HC Deb 22 October 1986 vol 102 cc1165-73 3.34 pm
Mr. Robert Hughes (Aberdeen, North)

(by private notice) asked the Secretary of State for Transport if he will make a statement about the proposed reduction in Government subsidy to British Rail and the consequent cuts in services and increases in rail fares.

The Secretary of State for Transport (Mr. John Moore)

The objectives which I set the board yesterday build on the success of those which my predecessor set in 1983. They have reduced the dependence of the railway on the taxpayer by over 25 per cent.— a saving of more than £200 million. This is a considerable achievement on which BR and its staff are to be congratulated. It has not brought any of the swingeing fares increases or massive service cuts which Jeremiahs on the Opposition Benches forecast then; nor will we see them now.

The new objectives ask for a continuation of this improvement in cost effectiveness. Increasing efficiency will mean that costs, and the need for grant, will fall. But we are also requiring a higher standard of service. Over the past three years many services have benefited from new rolling stock, refurbished stations and other investment. There are, however, other services where both we and the board agree that quality is not good enough. The Government have approved over £900 million of new investment and there is more to come. But we must get away from the idea that the only way to improve the railway is to throw more taxpayers' money at it.

Alarmist suggestions of massive fare increases are totally unfounded and show a remarkable lack of confidence in British Rail's ability to succeed. Fare levels are for the board, but — I stress "but" — the grant savings I am seeking from Network SouthEast and Provincial require a reduction of only 8 per cent. over three years. The remainder comes from the progress Inter City is making towards profitability. Most of the grant saving on NSE and Provincial will come from improved efficiency. But where quality improves, as I think clearly all of us want to see, it is reasonable for the passenger to pay a little more. But there will be no massive fares increase; nor will there be overall cuts in service. Our commitment to supporting the non-commercial railway and securing a modern efficient railway for the country is clear.

Mr. Hughes

I thank the Secretary of State for that lengthy reply, but I am bound to say that he would have improved his reputation in the House if he had made a statement yesterday instead of being compelled to answer a private notice question.

It is clear that the cut of 25 per cent. in the public service obligation in the next three years is a continuation of the Government's vindictiveness against British Rail. As the right hon. Gentleman's letter to Sir Robert Reid is clearly the result of prior discussions, he must know exactly how much fares will increase as a result of these cuts. He says that they will not be swingeing, but how much will fares increase in London and the south-east? Will it be 25 per cent. or more, as has been estimated in the newspapers? How much will fares on provincial services increase? Again, will it be 25 per cent. or more? The House has a right to answers.

The Secretary of State said that he wanted better standards. Why, therefore, did he say in his letter to Sir Robert Reid: I value your assurance that you would consult me if unforeseen circumstances should at any time make it necessary to consider measures that would materially undermine quality."? Did the chairman of British Rail tell the right hon. Gentleman that his current proposals could well lead to an undermining of quality? Why else was that put in the letter? There can be no other explanation except that he was warned.

The Secretary of State, in his letter to Sir Robert Reid, said: we are not asking for a programme of major route closures. For what is he asking? Will he give an assurance that no branch lines will be closed? If he will not give that assurance in the clearest terms, will he tell us which lines he intends to close? Why is he determined that British Rail must hive off to private enterprise every potentially commercially profitable part of its business—on railway stations, the up-keep of its business and its property?

Why, on the one hand, does the right hon. Gentleman's policy in general seem to be in favour of competition? Why, on the other hand, is he cosseting his pet friends, the new private bus operators, by erecting barriers to British Rail's competing against them where they think that that is necessary? That is clearly set out in the right hon. Gentleman's letter to Sir Robert Reid.

Why is the right hon. Gentleman determined that British Rail should subsidise private operators rather than invest in their own rolling stock to attract passengers? The whole package which he has presented today, and which he outlined in his letter to Sir Robert Reid, will drive passengers away from the railways; it will certainly not attract them. In the major cities it will increase congestion and pollution. The right hon. Gentleman really must answer the questions rather than replying to a private notice question in a way that shows that he has not thought about the results of his policy.

Mr. Moore

I shall deal first with the hon. Gentleman's last point, because quite the reverse of his suggestion is the truth. During the past three years the staff and management of British Rail have made the excellent achievement of reducing their grant, while there has been an increase in traffic of 3 per cent.

The cut in grant over the past three years has produced not a swingeing or massive increase in fares but, for the overall passenger railway, an increase of 7 per cent. in real terms. In addition, there are 22 more stations than there were in 1983 as well as grant aid being down by 25 per cent.

