British Railways Board (Finance) Bill

HC Deb 11 July 1991 vol 194 cc1102-90

Order for Second Reading read.

4.26 pm

The Secretary of State for Transport (Mr. Malcolm Rifkind)

I beg to move, That the Bill be now read a Second time.

The Bill is primarily a technical measuree, but the debate on its Second Reading gives the House an opportunity to spend a relatively unusual amount of time debating the railways in the United Kingdom. The Government are delighted that this opportunity should be available. It is also provides us with an opportunity to probe in the kindliest and gentlest way the views of Her Majesty's Opposition on railways policy. Clearly, over the months, a certain ambiguity, dubiety and equivocation have developed about exactly what those views are.

In my later remarks I shall seek to entice the hon. Member for Kingston upon Hull, East (Mr. Prescott) to abandon his customary shyness and speak to the House in a clear and unequivocal way so that we and the country can be better informed about the Labour party's views.

Mr. John Prescott (Kingston upon Hull, East)

The Secretary of State must make his own judgment about whether I am a shy Member. Is he aware that, in the latest National Opinion Poll survey, when people were asked whether they would trust the Labour party's or the Government's policy for transport in our country, 50 per cent. said that they would trust Labour and 29 per cent. said that they would trust the Tories? That is a sufficent answer to the Secretary of State's suggestion that there is confusion about our policies.

Mr. Rifkind

I am delighted that the hon. Gentleman is so interested in opinion polls. I presume that he was equally impressed by the opinion poll in yesterday's Guardian, which showed that most people wish to see British Rail privatised and that 23 per cent. of Labour voters believe that the railways would improve if they were privatised. As the hon. Gentleman has just confessed that he is an implicit believer in everything that the opinion polls say, privatisation will undoubtedly become part of the policy conversion that the Labour party is slowly and grudgingly moving towards.

Mr. Prescott

This is the last time I shall intervene in the Secretary of State's speech. I do not want to debate this important issue now, but the poll in The Guardian also showed that the people surveyed thought that privatisation had been pretty disastrous in other areas so far, but that they felt that it might work better for the railways. So their experience did not seem to fit in with the privatisation that they wanted.

Mr. Rifkind

The hon. Gentleman will have to start off by trying to persuade 23 per cent. of his own supporters that the Labour party's policy, which is hostile to privatisation, deserves their approval—

Mr. Peter Snape (West Bromwich, East)

The right hon. and learned Gentleman just said that we have not got one.

Mr. Rifkind

The Labour party certainly has many policies, but they are mutually inconsistent and they vary from spokesman to spokesman and from month to month. No one would dream of accusing the Labour party of being short of policies—that would be grossly unfair.

The Bill is a technical measure which amends the statutory provisions relating to the indebtedness of the British Railways Board. The first part of the Bill increases the limit on the borrowing powers of British Rail from the current figure of £1.1 billion to about £3 billion and it enables the Secretary of State to propose by affirmative order a further maximum of £5 billion. There are similar provisions with regard to grants under the public service obligation which also propose that the figure in question should not exceed £3 billion, with an opportunity to increase that sum by affirmative order to £5 billion.

For many years, for the railways and for other nationalised industries, there have been statutory limits which determine their maximum borrowing and grants at any given moment. Unless those limits are regularly increased, British Rail, like other nationalised industries, would be in the unusual position of having Government approval to fund a certain level of expenditure without being able to use that approval because it would conflict with the technical statutory limit laid down in the legislation.

It is especially important now to enable British Rail to go forward with the large investment programme that it has undertaken, based on heavy Government support. That investment programme usually funded by a combination of internal receipts and of borrowing, but the proportion of internal receipts falls if British Rail goes through a difficult period such as it has been in for the past 18 months.

Mr. D. N. Campbell-Savours (Workington)

Why does it take me longer to travel on the west coast line from Carlisle to London today than it did 12 years ago when I was first elected to Parliament? Why do trains invariably break down on that route? Why are trains often late? Why are there repeated signalling failures? There are broken seats; there is broken equipment; there are toilets that do not work; the carriages are overcrowded. What has gone wrong? Every time I travel on the line people complain to conductors and drivers. When they finally get to London they find that the escalator at Euston station does not work and has not worked for seven weeks—

Madam Deputy Speaker (Miss Betty Boothroyd)

Order. Interventions should be short and to the point. The hon. Gentleman is not making a speech at this stage.

Mr. Rifkind

The hon. Gentleman's remarks provide confirmation of the Government's view that the last Labour Government were foolish to cut investment in the railways, and that the present Government were right to increase it.

British Rail's annual figures, released last week, show that it went through a difficult period—as did many other companies—during the recession. Not so much because of railway activity but primarily because of a dramatic fall in the income that it would usually receive from property assets, it has not been possible for BR to fund from such receipts the proportion of the investment that it would have hoped to fund. Without the Bill, some time later this year, British Rail would have found itself with Government approval to continue its investment programme, but unable to do so because the borrowing requirement for that purpose would have taken it over the statutory limit.

Essentially, that is all that the Bill is about, and that is why it is appropriate to ask the House to allow these limits to be increased. It does not mean that British Rail will be getting borrowing or grant powers of £3,000 million at any given moment. The limits are intended to last for several years and, as in the past, future investment levels will be determined as part of the public expenditure survey programme.

Although it was a matter of some sadness that British Rail announced a loss of some £40 million last week, I found it particularly pleasing, and it was refreshing, that even last year, during what was undoubtedly an extremely difficult financial year for British Rail, two of its major businesses—InterCity and Bulk Freight—continued to make a profit. When the Government consider the likely course of privatisation in what we hope will be the not-too-distant future, we shall find it encouraging that, even during an economic recession, both those businesses demonstrated their capacity to make a profit.

Mr. A. J. Beith (Berwick-upon-Tweed)

In considering the public sector obligation grant, will the Secretary of State have regard to the complaints of the Transport Users Consultative Committee that the network on which the grant is being paid has effectively been reduced because the levels of service on many of the lines are far below what they were when the direction was given? In effect, that is closure by the back door, with no recourse to the Secretary of State or to a public inquiry, of a number of important rural lines.

Mr. Rifkind

I agree with the hon. Gentleman. However, in any given year, at any time, some services are increased and some are reduced and some lines are opened or re-opened. The public service obligation grant applies to the entirety of these services. While the hon. Gentleman is entitled to point to examples of reduced services, I find it encouraging that, over the past few years, there has been a substantial net increase in the totality of services offered by British Rail.

Mr. Robert Adley (Christchurch)

I am still waiting for my right hon. and learned Friend to convince me that the passenger will benefit from privatisation. Which country is he using as a model to provide guidance because this policy has been successfully undertaken there?

Mr. Rifkind

I am impressed by the fact that the policy of privatising the railways is being put forward by other Governments than the British Government, who have the support of the public as expressed in the opinion poll. It is also the policy of the Japanese Government, who are further ahead on these matters than we are. The Dutch Government have said that they are proposing to privatise the Dutch railways. The chairman of the German railways —the Deutsche Bundesbahn—was reported as saying in a recent speech that privatisation might be necessary for the German railways. The European Commission and the Council of Transport Ministers have taken the lead in ending state-controlled railway monopolies. Therefore, privatisation is part of an international trend which is very much to be welcomed.

Dr. Kim Howells (Pontypridd)

I am sure that the Secretary of State wil be aware that in Japan, a series of regional monopolies, plus a freight-carrying monopoly, have been created. Neither I nor anybody else who has investigated this matter has yet found a privatised railway system that involves real competition of the sort that I assume the Government would like to see. The problem about privatisation can be put simply. How does one make one train pass another on the same line? It is impossible.

Mr. Rifkind

The example that the hon. Gentleman used is absurd, as he is obviously aware. He must appreciate two things. First, competition can often mean two trains going from one destination to another by different routes. For example, one can get from London to Birmingham in two ways and from Edinburgh to Glasgow in two ways—one by ScotRail and one by InterCity. It may be that one day these two services will compete on price, perhaps under separate ownership, and that would be genuine competition.

There is also an opportunity for new entrants into the railway industry to provide services either for freight or passengers, which currently are reserved by law to British Rail or can be conducted only with the approval of British Rail. There is a multitude of ways in which greater choice can be introduced on the railways. It is for that reason that not just in this country, but in the European Community, such a policy is increasingly being pursued. I shall return to those matters in a few moments.

The Government's policy is to seek greater use of the railways, primarily for freight but also for passengers. It is appropriate to do that not only in the interests of the railways, but in the interests of the motorists and those who use our roads. To the extent that it is possible to encourage greater use of railways for freight, that will help to relieve congestion elsewhere.

Mr. David Nicholson (Taunton)

I am interested in the theme that my right hon. and learned Friend is beginning to enunciate. Is he aware that there was concern in my constituency when the Speedlink service was withdrawn from Taunton Cider, as it was feared that that would result in lorries using the narrow roads of Norton Fitzwarren. Fortunately, Tigerail has taken on most of that service, which I welcome. I hope that it is successful.

Does my right hon. and learned Friend have any proposals to enable the railways to take more freight away from lorries that use environmentally sensitive roads—

Madam Deputy Speaker

Order. Interventions are becoming speeches. I shall do my best to call the hon. Gentleman to make a speech. Will he please confine his intervention to a few comments?

Mr. Nicholson

There will also be a problem with bridges, which will cost Somerset a vast amount to improve if heavy lorries use them.

Mr. Rifkind

I reassure my hon. Friend on both counts. He may have noted my announcement two or three weeks ago on section 8 environmental grants, which substantially improved the entitlement to grants that can be paid to those who are currently using country roads, environmentally sensitive roads or other roads not designed for the carriage of heavy freight. They can be much more generously assisted to transfer that freight to the railways, which I am sure my hon. Friend would welcome.

On my hon. Friend's point about Speedlink, it was difficult to fault British Rail for deciding to close an operation which, on a turnover of £45 million, was expected this year to make a loss of £40 million. It was a great relief that BR negotiated with its former customers to ensure that 70 per cent. of that load would continue to be carried by rail. As my hon. Friend mentioned, new operators are also being invited to take over part of that responsibility.

Investment is a crucial part of the Government's objective of encouraging the development of our rail infrastructure. There is now more investment in our rail infrastructure than at any time since the days of Dr. Beeching. It is not simply a question of providing global sums, which can sometimes sound impressive, without indicating what that means in reality. However, the reality is impressive, and the investment is being used to improve the quality of service both for those who depend on the railways and those who would like to use them.

The figures are impressive. Currently, the approval given to British Rail for investments, and the rolling stock that is being manufactured, amount to no fewer than 1,361 passengers coaches, at various stages of manufacture. Some 112 new locomotives are also being manufactured. Network SouthEast, which operates in a part of the country that is often believed to be most dependent upon elderly stock, has no fewer than 895 passenger coaches in various stages of manufacture. They will transform the quality of travel for those who use its services in the months and years to come.

Mr. Jacques Arnold (Gravesham)

Is not a good example of what my right hon. and learned Friend just explained—and for which the people of north Kent are grateful—the introduction of the new Networker units on the north Kent line, which from the autumn will bring relief to commuters from Gravesend and elsewhere?

Mr. Rifkind

We were pleased to give British Rail the investment approval that it required for that service. As my hon. Friend rightly said, it was clearly an important and urgent priority.

Sir Philip Goodhart (Beckenham)

There has been a substantial delay in the introduction of the Networker coaches, and that has been a considerable disappointment to my constituents. Have the bugs in the manufacture of those coaches been eradicated?

Mr. Rifkind

I understand that the first coaches will be introduced in September. It is always regrettable when manufacturing delays retard the arrival of new rolling stock. However, it is clear that my hon. Friend's constituents will have the benefit of that investment in the near future.

Mr. Martin M. Brandon-Bravo (Nottingham, South)

I am grateful to my right hon. and learned Friend, who has given way many times. Will he say something about electrification? He is aware that he is not exactly the most popular figure in Nottingham because of his roads policy. Might he try to reclaim some of his lost popularity by suggesting that the midlands line to Nottingham could be electrified?

Mr. Rifkind

I appreciate that in some parts of my hon. Friend's constituency the preferred line of route for a particular road was not greeted with enormous rapture. However, I understand that, even among those closest to my hon. Friend, there are differences of view about the preferred line of route. If there can be differences of view in the heart of my hon. Friend's constituency, it cannot be surprising that our announcement had mixed reactions.

Individual projects for electrification are matters for British Rail. It analyses the various proposals and then comes to us if it believes that an investment can be justified. The level of investment—

Mr. Bob Cryer (Bradford, South)

The right hon. and learned Gentleman will be aware of the proposal for the overhead electrification of the Leeds-Bradford and the Aire Valley railways. That proposal has been forwarded to his Department and it has been approved. Unfortunately, there is no approval for the coaches and the rolling stock. As the right hon. and learned Gentleman will appreciate, one is no good without the other. At the current rate of progress, if there is much further delay the cost of the rolling stock will increase. As the Government want, I hope, maximum value for money, will he make a statement urgently— preferably tonight— giving authority for the passenger transport authority to go ahead with the purchase of the rolling stock?

Mr. Rifkind

I understand that there has been some change in the proposal regarding either the leasing or the purchase of the relevant rolling stock, and that will have to be given the fullest consideration.

The level of investment is crucial to the prospects for improving our railways, and investment is now at a higher level than at any time for 30 years. The opening of the channel tunnel will be significant. In the past, the prospects for encouraging freight to transfer to rail have been relatively limited. As many hon. Members will be aware, the economics of rail freight depends on the distance that it is carried— the longer the distance, the more commercially and economically attractive it is to use the railways.

The United Kingdom, which is geographically a relatively small country with a population largely concentrated in the south, has previously offered relatively few opportunities for long-distance rail journeys. The opening of the channel tunnel will transform the position, because it will be possible for freight to be carried on a single journey from Scotland, the midlands or wherever through the channel tunnel to France, Germany or Italy. That, together with the improved technology that is available for combined transport, makes rail freight much more feasible. British Rail estimates that about 400,000 lorry journeys a year will switch to rail as a result of the channel tunnel and that will make an important contribution towards relieving congestion on many of our roads.

Mr. Gerald Bowden (Dulwich)

I am pleased to hear my right hon. and learned Friend say that there will be a movement of freight from road to rail, but can he reassure the House that the gauges, both track and wagon, which are being manufactured for use in Britain by British Rail, will be wholly compatible with the gauges on the continent so that trains can run from the north of Scotland to Milan without the swapping of loads or other movements?

Mr. Rifkind

British Rail is conscious of the need to ensure that, as far as possible, there is compatibility. It estimates that some 80 per cent. of all the rolling stock on the continent used for freight purposes could use British lines as a result of the changes that are being made in various regards.

Mr. Andrew F. Bennett (Denton and Reddish)

Is the Secretary of State aware that, almost two years ago, Tameside local authority proposed a joint venture for a freight terminal at Guide Bridge on the edge of my constituency and we were originally promised a decision by January of this year? We still have not had that decision. Will he urge British Rail to make up its mind quickly about a freight terminal in the north-west and to accept the site at Guide Bridge and get on with the work there so that we can, as the Minister has just said, take a great deal of traffic off the roads and on to the railways?

Mr. Rifkind

I understand that British Rail expects to reach a decision on that matter this summer. Therefore, I hope that the hon. Gentleman will not have too long to wait before he is aware of its conclusions.

I have said that part of the thrust of the Government's policies concerns investment and part concerns using the new opportunities that the channel tunnel represents. I have also described the environmental impact represented by the improvement in section 8 grants. But I make no secret of the fact that I believe that one of the most important ways in which we can make progress is by ending the legally enshrined monopoly that British Rail presently has.

It is no coincidence that the ending of that monopoly is not only perceived in Britain to be important in increasing the use of the railways and is increasingly recognised as such within Europe, but has been adopted by the Commission and the Council of Transport Ministers. At the last meeting of Transport Ministers in Luxembourg on a proposal from the European Commission warmly supported by the United Kingdom, the EC, for the first time in the rail history of Europe, adopted a directive which will give a right of access to any international combined transport/freight operation that wishes to operate internationally within the EC.

The effect of that would be that if, for example, an operator wanted to provide a service from Manchester to Milan, he would have a right to do so, subject to the usual safety and other technical requirements, and it would not be subject to the veto of either a nationalised state monopoly railway undertaking or the Government of any member state. That is an historic decision taken by the EC which shows that the British approach to ending the monopoly as quickly as possible is warmly to be welcomed.

We in Britain have already stated our intention to move in that direction and I have been heartened over the past few weeks by the numerous representations and approaches that I have received from many United Kingdom companies interested in considering the use of rail and in making such proposals. In the near future, we will be having a seminar to which we have invited those who have an industrial interest in the possible use of rail in order that we can explore specific ways of taking the matters forward.

Mr. Adley

I am interested in what my right hon. and learned Friend is saying. He is putting forward a policy, certainly with regard to Europe, with which I wholeheartedly agree. He will, of course, confirm that his reason for welcoming the alternative uses of our tracks is not a party-political dogmatic one but is that he believes that it will offer the customer a better service. If we were to open up part of the tracks on British Rail to other operators, how would my right hon. and learned Friend feel if, for example, SNCF wanted to run trains on British tracks?

Mr. Rifkind

I welcome what I understand my hon. Friend to have just said— that he supports the decision taken by the EC and that he, too, like all my hon. Friends, is pleased that the monopoly of state-owned railway companies in Europe is gradually coming to an end. That is not only an important statement of principle; it recognises that there is no insuperable practical problem which would prevent the use by several operators of particular railway track. I know that my hon. Friend has been concerned in the past about some of the practical problems, and I am glad that, in his welcome for the principle, he clearly envisages that it should be possible and practicable to translate that principle into action.

My hon. Friend asked a specific question about the opportunities for SNCF or for other operators. Clearly, I look forward to the day when any railway operator within a single internal market in Europe which could meet the safety and other technical requirements would be free to provide services that the travelling public or industry in terms of freight carriage might find it useful to use. If we hope to have the opportunity for British operators to operate freely in other European countries, obviously the reverse will also have to apply or such a policy could not be taken forward. I genuinely welcome my hon. Friend's support for the ending of the monopoly, because he has an unrivalled knowledge of railway matters in the House over many years.

