§ 12.2 am
§ Mr. Keith Mans (Wyre)
Before setting out my proposals for further private investment in the railway system in this country, I congratulate the Minister of State, my hon. Friend the Member for Enfield, Southgate (Mr. Portillo), on his new appointment. His predecessor did much to improve efficiency within British Rail and encouraged private investment by his many activities. I hope that in winding up today's debate my hon. Friend will be able to give us encouragement and assurance that that process will continue and expand.
One of the Government's major successes has been the removal of many inefficient monopolies from the public sector to the private sector, where state subsidies have ceased and vast improvements in business efficiency have have taken place. They have provided choice where none existed before and have steadily turned themselves into consumer-led rather than producer-led organisations. Moreover, their investment policies have not been hamstrung by the public sector borrowing requirement. All this applies even to British Telecom, with competition provided by Mercury.
One of the last great monopolies left in the public sector is the railway system—still producer-led and still relatively inefficient. I hope to show that, by the provision of more private capital and by the introduction of consumer-oriented management techniques from the private sector, British Rail will be transformed in the coming few years. I know that some of my hon. Friends wish to contribute to the debate and accordingly I shall be brief. I know that they have ideas that should be presented to the House.
We should build on what we have achieved already in privatising certain parts of the British Rail network. Equally, we should build on the experience of other industries that have recently been privatised. Within the rail network, catering at stations is often operated by private concerns. We have sold off the railway hotel chain and Sealink. The engineering section will soon be sold off. All these sell-offs have provided more money for British Rail to invest in infrastructure. It should be remembered that 80 per cent. of the rolling stock, apart from the trains that operate between pitheads and power stations, are already in private hands, amounting to 16,000 trucks. The privatisation that has taken place is already showing returns. An increased amount of freight is being carried by the railways on private trucks. An additional move has been taken by Foster Yeoman, which has bought its own locomotives.
The other experience on which we should base our plans is that of other recently privatised industries. I think especially of the airlines and the airport authorities. We can probably learn something from the soon-to-be-privatised electricity industry and the recently privatised bus companies.
I shall use a comparison between British Rail and British Airways to show what I feel may be the future for the rail network. A few years ago, both industries were nationalised, both were making losses, both were producer-led, both lacked investment and both were overmanned; most important of all, both were insensitive to the market and to the consumer. The change in British Airways since it was privatised has been dramatic. It is now the most profitable airline in the world and is showing 669 a clean pair of heels to its European competitors, many of which are still in the public sector and still state-subsidised, and almost all of which are making losses. Unfortunately, British Rail is still in the public sector, and is still suffering from the ills that I have mentioned.
It is worth mentioning the role played in the airways and the air transportation system by the British Airports Authority—again, a recently privatised concern. It runs our airports, together with many other concerns. It runs the terminal and approach facilities that aircraft need when they land and take off. It is interesting that different airlines and airliners use the same airways. At the same time, the airlines see no need to own the airports at their points of departure and destination. Equally, they see no need to operate any of the air traffic control equipment.
It is on that experience that I base my proposal for a privatised rail network. First, we should build upon our experience, especially in the freight operations of British Rail. We should encourage private companies to own and operate passenger trains on the present rail network. We already have one example. The Orient express is owned by a private company and the rails that it runs on are leased for a period from British Rail. As the process develops, we should aim for all the rolling stock on British Rail to be owned by private companies.
§ Mr. Ian Taylor (Esher)
Does my hon. Friend not accept that the problem with the Orient express is that, although it leases the track, it has to accept British Rail workers, and that that has hampered its freedom to negotiate?
§ Mr. Mans
My hon. Friend is absolutely right. Any future proposals would involve train crews and operators being employed not by British Rail but by the newly created companies.
If we ensure that new investment in the railways is provided by the private sector, capital will be released in the initial stages of privatisation for British rail to invest in the infrastructure—in the signalling equipment and in the track itself. The structure of British Rail would allow that to happen relatively easily, because money obtained from sale or leasing of track goes not to the Treasury but to the British Rail board. The advantage of such a procedure is that it is the only way to provide true competition, simply because consumers would be given a choice between companies' trains operating on the same line.
§ Mr. Hughes
The relevance of the comment is that for decades LMS and LNER had a nice cosy arrangement not to compete with each other.
§ Mr. Mans
I do not think that that would happen in the case of the newly privatised British Rail network. I am much more inclined to think that the same situation would develop on the railways as followed the introduction of competition between British Airways and British Midland on the Glasgow-Heathrow route. If the hon. Gentleman had travelled on that service both before and after the introduction of competition, he would understand its 670 relevance to British Rail today. His rather anachronistic historical parallel has no bearing on the present circumstances.
My proposals would create true competition and a better service. Some inspired entrepreneur might actually suggest providing trains that guaranteed seats for the passengers. The airlines have guaranteed seats for years. They will even put on an extra aircraft at Heathrow to fly passengers to Glasgow, Manchester or Edinburgh if the first is full. That is precisely the sort of consumer service that we want to introduce on trains.
§ Mr. Cryer
The hon. Gentleman is speaking on the basis of ignorance. Does he not realise that if he were to put on a train from, say, London to Glasgow, the passenger capacity would be equivalent to that of a jumbo jet? There would be capacity for about 400 passengers to transport perhaps two or three.
§ Mr. Mans
That is exactly the point that I am making. As part of its campaign, British Airways will put on an extra aircraft for three people. That shows that Opposition Members do not understand the importance of consumer choice. They do not really want the consumer to be able to sit down on a train; they would prefer him to stand. I can understand that, because I know the background to their arguments.
We are left, then, with a rail network composed of the track and the stations. Our first move should be to sell off the stations. My hon. Friend the Member for Stroud (Mr. Knapman) produced an eminently sensible 10-minute Bill only a few days ago. I know that he wants to catch your eye, Mr. Deputy Speaker, and I hope that he will manage to do so, because I know that he has more to say on the subject.
As part of the sell-off of the stations, there must be a statutory obligation upon the new, private station companies to maintain the track and the signalling equipment in the vicinity of the station. The British Airports Authority has a similar statutory obligation to maintain all the runway aids, the radar and the other equipment which are needed by aircraft to land and take off. Therefore, the precedent exists, and experience has shown that BAA, as part of the private sector, offers a better service than that of old.
Once the stations have been sold off, we shall effectively have reduced British Rail to a national track authority. At that stage I believe that it would be advisable to make British Rail a public limited company. Ultimately, it would be responsible for the integrity of the network and for improvements, and it would derive its revenue from the train and station companies.
With the positive generation of cash at the start of the nationalisation process, present subsidies, which top nearly £7 million a year, could be rapidly reduced. In future, I believe that a partnership will develop between the individual train companies, local authorities and others to provide services in the rural areas. The recently privatised bus companies have already demonstrated the success of such partnerships.
