HC Deb 17 November 1987 vol 122 cc920-39
Mr. Speaker

I should announce to the House that I have selected the amendment in the name of the Prime Minister.

3.42 pm
Mr. Robert Hughes (Aberdeen, North)

I beg to move, That this House condemns the harmful effects on the Government's policies on transport; deplores the consequent reduction in the quality of service across all public transport, the increase in fares, the increased damage to the environment, inadequate level of investment, the reductions in safety standards, the complete failure to give necessary backing to British transport manufacturing industry, and the increasing priority given to profit rather than service to the customer; and calls on the Government to co-ordinate services across all modes of transport, putting the user first. I am glad that we are having this debate today. even if it is not exactly on schedule. Having said that, I have to remind the House that this is the first debate on transport we have had since the present Secretary of State took office. I suppose it is my duty yet again to formally welcome him to the Dispatch Box. He is the sixth Secretary of State since 1979. The length of service of the previous Secretaries of State varied enormously. One lasted only 137 days. I do not know whether the present Secretary of State is getting worried, but I calculate that he is probably about one third of the way through his time at Marsham street. Each Secretary of State has left the Department with services worse and at a lower ebb than when he started. Therefore, this Secretary of State has a chance to redeem that record and make a name for himself. Sadly. on current form, he is not living up to expectations.

I want to deal with British Rail ; with its service to the customer, and British Rail Engineering Ltd. When the Secretary of State comes to the Dispatch Box, I hope that we will not hear any alibis or excuses from him. When we question him and the Ministers at the Dispatch Box, they proclaim ad nauseam that it is up to British Rail to propose and for Ministers to dispose. That is the convenient and similar theme we hear when we try to question them about the day-to-day British Rail services. However, that is not the case. The Secretary of State and his Ministers frequently forget the three-year letter of intent of aims and objectives for British Rail, which is a sort of contract between the Government and British Rail. That was started by the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley) and continued by the previous Secretary of State.

I assume that the current Secretary of State stands by the letter issued in October 1986, which makes it clear beyond a peradventure that the Government are the paymaster and that the British Rail board is expected to dance to the Government's tune. What is that tune? It is a simple refrain, which says that the state does best when it does least. From that ideology comes the belief in privatisation and competition. Perhaps I should put that latter point more accurately — the belief that Government should not intervene in the market unless that is absolutely essential. That ideology distorts transport services, and experience shows that it does not work.

Investment in British Rail is inadequate and based on the wrong criteria. I concede to the Secretary of State that, at present, investment in British Rail is high, averaging £600 million per annum over the next five years. However, according to British Rail's plan in 1982, that investment should have been £800 million per annum. The present rate of investment is part of the 25-year cycle of the renewal of the rolling stock. Therefore, the fact that investment is now 8 per cent. above the 1979 level is nothing to boast about.

The investment picture is clouded and shown not to be so good when we realise that much of British Rail's investment has been financed by reductions in staff, which has decreased by 23 per cent. or by more than 40,000 jobs since 1983. We know that over that period asset sales have produced £370 million and that fares have increased. In addition, the Governments's cuts in the public service obligation have again distorted the type of investment. During the past three years, the PSO has been cut by 25 per cent. and in the next three years it will be cut by a further 25 per cent., to £555 million at today's prices by April 1989.

The Government may not be willing to accept our criticisms of British Rail. I do not like having to criticise British Rail, but, unfortunately, my criticisms are valid. If the Government are not willing to accept our criticisms, they should consider two reports on British Rail that have been published recently. The first was by the House of Commons Select Committee on Transport and was published just before the recent election. The second and more recent report was from the Monopolies and Mergers Commission and was about Network SouthEast. I remind the House that Network SouthEast serves 18 million people and has 930 stations. That is a considerable size of business. Both reports reached a similar conclusion — that British Rail is still not getting there—and illustrate the point that investment is wrongly targeted and is distorted.

Indeed, the rules and restrictions that the Government place on British Rail inhibit its work. Hon. Members will know that British Rail's finances are covered by its external financing limit and that it is not allowed to carry forward any underspending of the EFL from year to year. In 1982–83, British Rail was £75 million underspent on its EFL; in 1983–84 it was £142 million underspent and in 1984–85 it was £115 million underspent. That money is lost, but it is money that could and should have been used and put to good use. The conclusion from such underspending is that British Rail is discouraged from investment which does not show a return within 12 months. Winning back passengers and trade takes a lot longer than 12 months to mature. If one really wants to invest to get back traffic, the investment must be made over a longer period.

The truth is that the Government encourage cost-cutting investment but not revenue-generating investment. British Rail has simply gone along with that policy. British Rail and the Government sometimes remind me of someone who has started a business course, learned the part about cost cutting but then dropped out of the course and missed the point about expanding the business through investment to generate new wealth.

British Rail should learn from its own experience when it has, quite exceptionally, followed the course of action that we advise. The St. Pancras-Bedford line received multiple investment on trains, track and signals. The effect was a 40 per cent. increase in usage, whereas if new trains only had been provided perhaps only an 8 per cent. increase in traffic would have been achieved.

Those conclusions are validated by the Monopolies and Mergers Commission, which identified a number of respects in which quality was not up to standard. The southern region has witnessed a 16 per cent. increase in breakdowns since 1983 and a 15 per cent. increase in overcrowding since 1980. The Monopolies and Mergers Commission stated specifically that "performance has deteriorated significantly". Cleanliness has suffered, largely because of the staff freeze.

British Rail has investment and performance targets. It is interesting to note that, while investment targets are sometimes met, performance targets on quality are very seldom met. When challenged, British Rail simply changes its criteria.

Mr. Anthony Steen (South Hams)

The hon. Gentleman runs down British Rail. At one time I was a critic of British Rail's service to the West Country. However, for the past three years trains to the West Country have been remarkable. They are on time, they are clean, and one can reach Exeter in one hour and 55 minutes. I wholeheartedly recommend the hon. Gentleman to use British Rail's service to the West Country.

