British Railways (Serpell Report)

HC Deb 03 February 1983 vol 36 cc432-510 4.18 pm

Mr. Albert Booth (Barrow-in-Furness)

I beg to move, That this House opposes massive rail network cuts and commuter fare increases; and condemns the Government for its failure to reject outright the Serpell Report.

Mr. Speaker

I have selected the amendment in the name of the Prime Minister.

Mr. Booth

The publication of the Serpell report has lifted the curtain on the future of British Rail under a Conservative Government. It shows the unmitigated disaster that must flow from the Government's policy of starving British Rail of the investment that it needs for track renewal, new rolling stock and electrification.

The report damages the prospects for railways in three significant ways. First, by highlighting its options, it draws the attention of public debate to those options and away from the current crisis that is affecting British Rail. Secondly, by showing the worst horrors of these options, it will make other options, which would still mean serious cuts in our present network and service standards, appear more acceptable. Thirdly, it will detract from or delay decisions that are urgently needed on British Rail's investment proposals.

The whole thrust and direction of this report flows from the handling by the Government of British Rail's investment problems. Since they came into office, the Government have refused to make a decision on an overall investment plan for the railways. When they received the joint electrification plan, agreed unanimously between the Department of Transport and British Rail, which went to the Secretary of State's predecessor in December 1980, they refused to pick any of the four options clearly outlined therein for investment in the electrification of our main line network. Without such a decision it is almost impossible intelligently to plan investment in other parts of the system.

When British Rail pressed the Government on this matter, it was asked to go away and to do its sums again because assumptions had been made which did not hold good in a time of slump. When it came back, it was told to go away and to do the sums again, but this time to do them line by line instead of on a network basis. Then the Government said that the sums should be done on the basis of electrifying only those parts of the inter-city network that would be viable by 1985. So it goes on. British Rail has been told each time to do its sums again or to consider the problem from a different angle, but a decision on the essential matter of investment has never been taken.

There are wider and more serious refusals to face than a decision on this investment proposal. There has been no overall decision on the proposal by British Rail following the investigation by the Monopolies and Mergers Commission of the south-east railway services reported on in October 1980. Worse still, there has been no decision on the corporate plan for investment put forward for 1981–85 by British Rail, nor on the rail policy proposal for investment throughout the 1980s which was put to the Secretary of State in March 1981.

At any time a deferment of decisions for a major public industry on such a scale would be important, but in this case the issue is crucial, even vital, to the life of our railway network, because there was in that report a statement that the decision was expected to be taken in 1981. It went on to say that if the new investment did not commence by 1983, British Rail would have passed a watershed beyond which there would be an inevitable deterioration of the network and services.

In May 1980, a document was sent by British Rail's chairman to the then Secretary of State summarising the effect of continuing the existing investment level over the decade of the 1980s. It said that if investment continued at that level, 3,000 track miles would have to be closed, the availability of locos would deteriorate enormously and large sections of track would have to be put under speed restrictions. That was clearly predicted to the then Secretary of State in May 1980, yet the investment expenditure of British Rail was not sustained even at that level; it was run down.

In 1981 investment by the board was 54 per cent. higher than in 1979. We kept telling the Secretary of State in the House that his investment limits would make absolute nonsense if he did not adjust the external financing limits of British Rail to enable it to go ahead with investment, but the idea was pushed aside. Nevertheless, this has happened and there has been a drop of £180 million a year in actual expenditure on investment in British Rail. Anyone who disagrees with this can look at page 41 of the Serpell report, which sets out actual investment expenditure under this Government.

Given the nature of the Government's approach to railway investment and the narrow terms of reference of the Serpell report, we are hardly entitled to be surprised that the report is both negative and pessimistic. Its terms of reference were to examine finances and report on options designed to secure improved financial results. There was nothing in those terms of reference about looking at the social implications of letting our railway network collapse, nothing about the effect of transport systems on our environment and, more especially, nothing about catering for the needs of the travelling public. There was no suggestion that British Rail should be examined in the context of an integrated transport policy.

The whole thrust of those terms of reference, like the whole thrust of the Government's approach, was to narrow down and to take the blinkered approach, which is to look at the books and to take the accountant's view in the middle of a recession instead of considering the fundamental needs of a transport system in a modern industrialised country where people need mobility.

Sir David Price (Eastleigh)

The right hon. Gentleman is perhaps being a little unfair to the terms of reference, which are: To examine the finances of the railway and associated operations, in the light of all relevant considerations In the hands of an imaginative committee, I suggest that that could cover everything the right hon. Gentleman has mentioned. Where one might criticise the Serpell report is that the members did not take their terms of reference sufficiently widely. It might be possible to criticise the interpretation of the terms of reference, but it would be wrong to criticise the terms of reference themselves.

Mr. Booth

The whole of the Serpell report carries the implication that the members understood that they were carrying out their terms of reference and that all the things to which they referred were the things they were led to believe were relevant to the type of inquiry they were conducting. If this matter is as important as my right hon. and hon. Friends and I believe it to be, that should not have been left in doubt. The terms of reference should have clearly stated that the financies were to be examined in the light of the requirements of an integrated transport system or of the effect upon the social conditions of those who will suffer as a result of the withdrawal of the railway network.

Paragraph 5 of the introduction to the report spells out clearly what the members believed they were about: our review has been concerned with the railway's finances, not transport policy. What credence would hon. Members give to a report introduced by the Secretary of State for Education and Science which announced that it was concerned with school finances, not education? What credence would they give to a report introduced by the Secretary of State for Social Services which related to hospital finances, but paid no regard to health? If we take such reports seriously, we shall be accepting the madness of monetarist priorities.

The whole emphasis of Serpell is on cost-saving through cuts and fare increases. It offers no prospect of growth or of expanding services. Serpell is pessimism seeking to wear the clothes of realism. Viewed from the standpoint of public representatives concerned to maintain the transport services of their areas in the light of their knowledge of their constituents' needs, it does not represent a realistic approach.

The freight prospects are no better than the prospects for passengers. Having praised the Speedlink freight development as imaginative, the report states that the British Railways Board should not invest in it because the risks are too great. I put it to the Secretary of State that the risks of investing in Speedlink are only too obvious if the network is to be cut substantially. Those risks will not be lost on industrialists, who rely on rail services to maintain their industries. Those risks will not go unnoticed by those whom we should be persuading to take up section 8 grants to link their industries into our rail network so that rail can be used more effectively to provide for our freight transport needs.

Chapter 6 deals with engineering and raises the most alarming prospects not only for the reliability of our rail system, but for its safety. It estimates a saving of £92 million from a cut on continuous welded rail renewal. Paragraph 6.16 states that the track should not be maintained to a higher standard than is necessary. Paragraph 6.17 states that an experiment should be conducted to establish the lowest level of maintenance consistent with safety.

What reputable railway engineer would say that he could lower safety standards and that the line would still be safe or that the standards for signalling and locos could be lowered and that he would still vouch for their safety? That is an appalling suggestion. Standards of railway safety may be high in this country, but they are not too high for the representatives of the Labour party. Any experiment to reduce those standards could be carried to its logical conclusion only by risking the life and limb of British Rail passengers.

Mr. Dennis Skinner (Bolsover)

The Government are not bothered.

Mr. Booth

What is worse is that Serpell admits that the cost savings listed in the chapter are defective. He admits that the report has not considered the adverse effects on revenue from those savings. Serpell admits that the transitional costs of changes have not been evaluated and that he has ignored the investment costs involved in changing British Rail's maintenance arrangements. Therefore, that part of the report is an insult to those who seriously want to consider the implication of railway standards for Britain.

The report deals with British Rail Engineering Ltd. and the railway workshops, but there is no cost-benefit analysis of what is proposed. Instead, British Rail is condemned for buying British. I wonder whether there is any understanding between those who say that we should be patriotic and buy British and those who determine the financial guidelines of our nationalised industries. If implemented, most of the options would threaten not only the railway workshops, but the private industries that supply about 60 per cent. of the materials used by those workshops.

We are seriously concerned about the future of railway towns, such as Horwich, Shildon, and Swindon, whose communities have developed the tradition of serving British Rail's needs and wose workers have great expertise. They are undoubtedly capable of applying British Rail's superb research and development to meeting the needs of our railway network and exporting equipment. The threat of mass unemployment hangs over those towns.

I am told by my hon. Friend the Member for Westhoughton (Mr. Stott), in whose constituency Horwich lies, that a news sheet, published by one of the political parties represented in the House, states that the loco works may go by 15 May. I do not believe that. I do not believe that British Rail—and I hope that I am justified in saying that I do not believe that the Secretary of State—has any intention of announcing the closure of Horwich loco works, or any other such works, on 15 May. However, what a Front Bench Opposition spokesman believes does not constitute an authoritative position. Therefore, I call on the Secretary of State to do what only he can do and to set at rest the fears that have been stirred up in that town. I call on him to state categorically, either now or when he makes his speech, that no British Rail workshops will close as a result of the report. [HON. MEMBERS: "Answer the question."] The Secretary of State chooses not to answer now, but I trust that he will do so in his speech.

I shall deal briefly with the options in the report. Option A is the so-called commercial railway option. Conservative Members like things to be done in a commercial manner. The report's conclusion makes it clear that the options were studied at the direct invitation of the Secretary of State. Option A would mean a cut of 84 per cent. in the network. Just over 11,000 route miles would be cut to 1,630 route miles. The railway would serve Glasgow and Edinburgh by the west coast main line. Cardiff, Bristol, Bournemouth and Brighton, Dover and Norwich would also be served, and there would be the east coast line to Newcastle. According to Serpell, it would run at a profit of £34 million. What would be the cost to the community, to the country, to the people of Scotland—who would be virtually robbed of their rail service with the exception of Edinburgh and Glasgow—and to the people of the west country, who would not have any railway system? What would be the cost to the people of Wales, who would be left with only one railway service in the southern part of the country?

Mr. Harry Cowans (Newcastle upon Tyne, Central)

I am following my right hon. Friend's eloquent argument, but there is one aspect on which he has not touched. Even if the Government said that they would not implement the report immediately, and even if they had a regional policy—which they patently have not got—the decimation of communications in those regions that are trying to attract industry and investment would mean no chance of new investment in the northern region, Wales or Scotland.

Mr. Booth

My hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans) has made an extremely important point. Our motion condemns the Government for failing to reject the report outright and underlines the wider consequences that will flow from implementation of the report. It certainly has the consequences for regional development alluded to by my hon. Friend.

Even if we regard option A as the extreme possibility—one that would not be implemented—as I hope we can, it would be very much in keeping with the Government's approach to choose option B, which is described as a resource cost minimisation network. The only significant difference between option B and option A is that it would maintain London commuter lines that cover costs—a total of about 2,200 route miles. That would leave BR with a defict of £19 million. Option B would be as unjust as option A to the hundreds of towns and millions of people who would be cut off from railway networks.

If those options are unrealistic—some of us feel that they are unrealistic to the point of madness—they could have been viewed in a much more worthwhile and objective context had Serpell been instructed to examine the investment proposals put forward by British Rail for electrification and investment through the 1980s to create a rail network for the future. Serpell does not do that. Instead, he erects an Aunt Sally of a so-called high investment option and then rules it out of court.

The Government's amendment makes it clear that they welcome the prospects raised by the Serpell report for the sort of agonising debate in which we are engaged and for further cuts. As in so many other areas, the Labour party has an alternative policy. It is a published policy that: will achieve main line electrification, the replacement of worn-out trains, the expansion of rail freight services; the necessary track renewal and modern signaling.

Although the Serpell report is negative, it cannot be ignored. Even if the Government do not implement any part of the report before the general election, should the disaster befall the country of another Conservative Government being returned, what is now a spectre will become a reality. It is not likely that we shall ever have another Conservative Government, but what is Likely is that, from now until the general election, the Government will continue to refuse to invest in British Rail. Since 1979 we have seen a serious cut in investment in British Rail. The denial of the investment that is necessary to sustain our railway network is an implementation of Serpell by stealth.

In rejecting the report, we say not only that we want no part in any of the options that Serpell has spelt out, but that we call for investment to provide our people and industry with the modern railway system that they deserve.

4.44 pm

The Secretary of State for Transport (Mr. David Howell)

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: 'welcomes the opportunities, following the Serpell Report, for informed debate about how to achieve a better deal for both the rail customer and taxpayer, and how to cut costs and raise efficiency and establish a clear and positive direction for the railway's future for those it serves and those who work within it' I agree with the right hon. Member for Barrow-in-Furness (Mr. Booth) and many of his hon. Friends that the state of our railway system is not satisfactory, and that over the years it has been allowed to ossify—that is the word that has been used by British Rail—and that it is high time that a new, more creative and questioning approach was taken towards our railways.

We shall get nowhere by taking the attitude reflected in the motion, which says that when we ask the questions that could form the basis for a modern and successful railway future we must immediately slam the box shut because they are too difficult to answer. That is implied in the right hon. Gentleman's approach. It is a narrow-minded and wrong approach.

Although the railway system is not changing in the way that it should, in one sense a change has taken place. That change is in the taxpayers' contribution to the system. At 1982 constant prices, it has climbed from £664 million in 1977, to £702 million in 1978, to £768 million in 1979, to £774 million in 1980, to £891 million in 1981, to £926 million in the current year. That last figure means that the taxpayer is paying more than the fare-paying passenger to support the railway system. It is worth while reminding the House of those soaring figures when we hear so much about the denial of support for railways. In real terms, there has been a steady climb in social support for our railways system to the point when, for every passenger mile, the taxpayer is paying 5.4p and the fare-paying passenger 5.3p.

Mr. Philip Whitehead (Derby, North)

Will the Minister now read out to the House the comparable figures for other European countries? Will he say why the Serpell report does not give any international comparison?

Mr. Howell

I shall provide, later, international comparisons of both social support and investment. I believe that those are important issues. To put it mildly, there have been some misunderstandings about the figures that have been bandied about.

It was against the background of soaring taxpayer support and British Rail's own anxiety that, despite the vast increase in real social support, it still felt unable to fulfil its commitment and remit. So BR demanded and urgently sought a review. I chose Sir David Serpell to head the inquiry and the committee. He is a director of British Rail. That decision was warmly welcomed by British Rail as being a major step forward and a positive start to the sort of review that British Rail had been urging.

Sir Anthony Grant (Harrow, Central)

I apologise for intervening at such an early stage, but it is the right point at which to do so. Is my right hon. Friend aware that there has been grave disquiet because the report was leaked at an early stage, long before the House or any member of the public had an opportunity to see it? The report has been widely debated. Can he assure us that no leak took place from his Department? Does he think it significant that many copies were requested in advance by the British Rail chairman and by his public relations department?

Mr. Howell

I deeply share my hon. Friend's disquiet that what emerged were selective and highly distorted parts of the report.

The leaks were designed to give a wholly false and, in some cases, inaccurate impression of what went on. As soon as the report was received by me, a few copies were sent in confidence to the chairman and board of British Railways. Thereafter, orders were given rapidly to publish the considerable report with the accompanying tables, and it was brought to the House at the first possible opportunity.

British Rail warmly welcomed the appointment of Sir David Serpell and the arrangements for the report. Those matters were discussed with British Rail, and warmly welcomed. There was an urgency about the matter. BR was concerned that the report should make rapid progress. It is common knowledge—and has been since 1981—that the present chairman of BR, Sir Peter Parker, wished only to be reappointed in 1981 for a further two years. He has had those two years, and times have not been easy for BR.

During those two years, Sir Peter Parker, Bob Reid his chief executive, and their colleagues on the board have done a commendable job in getting to grips with some of the difficulties, management practices and restrictive practices, and also with the management reorganisation that was so clearly needed in British Rail and so clearly identified in the Serpell report. The difficulties were magnified by the way in which the Opposition went out of their way in the summer actively to support the disruptive action by ASLEF, which has done so much damage to British Rail.

Mr. Robert Hughes (Aberdeen, North)

The Secretary of State referred to the period of office for which Sir Peter Parker wished to be reappointed. Will he take this opportunity to deny a story in today's issue of The Standard to the effect that he intends to appoint a Mr. John Palmer—a senior civil servant in his Department—as chairman of British Rail at the end of Sir Peter Parker's term of office?

Mr. Howell

The report in the press is without any foundation, and is absolute rubbish. It is idle and, in some cases, malicious speculation. There is no truth in it whatsoever.

The Serpell report examined the action taken by British Rail. Sir Peter Parker, Bob Reid and others have made a major start on some of the inefficiencies and difficulties, especially in management information and control. The report says that there is much more to do. No one other than those who simply do not wish to discuss the issue can deny that. Sir Peter Parker told me in a note we intend to be using the opportunity of the Reports to make the most of the challenge in them. Sir Peter referred to planning, investment, engineering and financial information, and said: I am sure that the Committee's work, complemented by the work that we have put in hand, will enable us to accelerate the improvements that we had in mind in these fields and respond positively to new points raised by the Committee. What a sharp contrast that is to the wholly negative attitude of the right hon. Member for Barrow-in-Furness in everything that he said this afternoon.

The right hon. Gentleman made great play of the network options. He knows as well as I know that they are not closure plans. They do not present the Government with closure plans. That is made absolutely clear in the opening comments to the report. It is true that the report raises questions—as did the 1977 Labour Government's transport White Paper with which, presumably, the right hon. Gentleman was involved—about the most cost-effective way of meeting local transport needs. By showing the costs of parts of the network the report illuminates the costs in relation to the revenues. That was what the 1977 Labour White Paper rightly said was the question that should be asked. It is asked with great clarity in the report. The right hon. Gentleman thought that it was the right question to ask in 1977. He thinks that it is the wrong question in 1983 because he has been shunted sideways in his position and his thinking. In 1977, the right hon. Gentleman was part of a Government who thought that that was the right question to ask.

When considering rural transport needs it cannot be right to set our face against the best use of resources, new technology, alternative and different forms of service that are cheaper for the passenger and which, if they are applied, will save rural services that might otherwise be threatened. The right hon. Gentleman spoke about the threat to branch railway services and other services. It was precisely the view embodied in his speech this afternoon—that we should not even think of different ways of using resources and new technology or of different ways of operating on the track—that guarantees that the services could come under threat. The need to look at them in a new way offers the best hope for saving our railways that might otherwise be threatened.

Mr. Dafydd Wigley (Caernarvon)

The Secretary of State said on 20 January that the most extreme options were not applicable. Will he say which options he regards as the most extreme? That would help us in the debate tonight.

Mr. Howell

I certainly rule out extreme options. That includes the option that Mr. Goldstein has since said was only included as an example and was not practicable. I refer to option A which is, nevertheless, an important illustration of a purely commercial railway. It shows just how far we are from having a railway system that can cover its costs. It is a valuable illustration, but not a practicable option.

A great deal of what the right hon. Gentleman said turned on the point that our railways have been starved of investment. It is true that during the past two years, and especially last year, although there was no restraint on the investment ceiling, the actual amount of investment fell away. That is a matter of great regret. However, in considering why it fell away, the right hon. Gentleman might chose his words a little differently. British Rail was unable to invest up to the ceiling allowed by the Government because large sums of money—hundreds of millions of pounds—were siphoned away in pointless industrial disputes, which inflated costs. During the summer, the right hon. Member for Ebbw Vale (Mr. Foot), the right hon. Gentleman and other Opposition Members actively supported ASLEF in a futile and monstrous strike, which drained millions of pounds from the British Rail system. It is, therefore, a bit much that the right hon. Gentleman should lecture us today about the fall in investment on British Rail, which we all regret but the cause of which we know so well.

Mr. Booth

If the right hon. Gentleman seriously believes that, will he explain why both he and his predecessor refused to approve British Rail investment plans in the 1980 rail policy before there was any question of a strike?

Mr. Howell

I shall deal in a moment with a whole range of investment plans that have been approved. One that the right hon. Gentleman might ponder is that symbolised by the new electric rolling stock now at Cricklewood, with willows growing around it, which was meant to run on the Bedford-St. Pancras electrified line—£150 million of taxpayers' money has been spent on it, but it has not been operated because of restrictive practices on the railways. That is one example of investment undertaken in good faith, where the other side of the bargain has not been kept.

Mr. T. H. H. Skeet (Bedford)

That piece of railway has not been in action for a year because of labour troubles, and the losses amount to £160,000 a week.

Mr. Howell

My hon. Friend reinforces the reality of a sad story—one that shows that the charge that the problem turns solely on lack of investment projects and expenditure cannot be sustained.

The hon. Member for Derby, North (Mr. Whitehead) referred to international comparisons. It is true that British Rail is investing at about half the level of the SNCF. It may have something to do with the fact that our railway system is only half the size of the French system. It may also have something to do with the fact—and I fear that it has—that on almost every measure of productivity our railway is still performing at levels well below those on the French railway. If we could have secured the manning levels of the French railway, if we could have avoided the affairs and incidents that took place last year—which drained money away from the railways—it would have been possible for British Rail to have achieved the investment level that we would all have liked to see. But for the right hon. Gentleman to dismiss, ignore and not even mention those aspects, and to return again and again to the proposition that it is really just a question of pushing up investment, is really to shut his eyes tight to the real problems, which we must solve, facing the railways in the future.

Mr. Robin F. Cook (Edinburgh, Central)

rose—

Mr. Howell

I shall not give way any more because it is time we heard a few facts.

I shall list some of the investment approvals for this year. They include the west of England resignalling, the Anglian electrification programme, the lightweight diesel multiple unit investment, an entire generation of new ticket machines and the Glasgow-Ayr electrification. Those are important projects. We also accept the case for a major new investment in the Tonbridge-Hastings line, although a decision has yet to be taken on precisely what form that will take. So any suggestion that no investment is going on—I think at one stage the right hon. Gentleman used that phrase—is again false and misleads people about what is going on in British Rail.

The right hon. Gentleman did not touch on new organisation, which is part of his general wish for British Rail's affairs and problems not to be discussed and debated, but to be pushed constantly aside. During the past year, Sir Peter Parker and Mr. Bob Reid, the chief executive, have developed the concept of what they call sector management, which is, for the first time in the history of the nationalised enterprise, organising the different sectors and the different businesses under separate management structures. That is an excellent start. It immediately throws up healthy questions—the right hon. Gentleman does not seem to like questions about British Rail—within the different sectors as to whether they have to buy in from the central services, and whether to pay overheads to run the inter-city business or the freight business in the way that they have in the past. These are healthy management developments.

I also noticed that during the Serpell inquiry the board of southern region put forward the proposition that southern region might be organised as a separate and independent company. The board put that forward for good reasons concerned with management, loyalty, good work practices and a good service to the passenger and the customer. If the right hon. Gentleman will not consider the issues raised by the Serpell report, and is not interested in the future, may I persuade him—may I try to turn his mind—to begin thinking about a structure for our railways and for British Rail in the future that is an improvement on the pattern that we have inherited over the past 30 years, which has come down to us from vesting day in January 1949? That is a long time for any single organisation to stay in one mould. The right hon. Gentleman and his hon. Friends would do a much greater service to the railways if they would open their minds and began the debate on these issues instead of rushing to table a motion saying that the report should be dismissed and suppressed.

I suggest also that the right hon. Gentleman might open his mind, although I do not believe that he will be able to do so, to the opportunities of private capital. There are certainly opportunities, recognised by British Rail although not by the right hon. Gentleman, for joint ventures and for opportunities with private capital. I do not know what is the right hon. Gentleman's mood on this issue. I have seen reports in the newspapers, as he has, that there is a possibility of private catering operating on some British Rail lines. If I say that I encourage private catering, will I then be accused by the right hon. Gentleman of public sector asset-stripping? I suppose I will, but I believe that that would be a wholly negative attitude.

Mr. W. R. Rees-Davies (Thanet, West)

This is a totally new matter. Will my right hon. Friend invite Sir Peter Parker to consider having private catering of an attractive fashion at, for example, Victoria station, and on the different stations down the line? Will he also encourage the reintroduction of the great trains, which carried prestige—the Thanet Belle and the Brighton Belle? Such moves could bring real attraction to the railways again.

Mr. Howell

My hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies) is wholly correct. The dismissive attitude of right hon. and hon. Members on the Opposition Benches only typifies their negative attitude to the future development of the railways.

Mr. Frank Dobson (Holborn and St. Pancras, South)

rose—

Mr. Howell

I will not give way again because time is getting on.

One of the worst things that British Rail did in the last decade was to get rid of the Brighton Belle. It was a sad decision and contributed to the poor image of British Rail.

Mr. Dobson

rose—

Mr. Howell

I should like to refer next to engineering costs—

Mr. Dobson

rose—

Mr. Howell

These are serious matters.

The right hon. Gentleman spoke about the problems of British Rail Engineering Ltd which are, of course, examined in the Serpell report. I should have liked him to make reference today—and possibly given some recognition and welcome—to the new overseas order that has been secured for BREL. It is the first substantial order for British industry in the French-speaking part of Africa and is a major achievement. It is, in a sense, a real first. I am glad indeed to note that the credit terms that were made available and agreed with the Government helped to secure this order. So, when the right hon. Gentleman talks about the future of British Rail Engineering, and the worries, which of course there have been—but they did not start with the Serpell report—about the future matching of capacity to orders, it would be fairer and more constructive for those concerned if he were to concentrate on the possibilities for developing orders for the future and for opening up the type of export markets that are secured by the order to which I referred, which is announced in the newspapers today.