There is a crying need for a railway link between Heathrow and Paddington and for a link between 671 Manchester airport and the line that already runs to the north-west. We should also make provision for private companies to build and operate trains on those new lines. The national track authority would have a statutory obligation to connect those links with the main network. It is now 150 years since our Victorian forebears drove the industrial revolution onwards and outwards on the back of a brand new railway network. Their entrepreneurial spirit and engineering feats are still an inspiration to us. We must re-create that spirit and release the rail network from the present stranglehold of the state monopoly which it has suffered for far too long. Let us encourage private capital, combined with individual initiative and business skill, to help to create a second golden age for our railway network.
§ Mr. Bob Cryer (Bradford, South)
I apologise for my hesitation in getting up, but I thought that you, Mr. Deputy Speaker, called "Bob Dunn". I was looking round the Chamber for the recently sacked member of the Government.
I give you notice, Mr. Deputy Speaker, that I wish to withdraw my subject for debate, which is No. 12 on the list.
I listened to the speech of the hon. Member for Wyre (Mr. Mans) with increasing horror. He denigrated British Rail, which provides an excellent service, many times. Of course there are breakdowns, and of course trains are overcrowded, but if the Government provided more money for new trains and for track maintenance and signalling, none of that would happen. British Rail receives a smaller state subsidy than any other rail network in the Western world.
§ Mr. Cryer
I shall give way later, when I have developed my argument.
British Rail receives a subsidy to operate the provincial services, but the subsidy for the InterCity services is to be phased out. As a result, the high-speed trains are being driven into the ground. Those trains receive minimal maintenance because BR wants to keep the HSTs running in order to meet the strict financial limits that are placed upon it by the Government. The trains are often seedy and overcrowded, which is a direct result of the Government's financing limits.
§ Mr. Cryer
The hon. Member for York does not know many facts. If the hon. Member for Esher (Mr. Taylor) interrupts, my speech will get longer and longer and other hon. Members who wish to speak will not be able to do so.
As Tory Members find it funny to laugh at public bodies, I remind them that when they talked about selling off British Rail Engineering workshops, unless he was lying to the House, the Minister said that he thought the standard of work was extremely high and that the 672 workshops had an excellent record of producing railway wagons and equipment for British Rail, but the hon. Member for Wyre seemed to suggest that British Rail had no virtues and was producing no new ideas or technology.
The high-speed trains are a demonstration of public innovation and high technology in railway operation. That technology, introduced under public ownership, has been sold to many railways in other countries throughout the world. It was an outrageous act by the Government—one of many—when they closed the workshops or forced them to be sold off.
My hon. Friend the Member for Aberdeen, North (Mr. Hughes) was right to say that we have the experience of past years as a guide. Competition does not work. It results either in some companies going out of business and the winners taking all, or in comfortable cartel arrangements in which the notion of competition is simply and quietly pushed to one side.
In 1922, a Conservative Government compulsorily amalgamated a number of independent railway companies to form four railway companies which operated all but a handful of services throughout the United Kingdom, with the exception of Northern Ireland, where the arrangements were linked to two of the major companies operating there. Even on the basis of the experience of Conservative Governments, the idea of competing railways under private ownership simply does not work.
§ Mr. Roger Knapman (Stroud)
In fact there were not just four railway companies at the time of nationalisation. The then Minister of Transport, Mr. Barnes, said:On the assumption that the Bill receives Royal Assent in this Session … there will be transferred to public ownership some 60 railway undertakings".—[Official Report, 5 May 1947; Vol. 437, c. 36.]
§ Mr. Cryer
There was a handful—just 56. In terms of mileage, it was a tiny amount. The Stephens light railway was developed by Colonel Stephens in the 1920s, the Kent and East Sussex light railway operated about a dozen miles of grotty track, with equally grotty carriages and locomotives. In terms of mileage, locomotives and rolling stock a handful of railways were still privately owned, but they were largely irrelevant, and none of them operated into any main line stations in any major cities throughout the United Kingdom. Most of them were not even passenger railways. They were mostly freight branches serving junctions where the freight was transferred, and included a number of narrow-gauge railways which, of course, did not even operate to the standard gauge of 4ft 8½in.
I return to my original statement, that the great majority of railways, track and locomotives were taken over into the four major railway companies.
§ Mr. Gregory
I am grateful to the hon. Gentleman for giving way. The point that I wished to interject at an earlier stage in his argument was that; he tried to contend that the railways were not efficient because the Government were starving them of funds. The hon. Gentleman should do his homework before making such outrageous allegations. The British Railways Board has not gone up to its external financing limit for a number of years. The Government made the facilities available, but they were not taken up because there were no opportunities for investment.
§ Mr. Cryer
The chairman of British Rail, a Tory Government appointee and no doubt sympathiser, made 673 that decision against the wishes of the staff of British Rail. If the hon. Gentleman enjoyed their confidence he would know that they are faced with shortages of maintenance facilities, equipment and materials——
§ Mr. Cryer
It is precisely what I said. Because of Government policy, British Rail is short of money. The hon. Gentleman must know that, although the HSTs provide an excellent service, they are scheduled for mileages beyond their capability unless they receive more maintenance, because there are not enough high-speed train units. British Rail and the Government will not invest jointly in more units, which would relieve the problem of breakdowns on the main passenger services.
I want to mention a proposed privatisation by the Government. The new Minister of State has not yet been to the Settle-Carlisle railway, although he will doubtless visit it to keep himself up to date. The Government have proposed that the section of railway from Settle junction to Carlisle should be sold off because British Rail has proposed its closure. Some time ago British Rail decided to run the line down and failed to provide adequate moisture protection for the viaduct at Ribblehead. That is an example of how a lack of adequate finance for our national rail network has led to stringent economies, which inevitably have their effect over time. Then decisions must be made on whether to spend large sums on structures such as the Ribblehead viaduct or to close them down.
British Rail proposed closure. That is wrong, and the Government should tell British Rail so. They should tell British Rail to keep the line open and exploit it to its full potential. If British Rail receives that instruction, I have no doubt that its chairman will take up the challenge, allocate more funds to the line and appoint more people to market it. It is quite capable of doing that. British Rail has promoted several lines in Scotland for tourism and made a success of it. It could do the job in this case in conjunction with the Friends of Settle-Carlisle Railway Association, who are keen to work co-operatively with British Rail, but who recognise the great difficulties involved in a private organisation taking over this 72-mile double track main-line system.
The railway has already improved from carrying 90,000 passengers in 1983–84 to carrying more than 300,000 a year now. British Rail says that the maximum potential has been reached, but that is clearly not true. There are relatively few trains on the line now, and with more services there could be a much greater increase in passenger usage.