Mr. Hughes

That is an interesting proposition. It reminds me of the country yokel who, when asked how to get to Newcastle, replied, "I would not start from here." It is not much good to those who suffer from bad services to be told, "Don't bother, brothers; it is all right in some other part of the country." I concede that there are good things about British Rail, but it does not provide quality over the country at large.

Mr. Martin Flannery (Sheffield, Hillsborough)

Does my hon. Friend agree that it is not the Opposition but the Government who are running down British Rail? For example, on the midland line from Sheffield to London, trains now run every two hours whereas they used to run hourly. Furthermore, the 125 trains stop at three stations within five minutes of each other and nine times in all on the way to London.

Mr. Hughes

I accept my hon. Friend's argument. There are advantages in having point-to-point trains— for example, from Manchester to London. However, there is also a case for having trains that stop and pick up passengers at other stations. [Laughter.] My hon. Friend was making a serious point. We need to get the balance right. We need a mix of through trains and stopping trains to provide choice for the customer.

Let me get back to my point, if I have not forgotten what it was. British Rail changes its performance criteria when it is challenged. The target used to be that 87 per cent. of inter-city trains should arrive within five minutes of the correct time. In fact, 77 per cent. arrived within five minutes of the correct time. British Rail now operates on a performance criterion which says that 90 per cent. of trains should arrive within 10 minutes of the correct time. That should have led to a better service, but it has not.

The story of bad service and overcrowding is repeated throughout the country. What is British Rail's answer to overcrowding? It increases the fares. When asked last summer and the summer before, "Why are you putting your prices up during the summer, when you expect a lot of traffic?", British Rail spokesmen replied, "We have to put prices up because otherwise people will use the trains and we do not have the stock to carry them." That is no way to run a railway.

We expect fares to increase next year — some in January and some later in the year —and the letter of October 1986 from the Secretary of State made it clear that the increase would be higher than the rate of inflation.

Mr. David Gilroy Bevan (Birmingham, Yardley)


Mr. Hughes

I shall give way to the hon. Gentleman on this occasion but I have a lot to say and many of my hon. Friends want to speak.

Mr. Bevan

Would the hon. Gentleman agree that the correct statistics on timing — I cite British Rail's own statistics — show that last year 90 per cent. of all passenger trains arrived on time or within five minutes of the correct time, compared with 84 per cent. in 1979?

Mr. Hughes

The hon. Gentleman must use his source of statistics, and I must use mine. Mine come from published reports and independent advice. The hon. Gentleman must judge the quality of his brief, just as I must judge the quality of mine.

The Government have a direct responsibility for fares. A time bomb is ticking away in the EEC, and it will have a widespread effect on all public transport fares. Earlier this year, Lord Cockfield embarked on an exercise of harmonising VAT within the Community. His report was due to be announced in May. To no one's real surprise, it was not published at that time. Perhaps I am a little over-suspicious, but it is no coincidence that the report was not published when an election was due the following month. During the election, the Government refused to deal with VAT.

Several of my hon. Friends have sought to find out the Secretary of State's view on VAT on fares. They have put down parliamentary questions. I have to admit that I have a little admiration for the Secretary of State's ability to stonewall and sidestep. He transferred as many questions as he could to the Treasury. Those that he could not transfer, he chose to interpret totally differently and discussed air passenger fares and liberalisation in the EEC.

There is the prospect of VAT being applied to passenger fares. Passenger fares are extremely inflationary. They hurt the poorest the hardest. We do not know what VAT rate will be applied, but it will certainly not be less than 15 per cent. Indeed, if harmonisation takes place, average VAT will go up to 17.5 per cent. But let us stick with the possible 15 per cent. It will have a serious effect on the travelling public.

On 16 July, the Prime Minister told the House: Not only would this Government vote against Lord Cockfield's proposal, but a number of our European partners would do so as well."—[Official Report, 16 July 1987; Vol. 1422, c 1271.] She said that the Government would veto VAT on fuel, food and children's clothing, but she has been totally silent about VAT on fares. I want the Secretary of State to make it absolutely clear that he will veto any imposition of VAT on bus fares, train fares, or, indeed, air fares. Unless he does that, we cannot clearly see where we are going.

The work force of British Rail Engineering Ltd. have been most cynically betrayed. Promise after promise has been disgracefully broken. At the end of 1979, BREL employed 36,000 people. The British Rail plan envisaged that the company would expand to a work force of 43,000 by the end of 1984. In 1980, a new rail plan was instigated by the Government. In 1982, 5,500 employees had gone from BREL. In 1984, 1985, 1986, and twice this year, there have been further reductions in the work force. They will bring the current work force of only 10,000 down to 7,500 by April 1988. Further job losses are projected. The BREL plan for 1991, shows that there will be nothing left.

On each and every occasion that we have been told of reductions in the work force, we were told that job losses were necessary to protect the future. The same tired old excuse has been trotted out every time — that modern rolling stock requires less maintenance. As an engineer, I can see that there is some truth in that. If there is less maintenance, there is less work. But that is not the whole story. British Rail's procurement policy has an even greater significance for the future of BREL.

Before I deal with a general point, I shall refer to a more specific one. Hon. Members will recall that there was a contract for bogies for coach stock to be manufactured by Metro-Cammell. It was withheld from BREL on the ground that it was not ready to meet British Rail specification. BREL maintained that it could develop the bogies and meet the specification, but it was told by British Rail, "We cannot wait. We must place the order." Instead, the order was placed with a Swiss company. It is widely believed that that Swiss company cannot meet I he specifications. Unattributable sources within BREL confirm that speculation. Let us say that it is only speculation at the moment. I ask the Minister to give a firm guarantee that he will immediately conduct a full inquiry into this lamentable state of affairs and have the contract re-examined. He can do no more and no less for the people who work in BREL.

It seems to me that British Rail's procurement policy is governed by the Serpell report, which advocated buying abroad in the interests of economy. It must be the only report that has been apparently officially pigeonholed that still exerts a malevolent influence over such a wide-ranging part of British Rail's policies. There is a grave danger that Britain's manufacturing capacity and export potential will be severely damaged. British Rail makes a virtue of the fact that it is undertaking the most extensive traction and rolling stock renewal programme for 30 years. No one would dispute that that is long overdue. The programme in total is worth £1,100 million. That is big money ; many jobs in Britain could be provided if those orders were placed in the United Kingdom.