I believe that that is the right approach. Serpell was as concerned as the right hon. Gentleman with the future of the engineering part of British Rail. The committee looked constructively at options and ways in which the capacity and employment could be secured for the future. Refusal to discuss it, refusal even to contemplate the need for change, is a guarantee of growing difficulties. It is not the type of attitude that the Government are prepared to take.

Mr. Leslie Spriggs (St. Helens)

rose—

Mr. Howell

I have given way a great deal and I will not give way again.

I have touched on some of the points that the right hon. Gentleman raised in his negative contribution. It is apparently his view and that of some of his right hon. Friends, although it is not the view of many within British Rail and certainly not the view of many of those in the management of British Rail who want to get on to build a modern railway, that we should reject reports and examination, and light and illumination. One of his hon. Friends was even demanding that we should burn the report. That is not a healthy approach to books or reports in a free country.

The reality is that, like much else in this country, railway reform should have been tackled years ago. Those who have persistently resisted change and called for the rejection and supression of reports have befriended not progress but decay. In the short term we all know, and the report emphasises, that cost savings are essential, that further substantial cost savings and management improvements can be achieved. The report is clear about that. In the longer term, after 30 years of nationalisation, we clearly need a better structure for our railways. I believe that the Serpell report provides a stepping stone which should be welcomed and used as an advance towards that better railway. I urge the House to reject the right hon. Gentleman's myopic motion.

Mr. Deputy Speaker (Mr. Paul Dean)

Before I call the first Back-Bench Member, Mr. Speaker has asked me to appeal for brief speeches, as there are many hon. Members who wish to speak in the debate as well as four right hon. Members.

5.8 pm

Mr. William Rodgers (Stockton)

It is only right to say at an early stage in the debate that for over 30 years successive Governments have tried with more or less conviction to create an efficient railway system and none has wholly succeeded. When I was Secretary of State for Transport I said that there should never be another Beeching and I am happy to repeat that today. Just as the Beeching report, published exactly 20 years ago, led to an arid debate because of its proposals, my fear is that the Serpell report will also result in aridity, while a creative and rational debate is what we need above all.

The attempts of successive Governments to create an efficient railway system have not succeeded. Whoever has been in charge, all the problems have not been solved. It is no good sweeping them under the carpet and pretending that they do not exist. It is no good pretending that the House should not debate them from time to time. We want value for money from our railway system and value for money for the subsidy that we pay and must continue to pay. It is not apparent to me that we are necessarily getting that today.

Having said that, it follows that this is the wrong report at the wrong time. It was an error of political judgment on the part of the Secretary of State when he commissioned it. That error was compounded by the appointment of Mr. Alfred Goldstein to the committee and the appointment of R. Travers Morgan and Partners as consultants. I say that not only because of the controversy that has surrounded the appointments and the somewhat polemical statements made by Mr. Goldstein but because it was a mistake to appoint Mr. Butler of Peat, Marwick, Mitchell and Co. when that company also became consultants for the committee.

The Secretary of State may say that there are precedents for appointments of that kind and I am not saying that that may not be the case. However, it was an error and I hope that the Secretary of State will reflect upon it. There is a good case for ensuring that when an independent committee is appointed, those who are properly paid as consultants to it shoud have no professional relationship at all with members of that committee. I hope that that will be borne in mind and that the Secretary of State will realise that although he made the appointments in good faith—and I do not doubt the probity of those involved—wisdom would have suggested a different course.

It has been said that the report is a botched job and that it is full of technical oddities. That may be so. May I say in passing, in relation to a remark made by the Secretary of State, that I am prepared to stand by the White Paper, Cmnd. 6836, published in 1977 for which I was responsible? I confirm that the right hon. Member for Barrow-in-Furness (Mr. Booth) was also a member of the Cabinet at that time.

In drawing attention to the report's inadequacies, let us at least concede that there are some facts in it of which we ought to take account. The fact that we reject its conclusions should not make us blind to some of the statements and comments in it. For example, paragraph 2.18 of the report says that there is a need for a thorough examination of the present season ticket discount. No one can reasonably object to that. Paragraph 2.28 says that the provincial sector's average load factor is only 20 per cent. That is very depressing, whatever conclusion we may draw.

In paragraph 2.33 it is said that many of the provincial services represent poor value for the public. Indeed, for whatever reason, they do provide poor value for the public. I want no massive cuts or swingeing fare increases and reject both but we should recognise where the money now goes in drawing conclusions about where it should go in future.

Mr. Robert Adley (Christchurch and Lymington)

Is the right hon. Gentleman going to point out that most of the services that suffer from low load factors are those that are kept open under a social grant at the request of local and central government? British Rail is not insisting on keeping them open for the sake of it.

Mr. Rodgers

I am well prepared to say that that is the case. If those are services maintained with public money, a load factor of 20 per cent. is disturbing. I am not commenting on any one particular service, but that is something of which we should take note if we are to have value for money and if the railway is to serve its customer, which is what it exists for.

It is true that the British Railways Board has been overoptimistic about freight and parcel trade. I regret saying so, but that is the case. As Secretary of State for Transport I decided to return Freightliners Ltd. to British Rail. I believe that I was right to do so but British Rail will say that Freightliners has not been as successful as it had hoped. It is right to note that it made a loss of £6½ million last year in determining where the future should lie.

I was also responsible as Secretary of State, as is set out in the White Paper Cmnd. 6836, for widening the scope of section 8 grants and I am glad that they have been widened still further. Yet, despite all that, it is a matter for note and regret that the railways have not succeeded in attracting as much freight as I should like to see.

Mrs. Gwyneth Dunwoody (Crewe)

Has the right hon. Gentleman noticed during his myriad other ditties that there has been a recession since he was Minister of Transport?

Mr. Rodgers

Indeed, I have. I do not hold the railways responsible for the problems and nor have I said that I do. But it is crazy to be blind to these considerations. If we want to ensure that the railways have a proper future we should face the facts and not be blind to them.

The British Railways Board has said that the London and south-east region alone loses £12 million through evasion of payment of fares. That is a serious matter and the House should support anything that the British Railways Board does to try to prevent evasion on that scale.

I agree with the right hon. Member for Barrow-in-Furness about the importance of investment but the House cannot get away from the fact that investment can be unproductive as well as productive. My first act as Secretary of State was to authorise investment in the St.

Pancras to Bedford line. There can be no justification for the fact that trains are not running on that line today and that is an indictment of both management and trade unions. Investment must be productive and I am in favour of more, but once it has been made both management and unions must use it to best effect.

Mr. Peter Fry (Wellingborough)

The right hon. Gentleman said that the evasion of fares on southern region alone amounted to £12 million. Why has British Rail given such a low priority to the idea of automatic ticket collection, which would do away with such an enormous loss? British Rail should be criticised for not promoting a scheme that would increase its revenue.

Mr. Rodgers

As the hon. Gentleman rightly says, the Serpell report comments on methods of collection. I do not want to refer to them further. I am only saying that the British Railways Board has made clear the scale of the evasion and £12 million would be a significant sum even if it were for the whole of the railways, which it is not.

In the White Paper of 1977 it was said that there had been a national decision to maintain a national railway. That is correct and that is what the House should endorse today. But it is important that that national railway should not only be modern and extensive and sustained by adequate investment, but that it should have efficient working practices, good industrial relations and a significant level of public subsidy. Because a significant public subsidy is essential, options A and B in the Serpell report are nonsense and the other options are unacceptable to a lesser or greater degree.

I do not blame the committee in so far it was given only seven months to complete its report. I agree with the right hon. Member for Barrow-in-Furness that we cannot blame the committee in so far as its function was to mark out opportunities and options within a narrow compass. For that reason it is not surprising that the report is unlikely to satisfy many right hon. and hon. Members. It is superficial and muddled and, most important of all, it has missed the biggest opportunity. We cannot excuse the committee wholly but we should principally blame the Government for the time scale, the terms of reference and the failure to produce a plan.

I do not rule out the possibility of some competition in catering. I do not rule out the possibility, nor does the British Railways Board, of some bus substitution, given guarantees which were absent 20 years ago. I do not rule out a degree of regional autonomy of the kind, as the Secretary of State said, that the board proposes. I do not wholly rule out, provided that it does not affect the nature of the network, some private services on British Rail track. It would be wholly compatible with the idea of preserving a national railway were the board to choose to proceed in those directions.

Mr. Donald Anderson (Swansea, East)

Will the right hon. Gentleman accept that the new kites that are being flown about regional autonomy and new structures beg the question of finance? Questions about financing social lines will remain, however much one tinkers with the structure.

Mr. Rodgers

The hon. Gentleman is right. These are all factors that must be considered. But if we want to preserve a national railway network, which I do, and if the House recognises that there must be a subsidy, this does not preclude some constructive thinking in new directions.

I praise Sir Peter Parker's leadership. From the beginning, he identified himself with the railway. He was no doubt irritating from time to time to Ministers including the present Secretary of State. But his commitment to the railway system has been outstanding. He has dragged a rather reluctant and somewhat conservative board into new ways of looking at the system. In my view, it has not been the chairman's fault if the board has sometimes lacked imagination and will.

It is for the Government, answerable to Parliament, to decide what type of railway system they want and the terms upon which it should exist. There are two obvious fundamental choices. We could say that there will be no changes of any kind in the railway system as far ahead as we can see: it will be run as it is today with few changes at any level. There will then be an open-ended commitment to subsidise the cost. That is one choice which it would be proper for the House to make should it wish.

The second choice is for there to be a substantial subsidy, but the figure having been determined the railways should operate within it. In my view, the second choice is right. We should recognise that the railways need a substantial subsidy. We should decide what we want the railways to do and having made that decision we should determine the sum of money and let them go ahead.

On Tuesday this week the public expenditure White Paper was published. It is worth looking at some of the substantial sums of money that we spend. During the year 1982–83 we spent £770 million in grants and subsidies to agriculture, irrespective of the common agriculture policy; £818 million on general industrial assistance; £791 million on the coal industry; and £1,163 million on general housing subsidies.

Compared with those figures, the present figure of £862 million for the railways is not far out of line. We must determine the sum in the light of what the railways are expected to do. However, I do not believe that we can have an open-ended commitment. We should discuss what type of railway we want. We should decide what the House and the Government are prepared to pay for it. We should ensure that the board and its chairman are up to their job. We should then give them the freedom to get on with it.

There is a proper level of support, and there is such a thing as managerial independence. I should like to see the industry held much more at arm's length. Given the support, the industry needs stability and today's debate should point in that direction.

5.25 pm

Mr. Robert Adley (Christchurch and Lymington)

This afternoon Mr. Speaker made a statement about Prime Minister's Question Time. He said that the House is, perhaps, better at diagnosis than cure. We all know what is wrong with the railways, and we all think that we could run them better than the British Railways Board. However, when it comes to putting forward specific cures there has been an ominous silence from successive Governments.

At the beginning of our proceedings today some of us prayed. We said that we would not allow "prejudices, and partial affections" to be reflected in what we said or did as Members of Parliament. I should be wrong if I did not declare that I cannot guarantee to abide by that. It will be known by a number of my colleagues that I am a keen supporter of the railways and hope constantly to see them prosper.

I was a little disappointed with the speech of the right hon. Member for Barrow-in-Furness (Mr. Booth). However, I agree with him that the point raised by Serpell about experiments with safety was nothing less than grotesque. If we carried that type of experiment to its logical conclusion we should make the railways less and less safe until people were killed. It is incredible that anyone who expects to be taken seriously could put forward such proposals in 1983.

I should like to add my welcome to that of my right hon. Friend the Secretary of State and the right hon. Member for Stockton (Mr. Rodgers) to the experiments that have been announced by British Rail on its catering services. It is essential that we conduct experiments on our railway system, other nationalised industries and industry generally. My right hon. Friend the Secretary of State used the word "ossified". It is a word that has been used by the chairman of the British Railways Board and, indeed, the railways will ossify unless we experiment with them.

The difficulty with a speech such as this is to know what to leave out. The right hon. Member for Stockton talked about the problem of R. Travers Morgan and Partners. I do not want to go into that matter too deeply, but paragraph 3.01 of Mr. Goldstein's minority report says: Though each form of transport has throughout history created cultural and social change—and railways particularly so—each has been overtaken, in some or all aspects, by successors. When one reads that passage, one knows perfectly well the line that Mr. Goldstein will take.

However, I want to raise one point about R. Travers Morgan and Partners. I question whether consultants from the Sydney and Adelaide offices of that organisation are the best people to produce a report on our railway. If one looked for two countries which were geographically different it would be hard to find two that are less alike than Australia and Great Britain.

I do not say this in any spirit of animosity towards my right hon. Friend, but I believe that the way in which the report was presented to the House was unsatisfactory. There will always be leaks when a massive document such as this is produced and four or five weeks elapse between the preparation of the report and its final presentation to Parliament. I cannot understand why the Government, with this report, and previous Governments with similar reports, cannot present the report as soon as it is in the Minister's hands and say "There is the report. The Government will not comment immediately. We shall present the report, lay it before the House and debate it in five or six weeks' time." That would save a great deal of anguish. Unfortunately, many people now believe that the Serpell report is Government policy. It is not.

Some commentators and some of my hon. Friends have suggested that there is very little good to be said of British Rail and that it has stood still over the years. I am not an ardent supporter of every aspect of British trade unionism, but when the railways were nationalised in 1948 they employed 695,000 people, whereas by the end of 1982 the figure had fallen to 213,000—only 30 per cent. of the original work force. We should consider the enormous changes that the railways have willingly undergone, usually without industrial trouble, before we make swingeing accusations about their unwillingness to accept change.

It is disturbing to note that, although the Serpell committee found time to produce all these documents and plans to decimate the railway system, it apparently had no time at all to make any international comparisons. Comparisons may be odious, but one is certainly worth making. The percentage of total costs financed from revenue has been stated as 55.5 per cent. in France, 58 per cent. in West Germany and 71.2 per cent. for British Rail. Admittedly, those figures date from 1977. No later figures are available, not because British Rail is unwilling to produce them but because its European competitors were sat upon by their respective Governments for allowing their own figures to look so unattractive compared with those of British Rail. It would be interesting to see the latest figures.

I regard the Serpell report as useless as a basis for decisions about the future of British Rail. Parliament has to make political decisions, but the report does net address itself to two fundamental questions. First, do we need a railway in Britain? Secondly, how much are we prepared to pay for it? Some of my hon. Friends might answer the first question in the negative as I am afraid that some of them are so hostile to the entire public sector as to allow that to colour their judgment. The extremists on one side would like to return to the days of the Glasgow and South-Western Railway, which will never happen, while the extremists on the other side will not contemplate any experiments, trials or introduction of private capital. I agree with the right hon. Member for Stockton that unless we are prepared to consider new ideas our railway system will quietly rot away.

I suggest to my hon. Friends that we cannot expect Sir Peter Parker to achieve what no other railway in the world can do—to run at a profit while maintaining a social network. No one can set right overnight problems of this magnitude, whose difficulty we all understand and with which we must grapple. The House must grapple with these problems not only in relation to the railways. Conservatives seek to grapple with the problems of modernisation of trade union legislation, of law and order and of rates reform to name but three items. If we are prepared, as we must be, to accept justified criticism on all those issues, we must show a little more tolerance to the management of the railways as they struggle with the difficult problem of running the system effectively and efficiently.

To pretend that all is well with the railways is neither accurate nor sensible. We must ask ourselves what on earth we expect of the railways. The assumption in some quarters that they can be compared with, say, an ire cream factory is ludicrous. We must look far more closely at the position of the railways as part of the nation's transport infrastructure. We must compare the amount of money spent on railways with that spent on roads. The railways cannot be regarded in the same light as British Leyland or the British Steel Corporation. British Leyland builds cars, but so do other people in this country and abroad, The British Steel Corporation produces steel, but so do many other people around the world. British Rail, however, is part of the nation's transport infrastructure, and if we do not fund it and keep it going nobody else will—certainly not the Japanese, who are far too busy putting money into their own railway system.

The use of terms such as "privatisation" and "subsidy" raises another fundamental question. Whoever talks about privatising the Royal Navy or refers to the large funds received by numerous companies as "subsidies"? I am delighted that over the years Hawker Siddeley, for example, received massive sums to develop the Harrier, but we refer to that not as a subsidy but as an investment of taxpayers' money in a project that we believe to be in the national interest.

Mr. Rees-Davies

Will my hon. Friend go this far? Does he agree that there is no reason why we should not consider the possibility of private catering on the railways or developments such as the Thanet Belle? There is no reason to suppose that the hotel side could not be better organised with private investment, thus providing some of the capital investment in the railways that he wishes to see while lowering the subsidy that he agrees is partly necessary.

Mr. Adley

My hon. and learned Friend may not have been present or may not have heard me say that I strongly favour such experiments. This morning, I left London at 5.30 am and travelled back on the 6.50 am train from Brighton. I was able to discover the views of people on that train about the privatisation of the catering services. There was strong support for the idea. I certainly support such experiments to try to bring in private capital, but we fool ourselves if we imagine that bringing private capital into the catering services is anything more than tinkering at the edges of the problem.

We must ask ourselves when a subsidy is a subsidy and when it is an investment in technology. I am delighted to support my hon. Friend the Minister for Industry and Information Technology in putting public money into the microchip. That is certainly an investment, but I suppose that those who object to any money going into the public sector would call it a subsidy. Fewer words of abuse might be good for all of us. The investment in British Rail technology is puny when compared with that of the French.

Again, when we put money into British Leyland, are we not putting taxpayers' money into the road transport industry of this country? I find that perfectly acceptable, but it is ultimately putting public money into part of our transport system. We shall be failing in our duty if we do not far more closely identify the comparative sums that we put into road and rail.

The railways suffer from one great problem. Every item of their expenditure can be identified. The same is not true of the road lobby. If somebody drops litter in Lymington high street or paints graffiti on a public building, the ratepayers bear the cost of cleaning up. The million and one trivial items of that kind add up to an enormous sum that British Rail must include in its costs, while the road sector does not.

Yesterday I was in Bristol, and I declare an interest as a trustee of the Brunel Engineering Centre Trust. British Rail is giving £100,000 to a very worthwhile project there. That is the type of project that people expect from British Rail. Nevertheless, we cannot expect British Rail to participate, for instance, in payments like this, or in the preservation of hundreds of archaeologically important buildings and in the next breath talk about profit and loss as though we were dealing with that ice cream factory. There are assets and liabilities in any balance sheet. The liabilities in the roads sector include accidents, pollution, congestion and land use. If we make a fair, full and honest comparison, we shall find a picture very different from that painted by the Serpell report.

Whoever asks how much profit or loss the M6 made last week? I should like to quote some simple figures about accidents. Over the past 14 years, 526 people have been killed by accidents on British Rail, 2,660 people have been killed by violence in Northern Ireland and 105,000 people have been killed on the roads. I do not see anywhere in Serpell an evaluation of human life when discussing costs.

Mr. Stephen Ross (Isle of Wight)

Is the hon. Gentleman aware that about 300 of the deaths on British Rail are caused by suicides rather than accidents?

Mr. Adley

The hon. Gentleman is right, but it is part of the price that British Rail has to bear in these statistics.

In 1982 alone the cost to the community of road accidents was astronomic. It was £5,250 million. It is intolerable and unfair that these figures are not used in comparing road and rail.

There is also safety. What would the road transport industry do if Parliament laid upon it the safety obligations that we lay on British Rail? It would be unthinkable, and yet for 150 years the House has been legislating for the railways and telling them how to operate. Most of us would agree that safety standards are, among other things, very important.

Some of the ideas canvassed about the railways are ludicrous, such as the suggestion of concreting them over. Just imagine two road vehicles, not on fixed tracks, passing each other at 80 miles per hour on bridges where the parapet walls are less than 3 ft. away. It would be unthinkable. Not many weeks ago there was a rather unpleasant road accident in a road tunnel in Afghanistan and that is what might happen here if some of these dotty ideas are allowed to gather force.

As hon. Members we find that we are always in favour of prisons provided they are not in our towns. We are in favour of playschools, provided they are not in our street. We are in favour of cutting expenditure, as long as it is not in our constituencies. We are all in favour of reducing the so-called subsidy to the railways, as long at it is not on a line that serves some people who might vote for us at the next general election. This is why we are dealing with a political case that has to be dealt with not by learned reports from consultants coming from Adelaide or Sydney but by people elected to this House to make political decisions.

For too long British Rail has been the Aunt Sally of successive Governments. It has occasionally been given clear-cut targets and when it manages to meet them it is rarely thanked, but when it does not meet them we have been quick to criticise it.

My right hon. Friend the Secretary of State mentioned the Bedford-St. Pancras line. Labour Members will know from the tone of my speech where my heart lies, but they must recognise that when there is massive public investment in a line such as this and it then lies idle it is futile to expect this to not colour the attitude of the Government, who have to make decisions on the expenditure of public money. Rather than dragging the subject up again, I plead with Labour Members to do anything and everything that they can with their friends in the railway trade unions to stop this. Every time I advocate investment in the railways, many of my right hon. and hon. Friends simply say "Bedford-St. Pancras".

I was intending to read some letters that I have had from Conservative supporters, but I do not have the time. We in this small island invented the railway, and we have been left a magnificent legacy of railway tracks that we should be able to utilise to maintain and build up a decent modern railway system on our small, overcrowded island. I, for one, am not prepared to stand by and see this or any other Government destroy a precious asset, either by starvation or murder.

5.45 pm

Mr. David Ennals: (Norwich, North)

The hon. Member for Christchurch and Lymington (Mr. Adley) made a refreshing speech and took us away from the narrow issues of profit and loss. If only the Secretary of State had made a speech that was in any way comparable in terms of its commitment to British Rail, he would have achieved unanimity in the House. He could not, because he would have been sacked. Instead, he gave a dismal and negative speech, partly because he had given inadequate terms of reference to the Serpell committee, and forced it to do a job in a short time. Inevitably, it did a bad job. The vagueness of the definition of its task and its narrow interpretation have led to a blinkered and myopic report.

There are some interesting statistics in the report, but there are many other statistics that are not there. It does not offer the way forward, either for British Rail or for the transport system as a whole. There are some absolute failures in the report, largely because of the narrow terms of reference.

No attempt was made to look at an integrated transport system, looking at the problem of buses, coaches and cars—the whole road service—together with the rail service. The bus substitution proposal was an alternative, but I fear that there will be problems. Commitments may be entered into on many under-used lines to have bus services—I hope they will be run by British Rail—that would provide the same service, and link in with British Rail timetables. Before we know it, the timetables will be changed and the services will cease to be integrated. Rural areas already have suffered a cutback in bus services, not an expansion.

There has been no attempt to look at the social consequences, particularly of the more drastic options. There has been much talk about leaks, and there were leaks in the more responsible papers today to the effect that the Secretary of State would rule out some of the more radical options. However, he ruled out only one today, the first one. The right hon. Gentleman did not rule out B or C3 which I find almost as offensive and damaging to our rail structure as the one that he has ruled out.

The committee made no attempt to look at the social consequences of some of these options, or at the effect on employment in areas that would be cut off from rail services. This concerns not only employment now but opportunities for developing employment in the years that lie ahead. The committee made no attempt to look at the effect on the standard and quality of life of those in rural areas who suffer enough as it is—I know that from my county of Norwich. There was no apparent study of such economic consequences as the effects on industrial employment prospects. In my constituency, the towns of Norwich, Lowestoft and Yarmouth would be decimated if proposals B or C3 were to be carried out.

There is also the effect on the resorts and tourist centres, which are still important. Again locally—we inevitably relate the matters to ourselves—towns such as Yarmouth and Cromer know that the rail link is vital for tourist access.

As other hon. Members have pointed out, there is also nothing in the report about how other countries finance their railways at a much higher level than we do. I find this extraordinary. I was looking at the most recent figures, for 1980. If we take Austria, Belgium, France, Italy, the Netherlands, Switzerland and West Germany, 0.81 of their gross domestic product went in financial assistance—it is not called subsidy—to the railways. However, in the same year in Britain it was 0.29 per cent. We thus spend less than a third of what other countries do in terms of gross domestic product.

Electrification is absolutely vital for our main lines but the only comment about it in the report is negative, and comes in paragraph 8.14. The hon. Member for Peterborough (Dr. Mawhinney) referred to this when we questioned the Secretary of State on his recent statement. I want an assurance that there will be no going back on commitments to complete the electrification of the London to Norwich line.

In the second half of my speech, which I shall keep brief because I know that other hon. Members wish to speak, I shall concentrate on the horrific effects on East Anglia, especially Norfolk, of options B and C3, which the Government are still considering. After Scotland—certainly we shall hear from that area—Wales—certainly we shall hear from that area—and the south-west—and we shall certainly hear from that area—the area that is most seriously affected by these proposals is East Anglia, and the county in East Anglia that is most seriously affected is Norfolk. I therefore have an obligation to say that these proposals are totally unacceptable.