Closure would mean increased hardship. The Minister asked the transport users' consultative committee to examine the possibility of finding greater evidence of hardship. Since the last hearings of the TUCC, new services have been introduced. I understand from a ministerial reply that it is up to the TUCC to decide how it will assess that evidence and whether it will take written objections or hold hearings. So far, it has decided against hearings. That is wrong. I urge the Yorkshire and North-West TUCC to hold public hearings so that people can explain the greater hardship that would be suffered.
674 More time is required, in any event—the Minister has said that the committee must report by November. That is not enough time—if the Minister has decided that the line must be sold off by April 1989—to allow any private organisation to take over its operations and continue the expansion, in theory, of passenger traffic. I hope that the Minister will be prepared to allow more time to overcome any hardship and to consider the proposals that are put forward. I do not think that private ownership is a tenable alternative.
§ Mr. Waller
The hon. Gentleman said that British Rail does not believe that the number of passengers who use the line can be increased. The hon. Gentleman and I are anxious that the line should continue in use—we are both vice-presidents of the Friends of Settle-Carlisle Association—and, like the hon. Gentleman, I am strongly opposed to closure. Does the hon. Gentleman think that the line's long-term prospects might be enhanced if it were run by a body more strongly committed than British Rail to its future and to increasing traffic? Would it not be improved by the input of private capital and by its being run by a consortium of local authorities and passenger transport executives?
§ Mr. Cryer
Local authorities have offered in excess of £500,000 for the restoration of the Ribblehead viaduct. As the hon. Gentleman knows, they contribute to a diesel-multiple unit service and to a linking bus service between Garsdale and Hawes. That is a good basis for an integrated system, but I should like the line to continue operating for an experimental period of at least two years, linked to the Friends of Settle-Carlisle Railway Association, to see whether the type of promotion that the Minister mentioned with regard to the North Yorkshire Moors railway and the Severn Valley railway could be used by the Friends of Settle-Carlisle Railway Association. The revenue that it would yield would be allocated to that line, which would require British Rail to budget on a much narrower basis for the Settle to Carlisle section.
That possibility should be considered, because many thousands of people have a particular affection for the line. They use it to travel to work, photograph it and use it for pleasure because it is a magnificent railway set in beautiful scenery.
The notion of trying to sell off the line is a dead duck. I therefore think that the enthusiasm, dedication and energy of bodies such as the Friends of Settle-Carlisle Railway Association—all its members are volunteers and contribute because of their affection for the line—should be used to support the line, which is unlikely to meet all its capital and revenue costs over a long period. The time scale for any alternative is too short. I am pleased that the hon. Member for Skipton and Ripon (Mr. Curry) is nodding in agreement.
The hon. Member for Esher mentioned a friend of his who was talking about facts. I was the founder of the Keighley and Worth Valley railway preservation society. I was its chairman for the first 10 years and negotiated its purchase from British Rail. That agreement formed the basis for the purchase of the Severn Valley railway and the North Yorkshire Moors railway. I have carried out every job on a steam and diesel-operated light railway. I have fired and driven locomotives, including the largest class of locomotives such as 2–10–0 and Evening Star, as well as 675 small tank locomotives. I have maintained the boilers, the track, the platforms and the stations. Therefore, I know what I am talking about from hard graft and experience.
I have experienced the difficulties of raising money to buy a railway and finance it. I know that operating steam locomotives is a difficult business and that the amateur organisations do it with great skill, dedication and professionalism. When I say "amateur organisations", that is not a term of denigration. The Severn valley, the Worth valley and North Yorkshire Moors railways are operated to full professional standards. Railways cannot be operated to any other standard, or there would be the danger of accidents.
Having said that, to run steam locomotives over a 140-mile round trip is rather different from running them over a 10-mile branch such as the Keighley and Worth Valley railway. The Minister's predecessor suggested at a press conference that private owners of the Settle-Carlisle railway could borrow a few locomotives from the Worth Valley railway. The Worth Valley railway, with dozens of dedicated volunteers working through the winter, has great difficulty getting four or five steam locomotives ready for the summer each year. That is for a 10-mile branch, let alone for a 140-mile branch.
The purchasers of the railway would have 21 viaducts, 14 tunnels and 325 bridges, all of which have to be maintained to a safe standard by the operators of the railway. It is impossible for a private preservation society to do that.
The Minister's predecessors suggested that in order to encourage private ownership there should be some sort of dowry. On 16 May the Minister said:British Rail would undertake to lift, remove and pay for continuously welded rail surplus to the private owner's operating requirements. That could amount to up to £850,000."—[Official Report, 16 May 1988; Vol. 133, c. 678–79.]Today I asked the Ministerwhat information he has as to what mileage of rail on the Settle to Carlisle section of British Rail is continuously welded flat bottomed rail, as to its current value and as to what would be the replacement cost of flat bottomed or bull-head track of equivalent weight; and if he will make a statement.The answer from the Minister was:This information is not available.The Minister claimed that replacing continously welded flat bottomed rail would provide £850,000. That would not be much good if the new owners had to pay out £850,000 to replace the rail being taken out. We do not know from the Minister how much rail is involved anyway. I merely use that to demonstrate the impracticability of the Minister's suggestion to sell the Settle-Carlisle line to private owners.
There is the question of access. Settle is several miles north of Hellifield. Are the private owners to be given running rights over British Rail? The safety standards of the railway inspectorate would have to be observed. Would the trains run under the wires regularly at Carlisle? Would they go to Kingmoor shed, which has recently been closed, for maintenance facilities? The railway inspectorate will require adequate maintenance and inspection facilities for the locomotives and carriages used on the railway.
What about revenue for diversions? Diversions for the fiscal year ended 30 March 1988 amounted to 320 trains. Would British Rail be allowed to divert over the track? That is unknown and cannot be subject to negotiation. 676 Any potential purchaser has to know what the difficulties are and how they will be solved before embarking on such a vast enterprise.
The Government seem to think that a light railway order operation under the Light Railways Act 1912 at a maximum speed of 25 mph is a potential alternative, because they have not said that that should be ruled out. I should rule it out because travelling at 25 mph for a 140-mile round trip does not seem the most exciting way of spending several days out with the family—that is the amount of time that it would take.
All those points remain unanswered, and in my view they are insoluble. There is no millionaire on the horizon —the Minister's predecessor called him "Mr. Big"—who will spend several million pounds in affection for the Settle-Carlisle railway, to privatise it to the Government's satisfaction. In any case, if the Government are to privatise any part of the railways, the Settle-Carlisle railway is the one that makes the least sense. If one were talking about the Victoria-Gatwick service, that would at least have some shred of logic and credibility, but the Settle-Carlisle line has no potential in that regard.