I have given the Government's view on these matters and it would be helpful to the debate and to a better public appreciation in Britain if the public and hon. Members could have the same knowledge of the Opposition's views on railway matters. I start with investment, because that is clearly important. The hon. Member for Kingston upon Hull, East often speaks eloquently and at length about the need for massive investment in our railways and how he would seek to ensure that that was brought about. I do not doubt that he genuinely intends to bring about such a transformation, but it is not exactly reassuring to look at investment under the previous Labour Government. The hon. Gentleman is always reluctant to have these matters drawn to this attention, but we are entitled to compare what he says, no doubt sincerely, with what took place when his colleagues had responsibility for these matters.

When one looks at the period from 1974 to 1979, one finds not only that investment was far lower than under the present Government, but, what is even worse, and even more difficult to understand and to justify, that it got progressively lower. Far from increasing under the Labour Government, it was reduced. I can give the hon. Gentleman the figures. In 1990–91 prices— to make sure that we have a confident basis for comparison— in 1975 the Labour Government provided some £568 million for investment. The following year that fell to £561 million, the year after that it went down to £541 million, the year after that down to £526 million, and then it crawled up a bit to £537 million in the final year of the Labour Government.

The Conservative Government started with investment of £556 million and now we have investment of £818 million. Therefore, the record is extremely revealing. Year after year under Labour, investment in the railways was reduced. Under a Conservative Government, particularly in the past five years, there have been unrivalled increases in real terms in investment in our railways. When the hon. Gentleman chastises us on levels of investment, I must say to him, "Physician heal thyself, then you will be able to speak with greater authority."

Mr. Prescott

It was the Conservative Government who appointed the Monopolies and Mergers Commission inquiry into the south-east network and the provincial network. If he looks at the investment there from 1975, he is correct to say that up to 1979 it fluctuated within £10 million or £20 million. [Interruption.] I am trying seriously to answer a point. The level of investment raises serious issues which I want to address.[Interruption.] This is an opportunity for us to have a serious debate about railway finances. If the Secretary of State looks at the investment figures, he will see that they fluctuated in the way in which he described— up and down, but around the £500 million level. If the Secretary of State looks at the figures for the first two years of this Government, he will see that there was a cut of 10 per cent., according to the Monopolies and Mergers Commission. I am prepared to send to the Library for those figures, and I have copies of the figures on my desk at the moment. They show a cut of almost 10 per cent. in investment levels during the first two years of the Tory Government, which was caused by the same monetary policy which led to the recession.

Mr. Rifkind

I must gently chide the hon. Gentleman. Under the Labour Government, the figures did not fluctuate; they went down. The meaning of the word "fluctuate" is simple, and cannot describe continuing decline. I know that the hon. Gentleman is embarrassed by such matters and I realise that they are, in a sense, of historical interest, but I must press him on the question of why we should have greater confidence that a future Labour Government would be able to increase investment when Labour's record is so poor.

I understand that the hon. Member for Kingston upon Hull, East has said on several occasions—and I have heard him say this myself—that under a Labour Government, investment opportunities for British Rail would be transformed because it would be allowed to borrow from the private sector, as happens in France, and not only from the national loans fund. That is not quite as impressive as it sounds, for two reasons. First, the French Government still determine totality of investment; there is no unlimited investment opportunity. The only way in which one can give unlimited investment opportunity, in this country or in France, is by privatising the railways. As long as they are owned by the state, any investment, whether borrowed from the private sector or from the national loans fund, is inevitably constrained by the limits of public expenditure.

Secondly, as regards flexibility in this country, the hon. Gentleman's proposal was shot out of the air only last week by Sir Bob Reid in his evidence to the Select Committee on Transport, when he said that, even if British Rail had the opportunity to borrow from the private sector, it would not have the slightest intention of doing so because it is cheaper to borrow from the national loans fund than from the private sector, if one is in the public sector. As a consequence, British Rail's investment potential would be reduced if it adopted the hon. Gentleman's worthy recommendation. His point is not very valid.

Another comparison between the two Governments is revealing.

Mr. Andrew F. Bennett

Will the Secretary of State tell us what we got in oil revenues during the period of the previous Labour Government and the amount of oil revenues during the period of the Conservative Government? Will he accept that it was logical that, having had so much money from North sea oil, we should have had a massive investment in public transport between 1979 and the present? If he makes a comparison on that basis, the Government's record is pretty appalling.

Mr. Rifkind

As the hon. Gentleman knows perfectly well, the reason why investment fell under the previous Labour Government was not because they wanted it to fall, but because their management of the economy was so rotten that they had to cut investment in almost every sector, and the railways were treated in the same way as the rest of the economy, in which public expenditure collapsed.

We are all anxious to see an expansion in the use of rail, so it is interesting and instructive to examine what has been achieved under this Government compared with the period 1974–79. There has been a continuing increase in the number of railway stations being opened and reopened. Under the previous Labour Government, there was an increase of about 25 in the number of railway stations available to the travelling public. Under this Administration, there has been an increase of no fewer than 108. Under the Labour Government, there was a net reduction in the number of lines that British Rail operated, whereas under the Conservative Government, there has been a net increase. That is also a revealing comment.

Mr. David Nicholson

Does my right hon. and learned Friend agree that it might have been appropriate for the hon. Member for Workington (Mr. Campbell-Savours), who left the Chamber shortly after his lengthy intervention on the decline of services over the past 12 years, to stay for this important section of my right hon. and learned Friend's speech?

Mr. Rifkind

Indeed. If the hon. Member for Workington (Mr. Campbell-Savours) had stayed for my speech, he would have been no wiser, but probably better informed. That is a matter for him to consider.

I have some main questions to put to the hon. Member for Kingston upon Hull, East, and I put them in a spirit of genuine inquiry, because I know that he is always anxious to help the House and to clarify matters of confusion. He may want to intervene to clarify these points so that they can be put on one side quickly.

What is the attitude of the hon. Member for Kingston upon Hull, East, and of any future Labour Government, to industrial conflict on the railways? That matter has been of considerable importance in recent weeks, because there was a proposal at the recent conference of the Associated Society of Locomotive Engineers and Firemen to take industrial action because of alleged grievances felt by its members over the levels of investment and other quasi-political matters. On that occasion, the union leadership took advice and was told that, under the Employment Act 1982, such industrial action would be contrary to legislaton and would not have involved protection of union funds. The strike was called off and, fortunately, the British public were spared the frustration, inconvenience and general damage to their interests of a pointless strike. I raise that point because I and the House need to know the hon. Gentleman's view on whether the 1982 Act should remain on the statute book.

The hon. Gentleman expressed his view on the subject not long ago. On 27 December 1989, the hon. Gentleman was clear about his attitude towards that legislation. He was reported in The Independent as having said of a Labour Government: It's going to repeal all of it, there's no little bits you can keep of it. There's nothing you can keep of this legislation … It all has to go. That was his view not long ago. He gave a pledge, and we, need to know whether that is still his view and still the policy of the Labour party. If that were to be the policy of a future Labour Government, this country would face the likelihood of industrial disruption on the railways on quasi-political grounds, if the ASLEF action was anything to go by. I am happy to give way to the hon. Gentleman if he wants to clarify whether that is his view. It appears that he is still as shy as I described him some minutes ago and either he does not know what his party's policy is or he is reluctant to tell us what his policy is. As he is so shy on that matter, I will turn to another matter, on which he may be less recalcitrant.

Mr. Prescott

This is university debating stuff.

Mr. Rifkind

I am grateful for the compliment.

Mr. Cryer

Will the Secretary of State give way?

Mr. Rifkind

Yes, because we may hear about the Labour party's policy from the hon. Gentleman, as we are not told about it by the party's official spokesman.

Mr. Cryer

I ask a serious question about electrification around Bradford. As a result of the Government's dithering, jobs in a Leeds engineering factory are at stake. The right hon. and learned Gentleman's foolish policies have led to giving the passenger transport authority authorisation for electrification although he has still not made clear the position on rolling stock because he is patently not aware of it. The Secretary of State is supposed to make decisions as a member of the Government. All he can do is to try to make a few cheap debating points at the expense of the Labour party. The Secretary of State is a member of the Government. Why does he not make some decisions and give the people in West Yorkshire decent transport?

Mr. Rifkind

I announced an extra £400 million for British Rail only a couple of weeks ago, which the hon. Gentleman obviously missed. I appreciate his desire to divert the House's attention from understanding the policy of the Labour party. The House will have noted the shyness of the hon. Member for Kingston upon Hull, East and his colleagues and their reluctance even to tell us what the Labour party's policy is— let alone to defend it before the House.

I turn to a comparable matter of importance to see whether there is the same shyness.

Mr. Prescott

He is as bad as the other Secretary of State.

Mr. Rifkind

I am grateful for the hon. Gentleman's views. I come to his view on the need for or desirability of rail subsidies. In a number of speeches, the hon. Gentleman has attacked the Government for reducing the operating subsidies to British Rail over the years. We have emphasised that we believe that it is more important to increase investment than to use resources for operating subsidies.

What would be a Labour Government's view? The last Labour Government explained their attitude with splendid clarity— a clarity that we do not normally observe in the utterances of the hon. Member for Kingston upon Hull, East— in an official Government document, the 1977 transport White Paper. This is what it said about operating subsidies for the railways, and for other forms of public transport: subsidies transfer the cost of a service from the traveller to the taxpayer … and the traveller is often a taxpayer or ratepayer himself. To use subsidies to disguise from people the cost of the services they are paying for is pointless, and to subsidise richer people at the expense of poorer is perverse. That was the unequivocal view of the last Labour Government— a view which is very similar to the one that Conservative Members would probably express. Let me ask the hon. Gentleman again whether Labour has now renounced the policy enunciated in the 1977 White Paper, and, if so, why it has changed its view in this specific instance. After all, in every other regard Labour Members are anxious to show how moderate and reasonable they have become, and how consensual they would like to be. Why are they now rejecting the policy of the last Labour Government, and adopting an approach that not only differs entirely from that policy, but would deny the railways the resources for investment that are infinitely more important for their expansion?

That was the second of the hon. Gentleman's fudges; I now come to the third and final fudge. Earlier, I mentioned the European Community's historic decision to end rail monopoly in Europe. That was only the first step— there is a long way to go— but the principle has been established, and all the European Governments are now committed to it. The Conservative party is also committed to it, and I do not believe that the Liberals support a British Rail monopoly either. It seems from what we have heard so far that the hon. Member for Kingston upon Hull, East and Mr. Jimmy Knapp are the only two people left in Europe, let alone Britain, who still defend it.

I hope that the hon. Gentleman will tell us in his speech whether Labour still believes that British Rail should retain its present monopoly. Will he join me in saying that one of the best ways in which to ensure the expansion of our railways would be to end that statutory monopoly and allow all operators meeting the safety and technical requirements to provide either freight or passenger services to respond to the wishes of the travelling public and those of industry?

Mr. Conal Gregory (York)

Is it possible for Members of Parliament to travel on British Rail from the good city of Hull to experience the present opportunities, or are they forced to travel by road?

Mr. Rifkind

Let me emphasise that, by ending the present monopoly, we can encourage new operators not just to run trains on existing track, but, perhaps, to use new track. If new track is built, it will help to expand the network.

Mr. Mark Wolfson (Sevenoaks)

If the House approves the proposal, a brand-new dedicated track may soon be built joining the channel tunnel to London. Why should it not be built by private enterprise, rather than by British Rail?

Mr. Rifkind

As my hon. Friend implies, our objective is for anyone who meets the safety and other requirements to be free to invest in rail. Certainly, no one should be constrained by either law or policy.

Those, then, are the three Labour fudges: their expressed views on industrial relations law, the monopoly and subsidies. The hon. Member for Kingston upon Hull, East now has an opportunity to do away with the fudge and to introduce the clarity for which he would like to be remembered.

5.14 pm

Mr. John Prescott (Kingston upon Hull, East)

I welcome the opportunity for the House to re-examine the whole framework of the railway system. I want to avoid the rhetoric that we have heard in the past— I am as prone to rhetoric as any other hon. Member— and address my remarks chiefly to the need to establish a financial framework that will remove the current environmental and congestion problems.

When the Secretary of State first approached me about the Bill, I told him that the Opposition would give it their full support and would help to hurry it through the House. We recognised that, in the summer, British Rail would run into the buffers unless it received the necessary resources. Whatever Labour's position may have been in 1979, after more than 10 years of Conservative government, British Rail is rapidly running out of money to meet its capital investment requirement and enable it to operate effectively—money provided by the public service obligation funds.

That is not what was envisaged in 1983, when the Government appointed the Serpell committee to examine British Rail's finances. They believed that the system could be run with less money; now, we are dealing with the consequences. That is why the Bill is necessary.

Mr. Phillip Oppenheim (Amber Valley)

Will the hon. Gentleman give way?

Mr. Prescott

No, not yet.

Opposition Members are becoming used to being constantly addressed as though we were the Government. Recently, I was the first to address the Association of Metropolitan Authorities; the Secretary of State then gave his reaction to what I had said. I am happy to set the agenda on such occasions to enable a proper debate to take place. I am bound to say, however, that, after 11 years of this Conservative Government, the transport for which they are responsible is a national disgrace. They have produced the highest fares in Europe and one of the poorest services, and have failed to enable British Rail to reduce the current massive congestion costs and environmental damage.

There is growing concern in the country as a whole— a concern that is reflected on both sides of the House— about the decline in safety standards, most of which has taken place over the past 10 years. I am not relying on a hunch; inquiries have been conducted into the terrible railway tragedies at Kings Cross, Clapham, Purley and Bellgrove, all of which have been associated with the reduction in resources. In one case, single-track running caused two trains to collide: that was intended to save money. Fortunately, the incidence of people falling out of carriage doors is now under independent investigation— owing more to pressure from the Opposition than to pressure from the Secretary of State, whom I approached at an early stage.

In its recent indictment of British Rail, the inquiry into the Clapham tragedy made it clear that the Government were responsible and had accepted their responsibility. The judge then explained that he was imposing a very small fine, because he believed that the taxpayer would have to pay in the end. That should have imposed a special responsibility on the management, particularly the chairman of the day, who made it clear that he thought it better to stay than to resign. It is a question of accountability, in the public as in the private sector, and British Rail did not face up to that.

The quality of service, like safety, has much to do with resources, but managerial competence is also important, as are the framework in which the service operates and the objectives that we provide. The Secretary of State talks a good deal about Europe. According to the Select Committee on Transport, the Monopolies and Mergers Commission and all the other bodies that have analysed the matter, our railway system receives less money than any other European system— and it shows.

Mr. Oppenheim

As the hon. Gentleman is in such a consensual mood and as he so often praises the performance of the European rail system, can he tell us whether he welcomes the recent Railway Gazette International survey which shows that passenger growth on the British Rail system since 1985 has been far greater than that in France, Germany, Spain and Italy? The survey also shows that the punctuality of British Rail's inter-city service is far better than France's equivalent service.

Mr. Prescott

I welcome any improvement. We could argue about why people are changing from road to rail. Perhaps it is because we have the most congested motorway system in Europe. In 1979, a comparison was made between the British and European rail systems to establish just how efficient British Rail was. It came out with flying colours, compared with the European railway system, but that does not mean that there is no room for greater efficiency and for changes in the management structure.

We welcome the Bill, which provides the resources that are required for the investment that British Rail needs to make. A tremendous amount of money is required. Whether the railway system is publicly or privately owned, that investment has to be made. The new investment requirements and operating costs are considerable.

Mr. Gregory

The hon. Gentleman has rightly raised the important point that investment in British Rail lies at the heart of the Bill. Can he comment, please, on the fact that, during the last year that the Labour Government were in office, £537 million was spent on the railways, at 1990–91 prices, whereas £834 million is now being spent on the railways? Does he approve of that increase in investment? How does he answer the socialist claim that the Labour party is the only party that is really interested in public transport?

Mr. Prescott

The hon. Gentleman has proved one thing— that it would be better if I got on with my speech. I intend to make exactly that point. Since, however, he has raised it at this stage, let me say now that that important point was at the heart of the argument when Peter Parker, who was chairman of British Rail in the 1970s, said that, if money was not invested in the railway system, whatever Government were in power, it would begin to fail in a few years' time, primarily because the rolling stock was about 20 years old then. More than 10 years have passed since he said that. I shall deal further with that important point later in my speech.

Unfortunately, the railways have been treated to a bunching of investment. The Treasury's approach to long-term investment requirements has made matters worse. The Bill at least provides the Government with an important opportunity to say that borrowing powers will be made available. However, much more information is needed about investment projects. The Government have made many statements about what they intend to do, but they must provide the money for those projects, which will become a reality only if resources are provided.

My hon. Friend the Member for West Bromwich, East (Mr. Snape) will have something to say about a number of other investment programmes, but I intend to concentrate on the channel tunnel, which is probably the most important investment decision that has been made this century. It will have a major effect on our engineering works, the freight industry and the movement of people through Britain to the south and then into Europe.

Will resources be made available to finance improvements for the carriage of intermodal freight? It has been announced that Wakefield will have one of the freight terminal facilities, but British Rail has not yet allocated money for that purpose. No resources have been identified for that facility. Will it now be financed by means of the funds provided for in the Bill?

Ashford station, in a much reduced form, will be part of the international provision for the movement of goods and freight. How much money will be invested there? The Secretary of State is a convert to the advantages of overnight sleepers, as a result of his train journeys between Edinburgh and London. By means of overnight sleepers, does he intend to travel by train to Europe to discuss with the Commission British Rail's monopoly position?

I remind the Secretary of State that the Government have reached what amounts to a duopoly agreement with the French, that all freight and passenger traffic is to go through the tunnel. They have agreed, in a contract with the tunnel company to guarantee a certain level of income, whether earned or not. The Secretary of State has guaranteed that the monopoly will continue. Does he intend to repeal it? Is that part of European thinking?

It is difficult to believe that Mr. Smith, if he were allowed to run the train service, would be prepared to accept liability if there were insufficient freight or passengers. If the Secretary of State read the agreement, he might realise that he had created a duopoly between British Rail and the French railways, and that they are to be the sole provider of the services. I believe that that is right. Nevertheless, the new policy now enunciated by the Secretary of State raises interesting questions.

Will the passenger services north of London be financed by means of the funds provided for in the Bill? I doubt whether the Government and British Rail intend the service to run north beyond London. They will find that there are financial and technical reasons for curtailing it. All of a sudden, it will be Paris-Brussels-London, and then no further.