First, the proposals would be a body blow for Yarmouth and Lowestoft. The right hon. Member for Lowestoft (Mr. Prior) is not in his place, because he is in Northern Ireland, but I suspect that he shares my feelings about the loss of the rail link to Lowestoft. I am staggered that the hon. Member for Yarmouth (Sir A. Fell) is not here today, because Yarmouth is a "golden rail" resort. It is one of the major holiday resorts in the United Kingdom, and it has an important link with the continent through its port. That would be greatly undermined, because 14 per cent. of the travel to and from Yarmouth is by rail, as opposed to road. The whole prospect of developing the port-rail link in Yarmouth near the Vauxhall station would fall apart.

I am staggered that the hon. Member for Norfolk, North-West (Mr. Brocklebank-Fowler), who represents King's Lynn—whichever party he represents these days—is not in his place. There the result would be "absolutely horrifying" if option B or C3 were carried out. Those were the words of the president of the chamber of trade and commerce for King's Lynn.

Sheringham, Cromer, Fakenham and North Walsham would all be cut off. We must consider not only the people who live in that area but, as this debate is all about finance, the ability to finance main lines. If people cannot get to the main lines, there will be fewer on the inter-city lines. Those lines will cease to be profitable if people cannot get into Norwich and then move to the single route to London.

It will affect not only business men who have to go to London, but shoppers who want to come to Norwich. I quote the words of the Sheringham chamber of commerce: Closing the line to Sheringham would be a disaster". There is no route to Cambridge. People may ask "Who wants to go to Cambridge?" The hon. Member for Cambridge (Mr. Rhodes James) is not here, and I find that surprising. There is no rail route to the north, no way of getting to Birmingham or of travelling to Scotland—only to London and then northwards, as though London were the centre of life. By cutting out all branch lines to Norwich, the planners would also take away the feeder routes that help to keep the main line to London effectively used.

Finally—as you know, Mr. Deputy Speaker, my contributions are always brief, and I am glad to see you shaking your head, encouraging me to be so this time.

Dr. Brian Mawhinney (Peterborough)

rose—

Mr. Ennals

Very well, I shall give way.

Dr. Mawhinney

I suppose it is good that at least one East Anglian Member should say he is here, after what the right hon. Gentleman said. He knows that I, like all East Anglia Members, share his view that East Anglia tends to be one of the forgotten areas of the country. Will he tell us whether there is any limit to the subsidy that should be paid to all the lines about which he is telling us, or should they all be subsidised without any limit by the Government?

Mr. Ennals

I am not suggesting that there is any line in East Anglia or in any other part of the country that should remain for ever. Savings could be made on pay trains, as opposed to other systems. I am not opposed to considering the possibility of a bus service, provided there is a legal requirement on those who run the service—that is why I believe that it should be British Rail—to ensure that they will meet the timetable set by British Rail for the linking trains.

I want to make two points before I sit down about the options that were not rejected—except for one—by the Secretary of State. We talk about leaks. Where did that leak come from? Was it a leak from the right hon. Gentleman's Department, to the effect that he would remove at least one option? We get leaks every day from this Government. There is no point in complaining about leaks. This Government are the most leaky Government that we have ever had on every subject. Sometimes the leaks are right, sometimes they are wrong. The options not rejected by the Secretary of State would force more traffic on to already unsatisfactory bus systems. Certainly in the parts of East Anglia that I know the bus system is reducing, not expanding. The task, therefore, will be greater, and there might need to be a higher subsidy for buses if there were less financial support for rail.

My second point is that Norfolk is the fastest growing county in the country. It has one of the highest proportions of elderly retired people, and some of those who work there are among the lowest paid in the country. The growth of population in the county is taking place precisely in the areas that could be gravely damaged by rail closures. Rural life is already suffering seriously from closures of schools and pharmacies, with access to services greatly reduced. I do not believe that this or any other Government should strike another blow at people who live in rural areas. People expect their Members of Parliament to speak out loud, as did the hon. Member for Christchurch and Lymington. In the winding-up speech, I hope that we shall hear, not just that the first option has been withdrawn, but that most of the options have been withdrawn, and that the Government will take a realistic view of the total transport needs of the nation, and not just a narrow view of the financing of railways.

5.57 pm

Mr. Alex Pollock (Moray and Nairn)

I apologise to you, Mr. Deputy Speaker, and to the House for leaving the Chamber briefly during the debate. Unfortunately, I had just been given news of a train derailment in my constituency. At present, I have few details, but I am led to believe that one person has been killed, three are trapped, and several others injured. I hope that the House will join me in expressing sympathy to all those concerned. I hope, too, that my right hon. Friend can give me an assurance that we shall have a full and speedy inquiry into the circumstances, and that the findings will be made public.

In my general remarks, I shall concentrate mainly on the point of view of those who are concerned with the future of the rail network in the north-east of Scotland. I remind the House and the Government of how important a proper and adequate rail network is to the infrastructure in that area. There are perhaps some obvious examples. During the harsh winter months the railway can frequently be the only means of access to my constituency. On Monday of this week, during a comparatively mild winter, it was with great difficulty that the aircraft landed at Inverness, where I joined it to fly south to take part in the business of the House.

Last winter, when the weather was much more severe, I took my family to celebrate the new year in Glasgow. On our way home we got as far as Perth, where we were stranded because of the severity of the road conditions. Here I pay tribute to British Rail, because it went to a great deal of trouble to lay on a special train, not purely for my family, but for many stranded passengers in the same predicament. I should like to say how grateful we are to British Rail for what it can do in such circumstances.

Apart from the weather, there are other considerations that make the network so crucial to life in the north-east. For instance, I have no centres of higher education in my constituency. The nearest university is 80 miles away in Aberdeen. Therefore, many students make frequent and regular use of the network so that they can pursue their studies.

There are also two major RAF stations, Kinloss and Lossiemouth, in my constituency. They are manned by many thousands of service men, who in many cases come from different parts of the country. They frequently use the rail network to keep in touch with their families elsewhere. From the operational point of view, many of the parts and materials at RAF Lossiemouth are transported there by the rail network.

Therefore, the network is of considerable importance to the well-being of my constituents. It is also relevant in the delivery of materials for the whisky industry, another vital part of the community, which always gets a warm welcome across the party divide.

Over the years there has been a general acceptance by Government and public alike that, apart from purely commercial considerations of profit and loss, British Rail must take account of the public service obligation, with an appropriate subsidy from the taxpayer. I hope that the Government will adhere to that approach, with its obvious socio-economic ingredients. However, that should not preclude us from exploring, as Serpell does, means of achieving greater efficiency and cost-effectiveness where possible.

One idea in the Serpell report was about manpower. It states that even a 1 per cent. reduction in the present wage bill would improve railway finances by about £14 million. Of course, to achieve substantial further reductions in manpower would need sensitive handling of industrial relations and would also involve major transitional costs in redundancy payments.

To the Government's credit, the Secretary of State for Transport has already made a specific allowance of £33 million for such costs in increasing the 1982 public service obligation grant and the external financing limit for 1982–83.

Mr. Donald Stewart (Western Isles)

Does the hon. Gentleman agree that the Government should have another interest, which might be hidden at present? For example, during the war the Inverness to Kyle of Lochalsh railway was in constant use, taking materials across the north of Scotland from east to west.

Mr. Pollock

I understand the force of the right hon. Gentleman's historical point. No doubt, if he catches your eye, Mr. Speaker, he will develop that line of argument.

I am at pains to point out that Serpell wisely urges the Government to continue with their allowances scheme to assist the board in achieving the necessary manpower savings.

To summarise, the Government will hear from three main lobbyists. There are the sentimental railway buffs who will always try to keep the trains as they remember them from their boyhood days and for whom any change is a matter of regret. There are the many thousands whose jobs and employment prospects hinge directly on the Government's attitude to our railway network. However, perhaps the most important group to which the Government should listen are the regular and occasional users of the network whose best interests can surely be most fully realised by an intelligent use of manpower, equipment and resources.

Serpell wisely points the way ahead in suggesting many useful ideas. I invite the Government to pay attention to those rather than to some of the more alarmist and extreme noises with which the report has been received.

6.6 pm

Mr. Ron Lewis (Carlisle)

I am delighted to follow the hon. Member for Moray and Nairn (Mr. Pollock). I am sure that everyone will join him in expressing regret at the news of the disaster that he disclosed. I hope that it will not be as serious as expected.

As is the custom, I declare my interest. Before I was a Member of the House I was employed by British Rail. I am still an active member, I hope, of the National Union of Railwaymen. Therefore, that is my qualification for speaking on the report.

The Serpell committee has performed two useful public services. It has shed some light on the shadowy figures who exercise influence at the highest levels of government, and it has provided us with a glimpse of the future that faces the nationalised industries and the whole public sector if, by some disaster, the Tories the next general election.

The report is the latest attempt by that band of fanatical opponents of the railways of which the Prime Minister, her economic adviser Professor Alan Walters and Mr. Alfred Sherman are the principal members, effectively to shut down the industry. They hate the industry because it is publicly owned. I hope that it always will be. The railway is in business primarily to provide a public service. I am glad to say that it is an industry that remains strongly trade unionised, which is very important.

The role of Professor Walters in this disastrous exercise requires explanation by the Secretary of State. Why? The reason is well known. It was he who halted the programme of main line electrification, approved and endorsed by a joint working party of British Rail and the Department of Transport.

It was Professor Walters who succeeded in getting Mr. Alfred Goldstein appointed to the Serpell committee. What part did he play in the handing out of the consultancy contract to R. Travers Morgan, the firm which, up to last week, had been paid £370,000 out of public funds for research which anyone with any knowledge of the railways realises was second rate and a complete waste of time? It has been put to me on good authority that Mr. Goldstein showed a copy of the report to Professor Waite well in advance of publication and was advised by him to write a minority report.

These are serious questions to which the Minister must reply. They provide yet more evidence of just how great a disaster the Serpell report has proved to be. Far from providing the basis for a new financial framework for the railways, which both the Secretary of State and Sir Peter Parker agree is urgently required, it provides a vision of what lies in wait for Britain should the Government remain in office for another term.

There are several reports in the press of the Minister having fallen out with Sir Peter Parker, who is the most conciliatory nationalised industry chairman one could hope to find. My hon. Friends and I have had cause to criticise Sir Peter for not standing up more to the Government on matters such as the assassination of the main line electrification programme and for acquiescing in the blatant asset-stripping that is taking place in the sale of British Transport Hotels.

The Government pushed Sir Peter into the front line during last year's ASLEF strike and made him do their dirty work for them while the Secretary of State watched silently from the touchline. So why are they now determined that Parker should go? It is because, far from shelving the Serpell report, they intend to brin3 it back after the election, should they get a majority. I hazard a guess that there will be a new chairman, a new Secretary of State—there is no doubt that the days of the right hon. Gentleman in that office are numbered—and, I suspect, a new British Railways Board. Then the Government will start to implement the Serpell report.

The absurd network options will mean savage fare increases for commuters, a reduction in safety standards, the destruction of British Rail Engineering Ltd. and the ending of British Rail's "Buy British" policy. If the Secretary of State had any intention of ensuring a future for British Rail, he would have dismissed the Serpell report out of hand and got down to discussing with Sir Peter Parker and his board the investment proposals put forward in the 1981 rail policy document. Instead, in the House and on television, he refuses to rule out even the most absurd options.

With option A, for example, my constituency would retain one wayside station on the Euston to Glasgow line, with other connections to Carlisle closed. At least, I have some consolation. We are better off than major cities such as Sheffield, Derby, Leicester and Nottingham, which disappear entirely from the map.

The other so-called options remove one by one the lines serving Carlisle. In option C1, the least extreme, with no explanation from anyone, not even the Minister, the vital network link between Newcastle on the east coast and Carlisle on the north-west coast is closed. This line serves the constituencies of the Home Secretary and of the right hon. and learned Member for Hexham (Mr. Rippon), whose support on television for its retention I am pleased to acknowledge. I am told by British Rail that the deletion of the Carlisle to Newcastle line in option C1 is a mistake on the part of the consultants. Travers Morgan has so little knowledge of the railways that nothing will surprise me. The ratio of operating costs to revenue is certainly no worse for that line than for many provincial services which survive in other options.

Mr. Cowans

I am concerned lest my hon. Friend leaves the options. Does he realise that the commercial wizards who drew up the report have wiped out under option B the merry-go-round system that feeds all the power stations? How are the power stations to work?

Mr. Lewis

I agree with my hon. Friend. I hope the Minister will give him the reply that he expects.

Mr. Adley

Is the hon. Gentleman aware that, in its promotional literature, the firm is using the fact that it has done consultancy work on the railways for Her Majesty's Government?

Mr. Lewis

That makes it all the more deplorable that the Government should employ such a firm to do some of their work.

The Government's record on transport, and on railways in particular, is a disgrace. If the Secretary of State implements the Serpell report, it will be a disaster. The Serpell inquiry has been an expensive waste of time and a tragically missed opportunity. It could have provided the springboard for a new financial deal for the railways, a future which would benefit both passengers and freight customers, and restored the shattered morale of a willing and public-spirited work force by offering the prospect of security. It is difficult to imagine a better investment that we could make as a nation than the modernisation of our railway system.

In every debate on the Falkland Islands since April of last year we have heard the Prime Minister at the Dispatch Box and on television say that the wishes of the islanders were of paramount importance. I pray that she will apply the same criterion to those engaged in the railway industry.

6.19 pm

Mr. Stephen Ross (Isle of Wight)

I echo the words of the hon. Member for Carlisle (Mr. Lewis), whom I congratulate on an excellent speech. He showed courage and he seems to have much inside information, some of which I had been told but some I did not know about. Like him, I regard Serpell as a tragically missed opportunity. As The Economist said in a recent article—I hope people still read The Economist—the Government and British Rail are back to square one.

We on the Liberal Benches—I have a colleague with me today—find it incredible that no international comparisons were pursued. British Rail would come out of such an investigation quite well, as the hon. Member for Christchurch and Lymington (Mr. Adley) has shown. I suppose that I should express some delight that the Isle of Wight at least appears on three of the options, although in very diverging situations.

The only reference to safety records appears in the Travers Morgan report in page 32 of the supplementary volume. In paragraph 4.06, a totally unfair and irrational statistic purports to show, in respect of employees, that lorries and buses are safer than trains. It is tragic that today there should have been a rail accident. I express my sorrow that it should have happened. However, the statistics show that the number of passengers killed in railway accidents in 1981 was seven. There were 69 deaths in movement and non-movement accidents which, I assume, apply to staff. There were no fewer than 379 suicides. One can only feel sorry for drivers when people throw themselves in front of trains. The total number of deaths therefore is 445, although it has to be remembered that passengers killed in accidents numbered only seven. Those seriously injured amounted to 407.

On the roads 5,846 people were killed and no fewer than 78,259 were seriously injured. Those are terrible and tragic statistics. These were people setting out on journeys in their cars. Yet their deaths seem to be viewed by the public as an everyday occurrence which does not matter a damn. I find the figures tragic and appalling. They must be taken into account when there is talk of putting more vehicles on the roads and even of replacing trains by coaches. I wish to point out how ridiculous is the Travers Morgan evidence. The only statistic on safety relates to the paragraph I have mentioned. How can the report be taken seriously?

Much of the criticism of British Rail is no doubt justified. However, no appreciation seems to have been shown of advances in technology—for example, high speed trains. Such trains require a higher standard of track. The technology exists in only four countries. Paragraph 3.24 on page 28 is hardly fair. It talks of making savings and using different types of steel. Not all the details are known about the track needed for high speed trains. This is still at an experimental stage. One wonders therefore how the report can arrive at such conclusions.

British Rail desperately needs new investment. Hon. Members may have seen the television programme about the Aberystwyth line where every third sleeper is rotten and which has so many slowing down places that every journey takes an hour or so longer than it should. There is also a desperate need for new investment in carriages on the Southampton and Portsmouth lines and on the west coast main line to Liverpool. This work would provide jobs that are desperately needed, not least in my constituency.

The first paragraph of Mr. Goldstein's minority report, on page 106, sums up his views. Railways, he virtually says, are an outmoded form of transport; let us write them off. That is a précis of his first paragraph. I am glad that the Secretary of State seems to reject that attitude. One wonders, however, what would be in store under a new Conservative regime. I do not pretend that there is not a long way to go to improve productivity but of the target, set by the Secretary of State's predecessor, of 38,000 jobs to be lost between 1980 and 1985, some 24,000 redundancies, representing 60 per cent., have been achieved. The unions can claim to have gone a fair way down the path outlined in the House on 22 June 1981 by the right hon. Gentleman's predecessor. The unions could surely have expected a substantially greater commitment by the Government in response. Now, I believe, they are totally disillusioned.

Mr. Roger Moate (Faversham)

The hon. Gentleman has referred to a supposed statement by Mr. Goldstein in the minority report. I cannot find the words that the hon. Gentleman quoted. Will he give a precise reference to enable hon. Members to check the accuracy of the quotation?

Mr. Ross

I stated that I was giving a précis. I shall read out the paragraph, if I can be given time to find it. I am sorry, Mr. Speaker, to delay the House.

Mr. Speaker

It might be helpful if the hon. Member for Isle of Wight (Mr. Ross) wrote to the hon. Gentleman.

Mr. Ross

I shall find the paragraph for the hon. Gentleman and send it to him. I promise him that it is there.

Our opinion is that it is time that the Liberal party stated a clear policy setting out the role that we see for the railways and what the public should expect from them. Our party is not anti-railway, as many of the advisers of the Government appear to be. We want a good quality railway that is widely available at an affordable price. We believe that a successful railway should be as much an object of national pride as a successful army. I say "Hear, hear" to the hon. Member for Carlisle. God preserve us from the likes of Professor Walters, Alfred Sherman and Alfred Goldstein. We differ perhaps from the official Opposition in wanting a truly efficient railway. It will not do for the right hon. Member for Barrow-in-Furness (Mr. Booth) to bemoan continually the lack of investment in new equipment while his trade union friends refuse to accept an offer of £25 a week, or £5 a shift to drive new trains equipped for one-man operation. I hope that the tribunal finds a solution to that problem as quickly as possible.

We are faced with the prospect of the Conservative Party, if re-elected, dismantling our railways for doctrinaire reasons and the probability of the Labour party failing to persuade the unions to insist upon the necessary changes in working practices such as those advocated by Richard Hope in The Daily Telegraph today. I thank goodness that The Daily Telegraph has changed its leader writer from Alfred Sherman to Richard Hope. I commend the article to every hon. Member. Neither of these alternatives is attractive. Neither will secure the future of the railways. We would tell railway management clearly what we wanted—a thing that no Government have ever done.

We want hourly inter-city services serving main centres and two-hourly inter-city services to more distant centres. This would give an inter-city service broadly as it is now, but we would refrain from trying to make the service pass highly suspect tests of profitability. We want attractive commuter services in major cities using as much automated equipment as possible. The network should be broadly as extensive as it is now. If services have to be withdrawn, good quality bus services should be substituted. They should not be services, as happened under Beeching, that are withdrawn after a couple of years. We want freight services organised to attract 40 million tonnes of traffic each year back from the roads. I believe this to be possible.

Much has been written—some of it appears on pages 61 and 62 of the Serpell report—on the case for subsidising the railways. If there is to be a railway, it is better that it should be well used. It is known that other modes of transport are subsidised in one way or another. The best line of reasoning we can adopt is not to argue about the merits or the amount of subsidy but to define what we expect in return for the subsidy.

In return for financial support, Liberals would expect the provision of a national transport network giving accessibility throughout the country, good quality commuting around cities with quality defined in terms of fares, frequency, reliability, punctuality and cleanliness, the attraction of appropriate heavy freight from the roads and gradual electrification to give the opportunity for exploiting alternative energy sources. We would want the railway supply industry to build an export base as high technology was developed and installed on our own railway system. We would also want to see a contribution to the tourist industry, one of the few growth industries that remain in this country.

We believe that the Government should support these clear roles for a national railway system. In return, we would require a positive response from management and unions in terms of greater efficiency and accountability. This would include more efficient manning of trains with one man in charge and the acceptance of other modern technology, streamlined administration, competitive tendering for rolling stock procurement, and co-operation with private enterprise and local communities. We have nothing against companies taking over, or trying to take over, lines from which British Rail wish to withdraw. There may be a case for greater co-operation with the Welsh Office and the Scottish Office, as has already happened over the Ayr line.

Our basic measure of progress is that we would expect each year to see increasing use made of the railways in terms of the numbers of passengers and tons of freight carried for each pound spent in subsidy. We must be able to show what the taxpayer is getting for his money and measure how it is increasing year by year.

I have outlined what I believe is a message of hope to railway users and staff. Let us have a good, well-used, popular and efficient railway run by managers who are accountable through the easily understood ratio of subsidy to usage. Let us have a railway open to fresh ideas and co-operation with private enterprise.

I am all for introducing private catering. I was listening to a lady on the radio this morning and I understand that private catering is being introduced on some trains, although it is very expensive to run. On some stations it has already happened. At Waterloo station, British Rail has done a marvellous job in improving the catering facilities. We must give credit where credit is due. Above all, let us have a railway to be proud of.

In answer to the hon. Member for Faversham (Mr. Moate), may I point out that in paragraph 3.01, on page 106, Mr. Goldstein states: Railways are a means of transport. Though each form of transport has throughout history created cultural and social change—and railways particularly so—each has been overtaken, in some or all aspects by successors. The attachment many of us have for the present railway is not reflected in the fares we are prepared to pay, since these fares do not reflect the full cost. In other words, he is saying they are past their day. That is how I read it. If he is not saying that, I apologise.

6.32 pm

Sir David Price (Eastleigh)

In the interests of brevity, the hon. Member for Isle of Wight (Mr. Ross) will forgive me if I do not comment on the outlines of his Liberal transport railway policy. It contains all the platitudes in the book.

I have three personal reasons for seeking to attract the attention of the House. First, most hon. Members know that I have a strong constituency interest in the future of our railway system. Secondly, I am a member of the Select Committee on Transport. Thirdly, I have a personal commitment to the railway system; I travel by train by choice. "No names, no pack drill", but I am not one of those hon. Members who comes to the House to plead that his branch line must remain open, but who never uses it himself and travels by foreign car all the time.

The points that I shall make will be abbreviated. I shall not develop them, although all my points could be developed were we not under a tight timetable.

I interrupted the right hon. Member for Barrow-in-Furness (Mr. Booth) when he referred to the narrowness of the Serpell committee's terms of reference. I pointed out what seemed to be key words in the terms of reference. In my judgment, they enabled Sir David Serpell and his colleagues to go as wide as they wished and to cover many of the points that have come up during the course of this debate.

The right hon. Member for Barrow-in-Furness and most of the commentators on the Serpell report have started at the wrong end. In any service one must start with the customer—no customers, no railways. I agree strongly with the criticism of British Rail which appears in its paper "The initial response by the British Railways Board". It says on page 13: Our preoccupation in this increasingly competitive industry is with our customers. Some of the options outlined in the Reports for cost reductions would, in our view, impact adversely on service standards by reducing quality; consequently they would reduce revenue. The majority acknowledged this but failed to quantify the likely consequences. This is a serious omission". Last year the Select Committee examined the London commuter area. I should like to quote a passage in our report. We had been taking evidence from British Rail. The report states: British Rail gave us a graphic and familiar description of the effects of age and under-investment on their London and South East commuter services. There had, they said, been 'consistent under-investment in physical facilities and the inability to make proper provision for the future. This has resulted in a lowering of standards and a reduction in the quality of service provided. Rolling stock has not been replaced or refurbished when required; speed restrictions have had to be imposed; reliability and punctuality have deteriorated. At present, the level of investment is barely sufficient to maintain existing standards, let alone provide for the improvements in quality which are essential to ensure an attractive and efficient transport system, consistent with the importance of London as an international financial and commercial centre, and to safeguard its development potential for industry'. I could detain the House longer and read a great deal more. Everything is there in our report. Those of us whose main experience of British Rail is the southern region would agree with some lines of John Ruskin, who said over 100 years ago: Going by railroad I do not consider is travelling.… it is merely being 'sent' to a place and very little different from being a parcel. The only similar reference that Sir David Serpell makes in his report is in paragraph 6.19, where he said: We … consider that the state of many of the Board's stations must be a deterrent to travellers. He can say that again.

The second great omission is that Sir David has not referred to the staff of the railway. Here I defend Mr. Goldstein. He reported enthusiastically about the dedication of the staff. He said: I am struck by the dedication that our engineering consultants found so impressive among railway staff'. I hope that, coming from Eastleigh, I am not being too subjective when I say that there are many dedicated and conscientious railwaymen who are still proud of being on the railways. The management system down the line—and I mean literally down the line—is such that I do not believe that they are getting the direct personal leadership to which they are entitled. I have simple and old-fashioned views about leadership.

Sir Peter Parker has done an admirable job at the top. Nor do I blame individual managers. I believe that the problem lies in the system. We saw evidence of that during the long dispute over manning and rostering. It was not only about money. It also had something to do with the whole management system by which rosters were worked out when manning changes were made. One of the rights of man is the right to have a boss and not an impersonal system, and least of all to be run by a computer. We must pursue the area of human relations much further if we want to recast our railway system and make it more efficient.

