that.

One aspect that has not been touched upon is that if, because of some strange change of heart, the House were to carry the amendment, as I understand it what is proposed will be enforceable by law, yet the amendment does not seek to repeal any of the existing legislation which imposes duties on the British Railways Board and is contradictory to the aims of the amendment.

The amendment says that it wishes to improve the service to customers and to reduce costs. Those two aims may not be compatible. It may be that to improve services it will be necessary to increase costs. The amendment seeks to reduce grants, but to improve services to the customer it may be necessary to increase grants. The amendment also refers to staying within cost limits imposed by the Government, and again an increase in the service to passengers may be incompatible with that objective. If the amendment were carried, the British Railways Board could find itself in court at the whim of any of its customers because it was trying to please about six different masters.

Finally, and perhaps most importantly, all these aims individually have been accepted already, not only by British Rail, but in the main by the trade unions, too. Given that these provisions would be enforceable by law, and given that legal remedies could be imposed to try to improve productivity, one must ask what kind of way is that to try to achieve the desired result? If, in an effort to improve services, negotiations are undertaken with the trade unions, and if a dispute arises, the whole issue will be back in the law courts. That is no way to improve productivity. The way to improve productivity is not by confrontation but by consultation and co-operation. The amendment would mean the death knell of productivity, not an improvement.

Mr. Robin F. Cook (Edinburgh, Central)

I shall be brief, as I recognise that the House has given a thorough airing to this matter, and the Opposition appear to have retired from the field, so there seems little point in prolonging the engagement. However, I should like to take up just two points made from the Opposition Benches.

I take up first the point raised by the hon. Member for Newbury (Mr. McNair-Wilson). Quite properly, he drew attention to the very large sums of money that we supply to British Rail. These sums are of proper concern to the House. I think that I shall carry the hon. Member with me when I say that it is perhaps regrettable that whenever we pause to probe and to discuss this matter it is always the same small band of us who sit in this Chamber.

Having said that, however, I know that the hon. Member is aware, as a member of the Select Committee, of the findings that came out in the Select Committee's report, that the sums that we in Britain supply to our rail network compare very favourably with the sums supplied to other European rail networks, and that, broadly, British Rail gets one-third of all its revenue from the Government, as compared with over half in France and Italy and nearly half in Germany. So, on that basis, British Rail comes out comparatively well. If we do not provide the same sums to our rail network as those that are provided on the Continent, we cannot complain when afterwards people say that we do not get the same services that are obtained in Continental countries.

This brings me, very briefly, to the major point made by the hon. Member for Carshalton (Mr. Forman) about productivity. Since the hon. Member and I speak mainly in nuclear energy debates and therefore do not perhaps get as much opportunity as we would wish to disagree with each other, I should like to take exception to his observations on that point.

There are, of course, always arguments for additional breakthroughs in productivity. But we should not forget that British Rail has made major strides towards improving its productivity over the past 20 or 30 years. Indeed, two-thirds of the posts that existed at the time of nationalisation have disappeared. Some 410,000 jobs have been phased out since the day of nationalisation.

Again, if we compare British Rail with the networks in France and Germany, we find that British Rail has fewer staff per train mile, fewer staff per passenger mile, fewer staff per locomotive, and fewer staff per track mile than exist in either France or Germany. These are impressive comparisons, and we should not lose sight of them.

Mr. Forman

Does the hon. Member agree that in British Rail's own documents there is evidence that there is still room for productivity increases, notably in the administrative sector, in which British Rail has said that it could afford to shed no fewer than 40,000 jobs?

Mr. Cook

I would not disagree with the hon. Member's point. Indeed, it is perhaps interesting that in the Pryke and Dodgson book it was discovered that if one compared British Rail's administrative staff above the station level, one found that British Rail had twice as many top administrators as any other comparable rail network. I should have thought that that was one area in which we could look for over-manning and consider some reductions in staff.