Tenders for the class 60 locomotives were invited from a number of overseas manufacturers as well as from manufacturers within the United Kingdom. The closing date for the tenders was last week and I inquired this morning of British Rail about them. I am glad to tell the House that only three tenders were submitted for that work which will cost about £100 million. The three companies that have submitted tenders are GEC, Metro-Cammell and Brush. They are all British companies, and I welcome that. I believe that foreign companies did not submit tenders because our legitimate outrage that that work might go abroad frightened them off. I hope that the company that receives the tender will be successful in delivering the product.

I have no doubt that British Rail and the Government will defend the decision to invite overseas bids on the ground of economy. Despite the outcome of that tendering, the point still needs to be made that no other state-owned railway system in Europe would contemplate orders of that magnitude and importance going outside its national boundaries. If SNCF were even to think of allowing companies outside France to tender for any of its rolling stock or traction units, the French Government would rapidly step in and ensure that the work stayed in France. We have defended British manufacturing industry, but it remains the Government's responsibility to protect it in the future because other orders will arise in the next few years.

British Rail investment targets set by the Government lead to some startling conclusions. One conclusion is that the electrification of the east coast main line will stop at Edinburgh. British Rail steadfastly refuses to consider the electrification of the Edinburgh-to-Aberdeen line because it will not be "commercially viable". I remind the Government and British Rail that it is a national network and that the east coast main line is part of a network from Aberdeen to London and return or, as some hon. Members prefer, from London to Aberdeen and return. I doubt whether, if the Edinburgh-London part of the network were costed sectorally between the different stopping stations referred to earlier, it would be viable at intermediate points.

The total distance was considered. The whole matter must be looked at again. Similarly, I urge the Government seriously to reconsider their attitude to the Dornoch-Firth rail bridge because I believe it is essential to the socioeconomic future of the north of Scotland.

There are many topics to be discussed, and many hon. Members wish to take part in the debate. I am sure that some of them will take up issues such as London Regional Transport, bus deregulation and safety on our roads, in our sea lanes and in our air space. I do not believe that we should discuss the Zeebrugge incident, because the Director of Public Prosecutions is considering a report. However, I must say that the Government have not acted with sufficient urgency on safety. I have no doubt that my hon. Friend the Member for Stretford (Mr. Lloyd) will discuss that.

I apologise to the Under-Secretary of State for not giving advance warning, but on Sunday evening, on the "Watchdog" television programme, an allegation was made that the Volkswagen LD31 minibus, which is often used as a vehicle for carrying the disabled, has a dangerously weak fuel return pipe which spills petrol on to the top of the engine. This has lead to a number of fires, some involving loss of life. The Under-Secretary apparently accepts that the allegations are correct, because he said that he expected Volkswagen to take immediate remedial action. I trust that he has not left the matter there. He should order an inquiry by the Department of Transport into the safety of that vehicle. I hope that he is not relying on a homily in a television programme on such a serious matter. I hope that he has the power to compel the refitting of a safe fuel connection on every LD31 minibus. If he does not have sufficient power, I can promise him that the Opposition will facilitate either primary or secondary legislation to provide him with those essential powers.

I would have liked to spend some time on the issues that I hope my hon. Friends will take up, but time does not permit. I also would have preferred not to discuss the British Airways-British Caledonian merger, not because I have any inhibitions about discussing it, but because I believe that it is a proper subject for debate in Government time. Last week we had the unfortunate difficulties when the Government refused to make a statement on that issue. Government spokesmen hinted to me that there was no need for a statement because it could be discussed during the transport debate. I hope that such a debate will not hijack our Opposition day on the transport issues that we regard as important.

I had hoped that the merger issue would quieten down, but over the weekend the plot thinkened. Therefore, I think it is necessary to say a few words about that. BCal experienced its difficulties because the Government's policies on privatisation and competition are incompatible. The Government could not afford to carry out the propositions put to it by the Civil Aviation Authority because they had to keep British Airways fat and juicy, and ripe for privatisation. In doing that, they provided the death knell for British Caledonian.

I am not happy about the report of the Monopolies and Mergers Commission. Initially I had thought that the report was fairly clear, but a number of issues have since arisen. I read in the press that the first that British Caledonian knew that British Airways had concluded a deal to surrender British Caledonian's domestic licences and its three European routes, with the right to reapply for them, was two days before the report was published. That does not provide much of a basis for trust or for hon. Members to accept what Lord King says. When he was pressed about British Airways' ordering of the Airbus A320, he said that that depended on the Monopolies and Mergers Commission. If he is playing ducks and drakes with British industry and with British Caledonian, he must not be surprised if we scrutinise what he says. I have confirmed with British Caledonian that those weekend press reports are true. It confirmed that it is not simply speculation. That is quite disgraceful and intolerable.

Mr. Barry Jones (Alyn and Deeside)

I support the view that my hon. Friend is expressing. I hope that there will be a debate on the proposed merger. Does my hon. Friend know that the wings of the Airbus are manufactured in my constituency, that many hundreds of jobs are involved and that my constituents are concerned about the consequence of the merger on the ordering of Airbus?

Mr. Hughes

I am grateful to my hon. Friend for confirming my point about the type of merger and the important effect that that might have on jobs.

The merger was announced at 1.30 am — I heard about it at 9 am on the radio—and I believe that the Government had no choice but to refer the matter to the Monopolies and Mergers Commission. However, they had to do that once the announcement was made. The Government should have acted without sending the case to the Monopolies and Mergers Commission. There have been three and a half months of uncertainty and we do not know how many weeks of uncertainty still remain. The Chancellor of the Duchy of Lancaster, who speaks for the Department of Trade and Industry in this House, confirmed in response to a private notice question on the day of the announcement that the Department of Transport was told that merger negotiations were taking place a week before the conclusion of the exercise.