The hon. Gentleman asked me to estimate fares increases. As I tried to point out, the overall expectation of grant reduction within NSE and Provincial over three years is expected to be about 8 per cent. We trust that efficiency gains will ensure that there will be no need for any fares increases. However, we have encouraged BR to enhance the quality of its service and to add to its investment in quality service, so we should regard it as reasonable if that produced a minor and modest increase. However, the record of the past three years shows the nonsense of the hon. Gentleman's suggestion that this proposal will mean massive fares increases. To put the matter in perspective, the £50 million saving anticipated for NSE and Provincial should be compared with a cost for the whole area of £1.4 billion.

The hon. Gentleman asked why I had especially referred to quality in my letter to the BR chairman. We regard so highly the need to enhance quality that if the chairman found at any stage that there was some difficulty in achieving that I would clearly wish to be advised.

The hon. Gentleman asked about major closures. Exactly the same words were used in the objectives for 1983, and I have nothing further to add to that. I could continue, but I have the distinct feeling, Mr. Speaker, that you would like me to stop at this point.

Several Hon. Members


Mr. Speaker

Order. Hon. Members will note from the Order Paper reference to an affirmative order, so the matter w ill fall for debate in due course. As this is a private notice question, it will not be possible for me to call all hon. Members who wish to take part. However, I shall now call Mr. Toby Jessel.

Mr. Toby Jessel (Twickenham)

Will my right hon. Friend consider what can be done to ensure that British Rail fares are equitable for residents in outer south London who already, through their rates, have to subsidise residents of other parts of London who are able to make greater use of the London Transport underground?

Mr. Moore

My hon. Friend knows that I, too, have a constituency that has the blessing and good fortune to have a British Rail station, but not a tube station. I recognise the point that my hon. Friend is making. If he carefully considers my statement, he will realise that we want enhanced quality, enhanced service and a better and more efficient railway for the customers whom he and I see also as constituents.

Dr. John Marek (Wrexham)

As a result of this intensely depressing anti-rail statement, which will cause worse time-keeping and more overcrowding, will the Secretary of State promise and guarantee that the following lines in Wales will not close—the Cambrian coast line, the mid-Wales line, the central Wales line, the line from Shrewsbury to Wrexham and the line from Llandudno junction to Blaenau Ffestiniog?

Mr. Moore

Line recommendations and advice are clearly matters for British Rail, but I should have thought that the record of maintaining services during the past three years would be sufficient vindication. I regard the statement as a confirmation of the extraordinary ability of a first-class railroad to attain its objectives and to improve on them. We should be complimenting the staff and management rather than being so critical.

Mr. Robert Adley (Christchurch)

A fair-minded person would pay tribute to the Government for the investment levels in British Rail during the past few years. It is curmudgeonly and silly to do otherwise. Perhaps I might tackle my right hon. Friend on the London and south-east network, however, which does not affect my constituency. Will my right hon. Friend confirm that rail services in the Greater London area and probably in other cities are an essential part of the urban infrastructure, just as roads are, and that it is unreasonable and unrealistic ever to expect such services to pay? Will he further confirm that the price for not funding them through the taxpayer is more congestion, more pollution and more stagnation? Will he therefore give a clear commitment indefinitely that the Government accept their responsibility in this regard?

Mr. Moore

I am conscious of my hon. Friend's support and that of the Government for an efficient and successful railway that serves customers and taxpayers. I know that my hon. Friend is aware of the massive investment programme, but I remind him that, during the past three years, above and beyond the enhancement and modernisation of stations, we have added, in the area about which he is concerned, the Bournemouth to Weymouth electrification programme, the Waterloo resignalling programme and the Snow Hill tunnel and electric multiple unit programmes. I recognise what my hon. Friend is saying about the London commuter and railroad area. It is an essential part of the nation's fabric. It should be enhanced, improved and made as commercial and effective as possible.

Mr. John Cartwright (Woolwich)

Does the Secretary of State agree that talk of enhanced quality of service on Network SouthEast will be regarded as pie in the sky by many London commuters when they still suffer sudden cancellations, delays and dirty, overcrowded trains? Does he agree that many are reluctant commuters, and that they have been forced to depend on British Rail because jobs have gone from their areas? What estimate has he made of the impact of a fare increase persuading still more commuters to crowd on to London's already congested roads?

Mr. Moore

The hon. Member is compounding the error that others have made by assuming that there must be a fare increase.

Mr. Cartwright

No fare increase?