No one in the railway industry is opposed to greater productivity or reduced manning where that can be achieved. But to achieve that it is not simply a matter of shedding manpower. It is a matter of obtaining the money for investment to get the new equipment. If that money for investment is available, one will achieve greater productivity. The paradox for British Rail is that it is being asked to achieve greater productivity at a time when investment levels are being frozen and the demand and the need for further investment to keep the system going is increasing.

I think that the Opposition were very wise to decide not to divide the House on this amendment. The debate in the other place was a brief debate, of less than 20 minutes, in which only one Back-Bench Member spoke. That was Lord Duncan-Sandys, who described the amendment as a "piety" and a "counsel of perfection". Having described it as a piety, he went into the Division Lobby to vote for it.

I would not wish to appear to be against piety. Indeed, if the newspaper reports are correct, we are shortly coming up to the time when we shall all make pious declarations at least three times a day. But the place for that kind of piety and those kinds of pious statements of objectives belongs to political debate and political manifestos. They do not belong in legislation. By putting platitudes such as this in legislation, we do not enhance the respect for this House, nor do we make it any easier for those who have to carry out the legislation.

Mr. Gordon A. T. Bagier (Sunderland, South)

I shall not detain the House for more than a few minutes, having waited most of the day in anxious anticipation about what would happen in regard to this amendment. Having read it, I could only come to the conclusion that the only reason for it was that a knocking job was to be done on British Rail again. I am absolutely delighted, as well as amazed, that the debate is not taking that line. I would hope that this debate is the beginning of a new era.

I welcome very much the conciliatory tone of the hon. Member for Sutton Coldfield (Mr. Fowler) and his remarks about not only the management of British Rail but the trade unions and various other people involved.

Reference has been made to the volume of figures and information required Sometimes this House has to decide how many people it wants doing paperwork to provide that sort of information. Many people in the railway industry must be doing such non-productive work to satisfy the curiosity of this House or for other reasons. Statistics are best assembled from results.

9.45 p.m.

The hon. Member for Sutton Coldfield mentioned two points which are dear to the hearts of those who have been interested in transport, particularly the railways, for some time. First, improving the services is undoubtedly necessary. Successive Governments have been at fault in interfering with the rolling programmes for the improvement of stock and the provision of the necessary framework and hardware.

I hope that the rolling programme agreed by the Government will not easily be interfered with when this sector is used as an economic regulator. All of us who are interested in transport should resist any Treasury approach which entails such interference. Rolling programmes are designed for years and cannot easily be punched into if the customers are to get the best service.

Second, I greatly appreciate what the hon. Member said about higher productivity and the tribute he paid to what has been done. Since 1975, the subsidy to the passenger section has been reduced in real terms and railway staff have been reduced by 12,000, in conjunction with the rail unions. Those are considerable achievements.

Under the chairmanship of Sir Peter Parker, a welcome breath of fresh air has come into British Rail. The day out for old-age pensioners did them a world of good and achieved a great deal in public relations. Many people travelled that day who had never left their doorsteps before. It was a touch of humanity. Allowing blind people to take their dogs and to have first-class sleeping accommodation is another way of running a humane business. Sir Peter is doing a first-class job and I am sure that he will continue to operate a great enterprise with imagination.

If we are starting a new era and the railways are no longer to be a political punch-bag, we may start appreciating that there is no substitute for good management, a happy work force and a Government sensible and enlightened enough to leave British Rail to get on with its own business.

Mr. Moate

This debate has been characterised by bipartisanship and brevity, and I shall do my best not to spoil that record. I was intrigued, however, by the Under-Secretary's statement that the amendment could be embraced only by those who were in favour of virtue. He then did such a good demolition job on it, as did several of his hon. Friends, that one wondered about his relationship to virtue.

I do not understand why so many hon. Members have had difficulty in accepting even the principles of the amendment. They have argued, on the one hand, that it is unnecessary because the 1962 Act remains in force and, therefore, these injunctions apply to British Rail. We are told, on the other hand, that if these injunctions were accepted they would present serious difficulties. I do not think that these objectives contradict one another. The aim of British Rail must be and is to reduce dependence upon grants and to improve services.

