§ Question again proposed.
§ Mr. ClarkeI apologise to the hon. Member for Aberdeen, North for not sending him the two letters to which he referred. I recall working on drafts of them, so I apologise for what must be a complete breakdown in the system. It will be remedied immediately.
The substantial point about which the hon. Gentleman was concerned this evening was the question of electrification. I can only reiterate what I said last time. Contrary to belief in the railway community, the Government have not changed their position and nor has their commitment to the principle of a 10-year programme of electrification changed since the announcement was made last June.
This evening we touched again on the arguments about whether the announcement of my right hon. Friend the then Secretary of State in June last year involved a shift away from the programme considered earlier in the year. A joint study was undertaken and the results published by the Government on work carried out in our Department and by British Rail. The report has been quoted this evening. The estimates in it were based on estimated performance by the commercial railway—inter-city and freight—which already, by the time that the report appeared, the railway was not achieving in practice.
The Government were under a duty to the taxpayer to review the document. In June we nevertheless made a statement that accepted the principle of a 10-year programme of electrification of potentially profitable main line routes. Therefore, our policy declared in June and adhered to now accepts the points made by the hon. Members for Keighley and for Vauxhall about the need to take a continuous and developing view of a major investment project.
We accept the principle of a programme of electrification for potentially profitable main line routes. Because we were talking about potentially profitable main line routes on what are commercial businesses—inter-city and freight—we asked for new business plans to be produced for inter-city and freight. We also asked for a programme setting out the particular routes and indicating their order of priority based on their profitability. We also said that we expected to see progress on productivity and that we determined investment decisions on electrification in line with progress on productivity.
We did not set unreal targets. We took the targets for productivity that we indicated out of the board's corporate plan and what it hoped to achieve over the next five years by reductions in overmanning. Since that time the Government have been as disappointed as British Rail. We have not reached a stage where we have all the ingredients we asked for when we set out the policy in June.
It does not help to get bogged down in nit-picking arguments about who owes who a letter or whose fault the delay is. I can update matters a little from the Second Reading debate. We have now received the business plan for inter-city. We expect to receive the business plan for freight shortly. We still have not received the 10-year programme for electrification of routes, so we are in no position to assess the first routes. We expect British Rail's chosen first priority to be the east coast main line, but British Rail and the Government are anxious to make progress. We hope soon to have all the documents for the Government to take decisions.
836 The background remains the question of progress and productivity. As I said, this has been reasonably good over the past year. The agreements last August were particularly encouraging, although they are by no means the whole process that has to be gone through to achieve a modern railway. If British Rail continues to make progress on productivity it will be much easier for us to consider the programmes put up for investment. In the interests of the taxpayer and the cost benefit analysis that has to be done on all major investment we could not start to consider making rapid progress on new investment projects if, for some reason, all productivity progress is halted because of a belief in sacrosanct but out-of-date productivity agreements.
The Government have not been inflexible. We had an application before us that predated the main electrification studies—the East Anglian main line proposal was awaiting a decision. My right hon. Friend repeatedly had to explain that we could not divorce a decision on the East Anglian plan from the overall business performance of the railway, progress on productivity, and other advances.
Nevertheless, on 22 December 1981 the Government were able to say that the business performance was understandable in the light of the recession, that progress on productivity was being made—the NUR had just honoured the productivity agreement entered into by all three unions in August 1981—and that we approved the electrification to Norwich and Harwich.
§ Mr. Robert HughesThree years' hard work was done by British transport and British Rail on electrification. The study on electrification and profitability spoke of 11 per cent. financial returns. It looked at productivity and all the aspects mentioned by the hon. and learned Gentleman tonight. The Labour Party finds it difficult to understand what new proposals are now affecting the Government's decision. They seem to be injecting some new productivity proposals into the discussions on the basis of the decision. If that is what the hon. and learned Gentleman is saying, it sets aside the whole of that study on electrification. I cannot understand why the hon. and learned Gentleman has gone back to the board and why we are discussing virtually a new set of proposals.
Will the hon. and learned Gentleman make it clear that, when he is speaking about productivity, he is speaking about productivity and not demanning? What has soured the relations in the railways industry is the equation of productivity with demanning, and that is a prostitution of productivity agreements.
§ Mr. ClarkeI am not saying that anything is to be set aside. The policy is building on the electrification study that was carried out. The study was carried out at a time when the Government were agreeing financial targets for inter-city and freight, based on expectations of improving business performance. The economic analysis of electrification in the study made assumptions about improving performance of inter-city and freight.