Do the Government intend to turn the investment requirements into reality? God knows, they are needed. The way that the Government arrived at their decision on the channel tunnel has to be compared with the way in which the French Government reached theirs. There is no comparison. It shows the inadequacy of our approach to strategic planning when developing our railway system. Many people in Derby and York are waiting to hear whether money is going to be made available to create the work that the investment demands.

The Bill recognises that a railway system cannot be self-financing. Our railway network amounts to 11,000 miles. Its operational and investment costs cannot be met by its own revenues. According to the Serpell inquiry in the 1980s, it was thought that a railway network of 1,600 miles could be self-financing. Unless we want the railway system to be only 15 per cent. of what it is now, the reality is that it has to be funded with public money. That is not in dispute. There may be arguments about creating a monopoly, but that network must be funded one way or another. Experience in other countries has shown that a railway system cannot exist without the investment of public money, whether it be for the provincial network, inter-city purposes or freight. The railway system must be supported by public finance.

Those requirements have not been effectively met by previous legislators, whether Labour or Tory Governments. The financial framework of the railway system leaves a lot to be desired. I do not blame entirely the politicians. One has to take into account the relationships between politicians and civil servants. Most of these issues revolve round Treasury rules. Therefore, it is up to politicians to take their courage in their hands and argue against the Treasury. Although Treasury rules never appear in our election manifestos, they dictate just about everything that we do in this House.

Things are done differently in Europe, but we are not prepared to learn from that experience. The Secretary of State should learn the lesson of the European experience and bring it back here. That lies at the heart of whether private funds can be part of these massive capital requirements, a point to which I shall return.

Dr. Kim Howells

Does my hon. Friend agree that one of the great problems of strategic thinking for the railways is that, sometimes, rhetoric gets in the way of reality? There has been a great deal of rhetoric about privatisation in the Chamber today, but very few concrete plans about how it might happen. My hon. Friend has pointed out very well the difficulties of privatising any railway company that has to run a commuter network. It is impossible to make a profit on a commuter network if the bulk of trains are run at certain peak times in the day. How is such a company to be privatised?

Mr. Prescott

There is a real difficulty. We know from the civil servants in the Department of Transport and the Chevening seminar that many civil servants express the same view.

There have been inadequate funds for investment in and operation of the system. In the 1930s, the railways in Britain were collapsing. No one could find the money to operate the system or to invest in it. In fact, the system was saved by the war because the Government took it over. Then, in the 1950s, a Labour Government nationalised the railways and the first major tranche of investment in the system came under a Tory Government in 1955.

That investment was provided for the same reason as it is being provided now— the railways were collapsing. The money had to be found, whatever Government were in office. We switched from steam to diesel, cut the structure and changed the organisation. In the 1960s, Beeching and the business mind were introduced. The argument was that, if we could reduce the liabilities of the railway system, it could become viable. The network was reduced from 20,000 to 11,000 miles, which is the basic network today.

Whatever the Secretary of State may say, the reduction in line mileage is a marginal matter. That is an important point, because there have been many arguments in the House about that. In 1974, it was laid down that we should maintain a network of comparable size and quality. That has usually been defined as mileage only, not the quality or frequency of the service. That is one of the first signs of where both Tory and Labour Governments made mistakes in the management of the system.

Surprising as it may be, I want to take the politics out of the argument. The proper framework for a railway system is not an ideological issue in Europe. It is only in Britain that the Secretary of State talks about monopolies and privatisation. There may be a role for both, and we can argue about that. The system has to be supported by the state because the state has decided that a network of a certain size is necessary for our requirements. It needs to be financed and we are the custodians of the public purse. It is our job to decide what we expect of the railway, what it should do, what should be its quality and what fares should be charged.

Only some of those elements can be controlled. Both Tory and Labour Governments have tried to control them all. That continued right up to the statement by the right hon. Member for Hertsmere (Mr. Parkinson) on railway corporate finance. We said that that would not work, and it did not. He tried to control everything—the fares would go up and public subsidies would go down. He said that the Government might increase the investment, and I am still asking for a greater rate of return.

Now, the Bill is providing a great deal of money. In fact, the Secretary of State was shovelling in a great deal of money even before the Bill. Unusually, he was knocking on the Treasury door and changing the public expenditure requirements. The bid was already in, but the money was running out. The heart of the argument is that the House must decide what it wants to do with the railway system and what it wants the railways to contribute to the country's economy and prosperity.

Mr. Adley

This is one of the rare occasions on which I can agree with almost everything that the hon. Gentleman has said. My right hon. and learned Friend the Secretary of State had his fun, quite properly, and invited the hon. Member for Kingston upon Hull, East (Mr. Prescott) to intervene during his speech. The hon. Gentleman did not do so. I suggest that the hon. Gentleman might allow my right hon. and learned Friend to intervene in his speech. If we can reach a consensus on railway policy and long-term planning, which the hon. Gentleman is now advocating, we will have a better transport policy. Perhaps my right hon. and learned Friend would care to intervene and accept the challenge that we should take party politics out of the discussion on railways.

Mr. Prescott

The Secretary of State is an intelligent man, and he is open to argument.

Mr. Rifkind

rose—

Mr. Prescott

If the right hon. and learned Gentleman wishes to comment during the debate, we shall give him the opportunity, but I should like to develop my argument a little further.

There is an argument about relationships. As the Secretary of State pointed out, in the 1970s we saw the development of the public service obligation concept. The argument was that subsidies should not be provided for the railway service because it was subsidising only business and the rich. I do not think that many people supported that argument. The railway system of the 1990s has a major part to play in moving people round. That is an important change.

We began to identify a social part of the railway and a profitable part of the railway and that is when we began to make mistakes. We began to see that there was no cross-subsidisation and, to that extent, we should be asking ourselves what we expected from our railway system. When the Tory Government took office, they were ideologically against the fact that the railway system was publicly owned. They did not feel that the system had a great future, and people wondered whether they believed in it. In the 1980s, the then chairman of British Rail, Sir Peter Parker, and the British Railways Board made a clear statement about rail policy. It is interesting to see who sat on the British Railways Board at that time. It included Mr. David Serpell, who was later to reach far different conclusions when the civil servants got hold of him and produced the Serpell report. It also included Simon Jenkins, who is now the editor of The Times—I might get a good editorial tomorrow.

The report produced by that board said: The resulting fundamental problem, which is the thrust of this document, is that the Government through its various limits on investment, have never allowed us sufficient funds and the authority to achieve in the long term what was required. Sir Peter Parker was talking about the age profile of the system. He said that the Europeans system was better, and that we were trying to run ours with a quarter of the resources. We all know the arguments about subsidies. People were asking for a comparison.

At that time, a report, commissioned by British Rail, was produced by Leeds university. It showed that, in all areas, including productivity and financing, British Rail had done much better. The Government did not accept that view, and they set up the Serpell inquiry. The inquiry split into a minority group and a majority group. The majority held the view that somehow the railway system could be maintained by saving money on maintenance, signalling and so on. That was bitterly disputed by British Rail, which said that, if the railway was run with fewer resources, it would break down. However, that was the policy pursued by the Government from that day.

They reduced the amount of public support and said that if British Rail needed extra resources, it should sell off its land, sack its workers and increase fares. So we moved from the highest fares to even higher fares, yet, we still could not provide the necessary resources. During the 1980s, the decision to cut back on signalling and maintenance proved to be very wrong. The inquiries into those tragedies revealed a great deal of evidence to support those who said that there was a link between the tragedies and the cuts in maintenance.

The majority of those on the Serpell committee recommended that the service could be operated on less money. It is interesting to read the minority report by Mr. Goldstein, who said that the service could not be operated on less and that, if it were, it would simply put off the evil day. He said that that would have a tremendous effect on the quality of the service. He also said that the Government should recognise the objectives of the service and he suggested changes in the Department of Transport. He took the view that the rail system needed a 20-year plan, whereas the Serpell report concentrated on the PSO grant and whether it could be maintained at its 1974 level.

The Government made a fundamental mistake in the 1980s, because the lack of resources has had a considerable effect on investment. Ministers and Labour Front-Bench spokesmen have exchanged official figures from various organisations to show who gave most. Some hon. Members believe that if we say, "We gave the highest subsidy," or the Government say, "We allocated a higher PSO grant than you did," that is somehow a successful policy. That is not necessary and it lulls us into believing that it is a policy. It is not a policy, and in many ways it has been a major mistake.

The Secretary of State and the hon Member for York (Mr. Gregory) mentioned investment data. Page 41 of the report of the Monopolies and Mergers Commission shows how much investment has been made: £516 million in 1975; £495 million in 1976; £475 million in 1977; £500 million in 1978; and £513 million in 1979— and that was at 1982 prices. Interestingly, the Secretary of State did not mention 1980 or 1981. In 1980, investment fell from £513 million to £401 million and in 1981 it fell to £333 million.

That supports my argument about the Treasury's hostility to investment, which it has used as a regulator under Labour and Tory Governments. We will not get efficiences without higher sustained investment. In 1955, the Tory Minister could rightly have boasted about the Government's investment programme, but more than 30 years later, without that sustained investment, we have an inefficient system and concerns are being expressed about safety. Labour and Tory Governments accepted a financial framework for our rail system that was dictated by Treasury needs, which by definition are short-term and deadly to the development of a rail system.

Mr. Beith

I agree with the hon. Gentleman and with the general direction of his speech. He mentioned the PSO. Does he agree that the reduction in the PSO in the past two years has changed British Rail's policy, because it has sought to concentrate resources on a smaller and smaller part of the network in a desperate attempt to achieve the returns necessary to meet a reducing subsidy?

Mr. Prescott

I could go further. When the right hon. Member for Southend, West (Mr. Channon) was Secretary of State, he changed the PSO requirement so that it would no longer apply to inter-city services. The Select Committee on Transport disagreed. At the heart of the argument was the Government's policy of hiving off the profitable parts of the network.

The Secretary of State mentioned privatisation. The first stage of privatisation is to create a crisis so that a Minister can say, "Everybody wants privatisation because it must be better than what we have." The rail system that we have has resulted from the Government's inadequate financial provision. In their privatisation experiments, the Government have created a crisis and then suggested that the private sector could do better. As the polls show, people do not believe that once they have the goods.

Mr. Rifkind

The hon. Gentleman eloquently said that, under successive Governments, the Treasury's need to control public expenditure has had a significant effect on rail investment. Why does he not accept the logic of the argument that investment that cannot be made by the public sector will be attracted only by privatisation? As he is appealing for a new consensus on rail policy, as is my hon. Friend the Member for Christchurch (Mr. Adley), will he accept that there is a consensus throughout Europe among Governments of different political complexions, who have called for the end of the monopoly of state controlled railways? Will he, therefore, join that consensus and say that the Labour party does not distance itself from the Government or from the rest of Europe?

Mr. Prescott

The Secretary of State made great play of that political point at the Conservative women's conference, but the policy does not depend on ownership. We can argue about monopolies and duopolies and about privatising public utilities, but that is not helpful. Whether the system be private or public, public money is necessary because a rail system cannot operate only from the fare box. Therefore, we are entitled to ask for accountability.

It is argued that a company must be privatised to gain access to the private financial market, but that is not true. I do not suppose that that is a shock to the Secretary of State, who has been a Treasury Minister.

Mr. Rifkind

indicated dissent.

Mr. Prescott

I withdraw that remark. That is in his favour; I do not think that I will ever make it.

Investment in SNCF was announced on 23 May. It is phenomenally higher than ours, with 100 billion francs being spent on TGV in the next five years. The Secretary of State asked me a question that is answered in the report of SNCF's finances: In the 1990 budget, marked by an increase of 31.5 per cent. in the financial requirements, SNCF were able to finance internally 21 per cent. of investment", which British Rail can do, 9 per cent. was covered by miscellaneous income— grants and asset sales"— which also is possible under our grant system, but for the rest SNCF borrowed money by raising it in the financial markets as well as by selling TGV sets to a banking consortium who leased it back. It is not necessary to privatise the rail system to gain access to private money. The Treasury usually argues that using private money costs more, yet it has been clever in screwing a lot of money from our nationalised industries. Even the nuclear programme in France has been financed by the private market, primarily because that service is not allowed to go bust. The Treasury would say, "But that means that we stand as guarantor and it is part of our borrowing requirement." The French and German rail systems are not treated in that way.

The Secretary of State said that the French and German Governments control the amount of investment, but that is a different issue. The Secretary of State could properly ask, "Would we have to change British Rail's structure to one where a capital debt structure had to be worked out to allow it to borrow from the market?" The European Commission has asked that question. The Hundred Group of Chartered Accountants recommended what I am suggesting, and I believe that the Minister for Public Transport is a member of it.

The Minister for Public Transport (Mr. Roger Freeman)

indicated dissent.

Mr. Prescott

I withdraw that, but the hon. Gentleman is aware of the document. It is not essential for companies to go through the ideological process of privatisation to get private money.

I could never understand why publicly owned British Airways could lease aeroplanes, but British Rail could not lease its trains. It was said that, if the company went bust, aeroplanes could be sold, but that did not apply to trains. Neither would have been allowed to go bust. The truth was that the Treasury could not fund the huge amounts of money needed to buy aircraft, so not only did it allow British Airways to lease them, but it guaranteed the exchange rate. It would not help the rail system— and that was under a Labour Government.

It is the Treasury's philosophy that has dictated to us how to manage our railway system, and we then have to answer for the consequences of having a poor quality system. We get into the rhetoric of party ideology and wonder whether we are dealing with monopoly or privatisation. That remains an issue between the parties, but it is not an issue that determines the quality and safety of our railway system.

Mr. Gary Waller (Keighley)

The hon. Gentleman recognises that private sector borrowing, even by a state-owned corporation, still counts against the public sector borrowing requirement. Does he have the approval of his hon. Friend the Member for Derby, South (Mrs. Beckett) to say that in future it will not? Where will the money come from? The tenor of his remarks suggested that he will change the rules. Does he have his party's approval to say that?

Mr. Prescott

Yes, and that of the shadow Chancellor of the Exchequer. Does the hon. Gentleman think that I would come to the House and argue as I have done without discussing the issues with my colleagues? I would not.

There has been intensive discussion about what happens in the European Community. The Minister has been lecturing us from the Dispatch Box and suggesting that we learn from what is happening in Europe. One recommendation from Europe is precisely this— we do not have to privatise, although, as the Secretary of State said, that is the judgment of some chairmen, of some railways and of some Governments. That view is fine, but the Commission does not suggest that privatisation is a prerequisite, although a capital debt structure may be necessary on those industries.

I have suggested ring fencing as one method of financing the channel tunnel rail link. There are a number of attractive ways to proceed, and I am not limiting my ideas to the railways. I have just finished talking to financiers about a bus financing operation. We merely need to use our intelligence and, at the same time—

Mr. Bellingham

What intelligence?

Mr. Prescott

I did not have a public school education like you, you twit.

The bus industry is another example. Governments can play a part. We can argue about whether to go public or private, but access to the private market does not depend on becoming private.

Mr. Rifkind

The hon. Gentleman has made an important statement in answer to my hon. Friend the Member for Keighley (Mr. Waller). He said that he has the approval of the shadow Chancellor to say that a future Labour Government would change the rules of Treasury finance. They would allow access to the private sector for purposes of public expenditure with regard to railway and bus investment and, I presume, investment for other parts of the public sector.

Will he clarify that? Is he saying that the overall levels of public expenditure would be comparable to those we have at the moment, but that, instead of being financed, as in the case of the railways, from the national loans fund, they would be funded more expensively by borrowing from the private sector? Or is he saying that, through the change in the rules, he would add to the overall investment available to the railways by adding to the finance currently available from the national loans fund, many hundreds of millions of pounds from the private sector?

Mr. Prescott

At least we have been successful in bringing the Secretary of State on to the real problems of railways and finance. The technical questions that he posed have exercised my mind— [HoN. MEMBERS: "They are not technical."] They are technical in that they relate to how we define the way in which our public sector industries are dealt with and the rules of operation of equity and capital are drawn up. Those issues have been spelt out in many reports, and we are dealing with them.

The Secretary of State has a long way to go, but if he wants to learn about railways I refer him to the Transport Act 1962, which states: the Boards may borrow temporarily, by way of overdraft or otherwise, either from the Minister or, with the consent of the Minister, from any other person". The railways could go to the private market as envisaged under the 1962 legislation. It is the Treasury that has restricted the interpretation of how and from whom they borrow. It is a matter not of legislation, but of Treasury rules determined by Ministers and civil servants. Now that we have alerted the Secretary of State to the fact that there are other ways in which to proceed, I suggest that he puts a towel on his head and starts to think about the real issues of railway financing, and how to tackle the problems of the competing demands made on capital by hospitals, schools and other bodies.

Some cases are easier than others. Provincial railways are making losses, and although the Secretary of State talks about laying private lines it would not be easy to raise cash. There are many different approaches, such as the rail link at the channel tunnel site and its development values, the dedicated track and the new formulas for raising cash. If the Secretary of State spent as much time talking to bankers as I have done in the past year or so, he would understand that that is not impossible or unique— it has been done by European railway systems. Only ideological nonsense and Treasury daftness prevent us from doing so here.

Mr. Rifkind

I must press the hon. Gentleman further. He knows— it is not a matter of dispute—that, if one borrows from the private sector instead of from the national loans fund, it is more expensive. Therefore, if the total is the same, there will be less investment available. His proposals would help the railways only if he envisaged a substantial increase in total investment through borrowing from the private sector in addition to what the Government currently borrow from the national loans fund. Is that what he proposes? If not, his changes would lead only to a net reduction in the level of investment.

Mr. Prescott

No. We readily accept the arguments about joint financing between the public and private sectors. Why not? We would prefer that financing was publicly rather than privately led because otherwise it would be to the disadvantage of the public sector. It is possible to have different arrangements for raising money, such as leasing, and different rates. I accept that, in some cases, it may be more expensive, but it depends how much one puts in. If one wants to electrify a line and one reaches an agreement with a private company which is interested in doing the construction, one can reach arrangements that are not so heavy on the taxpayer because they have an interest in it. That is precisely what the group of one hundred auditors said.