In the light of the MMC report, my criticism of the Government is well founded. To paraphrase paragraph 8.70 of the report, before reference was made, British Airways offered conditional undertakings to the Office of Fair Trading — first to give up 5,000 slots at Gatwick ; secondly, not to oppose applications to the CAA by any other airline seeking to compete with it; and thirdly, to submit to any examination of routes currently operated by BCal, where further British competition would be desirable.

Those three specific offers were made to the Office of Fair Trading before referral. The Secretary of State for Trade and Industry, who is a Member of the other place, knew about the offer. As a result of that offer paragraph 8.71 of the MMC report refers to the giving up of BCal's domestic routes and three of the European routes, the right to reapply and the examination of international routes by the CAA. The Government should have taken that responsibility on themselves and not simply farmed it out to another agency.

Have the Government a view on aviation policy? Do they have a view on airports policy? Clearly they have not. Do they have any influence at all over what is going to happen? Clearly not. The present position is that we understand that Sir Adam Thompson is engaged in discussions with a number of European airlines. One airline, KLM, has withdrawn and is no longer interested. However, we know that opinions are being actively pursued.

I do not know whether Sir Adam Thompson is serious. He might simply he trying to jack up the value of the British Airways offer which apparently is down to £100 million compared with the original £267 million. He may be engaged in a bargaining game. On the other hand, given the fact that he has been so badly treated by British Airways, perhaps he is serious about accepting a foreign competitor or a foreign partner. If that is the case, what is the Government's attitude? What will they do? Will they veto any partnership with a foreign airline if that airline takes a given percentage of 25 per cent., 30 per cent. of 40 per cent. of British Caledonian? What will the Government do about that?

The Government cannot allow Sir Adam Thomson and the board of British Caledonian to negotiate with a foreign partner and then say that they are not very sure whether that is in the national interest. Will they then refer that to the Monopolies and Mergers Commission again, or send it to someone else to deal with it? That is no way to run an airline policy. The truth is that the Government do not have an airline policy. That collapsed because of the Government's interest in privatising British Airways, and they have no influence on or ideas about future airline policy.

I have another point to make about the Monopolies and Mergers Commission's report. On page 44, paragraph 5.38 of the report rehearses what was offered and the consequences. With regard to the revocation of licences, a little footnote states: The procedure used would be to apply to the CAA for revocation of the licences. This would enable BA to continue the services during the consideration by the CAA of application for the routes. I welcome that to the extent that services must continue until such time as a new licence operator comes in. However, it would appear that some airlines which currently hold licences to which British Caledonian has made objection might have to apply afresh for licences if British Caledonian withdraws these objections. Some operators have told me that there is some doubt, even if they get the go-ahead, that capacity and slots would be made available to them. I hope that the Secretary of State will answer those points and try to clear up the confusion.

Mr. Robert Adley (Christchurch)

In the interests of fairness and debate, I am sure that the hon. Gentleman forgot to remind his hon. Friend the Member for Alyn and Deeside (Mr. Jones), who has now left the Chamber, that the jobs in the factory at Hawarden in his constituency would have disappeared altogether were it not for the fact that an incoming Conservative Government reversed the previous Labour Government's decision to cancel the Airbus project. Before the hon. Member for Aberdeen, North (Mr. Hughes) jumps to defend the British Caledonian position, he should also remind the House that the Labour party policy on the Edwards report was against the establishment of a second airline in this country. We should have an honest admission on those matters.

Mr. Hughes

I will look into those points.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich)

I am sure that my hon. Friend would like to refute the idea that the Labour party was against a second airline. In the interests of customers, Labour Ministers supported the idea of the creation of British Caledonian. I was a Minister in the Department at the time and was involved in all the talks. It was obvious that, if we did not have that kind of extension, there would be very large private monopolies.

Mr. Hughes

I am very grateful to my hon. Friend. I was going to say more or less what she has said. I will look into the point about the Tory Government re-establishing the Airbus project, which the hon. Member for Christchurch (Mr. Adley) claimed had been cancelled by a Labour Government. I do not remember that, but I was not a Member of Parliament at the time. However, I will check it up.

I have no doubt that, if there is a choice between British Caledonian going into partnership with a foreign airline or going with British Airways, I would rather it went with British Airways. At the end of the day, the best result for the people working for the airline and for the customers would be for the merger to proceed, and I will seek to defend the interests of the employees of the two airlines to ensure that they get the best deal and give the best service.

I want to make it quite clear that the Government are in a muddle over a whole range of transport responsibilities. They proclaim their advocacy of the free market, but they know that the market does not work, has not worked and cannot work. The market cannot meet the needs of the individual or the corporate consumer. The Government are in a state of paralysis. They are unable to offer any strategy for transport. They are simply drifting. The sad truth is that the Department of Transport is ignored by the other Departments of State. The Department has failed and will continue to fail the nation. I invite the House to approve the Opposition motion.

4.17 pm.

The Secretary of State for Transport (Mr. Paul Channon)

I beg to move, to leave out from 'House' to the end of the Question, and to add instead thereof: 'congratulates the Government on the success of transport policies which have led to an improved transport infrastructure through increased investment whilst reducing the proportion of gross domestic product taken up by public expenditure, which have provided better value for money for taxpayers, ratepayers and industry, and which have increased choice of service to the customer; and furthermore notes with approval the Government's policies to safeguard the environment and to maintain and improve transport safety standards.' I am exceedingly grateful for the opportunity that the Opposition have given me today to publicise the achievements of the Government over the past eight years. I am particularly grateful for the opportunity to stress the improved service to the customer that we have created. We intend to continue with that. However, first I must thank the hon. Member for Aberdeen, North (Mr. Hughes) for his kind personal references to me. I note that he said that I will last only 137 days, a little longer than Napoleon, but not much. I shall do my best to hang on for a little longer than that.

The theme that runs through all of our transport policies is to provide the best transport service for the customer at the least cost to the taxpayer and ratepayer. I intend to consider Network SouthEast in some detail later. However, transport by road, rail, sea and air is a vital part of Britain's economic success. We all know that we are in the seventh successive year of steady growth. Industrial production is at its highest ever level and this country's transport system has played a great part in that success.