The hon. Member for Wyre, who initiated the debate, talked about the potential of private ownership. Private ownership would go for sections such as Victoria-Heathrow. It would not be interested in maintaining the Settle-Carlisle line—or other such routes which run through rural areas—with its 135 bridges, the maintenance of Ribblehead viaduct, and Blea Moor tunnel, which is nearly two miles long. Private ownership would not be prepared to take that on. It would shut lines and stations, sack staff and concentrate on the most lucrative and profitable areas.
Unless the provincial sector receives the £450 million subsidy that is currently paid for its services, that whole sector will go by the board. Why should only the south-east sector, which is subsidised by British Rail, get a subsidy, but not a rural line in Yorkshire, which gives access to the Yorkshire dales?
It is important that British Rail should have all possible sources of revenue—from stations, franchising and catering—from wherever it can get the money to help it cover the costs of the rural, relatively more lightly used branch and main-line services, which will inevitably cost money in maintenance because of the heavy costs that we have inherited from our Victorian ancestors.
I stress to the Minister that the future of the Settle-Carlisle line should be as part of British Rail. which should provide the through services with help from such dedicated bands of volunteers as the Friends of Settle-Carlisle Railway Association. I hope that that will be the future of the Settle-Carlisle line, and not the bleak future of closure, which will bring dismay and horror and which, if that is what happens, will be regarded as an act of unparalleled corporate vandalism by the Government.
§ Mr. David Curry (Skipton and Rippon)
I too wish to address my remarks primarily to the future of the Settle-Carlisle railway which runs the length of my constituency; I too am a vice-president of the Friends of the Settle-Carlisle Railway Association to which my hon. Friend the Member for Keighley (Mr. Waller) and the hon. Member for Bradford, South (Mr. Cryer) have referred. I reflect not only my own concerns and those of 677 Opposition Members, but especially those of my right hon. and learned Friend the Member for Ribble Valley (Mr. Waddington), whose constituency is also affected by the line, and those of my hon. Friends the Members for Pendle (Mr. Lee) and for Keighley (Mr. Waller), who spoke in the previous debate.
It is particularly appropriate, and indeed necessary, to raise this issue tonight because the brochure which is going out to people who have expressed an interest in purchasing the line is being sent out this week and may even be in the post tonight. It is intended that there will be a seminar in early September for those who respond to that brochure—the prospective purchasers—and the timetable demands that outline bids should be in by the end of September, with a decision due in November. Almost all that time falls when the House is in recess, so it is important that we should have our say tonight, because the period when we return will be crowded.
That brochure will detail the package of support which has already been pledged. It is important to highlight what is already on the table. There is £1 million from English Heritage for the Ribblehead viaduct. The Training Commission is offering support for projects which are based on the Jarvis recommendations. The English and Cumbrian tourist boards are planning to support tourist projects—for example, accommodation and visitor centres adjacent to the line. The Development Commission for Rural England has pledged up to £100,000 for Ribblehead. The Countryside Commission has pledged £100,000 to match capital invested in tourist projects and commercial concerns like Scottish and Newcastle Breweries, Grand Metropolitan and construction companies have also pledged support to a purchaser.
Those pledges are heavily tourist-oriented. They offer the chance that a private operator can do what British Rail cannot—as it is debarred from acting in this way—and combine rail and road traffic and offer packages that involve part rail and part road transport. That would open up a new market for tourism in the Yorkshire Dales.
Privatisation can succeed, but it needs more flexibility and promotion by the Government. To that end, there are several ways in which the Government can materially improve the prospects of the successful privatisation of the line.
First, I have learned from British Rail that it will be unable to give any figures about the anticipated revenue or level of passengers on the line. British Rail compiles its figures for another purpose, and it has been advised by its legal advisers that it may not give estimates of the level of passengers or revenue. It may not even refer to estimates by other bodies such as Cumbria county council.
It will be a bizarre prospectus if it cannot tell a prospector what he is going to purchase. There will be a blind man's buff in the prospectus. I urge the Minister to investigate that problem. I recognise that British Rail considers that to be a genuine problem, but I want the Minister to investigate to ensure that the information will enable a proper commercial decision to be made.
The hon. Member for Bradford, South referred to the November deadline. I want the Minister to give a clear undertaking that if serious negotiations are in train, given the very short time that any operator will have to prepare a bid from September when he receives the detailed 678 information—which will be very weighty, as it will include a long list of all the assets associated with the line—and assemble his capital, he will not apply the guillotine at that deadline. I want the Minister to undertake to proceed with his negotiations if that happens.
I pay tribute to the efforts made by the Minister's predecessor on behalf of the line. His predecessor said that if British Rail were authorised to cease operations, it would have four months to do so. That is not long enough. We need at least six months. I urge the Minister to make that concession now, as the brochures are sent out, so that purchasers have a proper idea of what is in store for them.
Local authorities have offered help under conditions. Any purchaser who takes on the line will have to accept the capital structures on the basis of "make do and mend". He will face the prospect of annual costs outstripping annual revenues. It would be more helpful if local authorities felt able to revert to an offer of an annual grant towards the operating costs of the line. I appreciate that they already do that in certain aspects. It would help if they upped that figure and in return demanded certain social services such as winter services and services at the beginning and end of the day.
I welcome British Rail's assurance that the private operator can have the option of running his trains over British Rail track to Carlisle into Hellifield and, if he wishes, to run trains to Blackburn via Clitheroe. Will the Minister raise that point with the local authorities, so that they may restructure their support?
Local needs are important. We must not get the idea that we are talking exclusively about a tourist operation. The local needs in that part of the world, with its severe winters and its high proportion of elderly people, must not be overlooked. With increased revenue from tourist operations—the £10.50 day return from Leeds to Carlisle is a very cheap option at the moment—plus some bridging finance for the operating costs, we are in sight of closing the gap between opérating costs and revenue, which would enable the line to continue.
This is a very sensitive and political issue. The Minister must appreciate that the Settle-Carlisle line is seen as the symbol of a history of a culture and a character. It is very difficult for me to explain to my constituents why it is right that taxpayers should be asked to pay £5 million to restore the Albert memorial, but it is not right to pay a fraction of that to restore the Ribblehead viaduct. Take those two together, and the Ribblehead viaduct is overwhelmingly the more important monument to our nation's history and has the greater promise for the nation's future.
I support privatisation. I do not seek pure subsidy, but I demand a real commitment to ensure that the venture succeeds. I hope that the Minister will ride the line. Indeed, he must ride the line before he makes his decision, so that he not merely feels its history, but sees its opportunities.