Unfortunately, by early 1981 it was obvious to everybody that the business performance of British Rail no longer matched those expectations. It was getting into difficulties and the time had come to look into the business to decide what the business prospects now were and also, as British Rail had been trying to do, to get down costs, adjust services and demand and bring back a sound business basis for the railways.
837 It was in the light of the changed circumstances that the Government asked for the new business plans for inter-city and freight. At the same time, we committed ourselves to the 10-year programme. We rapidly agreed with British Rail on the methodology on which to assess individual projects. We also said that productivity had to play a part.
I agree that productivity does not simply mean demanning. In an overmanned industry there is some room for reduction in manning. There have been spectacular reductions in the past in manning in the railways. Those reductions, and improvements in productivity, came to a halt for a long time in the 1970s. There have been welcome advances in the past 12 months. With continued commitment by the railway community, I am sure that advances will continue and the public and the Government will be given faith in a long-term railway system that justifies investment.
There has been much talk of the next 10 years, but I suggest that the amendments are impracticable. No Government can forecast the external financing limits for the next 10 years. The previous Government did not try to and neither will this Government. An external financing limit depends on a whole range of variables—training, climate, business performance and other factors. It is unreal to plan for 10 years.
The second amendment links borrowing to electrification. I have already explained that not all investment comes out of borrowing, although I was largely talking about the non-commercial railways. The need for British Rail's borrowing is not confined to investment. It has to borrow for many other purposes. It is impossible to earmark a particular sum out of the overall borrowing of British Rail for any particular investment project. Thus, neither of the amendments is practicable or necessary.
The House asked us to take a longer-term view of the financial problems and constraints on the railways. We propose to do that in the review of British Rail finances which my right hon. Friend the Secretary of State has already announced and which he is anxious to set up. That review was suggested by Sir Peter Parker and the board. It is quite wrong to say that it is another Beeching review. In fact, it has been generally welcomed by most people in the railway community and by the Government. The Government accept the need for a review of British Rail finances and policy objectives, which will include looking at the prospects of improving the business performance of the railways. We hope that we shall soon give details of the terms of reference and composition of the review.
The Government are not taking a short-term view. We are not running away from the necessity to keep looking at the policy objectives and financial constraints. We propose to set up the review to assist ourselves and British Rail to study them. The background is not one of tightening financial constraint or of meanness; it is a response to the problems of recession. The Government have given their response, and we expect a response from the management and trade unions. If everyone were to honour their agreements and look to the long-term future of a modern railway, and stopped retreating into the past—1919, the day when railways were dominated by steam engines—we should all make better progress.