I shall highlight four sectors of solid achievement in which we propose to go further during this Parliament. These are, a massive investment in transport infrastructure; obtaining value for public money ; the unprecedented increase in competition in transport; and improving safety, which was a point that the hon. Member for Aberdeen, North made.

I am sure that hon. Members will find it extraordinary, when they analyse the speech of the hon. Member for Aberdeen, North, which lasted about 37 minutes, that he did not once mention roads, except in relation to road safety. Over 80 per cent. of freight by volume in the United Kingdom travels by road. Some 90 per cent. of passengers are carried by car, taxi, bus or coach. Some two-thirds of households in the United Kingdom have regular access to a car, yet in its motion the Labour party does not mention roads.

An effective road system, by cutting transport costs, makes a vital contribution to national economic prosperity. That is not a new discovery ; the only difference is that the Government have delivered a road programme that is almost one-third larger, in real terms, than it was in 1979.

Mr. Flannery

Half of it has been coned off.

Mr. Channon

I am glad that the hon. Gentleman has raised the subject of cones. The only reason why there are so many cones on the motorways is that the Labour Government neglected maintenance ; I have had to spend money to catch up. By 1992 I shall have caught up on the years of neglect of motorway and trunk road maintenance, which was initiated largely by the right hon. Member for Leeds, East (Mr. Healey) after the IMF crisis.

Mrs. Margaret Ewing (Moray)


Mr. Elliot Morley (Glanford and Scunthorpe)


Mr. Channon

We have completed no fewer than 216 schemes and they have added 733 miles to the national network. Some 76 bypasses have been opened to take through traffic away from towns and villages. Since April 1987 we have opened 19 new road schemes, nine of which were bypasses.

Mr. Michael J. Martin (Glasgow, Springburn)

Will the Minister give way?

Mr. Channon

I shall finish this point and give way.

In the 1985 review of the road programme 51 schemes were added. Earlier this year a further 82 schemes were added.

Mr. Win Griffiths (Bridgend)

Will the Secretary of State tell us on what evidence his statement that since 1979 far more money has been spent per mile of motorway on maintenance is based? Will he tell us to what extent this problem has been caused by heavy lorries? For example, in south Wales, during the miners' strike, on the motorway between Port Talbot and Newport, one could see the ruts that were being caused by these heavy vehicles, which were clearly breaking the law.

Mr. Channon

I shall deal with that point a little later.

This year we plan to start schemes to add over 150 miles of road to the national network. The forward programme embraces some 360 schemes, with a total value of about £5 billion. Does that sound like neglect of the nation's transport needs?

Within the next few years we shall extend the M40 from Oxford to Birmingham, the M20 between Maidstone and Ashford, build the M66 from Denton to Middleton, open the A1-M1 link and the A69 Newcastle western by-pass, improve the Al in north Yorkshire and upgrade the north circular in London.

Mr. Robert Hughes

I welcome the introduction of these schemes, but will the Minister say when they were first projected?

Mr. Channon

Each scheme has a different date. I have announced the schemes that my predecessors added earlier this year. The point that I am coming to, about which the hon. Gentleman will be sensitive, is how the Labour party neglected our roads and how we are picking up the pieces.

Mr. Martin

Will the Minister give way?

Mr. Channon

I must get on because I must deal with rail, air and sea.

As to local roads, we are providing £180 million in transport supplementary grant to help local authorities. That will assist over 300 schemes, including the £39 million Birmingham middle ring road, the Bradford city ring road, the Manchester-Salford inner relief road, the £17 million Liverpool inner ring road and the £40 million black country route through Wolverhampton and Walsall.

Those schemes, which are at the heart of inner-city areas, will be an essential part of their regeneration.

Mr. Martin

Will the Minister give way?

Mrs. Ewing


Mr. Channon

I have a lot to deal with, but when I return to roads I shall give way to the hon. Member for Glasgow, Springburn (Mr. Martin).

The hon. Member for Aberdeen, North dealt at length with British Rail and painted a tale of woe and neglect. However, we should consider the figures. We have approved 20 major investment schemes, including nearly 2,000 new passenger vehicles, 96 new locomotives, and new cross-city links in London and Manchester. We have agreed, in principle, to sizeable investment on the international high-speed Channel services.

Overall, BR plans to invest £3 billion over the next five years. Its planned investment for each of the next five years is higher, in real terms, than its investment expenditure in any single year since the 1960s. Since June 1979 my predecessors and I have not turned down a single railway investment project that BR has submitted. We have approved investment of £3 billion, at today's prices, and we shall continue to support worthwhile investment proposals, including those needed—

Mrs. Dunwoody

The Government have sold off BR.

Mr. Channon

The hon. Lady knows perfectly well that we have not sold off BR.

We shall continue to support worthwhile investment proposals, including those needed for BR to meet quality of service standards for the grant-aided railway.

Several Hon. Members


Mr. Channon

Several hon. Members want me to give way, but I shall give way to the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) as she is an old friend.

Mrs. Dunwoody

We do not dispute the fact that there has been investment, but does not the Secretary of State remember that this is exactly what happened with the Royal Ordnance factories, when initially there was much investment, then a loss of jobs and then the selling of units?

Mr. Channon

The parallel with the Royal Ordnance factories is a little far fetched. I shall later deal with some points that the hon. Lady may find interesting in relation to her constituency.

Mr. Conal Gregory (York)

My right hon. Friend made a cogent point about investment in British Rail. Will he confirm that British Rail has not reached its limit of external financing and that, therefore, the Government have been most generous, in real terms, to BR?

Mr. Channon

That must be right, and investment expenditure, in real terms, for the next few years is enormous. If my hon. Friend is patient, he may hear some information that will interest him with regard to York.

We have authorised 1,333 track miles of electrified railway: London to Cambridge, London to Norwich, Tonbridge to Hastings, Bournemouth to Weymouth, and east coast electrification to Leeds, York and Edinburgh, which is the largest single rail investment for 25 years and the biggest ever electrification scheme. It is well ahead of schedule.

The average level of spending on electrification each year since 1979, in real terms, is £72 million. Between 1974–79, in real terms, it was only £41 million. Who has neglected the railways? Labour Members have made a completely bogus case about our level of BR investment.

