§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. David Hunt.]
§ 10.1 pm
§ Mr. Robin F. Cook (Edinburgh, Central)I am grateful for this opportunity to draw the attention of the House to British Rail's electrification programme. I am obliged to the Minister for making his second appearance at the Dispatch Box this evening.
The case for electrifying——
§ Mr. Harry Greenway (Ealing, North)On a point of order, Mr. Deputy Speaker. Would you explain to the House what is happening? I heard you put the Question on the Adjournment of the House, to which hon. Members said "No." Do I take it that the House does not adjourn when it says that it will not adjourn?
§ Mr. Deputy Speaker (Mr. Bernard Weatherill)I can explain the position to the House. I called the hon. Member for Edinburgh, Central (Mr. Cook) to speak to his Adjournment debate because it was after 10 o' clock.
§ Mr. CookI am obliged, Mr. Deputy Speaker. I am sure that the railway industry will greatly appreciate the interest shown by the many hon. Members in the Chamber.
The case for electrifying the railways is well known. It should certainly be well known to the Under-Secretary of State, because his Department participated with British Rail in a joint review of an electrification programme which came out earlier this year. As the Minister will be aware—and as the rest of the House will no doubt appreciate—that joint review came to the conclusion that electrification was a sound investment that would provide, in the view of the working party, a real rate of return of 11 per cent.
It would be a brave man who argued that the majority of the investment——
§ Mr. Deputy SpeakerOrder. Will hon. Members who wish to carry on conversations please leave the Chamber?
§ Mr. CookI am obliged to you, Mr. Deputy Speaker. I hope that hon. Members will stay for what I hope will be a matter of recognisable importance. It is a matter of regret that those who were apparently anxious to have a Division at the end of the last debate have already left the Chamber and that the SDP Benches are characteristically empty as we turn to a matter of critical importance to our transport system and to investment in our economic infrastructure.
The joint review concluded that electrification was a sound investment. It offered real gains in efficiency and productivity, because electrification would allow a reduction in manning per traffic volume and a reduction in locomotive power.
Electric traction would permit British Rail to run trains faster, and they would be capable of carrying heavier loads. They would be more reliable and would be pulled by locomotives that would spend less time undergoing maintenance and repair. Indeed, the maintenance cost of electrically-driven locomotives would be about one-third of the maintenance cost of the diesel units which provide the mainstay of the traction power of British Rail.
In short, electrification would offer Britain a more efficient railway industry and a more attractive transport 963 system to the passenger, but beyond the railway industry and the railway network wider benefits flow from electrification.
Electrification would provide us with a railway system that was more flexible in its use of energy; it would allow us to substitute electricity for oil; it would provide us with a more energy-efficient industry; and it would utilise the record surplus capacity within our generating system which is marked for decision by the generating board following the early retiral of its plant.
Electrification would provide a stimulus to the economy which would be felt in many industries which have undergone the severe effects of the recession—particularly the electric power supply industry and the civil engineering industry.
An electrification programme would give the British railway industry a serious chance to compete for the large foreign market that exists in the electrification of railways. On this matter I can do no better than quote a statement made by Mr. Cliff Moss of Balfour Beatty when the Government refused to give an urgent decision on the electrification of the Hitchin to Huntingdon line. According to The Daily Telegraph, he said:
Without a firm home base, the company's chances of getting major work abroad—and there are estimates that contracts worth £750 million are available worldwide in the next five years as most railways are modernised—would be drastically reduced.The reason is obvious. If we are not prepared to invest in electrification in our home base, it will be very difficult to persuade foreign Government that we are sufficiently confident in our suppliers and manufacturers of electrificiation equipment for them to purchase such equipment from us.The joint review reported in February 1981. However, it was not until June 1981 that we received a response from the Government. That response was not a decision but a series of further questions. The Government put up more hoops through which they expected British Rail to jump before it could gain approval for the electrification programme. It is curious that the Department of Transport, having been party for two years to an examination of the case for electrification, should suddenly find a whole new series of fundamental questions to ask. if the questions were relevant, the time to pose them was during the period of the joint review. The Minister will be aware—although he cannot admit it—why those questions arose at a later stage, after the task of the working party had been completed. Despite protracted examination of the case for electrification, the case was torpedoed at a late stage in a small street off Whitehall. It was taken apart by a lobbyist, who turned out to be more powerful than the Secretary of State, although he is not a member of the Government or an elected Member of Parliament.