Mr. Moore

No. I said that the hon. Member is assuming that BR cannot succeed through efficiency gains. The hon. Gentleman is ignoring my point, as are others who do not want enhanced customer service or better opportunities to travel by rail. He fails to understand our attempt to establish proper quality standards. BR has not succeeded in all respects, but, during the past three years, it has come within 0.5 per cent. of the objectives that it was given for quality standards. We are trying to enhance and increase that. I should have thought that that is what the hon. Member would want us to do, while encouraging more investment to improve quality to attract more customers.

Mr. Anthony Beaumont-Dark (Birmingham. Selly Oak)

Does my right hon. Friend accept that, over the years, BR has made many promises, very few of which have been kept? Is he aware that many of us will believe in the second coming before we believe further promises on this subject? Most of us have a great and abiding faith in the word of Ministers of the Crown. Will he promise that, with the changes that he wants to bring about with yet another saving, the fare structure will not go above the rate of inflation? If it did, it would be damaging to commuters and to inter-city services. Can we all recognise that the country's future depends on a good, stable and growing rail system and not driving traffic on the roads?

Mr. Moore

I have difficulty finding my way between the second coming and an excessive faith in Ministers, but I accept my hon. Friend's intent. He is trying to do precisely what the Government are trying to do — to ensure that there is an efficient, effective and commercial rail service and that railway grant for socially necessary services is delivered as efficiently as possible. Those are clearly the Government's objectives.

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

Does the Secretary of State agree that there is a limit to how much the railway industry through staff reductions can be expected to contribute to these reductions? Does he agree that this further three-year programme which he has given Sir Robert Reid is almost impossible to carry out without damaging the railways or increasing the fares, particularly in the south-east? What exactly does the Secretary of State mean by saying we are not asking for a programme of major route closures? What closures does he envisage, because in his letter he also refers to bus provision for rail services in the provincial sector? What exactly does he mean by saying: In the light of these considerations, I want you to make a significant reduction in the … requirement for PSO grant in the south-east region? Does that not mean massive increases in charges?

The Secretary of State paid great tribute to the non-supported services and mentioned the sums spent on intercity services, freight services, Freightliner, Travellers' Fare and so on. Is not his concern to make those services effective in order to move towards privatising them rather than merely to make them more effective?

Mr. Moore

No. My concern is precisely the concern that I expressed in the three-year objectives. Those are the targets, the aims and the goals, and there is nothing beyond them. I respect the hon. Gentleman. I know that he is Chairman of the Transport Select Committee and I know of his history in the railway industry. I hope that he will remember the past three years, as we should do if we are committed to a successful railway industry. If what he is now saying is true, the railways would not have been able to achieve the objectives in grant reductions, nor to add to the rail facilities and to those who travel on the railways, nor to enhance services. I expect and hope to see the same results from these objectives for the next three years.

Mr. Peter Fry (Wellingborough)

In view of my right hon. Friend's expressed hope in his letter to Sir Robert Reid that the private sector would play a greater part in British Rail's activities, and in view of his statement this afternoon, will he now consider ways in which the existing track could be opened up to other operators, thereby introducing on rail the type of competition which the Government hold so dear in the whole of public transport?

Mr. Moore

For those who have not had the opportunity to read yesterday's full written parliamentary reply, I should remind my hon. Friend of precisely what I said about the limits within the three-year objectives in terms of private participation. I said: Further steps to secure that others from outside the nationalised industry can play their part in the upkeep of the railway and its equipment, the supply of its needs, the development of its property, and the exploitation of the commercial potential of stations will all be welcome as ways of improving Railway finances." — [Official Report, 21 October 1986; Vol. 102, c. 774.] I would seek to have that participation to assist the success of our railways.

Mr. Alfred Morris (Manchester, Wythenshawe)

Can the Secretary of State say whether and to what extent the reduction in subsidy will affect British Rail's approach to the much needed rail link to Manchester International airport and the projected rail link to Stansted airport? Is he aware of how urgently the rail link to Manchester International airport is now needed in the interests of the north-west region as a whole?

Mr. Moore

I compliment the right hon. Gentleman on mentioning an issue in which we are all involved. It is not germane to these particular objectives—[HoN. MEMBERS: "Why?"] — because it comes within the context of the overall pattern and proposals of investment in British Rail. To that extent, the right hon. Gentleman and all hon. Members will know this Government's outstanding record on providing investment, which British Rail has acknowledged. I know the issue and that many hon. Members on both sides of the House are interested in it. I, too, am extremely interested in it and will certainly be giving it attention beyond the specific objectives that we are discussing today.