I hope that if the Secretary of State goes to the sleeper tonight he will read that report. I could lend him my copy. Instead of asking technical questions, he should be aware that there are alternatives to knocking on the Treasury door. He should take his courage in his hands and say that he can improve the railways by private capital. My God, here I am talking about private capital and how to use it effectively to those who have been elected as its guardians. That is almost a switch around. It is staggering, but I am concerned not about the ideology of capital, but about the quality of our railway system and how to get more money for it when there are many other competing demands made on the Treasury.

Mr. Gregory

rose—

Mr. Prescott

No, I cannot give way. If there is any doubt about the necessary scale of resources I quote Bob Reid, the new chairman, who said on "The World This Weekend": we're investing £1.3 billion, I would see that we would have to go on like that for the next four or five years to get the railways in shape— that's what you need. He was then asked: And this is new money, new grant, or what? He said, "This is new money."

He was then asked: would it come in the form of grant, loan— because the Government often prefers to see you borrow money … rather than to give it to you? He replied: It really depends how the Government want to finance it"— that is true— If it finances it by putting it in not as a grant, then of course you need to increase your subvention from the Government purse. The other alternative, which he put to the Select Committee, is to use private capital.

I want to leave in this debate the seeds of a cross-party consensus about a proper and adequate financial framework.

Mr. Rifkind

rose—

Mr. Prescott

I shall finish this point, and then I shall give way.

The Secretary of State should now consider a new financial framework for the railway system, and that is what I am suggesting. Let us debate what that framework should be but, first, we must be clear about our objectives for the railway industry. What do we expect it to do and what size should it be? As the Secretary of State knows, the Government can influence certain issues either by direction or by nods and winks.

For example, he has an interest in the fare levels. The quality of service is determined by the revenue secured through fares or through the subventions that he gives in borrowings or grants. One cannot control everything. The railway management must be given a competency to get on with the job, but we must be sure that we give the management clear directions. The 1974 direction is inadequate and does not specify what resources should be given or against what standards the railway must be measured.

The Select Committee made its case clear in 1987: we cannot continue with the 1974 objectives and the financial framework that is available. Now is the time for us to make a fundamental change and to rethink. Ten years of cutting resources have had a phenomenal effect on the quality of our system. It is true that investment levels are now increasing because most of the network is in a very bad state, and we have to do something about it. Now that that is happening— as it is under the present Government and as it would under a Labour Government if elected — let us look to the future and consider how, in the next 10 years, we can give British Rail an adequate financial structure and allow it to meet its objectives, about which the Labour party is much more specific than the Government. Do not let us be ideologically obsessive about whether the railways are publicly or privately funded.

Mr. Rifkind

The hon. Gentleman has still not given the House his view of the Labour party's attitude towards the ending of British Rail's statutory monopoly. I have asked him a very clear, very simple question. He knows the Government's view and that of the European Community. What is his view and what is his party's view?

Mr. Prescott

Let me come straight away to the point about ownership and the monopoly. I believe in the public system and in public accountability. I am prepared to accept that mixed or totally private systems can be operated, although I do not think that such systems are as good as the one in which I believe. If I am being asked to go for what is called "ending the monopoly" and privatising the system—

Mr. Bellingham

Answer.

Mr. Prescott

But it is at the heart of the argument, behind which lies the concept of competition. It is believed that competition is enhanced if there is more than one supplier on a route. I should have thought that that was part and parcel of the same philosophy. The answer is to be found in what the Government were told by their own people at the last seminar. I cannot remember who was the Secretary of State on 10 September; they change so quickly. I think that the present Secretary of State had just got the job.

Mr. Rifkind

No.

Mr. Prescott

Who was it then? [HON. MEMBERS: "Hertsmere."] That is right; it was the right hon. Member for Hertsmere. I suggest that the present Secretary of State should have a look at the confidential paper produced by civil servants and circulated to all those attending the seminar about whether we should privatise the railway system and end its monopoly. Right?

Mr. Rifkind

Really?

Mr. Prescott

These matters are part and parcel of the same argument. Didn't they tell you that at school, kid? The arguments about whether British Rail is a unit, whether there should be a track authority and so on are all connected. All those suggestions were rejected by civil servants and found not to be feasible or workable. Presumably the argument about whether there should be one provider of the railway system, a monopoly, is not so divorced from the track authority argument. Do we want the running of the track authority to be in the hands of two or three people?

Mr. Bellingham

What does this have to do with anything?

Hon. Members

Quiet, Bellingham.

Mr. Prescott

It is no wonder that the hon. Gentleman is a PPS. You will not go much further, kid.

Presumably, we would want to place the money for a track authority in the hands of one person. That would be a monopoly and would make a lot of sense. The same argument applies to the distribution of electricity. The power lies in the hands of one provider. In that case, too, it makes sense. In respect of the channel tunnel, there are two providers; a dual operator provides the services. The arrangements are written in to the contracts and agreed in Europe.

We shall not be allowing anyone else to control the system. People will not be able to say, "We are going to run a railway through," because that would run counter to the contract. But in respect of regional railways, I doubt the practicality of the monopoly position. I doubt whether any operator will consider it practicable for someone to come along and provide £500,000 for stock for a provincial railway and hope to run on the line, make a business out of it and get some of the subsidies. That is not a point worth pursuing.

Perhaps the question is whether InterCity should be a monopoly— whether we should allow ICI to run the 8 o'clock train from the north-east in competition with InterCity. That was partly what the Secretary of State was talking about when he referred to ScotRail and InterCity, except that the ownership would be different. He would be trying to introduce competition, even if one might argue about whether it would in fact constitute competition.

Perhaps the right hon. and learned Gentleman is concerned merely with the question of private capital. If he is asking whether the Labour party believes that a publicly owned body should become involved in joint ventures and private operations and the private sector should be allowed access to the railway system, whether in the operation of freight trains in the provision of other services, the answer is that we should be quite prepared to look at the question. We do not have an ideological position against it.

Such combinations can make a lot of sense. Such a system would also be cheaper for the railway, which could spread some of its capital costs. Track 29 provides a good example of such a system operating on the freight side. British Rail uses what it wants, and the private sector handles the facilities at the other end. I believe that TNT is asking to move on to the rail track system.

We must have one authority to deal with signalling and track safety. There is no doubt about that. One cannot put such matters into the hands of different regional authorities. That would be nonsense, as the Secretary of State's civil servants will tell him. We have no problem with general access, whether by private or public capital or in joint arrangements, and no problems with what is proposed by the EC, which I believe will not only assist with British Rail's immense capital requirements but help it to be more efficient in developing services and meeting the demands of passengers and freight. I do not have an ideological problem with that.

Mr. Rifkind

Frankly, I do not think that the House is yet any clearer about the hon. Gentleman's views on monopoly. I shall try to be as specific as possible. Even if British Rail remained a public-sector-owned industry, it would be possible to end its monopoly—in other words, to give other operators the right not just to provide capital but, without British Rail's approval, to operate freight or passenger services on the track. That is what ending the British Rail monopoly means. It is a separate issue from privatisation, and we still do not know what the Labour party's attitude to it is.

Mr. Prescott: The Secretary of State thinks that he is on to a major point. That is not the issue with the railways.

Mr. Rifkind

It is.

Mr. Prescott

The right hon. and learned Gentleman is absolutely obsessed with this point, and it is tragic to have a Secretary of State obsessed with a point.

Mr. Rifkind

Answer the question.

Mr. Prescott

I am trying to answer it. Unfortunately, the Secretary of State said nothing about the development of railway policy. We are talking about the monopoly, and whether parts of the system can be given over. We already have Yeoman Foster—

Mr. Rifkind

Answer.

Mr. Prescott

Wait a minute. There is already a lot of private capital operating on the railway system.

Mr. Rifkind

But with permission—

Mr. Prescott

The Secretary of State has apparently learnt that British Rail has to give permission—[Interruption.]

Madam Deputy Speaker

Order. Heckling from a sedentary position does nothing to improve the quality of our debates. Let us proceed.

Mr. Prescott

The Secretary of State and I can no doubt agree that the overriding consideration is the quality and safety of the railway system. That matter has to be in the hands of one authority. As the lorry industry has shown, it does not always work if one lays down quality standards and assumes that all the operators will meet them. I have severe doubts about such an approach.

There must be one authority, but I find no ideological problem in allowing the private sector access to the railway system, provided that the main authority has access to its terminals and can use its facilities to meet requirements and safety standards. Having said that, it is all-important for British Rail to continue to provide its own facilities and not simply to become a track authority for the private sector. It is important for British Rail to play a part in the development of services and not to be told, "Stay out; it is up to the private sector"—which, I suspect, is basically what the Government are about.

If what the Secretary of State wants is to end the monopoly to bring that about, we shall have a repetition of our experience with the privatisation of the bus service, where deregulation has led to real problems. I should hate to see such problems on the railway system. We believe that one responsible authority can produce better safety standards than can be produced where responsibility is distributed between a number of bodies. I maintain that there must be one authority.

Let me reiterate my point. The Bill affords an opportunity for us all to recognise what we can do and to learn from Europe. We should not be too arrogant to learn from European practices and to ask whether we can use European financing formulas in a different way and give a whole new future to the railway system. Everyone in the country wants that. We can unite in trying to achieve that end, but we must first be prepared to look at the problems and to leave political rhetoric behind us. Both because of congestion and in the interests of the environment, the people of Britain require a good railway system. Now, in the 1990s, the railways have a better opportunity than they have ever had before. Do not let us allow it to be spoilt because the politicians stay on the sidelines spouting ideological rhetoric and doing nothing to produce a proper railway system.

6.9 pm

Mr. Robert Adley (Christchurch)

I hope that my colleagues and the hon. Member for Kingston upon Hull, East (Mr. Prescott) will not mind if I say that the hon. Member made a remarkable speech. If it were possible to achieve the cross-party consensus of which he speaks, there is no doubt that the railways of this country would benefit, and that would mean that the people would benefit.

I do not normally write out my speeches with great care. However, I had written: Would it not be a good idea if we could have a cool if not philosophical look at a subject that would benefit from being free from party political prejudices? Before the debate started, I might have thought that that was a vain hope. Perhaps the hon. Member for Kingston upon Hull, East has given us a little hope that we might in the House and in the country once in a while lift our minds above the partisan political battle and agree on a long-term future for one vital part of our national economy—our railway system.

The money that is required for any major new railway project, and the time that is needed to spend it wisely on investment, extends far beyond the lifetime of any Government. I hope that I will not embarrass my right hon. and learned Friend the Secretary of State for Transport and his colleagues when I say that I welcome the obvious change in policy which they have initiated over the past few weeks.

Until quite recently it was my impression that the Government had no transport policy other than the quest for profitability almost regardless. That has been changed to a positive policy of seeking to transfer traffic from road to rail. The Government's conversion to the need for an interventionist public transport policy is good news for the railways which have a vital role to play in maintaining civilisation as we used to know it on a small, industrialised, overcrowded island.

The new policy was encapsulated by my right hon. and learned Friend the Secretary of State. Although I do not intend to weary the House with endless quotations, my right hon. and learned Friend, in his speech at the Financial Times conference on 28 May, said: Congestion is the result of the decisions of millions of ordinary people. The only solution to congestion is for many of those ordinary people to make different choices. The responsibility of Government is to help them make that choice. That was a sober assessment of the need not only for guidance and exhortation from Government but for a transport policy based on the national interest and one that recognises that the Government must convert from thought to reality the implementation of that policy. That inevitably means the long-term funding of such policies.

I want to divide my speech into three parts—the past, the present and the future. We do not need to spend much time on the past, but we can learn lessons from it. When the steam engine was invented in this country it provided man with his first opportunity to travel faster than the fastest horse or camel. We then saw the inexorable rise of the internal combustion engine. When people can drive their own cars, that will always be cheaper than using another form of transport where one must buy the services of a driver.

The hon. Member for Kingston upon Hull, East referred to Beeching. Beeching's main policy was to eliminate competitive rail routes. That was one of the most cynical acts of policy from which this country has ever suffered. It was a deliberate act of policy. The Beeching plan was sired by Marples, but implemented by Barbara Castle. I do not wish to make a partisan point about that because the policy was introduced by one Government, but implemented by another. That policy destroyed the option of rail competition between British cities.

If I may be a little blunt, my right hon. and learned Friend the Secretary of State was disingenuous to argue with the hon. Member for Pontypridd (Dr. Howells) when he made his point about rail services competing on the same track. My right hon. and learned Friend referred to the Glasgow to Edinburgh line. By sheer chance there are alternative routes. My right hon. and learned Friend knows the area much better than I do, but even he will agree that to propose that the route from Glasgow to Edinburgh via Carstairs is a more competitive route than the more direct line is to use circumstances to meet one's arguments. My right hon. and learned Friend would not design a rail link to take people from Glasgow to Edinburgh via Carstairs.

It used to be possible to have genuine competition between London and Birmingham. One could travel via the London Midland and Scottish railway between Euston and New Street or on the Great Western railway from Paddington to Snow Hill. Naturally the latter route was better, but of course I am never partisan about these matters.

My right hon. and learned Friend the Secretary of State referred to the London to Birmingham line as if we had turned the clock back 30 years. The line between Leamington Spa and Coventry has virtually all been singled. It was never the intention to maintain that line as a competing service between London and Birmingham. It is now possible to travel that route because of the intense pressure on travel requirements between London and Birmingham that has built up over the past few years. It is possible to travel that route in spite of, and not because of, the policies of successive Governments. If my right hon. and learned Friend the Secretary of State were to study the service of through trains between Paddington and Birmingham as recorded in British Rail's timetable, he would not, with his background, describe it in the House as a competing service for the Euston to New Street route.

We destroyed much of the genuine competition that had been built up over generations. Some people are now trying to create what I would describe as phoney competition on the same tracks. The hon. Member for Pontypridd referred to that, and his comments were pooh-poohed by some of my colleages.

My right hon. and learned Friend the Secretary of State was kind enough to suggest that I might know a little bit about railway policy and about railways. On the point about phoney competition, I want to quote from the evidence given by Mr. Richard Hope, who will be known to many hon. Members, when he appeared before the House of Lords European Communities Committee on 25 October 1990. He said: I am not aware of any situation in the world where there is effective competition between passenger trains using the same tracks. Those who advocate competition must address that point. They cannot duck it. The idea of creating competition between passenger trains using the same tracks is like trying to create phoney competition that will not result in the running of a better railway service. Will my right hon. and learned Friend the Secretary of State be kind enough to tell me which countries he was thinking of which had done that or were contemplating it?

Mr. Hugh Dykes (Harrow, East)

I have been listening very carefully to my hon. Friend. I agree with him and with some of the examples raised by hon. Members on both sides of the House earlier. Does my hon. Friend accept that what he has described is the approach taken by the European Commission, charged as it is under the treaty of Rome, for the development of a communitywide transport policy to promote the competition reforms to which my hon. Friend is alluding instead of the idea of different trains on the same tracks and all that illusory nonsense which is totally unrealistic? The Commission wants greater competition between different forms of transport.

Mr. Adley

My hon. Friend studies those matters, and he is right. I am in favour of ending BR's monopoly and that is the policy of my right hon. and learned Friend the Secretary of State. I have not yet been convinced however that the illusory privatisation argument, which is quite separate, would result in a better railway. Let me return to where I was. By selling track bed in the 1960s, we closed options just when the roads were becoming clogged. We have built more roads and they have become even more clogged.

I have pleaded with my right hon. and learned Friend the Secretary of State as I did with his predecessors—I have got nowhere although I place this point on the record again today—to recognise that there is a difference between instructions to BR to sell off surplus land of a general nature and an instruction from Government to BR to sell off track bed from which services have been removed. Unless we recognise that we are constantly destroying assets that can probably never be replaced, we will not be able to take advantage of the legacy of our forebears. That is a simple point, although I realise that its implementation requires a degree of intervention. However, if my right hon. and learned Friend's words are to be taken at face value, they mean that he is not opposed to some form of intervention. Please could we stop selling so-called redundant track bed?

What has happened in this country—and all over Europe—is simple; the internal combustion engine, which once appeared likely to sound the death knell of the railways, has by its very proliferation, brought about a railway renaissance. The purpose of this debate must be to see whether we have the will to achieve that renaissance and whether we shall will the means so to do. That is putting the debate in the context of learning from the past. We are now beginning to have what I regard as a healthy debate but, in the past, it has been motivated too much by partisan political knee-jerk reactions. Even The Times, that organ of independent thinking—[Laughter.] Hansard cannot record things in inverted commas, but my hon. Friends have just given a slight guffaw. The Times recently had a leader that was entitled "Break up and sell" but which then stated, BR is probably the most cost-effective big railway in the world". It is extraordinary to admit that one has one of the best railways in the world and yet to state that the prescription for its future is to break it up and sell it. If some of my hon. Friends could occasionally give some acknowledgement of British Rail's successes despite all its difficulties, that would be most welcome.

I welcome the commencement last week of the full electric service on the east coast mainline. The Times undertook an interesting exercise involving three travellers, travelling by air, rail and car. I shall not repeat all the comments that were made, but the only one who enjoyed his journey was the one who travelled by train. The journey by car took seven hours and 55 minutes. When I was sitting in the Tea Room, one of my right hon. and learned Friend's ministerial colleagues said, "Yes, but the journey only cost £30.73." That is where we come to the rub, because that amount is only a tiny fraction of the real cost of the car journey both to the driver and to the nation. Unless and until the House is willing to recognise the real cost to this country of motoring, the motor car and the internal combustion engine, we will never get to the heart of the debate.

Although, as I have said, I welcome the east coast main-line electrification, one has to be frank and say that we have spent £400 million on modernising a Victorian railway while most of our continental competitors are building new railways. I am often asked how the railways are doing in comparison with other countries. I shall weary the House briefly with a story that was told to me in a different context by my right hon. and noble Friend Lord Home of the Hirsel.

During his last year as a Member of this House, my right hon. and noble Friend was giving his annual garden party when he was approached by a man whom he recognised as one of his most cantankerous and difficult constituents. Of course, none of us has such people in our constituencies but, unfortunately, my right hon. and noble Friend did have such a constituent. Thinking of something totally bland to say as the chap walked towards him, Lord Home said, "Good afternoon, Mr. So-and-so, how is your wife?" to which the answer was, "Compared to what?"

I shall take that as the thesis for this part of my speech. When I am asked how our railways are doing, I must add, "Compared to what?" Compared to France and Germany to name but two, we are modernising a Victorian railway while they are building new railways.