Mr. Goldstein had a lot to say about and was highly critical of the current management structure in British Rail. I commend to the House what he said in paragraph 4 29: In my opinion, this structure of management is a sure recipe for uncertainty, low morale and less efficiency. In the short term the arrangement may have some galvanic effect as all changes are prone to. In the longer term, it simply will not work". He went on to say: I believe therefore that a more unified direct and clear command structure needs to be the target". Most of us who have experience of management in diverse occupations would agree with that principle. It is essential, whatever size the railway system becomes, that management should be recast so that there is a direct command structure.

Standards, safety and maintenance have already been mentioned. It is a subject that must be dealt with in more detail. It appears to me that the report criticises British Rail for giving too much attention to its standards of safety and maintenance. It suggests that it is not cost-effective. The cost of safety and maintenance cannot be fine-tuned financially. The performance must be fine-tuned. That gets back to the question of morale. It depends on the conscientiousness of the people carrying out the normal routines, inspections and drills. Once one lets standards slip, they go. One cannot aim too high. To me the list is the only thing that is acceptable. I speak as an old Guardsman.

I hope that the Select Committee will probe chapter 8 of the Serpell report and the high investment option H. Whatever arguments there may be about the current subsidy, unless more money is put into the infrastructure of British Rail, we shall have a continually deteriorating rail system. That was not the conclusion to which Sir David Serpell came in chapter 8, and I believe that he is wrong. Paragraph 14.20 states: As evaluated, therefore, the High Investment Option would not show a satisfactory financial return. It may not do that on his figures, but would it not produce a good railway system?

The key question is whether the railways can be made to pay: If they cannot, what railway system should we sustain and how much and how should we pay for it? The first question has slightly confused the consideration of the second, because it is a total dream to believe that in modern conditions a railway system of any size can be completely self-financing. To come to Mr. Goldstein's defence, that point came out clearly in his minority report. He made it much more clear than did Sir David Serpell and his colleagues in the majority report.

Finally, I draw the House's attention to the two options. Mr. Goldstein said: For the present railway system a keen pursuit of efficiency measures is unlikely to result in an annual passenger deficit of less than £800 million—£900 million in the long term … Investment levels would need to be significantly higher than today. In the short term, up to 1986, there is in my view little or no likelihood of the PSO requirement being contained to within the 1975 levels … in real terms. The majority report says that it could be maintained within those levels.

The Select Committee will investigate the matters in greater detail. Sir David Serpell, Mr. Goldstein, my right hon. Friend the Secretary of State and British Rail will give evidence to the Committee, and we hope to probe the question how the railway system can be paid for.

Those are a few preliminary observations to the House by way of prologue to what will be the continuing drama of the future of our railway system. I trust that that drama will not lapse into either tragedy or comedy.

6.42 pm

Mr. John Morris (Aberavon)

More than 15 years ago I chaired an inquiry into the finances and the management of British Rail. Many of the problems remain the same. That inquiry had an eminent membership—a future secretary to the Cabinet, a future Comptroller and Auditor General and a future chairman of the Port of London Authority, to name but a few. It laboured long and hard for more than a year. Its report was accepted on all sides and formed the basis of a comparatively non-controversial part of the Transport Act 1968, which should please my hon. Friend the Member for Nuneaton (Mr. Huckfield), who worked hard on the Committee on that legislation, and included the creation of grants for socially necessary lines.

How very different is the reception to the Serpell report. It has no friends. A fundamental difference between my joint steering group and this report is that ours was a tripartite effort of independents, of British Rail, and of the Government. The methods of this report are challenged, its premises are suspect, and it is a botched-up job done in a hurry. I am amazed that any consultants worthy of the name should allow their findings to be published in the way that they have. The impression that one gains far too frequently is of a gossip column of titbits and a catalogue of suggestions emanating from the bars of golf clubs in the home counties with seldom an iota of evidence to back them.

One example is that British Rail is critised for usually renewing tracks on Sundays. The report askes why it does not do that on other days. When last did members of the committee travel any great distance on a Sunday? Do they wish to transfer the discomfort and delays of Sunday travel to other days? How many passengers and customers would be lost? In contrast to the investigation of the Monopolies and Mergers Commission, the consultants did not take up the offer to talk to senior engineers at British Rail before they finalised their comments. No wonder that the only undisputed savings that are foreseen are the £150 million offered by British Rail.

British Rail accuses the consultants of double counting or, worse, assuming as safe bankers, mere expectations! I have always understood that the essence of good consultancy is to try to carry the investigated party with one on the facts. The serious flaw of this report is that so much is factually disputed.

I mention three major personalities. Mr. Goldstein's manner of operating is very strange. His report contained fundamental differences, but he waited until only 11 days before the finalising of the major report before telling his colleagues that he would dissent. That is extraordinary. Given the strictures of Sir David Serpell, I wonder whether he was worth his corn as a member of the board of British Rail since 1974. What on earth was he doing before that as permanent secretary at the Ministry of Transport and the Department of the Environment? Sir Peter Parker has done a great deal for the railways. Before the recession in 1980, passenger miles had returned to about the level at which they were before the Beeching cuts, when there were only half as many cars on the road.

However, the Secretary of State must carry the sole responsibility for the terms of reference of the inquiry and the way in which they have been interpreted in the majority and minority reports. The members of the committee differed among themselves. It may be that the time provided—a mere six months, extended by one month—is the cause of that narrow and restrictive interpretation.

Rail finance cannot usefully be discussed without a clear idea of the railway system that we need. That cannot be done without an idea of the correct relationship between rail and other forms of transport and the wider public interest. It is no good the inquiry advocating substantially higher fares for the south-east and being shrinking violets by declining to consider the probability of road congestion and other social costs. We have had inquiries and options by the bucketful during the years and, from time to time, British Rail has put plans and proposals to the Department of Transport. Decisions are required now. Given the period of 20 years contemplated by the committee, it should have answered the question about the railway system that we want and how it is to fit in with the rest of the transport system.

Both reports are clear that, short of the extreme option of a 1,600-mile system, no system will pay. No railway of significance in the world is paying its way. Our subsidies are half what the Germans pay and one-third of what the French pay. Yet the French are pumping more investment into their railways. If we do not recognise that need, by the process of non-decision-making, the railways will fold up by themselves.

The committee, on the advice of its whiz kids, belittles British Rail's claim that there is an 800-mile backlog in track maintenance. Its members blithely suggest the lowering of safety standards. I am sorry about the news we have had of the crash, or whatever it may be, in Scotland. I assure the Minister that it needs only a couple of major rail crashes and he will be coming down to the House wringing his hands, especially if it is found that any slowing down of maintenance is the cause of a crash. Of course it is right to challenge, and to do so ruthlessly, any cosiness on the part of BR in continuing existing practices, but the convictions of the inquisitors are not necessarily translatable into actual savings.

When we made our report in 1967—and many of the problems remain exactly the same—our aim was to eliminate all unfair burdens from British Rail so that it could operate commercially for the rest of its remit. We were far too optimistic, even though we rejected the even more optimistic British Rail. The truth is that British Rail has been, and continues to be, too optimistic. In this report we find that only the worst option of all could conceivably pay—an option that would be for Wales, for most of Scotland and for a good part of England the "zero option". That is what we would reject.

Even the calculations of the 1,600-mile option are dubious, relying as they do on freight profits; yet its truncated network does not carry any of British Rail's profitable freight routes.

What is sadly lacking in this report is any mention of the importance of the men and women of every grade who run the railways. This is particularly manifest in the main report. Over the years there has been a dramatic fall in manpower. As we have been told, a 1 per cent. fall in the labour force improves British Rail's finances to the tune of £40 million. It is this history of falling manpower that makes the unions extremely sensitive and suspicious. It is imperative in every labour-intensive industry to make a substantial effort to carry the labour force with one. Not only is the work force entitled to participate in the determination of its own future, but it is at least prudent of every sensible management to see that it does. I shall give one example.

There is nothing new in the failure to use new and expensive equipment in British Rail. Mr. Marples, as he then was, agreed to considerable investment in liner trains. When we came into office they were lying idle. Nothing happened until my Minister and I, unaccompanied by any officials, went to the headquarters of the National Union of Railwaymen to meet its executive. It took three days of solid talking to get an agreement. It must never be forgotten that the basic need in any industry that has seen the contraction of its labour force over the years is to remove suspicion. That was what was needed then—nothing more, nothing less. From that moment on, the expensive system that had not been used has expanded and developed.

I suggest that it would be both wrong and politically unacceptable to reduce the railways to the level of most of the options that are paraded before us. On the other hand, I would not defend the status quo without being convinced that it was the right size and in the nation's interest. The crux of the financial problem is the £500 million that goes to subsidise the provincial network. The truth is that Beeching's cuts achieved only very modest savings. He cut off the ends but forgot where the major losses took place, and that was in wagon-loaded traffic. Someone else had to tackle that.

If there is no significant investment in the industry, I foresee very little co-operation. If there is worthwhile investment, say, in electrification, then it might be easier to consider economies elsewhere. It would be a tragedy if the totality of the global loss drove out consideration of necessary new investment in the railways. For example, payments are made under the Transport Act 1968 for the grant-aiding of new sidings to couple industries with the railways. Much more needs to be done.

The House may recall that one of the casualties of the 1968 Bill was the removal of the clauses dealing with abnormal loads. The social costs which we now pay in the cars and lorries which are held up by those loads are colossal. Yet the senders of abnormal loads not only do not pay a penny for the privilege of cluttering up our roads, but do not even have to pay the cost of their police escorts.

If we are to have a significant railway system, run on a subsidy, then its role must be judged as part of the whole transport system and there should be a positive determination to shift more freight from road to rail. For some there is no alternative to rail. I took part professionally in an inquiry, during the course of which it was revealed that the alterative bus service offered passed over a weight-restricted bridge which was strong enough for the bus to go over provided it had no passengers. I am glad that that railway line in north Wales is open to this day.

A report that has been described by an eminent economist, now on the railways board, as pure poetry—the sort of doggerel found in elementary exercise books—must of necessity be questioned. I warn the Minister to reject this politically explosive package. If he does not, it will be done for him by his Back Benchers, as we have heard today. I had the painful task of closing hundreds of miles of railway and the most vehement opposition came from the Tory Back Benchers whose constituencies were affected. I cruelly reminded them individually at Question Time, because I carried the Division lists in my pocket, and when they came on delegations, that their names were marked as supporters of the Beeching report when it was debated in the House.

It will not do for the Minister to do a Ravenscraig on the railways—to defer the evil day until after the election. The electors will want to know what savage cuts he has in mind for the rural branch lines, what fare increases commuters can expect, what new safety standards are contemplated, and, despite the Prime Minister mouthing her slogan to "Buy British", how much will be left of the locomotive works if we import.

Many good questions have been asked in this report, but they are not the right ones. I invite the Minister to go back to the drawing board.

6.58 pm

Mr. Roger Moate (Faversham)

We owe a debt of gratitude to the right hon. and learned Member for Aberavon (Mr. Morris). I was going to accuse the Opposition of having added total amnesia to their myopia in dealing with the Serpell report but the right hon. and learned Gentleman has now reminded us—something I was going to do—of the extensive closures for which the Labour Government, of whom he was a member, were responsible from 1965 to 1970. One would have thought from the debate we have been having that railway line closures were a prerogative of Conservative Governments and something in which Labour Governments had never indulged. The period of Government to which the right hon. and learned Member for Aberavon has just referred was a period in which the Labour Government closed not just a few miles of branch lines, not just the hundreds of miles to which he referred, but over 4,000 miles of line. They preach to the nation that they are opposed to all closures, but hon. Members should recall that they closed 4,219 miles of line.

Mr. Les Huckfield (Nuneaton)

No.

Mr. Moate

I did not quote that figure from memory. I can assure the hon. Gentleman that that is true. In recent years this Government have consistently supported broadly the size of the railway network as it exists today. Hon. Members should look at the record before launching into too many diatribes or flights of fancy.

Let us get the facts straight. Previous Governments have carried out closures. In recent years, this Government have supported the size of the railways and the level of finance necessary to sustain the present network. They have maintained the levels of support that the previous Government maintained. We can be proud of that record.

Mr. Alexander W. Lyon (York)

The hon. Gentleman must be joking. If the level of Government support has been sufficient to keep the network going, why is it falling to bits? I agree that the Government have maintained the public service obligation at roughly the same level, but overall they have cut the amount of help given to British Rail and the amount of money that British Rail could invest to a level that is well below that required to keep the network going.

Mr. Moate

The hon. Gentleman should get his facts straight. It is on record that the total level of financial support given to British Rail, including investment and the PSO grant, is as high in real terms as it was under the Labour Government.

Mr. Cook

rose—

Mr. Moate

If it so happens that more of that support has gone into current subsidies and that nearly £100 million has been wasted through strikes and industrial action that have been supported by the Labour Front Bench, that should be laid not at this Government's door but at the door of others. However, the total level of financial support has been maintained.

Mr. Cook

rose—

Mr. Moate

I must continue, because other hon. Members wish to speak. If the hon. Gentleman wishes to speak later, I hope he may do so.

Investment may well have dropped and we regret that, but the total level of financial support has been maintained and it is up to British Rail, the management and the unions to answer for how the money is dispensed.

There is another myth to dispose of, although it is difficult to do so when the facts are so often distorted. The myth is that Serpell's principal recommendations consist of major cuts and of fare increases for passengers. That is just not true. It is most unfortunate, to say the least, that responsible Members of Parliament should have indulged in such grotesque distortions. Let us put the facts on the record and consider Serpell's principal conclusion. He reached simple conclusions. The report is long and there is a series of options and maps. However, page 85 contains just five short paragraphs giving clear conclusions. Paragraph 2 states: We see many opportunities to improve the efficiency, and reduce the costs, of the railway while keeping it at broadly its present size. Will any hon. Member dispute that there are opportunities to improve efficiency and to reduce costs? I trust not.

The report continues: If they are seized with the necessary determination, the level of grant required in 1986"— I shall leave out certain bits, but it is all on the record— could, we believe, be lower in real terms than the level Ministers considered appropriate between 1975 and 1980. The paragraph is too long for me to quote in full, but it will require transitional costs, which could be substantial. The report urges the Government to help to meet those costs and thus calls for more investment in order to maintain the network at broadly its present size. That is the conclusion, although one would not think so judging from the distorted extracts that Labour Members have given us. [Interruption.] The report continues: In the longer term, we see yet further possibilities for improvements in efficiency and for cost reduction, particularly in the engineering function. If the travelling public read that they will not recognise it as the report that has been referred to by Opposition Members. In order to put Serpell in context, I shall quote another important paragraph. It states: Our function, in the 7 months available to us"— many people might say that that was too short a time and it is to the credit of those involved that they carried out a major report in such a short time— has been to mark out opportunities and options, not to develop them in detail. We hope that our work will provide the Secretary of State with the foundation on which he can decide future policy for the railway and that it will provide the Board with the material on which they can take early action to improve their finances. It is the task of Ministers and of Parliament to decide policies. Serpell analysed the situation and gave us options on which we could take decisions.

Mr. Robert Hughes

The hon. Gentleman should quote paragraph 4, which states: It is clear to us that reductions in the size of the network will be required if the level of financial support for the railway is to be lowered substantially. If the hon. Gentleman quotes conclusions, he should quote them all, and not be selective.

Mr. Moate

The hon. Gentleman has made a much fairer point than other hon. Members have made. The report states: if the level of financial support for the railway is to be lowered substantially. Where is it stated that it is any party's policy to reduce the amount of financial support given to the railways? Time and again Serpell makes it glaringly clear that the politicians must decide. If we decide on a lower level of support, it suggests that we cannot maintain the present network. I should have thought hon. Members would welcome Serpell's analysis.

Let us take the first option. By stating clearly that there is no prospect of a commercially viable railway—other than on a very small network—Serpell has made it clear to us all, including those who hanker after a profitable let alone a viable railway, that it is not a politically realistic proposition.

Mrs. Kellett-Bowman

It is made absolutely clear on page 85 that if the savings and efficiency improvements are made, and the electrification that has already been paid for is taken advantage of, the PSO grant need be no higher in real terms in 1992 than at present.

Mr. Moate

It is important to put Serpell into the context of current thinking and policies. The Government have consistently said that broadly they want to maintain the network. That has been their consistent policy and there is no suggestion that we intend to make great cuts in the financial support given to the railways. That being so, Serpell helps us to look for areas of greater efficiency, management savings and cost reductions to ensure that the passenger and the taxpayer get a fairer deal.

Mr. Anderson

rose—

Mr. Moate

It would be unfair to the House if I gave way. I hope that the hon. Gentleman will forgive me, but I do not want to speak for too long.

I should like to lay or tackle another myth. I refer to the idea that Serpell suggests 40 per cent. increases in fares. I can understand those dedicated believers in the railways who think that anyone who ventures a criticism is doing the railways a disservice. Sometimes they distort the facts and try to scare the public. However, we should get the facts straight. There is no mention in the Serpell report of a 40 per cent. increase. The way in which the question of season ticket discounts is dealt with shows that the report recognises that it is simply something that should be considered. It states that it should be reviewed.

Mr. David Crouch (Canterbury)

I must intervene because I live in my hon. Friend's constituency and I use the railway line that he sometimes uses. In paragraph 2.22, Serpell does not talk about a 40 per cent. increase in fares in London and the south-east—he says something much more frightening. We are criticising not the Government, but the report. Serpell said: There is also the option of a substantial real increase in L&SE fares generally. This is the only sector of the passenger business where such an increase would be likely to improve the financial results significantly within the next two years. That is enough to make anybody pick up a pen and write an article about increased fares.

Mr. Moate

My hon. Friend and I have fought long and hard for commuter interests. The Government, British Rail and hon. Members representing constituencies in the south-east have made considerable efforts to keep down rail price fares roughly to the level of inflation. In past Select Committee reports, statements by Sir Peter Parker show that we are threatened with real increases in fares in the coming years, with or without Serpell. That is part of the problem that we face.

The much maligned minority report by Mr. Goldstein makes it clear that any major increase in season ticket costs would have severe effects upon road congestion, and should be subject to fundamental review. Are we, as a House or a nation, scared of even examining those fundamental concepts? We should take the report as it is—a helpful contribution to a railway debate.

Hon. Members who have rejected, abused and dismissed the report, even before reading it, do a disservice to themselves, the railways and, certainly, the taxpayer if they do not respond intelligently to it. It is a helpful report in the sense that it is our duty to ensure that the nearly £1 billion of taxpayers money is well spent.

We could all speak at length about the extensive report, but I shall be brief and conclude with two points, which any hon. Member is welcome to answer in his contribution. Should we proceed with major new investment decisions until the Bedford-St. Pancras line manning agreements are resolved? Is it right for the taxpayers that, while £150 million of new equipment is standing idle, they should be asked to pay more money?

Will someone comment on the simple point made in the report that the much quoted Leamington Spa to Stratford-upon-Avon line had a revenue of £76,000 in 1981, but that its direct costs alone were £420,000? Is that right? Politicians may decide for social reasons that it is right to keep such lines open, but it is equally right that the facts should be exposed and answered and that all such expenditure be justified.

The Government's record in supporting the railways is outstandingly good. The passenger and taxpayer need have nothing to fear if we openly and sensibly analyse the Serpell report and use it to make sensible decisions about the future of the railways. I strongly believe in a modern and efficient railway, and Serpell will help us to achieve it.

7.13 pm

Mr. Walter Johnson (Derby, South)

To digress for a moment, Mr. Speaker, I understand that you were elected to your present office seven years ago, on 3 February. I am sure that the whole House will wish me to congratulate you. [HON. MEMBERS: "Hear, hear."] You have retained the confidence and affection of us all.

Mr. Speaker

I hope that the House will forgive me if I say that I have enjoyed that part of the debate best of all.

Mr. Johnson

In those circumstances, Sir, perhaps I should sit down.

As was said earlier, there have been many reports on British Rail. My right hon. Friend the Member for Barrow-in-Furness (Mr. Booth) recalled some of them. As many hon. Members know, I have been concerned with the railways for a long time. I have never known any report to be so universally condemned. It has been a waste of time and money. I understand that it has cost more than £600,000—and all the bills have not yet been received.

There is a series of options in the so-called report or review, but no recommendations or proposals. Those of us who have worked in the industry could have given the Secretary of State all those options, and he need not have referred to Serpell. The report has been a serious embarrassment to the Secretary of State and the Government because of its various options. For example, if the Government accepted just one of the options, and there were massive increases in passenger fares—especially in the commuter belt—those living in and around London would be outraged. At the last general election, the Conservative party won almost every marginal seat in the London commuter belt. That would not be the case if the Government took up an option that increased fares dramatically—it would probably double them. Conservative Members would say something positive to the Secretary of State if he tried to implement such an option.

I charge the Secretary of State with questionable conduct in calling for a report that raises bogies in the form of outrageous and unacceptable options—especially those related to network size—which, after much huffing and puffing, he virtuously declares to be unacceptable. If the Government are serious about retaining the network at broadly its present size, why ask for an examination of the options for decimating the railways? The report provides a further excuse for not taking the positive, favourable decisions on railway finance and investment that are desperately required.

The report fails to discuss, let alone comment on, electrification, foreign railway comparisons and the Channel tunnel. Chapter 2 is devoted to passenger business, and an important section deals with inter-city business. The report may say that electrification cannot possibly affect the prospects of viability or otherwise before 1985, but it looks further ahead to 1992, and its brief comments for that period fail to take into account electrification—as does the examination of option H, the high investment option which considers whether a high level of investment would affect the financial results. Chapter 3 deals with freight, but does not even mention the Channel tunnel. That factor must be taken into account in the long run, especially if we are looking for economic hauls.

Too many reports about the future of the railways are circulating. They tend only to confuse. They do not help the business man planning his freight transport requirements. Worse still, one report cattily criticises the other. That is evident in Serpell's criticism of the British Railways Board's October 1982 rail plan. I understand that Sir David Serpell was a member of the board at that time, which makes it even worse.

Mr. Cook

Sir David wrote it.

Mr. Johnson

I had forgotten that. We need ministerial reassurance about the future of the industry and the necessary financing to consolidate existing services and to modernise for the future.

The Serpell report, as with many others in the past, makes the mistake of glibly accepting that cutting costs on the railways will be easy. There is little in the report to pinpoint where economies can be made. There is scant acknowledgement of the reduced costs and improved productivity that have been achieved already through the co-operation of the trade unions. I speak as a former president of the Transport Salaried Staffs Association. I challenge anyone in the House to say that my union and its members have failed to deliver the goods. In the past two years, 25,000 people have left the service of British Rail.

The Serpell report is more notable for its omissions than for anything else. The report accepts the case for subsidy to rail in London on the ground of road traffic congestion, but it does not take fully into account the wider benefits to the economy and the structure of London. Nor does it seem to accept the case for subsidy in other large conurbations where local passenger transport executives are showing their faith in rail's advanages in the urban environment. The Serpell committee seems satisfied to state that road vehicles pay more in tax than their direct cost to the public purse. That is nonsense. For instance, heavy lorries do not pay their full cost to the public purse, and the cost to the Exchequer of the company car tax loophole is more than twice the subsidy to British Rail.

In its discussion of the energy efficiency of different types of transport, the committee fails to point out the key issue of the inherent energy flexibility of electric railways. The railways provide an insurance against long-term energy shortages.

In the absence of subsidised public transport, many groups of workers would be deprived of access to social life brought about by mobility. Many have low mobility for social, economic or geographical reasons. In this area the Government will be heavily criticised if they adopt any of the options included in the report.

I should like to say a few words about the British Rail Engineering Ltd. workshops. I have two such workshops in my constituency. The report does not criticise at all the quality of BREL management or its performance. Instead, it criticises the ownership of BREL. It is hoped that this part of the report will not be used by the Minister and his colleagues to further their prejudices against publicly owned industry. Relationships between the British Railways Board and BREL are being geared to competitive tendering. Among the steps taken to develop this relationship is the competitive tendering currently under way between Metro-Cammell and BREL for prototype diesel multiple units and detailed examination of the contractual arrangements between BREL and the railway.

The board sees the development of that relationship as being the best policy to pursue because by doing so the board maintains control of maintenance and supply. In addition, it allows the development of railway exports backed by the know-how of British Rail. The board favours this approach because it says that it can achieve all that the Serpell review advocates without a change in ownership. The achievement of BREL management in recent years—the reduction, for example, of 5,000 wages grade staff in 1981–82, the reduction in surplus capacity costs of £4 million in 1982 and reductions of stocks of spares by £25 million in 1981–82—surely suggests that the arm's length relationship will be a success.

If the Government would agree to further investment for the railway workshops they could work at full capacity and there would be no need to close any of the workshops. There is a great need for new rolling stock. Much of the existing stock is clapped out. There is also a great need for new locomotives. All this work could be done in existing railway workshops. We have heard today of EREL's success in obtaining an overseas order. Many of these options can be taken up if the Government are prepared to invest in the way I have suggested.