A few days ago on the back page ofThe Times there was a splendid photograph of Mallard hauling a steam train across the Ribblehead viaduct. That symbolises what is at stake—it is not just a dramatic photograph, but a symbol of what there is to save and to build on. I look forward to hearing the Minister's response to those points.
§ Mr. Roger Knapman (Stroud)
As the hon. Member for Bradford, South (Mr. Cryer) has insisted upon duplicating his Adjournment debate speech of 26 May, some of us must take the Beeching axe to our own remarks.
It may interest hon. Members to know that, back at the time of privatisation, London, Midland and Scottish and London and North-Eastern Region were respectively the second and third biggest companies in the world. The Labour Minister of Transport at that time—1947—said:Passengers who travel on our railways have not today the comfort, either in matters of refreshment or of travel. which they ought to haveHe finished with a ringing appeal:Give this Labour Government five years of power in … transport services and the people of this country will see more progress than would be made in 500 years of Tory rule".Tell that to long-suffering commuters on Network SouthEast, or those trying to get their teeth through a British Rail sandwich.
If, like me, one cannot make a decent speech oneself, by far the next best thing is to hijack one that is 47 years old and resurrect it from that forgotten age. The person replying to that debate was no less than Major Sir David Maxwell Fyfe. His speech is just as topical now as it was then. I feel that I must mention two or three points that he made, having spent some four hours in the Library.
Major Sir David Maxwell Fyfe said:I ask those who interrupt me to look at the father and mother of the Bill, the T.U.C. document, in which it will be found that these low costs are stressed"—he was referring to the low costs, because of the short distances between manufacturing places and the ports—but we shall not have them under a monopoly which will be cumbrous and top-heavy, whose structural defects are as manifest as its powers are unlimited.He went on:The right hon. Gentleman has given us one reason for this integration, with regard to railway services, and that was the difficulty of doing capital works on the railways.That was just after the war.He knows as everyone knows that the railway companies had their plans ready for renewals, replacements and new works, and to take his own example, he knows it was planned and that everything was prepared to rebuild Euston Station, which is one of the examples he chose in this matter."—[Official Report, 16 December 1946; Vol. 431, c. 1637–8.]So the will for new works was there after the war—of that make no mistake.
Even more telling—I believe that the word "integration" will be much used in debates as we soon move towards railway privatisation—are the words of Sir Cyril Hurcombe, the Director-General of the Ministry of Transport, who was in charge of the railway system during the war:detailed allocation of traffic has not been practicable, nor, indeed, has it been easy to find any fixed principles on which to allocate at all. It must be confessed that wartime allocation of traffic has not been based on principles or methods likely to be applicable to ordinary conditions, so there will be much talk of integration but I suspect rather fewer people who know what integration means".I will not carry on after that short point, but in 1947 there were relatively few Conservative Members in this place—about the same miserable number as there are Opposition Members now. However, during that time we had the support of the Liberal party. The hon. Member for Yeovil (Mr. Ashdown) talks of the Liberal Bench, but the Liberals followed us through the Lobby time after time in that debate.
680 My hon. Friend the Minister can look forward to a nice easy ride. if I can put it that way, because we can look forward to certain help from the "SaLaD" party. which I presume to be the Liberal party's successor, when privatisation comes about. I hope that that will be soon.
§ Mr. David Shaw (Dover)
There have been many successful examples of privatisation under this Government. British Telecom is often labelled as one which has not been too successful, but any of us who tried to get telephones 12 or even four years ago knows that the service has been improving steadily. Under Labour, I found the delay excessive and unreasonable. Now, not only is there hardly any delay, but one has a choice of telephone. The consumer is at long last starting to rule the telephone industry and the introduction of Mercury will ensure that that continues.
The Government must not relax with British Rail privatisation. It would be very easy to say that it is too difficult, that it has been in the public sector too long and that it is an old industry. The Government should not go soft. They should face up to the fact that BR is an opportunity to provide the consumer with a better service.
BR's service has undoubtedly improved in some areas, but the current service is no more than adequate. Nothing really exciting exists in BR for passengers or for employees, who are denied the opportunity of profit-sharing and of share option schemes. Management is not paid as decent management would be, so one is tempted to say that it cannot be running a decent business and getting decent pay for it.
§ Mr. Shaw
Not as much as some BR managers.
This is not a decent business that provides a decent service. The businesses that depend on BR do not get the same reaction from the staff and management of BR as they would expect in their own businesses. BR has not been exciting for the taxpayer, who has been the investor for the past 40 years or so, as there has been no trace of a dividend.
Stations in my constituency are not tidy, carriages are out of date, catering facilities are hardly ever available and timekeeping does not accord with what BR tells us in its accounts. It is not very good, especially on Fridays. The only good news is my local village station, which has nice courteous staff and where newspapers are for sale. The station is also relatively well kept.
We are tempted to ask what can be done with private finance. I believe that it could offer new opportunities for BR and the travelling public. Much finance could be available if there were good investment returns for the private investor. Stations could be converted into retail shops, public houses or guest houses, and many of them could become tourist attractions.
As for the rolling stock, there are opportunities for business men's carriages where they can work as they travel. There could be office cubicles with telephones and fax and telex machines. There could be tourism carriages with glass tops in which people could tour around the country. There could be catering carriages with much better catering facilities.
681 Many property opportunities could be taken advantage of at the major termini. Hotels, offices, shops and business premises could be expanded on BR sites. Docklands and Canary wharf is the largest private sector development in the world at the moment, but it is small compared with the potential for King's Cross, which could be an £8 billion development. There are many opportunities for new investment in track. Even new lines could be contemplated if private sector finance and privatisation were introduced.
British Rail should be run to provide a good, efficient service for passengers together with a profit for the investors, and it should be a good place to work for the employees, who could do well from privatisation. My colleagues and I call on the Government to publish a Green Paper on privatisation and to introduce private finance as soon as possible.
§ Mr. Conal Gregory (York)
I congratulate my hon. Friend the Member for Wyre (Mr. Mans) on securing a place in the ballot and choosing this subject, and I am delighted to welcome my hon. Friend the Minister of State to the Front Bench for the first time on transport.
British Rail's corporate plan for 1988 published last week is a thin documentm, certainly unlikely to pass a GCSE in transport and rarely addressing the real issues. It is vital that the railways are put under the spotlight. There are exciting projects—for example, the east-coast mainline electrification, the construction of the Stansted airport rail link, the electrification of the Portsmouth-Southampton line and the provision of international rail services which will come about through the opening of the Channel tunnel in 1993.