Mr. Nicholas Soames (Crawley)

Will my right hon. Friend pass to the chairman of British Rail the congratulations of many of us who notice a real improvement in British Rail? Nevertheless, will he also transmit the message to the chairman of British Rail that hundreds of thousands of people who commute into the capital city every day do so in completely unacceptable conditions of discomfort? Will he tell the chairman of British Rail that our constituents expect a real improvement in those standards?

Mr. Moore

I welcome my hon. Friend's remarks, and I am sure that many hon. Members on both sides of the House would like to join in them. British Rail is to be congratulated. We should remember that British Rail sees these objectives as tough but achievable. I shall ensure that the chairman of British Rail is aware, as I know he already is, that we are not satisfied with the quality and standards. That is why we are seeking to enhance them.

The presumption by some Opposition Members that by throwing taxpayers' money at something it will improve efficiency and standards is bizarre. The chairman of British Rail is aware of the points that have been made, but I will ensure that I personally talk to him on the subject.

Mr. Ted Leadbitter (Hartlepool)

Does the Secretary of State understand that, so far as the general public have been made aware, his policy and that of his Department has two objectives: first, to achieve more punctual and better services; and, secondly, to have less crowded trains? Does he understand that neither he nor history can guarantee the former and that the latter will arrive only by increasing fares and causing further congestion on the roads? Does he agree that, instead of listening to Bob Reid, he should listen to Mr. Public?

Mr. Moore

That is precisely what Sir Robert Reid, the board of British Rail and the Government are trying to do. We are trying to ensure that, on the one hand, we have an enhanced, efficient commercial railway and, on the other, that we allow the railway to continue to carry out its public service functions in areas where it is socially necessary, even if it is not commercial. Neither of those militates against those two objectives.

Mr. David Crouch (Canterbury)

As one who sits on the south-east Back Benches, I hope that my right hon. Friend will recognise that there is some sensitivity about what he is doing in Network SouthEast. I understand why he is seeking to cut the subsidy, but does he think it right that, in making such a cut, he is driving passengers off the railway on to the already congested roads of the southeast?

Mr. Moore

May I remind my hon. Friend of precisely what has happened in the past three years. While there has been a subsidy reduction of £200 million, passenger traffic on the railways has increased. My hon. Friend will recognise that we are not only interested in an efficient railway, but we have a legitimate interest in the rights and roles of the taxpayer. If we can deliver benefits to the taxpayer and benefits to the railway and its customers, we shall he doing our job.

Mr. Ron Lewis (Carlisle)

Is the Minister aware that morale among railway employees today is at its lowest ebb? It is all very well for him to pay tribute to those employed by British Rail, but at the same time he is holding a dagger behind his back, intending to make more men and women redundant. Is he aware that his statement today has been heard time after time from successive Tory Secretaries of State for Transport? There is a limit to the efficiency programmes that can be carried out. Will the Secretary of State leave his office and talk to the men and women employed on British Rail, who have to do the job? They will tell him that they are trying to do the same as the Egyptians did—making more bricks with less straw.

Mr. Moore

I understand the emotion with which the hon. Gentleman makes his point. I have spent much of my life travelling on British Rail, and in the past few months I have spent a great deal of time travelling on British Rail, and I have not found the conditions that the hon. Gentleman describes. I found a recognition among British Rail staff that the Government have committed a massive investment and are committed to British Rail. As I said in my speech at the party conference, "We believe in British Rail". We do, but we want it to be efficient and effective and not such a large drag on the taxpayer.

Mr. Robert Hicks (Cornwall, South-East)

Does my right hon. Friend accept that some parts of the rail network will never be commercially viable, yet they form an integral part of the system? Is he aware that the entire rail network west of Plymouth—in Cornwall—is grant-aided and that any reduction in that system would work to the disadvantage, socially and economically, of the county of Cornwall?

Mr. Moore

I am conscious of the points made by my hon. Friend, and that is why I sought to make it clear that the Government recognise the need to maintain the socially necessary parts of the railway. As he rightly says, the provincial network is 75 per cent. grant-aided. To that extent, he will be conscious of the degree to which I have tried to correct the misapprehension which some may have. We are looking for an 8 per cent. reduction in grant for the whole of Network SouthEast and Provincial over three years, which is a modest target for efficiency gains.