The Serpell report is damaging. It does nothing to help the railways. I hope that when the House divides tonight Conservative Members will agree to come into the right lobby because they know that implementation of the report would seriously damage to their prospects at the next general election.

7.24 pm

Dr. Brian Mawhinney (Peterborough)

I do not pretend to have the detailed knowledge of the industry of the hon. Member for Derby, South (Mr. Johnson). I should like to start by declaring an interest. First, I represent a famous railway town. Secondly, I have a considerable number of commuters in my constituency. Although Peterborough is 85 miles from London, more than 500 of my constituents commute daily to London. Thirdly, I wish to acknowledge, as did my hon. Friend the Member for Eastleigh (Sir D. Price), a personal commitment to the railways—one shared by my right hon. and hon. Friends on the Front Bench.

That commitment is shared by most of my constituents. They want a railway service. They want a good railway service. When they complain to me they do not complain about the existence of the service but about the fact that it is not up to the standard they expect it to reach. In other words, they are saying what Serpell is saying. They want better service, they want a higher quality and more efficiency. But equally they want the rail network to be maintained roughly at its present level which, as my hon. Friend the Member for Faversham (Mr. Moate) said, is Government policy.

My constituents would be surprised to learn that the taxpayer is now contributing slightly more to the cost of railway journeys than is the farepayer. They would also be surprised to be reminded that the Exchequer is contributing almost £1 billion to the railway industry this year.

In the first of my two comments about the report I wish to concentrate, as did my hon. Friend the Member for Eastleigh, on the customer. The customer is not getting value for money out of the service at the moment. There is little in the Serpell report that looks at things from the customers' point of view. The customers' perception of the railways is not a particularly good one. They remember last year's strikes and the amount of money that that cost the railway system. They did not hear at that time anyone being seriously concerned about the customer. People were concerned about the politics of the strike and about the impression that was created that the railways were there primarily to provide jobs rather than a public service. They were "turned off' by this.

Secondly, people are unhappy about their perception of the railways, which they see as a political football, suffering from rigid management structures—although I, too, should like to pay tribute to Sir Peter Parker, and the improvements that have been instituted under his management. People see archaic work practices and overmanning still in the industry.

One of the advantages of being in a railway town is that the people who work on the railways talk to their neighbours. Their neighbours are still upset that railway drivers are working, in some cases three-and-a-half hours out of an eight-hour shift. They believe that more can be done in that regard.

Mr. Huckfield

That is arrant nonsense.

Dr. Mawhinney

It is not nonsense.

Mrs. Dunwoody

When people talk to the hon. Gentleman about consultants or about scientists working within the National Health Service on the basis of evidence gathered from their neighbours, does he regard that as reliable and informed comment or gossip?

Dr. Mawhinney

As the hon. Lady well knows, in some cases it is the former and in some cases it is the latter, as is true in this case. I said that one of the advantages of representing a railway town is that one gets the views of those who work on the railways, first hand. They are my constituents. They talk to me. As the hon. Lady may know, I have good relations with the people who work on the railways in Peterborough. I have met the executives of the branches of both ASLEF and the NUR.

I shall now say something of which the hon. Lady will approve, but I say it because I believe it. The Serpell report does not deal with the frustration that is building up among workers in the railway industry who have met the criteria laid down by management but who are still not receiving the benefit of achieving them because some of their colleagues and union leaders are not willing to move as quickly as, for example, some of my constituents have already done.

Serpell notes that the industry has shed 250,000 workers in the past 20 years and that is to be commended. In addition, as we have been reminded, 25,000 workers have gone in the last two years. I should like to underline Serpell's encouragement to the Government that more money, in a transitory sense, should be made available in order to continue that process. The railway industry has in it men who have worked all their lives and who would be willing to retire early with appropriate help from Government funds so that we could build a railway system for the future on the young men in the industry to whom we shall have to turn The customers see a service which in their view is sometimes run for the benefit of British Rail rather than for the benefit of the traveller. A distinguished constituent of mine telephoned me this morning—the leader of the Peterborough city council, who is well known to Labour Members and the Under-Secretary of State. He telephoned me as a constituent, not as the leader of the council. Last night a 125 train broke down at St. Neots and the passengers were left to sit on it with no information for 50 minutes. Mr. Swift arrived driving a lightweight engine and towed the train to Biggleswade, where it was left sitting for another 50 minutes and again the passengers were given no information. Nobody would stop a through train to take them off and nobody gave them information. All that was for the convenience of British Rail, that it might get another driver from London to take over the disabled 125 engine. Given such an example, about which an ASLEF member of 39 years' standing and a senior Labour politician was so angry that he rang me at home at breakfast time this morning to ask me to raise the matter in the House, it is no wonder that the customer is fed up with the type of service that is being offered to him and is demanding a more efficient, cost-effective service of a higher quality than is presently available.

One paragraph in the Serpell report dismisses electrification. That is not acceptable and on that I agree with the hon. Member for Derby, South. There is only one negative paragraph about electrification. The House knows that I have consistently urged on the Government the need to electrify the east coast main line from London to the north. The Government set demanding conditions for that which were clearly explained to the House in June 1981 by my right hon. Friend who was then Secretary of State for Transport and who is now the Secretary of State for Social Services.

Among other things, the Secretary of State for Transport said that the Government would be willing to be committed to supporting a programme of electrification provided that the board could show that the inter-city and freight business sectors could be made viable by 1985; prove that the routes to be electrified were potentially profitable; show that investment in electrification of each project within the network of routes to be electrified would produce at least seven per cent. return taking into account any network effects; and provide convincing evidence of progress towards reducing staff numbers towards the target of 38,000 fewer by the end of 1985. After two years, staff numbers have been reduced by 25,000.

The House knows that since June 1981 much additional work has been undertaken by British Rail within the stringent guidelines which, quite properly, my right hon. Friend the Secretary of State for Transport set forth. A measure of that work can be seen in that inter-city and freight sectors were redefined and prospectuses prepared that met the agreed criteria, and those were sent to my right hon. Friend in January 1982. Route profitability assessments were completed, which disclosed that all the routes selected for inclusion in the 10 year programme passed the tests devised by my right hon. Friend. Those convincing prospectuses were sent to the Secretary of State a year ago but events and forecasts have changed, particularly in respect of traffic volumes. The board is now producing a new set of proposals and it tells me that it hopes to send that to my right hon. Friend in about four weeks' time. It is confident that they will meet the criteria which have been set down.

I hope that when those proposals are received the Secretary of State and the Under-Secretary of State will look at them quickly and produce a detailed and affirmative response in a short time. That is necessary, first, because teams of skilled men in electrification work are now having to be disbanded and it will take a long time to put some of those teams back together again. Therefore, it is not in Britain's interests that a decision should be long delayed once that report is received.

Secondly, electrification of the east coast main line is inevitable. It will happen one day because electrified trains are cheaper, more efficient and provide a better service. There is no suggestion that anyone would close the east coast main line and so we must have the best possible service on it in the long term. That means electrification. If it is inevitable, as I believe it is, then twere well It were done quickly. Thirdly, the Conservative party has a commitment to the railway system. It is a commitment that I know my right hon. Friend the Secretary of State shares. Incidentally, it is a commitment that the House may care to note has been demonstrated by my right hon. Friend because since the Government came to power British Rail has asked for the closure of routes about 30 times and each time has been refused permission by the Government. That commitment to the railway service will be welcomed. I hope that my right hon. Friend will accept that, while the Government are moving to introduce the necessary reforms and pressures to improve the system and its quality, a decision to electrify the east coast main line would be seen by everyone as a symbol of the Government's commitment to the railways.

7.37 pm

Mr. Robin F. Cook (Edinburgh, Central)

I am not sure that the hon. Member for Peterborough (Dr.

Mawhinney) has read the Serpell report correctly. However, I must warn him that his reading of Shakespeare is suspect. The lines If it were done when 'tis done, then twere well It were done quickly preceded a major murder. The hon. Gentleman's reading of the Serpell report is also founded on certain misconceptions as to what it contains.

The hon. Gentleman said that his constituents wanted a better railway system and that that is what the Serpell report is about. I must warn him that if the recommendations of the Serpell report are carried out his constituents will have a more dangerous railway service because safety standards will be lower. It will be slower, because the report explicitly recommends that signalling standards should be relaxed, even if that means delays. It will be subject to more frequent interruption, because maintenance work will be carried out on weekdays when the hon. Gentleman's 500 commuters are trying to get to London. I cannot believe that that is the kind of service that his constituents want.

It is not surprising that in the debate the Serpell report has found few friends, unless we count the hon. Member for Faversham (Mr. Moate), whose most encouraging comment about the report was that it did not come to any real conclusions, but only suggested things that we should think about. If that is all we wanted, surely we did not need to spend £600,000 of taxpayer's money to get it. We could have asked a Member of the Social Democratic Party to make a speech saying what we needed to think about without arriving at a decision for action, as they are for ever doing.

The report is valueless as a means of deciding what needs to be done in the public interest. The main reason that Serpell is valueless is that it refers several times, both at the beginning and the end, to a railway system that provides a satisfactory return. Throughout its report the committee appears to consider a satisfactory return simply on the narrow ground of a surplus on the balance sheet. Nowhere does it appear to grasp the fact that a satisfactory return in terms of the railway network might be a cost-effective railway system. It does not seem to grasp the distinction between a surplus on the balance sheet and a cost-effective railway system. Instead of asking how a cost-effective railway network can be achieved, it has undertaken a simple-minded exercise in how to cut public expenditure on the railway network. Even in those terms there is some remarkably shoddy accountancy.

I refer the House to paragraph 12.21, in which the report mentions the British Railways Board's proposed savings and tops them up with some savings discovered by their engineers on a different basis. It adds the following sentence: We recognise the difficulties of putting together figures which contain two elements: some which have been estimated against the Board's planned expenditure to 1986, while others are based on the actual amounts spent in 1981. It is not a matter of there being difficulties. It is utterly impossible to reconcile such wildly different bases. British Rail has made it plain that it suspects that the engineers found additional savings by the simple device of double counting some of the savings already identified by British Rail.

There is a whole range of areas in which the report fails to take account of the increased expenditure which would flow from the consequences of some of its recommendations. Paragraph 6.4 states that it did not evaluate the increase investment necessary to generate savings in engineering. Paragraph 13.21 states: No account has been taken of the net cost of replacement bus services". Most breathtakingly of all, paragraph 14.5 tells us that there was not time to check the resource cost of road congestion resulting from the shutting down of the commuter lines.

However, the report says that the congestion would be confined to London and would not occur anywhere else in Great Britain. How can it say that? The committee gives its explanation for its confidence in that assertion in three lines. It is based on the fact that the Department of Transport told the committee that during the strikes in 1982 congestion proved insupportable only in London. I query the cost efficiency of paying £600,000 to a team to tell the Minister what the Department of Transport told it. That apart, it is grotesquely inadequate to suggest that there will be no congestion anywhere else in Great Britain because of the limited experience gained from the 1982 rail strikes. The conclusion is based on anecdotal evidence.

The train service that I use most regularly is the one from Glasgow to Edinburgh. It is eliminated in two of the options. It is the swiftest, safest and most convenient way of moving from the centre of Edinburgh to the centre of Glasgow. It is used daily by tens of thousands of Glasgow and Edinburgh residents.

Mr. Tam Dalyell (West Lothian)

And Linlithgow.

Mr. Cook

Yes, and Linlithgow. It is also the only real alternative to the journey on the M8, which is one of the most congested motorways. There is no question but that the loss of that railway would produce greater congestion in the south of Scotland.

What fills me with a sense of weariness at having to make these points is that there was, in comparison to Serpell, a scholarly report published six years ago by Mr. Leitch entitled "Trunk Road Assessment." He recommended that where rail closures were proposed there should be a cost-benefit analysis of the railway provision and the competing methods of providing transport needs supplied by that railway line. There is no reference in Serpell to that report. As far as I can make out, no Member of the committee was aware that that report had been produced. Far from the Serpell report taking us into the future, it represents a massive leap back six years beyond the point at which the committee provided its report to the Minister of Transport.

I come to the appalling incompetence of the technical work that was supplied to the committee. One's reaction to its quality alternates between hilarity at the high comedy of some of the results and fury that they should be put forward as a firm basis for future policy decisions.

There is a number of ghastly howlers. I shall illustrate one from my region. In no fewer than two of the options the Highland railway stops at Crianlarich. Crianlarich is a hamlet, not a village. I say nothing critical of the good people of Crianlarich when I say that there would be no station there if it were not for the fact that it is in the glen through which one has to pass on the way to Oban, Mallaig and Fort William, which are reasonably populated. It is absolutely lunatic to run the railway to Crianlarich and stop it there. The only point of a railway going there is to go on to Oban, Mallaig or Fort William.

The line from March to Spalding is retained in two of the options. British Rail closed that line last year. It is still in two of the options, although the tracks have been lifted.

There are major strategic failures. There is a failure to reckon the loss in revenue to the main lines which results from cutting branch lines. A railway system is like a river. If the streams are cut away, one no longer has the river. One needs the tributaries to feed the river.

There is the consequence to freight, as my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans) has pointed out. One of the consequences of option A or B is that there would not be one power station in Great Britain linked to a coalfield by a railway line, and yet the report assumes a £10 million revenue in freight traffic in options A and B.

At the end the report has the effrontery to suggest that the computer model which churned out this garbage is an important development in railway planning.

Other hon. Members have drawn attention to the impropriety of the appointment of R. Travers Morgan and Partners. I am less worried about the impropriety of the appointment, although I believe that we are entitled to expect from members of a departmental committee at least the same standards of public conduct that we expect from local government councillors, any one of whom would find himself in serious risk of being disfranchised if he were to put himself in the position in which Mr. Goldstein found himself on the Serpell committee.

What worries me more is the sheer inappropriateness of the appointment. There are 33 pages in Jane's "All the World's Railways" listing all the railway consultants in the world. The name of R. Travers Morgan and Partners does not appear in them. As far as I can discover, it has only once carried out a study for British Rail. It was of a limited nature, considering, of all things, rail electrification, which is wholly ignored in the Serpell report.

The lack of the consultants' experience and technical expertise shouts out fom every page of the report. However, the committee's failure is more than a failure of technical competence; it is a fundamental failure to appreciate the strength of our rail system and network. The strength of our rail system is that it provides a means of mass transit. If we want a cost-effective rail system, we should set about maximising traffic, not minimising it. Time and again, far from looking at ways in which to increase the number of passengers travelling by rail, Serpell cheerfully writes off chunks of the traffic on the basis that they could be done without.

One is left with the impression that the Serpell committee's vision of an ideal rail network would be one that provided a service in privileged areas such as London and the south-east for a few wealthy people who could afford to pay an economic price for their tickets—in short, a railway service catering solely for the kind of people on the Serpell committee. I cannot believe that any hon. Member wishes that vision to come to pass.

The Secretary of State made it clear when he answered questions the other week that there would be no snap decisions on the report. The Secretary of State for Scotland was more explicit. He is quoted in The Scotsman as saying: you can assume that nothing drastic will happen for the next year or two at least". I am confident that nothing drastic will happen at least until after the next general election.

The tragedy for British Rail and for our transport system is that we cannot afford to wait for decisions. Ministers may say that they do not favour a major contraction of the network, but if vital investment decisions are not taken soon that contraction will take place in any case. It will be pointless for hon. Members to make sincere, genuine pleas for the retention of the branch lines in their constituencies, because unless further tranches of investment are released soon there will be no locomotives to maintain services on those lines, whether the Secretary of State wishes to close them or not.

The tragedy of this whole episode is that financial decisions were delayed for seven months pending the Serpell report, and I view with consternation and anxiety the possibility of a further seven months or more delay in taking decisions on the contents of the report.

Finally, I cannot refrain from making the following comparison. On Tuesday, the Government published their White Paper on public expenditure. One of the many fascinating statistics to emerge from it is that by the end of the Government's period of office public expenditure on defence will have increased by 23 per cent. in real terms. I am struck with wonder at the contrasting priorities of a Government prepared to find such an extravagant sum for that budget while remaining obsessed with finding ways to whittle away expenditure on our railway network, irrespective of the damage that will be caused. I doubt whether it is possible to build a civilised society on those priorities. I am certain that we cannot create a thriving, growing economy on the basis of a savage attack on our transport infrastructure.

7.52 pm

Mr. Dafydd Wigley (Caernarvon)

If the implications of the report are put into effect, Wales will become a transport desert. At £600,000, the report is extremely bad value for money. Even at this late stage, one wonders about the status of the report. The accompanying letter, printed on page 1, presents the report for "early action" by the British Railways Board. If there is early action on the alternatives set out in the report, the options are greatly restricted and do not open up the decisions that we believe should be taken.

I agree with hon. Members who have said that the report is extremely negative. It has not applied itself to the question of building up the railways through an investment plan. Without investment, we shall be left not with the status quo, but with a gradual deterioration of the network as various parts of it become inoperative.

It is incredible that only one paragraph of the report deals with electrification—one of the most important investment decisions facing the board.

There is also no analysis of comparative energy costs between rail and road. Rail transport has great advantages in this respect and it will become increasingly important as the years go by. It would be tragic to cut away the network now, when in 30 or 40 years we may find that it is an essential mode of transport and we shall then greatly regret having destroyed the infrastructure. More thought should have been given to achieving fair competition between road and rail. At present, British Rail must sustain the cost of keeping the network infrastructure open, whereas for the roads the cost is met from taxpayers' money. I suggest that the maintenance of track and infrastructure should be a direct Exchequer charge, and that decisions as to the viability of services should be taken on that basis.

Any decision of this nature requires a proper cost-benefit analysis, but such an analysis is patent] y absent from the report. A report undertaken in as hurried a way as this one was cannot go into that kind of depth. For that reason, the report should not have been rushed.

The most extreme of the six options makes Beeching seem like child's play. Beeching suggested cuts of between 20 and 30 per cent. in the network, but the most extreme of the Serpell recommendations would chop 84 per cent. from the network. The Beeching proposals were mere trimming and pruning compared with that kind of root and branch axing. I intervened in the Secretary of State's speech to ask which options he ruled out when he introduced the report a couple of weeks ago. I was disturbed to hear his reply that option A was the only one that he excluded. That means that option B and the other extreme proposals are still in play. The Minister shakes his head, but that was the reply I received. If the Minister wishes to correct that impression, I shall happily give way. I see that no intervention is forthcoming. If these are the only options being considered, the one thing that should be axed is the report, and right now.

On the structure and control of the railways, particularly in Wales, many people have advocated that the railway services should be linked with the Welsh Office. There was a recommendation to that effect from the Welsh counties committee last year. As the Welsh Office controls roads, there is a strong argument for bringing road and rail under the same control to achieve an integrated system. The Financial Times today refers to the delegation of power over railways, particularly to Scotland and Wales. If such a devolution of power is considered, I would emphasise the point made in The Times today: Given adequate financial support from central Government, it is now seen as a real possibility. It could be the best hope of saving the lines that Serpell identified for possible closure". It is essential that the financial support should be forthcoming. Otherwise, such a development would be useless.

A number of railway lines in Wales will be closed under several of the options. For instance, five out of six options recommend closure of the Conwy Valley line. Yet that line serves the Trawsfynydd nuclear power station, so nuclear waste will presumably have to be carried by road. The Amlwch freight link carries dangerous industrial waste; but, again, five out of six of the options recommend closure. Five out of six options would also close the central Wales line, and five out of six recommend closure of the rail link to the important port of Fishguard. Indeed, three out of the six options envisage no line beyond Swansea. That is incredible in view of the importance of Pembrokeshire as an oil port area. In options A and B, the line runs only 20 miles into Wales and stops at Cardiff, leaving Wales devoid of lines. As we have heard, the proposals for Scotland are similar.

There is only one railway line in my constituency—the Cumbrian coast railway line. Five out of six options recommend that it be axed. There has been uncertainty about the future of that line for some years because British Rail could not find the necessary capital investment. It requires only £4 million or £5 million to bring the track and the Barmouth viaduct up to standard—£30,000 per mile compared with £12 million per mile being invested on the Colcon road in north Wales. Yet the Cumbrian coast railway line is vital to the tourist industry and to take local people to work and their children to school. If it were closed, two more barrages or road bridges over the Mauddach and Dyfi estuaries would be necessary, probably at a cost of about £50 million, but that has not been taken into account at all.

The most devastating suggestion for my area is the possibility that the line from Crewe to Holyhead will be closed. This vital link is part of the official Euroroute to Ireland. In three out of six options, the route is down for axing. Its closure would be a body blow to any hopes of economic regeneration in north Wales. It is essential for tourism and for industry. The uncertainty caused by the Serpell report will make it difficult to attract industry to set up in areas such as Gwynedd.

We want this uncertainty to be ended, and ended now. We want the Government to make it clear that the extreme options—not just option A, but the other four—or, better still, the report altogether will be axed.

There are tremendous road problems in areas such as Anglesey and Carnarvonshire because of the volume of road traffic, particularly in summer. It will be even worse when the large lorries have to take what is transferred from the railway if it is closed. The closure of the rail link from Crewe to Holyhead would mean the end of the container service between Holyhead and Dublin, which would be a body blow to Holyhead as a port. It would mean the end of the Sealink shipping service to Dun Laoghaire as the proportion of foot passengers carried by train is high.

A commitment to electrification of the line to Holyhead is essential to the development of that port. If the railway line is closed, the port will be run down and the base of the economy in that area will be threatened. I apologise for referring to this matter when the hon. Member for Anglesey (Mr. Best) is not here, but it is of great importance not only for his constituency but for all north-west Wales.

The replacement bus service suggested by the report could not provide an efficient or speedy link from Holyhead to Crewe, because of the poor quality of the roads in north-west Wales and Anglesey.

Those three points are of considerable importance for the future of Holyhead. The closure of the rail service would inevitably mean the end of the port. If the north Wales coast line is not kept open, it will make the work of north Wales Members, who wish the area to be developed, virtually impossible.

My fear is the fear expressed in The Guardian on 24 January: The Treasury is thought to be the most determined to prevent the Serpell Report from slipping into oblivion. Mr. Leon Brittan is reported to want the matter kept alive, ready for revival after the next election. The writing is on the wall and it is up to us now, before the election, to bury the report.

8.2 pm

Mr. Terence Higgins (Worthing)

It is clear from a number of speeches this evening that some hon. Members are inclined to paraphrase the late Lord Butler and say that this is the best Serpell report on railway finances that we have. It has received a very unsympathetic response in the House.

The letter at the beginning of the report records that one of the members did not tell the committee until the last minute that he proposed to submit a minority report. It must be one of the strangest letters ever received by a Secretary of State in these circumstances. It is particularly unfortunate, not least because the dissenting member of the committee expressed his views about the committee's recommendations without giving the rest of the committee a chance to say what it thought about his minority report. It is a strange report in that respect.

Another point that is worth making—it cannot be made too strongly—is that the report sets out various options. It reaches some fairly vague conclusions, but does not make specific recommendations. That is in marked contrast, as hon. Members have pointed out, to a number of other reports, not least the Armitage report on heavy lorries. There was immense controversy about the Armitage report, but we were at least clear on the committee's views. The Government could accept some and reject other parts of the report, and the House could reach a conclusion. It is not helpful to set out every conceivable option in a politically naive way, ranging from an option that no one will get along with to the other extreme.

The hon. Member for Caernarvon (Mr. Wigley), Opposition Members, some television commentators and others have said that the Conservative Government will not implement the report before the election, but that afterwards they will take the extreme option. That creates a strange situation.

Therefore, the Government should in due course make their views known. It would be wrong for them to rush forward on the basis of the report and feel that they are obliged to say exactly where they stand. The report contains much relevant information and we need to appraise it in the light of other information available to the House.

As hon. Members have pointed out, the conclusions run to half a page only in the majority report and to three quarters of a page in the minority report. They are in the most general terms and do not give us clear views on the conclusions reached by the committee.

It is clear that the committee is worried about two aspects of British Rail's operations—its ability in the matters of project appraisal and of forward planning. In both of these respects, the committee makes a number of cogent points that should have the attention of the House. I am sure that Sir Peter Parker and his board will need to give them careful consideration.

It is essential for the industry to have an efficient system of planning which will provide the House and the Minister with a reasonable basis on which to take decisions. In that context, the Parliamentary Control of Expenditure (Reform) Bill, introduced by my right hon. Friend the Member for Chelmsford (Mr. St. John-Stevas) and given a Second Reading last Friday, is important. The Comptroller and Auditor General, under that measure, would have a continuing participation in the British Rail operation, and that should give it a real chance. The Comptroller and Auditor General should be able to make positive contributions to planning and project appraisal. Sir Peter Parker has kept a low profile on this issue, but the Bill presents an opportunity for improving efficiency in precisely the areas where the report makes the more valuable contribution.

I wish to comment on some aspects of what is summed up by the awful word "privatisation". There is a real opportunity here, for example, in catering, about which we had a number of press reports yesterday. As the hon. Member for Worthing, I am bound to agree with remarks made about the Brighton Belle and the Pullman service. Rolling stock on many lines, such as those in my constituency, is in a deplorable state. More private capital would increase the choice available to those who necessarily have to travel by train. When considering investment in electrification, we have to recognise that the inquiry was carried out against a background of industrial dispute that can only be described as turbulent. There are a number of important implications. My right hon. Friend the Secretary of State drew attention to the extent to which Labour Members were prepared to back unjustifiable industrial disputes in British Rail last year. Sir Peter Parker had the greatest difficulty not least because it was difficult to know whether any agreement that was made would be carried out.