Mrs. Ewing

I am deeply concerned that the Secretary of State has not referred to investment programmes in Scotland or Wales. As to the specific point about the east coast electrification, is he aware of the deep concern of people in the Grampian region that the rail electrification will stop at Edinburgh, thus leaving the oil capital of Europe stranded in that there will be no electrified line running from Edinburgh up the east coast? Is that not ludicrous? Will he therefore persuade BR that investment must continue north of the central belt of Scotland to ensure that we can link into the network system?

Mr. Channon

The hon. Member for Aberdeen, North made a similar point when he opened the debate and I understand his concern for constituency interests. Of course, we would not turn down any worthwhile investment scheme that British Rail put to us, nor have we ever done so. Any scheme put forward must be cost-effective. The same answer applies to the high-speed trains. We will consider any worthwhile investment scheme that is put forward.

Mr. Barry Jones (Alyn and Deeside)


Mr. Channon

I am glad to welcome the hon. Gentleman back—we missed him for a few moments.

The Crewe-Holyhead—

Mr. Barry Jones

Will the right hon. Gentleman give way?

Mr. Channon

I must press on. I am sorry, but I have two other areas of interest to deal with.

Let us consider BR's rail fares and quality of service. The hon. Member for Aberdeen, North mentioned this. Over the past three years average fares on the railways, taking account of discounts, have increased by under 4 per cent. in real terms. In fact, average fares paid on Network South East, including Capitalcard and off-peak fares, have fallen by 2 per cent. in the same period. That is against the background of the highest level of passenger mileage for a decade—indeed, it has increased by 5 per cent in the past year.

I recognise, as some season ticket holders recognise, that some fares have risen more than average, but that must be seen in perspective. I believe that fares must be set at levels that enable BR to invest in the quality of service that customers want and are willing to pay for. What really concerns people is when they pay higher fares without the corresponding improvement in quality. The chairman of BR and I are determined to ensure that fares increases are matched by increases in quality. I shall expect BR to report to me on the progress towards meeting those objectives.

Mr. Rhodri Morgan (Cardiff, West)

Will the right hon. Gentleman give way?

Mr. Channon

No. I am coming on to Network SouthEast and the challenge that was made by the hon. Member for Aberdeen, North.

Investment in Network SouthEast and elsewhere has helped to improve BR's quality of service. The hon. Member for Aberdeen, North mentioned the new Bedford-St. Pancras line and I am glad I have his support for that. The Great Eastern multiple units will alleviate overcrowding on those lines. Since I have taken office the electrification of the East Grinstead line has been completed. New rolling stock will be made available in Essex and Cambridgeshire, along with major station refurbishments and signal improvements. I accept that there is a great deal further to go, but steps are being taken to improve services.

I am delighted to tell the House that I have, today, approved BR investment in Super Sprinters. My approval will give BR authorisation to build 204 new vehicles at a cost of nearly £69 million. They will operate on main lines in Scotland, on the north trans-Pennine route, on some express routes in the midlands and between Cardiff and the south coast. So much for the neglect of rail.

I now wish to deal with British Rail Engineering Ltd. I regret the redundancies that have occurred over the past few years at BREL. The hon. Member for Aberdeen, North was generous enough to accept that those redundancies were caused by the modernisation—

Mr. Robert Hughes

Partly caused.

Mr. Channon

Partly caused in the hon. Gentleman's opinion, but I believe that the main cause was the modernisation of BR's locomotive and rolling stock. We all want to see a modern and up-to-date railway — modern rolling stock needs less repair. The Opposition must recognise that. The growing investment programme in new rolling stock undertaken by BR presents opportunities for BREL, but it must compete for the orders. Since BR began placing new build orders competitively BREL has done very well. It has obtained around 70 per cent. of the orders, but it has lost others. If it is to succeed it must improve and go on improving its productivity and methods of production. Great strides are already being made in this direction by the management and work force. Great prizes are to be won. British Rail plans to spend £ 1 billion on new locomotives and rolling stock over the next five years and there are prospects of large orders for the Channel tunnel and the Underground. Earlier I announced the order worth nearly £69 million for Super Sprinters and I can now say that that order will go to BREL. There are bright prospects for the BR supply industry and for BREL's future within it.

Mr. Greg Knight (Derby, North)

Is my right hon. Friend aware that his announcement about the Super Sprinters will be warmly welcomed by BREL employees? However, is there not also a need to secure the long-term future of that company? In that regard, and with a view to increasing further investment, is my right hon. Friend considering the question of privatisation?

Mr. Channon

I am grateful to my hon. Friend for his remarks. I am considering the long-term future of BREL with the chairman of BR. I want to see a secure future for that company and I hope to be able to come to the House before long to announce what I believe to be the best way forward. I certainly note what my hon. Friend says. There are great prizes to be won and BREL could win them.

Let us consider investment in public transport in London. It is true that we plan to spend £1 billion on London's roads. However, over the next five years planned investment in Network SouthEast alone totals almost £1 billion. To that must be added investment by London Regional Transport—a record of £300 million this year. I propose to authorise spending at £1 million a day next year for LRT. That will provide for projects such as relief for congested stations — a large scheme for The Angel costing £20 million has just been approved — 16 new trains for the tubes worth £45 million, including the northern line; a £135 million automatic ticketing programme and £150 million for the City extension, to be the Dockland light railway. Plans are in hand for the major re-equipment of the central line, which will start soon.

Mr. Patrick McLoughlin (Derbyshire, West)

I wish to return briefly to the question of BREL. My right hon. Friend has said that, at the moment, he is having discussions regarding the long-term future of that company. Can he give us a suggestion as to when he would hope to come to the House with his decision? Is it likely to be before the House rises for the Christmas recess?

Mr. Channon

I shall be very disappointed if it is not.

Mr. Robert Hughes

Will the right hon. Gentleman now give me a specific answer regarding the imposition of VAT on fares?