I take issue with one of the questions that has been posed to British Rail. Indeed, British Rail has been asked to jump through this hoop before further approval for electrification is granted. I refer to the request for a statement on route profitablility before any approval is given to a rolling electrification programme. That request for an assessment of route profitablility is a logical absurdity. The Minister will be well aware of the difficulty of isolating a particular line and of the problems of trying to consider that line in isolation from the lines that feed it and into which it, in turn, feeds.
964 If British Rail is asked to judge and assess the benefits of investing in one line, in isolation from investment in other lines that feed that line and into which it, in turn, feeds, those difficulties will be compounded. The benefits of electrification will be greatest when electrification has spread widely across the network and when the initial cost of acquiring electric locomotives and traction equipment have been spread across investment in the network as a whole.
§ Mr. Peter Snape (West Bromwich, East)I apologise for interrupting my hon. Friend's interesting speech. Perhaps he will ask the Minister to comment on the fact that the basis for profitability that my hon. Friend has outlined is applied to the road network. For example, the Government have decided to build the M40, but that is not considered section by section, in isolation, as British Rail's electrification proposals are.
§ Mr. CookI am grateful to my hon. Friend for that observation, which buttresses my general case. It is particularly relevant, because we have learnt that the £109 million that the EEC has refunded to Britain is to be spent by the Department on the trunk road programme. Indeed, £109 million is almost three times the amount sought from the joint review for investment in a rolling electrification programme. It is sad that sums of that size can be found for investment in a trunk road programme that does not have to pass the rigorous tests applied to the electrification programme when much more modest sums cannot be found for the electrification of our railways.
My case is that the test of route profitability is a logical absurdity, but whether logical or illogical it is irrelevant to an assessment of whether electrification is desirable. The test that was applied in the joint review was whether electrification would provide a real rate of return. On some of the lines that might be judged as less profitable in a test of route profitability the rate of return might be higher than for those lines that might pass the test. On the lines that are currently unprofitable, there is probably decayed, dilapidated equipment and an urgent need for further investment.
What is the point of the questions? The Secretary of State has given assurances that he is committed to preserving the present scale of the network. Presumably it is not his intention to close the lines that fail the test of route profitability. But if the lines are to remain open, some means must be provided to pull the trains that run on them. If electrification is ruled out, traction power will have to be provided by diesel-powered locomotives. Therefore, we are reduced to the absurdity that, because those lines are judged to be not profitable, British Rail might be obliged to invest in the less efficient method of traction power.
With respect to the other hoops that were announced in June, British Rail must be congratulated on the agility with which it has tried to jump through them. I understand that within the next month the Under-Secretary and his right hon. Friend will receive the prospectuses of British Rail for inter-city routes and the freight section. By the spring, they may expect to receive the different assessments of the 20 segments that make up the electrification programme.
If the Minister wishes to be punctilious, he can tell the House that as yet he has received no submission from British Rail, which is technically true. But, as he knows, his officials have been working closely with British Rail 965 in elaborating its response to the questions. If he is interested in what is happening, his officials will be happy to brief him on their discussions with British Rail. I am sure that they will also be happy to make it clear to him that there have been substantial improvements in productivity in British Rail during the past 18 months. Since April 1980, 12,000 posts have been shed by British Rail with the co-operation of the trade unions. That puts British Rail bang on target for the shedding of 38,000 posts by 1985. The Minister is aware that the shedding of posts in the collection and delivery of parcels was so efficiently carried out that it was achieved at less cost than was originally estimated by British Rail. I am happy to tell the Minister that only this evening the NUR executive approved a decision to go ahead with variable rostering hours and reached an agreement with British Rail.
The railway community has delivered its side of the bargain. The Minister should be under no illusion that it will be possible to maintain that momentum if the Government do not honour their side of the bargain by investing in the future of the industry and allowing British Rail to go ahead with the essential modernisation programme of electrification.