We can judge the argument for further investment only in the overall context. Time and again, we quote the still hazardous problem of the Bedford-St. Pancras line and the £150 million investment that is not being properly used. We want a more efficient railway. We want reasonable investment that is profitable and will improve the service to passengers. However, that will happen only if there is a corresponding response from the trade unions. It is a matter of great regret that that has not happened, certainly during the past couple of years. We can only hope that, against the present background, there is more scope for investment.

I agree with those who have said that the Serpell report takes us no further on the vexed question of electrification generally. In this connection, my hon. Friend the Member for Peterborough (Dr. Mawhinney) made a number of cogent points.

I want to comment briefly on another aspect. The report, in page 27, deals with off-peak travel in what seems a confused paragraph. It seems to imply that concessions should be given for off-peak travel, and that it may be possible to eliminate the costs incurred. That is a somewhat strange approach. If we are to invest in the railways, we must invest to meet the traffic at the peak. We have done nothing like enough to try to reduce the travel peaks, not least in the south-east.

Mr. Fry

Does my right hon. Friend accept that, unless we encourage use at the peak, at the same time as giving a heavy subsidy, the demands on the public purse will be endless? That is the danger.

Mr. Higgins

I agree with my hon. Friend the Member for Wellingborough (Mr. Fry). It seems that I did not make myself clear. What worries me is that we necessarily invest to carry the peak traffic and that we do not do sufficient, either in the immediate areas of the railways—for instance, by differential fares—or, more broadly, in terms of working hours—for instance, in the Civil Service—or in giving incentives to people in business to stagger their working hours, so that we do not need to invest so much to reduce the peak and can use more efficiently the capital that we invest.

The final matter that I wish to bring to my right hon. Friend's attention relates to the longer term. This matter, which has not been raised, needs to be considered. Those who take the extreme option say effectively that we should concrete over the railways and send everything by road.

I do not take that view. In my view, the railways have a vital contribution to make. At the same time, however, we face a major problem where the road network approaches and goes through central London. The railways are now taking a better view about the utilisation of land that they are not using. Certainly that has been an improvement in recent years. However, we need to consider more carefully, as one motorway after another moves closer and closer to central London, whether we should build roads over the railways. The board could reasonably charge a certain amount for that, or it might even consider building the roads on a toll basis. It could be said that that would create even greater congestion in central London. One could argue that perhaps we should have massive car parks over the railway terminals, and not allow the cars out at this end, or only at a very high cost.

In many respects, insufficient imagination is de voted to transport problems. The relationship between roads and rail, and the way in which they can co-operate together to their mutual benefit, is a matter to which we shall need to give more attention in the longer term, which is the concern of this report.

The Opposition motion links condemnation of the Serpell report with an implication that the Opposition are against the idea of higher fares, and so on. It is important to appreciate that the Serpell report simply sets out the options. The connection between the report and the other points in the Opposition motion is not clear. Indeed, I do not believe that it exists at all. That is a matter for broader policy, which we can debate more efficiently on another occasion.

8.14 pm

Mr. Les Huckfield (Nuneaton)

I speak in this House on behalf of the Associated Society of Locomotive Engineers and Firemen. In that context, the right hon. Member for Worthing (Mr. Higgins), when he talked about co-ordination between road and rail at the end of his speech, was getting to the meat of the matter, the subject that many of us felt should have been discussed tonight. The Committee of my right hon. and learned Friend the Member for Aberavon (Mr. Morris)—we should all be grateful to him, incidentally, because his report invented the concept of the social railway—carried out a much broader-based investigation, and took into account the effects on road investment and, much more worrying, the effects on road congestion. So I am glad that the right hon. Member for Worthing got round to that issue at the end of his speech.

I am not here tonight to apologise for the Associated Society of Locomotive Engineers and Firemen because the facts speak for themselves. If one considers the peak of railway employment in 1950, and one considers the numbers of train crews now, it is evident that the train crew numbers since 1950 have reduced by 70 per cent. I know of no other group on the railways, with the possible exception of signalmen, that has been reduced by similar numbers. I wish that Conservative Members would take cognisance of the fact that staff numbers, particularly in higher administrative grades, have increased by mo.-e than 30 per cent. in the same period. So, if we are talking about increases or decreases in productivity, I wish that Conservative Members would give the whole picture.

When one talks about the disputes last year—I refer to this issue because Conservative Members have referred to it—it is interesting to note that Serpell says that last year's disputes are alleged to have cost about £140 million. I have seen figures even higher than that. Even British Rail's evidence to the railway staff national tribunal said that over the next four years, if it could get all that it wanted from flexible rostering, it would not save more than a mere £9 million. Having lost about £140 million with an alleged and projected mere £9 million saving—the board's own figure, not mine—one begins to wonder what the dispute was all about. Was it about flexible rosters or was it about breaking ASLEF? Certainly the savings that are supposed to emanate from flexible rosters do not justify the stand that the board took.

Many of us suspect that the real savings from flexible rosters—now that they are supposed to be being worked, although in fact only a few are being worked—will come only when the depots start to close. When that happens, Conservative Members will have to be very careful because that will mean that stations will close as well. Again, I hope that Conservative Members will consider the whole picture.

If the Secretary of State wanted his much forecasted great debate on the railway system, and if he did not want, as he alleges, some of the extreme reactions that have resulted from it—many of the reactions following the Serpell report have been because of his attitude—if he had come to this House and immediately ruled out the more extreme options in Serpell, particularly some of the nonsense about reducing track and signalling safety standards, we might have had a more balanced debate. It is because the right hon. Gentleman did not rule out those extreme options that we have had some of the reactions that we have had. Is it any wonder, for example, that many midlands towns and large communities in that area are now worried that one of the options in Serpell predicts only six railway stations in the whole of the west midlands—Nuneaton, incidentally, not being one? When one realises that whole areas of the country could have no railway access at all, and that many of those areas previously deprived of railway access know what happens when a bus replacement service is then withdrawn, is it any wonder that many areas are deeply concerned and shocked, not only by the Serpell report but by the right hon. Gentleman's reaction to it?

Therefore, many of us are bound to wonder whether we are being softened up for what the Secretary of State would like to do after the election. The Government can then come back and say "At least it was not as bad as the worst option in Serpell. At least it was not as bad as the option that proposed to reduce the network by 84 per cent. You should think yourselves lucky that under this new Conservative Government, recently re-elected, your railway station has been saved." That tactic will be applied by the Secretary of State.

The debate is a little like the Beeching debate in 1962. I was not here then, but Conservative Members praised Beeching for producing an excellent report. However, when the branch line in their constituency was affected, out came the begging bowl with the protests, the deputations, and the lord mayor, saying, "Our station must not close". I forecast that exactly the same will happen if the Conservative Government, God forbid, are returned after the next election.

I could give many more figures for some of the achievements to which I wish the Secretary of State could have referred. They are Serpell's figures. It is interesting to note that between 1975 and 1982, despite difficult economic circumstances, particularly in the past three years, passenger miles operated have been reduced only from 18,800 to 17,300. Revenue per passenger mile has increased from 5.2p to 5.3p. The grant increase over the same period, in difficult trading circumstances, was only 3.9p to 5.4p. To have maintained that performance in those difficult circumstances is a commendable achievement.

If one looks at the passenger miles operated one finds that in 1979, before the onset of this Government, passenger mileage was as high as in 1961. That is a considerable achievement, bearing in mind the vast increase in the numbers of passengers carried and the reduction in the route network. By 1981 reduced fares and special promotions were producing 34 per cent. of total revenue. That included 2.6 million railcards, which produced £140 million.

Is it not interesting that just when railway passenger mile figures are starting to move up because special promotions, discounts and rail cards are encouraging travel, the Serpell report is published? Just when all those achievements should be extended and built upon, the Government start to talk about cuts.

Unfortunately, hon. Members have not referred much to safety. I hope that the Minister will refer to it. One section of the report has the temerity to suggest that signalling should be replaced only when it is unable to cater for the timetabled service". That is a dangerous and lunatic proposition. Any locomotive driver or anyone who works on the railways will tell the Secretary of State that safety standards are low enough already. I do not blame that on the staff. I blame it on the lack of finance. I am sure that the railways management has told the Secretary of State this on many occasions. According to its calculations, there are already about 800 miles of maintenance in arrears and a further 300 miles upon which it has to impose almost permanent speed restrictions. It is getting to the stage where, if the railways do not have the investment soon—according to the corporate plan, this was supposed to be the critical investment year—about 3,000 miles of the route will have to be withdrawn simply because British Rail does not have the money to maintain the track and keep it up to standard.

In the railway inspector's report, Lieutenant-Colonel McNaughton said that many of the accidents that are caused arise from the direct or indirect effects of the continuing financial problems facing railway management … I do not see the position improving so long as the average age of the track goes on increasing. That was said by the chief inspecting officer appointed by the Secretary of State. He is telling the right hon. Gentleman that unless the provision for the maintenance of track is increased, the accident record will get worse. Yet the Serpell report dares to say that maintenance of track and safety standards should be reduced. If the Secretary of State does nothing else, he should deplore, condemn and rule out that most nonsensical part of the report.

There is no part of the report where Serpell seems to have a good word for the railway system. If one looks at the figures for passenger miles, the revenue per passenger mile, the way in which British Rail has been gradually extending the benefits of railway travel to old-age pensioners, young people and families and the special promotions, one sees that the railway system is at last starting to be accessible to more sections of the community. I would have hoped that, as we are coming up to an election, the right hon. Gentleman would be in favour of extending that trend. However, because he has failed to rule out some of the dafter, more stupid and extreme options, he is receiving the present reaction. I ask the right hon. Gentleman, not only on behalf of ASLEF but on behalf of the travelling public and whole townships, at least to say that he will condemn the most extreme parts of the report. We shall then have a more balanced debate, which the right hon. Gentleman has been seeking.

8.27 pm

Mr. Peter Fry (Wellingborough)

The trouble with the debate is that far too many hon. Members have come along with the intention of burying Serpell rather than praising it. It is a great pity that hon. Members have tended to mount their hobby horses and on predictable lines as opposed to addressing themselves to the basic problem that was the main cause for the Secretary of State inviting Sir David Serpell to produce the report.

Ever since 1975 there has been an injunction on the British Railways Board to operate the existing network. Ever since then successive Secretaries of State have viewed with exceeding suspicion any attempts by British Rail to say how much the public service obligation ought to be to keep that network going. When we have been investigating the whole range of public expenditure, surely it is proper for, and the duty of, any Secretary of State to try to investigate whether the amount of public money that he suggests should go to the British Railways Board is being used in the best interests not just of the board and the railway network but of the travelling public.

One problem was that certain parts of the report were leaked several weeks in advance of publication. Some sections of British Rail's public relations activities have nothing to learn from any dirty tricks department in any country or organisation. What was leaked to the press was not the six options or the fact that half the report was based on how to keep the existing network going, but sections that would exclusively and particularly excite passion. What did my constituents say to me? They wanted to know whether they had to pay an extra 40 per cent. to commute to London, or whether it was true that there would not be a line running through Wellingborough up to Derby and Sheffield.

The leak was deliberate, so that before the report appeared Serpell was damned. I do not know how the leak came about. I too, like other hon. Members, have the greatest respect and admiration for Sir Peter Parker. But British Rail should take care to ensure that the activities of some parts of its public relations department are not repeated in future. In the long run, it is counter productive and will do no good to British Rail.

Mr. Alexander W. Lyon

As the hon. Gentleman will have read the Serpell report at his leisure, can he tell us whether the line through Wellingborough will be closed? The threat is still there in the report.

Mr. Fry

If the widest option were to be adopted the line would disappear, but we have already heard that the widest option is not to be accepted.

Mr. Alexander W. Lyon

No.

Mr. Fry

The worst option has been excluded. My answer to the hon. Gentleman is simple. Party politics aside, neither he nor I would expect any Secretary of State to accept what one would call the worst option. Pure practical politics and common sense dictate that no Secretary of State would preside over the total dismemberment of the rail system. This is where the debate is doing a disservice.

There is an important and fundamental question to be answered: what kind of remit should the Secretary of State be giving to the British Railways Board? The trouble is that it has not been clear. This applies not just to my right hon. Friend but to previous Secretaries of State Earlier today the Secretary of State in the last Labour Administration, the right hon. Member for Stockton (Mr. Rodgers), said that his solution would be to give a certain amount of money to the British Railways Board and tell it to get on with the job. But he forgot to say how much of the network he would expect the board to operate. His advice was useless without that information.

All that I and, I think, the British Railways Board are asking for is a degree of certainty about what is expected of the board. Is it to be given a flat amount of money and told to manage the network on it, if necessary, by closing parts of it; or is it to be told to keep a certain size of network open and that the Government will make up with the public service obligation the money that is needed to keep it? After all these years it is high time that this fundamental issue was sorted out.

That is a simplistic approach. I know that there are complicating issues, one of which is that the British Railways Board has found it impossible to get its answers right. I do not blame the board. The recession has knocked its immediate plans sideways. If one examines the board's forecasts and the way its plans have come out, there is no doubt that it has gone sadly astray. Nonetheless, and I take heart from this: the board says that it could save approximately £147 million by undertaking certain changes in its operations. All credit to the board. Perhaps Sir David Serpell was a little naive in accepting the ways in which the £147 million saving would be achieved. None the less, I do not argue about the figure. The point is that economies are possible. My right hon. Friend is entitled to ask the British Railways Board for those savings.

Mr. Spriggs

I think it is fair to inform the House, while the Minister is present, that long before the Serpell committee was set up Sir Peter Parker was telling the Government and Members of Parliament on both sides of the House that unless he could get a proper financial understanding, that is, a 10-year rolling programme, he could not guarantee to carry out his job as chairman of the board, to provide a proper railway service throughout the country.

Mr. Fry

I respect the hon. Gentleman's point of view. However, although money was provided in the past, for instance, for the Bedford to St. Pancras line, we are still waiting to see the benefit of that investment. I would not like the hon. Gentleman or the House to be under the misapprehension that I am not in favour of capital investment in British Rail. As a member of the Select Committee on Transport, I agreed with the report on the need for electrification. I stand by that.

Mr. Stanley Cohen (Leeds, South-East)

Will the hon. Gentleman confirm that the saving to which he refers will not affect the safety aspects of British Rail?

Mr. Fry

I accept that. I do not accept what Serpell says on safety. I do not think that any Secretary of State will want to see a diminution of safety on the rail network. Nevertheless, there are grounds for economies. When the Secretary of State is deciding the amount of money he will allocate to British Rail, he is entitled to ask it to make the economies that can be made and to ask whether the travelling public is getting the best value for money.

This brings me to the vexed question whether there should be closure of certain parts of the network and their replacement by buses. I declare an interest as an adviser to certain bus companies. This issue will have to be investigated closely in future years if only because British Rail itself has been investigating whether buses might replace trains on expensive and low-revenue producing lines. It is, of course, true that when buses replaced trains, following the Beeching report, the results were disappointing. The buses were rapidly withdrawn. It is hardly surprising that the attempt to run buses, without any subsidy, on a route that was not attracting passengers in the first place should prove not be successful.

One service performed by Serpell is to kill this idea. His findings show that there is no reason why such an alternative should not be considered. There would be need for British Rail direction to ensure that rail services were co-ordinated at either end of the route and to provide a degree of certainty that the routes would not disappear two or three weeks after the trains had been withdrawn. It may appear trifling, but if one studies the options involving the least reduction in railway lines, one discovers that over £100 million could be saved. The Secretary of State is right to be asking whether that amount would not be better applied to capital investment in British Rail rather than subsidising a few miles of line carrying few passengers, where the train could be replaced by the bus.

This is the essence of the question. I do not believe that my right hon. Friend the Secretary of State wll ever apply the broad brush treatment and wipe away the bulk of the rail system. However, my right hon. Friend is entitled to examine whether the existing system is ideal and right for the future. No particular line need be sacrosanct. That is what I am asking. If my right hon. Friend bears that in mind and explains at the same time what he wants from British Rail, as Serpell has asked, by giving clear directions to the British Railways Board, I believe that Serpell and today's debate will have been useful.

The debate, as I have intimated, was almost neutered at the start. But a continuing debate will prove valuable not only to my right hon. Friend but also to the House and to the country. We need a debate on the future of the rail system. We need to debate how much of the system should be supported by the taxpayer. After that, we want answers from my right hon. Friend. When he has given his directions, we want action from the British Railways Board.

8.40 pm

Mr. Michael Martin (Glasgow, Springburn)

Not long ago my community had four British Rail engineering workshops—some of them were private—Cowlairs, St. Rollox, Hydepark and Atlas. In their heyday, 10,000 highly skilled engineers worked in those workshops. Most people in the Springburn area worked locally. Anyone who travelled to work would have been considered slightly eccentric. Sadly, now only one loco shed remains at Eastfield. The position is very serious.

I am worried about the impact that the Serpell report will have on tourism in Scotland. The proposal that railways should go no further north than Edinburgh or Glasgow would affect the regions in Scotland that depend upon tourism. To do away with the railways in those regions would mean cutting off the only source of employment for people in the highlands of Scotland.

Scotland has beautiful scenery. We have some of the finest scenic railway routes in the world. They are second to none. The Government should encourage tourists to use those routes. The Government must ensure that the facilities are used so that the railways and tourism in Scotland thrive. I am worried about the only British Rail engineering workshop that remains. We must have a commitment from the Government on investment, and especially development.

I worked for the Rolls-Royce aero engine company, and I remember that in 1970 the Tory Government would not allow it to collapse because of the serious effect that that would have had on defence policies and strategies. Rolls-Royce did not fail because of lack of workmanship—quite the reverse. The problem arose because much of its resources had to go into the development of engines which took away money and capital from that industry.

We need development in British Rail engineering. We have the finest engineers in the world, and we should be able to say to people abroad, "Come to Britain and we will show you advanced British Rail technology"—technology that any country would be proud to have in its railway system. If we can get such a commitment from the Government, not only my community but communities throughout the United Kingdom will have a future.

The official unemployment figure quoted for my constituency in 1981 was about 25 per cent. More and more people have gone on the dole since then. More and more young people have had to get involved in the so-called job creation schemes. I am being moderate when I say that the unemployment rate in my constituency is about 30 per cent.

A book called "The Springburn Story" is very well read in my constituency. It is all about the glorious past when we built locomotives for the world. I do not wish to wallow in the past. The past will not put bread on anyone's table. What worries me about the Serpell report is that it could be the last chapter in the Springburn story.

I have made a big investment in my community. I live in my constituency and my children are being brought up there. I want the children in my constituency to be able to learn the skills that their fathers and grandfathers learnt before them. I plead with the Government to make sure that they put this report on the scrap heap and to make some investment in our railway industry.

8.44 pm

Mr. Richard Needham (Chippenham)

When I read the Serpell report, it reminded me of my cantankerous old aunt who used to stay with my family at Christmas and who criticised my poor mother in the greatest possible detail for everything that she did. Unfortunately, my aunt never came up with any solutions that were not either ridiculous or impracticable. But because my parents were poor and my aunt was very rich, we were always forbidden to criticise her on the ground that when she finally passed on she would leave us her money. However, she left it to a cats' home. The British Railways Board must feel about this report as my mother felt about that old aunt.

The first half of the report is too detailed in its criticism and goes to the most extraordinary lengths to examine what British Rail is or is not doing. Paragraph 5.3 states: The Board must be on guard against retaining market share at too high a cost. I am sure that the board is aware of that. Paragraph 5.6 states: The range of fares, travel cards, and special promotions now on offer to the passenger is large and confusing"— as is this report.

The Board are planning to introduce a revised and simplified structure. We consider this is urgently required. There again, the report states something that, if it is not obvious, should be taken into account by the board or by management of any calibre.

Paragraph 5.12 states: The introduction of automatic barriers would counteract fraud and reduce staff costs. If the Serpell committee spent almost all its time making such criticisms in such detail, and felt that that was its main task, we need not a Serpell report but a new board. I do not accept for one moment that the management of British Rail is so bad that it does not realise the obvious necessity of dealing with most of the detailed criticisms in the report.

When the report is not going into the nitty-gritty details of what British Rail's management should and should not do, it is superb at stating the almost complete obvious. Paragraph 6.12 states: The softwood sleepers widely installed in the 1950s and 1960s on what are now lower category tracks are approaching the ends of their lives and will need replacing. I am surprised! I wondered what would happen to them when they reached the end of their lives. Paragraph 6.35 states: Rail vehicles need to be durable, reliable and safe. Good gracious me!

Such platitudinous comment does not give one confidence in the way that the report has been put together. The committee seems to have spent all its time on such details and to have spent insufficient time thinking through the practical strategies that my right hon. Friend asked it to consider. As hon. Members have said, the conclusions take up only half a page. One states: Our function, in the 7 months available to us, has been to mark out opportunities and options, not to develop them in detail. However, the committee developed in the most incredible detail its criticisms of the board of British Rail when it should have exercised its mind in developing the sensible and practical strategies that British Rail should consider.

My constituency's largest employer is Westinghouse, which relies almost entirely on the railway industry. When I telephoned the managing director and asked him for his view, he said, "For goodness sake, say to the Secretary of State that what they must not do is close Chippenham station. If they do, how on earth will I be able to get all my export orders because I won't have a station to bring all the foreign buyers to and I won't be able to impress them with a railway system that is ever prepared to keep open the station that serves our factory." I looked in vain in the report for anything other than option A, which the Secretary of State has wiped out, for closing Chippenham station. The point is that that managing director believed that option A was a possibility. The naiveté of Serpell in allowing that option to be considered has given to right hon. and hon. Members on the Opposition Benches a wonderful opportunity to suggest that which no one would ever bring about and to make as much political capital out of it as they could.

It is crucial that in the not-too-distant future my right hon. Friend should make up his mind about British Rail and put British Rail management and everyone else out of their misery. This uncertainty affects not only the railways but those companies that supply the railway industry. They need to know where they are going in order to make sure they have the right skills and the right staff, and to give them confidence to develop the products which will modernise and revolutionise railway technology.

I therefore ask my right hon. Friend not to pay too much attention to the Serpell report but to pay great attention to the important problems facing British Rail. Not only is that vital to the success of British Rail; his decision will also be vital to the success of the hon. Member for Chippenham.

Mr. Speaker

I am much obliged to hon. Members for their brief speeches. The winding-up speeches are, I understand, to begin at 9.20. If we continue to have brief speeches, we shall be able to fit everyone in.

8.52 pm

Mr. Donald Anderson (Swansea, East)

The Serpell report has had an almost universally bad press, not just because of the selective quotations from it made in advance. It is an entirely negative report, simply looking at different forms of retreat on the current network. It fails to make international comparisons and is therefore totally insular. It fails to examine an overall transport policy or to pay any real heed to the needs of the consumer and passenger. It seems to have disappointed everyone.

Its genesis was the frustration of Sir Peter Parker after his years with the board, when he realised he had run against the buffers of the impossibility of getting increased investment from the Government and was viewing the decline of the rail network. Seeing that the railways were at the crossroads of advance or decline, and realising that this was a time when a positive investment policy was needed from the Government, he was hoping that the report would be a blueprint for the modernisation that is so much needed. Instead of his last gift to the railway industry being a real and positive future, however, he has seen put forward a negative report, tinged with the world-weary scepticism that is characteristic of this Government and based more on cutting back public expenditure rather than on looking at railways in the broader social and transport context.

Clearly, Sir Peter Parker and the board are displeased and disappointed with the report's conclusions, just as the Government must be. The report has no vision. It is very expensive—albeit it was carried out in seven months—and it fails to give the Government any positive guidelines, as many hon. Members have pointed out. It is unwept and unmourned and has no real supporters.

In the past few days the Government have used their propaganda machinery to talk about restructuring the railways. I accept the point that was well made by the right hon. Member for Worthing (Mr. Higgins), that the report makes some positive criticisms about British Rail's form of management. However, the Government now say that they favour a restructuring of British Rail, perhaps on a regional and financially self-supporting basis. Surely the Secretary of State realises that, unless such restructuring is accompanied by a more positive investment policy, it will simply beg questions about the future of our railways. There will be the same lack of investment in lines, the same threat to the future of lines, the same problems of lines being lost or of trains having to reduce speed through lack of investment, whatever the new structure.

There could be new profit centres and new units, but I fear that the Government may leave local authorities to decide whether to find the finance for the network, while at the same time squeezing them through the rate support grant and the transport supplementary grant. Local authorities will be blamed because central Government are not providing the finance. They would just be giving local authorities an illusory choice, as they have done before. Restructuring cannot be positive unless the investment policy is far more positive.

Following your exhortation, Mr. Speaker, I shall try to be brief. Because of the report, the stagnation in positive thinking prior to the report, and the Government's unwillingness to react immediately, there will be uncertainty for some time. According to railway management in my area, the uncertainty and lack of continuity is already affecting customers. For example, those involved in freight in south Wales are asking management whether there is a future and whether they should look to other modes of transport.