Although we hear that British Rail is becoming more customer-orientated—Jimmy Savile used to proclaim that it was "getting there"—the facts speak substantially to the contrary. Can one imagine any other company with rationale advertising its failure by taking advertisements—full-page and London Underground ones—showing the black and red dots of their failure? I cannot imagine any other company doing that. Clearly the railways are operator-led rather than customer-orientated, although they moved from an £83 million loss to a £291 million surplus last year.
The time has come for the Government to ask British Rail for its denationalisation strategy. It is long overdue. It may propose privatising region by region, and on my recent visit to Scotland that was welcomed. It may privatise sector by sector, or, most probably, split the track and maintenance from the operators. I favour the latter. The former runs along CAA lines and the latter would be like customer-oriented companies.
What would denationalisation bring? First, it would bring employee participation, which would be beloved by Labour Members, if they were present, but I see many empty Benches. I look forward to British Rail Engineering Limited being awarded to a company or consortium which allows staff at all levels to participate. Even York's hard Left council paid for a private consultant's report last year which concluded that the best future for the engineering company was—surprise, surprise—in private hands. How right it was, and how silent the Socialist councillors have been since. It makes sense for a heavy engineering firm to 682 be able to take on all appropriate work at competitive prices that would include major coach and defence contracts, using skills which are rarely fully utilised.
Secondly, denationalisation would bring frequency of service. If anyone wishes to go to a theatre or cinema in London or to have a meal at a reasonable time, he will fail to get back to York that evening, because the last published time of departure is 10 pm. I could give examples for many other provincial cities.
Thirdly, at present it is impossible to buy any magazine or newspaper on any train in the United Kingdom. I cannot understand why that is, or why there is that stranglehold monopoly. No doubt the hon. Member for Aberdeen, North (Mr. Hughes) has noticed that he cannot enjoy the pleasure of purchasingLabour Weekly on the train.
Furthermore, denationalisation would bring catering en route for the customer. Why is it that frequently no facilities are available for the first 20 minutes or last 30 minutes of a journey? Lunch stops at 12 noon on a train from the north when it reaches Newark. It is time for vending machines on every InterCity and provincial train. It is right that there should be a seat for every customer. Frequently, standard class ticket holders have no seat and British Rail has no answer for that.
My hon. Friend the Member for Wyre referred to the privatisation of railway stations. We need open stations. At present, staff at London termini such as King's Cross simply obstruct passengers and make the carrying of luggage extremely difficult by restricting space. They have even tried to stop me boarding the right train. There is no need for those staff to be there; they could be put to productive use. Similarly, we need to develop passenger services at stations. Why do we not have banking facilities at every station, and why do not all stations do what the Essex stations do and provide one with the opportunity to service one's car?
A visit to the Utrecht headquarters of Dutch Railways showed me the proper use of real estate. There, 250 to 280 retail points exist. The property board of British Rail may say, "We haven't got the space." The answer is to push the railway lines at Paddington and Waterloo further out, so as to put that real estate—the most valuable in Britain—to use.
One should not expect to find trolleys at these important destinations. If hon. Members went to King's Cross tonight they would find trolleys not on the platforms for use by passengers, but at the exit point, where no doubt there would be 200 or more. One will not find services advertised as one would at Heathrow or Gatwick. One will find no facilities whatever. Even the common rail ticket does not refer to any other service or product that is available.
The customer should come first, not the railways or the operator. I look forward to a commitment by the Government to put the user first and to ask British Rail, as a matter of urgency, not for completely inadequate corporate plans but for its solid denationalisation proposals.
§ 1.6 am
§ Mr. Quentin Davies (Stamford and Spalding)
It is no exaggeration to say that the railways in this country have been something of a disaster on wheels throughout this century. I thoroughly agree with the hon. Member for 683 Bradford, South (Mr. Cryer), the only Opposition Member who has spoken, who implied that the problems went back to a time long before privatisation. Of course they do; they go back to the beginning of the century and are associated with three interlinked factors.
The first was the growth of monopolistic or oligopolistic practices and attitudes of mind on the part of the companies. The second was the extensive and intensive degree of trade unionisation from which the industry suffered from the beginning of the century. The third was creeping Government interference. Nationalisation was promoted as a solution to the problems of the railways, but it made all three aspects distinctly worse.
If I had had time after discovering that you had chosen this very timely subject for debate, Mr. Deputy Speaker, I would have done some research with a view to presenting to the House in terms of constant 1988 prices the sum of the operating deficits incurred by British Railways and British Rail since nationalisation and the new investment poured in from public funds. Presented in constant 1988 prices, those figures would have been very revealing. I am sorry that I cannot present those figures tonight, although I fear that I can think of few more depressing avenues of industrial research.
This unfortunate state of affairs is the result of three factors that were completely predictable. A monopoly will generate monopoly costs; they always do. Those costs are insidious, though incalculable, and they would not exist if there was competitive pressure on the firm. At the same time, a monopoly will not seize the opportunities that a competitive firm would seize, so incremental revenues that might have been generated will not be generated.
The second problem is that a monopoly will develop a very producer-oriented culture. We see that in the terrible structure of restrictive practices, closed shops and compulsory overmanning from which British Rail has always suffered. We also know it anecdotally every time we take the train. Whenever I go to Lincolnshire, I have to queue for about 10 minutes to buy a ticket, and I have to queue to get on to the platform. Ours is the only railway system in the world that makes one queue to get on to the platform. If one wants to get a sandwich or a drink, one has to queue at the bar, which is not normally opened until 10 minutes or so after the train has left the station or when the staff happen to feel like it. That is real producer orientation for you.
The next problem with a nationalised monopoly is that it will always suffer from insidious political interference such as artificial limits being imposed on its borrowing powers.
Nationalisation has made the railways hopelessly unattractive economically. It is impossible to produce a prospectus for major parts of the railway system and have any hope of floating them off. On the other hand, this can be a vicious circle. Nationalisation having destroyed the railways as an attractive investment proposition, we may never be able to get out of nationalisation so as to make the activity prosperous, attractive and viable again. The only way to square the circle is to look for niches which enable us to carve into that monopoly and introduce elements of privatisation.
That is why I welcome the ideas we have heard tonight—for example to privatise small regional railways or to allow private companies to run trains on publicly owned track. We must go forward in the interests of the customers of the railways and the economy as a whole, and not least 684 in the interests of the poor taxpayer who has borne this burden over the years. We must seize every opportunity to reverse the fatal tendency towards monopoly from which the railway system has suffered through the decades of this century.
§ Mrs. Teresa Gorman (Billericay)
I love trains and, like all hon. Members, I want to see the railways improved. I hope that before the Minister achieves that objective by privatising the whole system, he will preserve a few samples of British Rail, such as the plastic cup that bends in the middle and spills boiling hot liquid all over one, the curly sandwich, the dirty old carriage complete with split seat on which one would prefer not to put one's clean clothes, and the timetable.