I wish to raise three specific points, which I hope the Minister will answer. First, can he say that a decision will be announced in the near future, if not tonight, on the Anglia proposal that he received from British Rail in November last year? That proposal was not part of the electrification programme considered for the joint review, but a commitment that that line will go ahead will be, at least, an earnest of good intent by the Government.
Secondly, I hope that the Minister will assure us that when he receives the responses from British Rail to the test that he set in June this year there will be a swift decision on the submissions. Can he assure us that there will not be a further series of questions and hoops set up for British Rail to jump through to delay the decision for another year? Will he confirm that it is not the Government's intention to shunt off electrification to be considered as part of what is optimistically known as the brisk review of British Rail?
In short, will the Minister assure us that this time he will not allow the strategic decision to be mugged in a Cabinet sub-committee on the basis of papers from seconded academics seeking to cause mischief, and that the Department of Transport will fight its corner to ensure that the decision which it knows to be the right one in the interests of the transport industry will be taken?
Thirdly, will the Minister tell the House how the Department of Transport proposes to respond to the crisis which has now arisen as a result of the work of the design team reaching the point of exhaustion? The Minister will be aware that the Balfour Beatty team has completed all the design work associated with the Bedford to St. Pancras line. It has been retained for the present for Balfour Beatty, but Balfour Beatty will not indefinitely retain that team when there is no immediate prospect of work for it. If that team is not to be broken up, a rapid decision is required to provide security for that team, which is the sole team with specialised skills to carry out electrification.
I hope that the Minister will be able to respond sympathetically to the proposals which have been before him for a month to enable work to start on a modest section of track from Hitchin to Huntingdon, which would at least 966 have the advantage of holding together that unique team of specialised skills until a decision is reached on the major electrification programme.
The advantages of electrification are widely perceived in other countries. There are now 16 other countries which have a higher proportion of their railway track electrified than Great Britain, although we were one of the first nations to have a railway network. One would expect France and Germany to be ahead of us in electrification. Perhaps the House would not expect Bulgaria and Poland to be ahead of us. It is a sad day when countries which started their railway industries well behind us now have more modern track systems than Britain.
I cannot believe that even the present Government are content with that position. I hope, therefore, that the Government will give an assurance that when they receive the submission from British Rail early next year they will seize the opportunity which they let slip through their fingers earlier this year when they received the report of their own joint review.
§ The Under-Secretary of State for Transport (Mr. Kenneth Clarke)The hon. Member for Edinburgh, Central (Mr. Cook) has used, as he usually does, a strong turn of phrase to advance his more compelling arguments. I hope to be able to persude him yet again that there is no real difference in principle between him and the Government.
The Government remain committed in principle to the concept of a 10-year programme for electrification. I do not wish to argue with the hon. Gentleman on the general merits of electrifying the railway system. The Government remain committed to the programme and will proceed with it when they are satisfied that it will be a worthwhile economic investment and a worthwhile use a public resources. We hope that by a process of co-operation and movement together by the Government, the railway management and the trade unions we shall progress towards electrification.
Perhaps I can best reassure the hon. Gentleman by dealing with his first specific question about Anglia electrification. We have had the application to electrify Anglia lines in the Department for a considerable time. The application reached the Department before it arrived at the decision-making stage on the main programme of electrifying the national network. My right hon. Friend has been anxious for some time to make a decision on the electrification of the Anglia lines. Impatience has been growing among passengers and in the railway community as they have awaited a decision.
It was not possible for my right hon. Friend to divorce the question whether to approve the Anglia electrification scheme from the deteriorating financial performance of the railways and the need to ensure that they make worthwhile progress in reducing costs and improving productivity. I am glad to say that British Rail has begun to make worthwhile advances on the productivity front. I congratulate both the management and the trade unions on what has been achieved. Indeed, they are slightly ahead of the timetable that they set at the time of the electrification statement.