The Government must accept that both the passenger and the freight sides of the industry are uncertain and that that uncertainty will continue until the Government make their decision clear. I am confident that the blame for that uncertainty lies in part at the Secretary of State's door. If he had come to the House when the report was first published and told us that options A and B were absurd—as we all know—and that no Government would propose those options, he would have removed some of that uncertainty at a stroke. After all, Serpell put forward several options and proposed that they were all equally worthy of consideration. That uncertainty is having an adverse effect on the industry and the Secretary of State can be in no doubt about that uncertainty when he looks at the Benches behind him.

The cynics say that the Government's response has been to kick for touch and to avoid making any decision until after the general election. One fears that—like Ravenscraig and the Think Tank report on the National Health Service—such horrors might be put into operation if the Conservative party is re-elected.

We know that Serpell's negative penny-pinching response is very much in tune with the Prime Minister's own view of the railways. It has been said, perhaps wisely, that she hates British Rail almost as much as she hates the Foreign Office. If the Secretary of State believes that the more extreme options—not only option A, but option B and the others which slash the current network—are out of court in serious policy considerations, why does he not tell the House that now and put out of their misery those Conservative Members who represent commuter seats—a dwindling band after the next election—and seats in Scotland, Wales and elsewhere? Is he waiting for the opportunity that would be presented if a Conservative Government were to be re-elected to get rid of Sir Peter Parker when his mandate comes up for renewal in August? Are the Government waiting to replace him with a "yes" man who is prepared to carry out a severe pruning of the railway network? If the Secretary of State considers that the options put forward in the report are just not on, let him say so and put the railway industry, the country and the county Tories around him out of their misery.

9.1 pm

Mr. Kenneth Warren (Hastings)

I am grateful to the hon. Member for Swansea, East (Mr. Anderson) for making what was really a speech in support of the Conservative party.

I hope that my right hon. Friend the Secretary of State will bear in mind that commuter Members support what he has said. I was delighted to hear him refer to the electrification of the Hastings to Tunbridge Wells line. I hope that his decison will not be delayed and that he can make it the first electrification decision in favour of British Rail this year.

I hope that my right hon. Friend is aware that the report crashes in on the world of transport, in which I declare an interest. I am a member of the Chartered Institute of Transport, but I am delighted to say that it did not accept my advice about the evidence that it gave to the Serpell committee.

Is my right hon. Friend aware of the impact of the report on the decision-making process in business? I hope that he will decide quickly to wipe out those options that must have an adverse impact on that process when business wishes to expand outside the major urban areas.

At first sight, I thought that the Serpell report was a reasonable study. It was an important and timely report. However, at the end of the day, having had a chance to examine it, none of us on either side of the House will be left in doubt that there is substantial confusion. One wonders about the commuter programme throughout the whole of the south-east during the next 10 or 20 years for people travelling to work. The idea that one should pay 40 per cent. more to keep British Rail in profit shows how blinkered the Serpell study was. With respect to my right hon. Friend, I wonder what Serpell's terms of reference were for examining the transport industry and the position in the south-east.

I cannot see how it is possible to examine the railways without examining the whole of the transport system including roads. That has been done in Paris. I commend my right hon. Friend to take a look at Paris. It is a delightful place to visit, and I should be only too pleased to tell him the best places to stay. He should see the way in which that city has indulged itself in an investment programme for the improvement of surburban and commuter services. It is larger than the whole of the British Rail investment programme for the United Kingdom. I also commend to him the fact that the transport policy of Paris is spread over 15 years and takes into account both roads and railways.

I have a query about the Serpell report in its mathematical modelling. I had naively assumed—engineers are always naively assuming—that there was some mysterious model to which Serpell had referred to find out how to relate his information to the real world in which we live. I tabled two questions today—which my right hon. Friend courteously answered—about the model to which Serpell referred. I assumed that it was in my right hon. Friend's Department. I found that the Department has no such model. So where did Serpell find his information and how did he derive the answers?

The report refers to the load factor along a line being constant. For example, on the line between London and Penzance, people board at London and get off at Penzance. We all know that that is impossible. The maps in the report show that option A would give a network with nothing in Wales—I am sure that you, Mr. Speaker, would not want that—nothing in Scotland and nothing in the south-west. Option B provides for the same, but, even worse, none of the prime freight lines is included. My right hon. Friend must wipe out options A and B immediately.

Looking at the map, I realised that one freight line is close to my constituency. It runs from Appledore to the Rye golf club. It is supposed to be an important line. I concluded that it related to the Dungeness power station and is supposed to carry nuclear fuel. Several of the options provided no link with the main rail network. How could Serpell seriously ask hon Members, on behalf of the public, to consider a suggestion that nuclear fuel should be moved along a short section of line, transferred to the road and then back to the railway? It is in those small details that we must test the value of Serpell. I hope that the conclusion tonight will be that Serpell came, saw, was recorded, and went.

You will be familiar, Mr. Speaker, with options Cl and C2, with the offer of a railway line from Aberystwyth to Devil's Bridge, which is 40 miles from the next British rail station. Did Serpell realise that on the Stratford to Leamington Spa line, which is recommended for closure, 80 per cent. of the passengers continue their travel on the main lines? My hon. Friend the Member for Faversham (Mr. Moate) referred to direct costs, but he failed to note that point. Serpell failed to take account of the value of feeder line passengers using main rail networks.

Option C3 would allow a passenger to travel from Paddington to Exeter, but not to continue to Plymouth and Torbay. Yet one third more of that line would double the revenue. Option C2 would have passengers ending up in a bog in Banffshire, the northern terminus in Scotland. As Parliamentary Private Secretary to the Secretary of State for Education and Science, I must be careful when I say that the terminus would be called Keith.

I have considerable concern about the report. I thought that a report costing 10 times as much as the Franks report would give the House an accuracy of study, understanding and reality that would benefit us all and enable us to make some real decisions about British Rail. Although I support the Government's amendment, I regret to say that the report should be filed and forgotten.

9.9 pm

Mr. David Stoddart (Swindon)

Since its publication I have heard many comments about the Serpell report and its cost. Many of the comments that I have received have been quite unprintable but the tone of all of them has been hostile and condemnatory. The Opposition motion rightly seeks to condemn the Government for their failure to reject the report outright. I hope that the House will support that motion in the lobby tonight.

I perfectly understand that the Serpell committee was under pressure of time and apparently believed also that it had restricted terms of reference. Nevertheless, the report deserves to be treated contemptuously because of its lack of coherence and its lack of erudition. Hon. Members who have spoken tonight and have analysed the report have shown that the report lacks erudition in every sense of the word.

It also deserves contempt for giving comfort and encouragement to the blinkered anti-railway lobby, which would close down railways completely and concrete over the railway tracks. It was interesting that when the Secretary of State said that he rejected the extreme option, option A, he did not actually reject option B. He said nothing about option B. The House should understand that option B would reduce the railway network to 2,220 route miles. The Secretary of State would apparently consider option B, since he mentioned only option A.

The House and the country deserve an absolute assurance from the Secretary of State that the railway network will not be slashed either before or after a general election. I hope that that assurance will be given tonight. Indeed, the right hon. Gentleman needs to give that assurance and make that assurance stick for the sake of many of his own colleagues with seats in the south-east and the south-west, whose constituents may lose railways or, if not, may find that fares are very much higher than they are at present.

The Secretary of State also expressed horror that the taxpayer provides nearly as much in railway revenue as is provided through fares. All other countries accept that railways are essential and must receive substantial subsidy. They recognise, as the Secretary of State apparently does not, that the benefits in a more efficient total transportation system and the considerable environmental gain are worth paying for through general taxation. In any event, if the Secretary of State is so worried about a substantial subsidy to a single industry, he should read the book about agriculture published by his hon. Friend the Member for Holland with Boston (Mr. Body). His hon. Friend shows that agriculture is subsidised to the tune of 166 per cent. of farm incomes, yet the Secretary of State's Government plan to expand agriculture, not to kill it. I hope that the Secretary of State will take that point on board.

My constituency of Swindon owes its existence as a great town to the railways. Although its continuing existence is not threatened by closure or rundown, like other railway towns with workshops, nevertheless, it would be a considerable blow to railway workers in particular and the town in general if there were a further rundown and final closure of the workshops. The fear of closure was there before the Serpell report appeared. The fear now, since the report has been published, hits been heightened by the spectres raised in the report. The sense of insecurity is enhanced for those employed in the workshops, their families and the town itself. They feel betrayed, because over the past two years the work force in Swindon, like work forces throughout British Rail and BREL, has co-operated more than fully with management to make enormous improvements in productivity, getting rid of restrictive working practices and reducing unit costs to very competitive levels. They have done that over a long period of time. They now feel that their reward to be thrown into the dustbin with the railway itself. They are faced with this report which, if it were implemented, they believe would close many workshops, indeed perhaps all of them, and kill their jobs stone dead.

Rail workers at Swindon and elsewhere can be excused for blasting a report that suggests importing locomotives and other railway equipment at a time when there are 3½ million people unemployed and new redundancies are being announced every day. As the hon. Member for Chippenham (Mr. Needham) pointed out, the report affects not only railway workers but many other industries, one of which is in his constituency, as the railways buy 60 per cent. of their goods from private industry. Therefore, it is not only railway workers who are threatened by the report, but a whole range of workers throughout Britain. It is little wonder that my people in Swindon consider the writers of the Serpell report to be insensitive, cruel, out of touch and anti-British.

Britain needs the Serpell report like a hole in the head. What it really needs is an expansion of the railway system and recognition of the fact that, without a good railway system, our transportation policy will not be able to deal with any expansion in our economy and our environment will be completely ruined.

Britain has the opportunity to provide a good transportation system—a good railway system. It is no good believing that the railways can carry more goods if the branch lines are closed down. It is because of the closure of branch lines that we do not carry so many goods now. We cannot get railway wagons to the new localities where the factories are.

I sincerely hope that the House will vote for the Opposition's motion tonight and, furthermore, that when the Under-Secretary of State replies he will give the assurances that hon. Members have asked for.

9.16 pm

Mr. Den Dover (Chorley)

I support the Serpell report, although we have heard much criticism of it. It says on page 5 that it does not concern itself to any significant extent with the Board's non-railway activities". I only wish that British Rail's management had done the same.

Two scare stories have been dismissed this evening. First, the Secretary of State has said that option A is not to be proceeded with, and, secondly, we have the chief inspector's report on safety in which it is said categorically that safety standards are high. That is not the widely held view of the public. Laymen such as myself believe the scare stories and sometimes travel in a state of anxiety.

I was most surprised to read that there was a lack of adequate management and comparative information. Surely a large management organisation such as British Rail needs such figures to be able to see whether it is performing efficiently. I am delighted that the report points the way to further manning reductions. When the members of the Select Committee on Transport visited Tyne and Wear Metro, I was astounded at how efficiently it was being run. There was one-man operation of the trains and certain stations were not manned at all. It was run sensibly and efficiently.

The report says that British Rail will find it impossible to make the inter-city service viable. I do not accept that. I am sure that with the best will in the world the Government and British Rail's management can make profits just as the National Bus Company has with its intercity service.

As an engineer I was most surprised to find that engineering expenditure is over 50 per cent. of all the costs in British Rail. Surely to goodness we should be selling off or privatising some of those activities to reduce the total cost. The report says that there has been no competition in the provision of rails or concrete sleepers underneath the rails. That is amazing. We learn that the last tender from the private sector for rolling stock was in 1974. That surely cannot be accepted in today's world when we need efficiency and cost reductions.

We need value for money and must consider the alternative course. Should not we be replacing some of these small lines—the big losers—with buses? However, in my constituency there is the Ormskirk to Preston line, and I must emphasise that some roads do not run parallel to rails and it would be impossible to replace certain railway lines with roads.

There has been much press comment in the past few days about the need to reorganise, perhaps on a regional basis. Yet we read in the report that inter-city, London and the south-east, freight and provincial are separate in the management structure. Perhaps we need fewer managers. Surely if we can concentrate British Rail's resources, bring those into cost centres and shorten lines of communication, we could improve the performance.

British Rail can show the world what its engineering and enterprise can do. We have a great many electrification contracts all over the world. We lead the world in civil, mechanical and electrical engineering and we must continue to do so. Looking ahead, surely we can see the building of the Channel tunnel and some expansion of services.

9.20 pm

Mr. Robert Hughes (Aberdeen, North)

The House will wish me, on behalf of the Opposition, to associate myself immediately with the sentiments of the hon. Member for Moray and Nairn (Mr. Pollock) concerning our anxiety for the casualties in the derailment that has taken place today at Llanbryde, near Folhabers in his constituency, and hope that there will be an early and full report on the circumstances.

We have had one of the most interesting and exciting debates on transport for a long time. It has been a remarkable debate because of the few friends that the Serpell committee report has had. Only one Member had anything good to say about it, and that was the Secretary of State.

It is difficult to pick out any particular speech among the many that have been made. At the cost of perhaps damaging his future, I commend the brave speech of the hon. Member for Christchurch and Lymington (Mr. Adley). Without doubt, the most disappointed man in the country is Sir Peter Parker, the chairman of British Rail. He more than anyone else lobbied assiduously and with great tenacity to have the committee set up to inquire into British Rail's finances. The nature, style and content of the report must be galling to him because he believed that the report would be a catalyst to produce a chain reaction that would galvanise the Secretary of State for Transport into obtaining and releasing the long overdue and vital investment in British Rail. Alas, instead of a catalyst the Serpell committee report is an inhibitor which will confine the Secretary of State for Transport in his customary role and state of indecision.

The report has effects that go well beyond the railway industry which, in my view, will suffer from investment blight. I shall seek to show later that that investment blight will affect not just the present and the future of the railway system but everyone connected with the railways or those communities served by them.

I come to the curious matter of the cost of the report and how it is made up. In a parliamentary answer I was told that until 31 January it had cost £610,000 of which £550,000 was paid to two consultant firms. Peat, Marwick and Mitchell were paid £182,000 and £370,000 went to R. Travers Morgan and Partners. I find it astonishing that Mr. Butler and Mr. Goldstein, senior partners in those two companies respectively, were members of the committee.

We are advised that their interest in the companies was well known and that, therefore, there was no need for a declaration of interest. We were told also that the payments were above board and within the rules governing payments to consultants. Be that as it may, I invite the House to consider the reaction had the leader of a Labour council appointed a friend of a friend to a committee to look into part of the council's finances, and then given his company a contract worth a tenth of this sum to do the work without the contract going to tender. The Fleet Street tabloids would have found it difficult to get a big enough type face to fill the page shouting "Scandal, Corruption". There would have been calls for Scotland Yard to investigate the awards of the contracts. The Times and The Daily Telegraph would have pontificated in leaders and centre page articles about the necessity for financial probity and integrity when public money is being spent. The Prime Minister at her most shrill and harridan-like would have denounced such profligacy with taxpayers' money.

In this case, however, we are told that everything is in order and that it is all within the rules. If that is so, it is high time that the rules were toughened up. The Public Accounts Committee has a duty to examine seriously, not only these contracts, but the whole question of how contracts are issued, because they involve very big money. On 20 January, I was told that the total fees and expenses paid to consultants by the Department of Transport in relation to motorway and trunk road schemes alone was £12.7 million in 1979–80. For 1982–83, the amount to be spent on consultants is forecast at £43.6 million. The Government are cutting the Civil Service, but the money is simply being spent on consultants instead. This is a serious matter and it should be investigated.

If any stigma attaches to such large sums having been received, it falls not on the two men involved but on the Secretary of State. In this case, the relationship between the Prime Minister, Professor Walters and Mr. Goldstein may have been such that there is now too cosy a connection with the Department of Transport. If that is so, something should be done about it.

More important in many ways than the integrity or prejudice of the individuals concerned is the way in which the independence and objectivity of the report itself has been totally prejudiced. I concede at once that the Secretary of State has the right to appoint consultants to examine any aspect of British Rail finances, but the matter should be properly tendered according to the rules. The Secretary of State is entitled to ask for a consultant's report, but he is not entitled to put senior members of the consultancy firms involved on the committee of inquiry and then pretend that it has given objective advice. We must be particularly concerned to ensure independence and objectivity, especially as the report is so negative and hostile to the railway industry.

The inadequacy of the report both in its general approach and in its conclusions is exemplified in its treatment of British Rail Engineering Ltd. No one doubts that the workshops face a lean future. Many of my hon. Friends have raised this in the debate and my hon. Friend the Member for Westhoughton (Mr. Stott) has fought as hard as anyone, with a constructive approach, for r decent future for his constituents at the Horwich works. We know that there are problems, but the report produces only negative options with no supporting evidence. The report states clearly on page 40: We have not attempted to estimate the costs of implementing these options, or their relative costs and benefits. People's livelihoods are at stake, yet options are proposed without any consideration of costs.

The committee should have adopted a constructive approach. It should have recognised that there are first-class assets in BREL. There is capital equipment and machinery of real quality and a highly skilled and well trained labour force. Having recognised the expertise available, the committee should have considered how those assets could be used in the best interests of British Rail and of the nation.

Oddly enough, this is the only part of the report that takes account of any international comparisons. Astonishingly, it did not look positively at international business prospects, which are important. There are large areas of the under-developed world with a great need to develop transport services. Given the large distances involved in many of these countries, railway development is a major attraction.

The South African development co-ordinating conference has identified transport as of major importance and of the highest priority. I welcome the announcement today by the Secretary of State that an order has been won from French-speaking Africa. He did not give any details, but I am glad that this has happened.

The machinery of Government should be put in motion in full by consultations between BREL, the Minister for Overseas Development, the Secretary of State for Transport and the Foreign Office to identify the needs of transport development overseas and to maximise the potential orders for BREL. Such a process would bring together both our interests and the interests of developing countries to our mutual benefit. The Secretary of State seems to favour that approach, and I hope that he will give a guarantee through the Under-Secretary that he will retain the BREL workshop capacity to meet these objectives in the future.

The main part of the report concerns the network options, and I am interested in the Government's response. Inevitably, there has been a major discussion on the extreme option of reducing the network to a core of about 1,630 route miles serving only Glasgow and Edinburgh, Cardiff and Bristol, Bournemouth, Brighton, Dover, Norwich and Newcastle. Such a reduction, which would be a cut of 84 per cent. of the present mileage, would leave Scotland with vast tracts without any railway, most of the west country with no railway, and precious little left in the rest of England.

The Secretary of State defends the report by explaining that these are simply illustrative options—they would not sell in Sotheby's whatever else they might do. The Government have reportedly ruled out the extreme options with the most massive cuts. However, the difficulty with the Secretary of State is that he undermines these reports by his answers, if one reads Hansard and the replies to the questions on his statement.

In c. 495, on 20 January, in answer to his hon. Friend the Member for Faversham (Mr. Moate), and in c. 499, in answer to the hon. Member for Dumfries (Sir H. Monro), the Secretary to State said that the Government would not wish to travel down the road of extreme options without the fullest public debate and without making a conscious decision. That is not much good. The Government do not wish to go down the road until they have discussed the matter and made their minds up. By saying that, the Secretary of State undermines his reassurances.

There was then the Secretary of State's curious answer to the hon. Member for Moray and Nairn. I hope that the hon. Member will not mind my taking him gently to task. Here we have a report in which two, at least, of the options suggest Scotland should have no internal railway system. Faced with that, one would have thought that the hon. Member would have set his sights a little higher than his concern with the railway line that happens to pass through his consitutuency. Perhaps in a sense he deserved the ignominy of the answer that he received, which reduced the status of the Aberdeen-Inverness line to that of a branch line. The answer reads: I cannot stand here, … and guarantee the future of every branch line for all time."—[Official Report, 20 January 1983; Vol. 35, c. 497.] If the Parliamentary Private Secretary to the Secretary of State for Scotland, described in one of the newspapers as a "senior Government Back Bencher", is treated with such cavalier disregard, every hon. Member with a railway running through his constituency must have felt a chill run down his spine.

The Secretary of State cropped up on "Panorama" and, despite repeated questioning by Vincent Hanna, he again refused to repudiate the extreme options. On that occasion he was at his most equivocal. He said that every option needed to be considered and was valuable to the discussion. What better opportunity is there than today to put all our minds at rest?

So what did the Secretary of State say today? The only option that he ruled out was option A. He was specifically asked to rule out the options. He said that, of course, option A is out of the window. However, option B is still on the agenda, and option B is really option A plus some more commuter lines in London and the south-east. That would leave us with only 2,200 route miles.

The immediate danger that Serpell leads us into is investment blight. Until a firm decision is taken on the size of the network, investment planning in British Rail cannot make any sense. There will, therefore, be a further slowing down of investment, which sadly has declined in recent years and months.

Moreover, British Rail cannot seek to expand its services by looking for new business, because much of the current sales approach of BR—certainly in terms of freight—is to try to obtain long-term contracts, often through lease-back arrangements of privately owned wagons, and by trying to persuade companies to set up private sidings with section 8 grants. That approach cannot work as long as there is a threat hanging over so many parts of the railway system.

Secondly, investment that is needed for companies in various communities currently served by railway lines will be under question, and may be held back, certainly as long as closure threats remain. That is another case of investment blight.

Thirdly, communities will not be able to attract new industry to their areas. One aspect that often sells an area to a new investor is the availability of a railway line and the possibility of sidings. That is not possible while threats of closure remain. It is another example of investment blight. The Secretary of State must do something about that.

Those who welcomed the appointment of the Serpell committee had hoped that the years between now and the end of the century would be charted with a reasonable degree of certainty so that there could be sensible planning. This report produces the very antithesis of central planning. It will destroy initiative, inventiveness in railway planning and management. The Secretary of State should immediately repudiate the report. He should tell us immediately what size he wants the network to be. He should begin immediately to discuss future investment with British Rail.

The fatal flaw in the report is identified by the committee in paragraph 5 of its own introduction on page 5. It says: While we have paid close attention to the evidence,"— I would hope that they would pay close attention to the evidence— we have not by any means addressed all the issues raised with us. This is mainly because our review has been concerned with the railway's finances, not transport policy". I repeat and re-emphasise: our review has been concerned with the railway's finances, not transport policy". That is the fatal flaw, not only of the committee but of the Government, and the Secretary of State in particular. Transport policy is the furthest thing from his mind. He is stuck in the rut, simply concerned with finance. All that matters is finance. Public service and the needs of the community are foreign concepts to the Government. The Serpell committee simply reflects Government thinking. Its report should be totally rejected in favour of Labour's approach for investment in public service. I commend our motion to the House.

9.40 pm

The Under-Secretary of State for Transport (Mr. Reginald Eyre)

The Government have been glad of the opportunity provided by the debate. It allows us to put the record straight on a number of misconceptions and unnecessary scares. It allows us to begin to set an agenda for future debate and consideration. That debate must be about not only the important issues raised by Serpell but the whole future and role of the railway.

I fear that the Opposition are not interested in an open and wide-ranging debate. Their motion shows that they are not as a whole prepared to reflect on the problems and opportunities of the railway. The right hon. Member for Barrow-in-Furness (Mr. Booth) and the hon. Members for Derby, South (Mr. Johnson) and Carlisle (Mr. Lewis) preferred to enter into root and branch opposition to the possibility of change. One can understand the emotional feeling of lifetime railwaymen such as the hon. Members for Carlisle and Derby, South. However, the views that they expressed are not in the best interests of present and future railwaymen. My hon. Friend the Member for Peterborough (Dr. Mawhinney) showed considerable understanding in referring to that aspect.

Serpell forces us to face up to some difficult but unavoidable issues. We serve no one's interests by sticking our heads in the sand or letting emotion overcome reason and calm study of the problems. Therefore, it saddened me more than anything else to hear the blinkered response of the right hon. Member for Barrow-in-Furness and, I am sorry to say, of the hon. Member for Aberdeen, North (Mr. Hughes). Living in the past is no way to achieve an improved service for the travelling public and better value for taxpayers. The arguments that they used boiled down essentially to the demand for more public money, almost irrespective of the use made of it, British Rail's performance, value for money or the legitimate interests of the taxpayer.

The right hon. Gentleman and others, including, unfortunately, the hon. Member for Nuneaton (Mr. Huckfield), and also, less surprisingly, the hon. Member for Caernarvon (Mr. Wigley), referred to the unjustified scare stories of which they have made so much in recent weeks. We have heard all sorts of suggestions about the network. We must not jump to conclusions or make snap judgments. The options in the report are illustrations only. They are not the Government's options, nor their only choices. Still less are they conclusions. They are not even a basis for decisions. [HON. MEMBERS: "Hear, hear".] Nor were they intended as such. Their value is to stimulate informed public debate on the costs and efficiency of this form of public transport. We want to hear the arguments and have the debate before we even consider conclusions.

My hon. Friend the Member for Faversham (Mr. Moate) said in his strong speech, with which I agreed very much, that it is the task of Ministers and of Parliament to decide policies.

I repeat the assurances given by my right hon. Friend the Secretary of State earlier in the debate. The extreme illustrations are ruled out. The Government want a good, modern and economic railway that meets the requirements of the travelling public and of its freight customers.