Mr. Gerald Bowden

I am interested in my hon. Friend's point, but I wonder whether he thinks it right that British Rail is bringing forward proposals for a channel tunnel rail link which is to be superimposed on the existing Network SouthEast? Would it not be far more sensible to have a completely new route, with a dedicated freight line and a fast passenger route instead of the makeshift and ramshackle proposals that British Rail has produced so far?

Mr. Adley

My hon. Friend is tempting me. Some of our European colleagues think that we are barmy. They do not understand how we can still be arguing about whether to build a brand new railway line. Of course my hon. Friend is right. Of course we have to have a new railway line. However, I am afraid that my right hon. Friend the Member for Finchley (Mrs. Thatcher) allowed herself to be persuaded to include clause 42 in the channel tunnel legislation at the behest of some of her friends who ran the ferries, thus preventing public investment in a new railway system, and that is the root cause of the problem. However, that was during the ancien regime, and I do not want to be sidetracked down that blind alley.

The train grand vitesse is the French Government's visible commitment to a transport policy in which the train is more than an afterthought. As has been said, the French Government are about to invest £21 billion, aimed at more than doubling the size of France's TGV network over the next two decades.

Together with the hon. Member for Pontypridd, I spent two or three days in Germany a couple of weeks ago. We talked to the German Department of Transport, to those connected with the German railways and to German politicians. We travelled from Frankfurt to Hanover in the cab of a new German intercity express on a brand new railway line. One only has to do that to see the investment that has been made. One could almost hear the money falling out of the German Treasury. There has been massive investment in a public facility. The German Government are not exactly noted for running the most inefficient and overburdened economy in western Europe—

Mr. Gregory

Will my hon. Friend give way?

Mr. Adley

Of course, if you, Madam Deputy Speaker, do not mind.

Madam Deputy Speaker

I do not, provided that the intervention is short.

Mr. Gregory

I am grateful to my hon. Friend for giving way. He has said that he travelled in the cab of a German train. Will he tell the House the manning levels in that cab? Was one driver responsible, or, as in this country, was there overmanning? The Associated Society of Locomotive Engineers and Firemen has such power that it can require a minimum of two people in the cab at all times so that the second person can be pouring tea or reading the Daily Mirror.

Mr. Adley

I am sorry to disappoint my hon. Friend, but there were two people in that cab—

Mr. Gregory

My hon. Friend and the driver.

Mr. Adley

There were two German railwaymen in the train, the hon. Member for Pontypridd and myself—

Mr. Gregory

That makes three.

Mr. Adley

No, There were two German railwaymen in the train, plus the hon. Member for Pontypridd and myself, which makes four. I must advise my hon. Friend that two plus two still equals four, so the answer to his question is that there were two railwaymen in the cab.

Mr. Snape

I am sorry to interrupt the hon. Gentleman who, like me, is usually provoked by the barmy interventions of his hon. Friend the Member for York (Mr. Gregory)—who, fortunately for the fair city of York, will soon be back sniffing wine corks or doing whatever he did before being elected to the House. As we are comparing cab rides, may I advise him that, when I travelled on the Japanese high-speed railway line some years ago, there were two men in the cab although the line is virtually semi-automatically operated? Before the hon. Member for York asks any more inane questions, there was a driver and his mate, but I am not sure of the Japanese translations for either.

Mr. Adley

The hon. Gentleman is, as usual, being extremely unkind and unfair to my hon. Friend the Member for York (Mr. Gregory), who asked a question to which I did my best to give him a straightforward answer.

The line from Frankfurt to Hanover continues to Hamburg, and 40 per cent. of it runs in a tunnel to cope with the environmental problems that might otherwise have been caused. Perhaps that helps to answer the question of my hon. Friend the Member for Dulwich (Mr. Bowden). The Germans recognise that, if there is a conflict between the environment and public transport—the railways—the Government must pay the environmental costs.

I have mentioned France and Germany, and shall now turn to Sweden which, until recently, used to be mentioned by some of my hon. Friends with incredulity as a country that is privatising its railways. At the moment, the Swedish national railways have a Government-funded budget of £1.5 billion over the next seven years—for a country of 8.5 million people. It is true that the Swedish Government have carried out a detailed examination of the option of privatisation, but they have now decided that that is an unattainable ambition and that all the shares in the railway company that was established will be held by the Government of Sweden for the indefinite future. There are now no plans to seek to sell off the shares. That is yet another country which has tried to find a way of privatising the railways and has not succeeded.

One thing that the Swedish Government have done—perhaps my hon. Friend the Minister will take comfort from this—is to allow the Swedish railways to run alternative modes of transport. The Swedish railways have set up their own bus services in competition with the private sector but in co-ordination with their railway services. That, too, might make some of my hon. Friends gasp, but I merely state the factual position in Sweden.

The Swedes have introduced what they call the tilt train, which we called the advanced passenger train when we invented it here 15 or so years ago and starved it to death for lack of investment. That system of transport could now be sweeping the industrialised world. Fiat is building a train similar to the APT, and so are the Swedes. If ever one wanted a classic example of failing to back success, one would have to look only at the sad tale of the APT and the steps that are being taken elsewhere in Europe to build what we invented.

My right hon. and learned Friend the Secretary of State, who has had to leave the Chamber, referred to Japan in his speech. I have had lengthy meetings with the Japanese transport councillor at the Japanese embassy in London and the head of one of Japan's six new companies. They told me that I was the first British politician who had ever been to see them to discuss Japanese railway policy and what was happening in Japan.

The Japanese are restructuring their railways, as the hon. Member for Pontypridd knows. I must say that I am training him well to be a spokesman on the railways. The Japanese have established six non-competing passenger companies. They have been created on a geographic basis into regional monopolies. The counsellor at the Japanese embassy said to me: Your understanding of privatisation is totally different from ours. Ours is restructuring not privatisation. In the past 27 years, the Japanese national railways have procured over 2,000 km of new double-track mainline high-speed railway—all constructed with public funds. What have we done in Britain during the same period? The latest information available to me is that we have built one and a half miles of new double-track high-speed railway—the Windsor link in Manchester. It is true that the Stansted link will be built. Indeed, I believe that it is nearing completion. But it perhaps says a great deal more than words of mine ever could that that piece of track will be the longest piece of new railway in Britain, and it is a branch line to an airport.

The six Japanese regional companies will automatically qualify for 50 per cent. Government grant on new railway construction costs. I have done my best to check my facts.

Mr. Dykes

Perhaps my hon. Friend would also care to mention the high-speed train that is planned between Madrid and Seville, on which we both travelled in recent months.

Mr. Adley

I am trying to keep my speech short. Of course I could mention that line, but my hon. Friend has now done so, so I do not need to amplify the point. Spain is yet another European country which is building new railways.

My right hon. and learned Friend the Secretary of State has frequently said to me, "We are going to do what the Japanese are doing." All that we have to do in order to do what the Japanese are doing is the following. It is quite simple. We build 2,000 km of main-line railway for high-speed trains at public expense. Then we transfer British Rail free of charge to six non-competing regional monopolies, financed initially by the public sector. Having done that, we write off all British Rail's debts and financial commitments involved in any staff reductions which any new private railway might inherit. Then, to finalise the process, we give the six regional monopolies an open-ended guarantee that any new private railway company would automatically qualify for a 50 per cent. grant for all new construction.

If that is what my right hon. and learned Friend means by privatisation, I am entirely in favour of it, but I suspect that that may not be quite what some of my colleagues have in mind. The debate continues, but if Lord Home were to ask his erstwhile constituent what he thought of our railways the reply might also be, "Compared to what?"

I turn briefly to the future. The Government have at last begun to define the future role of our railways. I welcome that and the recent decision referred to by my right hon. and learned Friend the Secretary of State, by the Community transport council in Luxembourg to seek to create a single market in transport. But the question for us remains whether we are prepared to recognise that the Department of Transport operates a wholly unequal investment regime between road and rail when there is competition for scarce funds.

I referred earlier to the comment by one of the Minister's colleagues in the Tea Room abut the £30.73 cost of travelling by car from London to Edinburgh. The true cost of the internal combustion engine in Britain is unknown and, at the behest of the road lobby, remains carefully hidden. Over the years, I have done my best to find out the cost, for example, of the court time which is taken up in dealing with traffic offences and accidents. When I asked specifically what was the cost I was told in a written answer that the cost of answering my question would be prohibitive. The Department cannot even afford to answer the question, so we have absolutely no idea what the real costs are.

Recently, my wife and I were travelling to London with our three dogs and God knows what else—by road, I fear. We were stopped by the Wiltshire constabulary—

Mr. Gregory

For speeding?

Mr. Adley

No, we were not stopped for speeding.

Two highly trained policemen in a large motor car spent 23 minutes with us. My wife is an extremely careful driver. She never drives at more than 69 miles an hour.I timed the two policemen. They spent 23 minutes following and then measuring, centimetre by centimetre, the distance between the letters and the numbers on my front and back number plates. What was the cost to the taxpayer of that 23 minutes of the time of two highly trained men? Do the police have nothing better to do? That is a matter for the chief constable of Wiltshire, but if we added up the true costs of the internal combustion engine in Britain, the answer would be unbelievable.

It is not just the cost of police time in dealing with accidents and congestion, apart from the time-wasting activities such as I have described—[Interruption.] My hon. Friend the Member for Faversham (Mr. Moate) is muttering. I am not sure what he is saying.

British Rail pays its own police force. Why, if we are trying to create a level playing field, do we tolerate British Rail having to pay for its own police force?

How much does the nation spend on lawyers to deal with traffic offences? How much does road transport cost the national health service? We kill 5,000 people and maim 250,000 every year. How much social security funding is stashed away on helping people who have been injured in road accidents? In the end, what is the value of human life? If we valued human life, we would impose on our roads the same safety criteria that Parliament has always applied to the railways. That would, at a stroke, make British rail the most profitable organisation in the world. But there is no chance of that, because the sad fact is that, in road transport, any conflict between human misery and human convenience is always settled in favour of the latter.

If the future is to be based on a serious and honest assessment of the true costs of road traffic and the inevitable congestion and pollution that flows therefrom, no one will be happier than me. But I have yet to detect any hint that that is the Government's or any political party's intention.

In conclusion, I turn to the citizens charter. What does the citizen want? I suspect that the citizen wants fast, punctual trains and cheap fares as well as empty roads and free parking. In the case of British Rail, the idea behind the citizens charter fails to tackle the question whether the provider of the service has the resources and the ability to provide what the traveller wants. I do not know whether that question has been considered seriously. Of course, British Rail is subject to substantial restraints on investment and subsidy which inevitably affect the level and quality of service. Those are ministerial decisions.

Will Ministers be held to account if the rail traveller seeks to invoke the citizens charter? Let us suppose that Joe Bloggs finds that his train is late and wants to invoke the charter and claim compensation. All sorts of questions arise. Was the delay caused by an accident? Was it caused by vandalism? Was there a suicide on the line? What about hoax telephone calls? On 25 February this year, one man —I am glad to say that he is in prison now—disrupted the travel plans of 500,000 passengers and cost British Rail £25 million. How does the citizens charter fit into that? I fear that, if we are not careful, we shall end by putting more money into the hands of lawyers, as so often happens when we allow enthusiasm to evolve into legislation.

Is the road traveller to have a citizens charter? Are delays to be blamed on Ministers who allow road works to take place on the A303 trunk road to the west country in the middle of July? What about a citizens charter for airline passengers—or is it only the public sector that should be subject to the rigours of this discipline? If so, is there really a role for a citizens charter in transport?

I have not had time to discuss numerous aspects of future policy options. I close with a few thoughts on what is happening in Germany. The Germans have a state-funded railway, but they know that it costs them a great deal of money, so there is now a thoroughgoing examination of the relationship between the German Government, Deutsche Bundesbahn and the German people. As the hon. Member for Kingston upon Hull, East said, it is essential to recognise that discussion of privatisation is quite separate from the need to strike a fair balance as between the infrastructure costs of road and rail.

There is no doubt that those costs need to be reviewed, but that is a discussion separate from the one about privatisation. The Germans are less hidebound on these issues than we are, with our party political stances, and they recognise this. Chancellor Kohl has decided to establish a Government railway commission. Can we re-examine the role of the railways in society free from partisan prejudice? Let us take a leaf from Helmut Kohl's book. Changes to the relationship between the German Government and Deutsche Bundesbahn would require a change in the constitution, a problem that we do not face here, so such changes should be much simpler for us.

I should like the Government to establish a Government railway commission with terms of reference similar to those given by Chancellor Kohl to the German railway commission. Those terms would be simple: first, to define the role of British Rail in the national and international transport markets; secondly, to define and delineate the railways' public or community responsibilities versus their business or economic responsibilities; thirdly, to set out the conditions for a rational and requirement-specific fulfilment of tasks by British Rail. In this way our future transport policy could be reached in a climate of rationality and realism which is long overdue.

6.42 pm

Mr. John Hughes (Coventry, North-East)

This debate is timely, in that it allows those concerned with the declining standards of service on British Rail to demonstrate the desperate and long-standing need for higher investment and for decent levels of borrowing. It is also timely because BR is in a grave crisis due to the terrible neglect of the past decade or more. It is desperately in need of a new deal. Cosmetic promises have been made by the Secretary of State; now is the time to put his money where his mouth is. That is what most people want.

It is a major scandal that the Government have run the railways into the ground, compared with those of other countries such as France, where Governments of left and right value praise and even use the railways. The crisis on BR has become so acute that senior management figures, honourable men and women with a public service vocation and a concern for BR, are prepared to put their jobs on the line.

Many hon. Members will have seen the informative article in The Independent on Sunday on this issue. I want to refer to it briefly. According to Ian King, then an area manager in Manchester, we are giving our customers as poor a quality of service as many of us can remember. He has also said: We charge fares that should provide a quality product but we do not. These BR dissidents have been treated in a way that would make Joseph Stalin blush. This House, if not the British Railways Board or the Government, should carefully listen to their views. They reflect the experience of many years and a commitment to decent public transport, which is vital if we are to reduce the environmental damage of the motor car.

Many managers are terrifically concerned about the quality of the service—late trains, cancelled trains, overcrowded trains, insufficient public investment and high fares. The central transport consultative committee has justly criticised the Government's underfunding and has questioned the legality of cuts in British Rail services —cuts that have hit rural areas hard, and they are the areas of greatest social need.

Has the Minister finally replied to the committee's letter? If not, will he answer it when he closes the debate? I share the committee's anxiety, but I want to concentrate this evening on one aspect of the BR crisis.

No one has yet mentioned the problems and treatment of the disabled. That treatment is disgraceful, uncivilised, discriminatory and unjust. The Government's consistent underfunding of British Rail and their limitations on borrowing have prevented BR from ensuring that its services are fully accessible to all citizens, especially disabled people.

Disabled people get a raw deal in all walks of life. There are well over 6 million of them and they deserve better, comprehensive and anti-discriminatory laws to guarantee their rights, not least on the railways. Unfortunately, the Government cop out on the need for such laws. Worse, instead of enhancing the rights of the disabled in employment, they are eroding those rights. If anything, the Government are anti-disabled. For them, the disabled are second-class citizens.

It is in this shocking state of affairs that BR is trying to do its best within the limitations of its funding. Its record may be better than that of other major institutions, but it still leaves a great deal to be desired. BR has set up an advisory group on disability, I concede, but its efforts have been shown to be half-hearted and less than credible by the outrageous experience of the new multi-million pound sprinter class 323 train, which can be seen at Tickfords of Coventry.

I recently took the opportunity, together with local representatives of disabled people, of inspecting the mock-up of the new train. The class 323 train miserably fails to provide for the disabled, who need easily accessible door operating buttons, signs, fixtures and other special fittings. In response to early-day motions that I have tabled on this matter, BR's parliamentary affairs manager, Mr. Austin, sent me a letter outlining the official BR position. It argues that credit should be given for real successes and that solutions should be sought to real problems. I take it from the letter that the needs of the disabled do not constitute a real problem. Perhaps I should hand a bouquet to the Government, British Rail, Centro, and Greater Manchester and West Yorkshire transport authorities—to the professional staff and the politicians who deliberately decided to commission the class 323 train, which has toilets for the able-bodied and no toilets for the disabled and whose design gives little consideration to handrails or door-operating buttons.

In the light of those glaring omissions, I would point out to Mr. Austin and to all involved in this project that one cannot give to anyone what is their right. However, as of right, the disabled must have toilets, and the wide range of aids that they need at every station and on every train. I would also point out to all involved in transport strategy that the introduction of this type of train in America would fall foul of the law there.

Mr. Snape

Is my hon. Friend aware that the class 323 was designed to the specification of some of the passenger transport authorities that he has just castigated; that the door to the toilet, which he said could not be used by the disabled, will be redesigned before the train enters service, so that they can use it; that the class 323 is a two-car unit in which one seat can readily be removed so that a wheelchair can be placed at a table inside the train; and that the vestibule on both the coaches making up the unit has been designed to allow people with disabilities—to use the proper term—to use a local train travelling over comparatively short distances? Furthermore, Centro and the other passenger transport authorities consulted BR's disability panel, which consists entirely of people with disabilities.

I hope that, on reflection, my hon. Friend will realise that some of his criticisms were a little unfair, and that, despite the financial constraints under which passenger transport authorities have to operate, some new provision is being made for the disabled.

Mr. Hughes

I acknowledge the point that my hon. Friend has made.

I mentioned the law in America. The legislation dealing with passenger coaches for those who use wheelchairs says: Single-level passenger coaches shall be required to—

1. (i) be able to be entered by an individual who uses a wheelchair;
2. (ii) have space to park and secure a wheelchair;
3. (iii) have a seat to which a passenger in a wheelchair can transfer, and a space to fold and store such passenger's wheelchair; and
4. (iv) have a restroom usable by an individual who uses a wheelchair".

The provisions that we make fall far short of those requirements.

However, just because the British Government are opposed so strongly to legislation that would discriminate in favour of the disabled does not absolve others from their obligation towards the disabled. Silence on this important issue is tantamount to collusion. Inaction reinforces discrimination. Lip service has been paid by many to this important issue. This is obvious when Centro says that the passenger transport executive did not have a demand for toilets, and when BR has decided that the disabled should have toilets only at stations. I welcome the building of those toilets, but there are 63 stations in the Centro region, and toilets should be built at every station. BR cannot be allowed to dodge its responsibility to the disabled, and to relegate them to third-class status. If there are accessible toilets for the able-bodied, then there should be toilets for the disabled, too.