I therefore ask the House to reject the amendment on the basis that there is a better way of getting the kind of future that we want for the railways.
§ Question put, That the amendment be made:-
§ The House divided: Ayes 62, Noes 108.
756| Division No. 49] | [4.05 pm |
| AYES | |
| Alton, David | Penhaligon, David |
| Ashton, Joe | Ross, Stephen (Isle of Wight) |
| Callaghan, Jim (Midd't'n & P) | Sandelson, Neville |
| Ford, Ben | Steel, Rt Hon David |
| Freud, Clement | Wainwright, R.(ColneV) |
| Grimond, Rt Hon J. | |
| Hawksley, Warren | Tellers for the Ayes: |
| Janner, HonGreville | Mr. A. J. Beith and |
| Johnston, Russell(Inverness) | Mr. William Pitt. |
| McNally.Thomas | |
| NOES | |
| Adley, Robert | Canavan, Dennis |
| Aitken, Jonathan | Carlisle, John (Luton West) |
| Alexander, Richard | Carlisle, Kenneth (Lincoln) |
| Alison, RtHonMichael | Carter-Jones, Lewis |
| Allaun, Frank | Channon, Rt. Hon. Paul |
| Ancram, Michael | Chapman, Sydney |
| Archer, Rt Hon Peter | Clark, Hon A. (Plym'th, S'n) |
| Aspinwall, Jack | Clark, Dr David (S Shields) |
| Atkins, Robert(PrestonN) | Clark, Sir W.(Croydon S) |
| Barnett, Guy (Greenwich) | Clarke, Kenneth (Rushcliffe) |
| Beaumont-Dark, Anthony | Clegg, Sir Walter |
| Bennett, Andrew(St'kp'tN) | Cockeram, Eric |
| Benyon, W. (Buckingham) | Cocks, Rt Hon M. (B'stol S) |
| Berry, HonAnthony | Cope, John |
| Best, Keith | Corrie, John |
| Bevan, David Gilroy | Cranborne, Viscount |
| Biggs-Davison, SirJohn | Cryer, Bob |
| Blackburn, John | Cunliffe, Lawrence |
| Blaker, Peter | Cunningham, G.(lslingtonS) |
| Booth, RtHonAlbert | Cunningham, DrJ.(W'h'n) |
| Boothroyd, MissBetty | Davis, Terry (B'ham, Stechf'd) |
| Boscawen, HonRobert | Dean, Joseph (Leeds West) |
| Bottomley, Peter(W'wich W) | Dewar, Donald |
| Boyson, DrRhodes | Dixon, Donald |
| Brooke, Hon Peter | Dobson, Frank |
| Brotherton, Michael | Dormand, Jack |
| Brown, Michael(Brigg&Sc'n) | Douglas-Hamilton, LordJ. |
| Brown, R. C. (N'castle W) | Dubs, Alfred |
| Browrne, John(Winchester) | Dunwoody, Hon Mrs G. |
| Bryan, SirPaul | Eadie, Alex |
| Buck, Antony | Elliott, SirWilliam |
| Budgen, Nick | Emery, Sir Peter |
| Campbell-Savours, Dale | English, Michael |
| Ennals, Rt Hon David | Hunt, David (Wirral) |
| Evans, loan (Aberdare) | Jenkin, RtHon Patrick |
| Evans, John (Newton) | John, Brynmor |
| Ewing, Harry | Johnson, James (Hull West) |
| Eyre, Reginald | JohnsonSmith, Geoffrey |
| Fairgrieve, SirRussell | Jones, Barry (East Flint) |
| Farr, John | Jopling, RtHon Michael |
| Faulds, Andrew | Kaufman, RtHon Gerald |
| Fenner, Mrs Peggy | Kerr, Russell |
| Finsberg, Geoffrey | Kershaw, SirAnthony |
| Fisher, SirNigel | Kilroy-Silk, Robert |
| Fitt, Gerard | King, RtHon Tom |
| Flannery, Martin | Lamond, James |
| Fletcher, A. (Ed'nb'ghN) | Lang, Ian |
| Fookes, Miss Janet | Leighton, Ronald |
| Forrester, John | LeMarchant, Spencer |
| Foster, Derek | Lennox-Boyd, HonMark |
| Fowler, Rt Hon Norman | Lestor, MissJoan |
| Fox, Marcus | Lewis, Arthur (N'ham NW) |
| Gardiner, George (Reigate) | Lewis, Ron (Carlisle) |
| Garel-Jones, Tristan | Litherland, Robert |
| Garrett, John (NorwichS) | Lofthouse, Geoffrey |
| Glyn, Dr Alan | Luce, Richard |
| Golding, John | McCartney, Hugh |
| Goodhew, SirVictor | McCrindle, Robert |
| Goodlad, Alastair | McDonald, DrOonagh |
| Gow, Ian | Macfarlane, Neil |