Sometimes trains run to time, but often on the lines into and out of my constituency they run up to an hour and a half late. My secretary goes home every evening on the train to Southend. On leaving my office at 5.30—if she is lucky—she makes her way to Fenchurch Street station, from where she arrives at her home in Southend sometimes as late as 9 o'clock, a journey which technically should take an hour.
Delays occur because the driver will not go the whole distance, as his scheduled time is up, or he started late, or somebody was not available to operate the signals, or perhaps for no reason at all. So the train is shunted into a siding and after perhaps an hour the passengers are offered a coach ride to complete their journey. The result is that my secretary and her husband do not have their dinner until late.
What I have described is the reality for many commuters. There are four major railway stations in my constituency and almost every household is affected because they have in their families commuters working in London. They are lucky to get to work on time and even luckier to arrive home at a reasonable hour. My description of travelling on these lines is a typical occurrence for commuters who use Liverpool Street and Fenchurch Street stations.
What is more, the rolling stock used on those lines is dreadful old stuff. Whenever I travel in these trains, I feel I need a wash and brush-up on arriving at the terminal, so dusty and dirty are the seats and carriage walls.
This debate is about how we might use private investment to improve the railway system, and already we could allow private operators to run services over BR lines. We could thereby slot in many more trains. Ample people exist to do this. Reference has been made to the Orient express operation. Those concerned with that operate on other lines, too. There are other companies, including Tiphook plc and Foster Yeoman plc, which are able and willing to do this work.
The present dirty old carriages could be improved. Allied Lyons plc recently paid about half the cost of refurbishing coaches on the Waterloo-City line in return for having the company's logo on the outside of the coaches, as is done with the red buses. There is no reason why that type of action should not be taken immediately, even before we get new rolling stock.
My hon. Friend the Minister will be aware that there is a surplus of drivers, so there is no reason for trains to stop in the middle of nowhere because there is no driver. Far more are trained than we need, and young qualified drivers 685 often wait years for promotion, which is on the basis of age. Sometimes they have to wait until they are 50 and have only 15 years left. If some of them became private contract drivers with licences, they could come in and take over trains when other drivers reach the end of their schedule. We could also have self-employed porters. In America they do a deal with the passenger on the cost of carrying the luggage and are happy to work on a self-employed basis. Computer technology could do much to improve timetabling.
The platform at Billericay has holes so big that people trip and have serious accidents. We could privatise the maintenance of stations as well as the track. And while we are waiting around for the trains, why should we not have shopping facilities? Every train station could be a mini-concourse of the kind found at Heathrow and Gatwick airports, where people can buy all kinds of bits and pieces. There are so many ways in which the private sector could inject capital straight away and improve the lot of those who travel on those lines.
Finally, I wish to put in a little word for myself. I often travel by rail. As I have said, I enjoy it. I often travel first class, especially if the person inviting me is prepared to pay for the ticket. First-class travel is expensive. It can cost more to visit Hazel Grove than Paris or Barcelona if one pays the full fare of £85, and what does one get for it? There is no reclining seat, no decent selection of food, no in-service magazines, newspapers, muzak or video, or any of the other services provided by British Airways for the same price. I hope that, without the need for primary legislation, my hon. Friend the Minister will think of my poor commuters going up and down those two lines and do what he can straight away to bring in private enterprise and make their lives happier.
§ Mr. Robert Hughes (Aberdeen, North)
I am glad that the hon. Member for Wyre (Mr. Mans) has raised the subject of rail privatisation, as it needs to be properly debated. The Government have been far too reticent about their plans. On Tuesday, the Secretary of State chided the Labour party for not having a transport policy. As he said that he had read every word of our policy review, I give the right hon. Gentleman 100 per cent. for diligence but zero for comprehension as he clearly did not understand a word of what he read. Our policy, which I believe is well supported by most people, is that the railways, like all forms of transport and all service industries, exist to provide for the customer and the user, whether individual or corporate and whether in terms of the economy, regional development or whatever. The main purpose is to provide a service.
The problem is that we are getting privatisation by stealth, which is distorting the whole transport market. As soon as there is the slightest possibility of money being made, private capital is brought in to siphon off the gravy. As a result, morale within British Rail is debilitated. How can one expect initiative from British Rail when it is told that it will be left with the dross and that the only way to survive is to sell off anything that is any good, and constantly retrench?
Comparisons have been made with British Airways and the British Airports Authority. The only excuse for 686 privatisation of the BAA was that it would be able to go out and build hotels, car parks and shops. The hon. Member for Keighley (Mr. Waller), who has such an interest in the Settle-Carlisle line, said that the problem was that British Rail was prevented from doing certain things. That is what needs to be cured. It is not a matter of privatisation but of allowing British Rail to use its initiative and expand. It was forced to sell off its hotels, but it ought to be able to go back into that sector and provide a service if it wishes. In our view, this is the way forward.
The paucity of the Government's policy is amply illustrated by their decision for the Settle-Carlisle line. Everyone knows and accepts that the line should be kept open. Everyone says so. The Secretary of State for Transport accepts that it should be kept open. Even the Secretary of State for the Environment accepts that it should be kept open. The only trouble is that the Cabinet decided that the Secretary of State for Transport should lose, that the Secretary of State for the Environment should be the winner, and that there should be a private enterprise solution.
The so-called dowry—the subsidy for the private section solution—is to be provided by the public sector. I have seen the letter of the Secretary of State for the Environment in which he states that the Government should provide the money to keep the line open, but adds that the last thing that they should so is make it available to British Rail. That is dogma gone mad. The sooner that the Secretary of State and the Minister of State realise that, the better. I hope that they will fight for British Rail and for the passenger.
The deregulation of bus services and the privatization of the National Bus Company, for example, brought a poorer service for those who are on the periphery. We know—[Interruption.] I can understand that at this time of night Conservative Members are unwilling to face reality. The trouble is that they take their dogma and their blinkers through the daylight as well. The problem is that we are dealing——
§ Mr. Hughes
I ask my hon. Friend not to heckle. That goes for Conservative Members as well. I am trying to finish my speech.
Instead of endeavouring to provide a service for the public and the nation, the Government are concerned about service for the moneylender. That is the only thing that matters to them. It is that attitude that is destroying the transport system. The Channel tunnel and the concept of spreading benefits throughout the country and not only to Kent, which for some reason does not want it, or to London, where there are problems, will fail because the Government will not accept that the railways are part of the transport system. They will not give priority to service and they will not make available the necessary investment. They will not allow British Rail to use initiative. For all these reasons, British Rail is failing. The new Minister of State can make his mark in the Department if he casts aside all the dogma and past practice and considers seriously developing the railways.