Only today the National Union of Railwaymen confirmed an agreement with British Rail that it would move over to variable rostering, as agreed in reaching the pay agreement in the autumn. Clearly, that agreement on 967 variable rostering has no direct relationship with electrification, because it is a productivity deal linked to 3 per cent. extra on the pay which the NUR members hoped to achieve. Nevertheless, on hearing of the decision to accept variable rostering, my right hon. Friend the Secretary of State at last felt able to agree to give approval to the rail electrification to Norwich. This evening he announced his approval of major electrification to improve rail services to Ipswich, Norwich and Harwich.
The scheme, which will cost nearly £30 million, will enable through electric running between Liverpool Street, Ipswich, Norwich and Harwich. Journey times will be cut by nearly 20 per cent. between London and Ipswich, and it will no longer be necessary to change trains on the journey from London to Harwich. British Rail plans to rationalise the track and re-signal the line between Ipswich and Norwich before it gets on with the electrification work. It can now go forward with the schemes within its investment programme.
I trust that that announcement will eventually be to the benefit both of passengers and of railwaymen who work in that part of the country. It will be accepted in the terms that the hon. Member for Edinburgh, Central used, as an earnest of the Government's good intent and our intention to work alongside the railway industry and move together. As the industry moves on the productivity front and on improving the business performance, so the Government will move on their commitment to railway electrification.
§ Mr. SnapeI am sure that my hon. Friend the Member for Edinburgh, Central (Mr. Cook), who spoke so ably earlier, will welcome the Minister's announcement of that electrification. Are the Government prepared to provide additional funds for such matters as re-signalling and track and bridge improvements which will be necessary before the electrification schemes?
§ Mr. ClarkeI think that British Rail contemplates being able to do that under its present investment ceiling. The next step will be to improve the signalling and the track in advance of starting electrification work, which will begin as soon as possible—a few years from now. I am not aware that British Rail faces difficulties. It welcomes the decision, and I think that it will be able to cope with the track and signalling improvements and then the electrification as soon as it can be achieved.
That scheme was on the desk of my right hon. Friend the Member for Sutton Coldfield (Mr. Fowler) when he was Secretary of State for Transport before we reached decision time on the main electrification review and the proposals for electrification of a substantial network. We reached that decision with my right hon. Friend's statement on 22 June after we had considered the electrification review, a joint review between the Department and British Rail, which had been set up in 1978 and which reported last year. It demonstrated an internal rate of return which looked quite attractive for various networks of electrification schemes.
We welcomed that, but I emphasise that it was a review which was the background for the Government's policy, a policy that was arrived at on 22 June. I emphasise that because I want to answer some criticisms that the hon. Member for Edinburgh, Central hinted at, that somehow the Government had changed their position. It is not the case, as some people imply, that we first reached one 968 policy and then changed it, or that we keep putting up additional hoops for the Railways Board to go through, and keep asking more difficult questions. We had the electrification review coming to us. We received it and considered it, and made a statement on 22 June. We have not changed our policy in the slightest respect since 22 June.
The review certainly demonstrated a good internal rate of return, but on the face of it it made certain assumptions about the traffic and business performance of both inter-city and freight that unfortunately were then open to question. It was already clear by the time we received the review that unfortunately the inter-city and freight businesses of the railway were failing to meet the commercial remit set by the Government, which had recently been agreed. For those reasons, the economics had to be reviewed, and we felt when we made our statement on 22 June that it must be clearly spelt out that electrification was linked to improved business performance, profitable investment and improving productivity on the railways. The result was that we asked the board first to submit new plans for the commercial businesses of inter-city and freight to achieve a fully commercial performance by 1985, at the same time as we asked it to submit the 10-year programme of electrification. We also made clear that the progress on electrification would depend upon the achievement of the changes necessary to secure manpower reductions and improvements in productivity. We also set out in June that the approval of successive electrification projects would depend upon the achievement of these necessary improvements as well as the profitability of the investment in question.
The Government stand by all those statements. We have not changed any of them. At the time when that statement was made by my right hon. Friend, then Secretary of State for Transport, the chairman of the Railways Board, Sir Peter Parker, welcomed it as showing "a positive way ahead" for railway electrification, as it was intended to be by the Government.