| Graham, Ted | McKay, Allen (Penistone) |
| Grant, George (Morpeth) | MacKay, John (Argyll) |
| Greenway, Harry | McNamara, Kevin |
| Gummer, JohnSelwyn | McQuarrie, Albert |
| Hamilton, James (Bothwell) | Marks, Kenneth |
| Hamilton, Michael (Salisbury) | Marlow. Antony |
| Hampson, DrKeith | Marshall, D(G'gowS'ton) |
| Harrison, RtHon Walter | Marshall, DrEdmund (Goole) |
| Havers, Rt Hon Sir Michael | Marten, RtHon Neil |
| Hayhoe, Barney | Martin, M(G'gowS'burn) |
| Haynes, Frank | Maxwell-Hyslop, Robin |
| Heffer, Eric S. | Mayhew, Patrick |
| Henderson, Barry | Maynard, Miss Joan |
| Hogg, N. (EDunb't'nshire) | Meacher, Michael |
| Holland, Philip (Carlton) | Miller, Hal(B'grove) |
| Holland, S.(L'b'th, Vauxh'll) | Mills, lain(Meriden) |
| HomeRobertson, John | Miscampbell, Norman |
| Hoyle, Douglas | Mitchell, David(Basingstoke) |
| Huckfield, Les | Mitchell, R.C. (Soton Itchen) |
| Hughes, Mark (Durham) | Molyneaux, James |
| Hughes, Robert (Aberdeen N) | Monro, SirHector |
| Hughes, Roy (Newport) | Morris, Rt Hon A. (W'shawe) |
| Morrison, Hon C. (Devizes) | Sims, Roger |
| Morrison, Hon P. (Chester) | Skinner, Dennis |
| Morton, George | Snape, Peter |
| Murphy, Christopher | Spearing, Nigel |
| Neale, Gerrard | Speed, Keith |
| Needham, Richard | Spence, John |
| Nelson, Anthony | Stanbrook, Ivor |
| Neubert, Michael | Stanley, John |
| Newens, Stanley | Steen, Anthony |
| Newton, Tony | Stewart, A. (ERenfrewshire) |
| Nott, Rt Hon John | Stewart, Rt Hon D. (W Isles) |
| Ogden, Eric | Stewart, Ian (Hitchin) |
| Onslow, Cranley | Stokes, John |
| Oppenheim, Rt Hon Mrs S. | Stott, Roger |
| Orme, Rt Hon Stanley | Stradling Thomas, J. |
| Palmer, Arthur | Straw, Jack |
| Park, George | Summerskill, HonDrShirley |
| Parker, John | Tapsell, Peter |
| Pattie, Geoffrey | Taylor, Mrs Ann (Bolton W) |
| Percival, Sir lan | Thomas, Rt Hon Peter |
| Prentice, Rt Hon Reg | Thompson, Donald |
| Price, C. (Lewisham W) | Thorne, Stan (Preston South) |
| Proctor, K. Harvey | Thornton, Malcolm |
| Pym, Rt Hon Francis | Torney, Tom |
| Radice, Giles | Townsend, Cyril D, (B'heath) |
| Raison, Timothy | Trippier, David |
| Rathbone, Tim | Trotter, Neville |
| Rees-Davies, W. R. | Varley, Rt Hon Eric G. |
| Rhodes James, Robert | Viggers, Peter |
| Ridley, HonNicholas | Wakeham, John |
| Rifkind, Malcolm | Waldeg rave, HonWilliam |
| Roberts, Albert (Normanton) | Ward, John |
| Roberts, Ernest (Hackney N) | Wells.John (Maidstone) |
| Roberts, Wyn (Conway) | Welsh, Michael |
| Ross, Ernest (Dundee West) | White, Frank R. |
| Sainsbury.HonTimothy | Wilkinson, John |
| St. John-Stevas, Rt Hon N. | Wilson, Gordon (DundeeE) |
| Scott, Nicholas | Winterton, Nicholas |
| Sever, John | Wolfson, Mark |
| Shaw, Giles (Pudsey) | Woolmer, Kenneth |
| Shaw, Michael (Scarborough) | Young, David (BoltonE) |
| Sheerman, Barry | Young, SirGeorge (Acton) |
| Sheldon, Rt Hon R. | |
| Shelton, William (Streatham) | Tellers for the Noes: |
| Silkin, Rt Hon J. (Deptford) | Mr. Frank Hooley and |
| Silvester, Fred | Mr. David Stoddart. |
| Division No. 50] | [10.12 pm |
| AYES | |
| Allaun, Frank | Hughes, Robert(Aberdeen N) |
| Alton, David | Jones, Dan(Burnley) |
| Atkinson, N.(H'gey) | Leighton, Ronald |
| Beith, A.J. | Lewis, Arthur(N'ham NW) |
| Bennett, Andrew(St'kp'tN) | Lewis, Ron(Carlisle) |
| Booth, RtHon Albert | Litherland, Robert |
| Callaghan, Jim(Midd't'n &P) | McElhone, Frank |
| Campbell-Savours, Dale | McKay, Allen(Penistone) |
| Clark, Dr David (S Shields) | Marks, Kenneth |