We all welcome the fact that there is a greater consensus today, which arises because in the past few years British Rail has made great strides towards reducing its dependence on grants. It has proclaimed the fact that it has asked for less than it might have had to ask for this year and has at the same time improved many services.

Although we can argue about whether it is right to put statutory exhortations of this kind into an Act of Parliament—we are not making an issue of this tonight—it is clear that the objectives expressed in the amendment should be acceptable to us all. I suspect that, if Sir Peter Parker were making the decision as to whether an amendment of this kind should be written into legislation, he would have no difficulty in accepting it and saying that this is a welcome statement of objectives for British Rail. It is some of the statements by Sir Peter Parker that allow us to proceed not in any sense of complacency, because I do not think that any of us should underestimate the size of the problems that British Rail faces, but with a general feeling of satisfaction that we are going in the right direction and, because of that, we can start to adopt this bipartisan approach. That is not to say that we have actually reached the goal, because we all know full well that there are many difficulties ahead.

I do not wish to disturb the calm, but we should be deceiving ourselves and those who travel by British Rail if we did not recognise that British Rail is still on something of a tight-rope, that there are financial pressures and that problems could arise from a sudden increase in costs or in fares and the ill will that could be generated by such an increase. Problems might arise with industrial relations. The trade unions have yet to come to terms with the productivity targets that have been set by British Rail and endorsed by the Government.

In response to the report of the Select Committee, the Government have made clear that they endorse the target of reducing manpower employed by the railways by 40,000 by the end of December 1981. We all recognise that that will be a superhuman challenge and that significant manpower reductions have been achieved, thanks to better industrial relations and great co-operation between the unions and management. We all recognise the size of that task, and if we can work towards those goals in an atmosphere of co-operation we shall get a much better railway system in the end.

Better productivity is not simply a way of reducing costs so that higher fares are not passed on to the consumer. Greater productivity is the only way to ensure a good future for the railwayman, that wages are at an adequate level, that jobs are secure and that working conditions are improved. That is why we constantly return to the need for improvements in productivity.

Sir Peter Parker's commentary in the annual report and accounts for 1977 seems to be saying many of the things that we on our side of the House have been saying for the past few years. This is why we gladly welcome some of these statements. Sir Peter Parker says this: In recent years the railway has been investigated and analysed, written on, and even by some, written off—that decade of doubt is surely over. I hope and believe that it is. Indeed, in the past few years the House has probably had more extensive debates on the railway system than we had in previous years, and that has contributed to this more healthy atmosphere.

Sir Peter continues: Of course there are uncertainties and problems ahead. Investment needs for many of our passenger trains for commuters and local services; the urgencies of the London and South East complex which widen far beyond BR". This was the point made by my hon. Friend the Member for Carshalton (Mr. Forman), who rightly emphasised the immense problems which still exist for commuters. The House cannot afford to be complacent about them.

Sir Peter continues: We have a vital need in the railway industry to match pay awards by productivity deals to pay for them. That takes us back to the major problem which still exists to which unions and management have to address themselves. I believe that, left alone by the House, they will address themselves to it. and, given the objectives and targets referred to today and set out in the White Paper, we shall be able to achieve a stronger and healthier British Rail, in the long term probably less dependent on subsidies and certainly able to provide a better service to the consumer as well as a better standard of living, greater job security and more job satisfaction to those working in the industry.

I join those who have welcomed the present greater consensus and the progress which has obviously been achieved thus far by British Rail. In some ways I regret that the Lords amendment cannot be put into the statute, but British Rail is working on those lines and in some respects the objectives already exist in the 1962 Act. Even though the amendment may not go on to the statute book, we feel that the debate which it has stimulated has been immensely helpful to both British Rail and the House.

Question put and agreed to.

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