Mr. Eric S. Heffer (Liverpool, Walton)

How can the right hon. Gentleman talk about seeking to improve the service and the railway system when he is cutting the subsidy? Is it not clear that in Western Germany, France, Italy and other European countries the railways are highly subsidised, and the people have a much better and more efficient service than we have? The right hon. Gentleman might shake his head, but I often travel on those railways and they are much better and more efficient than our service, which has deteriorated, especially since this Government have been in office. The Minister is suggesting further cuts in the service and ways to make impossible the life of those who are trying to make it efficient. It is time that the Government changed their attitude, stopped their ideological nonsense, and put the interests of the people before those of people like the right hon. Gentleman who think that profit is the all-important god.

Mr. Moore

No. I think that the consumer, whether he is a customer on the railway or elsewhere, is the person with whom we should concern ourselves. Because I am so conscious of the needs of the consumer, I do not always assume that subsidy is the way in which the consumer is best served. However, we are talking about a railway system large parts of which will continue to be in need of support, and to that extent this set of objectives does not diminish that opportunity.

Mr. Heffer

Yes, it does.

Mr. Moore

I apologise if the hon. Member was not here earlier or inadvertently did not hear perfectly what I said, but I shall repeat that railway traffic went up over the past three years when the subsidy went down. I repeat that for the record in case, unfortunately, the hon. Gentleman's problem of interrupting from a sedentary position meant that he was unable to hear me the first time.

Sir Hector Monro

Will my right hon. Friend give credit to Scotrail for introducing new electric services. much improving track mileage and, in particular, improving safety? Can he assure me that the investment in track mileage in Scotland will continue?

Mr. Moore

Network SouthEast has the benefit of the former director of Scotrail now running it. I make that clear for those who wish to make an issue of it. I recognise the needs of Scotrail, and to the extent that investment proposals come forward, British Rail has not, throughout the system, found the Government in any difficulty in ensuring that such commercial investment is advanced.

Mr. David Marshall (Glasgow, Shettleston)

Despite what the Secretary of State said, this policy inevitably means that provincial fares will increase. In view of the consultations, the Secretary of State must know by how much fares are expected to increase. Will he come clean and tell us, for example, by how much fares in Scotland will increase?

Mr. Moore

What I have said, and keep repeating, is that the figures in terms of the expectations through the objectives of the next three years assume a relatively modest reduction in grant of 8 per cent. throughout Network SouthEast and Provincial. That can he achieved over three years by efficiency gains, to the extent that Network SouthEast is expected to see enhanced investment for enhanced quality. However, if that cannot be achieved by efficiency gains, there could be a modest increase in fares. That will be up to British Rail.

Several Hon. Members


Mr. Speaker

Order. This is a private notice question, not a statement, and I have already announced that there will be a debate about it. I shall call one Member from each side and then we must move on. Without making any absolute commitment, I shall bear in mind those who have not been called when the debate is held.

Mr. Roger Gale (Thanet, North)

Is it not desirable to attract external investment in Network SouthEast? Therefore, will my right hon. Friend welcome the plan for £35 million of investment in a new rail terminal in Thanet? Does that not show tremendous confidence in the future of Port Ramsgate and British Rail in the face of the challenge posed by the Channel tunnel? Will he urge my right hon. Friend the Secretary of State for the Environment to allow that plan to proceed with all possible speed?

Mr. Moore

I congratulate my hon. Friend on seeking to get me to comment on an issue about which there is a planning inquiry. I recognise his legitimate interest in his constituency and the problems of Thanet and the way in which he has ardently argued for his constituents about what he sees as the problem of the Channel tunnel. I shall look at all rail investment in that area and any enhancement of it through as sympathetic eyes as I can.

Mr. Donald Anderson (Swansea, East)

Before the Minister rushes to congratulate the chairman on improvements in service, will he bear in mind the fact that in the recent past we in Wales have lost our sleeper service and now, in the new programme, there is no train after 6.30 in the evening from Swansea to London, and for most people there has been a deterioration in service? When he talks about efficiency savings, does that mean job losses? How many jobs does he expect to be lost on British Rail through so-called efficiency savings as a result of this announcement?

Mr. Moore

I do not believe, although it is a matter for British Rail, that this necessarily means changes in job levels. However, I did not rush to congratulate the chairman of British Rail about the standards. I have been a regular traveller on British Rail for many years. Some of us actually travel in other parts of the land. [Interruption.] I shall take as long as the hon. Gentleman wishes me to take, and until his hon. Friends can contain themselves. I also recognise that there is considerable discontent, and there has been for many years under many Governments, about the standards and quality of British Rail. What is different is that the Government, with the co-operation of British Rail, have sought to establish the quality standards that the railway seeks to achieve, and we shall seek to enhance those standards. We have no complacency about the present position.