| Cocks, Rt Hon M. (B'stol S) | Marshall, D(G'gowS'ton) |
| Concannon, Rt Hon J. D. | Morton, George |
| Cook, Robin F. | Palmer, Arthur |
| Cryer, Bob | Penhaligon, David |
| Cunliffe, Lawrence | Powell, Raymond(Ogmore) |
| Cunningham, DrJ.(W'h'n) | Prescott, John |
| Dalyell, Tam | Robertson, George |
| Davidson, Arthur | Ross, Stephen (Isle of Wight) |
| Davis, Terry (B'ham, Stechf'd) | Skinner, Dennis |
| Dewar, Donald | Smith, Cyril(Rochdale) |
| Dixon, Donald | Snape, Peter |
| Dobson, Frank | Steel, Rt Hon David |
| Dormand. Jack | Stoddart, David |
| Evans, John (Newton) | Stott, Roger |
| Grimond, Rt Hon J. | Wainwright, E.(Dearne V) |
| Hamilton, James(Bothwell) | Walker, Rt Hon H.(D'caster) |
| Hamilton, W. W. (C'tral Fife) | Welsh, Michael |
| Harrison, Rt Hon Walter | White, Frank R. |
| Haynes, Frank | Whitlock, William |
| Holland, S.(L'b'th, Vauxh'll) | Woolmer, Kenneth |
| HomeRobertson, John | |
| Hooley, Frank | Tellers for the Ayes: |
| Howells, Geraint | Mr. James Tinn and |
| Huckfield, Les | Mr. Hugh McCartney. |
| NOES | |
| Alexander, Richard | Hamilton, HonA. |
| Ancram, Michael | Hawksley, Warren |
| Aspinwall, Jack | Hogg, HonDouglas(Gr'th'm) |
| Baker, Nicholas (N Dorset) | Holland, Philip(Carlton) |
| Beaumont-Dark, Anthony | Howell, Rt Hon D. (G'ldf'd) |
| Benyon, W.(Buckingham) | Hunt, John(Ravensbourne) |
| Berry, HonAnthony | Jopling, RtHonMichael |
| Biggs-Davison, SirJohn | Lang, Ian |
| Blackburn, John | LeMarchant, Spencer |
| Boscawen, HonRobert | Lester, Jim (Beeston) |
| Boyson, Dr Rhodes | Lyell, Nicholas |
| Bright, Graham | Macfarlane, Neil |
| Brinton, Tim | MacGregor, John |
| Brooke, Hon Peter | MacKay, John(Argyll) |
| Brown, Michael(Brigg&Sc'n) | McNair-Wilson, M.(N'bury) |
| Bruce-Gardyne, John | Major, John |
| Budgen, Nick | Marlow, Antony |
| Cadbury, Jocelyn | Marshall, Michael(Arundel) |
| Carlisle, John (Luton West) | Mates, Michael |
| Carlisle, Kenneth(Lincoln) | Maude, Rt Hon Sir Angus |
| Chapman, Sydney | Maxwell-Hyslop, Robin |
| Churchill, W.S. | Mayhew, Patrick |
| Clark, Hon A. (Plym'th, S'n) | Mellor, David |
| Clarke, Kenneth(Rushcliffe) | Meyer, Sir Anthony |
| Cockeram, Eric | Mills, lain (Meriden) |
| Cope, John | Mitchell, David(Basingstoke) |
| Cranborne, Viscount | Molyneaux, James |
| Dean, Paul (North Somerset) | Murphy, Christopher |
| Douglas-Hamilton, LordJ. | Myles, David |
| Dykes, Hugh | Neale, Gerrard |
| Elliott, SirWilliam | Nelson, Anthony |
| Faith, Mrs Sheila | Newton, Tony |
| Fenner, Mrs Peggy | Onslow, Cranley |
| Fletcher-Cooke, SirCharles | Parris, Matthew |
| Garel-Jones, Tristan | Pattie, Geoffrey |
| Goodhew, SirVictor | Pawsey, James |
| Goodlad, Alastair | Percival, Sir lan |
| Gorst, John | Proctor, K. Harvey |
| Greenway, Harry | Rathbone, Tim |
| Griffiths, PeterPortsm'thN) | Renton, Tim |
| Rhys Williams, Sir Brandon | Stevens, Martin |
| Roberts, M. (Cardiff NW) | Stradling Thomas, J. |
| Rossi, Hugh | Taylor, Teddy (S'end E) |
| Shaw, Giles (Pudsey) | Tebbit, Rt Hon Norman |
| Silvester, Fred | Thomas, Rt Hon Peter |
| Speller, Tony | Thompson, Donald |
| Spicer, Jim (West Dorset) | Thorne, Neil (llfordSouth) |
| Squire, Robin | Thornton, Malcolm |
| Stanbrook, lvor | Townend, John(Bridlington) |
| Trippier, David | Wheeler, John |
| Viggers, Peter | Winterton, Nicholas |
| Waddington, David | Wolfson, Mark |
| Waldegrave, Hon William | |
| Walker-Smith, Rt Hon Sir D. | Tellers for the Noes: |
| Watson, John | Mr. Selwyn Gummer and |
| Wells, John(Maidstone) | Mr. David Hunt. |
§ Question accordingly negatived.