What is worse—to add insult to injury—the 323 train toilets are situated next to the wheelchair section of the unit. As one of the local representatives of the disabled has pointed out: No other passenger is asked to sit next to or near the toilet facility. But that seems to be all right for the disabled, even though they cannot use the facility and even though some would be adversely affected—physically—by proximity to the toilet and running water.

BR cannot be allowed to wash its hands of the disabled, although I readily concede that the ultimate responsibility for this dreadful discrimination lies with the Government and their refusal to fund a decent public service for all.

Mr. Gregor

Will the hon. Gentleman give way?

Mr. Hughes

In his response to me, Mr. Austin argued: British Rail has always believed that wheelchair users should be assisted in and out of trains, using ramps, to minimise the risks of injury to both customers and staff. I am afraid that that is not good enough. To pick up what my hon. Friend the Member for West Bromwich, East (Mr. Snape) said about consultation with other bodies for the disabled, I can say that my friend, Mary Beaumont.. the representative for Nuneaton and Bedworth Council for the Disabled, asked: Was it not perceived that many disabled prefer to travel independently, as do the able-bodied? What if there is not staff available at the station when the wheelchair user gets on or off the train? As she points out, even if somebody has helped you on to the train, you can be stuck at the other end if you cannot open the door at your station, and if you are in an electric wheelchair and there is no ramp available at the platform. She adds that she is worried that even though other people may be on the train"— of course, they may not be— they may not be getting off at your station, and by the time someone has noticed you cannot open the door"— that is, if they are bothered—the train will have moved on.

Mr. Gregory

Will the hon. Gentleman give way?

Mr. Hughes

Mr. Austin also argues that the single step allows the optimum compromise between vertical and horizontal stepping distances.

Mr. Gregory

On a point of order, Mr. Deputy Speaker. Will you clarify whether this is a debate or an opportunity for hon. Members to read a script that they can later give to Hansard? If it is a debate, does it not involve both sides of the House, Government and Opposition?

Mr. Deputy Speaker (Mr. Harold Walker)

The hon. Gentleman knows that it is within the accepted traditions of the House for an hon. Member to refresh his memory from notes, albeit that they may be copious from time to time.

Mr. Hughes

Mr. Austin also argues: Any dropping of train-floor height requires an increase in the horizonal gap which would be dangerous to all passengers… There is no simple solution to that problem without rebuilding Britain's railway infrastructure. It is one thing to say that change cannot be made overnight, and another to refuse even to start the process of change. The main problem is finance, and this brings us back to the Government's underfunding and the need to increase BR borrowing.

Mary Arnold of the Coventry Council for the Disabled, of which all Coventry Members of Parliament are vice-presidents, adds to my criticism of the 323 train by saying: The only real concession to wheelchair users is the tip up seats. The electric door switches are impossible to reach… there is no grabrail to hold on to, to keep your wheelchair steady. Overall, I hope that the House will agree with Mary Beaumont, the representative of the Nuneaton and Bedworth Council for the Disabled and the Warwickshire Coalition for People with Disabilities, when she describes these mock-ups as "glorified guard's vans".

My final criticism is about BR's consultation with disabled people. The direct testimony of disabled people that I have quoted should have been taken fully into account in drawing up the design specifications. Mary Beaumont rightly expressed her deep disappointment that more research into possible usage by wheelchair-bound people, who are also potential commuters, was not carried out. I am sure that this contention will be reflected by the central passenger transport consultative committee. According to its secretary, Michael Patterson, it has yet to finalise its report on the class 323 and provision for disabled people. The Coventry Hereward college for the disabled is also preparing a report on the mock-up. I await those reports with interest.

I hope that hon. Members will put pressure on the appropriate authorities to make the necessary changes in the new train. It is not too late to change the design specifications for the class 323 so that it provides the best of facilities for disabled people. I urgently appeal to British Rail to do that, or it will do the disabled a great injustice.

I ask the House to examine the American disabilities legislation, from which I have quoted. That law was passed without reference to costs because those who passed it argued that the rights of the disabled were above cost. Such laws should be part of human rights. A society that treats disabled people so shabbily disables itself because it fails to tap the many talents of all its citizens. The way in which disabled people are treated on the trains, the buses, and almost everywhere else is a disgrace. Investment in and higher borrowing levels for British Rail would start to give the disabled a better deal, especially if they and their organisations are fully consulted. I hope that the Minister will tell the House tonight that the Government will urgently allocate specific funds for the needs of the disabled.

7 pm

Mr. Conal Gregory (York)

For a long time—indeed, since I became a Member of this House in 1983—I have had a keen interest in transport, and in the railway industry in particular. I am vice-chairman, together with my hon. Friend the Member for Christchurch (Mr. Adley), of the Conservative parliamentary transport committee. We work strongly in the best interests of public transport, and the railways in particular.

I welcome this Second Reading debate, as I shall welcome the other stages of the Bill. I have a constituency interest as York has the headquarters of the eastern region of British Rail, and shortly it will have the headquarters of BR's freight operation. York is also an important centre for the denationalised sector of British Rail, as one of the key plants of British Rail Engineering Limited is situated there, with two more being in Derby and the fourth in Crewe. It also has Golden Rail, the tourism interest of BR, and the Royal York hotel—to name but a few.

The Bill would increase BR's borrowing limit to £3,000 million, which is not an inconsiderable sum, extendable to £5,000 million, with the grant at the same levels. It is therefore appropriate that the House considers the use of the finances provided to date and how far BR has fulfilled its obligations to its passengers, its freight customers and its staff.

It is clear that, at today's prices, BR has cost the taxpayer £16 billion since the Conservative party took office. I shall put that into the jargon that the electorate can understand—it is £800 for every household in the country. One point that is crystal clear now, and will be crystal clear at the hustings, is that investment under the Conservative Government has been the highest in real terms for 29 years, at £834 million. That is a telling figure, of which I am proud.

Dr. Kim Howells

The hon. Gentleman has referred to large sums, and we all appreciate the enormous strain of such sums on the economy. However, they must be compared with the amount of money invested by the most successful economy, at least until now, in western Europe —west Germany. The hon. Member for Christchurch (Mr. Adley) and I were told by representatives of the west German Government that the subsidy—they call it a payment—this year will be DM27 billion. That puts £16 billion, spread over 12 years, into perspective.

Mr. Gregory

I appreciate the hon. Gentleman's comments, and I shall give some European comparisons in due course. He, as a member of the Labour party, is not too happy to look at its record. Indeed, he must be embarrassed by its neglect of BR. It is only the Conservative Government who have honoured their commitments and properly invested in the railways.

We are about to increase BR's borrowing limit by more than £1 billion in 1991–92, and the Government have approved an increase of more than 20 per cent. to £600 million in the public service obligation for 1990–91. I am sorry that the shadow transport spokesman is not here; however, as always, I welcome his deputy. Had the shadow spokesman been present, I could have asked him how he wanted borrowings to increase, and whether he would approve of the Labour-controlled councils that have invested in such dubious banks as BCCI for one eighth of I per cent. more. It would be interesting to know whether he would suggest that as a blueprint for the private sector of the railway industry.

I have cited the solid investment programme under the Conservative Government. We must now ask whether there has been an increase in quality.

Mr. Snape

My point is not strictly relevant to the debate, but whenever we debate transport matters, the hon. Gentleman has an irresistible urge to make a fool of himself, and today has been no exception. Can he tell us how many left-wing socialists there are on the Shetland and Croydon councils, which together lost £30 million in BCCI?

Mr. Gregory

I regret giving way to the hon. Gentleman, because he is not advancing the matter of transport policy. Yet again the hon. Gentleman, who will shortly be returning to his occupation in the railway industry following the next election, shows that he has little understanding of finances, or he would not have got them so hopelessly wrong. I assume that he was referring not to a £30 million but to a £23 million loss in the Western Isles. He can further consider these issues when he returns to his full-time occupation in the railway industry.

The subject that we are debating is the railway industry, not the failure of Labour Members to read the financial press. I referred to the quality of management and of delivery in British Rail and how those relate to such considerable investment programmes. The House is being asked tonight to increase those investments.

Electrification is a splendid form of investment, and it is a tangible way to judge the money from the public purse that is going into BR. The east coast main line has taken £400 million of investment, yet with the new timetable that was introduced on Monday it is now impossible for anyone from York or from the constituency of the hon. Member for Berwick-upon-Tweed (Mr. Beith) to attend a function in London and return that evening, because the last train departs at 10 pm.

Although this week saw the introduction of the new InterCity 225 service on the 393-mile east coast line from London to Edinburgh—using the new class 91 Electra electric locomotives—we must ask whether we are getting an increased service. The hon. Member for Pontypridd (Dr. Howells) mentioned European comparisons. I can draw examples from the excellent railway service that I have experienced in north America—a good way to show that BR can succeed with Amtrak. BR is letting down its passengers and its staff, and I shall give examples of that.

Mr. Adley

What conclusion would my hon. Friend draw from the fact that when the American passenger railways were in the private sector they were ghastly, but that is no longer the case now that they are owned by Amtrak, which is financed by the Federal Government?

Mr. Gregory

I am well aware that Amtrak has some public finances, but I would not agree that the services were ghastly before. However, that is a subjective view and I shall try to be as objective as 1 can.

Let us consider whether the quality of British Rail's management has improved as a result of the generosity of the public purse. British Rail does not only provide a railway system to go from A to B but, without going into the business of cattle trucks, it should provide a service for people such as the disabled. I welcome the speech of the hon. Member for Coventry, North-East (Mr. Hughes), but he dwelt a little unnecessarily on the physically disabled. I should have liked him to say a few words about British Rail's lack of interest in the blind and partially sighted because there are a number of cheap ways in which British Rail could make their life considerably easier. Its failure to do so may be because most of those who sit on the disability committee—excuse the pun—are in wheelchairs, not standing, and blind or partially sighted. I hope that that is a matter to which British Rail will address its mind shortly.

Let me examine the finances of the buffet facilities which, sadly, are still in state control. [Interruption.] Travellers' Fare is a wholly owned subsidiary of British Rail. On many routes, it is extremely slow to open, the major exception being on trains out of Paddington. I travel frequently on the east coast main line and its Travellers' Fare services often do not open until 20 or 30 minutes after the train has departed. If one goes up the train before it departs, one is in danger of seeing the staff waiting for the goods to come on board or interrupting some card game.

Once the buffet is open, many items that the public might like to purchase, such as KitKat, that excellent confectionery from my constituency, are not available, presumably because there is the danger that they would increase customer satisfaction or reduce the public service obligation. Such good brands of confectionery, or even those made in places such as Birmingham or Slough—I cannot recall the brands offhand—are not available.

There are long queues for the buffet, and one way to reduce them would be to provide vending machines so that those who simply want a hot or cold drink could obtain one without queueing for a wider range of services. However, that would increase customer satisfaction and so has been put at the bottom of British Rail's list.

Mr. Adley

Will my hon. Friend give way?

Mr. Gregory

Let me finish my point. My hon. Friend may be about to refer to those services which have been denationalised, such as the trolley service between Victoria and Gatwick, which is excellent. Not only does it take five different currencies—I am not referring to Scottish pound notes—but a range of drinks is available which it is almost impossible to find at Travellers' Fare. In addition, on no train in the United Kingdom is it possible to purchase a newspaper or a magazine. Such a service would also increase customer satisfaction and reduce the public service obligation. Those are two matters that are not at the top of British Rail's list of priorities.

Mr. Adley

The catering services on the Waterloo-Salisbury-Exeter line have been privatised, and a way has been found of getting rid of the queues after Salisbury by discontinuing the service because the girls have to go home to Bristol.

Mr. Gregory

It is important that this House starts its deliberations on time and you, Mr. Deputy Speaker, are mindful of the fact that on Monday to Thursday we start at 1430 hours. But for British Rail that would not necessarily be on time. Because British Railways Board members and senior executives are paid an overrider based on the percentage of trains that arrive on time, it is particularly important to them that the trains do arrive on time. Sadly, they found that their overrider beyond their salary was not very substantial, so they changed the definition of "on time". For inter-city trains to be on lime now, they have to arrive within 20 minutes of the scheduled arrival time. That is not on time for my constituents; it is only on time for those who are deriving a percentage bonus. On time should mean literally on time, not a sloppy 20 minutes later, which helps no one. Let us have a bit of honesty and ensure that trains are on time and that those who are responsible for trains arriving on time receive the appropriate reward.

My hon. Friend the Member for Christchurch referred, not for the first time, with a little humour, to a citizens charter. My right hon. Friend the Prime Minister was the first senior politician in Britain to devise a citizens charter, and he had British Rail very much in mind when he did so. [Interruption.] I am glad that the few Opposition Members who are present agree.

Compensation is particularly appropriate with regard to British Rail. My hon. Friend the Member for Christchurch and I travelled on the TGV to Lyons. Because the train was delayed, not for the first time, by the rail union of that country which has that facility, just as it does here, the guard came through the train giving compensation vouchers. There was no question of people having to queue up or write letters to SNCF. I have asked the previous chairman and the present chairman of British Rail to consider such a feature in order to encourage people if the service falls short of their high expectations.

That market-oriented approach is anathema to British Rail. The former chairman, for whom I have great regard, could not understand the concept, because he thought that everybody, except for the solicitor and the architect, could be retrained. He had been retrained a number of times. But, sadly, that aspect of marketing never came up for serious discussion.

Therefore, when my hon. Friend replies to this interesting debate, I hope that he will say whether, if we approve the higher investment tonight, we shall at the same time enter into a genuine contract between British Rail and the customer, whether that is the passenger or freight company. If British Rail falls short of such a contract, what genuine compensation would it offer? It should not take the form of the rather feeble letters that I have to pass on to many of my constituents; it should be genuine compensation which will encourage people to return to the service and to recommend it. There is nothing like proper compensation to attract people.

There is much lost opportunity at our railway stations. I will give two examples, the first of which is my constituency city of York. Its famous station was opened in 1877, and has been the beloved station of a number of poets and others. The station is approximately the size of Utrecht station in the Netherlands, but only recently has British Rail provided a few extra services. We now have a flower seller, one of the few in the city which is open on a Sunday. We have no banking facilities, in common with every station bar one in the United Kingdom. It is impossible to cash a cheque at any railway station except for one. There is a little cafeteria, but it has a limited menu.

Mr. Cryer

There are two.

Mr. Gregory

I am surprised that the hon. Gentleman's definition of "cafeteria" extends so far. Utrecht station has 250 shops and offices; it is a whole complex, although it covers the same area as York station does. We want greater imagination from British Rail. British Rail does not have the staff to provide that imagination, but it has the expertise to go to outside agencies that could develop ideas for it. It could consult commercial estate agents and other developers who could enter partnership agreements to provide such assistance.

Mr. Gerald Bowden

Does my hon. Friend recognise, as I do, that among the critics of British Rail are many people who in their professional lives have built, designed and operated railways in other countries? When they make suggestions to British Rail about how it can improve its operational performance, they meet a blank wall and deaf ears. British Rail does not recognise that anyone outside Euston house can understand railways better.

Mr. Gregory

My hon. Friend makes an excellent point. At the risk of making a pun, I must say that British Rail tends to have tunnel vision. It believes that the only people who understand railways are those who have been steeped in them from the age of 16 or from immediately after the time they left university.

Important as it is for a certain group to understand engineering, signalling and maintenance, there are further opportunities for British Rail. It is not yet an albatross, despite the unhelpful comments made so frequently by the Federation of Railway Unions, which seeks to put British Rail into the dinosaur category. I continue to work to show that British Rail has a strong and serious future provided that it will enter a partnership with the private sector.

Mr. Snape

Will the hon. Gentleman give way?

Mr. Gregory

We must stick to railway policy rather than get sidetracked, as we were before, by the hon. Member for West Bromwich, East.

Mr. Snape

rose—

Mr. Gregory

My second example concerns London. There is no difficulty in extending the range of services at railway stations in London. If British Rail is restricted at King's Cross or at Paddington, it can simply push the railway lines out by half a mile, one mile or two miles. A range of activities could be provided there, from bowling alleys and cinemas to restaurants and banking. If British Rail has any doubts, it could enter partnership agreements, as happens in other parts of the world and in the airlanes. If British Rail has doubts on those matters, it could talk to the airlines and the airports. If we could get some synergy between the British Airports Authority and British Rail, we would move towards a far more customer-orientated railway industry.

The House and the public outside should be aware of the real danger to British Rail if it should ever again fall under a socialist Government. That is very unlikely, but as it is just a possibility, we should spell out that point. Labour has said that it will support the Bill tonight, but the hon. Member for Kingston upon Hull, East (Mr. Prescott) said that British Rail should be allowed to borrow from the private sector. He has not made it clear whether loans from the private sector would be cheaper or more expensive than loans from the national loans fund. Clearly they would be substantially more expensive. We must remember that, whether British Rail borrows from the public or the private sector, the debt is still a public sector one. As Sir Bob Reid, the chairman of British Rail, has said, investment in the railways is a social cost benefit to the public. That factor should be borne in mind when considering his comments to the Treasury in early July.

British Rail has already gone successfully down the path towards denationalisation. Those who have brothers or fathers some of whom are in British Rail whereas others are in British Rail Engineering do not find themselves torn between the two. The person coming home with a pay packet from British Rail Engineering has between one fifth and one quarter more—plus shares—than the person with similar experience and qualifications who works for British Rail has. British Rail will move in the direction of British Rail Engineering, once it moves down the path of denationalisation.

Under this Government, investment has been higher than it was in any year under the socialists. To be charitable, let us take Labour's most recent year in office, when it spent £537 million on the railways at 1990—91 prices. In the past year, the Conservatives have invested £834 million—or have allowed British Rail to invest that sum. Labour insists on maintaining the British Rail monopoly, which is clearly out of tune with the feeling in the European Community, as my hon. Friend the Member for Harrow, East (Mr. Dykes) will no doubt confirm. That is totally out of step with the rest of Europe.

The case for denationalisation could not be greater if we consider British Steel, British Telecom and British Leyland. They used to make losses on the same scale as British Rail has. I choose those examples carefully because they are companies of a similar size. Now that they have been denationalised, they are—surprise, surprise—all making profits. On moral and economic grounds, the present subsidy to British Rail is excessive. It should be carefully targeted in terms of staff, so that they have shares for the first time.