Shortly after that statement, we explained to the board that the decisions meant that, in order to reach further decisions on electrification, we required from it a programme of schemes which were ranked in order of return. We also required a demonstration that the routes included in the programme were potentially profitable and an outline appraisal of each scheme, with an appraisal of the first in sufficient detail to enable us to reach a decision at the same time. We recognise the potential savings that would accrue from a programme of schemes, but separate appraisal of individual schemes is also needed to ensure that the programme offers the best possible financial return and that each scheme is fully justified.
The programme of schemes and the appraisal of individual schemes for which we asked would need to be based on the new plans for the inter-city and freight businesses which the board has been asked to submit. Those requirements were accepted by the board and there has been no subsequent change by the Government.
I shall not divert the debate and talk about the points made about the road programme by.the hon. Members for West Bromwich, East (Mr. Snape) and Edinburgh, Central. The Government attempt to submit roads to exactly the same rigorous economic examination. The M40 shows a worthwhile rate of return. Otherwise, the Government would not proceed with it. As I have said before, as the road and rail programmes are aimed at 969 different markets and carry very different levels of traffic, I have never understood why it is felt necessary by those who are interested in the rail industry to attack the road programme and by those who are interested in haulage to attack the railway industry. That is not a worth while way of pursuing an interest. I know that the hon. Member for West Bromwich, East would like to reply, but if we start to debate that I shall not reach other matters which interest him.
I hope to explain what progress has been made since the statement, as there have been press reports of some rather silly disputes, apparent rather than real, between the Government and the board over the methodology and what has happened since. The new requirement contained in our statement was a method for assessing route profitability, but there was no difficulty in reaching early agreement on this and, shortly afterwards, agreement on the methodology for ranking and appraising schemes. The board has always acknowledged the consistently helpful attitude of the Department in developing this methodology.
Unfortunately, there has been delay. This is regretted by the board and by the Government, as well as by the railway unions and everyone else, including hon. Members interested in the railway industry. But the delay has not been caused by obstructionism or changes in the rules since June. It has been caused by the board's difficulty in reaching decisions on the financial prospects for the inter-city and freight businesses. The board has taken longer than it had hoped to settle the new commercial plans for those two businesses which are the essential basis of the 10-year programme.
Again, trying to strike a positive note today, I am glad to tell the House that we are making progress. We have now received the board's new policy for inter-city and this is undoubtedly a major step. We expect to receive the board's plan for freight very soon—by which I expect, and no doubt the board hopes, that it will be within the next few weeks.
These plans are the product of much careful thought about the future of the commercial rail businesses, and implementation of those plans will require many difficult decisions over the next few years. In the Government's 970 opinion, it is vital that those plans, now that they have been produced, should be followed by sustained action by the board towards the objectives that it has set for itself. For the moment, however, they are the essential basis for the board to evaluate the potential profitability of its main line routes, to begin drawing up the 10-year programme of schemes and to begin preparing a detailed investment submission for the first of the schemes.
The Department is ready to assist the board in every way possible. We look forward to receiving the 10-year programme as soon as possible and I assure the hon. Gentleman, in response to his third question, that we shall give it urgent consideration as soon as it becomes available.
I have left myself little time to deal with two final points. All of this is still linked to continuing productivity. We indicated a target in June based on the railways' own corporate plan of 38,000 fewer posts at the end of 1985. I have already acknowledged British Rail's success in moving towards that target slightly ahead of schedule.
We have considered the Hitchin-Huntingdon route, but it makes no sense except in the context of the King's Cross to Leeds route. For the same reasons as in the case of road programmes, no case can be made for the Hitchin to Huntingdon route. Huntingdon is a nice place, but it is not big enough to justify electric trains being extended to it. We shall look as soon as we can at the King's Cross to Leeds route if, in the board's judgment, it turns out to be the first scheme in the programme, with the highest priority, and the board can work it out and give us the necessary information.
I am aware of the problems of Balfour Beatty, but for short-term problems of that kind we cannot divorce ourselves from the main policy objectives that we set ourselves. We hope that if we can make progress with the business programmes and the 10-year programme., our policy and the needs of the country, Balfour Beatty and everyone else will match up. But that requires good progress on productivity and on these schemes coming along.
§ Question put and agreed to.
§ Adjourned accordingly at half-past Ten o'clock.