The Minister for Public Transport (Mr. Michael Portilio)
The hon. Member for Aberdeen, North (Mr. Hughes) paid tribute to my right hon. Friend the Secretary of State for Transport for his diligence in reading the Labour party's policy on these matters. In the 72 hours that I have held my present office it has not been my highest priority to mug up on Labour party policy. I have not been encouraged to do so by the statement that the market has been distorted by private capital. That is such an extraordinary statement that I am not tempted to read on.
I congratulate my hon. Friend the Member for Wyre (Mr. Mans) on initiating the debate. Two things have become evident to me. First, it is impossible to ignore the spontaneous eruption of opinion on the Government Benches in favour of further privatisation. The full Benches behind me, even in the middle of the night, testify to how strongly that opinion is felt. Secondly, it will be impossible for me to ignore the Settle-Carlisle railway, which will be a major concern of mine in the months to come.
I must disappoint my hon. Friends by saying that I have no major announcement to make, such as the preparation of a Green Paper. That will be a disappointment to my hon. Friends the Members for Dover (Mr. Shaw) and for York (Mr. Gregory), as well as to my hon. Friend the Member for Billericay (Mrs. Gorman), who showed us tonight her clean clothes and her entrepreneurial inventiveness. I congratulate her on that.
We listened to the hon. Member for Bradford, South (Mr. Cryer), who said that the railways were short of finance because of Government policy. No investment proposal since 1983 has been rejected by the Government. If there were a shortage of finance because of Government constraints, surely that would be an argument for privatisation. I found the hon. Gentleman's argument puzzling.
My hon. Friend the Member for Stroud (Mr. Knapman) quoted a speech that was 41 years old. I have to say that it had a fresher feel to it than the speech by the hon. Member for Bradford, South. My hon. Friend the Member for Skipton and Ripon (Mr. Curry) was very concerned about the Settle-Carlisle railway, as indeed was the hon. Member for Bradford, South. I recognise the serious concerns about that, and I look forward to applying my mind to the problems that confront us.
I shall take into account some of the points that my hon. Friend has made, and when I meet the local authorities, as I shall before long, I shall mention what he has said. I shall consider carefully his comments about the lack of available information. I am also happy to concede to him that as the timetable change in any case occurs in mid-May 1989, it seems reasonable that if closure is decided on it should not occur until then. That extends the period in which we can seek a private sector solution, although in my view it is still right for the new evidence on hardship to come forward under the timetable so that we can reach final decisions with a fair degree of urgency.
I very much agreed with the general defence of privatisation policies produced by my hon. Friend the Member for Wyre. Successive Governments have attempted to grapple with the poor performance of nationalised industries through increasingly stringent control frameworks. The cumulative effect has been to 688 create a set of external stimuli which, in the absence of real competitive forces, try to provide pressure similar to that normally provided by market mechanisms. The intention behind the Government's privatisation and competition policy is to replace the surrogate market with the real market.
Privatisation is intended to benefit customers, employees and the economy as a whole. The customers benefit from greater efficiency, which then results in lower prices, wider choice and better service. For employees, privatisation means working in a company with clear objectives, the means to achieve them and rewards for success. The economy benefits through higher returns on capital in the privatised industries, which can no longer pre-empt resources from elsewhere in the economy but must compete for funds in the open market.
Let me say in parenthesis that no better defence of the Government's privatisation programme has ever been made than that made by my right hon. Friend, now the Secretary of State for Social Security, back in 1983. It still remains a remarkable statement about our objectives.
I am proud to join the Department of Transport, which has a most impressive privatisation record. Let me say to my hon. Friend the Member for Stamford and Spalding (Mr. Davies) that there are many examples of the vicious circle being broken in the past. The Department has privatised the National Freight Consortium, Associated British Ports, British Airways and the British Airports Authority, and has a major privatisation programme for the subsidiaries of the National Bus Company. That leaves three industries in the Department of Transport—the Civil Aviation Authority, which I believe is in a category of its own, London Regional Transport, and British Rail.
I stress that we have no plans to privatise British Rail at present, and we are constantly reviewing our long-term options. None is ruled out, as has been made clear successively by my right hon. Friend and my predecessor, my hon. Friend the Member for Hampshire, North-West (Sir D. Mitchell), to whom such a generous tribute has been paid not only tonight but during our debate the other day.
Many issues need further study. We need to examine regulation in monopolies and arrangements for subsidy of loss-making services. In the meantime, as so many of my hon. Friends have said, the priority is to improve British Rail's service to the customer and to increase efficiency. Good progress is being made, with dependence on grant being reduced, productivity increased and substantial investment being made to improve the quality of service.
The objectives set out and agreed between my right hon. Friend the Secretary of State for Transport—now Secretary of State for Social Security—and the British Railways Board call for a series of vigorous measures to broaden the participation of the private sector in providing services to the railway, and for British Rail to establish specific programmes to that end. Private sector involvement has been increasing over the past few years, and I am very pleased with that. It is now quite extensive, with British Rail spending some £1.3 billion annually with private companies, out of a total expenditure of £3.3 billion.
Private caterers compete with Travellers Fare at eight major stations and private companies operate alone at 90 other stations. The private sector also provides prepared food for on-train catering and about 20 private on-train 689 trolley services are now operating. Total private sector involvement in property development is running at about £1 billion.
My hon. Friends will be familiar with earlier sell-offs, which include Sealink, British Transport Hotels, Hovercraft, British Transport Advertising and Doncaster wagon works. That policy will continue, and the House will be aware that British Rail will be issuing a BREL information package shortly to a number of prospective purchasers. Today, the executive directors of BREL made an announcement about their plans for a management and employee buy-out, in which they would be supported by ASEA Brown-Boveri and Trafalgar House. Naturally we welcome all serious expressions of interest in bidding for BREL, although it is too soon to say who the successful purchaser will be. Our approval will be needed for the eventual sale and we shall take all relevant factors into account.
With our agreement, BR is preparing to invite offers for Travellers Fare. That will give the new owners greater freedom to develop the business and should be good for the customer and good for the railway. I thought that there was a certain obsessiveness with food and catering in some of my hon. Friends' remarks. Therefore, I know that they will be interested in that information. British Rail will be ready to invite bids in September and it hopes to complete the sale before the end of this financial year.
The reason why we are able to discuss BR privatisation is that it has made progress under firm Government guidelines and with taxpayer investment. Two other things, however, were necessary—first, the determination of Ministers since 1979 to move industries into the private sector and to stimulate competition; and, secondly, the presence of opinion formers who created the climate in which such enlightened changes could be made. Such opinion formers have been with us tonight on the Benches behind me. I congratulate all my hon. Friends who have made their voices loudly heard.