Mr. Channon

The hon. Gentleman knows perfectly well that VAT and the application of taxation policies are entirely a matter for my right hon. Friend the Chancellor. I have nothing to add to what my right hon. Friend has said on numerous occasions. The hon. Gentleman's questions have been answered by my right hon. Friend and I must refer the hon. Gentleman to them.

Regional airports are extremely important. Since 1979 we have authorised £240 million worth of capital expenditure specifically for regional airports. That sum should be compared with the £16 million spent in the five years of the previous Labour Government — it is 10 times higher. There is a brand new terminal at Birmingham and substantial terminal extensions have taken place at Luton, Newcastle and Manchester. There have been runway extensions at Leeds-Bradford and Manchester. Once again, vital national assets have been significantly improved and extended. If we asked anyone in 1979 whether it was possible to increase investment as we have done and yet reduce the total burden on taxpayers no one would have believed it. In real terms total transport spending has been reduced by 8 per cent. at a time when capital spending has gone up, across the board, by 5 per cent. We are also spending considerably more on roads.

Now let us consider contraflows.

Mr. Kenneth Hind (Lancashire, West)

Will my right hon. Friend give way?

Mr. Channon

I would like to give way, but I have been going 20 minutes and I have a lot more to say.

Everyone in the House is infuriated by cones and the resulting delays. Many contraflows are precisely the result of the neglect of central maintenance in the late 1970s. The cones are a monument to the mistakes of previous Administrations, who, by putting off essential main-tenance, cost the nation more in the long run. In 1979 there was a substantial backlog in motorway maintenance. I intend to spend on maintenance more than double the 1979 level in real terms. We intend to renew the greatest ever length of motorway in one year and to eliminate the backlog by 1992. We shall also get value for money with our lane rental scheme, rewards for speedy work and penalties for contractors who block major routes for too long. Already the lane rental scheme has saved the taxpayer £8 million and road users 500 days of delay.

Those hon. Members who complain should remember that it is their fault that maintenance has been neglected in the past.

Mr. Michael J. Martin


Mr. Flannery


Mr. Channon

I shall give way to the hon. Member for Sheffield, Hillsborough (Mr. Flannery) because I promised to do so earlier.

Mr. Flannery

The right hon. Gentleman has not mentioned the fact that it is the increasing size of heavy lorries that is destroying the roadways. The right hon. Gentleman has said that money is being invested, but he has not mentioned the fundamental cause of the breakdown and destruction of our roads. Surely that is worth talking about.

Mr. Channon

Of course, I understand the hon. Gentleman's point. My point—it is a valid one—is that, whatever criticisms the hon. Gentleman has of me, at least I and my predecessors are and have been providing a service for the country by increasing capital investment in almost every section of transport to an extent that is unparalleled in the history of transport here. Yet the motion criticises us.

Mrs. Margaret Beckett (Derby, South)


Mr. Channon

I am sorry, but I must press on.

It is interesting that the hon. Member for Aberdeen, North did not examine bus deregulation. The industry has been liberated from 50 years of control, which led to a vicious circle of rising costs, fares and subsidies. Opposition Members said that bus services would collapse after deregulation ; in fact, mileage has increased by 12 per cent. in the past year, and by 17 per cent. in the shire counties. Mini-buses are now operating in 250 areas. Our critics said that no subsidies would mean no buses. In fact, since D-day, more than 400 new operators have entered the market, there are reports of competition in more than 100 areas and the mileage run by the private sector has increased by three quarters. The prospect of competition has ensured that 85 per cent. of bus miles are run commercially without subsidy. The dog did not bark in the night. It is interesting that no one criticises the position now.

Several hon. Members


Mr. Channon

If the House will allow me, I must press on ; otherwise, I shall be here until 10 pm.

Mr. Michael J. Martin

The Secretary of State promised that he would give way to me when he mentioned roads. When motorways are built in inner cities, they split up and divide communities and cause a great deal of planning blight. Glasgow has many positive points, but many of its communities have disappeared off the face of the earth.

Can the Secretary of State assure the House that those officials who are known to be suffering from motorway madness will not be allowed to put motorways through cities and communities in which they are not necessary, and will he scrutinise all proposals to prevent such measures from being taken?

Mr. Channon

Of course, I shall scrutinise any proposals, and I entirely agree that motorways must be planned sensitively —as must large trunk roads, too. I shall examine what the hon. Gentleman has told me about the position in Glasgow.

The House will expect me to say a word about the British Airways—British Caledonian merger. The House knows that, following the report by the Monopolies and Mergers Commission, and the announcement made by my right hon. and noble Friend last Wednesday, the ball is now firmly in the court of those companies. They must now decide what to do. The objectives of the Government's airline competition policy are set out in the 1984 White Paper on airline competition policy and they remain today as they were then. The objectives were, first, to encourage a competitive multi-airline industry with a variety of airlines serving travellers' needs and strong enough to compete aggressively against foreign airlines. The second objective was to promote competition in all markets — international and domestic — by working to reduce restrictions on services and making it easier for new airlines to enter the market. The third objective was to ensure adequate safeguards against anti-competitive behaviour by airlines.

The proposed merger offers a number of benefits. It would strengthen the international competitive position of the British industry in a world that is moving towards larger carriers. It would remove the present uncertainty about British Caledonian's future and provide opportunities for improved efficiency. However, we must also continue to promote competition within the United Kingdom industry and provide suitable safeguards against anti-competitive behaviour.

The proposals that British Airways put to the Monopolies and Mergers Commission will, if the merger proceeds, open up new opportunities for other British airlines. Such airlines will be free to apply for licences to serve five major domestic routes from Gatwick and they will be able to compete for 10 major destinations in Europe. It would be wrong of me, in view of my appellate position, to comment on the likely outcome of any applications by other airlines for licences returned by the merged airline, but I should be surprised, in view of their record, if none of them could make a good case.