If the hon. Member for West Bromwich, East has any doubts about that, he should ask his constituents who are employed by National Freight whether they want to go back to life under state control. They will make it clear to him that they are proud of their share certificates. They frame them, just as they will frame their shares in British Rail in due course.

Safety is another element. I referred to my hon. Friend the Member for Christchurch in connection with the manning in the cab. By a curious twist of logic, British Rail says that two men must be in the cab of an inter-city train. When I have been in the cab of such a train, the second person has done almost no work. The case for having a second person is not convincing for the inter-city services, but it is convincing for the regional network, which is now far more complicated and does not have all the safety devices that inter-city services have. If we are to have that overmanning, it should be on the regional railways and not on inter-city services. We should address our minds to that.

I commend the Bill to the House, with the reservations that I have expressed. I look forward to a new era for the railways which is customer-orientated and which truly recognises staff commitment and responsibility.

7.28 pm

Mr. A. J. Beith (Berwick-upon-Tweed)

Although I have some criticisms of British Rail, it is worth placing on record the fact that there have been substantial improvements in the quality of railway services and some significant changes in the atmosphere and approach of the railway system and its staff. Like many hon. Members—although unfortunately not all—I travel many thousands of miles a month on British Rail and I have a pretty wide experience of what happens. I travel from Berwick-upon-Tweed to London—I will come to the new timetable in a moment—a journey that enables me to walk out of my house and to be in the centre of London just over four hours later, having had a comfortable journey and having done four hours' work in the process.

I am almost invariably on time, although having said that, I shall probably be late on my next two or three journeys. It is the ill luck of many of my constituents who make only occasional journeys to find that theirs is the train that is an hour late on a four-hour journey, whereas in the high sample of rail journeys from which I have to draw, there is a high proportion of journeys that I complete on time and sometimes early.

I have also noted significant improvements on my cross-country journeys. For many years, I crossed the Pennines on filthy trains, with grossly inadequate timetables and no hope of a cup of tea; now the rolling stock is much better, the service is more frequent and a private-enterprise trolley travels up and down the train regularly. The change in attitudes, and the combination of public and private-sector effort, has greatly improved many other services as well.

On my travels, I meet many dedicated British Rail staff who go out of their way to try to ensure that passengers are well catered for, and that when things go wrong every possible effort is made to help. That does not always happen, but it happens often enough to be worthy of note. Another welcome development is the arrival on delayed trains of British Rail staff carrying mobile telephones for the use of customers who will be unduly delayed.

I am slightly worried about the possibility that "sectorisation" will make it increasingly difficult for staff at the main terminal stations to make use of resources to deal with such difficult circumstances. Staff who would, in the past, use the resources of another sector have expressed anxiety to me about this. It may no longer be easy, for instance, to use a regional railway's diesel train, or to run an InterCity train to complete a journey on which a transfer to a regional service might otherwise have been necessary. Any move that cramps BR staff's initiative and their ability to cope when things are going badly is regrettable, and I hope that BR will continue to encourage those who still cling to the old attitudes to change their approach.

Despite the improvements that I have observed, there is still a serious lack of attention to passenger needs, even at times of major investment. That was brought home to me by my experience of the new east coast main-line timetable. At the beginning of this week, I had to set out for London 20 minutes earlier than I did under the previous timetable to catch the first train of the day, in order to arrive no earlier than I would have done on the old diesel-hauled 125. I boarded a new electric train that was due to arrive 20 minutes later than the diesel train that had run in the previous week.

When the train reached Newcastle, it broke down, because the staff could not shut the automatic doors; that was on the second day of the new timetable. I switched to a fast train, which enabled me to reach my destination no sooner than I could have done before the introduction of electrification. That does not strike me as a major step forward.

Mr. Adley

The hon. Gentleman should not complain about the east coast main line. He should accompany me on the Waterloo-Salisbury-Exeter line when I go home. The fastest train now takes six minutes longer to get from Waterloo to Salisbury than the same service took in 1964, the last full year of steam operation, when the train was pulled by a Merchant Navy Pacific engine.

Mr. Beith

Many such examples could be given. My complaint about the east coast main line timetable—which I hope will be improved in subsequent editions—is that the opportunities for improvement provided by electrification have not been directed at all the areas from which customers emerge, and in which fresh business can be secured by means of effective marketing. Certainly passengers from the borders are getting a fairly raw deal at peak times; they are also finding that the last train from London to Berwick leaves not at 8 pm—as they were promised when the sleeper services were withdrawn—but at 6.30 pm, and that the last train from Edinburgh to Berwick on Saturdays leaves at 7 pm, which makes it impossible for passengers to take the train to attend any evening event in Edinburgh.

Following electrification, overnight services have returned to the east coast main line. Once a week., on Friday nights, it is possible to take an overnight train from Edinburgh, Berwick or Newcastle, to London. Of course, it is not possible to lie down in a sleeping car; that would be too much to expect. Passengers must sit up for the whole journey. British Rail has shown that it is possible to reintroduce overnight services, but has not done the obvious—that is, run a proper service to Edinburgh with sleeping cars, and gain the extra business that is there to be obtained from the borders and from Tyneside

The Secretary of State knows that very well, because he travels regularly to Edinburgh in the sleeper. I cannot get into my sleeper compartment for the television crews that follow the right hon. and learned Gentleman nowadays to provide background film to accompany his statements. I am glad, however, that he is a regular rail traveller: as such, he probably realises how absurd it was to withdraw all the sleeper services from the east coast main line. It would be perfectly possible to run one of the Scottish sleepers through Tyneside and the borders.

British Rail's failure to honour its promise in that regard constitutes a standing warning to passengers never to believe what it says when it wants to get private Bills through the House. I shall issue the same warning in respect of every private Bill that BR introduces until its meets that undertaking.

I shall say more about regional services in my part of the world later in my speech. First, let me deal with the financial core of the Bill. In real terms, direct Government support for the railways is now 40 per cent. below the 1983 level, according to British Rail's annual report. Investment has been hopelessly constricted: the hon. Member for Kingston upon Hull, East (Mr. Prescott) mentioned the "bunching" of investment and the long periods in which no significant investment was made.

Because of that, many opportunities have been missed. This country did not develop the high-speed TGV service on a dedicated line; France did. We have been hanging about rather than making a decision on direct links with Europe and the new line to the channel tunnel, which baffles other European countries: as other hon. Members have pointed out, they cannot understand why we have not leapt at the opportunity to ensure that we have direct links not only with the south-east, but with the north, Scotland and Wales. By that means, we could attract freight on to the system by offering a rapid, direct journey, and also ensure that freight terminal facilities were available in the areas from which the business would come. Because of the current indecision, there is no prospect of a proper freight terminal to serve Tyneside, for example.

In recent years, there have been endless delays in the replacement of commuter and provincial stock, to the enormous discomfort of those who travel into London and some of our other conurbations. That discomfort is relieved only by the efforts of some passenger transport authorities, which have spent a fair amount on building up commuter services in co-operation with British Rail.

The kind of investment practice that we have seen for many years certainly will not secure the transport system whose desirability has been implicit in the Secretary of State's speeches ever since he came to office. We all welcome the tone of what he has been saying, but we want that to be borne out in the financial structure that he gives the railways. According to the current edition of Modern Railways: The Transport Secretary's recent speech was a cleanly-executed piece of public relations, and at the very least, it is significant that he feels what he said to be politically necessary. But the railways will not improve just because he has declared that it is OK to favour them. The big missing link in the Transport Secretary's declaration on rail transport is a willingness to assess all forms of transport on a common basis. We know perfectly well from previous debates that the rail passenger is being asked to contribute more of the infrastructure costs of his journey than is the road passenger, who notices very little marginal cost arising from his decision to make that particular journey by road. That distorts the objective that the Secretary of State has set out, and, indeed, prevents the achievement of that objective.

It makes environmental sense for us to attract more and more people to travel by rail rather than driving. It makes more sense in conurbations, but the principle is not confined to them. It also makes environmental sense for us to carry a much larger proportion of our freight by rail, and the investment structure must be built up to meet those needs.

Various of my hon. Friends favour specific projects on which they will wish to press the Secretary of State: one example in the extension of electrification to Aberdeen. We can all cite examples of projects that ought to be undertaken. I suspect that that will require far more investment than the Bill contemplates.

Much was said earlier about privatisation and its implications for the railway system. We take the view that the railway system needs to be opened up to more providers of services. The principle of the common network being available to more providers is appropriate, just as it is appropriate for telecommunications and other services where, until now, there has been a public service monopoly. We see considerable attractions in identifying ways in which new operators can be brought into the railway system.

The idea is not foreign to the railway system. Private trains are running about now, carrying both freight and passengers on the network. That concept could be developed extensively. It will be necessary to retain a publicly owned and managed network on which the services run. The Secretary of State asked the hon. Member for Kingston upon Hull, East whether the concept that I am advancing is supported by him.

However, the Secretary of State has not answered questions put to him as to his views about the future of the network. Does he believe that we need to retain a publicly-owned and managed basic network for the railway system, or does he believe that the entire system can be privatised? Our judgment, reached on the basis of our studies so far, is that a publicly managed system is likely to continue to be needed but that there is extensive scope for private enterprise activity on the network.

The public service obligation grant goes to the heart of the Bill's provisions. For some years, public service obligation money has been the subject of a reducing target. The original plan was to reduce it in 1992–93 to £345 million. The Bill refers to a figure of over £400 million, which shows that the Government recognise that that target cannot be achieved. If the regional railway system, that provides cross-country and rural services, is to be faced with a declining level of public support every year, what will happen is what is now happening.

Railway managers will say that there is only one way in which they can cope—by contracting the network. However, the network cannot be contracted without closures being proposed and without going through all the machinery that is involved in closure proposals. The Government do not want to be seen to be a Government who close railways. They do not want the Beeching tag hanging round their neck.

Managers of regional railways have found an answer to that—to cut down services on large parts of the network to the point where nobody can use them. They are turned into completely unusable services, or they are reduced to such a level that they cost the absolute minimum. Resources are then concentrated on areas where the largest number of people live. In that way, the managers have some hope of increasing their returns.

If regional railways are run like that, the public service obligation is not discharged in the way that was originally intended. The principle underlying that obligation was that a basic network of cross-country and rural railways ought to be retained. The public service obligation refers to that broad network being maintained, and is not now being maintained.

This is not a political point, put forward by me as the Liberal Democrat spokesman. It is the view trenchantly expressed by the Central Transport Consultative Committee, which is extremely concerned about what is happening to the rural network. The Central Transport Consultative Committee considers that the direction given to British Railways—to operate its passenger service so as to provide a public service broadly comparable generally with that provided by the board at present—was intended as a benchmark, below which grant-supported services must not fall. The committee points out that the services are falling well below that level and it lists services where there have been reductions of 50 per cent. or more below the level stated when the direction was given, which was as recently as 1988. It points out that in many rural areas the frequency has been dramatically reduced.

I can give the Secretary of State the most ghastly examples from my constituency. During the last three years, a stopping service of trains on the east coast main line, serving stations at Chathill, Alnmouth, Widdrington, Pegswood and Acklington, has been reduced by one train a year. There were only four trains to start with, so there is only one more year to go before we reach zero. The northbound train service on that line has been reduced by one train every year. It is now impossible to travel from Chathill station northwards to Scotland, even by using a connecting train at Berwick, and return to Chathill on the same day. As there is only one train, one has to return to Chathill the following day. Moreover, it is impossible to travel to Chathill by train and return from it that day. One can travel there by train only in the evening.

Chathill station is provided with a postbus connection —an efficient bit of transport co-ordination to which the Post Office and the local authority are committed, and that has been very successful in enabling people from the coastal areas of Seahouses and Bamburgh to use that rail service. However, that service is now hopeless because there is no train with which the postbus can connect. British Rail says, "By taking away the trains that we were using on that service, we can get more passengers on to the stock by using it in urban Tyneside." Surely, however, the objective of the public service obligation was to ensure that a basic network continued to be available. It cannot be set absolutely in stone, but the regional network is now being cut wholesale in order to meet impossible obligations.

The Secretary of State should consider it in terms that he would find congenial or agreeable—in terms of performance obligations and performance measurements. There is no performance measurement now for regional railways when it comes to providing rural services. There is not even a benchmark—that a basic service should be retained. The Government shouled not dole out very large subsidies without there being some sort of performance measurement against which the subsidy that is given can be measured. But that is what is happening now. A large subsidy is given to a whole network without any assessment of whether the network as a whole is being maintained. I sought to amend the Bill to include such an obligation.

In your other capacity, Mr. Deputy Speaker, as Chairman of Ways and Means, you felt unable to select those amendments to the Bill. We therefore face the dilemma of whether to vote against individual clauses that deal with the public service obligation. That may be the only way to get the point across. It does not make sense to continue a public service obligation grant that is not measured against whether the network for which it is being provided is still there and still provides a reasonable and recognisable level of service.

Mr. Snape

Does the hon. Gentleman agree that when Ministers are asked about this practice, it is unfair for them to say, "These matters are entirely ones that should be answered by British Rail"? The House has great difficulty in obtaining information from a Department that, due to its own financial noose, causes these cuts yet declines to accept responsibility for them in this place.

Mr. Beith

Absolutely. The Secretary of State has placed British Rail in the position that it can run regional railways only on the basis of retrenchment—on the basis of concentrating rolling stock in such a way as to obtain the maximum return. British Rail is the originator of the policy. It may say that that is not what it wants—that it has its own ideas about what can be achieved. In that case, why are the Government telling British Rail and the House what that basis is? I shall be happy to give way to the Secretary of State if he wishes to intervene to clarify the point.

What is the point of having a Central Transport Consultative Committee if the Secretary of State takes no notice of what it says on the subject? It has written to him at considerable length and made public statements, but we are getting no further. The committee has gone into considerable detail about the performance targets that should apply to British Rail in relation to its rural services, but it has received no response. It says: The CTCC is disappointed with the Department's interpretation of the PSO direction. It seems to give BR the right to reduce a train service on a particular line or at a particular station to the bare minimum to avoid closure proceedings, irrespective of the social need which that service satisfies and for which BR receives grant. The CTCC believes that situation to be most unsatisfactory and one which must be tackled by future legislation. This is a legislative opportunity. Do Ministers intend that British Rail should meet its target by cutting to a minimum the services on the more extended parts of the rural network, thereby meeting the obligation of reducing the public service grant? Is that the plan, or do Ministers intend that the rural service network should remain at broadly the same level as now? I should like the service extended in some areas and more stations to be opened. It has been demonstrated in some of the passenger transport authority areas that new business can be achieved by that, and the same could take place on some of the rural lines. However, currently everything is going in the opposite direction.

It is not reasonable to ask the House to approve the increases in the public service obligation, which is one part of the Bill, without explaining what the money is to pay for, what obligations arise from it and what the Government's policy is. The Bill sets out only the limits. it does not set out what the Government will give in PSO grants, just the maximum that they are allowed to give.

The Minister who has day-to-day responsibility for the railways has returned to the Chamber. He must tell us his response to the views of the Central Transport Consultative Committee on the issue that affects rural railway users in Northumberland and Wales, including the constituency of my hon. Friend the Member for Ceredigion and Pembroke, North (Mr. Howells) and other hon. Members in mid-Wales and in the south-west and all over the country where services are being severely damaged. It is not reasonable to ask the House to approve the Bill without dealing with such questions.

7.51 pm

Mr. Gerald Bowden (Dulwich)

I was reassured by the opening remarks of my right hon. and learned Friend the Secretary of State. It is encouraging to see increased investment in railways and an increase in competition in railway services. It is pleasing to learn that the monopoly that British Rail has enjoyed and exploited over the years is likely to be broken by private enterprise opportunities opening up and, ultimately, by denationalisation. In addition, there is the encouraging thought that we now have a more positive freight policy on rail, as opposed to roads, than we have had for many years.

Given the welcome signs that are the background to the Bill, it is a pity that the one great investment opportunity, perhaps the greatest opportunity of the century—the channel tunnel and its rail link—has been so mishandled by British Rail. It has failed to rise to the challenge. The transportation of freight and the communication of passengers with other parts of Europe has been handled in a cack-handed way. If British Rail's proposals for the channel tunnel rail link are introduced, they will make Britain a branch line of the rest of Europe rather than part of the main line.

I shall outline the deficiencies and failures of British Rail's proposed route, how it fails to rise to the opportunities offered by the Bill and how alternatives could meet those requirements in a much better way.

British Rail has sought to impose a channel tunnel rail link that goes no further than London. It pays lip service to going beyond King's Cross, but, by and large, it will represent a buffer stop for passengers. Those who travel to the west country will have to go from King's Cross to Paddington under their own arrangements and then use other parts of British Rail for the rest of their journey. If one is trying to attract passengers to travel from all parts of the United Kingdom by rail instead of by road or air, it is nonsense if there is no proper network of through trains allowing passengers to travel without stopping in London to change trains.

That is culpable enough, but, worse than that, British Rail has made no real provision for freight. It intends to superimpose a freight route on existing commuter routes in the south-east. British Rail is not offering a freight policy, but is using the slack time on commuter routes. That is no way to encourage those who ship from the north of Scotland to the south of Italy to use a train or a rail container rather than road. Until that matter is seized by those who operate the service now or who will operate it in the future, particularly the channel tunnel link, rail will never command the commercial and financial support that it should have.

British Rail's proposals seem merely to link the King's Cross area of London with the capitals of Europe. It will offer an opportunity for passengers covering that distance, but precious little else. The reason for that planning may have been dominated by the development aspect. There is no doubt that the opportunity to exploit the development potential around King's Cross has been fully investigated by British Rail.

I have no knowledge of precise details, but we can surmise that, if an office development were to be built on top of a terminal linking King's Cross with Paris, Brussels and the other capitals of continental Europe, the value of such accommodation would be increased by a factor of three or four. So, what is worth £x per sq ft now could be worth £4x after the development. Think of the advantages to any European or international company if its employees could simply go down in the lift from their office to the platform below and travel straight to the heart of Europe without the hassle of travelling to Heathrow, Gatwick or even City airport. That would greatly enhance the property development value of King's Cross.

I have no reason to know this, but perhaps the reason for British Rail's preoccupation with a terminal at King's Cross with precious few facilities for through trains beyond King's Cross is dominated by the desire to exploit to the best advantage the land around that area.