Mr. Whitehead

Which of the extreme options are ruled out? Will only options A and B be ruled out, or will option C3, which cuts 40 per cent. out of the network, also be ruled out?

Mr. Eyre

I must emphasise to the hon. Gentleman, because right hon. and hon. Members of the Opposition are deliberately misunderstanding this, that there are no proposals for closure before the Government or before the House. The options that are referred to in the report are illustrative only and subject to all the qualifications that I have spelt out.

We cannot altogether rule out consideration of change to achieve that objective. I want to take the example of bus substitution, to which my hon. Friend the Member for Wellingborough (Mr. Fry) referred. From the way in which that suggestion has been greeted in some quarters, one would never guess that it had been proposed by British Rail itself, by the former Select Committee on Nationalised Industries and, come to that, in the White Paper on transport policy put out by the Labour Government. I was very interested to hear the support which the right hon. Member for Norwich, North (Mr. Ennals) gave to the proposal and all the safeguards which would have to be given serious consideration.

Mr. Booth

I understand the Under-Secretary of State to say that certain of the options in the Serpell report are ruled out by the Government. Will he tell us which of the options are ruled out?

Mr. Eyre

I made it perfectly clear that they are illustrative options and that their purpose is merely to stimulate debate. That was their intention and they have undoubtedly succeeded in doing that.

I was pleased to hear the reference by the right hon. Member for Stockton (Mr. Rodgers) and by my hon. Friend the Member for Christchurch and Lymington (Mr. Adley) to certain aspects of privatisation, including private catering.

Mr. Adley

Can my hon. Friend confirm that it is the Government's policy to maintain the rail network more or less at its present size? Is my understanding correct?

Mr. Eyre

My hon. Friend knows that my right hon. Friend has often said that that is the basic position, but he has had to accompany it with the qualification that one must take account of the circumstances which apply in different parts of the country. Those are illustrated in the report. The situation could not be regarded as absolutely set in aspic. The discussion about the possibility of bus substitution illustrates the point I am making. It sets the debate in perspective, if right hon. and hon. Members would not get so emotional about it.

I emphasise that no snap decisions will be taken with regard to the network. Nor can the network be looked at in a vacuum. There are wider regional and social aspects. The network cannot be determined independently of British Rail's performance and the response to other objectives of policy. Nor can it be considered in isolation from what customers want and are willing to use. What we want to avoid, as my right hon. Friend the Member for Worthing (Mr. Higgins) has wisely demonstrated, is the belief that there must be no discussion, no debate and no possibility of change in regard to bus substitution irrespective of circumstances, needs or costs.

Mr. Roger Stott (Westhoughton)

The Minister says that no snap decisions are about to be taken. I take it that the ruling out of the extreme options A and H is not a snap decision. Will the Minister say whether option B is a snap decision? How do the Government view option B? That is the most critical decision he has to make.

Mr. Eyre

I repeat that no snap decisions and no closure proposals are before us. The options in the report are merely illuminatory—[Interruption.]—and their purpose is to stimulate debate.

I wish to deal with fares. It has been alleged that there will be a 40 per cent. rise in fares for commuters. That is nonsense. Nowhere in the report is it suggested. There are no recommendations on fares in the report. The committee stated that fares—[Interruption.]

Mr. Speaker

Order. I think that the House is being unfair. I want to listen to the Minister.

Mr. Eyre

I am grateful, Mr. Speaker.

The committee stated that fares and particularly the size of discounts given to season ticketholders were a subject for discussion. It also, to be fair, pointed to the possible effects on congestion. Mr. Goldstein said that it would in my view be wrong to go forward with other than modest increases without undertaking a very far reaching examination. I can assure the House that there will be no sudden big increases in rail fares. The main way to achieve sustainable fares at reasonable levels must be by cutting costs.

My hon. Friend the Member for Moray and Nairn (Mr. Pollock) has reported upon the tragic accident today in his constituency. My right hon. Friend and I would like to offer our sympathy to those involved in the accident. I can assure my hon. Friend that a public inquiry will be held into the cause of the accident.

Safety is paramount. The committee has in no way suggested that it should be compromised. [HON. MEMBERS: "It has."]. I assure hon. Members, including the right hon. and learned Member for Aberavon (Mr. Morris) and the hon. Member for Isle of Wight (Mr. Ross), that we would not countenance any increase in danger to travellers or to rail staff. The points that have been made on this subject will be carefully borne in mind. My hon. Friend the Member for Chorley (Mr. Dover) made an important point when he said that the chief inspecting officer told Serpell that he had received firm assurances from the board that safety would not be prejudiced on any part of the system.

Hon. Members have argued in this debate, as in the past, that the solution to the railway problem is more investment. It is not true to say that the costs of the railway could be totally transformed if only there was more investment in equipment. This is emphasised by the desperately frustrating situation affecting the Bedford-St. Pancras service. Vast amounts of investment have gone into the railways in recent years—well over £3 billion at current price levels since 1975 alone. Even last year, at a time of particular severe financial difficulty for it, the board invested more than £350 million in its activities.

The Government have not limited British Rail investment. Shortage of funds during the past year or two, in spite of record levels of public support by way of grant and including the EFL arrangements, has stemmed from the inability to improve efficiency and to cut costs when traffic has fallen away during a world recession, together with losses incurred due to industrial disputes.

As my right hon. Friend said, and looking to the future, British Rail now foresees scope for an increase in investment within its external financing limit. It has removed the moratorium on new investment that it imposed last year. That is welcome news. I hope that it will be able to take note of the committee's view that emphasis should be given to investment offering cost savings and early returns. Priorities should include improving facilities for customers and passengers. The aim must be a better deal for passengers, users and taxpayers.

Many hon. Members, especially the hon. Member for Swindon (Mr. Stoddart), have expressed concern about the future of British Rail Engineering Ltd. It has been clear for some time that British Rail faces big problems with British Rail Engineering Ltd. Those problems arise in large part from the undoubted fact that BREL has excess capacity. This excess capacity is very costly. It must be dealt with, and BR is already seeking to take action.

All those questions need further investigation. I fully recognise the deep concern that has been expressed today, but the best guarantee for jobs is for our suppliers to be able to meet demand at home and overseas at the right price and quality.

There is at present too much capacity worldwide in the railway supply industry. There is intense competition for orders. I am, therefore, very pleased to announce that yesterday BREL, with Government support, signed a contract to supply 115 wagons and 36 coaches, worth in total £23 million, to the Congo. BREL has obtained £75 million worth of export work in the past 12 months. I wish the company every success in its future attempts to obtain similar work.

The real task of the House now, as well as of the Government, British Rail and, indeed, the country at large, is to look to the future in a constructive spirit and address themselves to the key questions of the kind of railway we need and can afford and how to achieve it.

A central theme of the report, in the section on engineering and planning, for the future is efficiency. There is an undeniable case for improving matters. British Rail is working on improvements. I gladly recognise, as did my right hon. Friend, all it has done. More needs to be done, as British Rail recognises. British Rail wants to see better value for money for the customer and the taxpayer. It also recognises that the services provided by British Rail must be better related to the customer's requirements. Not all the suggestions made and opportunities identified by the committee in its report may be right, but none of them can be ignored. The chairman of the board, Sir Peter Parker, sees many constructive points in the report. In those circumstances, how can the Opposition's root and branch opposition be right or responsible?

We have not reached instant conclusions, nor will we come to hasty judgments. The House and the country should be clear about the Government's general objectives and attitudes to the railway. We want a modern railway, with a good, long-term future, playing its proper part in the transport system. Nobody can guarantee that role. It depends on the railway being run efficiently and achieving cost savings while maintaining safety; it depends on the railway being attuned to the demands of its customers, with a businesslike approach; and it depends on the railway giving value for money to both taxpayers and fare-paying travellers.

Those aims will not be achieved without fresh attitudes, new ideas and innovation—the lifeblood of any successful organisation. Serpell helps to provide some of the ideas. Sir Peter Parker himself said that the report contained "many constructive points". On that basis, I urge the House to accept the Government amendment and to reject the Opposition's motion.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 250, Noes 294.

Division No. 60]	[10 pm
AYES
Abse, Leo	Barnett, Guy (Greenwich)
Adams, Allen	Barnett, Rt Hon Joel (H'wd)
Allaun, Frank	Beith, A. J.
Alton, David	Benn, Rt Hon Tony
Anderson, Donald	Bennett, Andrew (St'kp't N)
Archer, Rt Hon Peter	Bidwell, Sydney
Ashley, Rt Hon Jack	Booth, Rt Hon Albert
Ashton, Joe	Boothroyd, Miss Betty
Atkinson, N.(H'gey,)	Bottomley, Rt Hon A. (M'b'ro)
Bagier, Gordon A.T.	Bradley, Tom

Bray, Dr Jeremy	Healey, Rt Hon Denis
Brocklebank-Fowler, C.	Heffer, Eric S.
Brown, Hugh D. (Provan)	Hogg, N. (E Dunb't'nshire)
Brown, R. C. (N'castle W)	Holland, S. (L'b'th, Vauxh'll)
Brown, Ronald W. (H'ckn'y S)	Home Robertson, John
Brown, Ron (E'burgh, Leith)	Homewood, William
Buchan, Norman	Howell, Rt Hon D.
Callaghan, Rt Hon J.	Howells, Geraint
Callaghan, Jim (Midd't'n & P)	Hoyle, Douglas
Campbell, Ian	Huckfield, Les
Campbell-Savours, Dale	Hudson Davies, Gwilym E.
Cant, R. B.	Hughes, Robert (Aberdeen N)
Carmichael, Neil	Hughes, Roy (Newport)
Carter-Jones, Lewis	Jay, Rt Hon Douglas
Cartwright, John	Jenkins, Rt Hon Roy (Hillh'd)
Clark, Dr David (S Shields)	John, Brynmor
Clarke, Thomas (C'b'dge, A'rie)	Johnson, James (Hull West)
Cocks, Rt Hon M. (B'stol S)	Johnson, Walter (Derby S)
Cohen, Stanley	Johnston, Russell (Inverness)
Coleman, Donald	Jones, Rt Hon Alec (Rh'dda)
Conlan, Bernard	Jones, Barry (East Flint)
Cook, Robin F.	Jones, Dan (Burnley)
Cox, T. (W'dsw'th, Toot'g)	Kaufman, Rt Hon Gerald
Crawshaw, Richard	Kerr, Russell
Crowther, Stan	Kilroy-Silk, Robert
Cryer, Bob	Lambie, David
Cunliffe, Lawrence	Lamond, James
Cunningham, G. (Islington S)	Leadbitter, Ted
Cunningham, Dr J. (W'h'n)	Leighton, Ronald
Dalyell, Tam	Lestor, Miss Joan
Davidson, Arthur	Lewis, Arthur (N'ham NW)
Davies, Rt Hon Denzil (L'lli)	Lewis, Ron (Carlisle)
Davis, Clinton (Hackney C)	Litherland, Robert
Davis, Terry (B'ham, Stechf'd)	Lofthouse, Geoffrey
Deakins, Eric	Lyon, Alexander (York)
Dean, Joseph (Leeds West)	Lyons, Edward (Bradf'd W)
Dewar, Donald	Mabon, Rt Hon Dr J, Dickson
Dixon, Donald	McCartney, Hugh
Dobson, Frank	McDonald, Dr Oonagh
Dormand, Jack	McElhone, Mrs Helen
Dubs, Alfred	McGuire, Michael (Ince)
Duffy, A. E. P.	McKelvey, William
Dunnett, Jack	MacKenzie, Rt Hon Gregor
Dunwoody, Hon Mrs G.	Maclennan, Robert
Eadie, Alex	McNally, Thomas
Eastham, Ken	McTaggart, Robert
Edwards, R. (W'hampt'n S E)	McWilliam, John
Ellis, R. (NE D'bysh're)	Magee, Bryan
Ellis, Tom (Wrexham)	Marks, Kenneth
English, Michael	Marshall, D (G'gow S'ton)
Ennals, Rt Hon David	Marshall, Dr Edmund (Goole)
Evans, Ioan (Aberdare)	Marshall, Jim (Leicester S)
Evans, John (Newton)	Martin, M (G'gow S'burn)
Ewing, Harry	Mason, Rt Hon Roy
Faulds, Andrew	Maxton, John
Field, Frank	Maynard, Miss Joan
Fitch, Alan	Meacher, Michael
Flannery, Martin	Mikardo, Ian
Foot, Rt Hon Michael	Millan, Rt Hon Bruce
Forrester, John	Miller, Dr M. S. (E Kilbride)
Foster, Derek	Morris, Rt Hon A. (W'shawe)
Fraser, J. (Lamb'th, N'w'd)	Morris, Rt Hon C. (O'shaw)
Freeson, Rt Hon Reginald	Morris, Rt Hon J. (Aberavon)
Freud, Clement	Morton, George
Garrett, John (Norwich S)	Moyle, Rt Hon Roland
Garrett, W. E. (Wallsend)	Newens, Stanley
George, Bruce	Oakes, Rt Hon Gordon
Ginsburg, David	Ogden, Eric
Golding, John	O'Neill, Martin
Graham, Ted	Orme, Rt Hon Stanley
Grant, John (Islington C)	Owen, Rt Hon Dr David
Grimond, Rt Hon J.	Paisley, Rev Ian
Hamilton, James (Bothwell)	Park, George
Hamilton, W. W. (C'tral Fife)	Parker, John
Hardy, Peter	Parry, Robert
Harman, Harriet (Peckham)	Pavitt, Laurie
Harrison, Rt Hon Walter	Pendry, Tom
Hart, Rt Hon Dame Judith	Penhaligon, David
Hattersley, Rt Hon Roy	Pitt, William Henry
Haynes, Frank	Powell, Raymond (Ogmore)

Prescott, John	Stoddart, David
Price, C. (Lewisham W)	Stott, Roger
Race, Reg	Strang, Gavin
Radice, Giles	Straw, Jack
Rees, Rt Hon M (Leeds S)	Summerskill, Hon Dr Shirley
Richardson, Jo	Taylor, Mrs Ann (Bolton W)
Roberts, Albert (Normanton)	Thomas, Jeffrey (Abertillery)
Roberts, Allan (Bootle)	Thomas, Mike (Newcastle E)
Roberts, Ernest (Hackney N)	Thomas, Dr R. (Carmarthen)
Roberts, Gwilym (Cannock)	Thorne, Stan (Preston South
Robertson, George	Tilley, John
Robinson, G. (Coventry NW)	Tinn, James
Robinson, P. (Belfast E)	Torney, Tom
Rodgers, Rt Hon William	Varley, Rt Hon Eric G.
Rooker, J. W.	Walker, Rt Hon H. (D'caster)
Roper, John	Wardell, Gareth
Ross, Ernest (Dundee West)	Watkins, David
Ross, Stephen (Isle of Wight)	Weetch, Ken
Rowlands, Ted	Wellbeloved, James
Ryman, John	Welsh, Michael
Sandelson, Neville	White, J. (G'gow Pollok)
Sever, John	Whitehead, Phillip
Sheerman, Barry	Whitlock, William
Sheldon, Rt Hon R.	Wigley, Dafydd
Shore, Rt Hon Peter	Willey, Rt Hon Frederick
Short, Mrs Renée	Williams, Rt Hon A. (S'sea W)
Silkin, Rt Hon J. (Deptford)	Williams, Rt Hon Mrs (Crosby)
Silkin, Rt Hon S. C (Dulwich)	Wilson, Gordon (Dundee E)
Silverman, Julius	Wilson, William (C'try SE)
Skinner, Dennis	Winnick, David
Smith, Rt Hon J. (N Lanark)	Woodall, Alec
Snape, Peter	Woolmer, Kenneth
Spellar, John Francis (B'ham)	Young, David (Bolton E)
Spriggs, Leslie
Stallard, A. W.	Tellers for the Ayes:
Steel, Rt Hon David	Mr. Harry Cowans and
Stewart, Rt Hon D. (W Isles)	Mr. Allen McKay.
NOES
Aitken, Jonathan	Carlisle, John (Luton West)
Alexander, Richard	Carlisle, Kenneth (Lincoln)
Alison, Rt Hon Michael	Carlisle, Rt Hon M. (R'c'n)
Amery, Rt Hon Julian	Chalker, Mrs. Lynda
Ancram, Michael	Channon, Rt. Hon. Paul
Arnold, Tom	Chapman, Sydney
Aspinwall, Jack	Churchill, W. S.
Atkins, Rt Hon H. (S'thorne)	Clark, Hon A. (Plym'th, S'n)
Atkins, Robert (Preston N)	Clark, Sir W. (Croydon S)
Atkinson, David (B'm'th, E)	Clegg, Sir Walter
Baker, Kenneth (St. M'bone)	Cockeram, Eric
Baker, Nicholas (N Dorset)	Colvin, Michael
Bendall, Vivian	Cope, John
Benyon, Thomas (A'don)	Corrie, John
Benyon, W. (Buckingham)	Costain, Sir Albert
Best, Keith	Cranborne, Viscount
Bevan, David Gilroy	Critchley, Julian
Biffen, Rt Hon John	Crouch, David
Biggs-Davison, Sir John	Dickens, Geoffrey
Blackburn, John	Dorrell, Stephen
Blaker, Peter	Douglas-Hamilton, Lord J.
Body, Richard	Dover, Denshore
Bonsor, Sir Nicholas	du Cann, Rt Hon Edward
Boscawen, Hon Robert	Dunn, Robert (Dartford)
Bottomley, Peter (W'wich W)	Durant, Tony
Bowden, Andrew	Eden, Rt Hon Sir John
Boyson, Dr Rhodes	Eggar, Tim
Braine, Sir Bernard	Elliott, Sir William
Brinton, Tim	Emery, Sir Peter
Brittan, Rt. Hon. Leon	Eyre, Reginald
Brooke, Hon Peter	Fairbairn, Nicholas
Brotherton, Michael	Fairgrieve, Sir Russell
Browne, John (Winchester)	Faith, Mrs Sheila
Bruce-Gardyne, John	Farr, John
Bryan, Sir Paul	Fell, Sir Anthony
Buchanan-Smith, Rt. Hon. A.	Fenner, Mrs Peggy
Buck, Antony	Finsberg, Geoffrey
Budgen, Nick	Fisher, Sir Nigel
Bulmer, Esmond	Fletcher, A. (Ed'nb'gh N)
Butcher, John	Fletcher-Cooke, Sir Charles
Butler, Hon Adam	Forman, Nigel

Fowler, Rt Hon Norman	Lang, Ian
Fox, Marcus	Langford-Holt, Sir John
Fraser, Rt Hon Sir Hugh	Latham, Michael
Fraser, Peter (South Angus)	Lawrence, Ivan
Fry, Peter	Lawson, Rt Hon Nigel
Gardiner, George (Reigate)	Lee, John
Gardner, Sir Edward	Le Marchant, Spencer
Garel-Jones, Tristan	Lennox-Boyd, Hon Mark
Gilmour, Rt Hon Sir Ian	Lewis, Sir Kenneth (Rutland)
Goodhart, Sir Philip	Lloyd, Ian (Havant & W'loo)
Goodhew, Sir Victor	Lloyd, Peter (Fareham)
Goodlad, Alastair	Loveridge, John
Gorst, John	Luce, Richard
Gow, Ian	Lyell, Nicholas
Gower, Sir Raymond	McCrindle, Robert
Grant, Sir Anthony	Macfarlane, Neil
Gray, Rt Hon Hamish	MacGregor, John
Greenway, Harry	MacKay, John (Argyll)
Grieve, Percy	Macmillan, Rt Hon M.
Griffiths, Peter (Portsm'th N)	McNair-Wilson, M. (N'bury)
Grist, Ian	McNair-Wilson, P. (New F'st)
Grylls, Michael	McQuarrie, Albert
Gummer, John Selwyn	Madel, David
Hamilton, Hon A.	Major, John
Hamilton, Michael (Salisbury)	Marland, Paul
Hampson, Dr Keith	Marlow, Antony
Hannam, John	Marshall, Michael (Arundel)
Haselhurst, Alan	Marten, Rt Hon Neil
Hastings, Stephen	Mates, Michael
Havers, Rt Hon Sir Michael	Maude, Rt Hon Sir Angus
Hawkins, Sir Paul	Mawby, Ray
Hawksley, Warren	Mawhinney, Dr Brian
Hayhoe, Barney	Maxwell-Hyslop, Robin
Heath, Rt Hon Edward	Mayhew, Patrick
Heddle, John	Mellor, David
Henderson, Barry	Meyer, Sir Anthony
Heseltine, Rt Hon Michael	Miller, Hal (B'grove)
Hicks, Robert	Mills, Iain (Meriden)
Higgins, Rt Hon Terence L.	Mills, Sir Peter (West Devon)
Hill, James	Miscampbell, Norman
Hogg, Hon Douglas (Gr'th'm)	Mitchell, David (Basingstoke)
Holland, Philip (Carlton)	Moate, Roger
Hooson, Tom	Monro, Sir Hector
Hordern, Peter	Montgomery, Fergus
Howe, Rt Hon Sir Geoffrey	Moore, John
Howell, Rt Hon D. (G'ldf'd)	Morgan, Geraint
Howell, Ralph (N Norfolk)	Morris, M. (N'hampton S)
Hunt, David (Wirral)	Morrison, Hon C. (Devizes)
Hunt, John (Ravensbourne)	Murphy, Christopher
Hurd, Rt Hon Douglas	Myles, David
Irvine, Rt Hon Bryant Godman	Neale, Gerrard
Irving, Charles (Cheltenham)	Needham, Richard
Jenkin, Rt Hon Patrick	Nelson, Anthony
Jessel, Toby	Neubert, Michael
Johnson Smith, Sir Geoffrey	Newton, Tony
Jopling, Rt Hon Michael	Nott, Rt Hon Sir John
Joseph, Rt Hon Sir Keith	Oppenheim, Rt Hon Mrs S.
Kaberry, Sir Donald	Osborn, John
Kellett-Bowman, Mrs Elaine	Page, John (Harrow, West)
Kimball, Sir Marcus	Page, Richard (SW Herts)
King, Rt Hon Tom	Parkinson, Rt Hon Cecil
Knight, Mrs Jill	Parris, Matthew
Knox, David	Patten, Christopher (Bath)

Patten, John (Oxford)	Stanley, John
Pattie, Geoffrey	Steen, Anthony
Pawsey, James	Stevens, Martin
Percival, Sir Ian	Stewart, A. (E Renfrewshire)
Peyton, Rt Hon John	Stewart, Ian (Hitchin)
Pink, R. Bonner	Stokes, John
Pollock, Alexander	Stradling Thomas, J.
Porter, Barry	Tapsell, Peter
Prentice, Rt Hon Reg	Tebbit, Rt Hon Norman
Price, Sir David (Eastleigh)	Temple-Morris, Peter
Prior, Rt Hon James	Thomas, Rt Hon Peter
Proctor, K. Harvey	Thompson, Donald
Pym, Rt Hon Francis	Townend, John (Bridlington)
Rees, Peter (Dover and Deal)	Trippier, David
Rees-Davies, W. R.	Trotter, Neville
Renton, Tim	van Straubenzee, Sir W.
Rhodes James, Robert	Vaughan, Dr Gerard
Rhys Williams, Sir Brandon	Viggers, Peter
Ridley, Rt Hon Nicholas	Waddington, David
Rifkind, Malcolm	Wakeham, John
Rippon, Rt Hon Geoffrey	Waldegrave, Hon William
Roberts, Wyn (Conway)	Walker, B. (Perth)
Rossi, Hugh	Walker-Smith, Rt Hon Sir D.
Rost, Peter	Waller, Gary
Rumbold, Mrs A. C. R.	Walters, Dennis
St. John-Stevas, Rt Hon N.	Ward, John
Scott, Nicholas	Warren, Kenneth
Shaw, Giles (Pudsey)	Watson, John
Shaw, Sir Michael (Scarb')	Wells, Bowen
Shelton, William (Streatham)	Wells, John (Maidstone)
Shepherd, Colin (Hereford)	Wheeler, John
Shepherd, Richard	Whitelaw, Rt Hon William
Shersby, Michael	Whitney, Raymond
Silvester, Fred	Wickenden, Keith
Skeet, T. H. H.	Wiggin, Jerry
Smith, Sir Dudley	Wilkinson, John
Smith, Tim (Beaconsfield)	Williams, D. (Montgomery)
Speller, Tony	Winterton, Nicholas
Spence, John	Wolfson, Mark
Spicer, Jim (West Dorset)	Young, Sir George (Acton)
Spicer, Michael (S Worcs)	Younger, Rt Hon George
Sproat, Iain
Squire, Robin	Tellers for the Noes:
Stainton, Keith	Mr. Carol Mather and
Stanbrook, Ivor	Mr. Anthony Berry.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 32 (Questions on amendments), and agreed to.

Mr. Speaker

forthwith declared the main Question, as amended, to be agreed to.

Resolved, That this House welcomes the opportunities, following the Serpell Report, for informed debate about how to achieve a better deal for both the rail customer and taxpayer, and how to cut costs and raise efficiency and establish a clear and positive direction for the railway's future for those it serves and those who work within it.