As important as licences are airport slots. BA proposes to surrender the slots associated with any services for which the licences are returned and which are not re-issued to British Airways. As a minimum, British Airways will surrender 5,000 slots at Gatwick, spread throughout the year. Those will provide opportunities for other airlines to develop services at Gatwick. Before the merger proposal was announced, the CAA was engaged in public consultations about the licensing policies that it should adopt on market entry and anti-competitive behaviour. I have discussed the scope and timing of these consultations with the chairman of the CAA, and the subject of whether any other issues should be covered. The chairman has said that he intends to relaunch these consultations as soon as possible after it is known whether the proposed merger is to go ahead. He also intends to extend them to include substitution policy, tariff deregulation and alternative licensing procedures. I shall keep the House in touch about that.

I am sure that most hon. Members would have preferred British Caledonian to prosper as an independent airline. However, British Caledonian may conclude that a merger on the basis set out in the Commission's report would be preferable to trying to continue alone. I am satisfied that the continued existence of an independent BCal is not essential to the development of a sound and competitive multi-airline industry. However, it is imperative that if the merger proceeds, it should do so on the basis of the revised proposals put forward by British Airways to the Monopolies and Mergers Commission. I have asked the chairman of the CAA to report to me a year after the merger about its implementation. He and I have powers for the regulation of civil aviation. My right hon. and noble Friend the Secretary of State for Trade and Industry has separate powers under the competition legislation to deal with any future concerns about competition in the airline industry.

Mr. Morgan

Is the Secretary of State telling the House that if, in a year's time, he is not happy with the merger's impact on airlines, consumers and competition, he will insist that British Airways disgorge British Caledonian on to the market again?

Mr. Channon

I am not saying that, and it would not be wise for me to answer the question in the terms in which the hon. Gentleman framed it. What I am saying is that, if the merger takes place, the chairman will report to me after its implementation. I have powers for the regulation of civil aviation, and I have already outlined the policies that I believe should be followed in the aviation industry in this country. Let us hope that the situation that the hon. Gentleman described does not arise. With a merger that is as yet hypothetical, I am not prepared now to say what I might or might not do a year ahead. If the hon. Gentleman were in my position, he would go no further than I, because he would have appellate powers, too. The House will appreciate that no responsible Secretary of State could go further than that this afternoon.

The success of our policies for investment, value for money and competition has depended on sweeping away many unnecessary regulations. However, we have reinforced one area and we shall continue to do so. I refer to safety, and I was sorry that the hon. Member for Aberdeen, North said what he did about marine safety. It was wholly contradictory of what his hon. Friend the Member for West Bromwich, East (Mr. Snape) said during last Wednesday's debate, which was extremely gratifying to me.

The horrific Zeebrugge disaster was a shocking reminder of the need for vigilance in reviewing safety standards. I am determined that no effort should be spared in ensuring that such a disaster never happens again. The lessons learned must be used to set new safety standards for passenger ships, and, particularly, for roll-on/roll-off ferries. Many steps have been taken since the inquiry report was published in July. Many of them will come before the House in due course, and it would be wrong for me to go into detail now. Nevertheless, I want to reassure the House of our commitment to ensuring standards of safety for passengers and crew.

Mr. Robert Adley (Christchurch)

I want to add my unequivocal congratulations to my right hon. Friend for what he has done. When his new Bill goes to a Standing Committee, will he accept, without too strenuous resistance, amendments adding one or two noughts to the penalties?

Mr. Channon

I shall not resist them too strenuously because most serious offences have an unlimited fine. So an unlimited fine multiplied by 100 would be otiose. However, I would be out of order if I went too far into the details of the new Bill.

This is not the time to deal in detail with road safety, but I shall say a little about it. Our roads must be safe. Despite the large increase in the number of vehicles on our roads, there has been a significant reduction in the number of people killed. The figure is down by almost one third since 1965 to 5,000 people a year. The House will take pleasure in hearing about that reduction. However, this is still far too many and our aim is to reduce road casualties by a third by the year 2000. No doubt there will be other occasions on which we can debate this at greater length.

Overall the picture on transport safety is one of long-term improvement. However, as Zeebrugge shows, major tragedies can and do still occur. This is not a party issue. To achieve our targets we need the support of all hon. Members and the whole community. An exciting development in transport is the new co-operation between Government and private enterprise in providing transport infrastructure. The private sector finances new investment for a reasonable return on capital, and the taxpayer receives—often at no cost — a valuable addition to the transport system.

In this debate I shall not deal with the Channel tunnel, although it is obviously in the minds of hon. Members. The new London City airport was built by the private sector and opened only last month. Roughly half the cost of work now under way to extend the Docklands light railway to Bank station will be met by the private sector. The whole of the cost of the eastward extension of the DLR will be met by private sector developers from increased land values. That is a massive stimulus to the regeneration of docklands. Further east there will be the Dartford-Thurrock crossing, also to be built by private enterprise. This collaboration of private enterprise and public initiative benefits the investor, the taxpayer and, above all, the transport user. We shall continue to look for suitable projects.

Not surprisingly, the Labour party was critical of us today and has been critical of us in the past. What about the Opposition's policies? I had a good look at their manifesto but it did not tell me a great deal. There is a much more enjoyable document called, somewhat inappropriately, "Fresh Directions". The directions are about as fresh as a wilting red rose. and reading it is like experiencing time travel. I felt like Dr. Who in one of those early serials, going back in my Tardis to about the time of the Romans. In that document one sees all the failed notions and policies of the 1960s and even that hoary old chestnut the integrated transport policy that the Opposition have been hammering away at in this debate — [Interruption.] Here we go again. There is one wonderful section about more power to local bureaucrats and less choice to the ordinary member of the travelling public. The document says: The Local Authority will design its transport policies through an overall transport plan". Alas, that is not the end because "Fresh Directions" goes on to say: The Local Transport Plan will be a five-year strategic plan, supplemented by Annual Rolling Plans and will include a Public Transport Plan and a Road Traffic Plan". I suspect that the annual transport plan will be the only thing that rolls — transport certainly will not. I look forward with interest to seeing what the Opposition's review of party policy will produce. We have not learned much more today about Labour party policy.

Everybody knows that there is always scope for improvement in transport. If the House is honest with itself, it will recognise that over the last eight years a great deal has been done to improve our transport system and there are realistic and cost-effective plans for further improving transport for everyone. I urge the House to support our amendment to this ridiculous motion.

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