British Rail's outlined route fails on three main criteria that should apply. First, it is commercially and financially unattractive. The private investor partners who linked with British Rail in an attempt to reach a partnership agreement to build the King's Cross southern route dropped out because they found it commercially and financially unsustainable. Secondly, operationally it is of no great benefit. In terms of passenger time, the direct link to King's Cross saves perhaps 12 or, at best, 20 minutes. That is a small amount of time when one considers what an alternative could offer. Also, as I have mentioned, it makes no provision for freight, which will trundle around the existing commuter lines.

Thirdly, and perhaps most damaging, the proposed line is environmentally disastrous. It would cause much damage, not only to the heritage, farmland and landscape of Kent, but, when it passed through Warwick gardens in my constituency and on to King's Cross, it would cause the maximum disturbance and devastation to the area. The cost of mitigating that environmental damage is out of all proportion to the benefit that would be gained by following that route.

British Rail has chosen the worst proposals to meet the challenge. We are debating a railway for the 21st century and how we ensure that the United Kingdom, although separated from it by the Channel, can nevertheless have a direct rail link with the rest of continental Europe. British Rail has failed to recognise the opportunities and to meet that challenge. My right hon. and learned Friend the Secretary of State promised that increased investment will lead to an improved service and that the rail system will be subject to competition and private enterprise. The channel tunnel offers him perhaps the best opportunity to fulfil those promises.

Alternative routes have been proposed that can be built de novo and do not superimpose themselves on existing lines. More than one alternative route is under consideration, but I shall highlight the main points of what might be called the Ove Arup concept, which is a way of linking Folkestone with London—the capital link is important—without pushing all passenger or freight traffic through the bottlenecks of central London or King's Cross. The Ove Arup route goes through parts of north-east Kent that are regarded as the under-privileged areas of the south-east, which could do with some economic uplift and where flagging industries would benefit from the increased investment and opportunities that would flow from the link.

The line would continue through south-east Essex—another area that would benefit from economic uplift—to Stratford. Trains travelling to the west would continue to King's Cross, Paddington, Heathrow, Bristol, the south-west, the north-west and Wales. People in Cardiff could board a train and get off in Paris, Brussels or Milan without changing in London.

Passengers travelling to the north would not need to travel to King's Cross, as their train would go straight through Stratford and up to the north-east, the north-west and Scotland. That would avoid pushing freight and passenger traffic through central London.

Building that route de novo offers an opportunity to build a dedicated freight route alongside it. I recently asked Ministers whether BR's arrangements for freight traffic are compatible—whether the track and wagon gauge are compatible with European systems. If the route is to link the United Kingdom with continental Europe, trains must be able to run without transferring their loads or stopping in sidings. The alternative routes offer advantages that British Rail's preferred route does not.

I mentioned the development opportunities at King's Cross, which no doubt British Rail has assessed and will seek to exploit. Similar opportunities arise at Stratford, which is near the major development at docklands. Industry and enterprise in docklands would have easier access to the channel tunnel link. Stratford offers passengers the opportunity to park and ride, as they can at the airport, but certainly could not at King's Cross, or what is now called the kiss-and-ride syndrome—one says goodbye to granny or the children but later can pick them up near where they get off the train.

We should seize that opportunity now, because if we make the wrong decision not only we but many generations will suffer. It will be an inconvenience for us now, but disastrous for the long-term economic prospects of not only London and docklands but, more important, of the whole of the United Kingdom. If the opportunity is missed now, it is missed for ever.

I welcome what my right hon. and learned Friend the Secretary of State said, but I urge him most seriously to consider the opportunities that lie beyond the vision of British Rail and to ensure that the whole of the United Kingdom becomes part of continental Europe. I commend the Bill in those terms.

8.7 pm

Dr. Kim Howells (Pontypridd)

I am sure that you, Madam Deputy Speaker, will be relieved to hear that I shall be brief.

We have had an even-tempered and good debate. The lesson to be drawn from it is that the future of the railways is of extraordinary importance. The publications that the Secretary of State for Transport has issued show that, on a cross-party basis and throughout the world, it is regarded as the alternative to our choked road system.

I hope that the discussion will not obsess itself with whether the rail system should be nationalised or privatised, but will concentrate on ensuring that our rail system is efficient, safe and, if possible, cheap. Geographically, Britain is on the periphery of Europe—Wales and Scotland are literally on the periphery of Europe. It is vital that we have the direct links that the hon. Member for Dulwich (Mr. Bowden) mentioned.

The problem that is faced by my constituents and many others in the former mining valleys of south Wales is how we ensure that we continue to enjoy the services of a commuter rail system. Much of the area's population, perhaps I million people, use that excellent service, which is distinguished by a young female manager, the imaginative Alison Ingram. She has some good ideas about the future of that rail system. It is difficult to apply normal financial criteria to what is essentially a commuter system.

The hon. Member for Christchurch (Mr. Adley) did the rail service a great service by drawing the House's attention to the false comparisons which are frequently made between the competitiveness of the railways with the roads. I was glad that he brought to our attention the hidden costs of road transport. I hope that the Minister for Public Transport, who, I know, cares a great deal about the railways, will bear that in mind when he replies.

Such false comparisons always detract from the value that we place on our railways. That comparison is crucial if we are to take as seriously as we should the environmental superiority of the railways over any other form of public transport. No matter which party is in power, it will be difficult for us to break off our love affair with cars and the easy accessibility so often offered by road transport to factories, villages and supermarkets. However, we must make some fundamental decisions now.

The hon. Member for Dulwich drew our attention to a decision that is of supreme importance at least in terms of our links with Europe. I should like the western half of Britain to be saved the pain of going through a certain London bottleneck. I am sure that many hon. Members know the Reading-Redhill-Ashford line. It needs upgrading, and I understand that there are some difficulties with Redhill station, but the sums needed to modify the line are very small when compared to those spent by other European countries. The same applies to the possible Stratford-King's Cross line, and the way in which British Rail management is, I suspect, forced to skimp on any of its imaginative projections is laughable.

I remember when British Rail management were brought before the Select Committee on Welsh Affairs. We asked them to describe to us—because we could not get a clear picture—how somebody would travel from Cardiff to Paris during the day. We were told that that person would get on a train in Cardiff, travel to Paddington, pick up his cases and then get on the Circle line, which would, of course, be vastly improved by that time. The groans of disappointment and the guffaws were louder than the noise of a 125 diesel pulling out of Cardiff station. The notion that everyone west of London has to travel in that way to get to Paris is an insult to an area which has been one of the great growth areas of the economy in the past 10 to 15 years.

We must think seriously and urgently if we are to avoid falling into the trap of short termism and of trying to upgrade only the main London railway terminals to take this huge step forward.

There have been worrying tendencies in south Wales to try to eke out the public sector obligation grant by cutting early-morning and late-night services. Having spoken to the management in south Wales, I can understand why it is trying to do that, but it detracts from the overall service offered in areas such as south Wales. If we start lopping off services at either end of the day, we may end up in a position similar to that which existed in the mining villages. We said that as long as we took off the uneconomic tail, we would be left with a profitable middle sector, but, inevitably, we were left with nothing—south Wales now has two pits. We do not want to be left with two rail services a day to Pontypridd or Treherbert, but there are alternatives.

I hope that the Minister will consider carefully the suggestions made to me by British Rail management in Cardiff. It was suggested that one solution might be to substitute its own buses for trains in the early morning and late at night. That could be done at a fraction of the cost of running trains at that time because of difficulties with timetabling and signalling. Management said that they could not do that because they did not have the power of their German and Swiss equivalents, which can run buses. I should have thought that it would be a sensible extension of British Rail's powers to allow them that flexibility.

It is difficult for some of the valley communities, and, I am sure, for many rural communities elsewhere, to find a substitute form of transport. We often end up throwing people back on to the roads. We say that we want to cut down on pollution from cars and to reduce the whole of the car economy which is such an environmental problem, yet at the same time we fail to recognise that we must allow British Rail—or whatever it will be called in the future —to be flexible enough to overcome those central economic difficulties early in the morning and late at night.

The Minister is also aware that we are unhappy about our service in south Wales. Signalling, the conditions of many railway stations and on-line services need to be much improved. Although I disagreed with much of what the hon. Member for York (Mr. Gregory) said, he put his finger on a number of points which need special attention. Railway stations need to be refurbished and the quality of service on trains needs to continue to be improved.

For example, many improvements are needed at Cardiff station. I mention one of the more light-hearted problems; it is less urgent but it is immensely irritating. When I get off the 125 diesel and cross to the platform from which trains leave for the valleys, my ears are assaulted by the wonderful plummy tones of someone who says, "Welcome to the velleys lines". That is not how the valleys are known in south Wales. The same applies to the stations enumerated by the announcer. He says, in his plumy tones, "The train about to depart goes to Treherbert and Bargoed." It would be nice if we did not feel that such an alien presence was directing us from one platform or one train to another.

Mr. Wolfson

I hope that British Rail will take to heart what the hon. Gentleman says and will use his voice as an alternative.

Dr. Howells

I hope that my majority is not that thin.

On a more serious point, many of the people who use the valleys lines work in Cardiff and along the M4 corridor. The economy and the social economy of south Wales have changed dramatically over the past 30 years and especially over the past 10 or 15 years. We do not have as many community-based employers as we did. The pits have largely gone, as have many of the manufacturing plants in the valleys. Increasingly, investment is being concentrated along the M4 corridor. That is where the jobs are, and that is where people want to get to.

I am sure that the Minister is well aware that one of our great problems is that, because of the topography of the valleys—the physical restrictions—it is impossible to build any more roads there. We have had a dualled A470 for quite a long time now. It is highly congested, with constant traffic jams and attendant delays and such congestion adds considerably to the costs of road-borne traffic. To the communities of south Wales, that is a crucial question, because we are trying to reduce our unit costs. Our road transport firms have performed valiantly in trying to negotiate inadequate roads in the valleys and the eternal bottleneck of the Severn bridge—and I am glad that the construction of the new bridge is to start shortly. I would only say, about time too.

We must realise that we cannot go on filling the valleys with roads, not least because the people do not want them and because communities such as mine suffer badly. Places such as Talbot Green, Llantrisant and Taff's Well are choked with traffic. I hope that the Government will take that on board and will realise that the alternative is to launch a series of imaginative initiatives, some of which will cost money, to attract people and heavy goods on to the railways and off the roads.

I know that the Minister is very much concerned with the problem. I am sure that he is aware that all kinds of experiments are taking place in Germany—for example, with tax breaks and new technologies. The Germans are only just starting, I do not think that they are much further advanced than we are. I must say that some of the proposals that I have heard from British Rail and from private concerns about how the swap-over from road to rail might take place are extremely interesting, and at least as imaginative as those that I came across in Germany with the hon. Member for Christchurch.

Ours is a very good rail service—certainly in terms of the amount of cash that we make available to it. The German rolling stock that we saw was certainly of no better quality than British rolling stock, and much of it was of inferior quality. In many ways, British Rail management has done an excellent job, but we must realise, that it is the Government who hold the purse strings. It is the Government who have their hands on the rope round British Rail's neck. If they care to loosen it and to encourage BR—and I am glad to hear encouraging noises—we may well see that changeover take place: a whole new generation of rail transport may be helped to supersede the great problems on our roads. I hope that the Minister will continue in that direction, and that the new age of railways will take off.

8.23 pm

Mr. Hugh Dykes (Harrow, East)

This has been an interesting debate, in which there has been a meeting of minds on a number of salient points. I had some sympathy with what the hon. Member for Pontypridd (Dr. Howells) said about plummy tones on stations—albeit that it was not perhaps one of his most important points. The LRT network is not part of the subject of today's debate, but the House will know that we in London are very familiar with the immortal announcement, "Mind the gap", usually delivered in very plummy old-Etonian tones. I am sure that people's voices are not normally like that. The voices on the southern region are often very Roedean or very Eton in tone.

"Mind the gap" is an important injunction for both Government and Opposition Front-Bench spokesmen. There is still an enormous gap in respect of the ideas and proposals on transport and rail policies for the future. "Mind the gap" is also a useful admonition for the Government. The danger is that we are still seemingly rather half-hearted about our railway policy. Yet I detect the first stages of a change of mind on the Government's part—it was alluded to by my hon. Friend the Member for Christchurch (Mr. Adley) in his excellent speech—and that is welcome. At the same time, the Government seem to be nervous and hesitant about going further. I pay tribute to the work of my hon. Friend the Member for Christchurch and my right hon. and learned Friend the Secretary of State for their work in beginning to restore—and then to increase—the morale of British Rail management. That is an important task, and we are a long way from completing it.

Many of BR's long-distance services—and, indeed, its other services—are very good. We all have a tendency to knock the rail network, probably excessively. Moreover, the Government are hesitant when it comes to providing the enormous resources that are needed in terms of investment capital. Having said that, I recognise that the Government have made some substantial increases in investment resources and the Bill is an expression of that.

All that is very welcome, but we are not there yet. When I visit other European countries, I note that there is a totally different psychological attitude towards railways as a system of internal transport. Perhaps, in future, we shall have slightly transmogrified monopolies. Incidentally, it is not right to pray in aid the Commission's attitude to policy formation in respect of internal transport policy. That is not its function. The function of the Commission in Brussels is to try to achieve a co-ordinated single market in transport policy, which involves it in what happens across frontiers, in what is done by way of intermodal developments and more intensive co-ordination of the different national railway systems and perhaps, therefore, in bringing in more private operations. The Commission is certainly not saying that privatisation in all the individual member states would be a good thing.

It would also be a gross exaggeration to suggest that other national Governments are thinking in terms of privatisation on a major scale. They may be thinking of reducing the monopoly in an operational practical sense. They may be thinking of other operators coming in with the national central railway system on a greater scale. I note the amusing example from Switzerland, where I gather no substantial changes are proposed, but where it is planned to let MacDonalds run some of the rolling restaurant cars. It would be daft to cite that as an example of major privatisation. I do not think that any of the political parties, including the centrist and Christian Democrat parties, have concluded that privatisation is an indispensable part of any future policy.

We all want a heavily invested national railway asset. That is especially true in Britain, which has fallen behind some other countries, and in Germany, which benefits particularly from the advantages of a dense network. I think that my hon. Friend the Member for Christchurch, who has visited the Bundesbahn, will agree with me that the Germans are now beginning to worry about the cost of the network and the size of the deficit, yet the network makes a direct contribution to the development of the German gross domestic product. One cannot say that our railway system makes such a contribution. BR management would like to do that, but they have been prevented by circumstances, including ideological circumstances, from doing so in recent years. That is a great tragedy for Britain.

Mr. Adley

My hon. Friend is right that the Germans are worried, but they are worried because, with the amalgamation of east and west Germany, they are faced with the prospect of having to build a virtually completely new lateral railway system. What is causing the problem is the amount of investment that that will involve.

Mr. Dykes

That is right, although I suppose one might say, amusingly, that the incorporation of the five new Lander into the Federal Republic amounted to the Deutsche bank having the world's biggest rights issue and deciding to use the West German Government as the means to do it.

Enormous amounts of capital will be needed to bring the Reichsbahn network from east Germany into the Federal railway system—something that is scheduled to happen in two years' time. I have the feeling that the Germans will tackle that problem and raise the capital. I think that they will accept the capital deficit that that will entail as well as the operating deficit on German railways. The Germans will regard the development as a direct positive contribution to the development of their economy. In that sense, investment in the railways is better than many other forms of public sector investment. The Germans do not say, "The railways must make a profit." In Britain, we have reduced the steel industry to half its previous output level. It is one of the smallest steel industries, in a nation with a population of 50 million.

We could all find ways of reducing the railway network and making it fabulously profitable on current account. We could probably do that by having five lines. The smaller the network, the more profitable it becomes in economic terms, but does it serve the nation? Of course my hon. Friend the Minister knows that it does not, even if he will not agree with me now. I detect the beginnings of a major psychological change. This is not the ancien regime. For some reason, the previous Prime Minister did not like railways. I did not have a chance to discuss it with her. However, the new Cabinet is pro-railway and that is witnessed by the Bill which I heartily support and by the change of attitude. Perhaps in future there will be a "Malcolm Rifkind plaza" at Waverley station or a "Roger Freeman plaza" before Euston station as the new commitment unfolds. However, that will mean a lot more money.

Mr. Snape

Will the hon. Gentleman give way?

Mr. Dykes

I will give way reluctantly.

Mr. Snape

And I intervene equally reluctantly. Before the hon. Member for Harrow, East (Mr. Dykes), in his eloquent way, hails this new golden age of railways, we should allow reality to intrude for a moment. Without the Bill, BR would be virtually bankrupt by mid-summer. There is no real alternative and there has been no great conversion just yet.

Mr. Dykes

The hon. Member for West Bromwich, East (Mr. Snape) obviously was not listening carefully to me earlier. He was talking animatedly to his hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) to ensure that he says the right thing when he speaks later. If he had listened more carefully, he would have heard me say that the Bill is the first small step for mankind and that it is welcome. However, a lot more needs to be done.

Not withstanding the sympathy that we feel for my hon. Friend the Member for Dulwich (Mr. Bowden) about the channel tunnel rail link route, the time that it is taking to decide on the route is alarming. It is also alarming to hear our friends on the continent asking what the Government and BR's management are doing to our railway system. I am reluctant to blame the BR management. They have coped almost heroically with enormously adverse circumstances and restrictions and with the atmosphere of hostility.

I do not believe that many of my Conservative colleagues are mad about the privatisation of the railways. They want an efficient network and more capital devoted to the railways. They would probably welcome the intermodal competition of private enterprise providing services with BR. The linkage between road haulage, freight and trains is crucial and it must be achieved properly. That is one of the preoccupations of the European Commission. However, that is very different from saying that if BR is privatised and run by Lord Hanson or Gerald Ronson—

Mr. Adley

If that were the case, one would never get from Wandsworth to Brixton.

Mr. Dykes

I will resist the temptation to comment on that.

We know that it would be a nightmare if there was a 19th-century, old-fashioned capitalist approach to railways. That is one way of running the system down. I welcome the change of attitude. That attitude was mirrored by the reference of the hon. Member for Pontypridd to people being addicted to their motor cars. That idea no longer grips people as it used to.

People like to use their cars these days for holidays, on essential journeys and for journeys where there is no railway or bus alternative. However, people now realise the negative aspects of such a policy. They want a railway network that will serve the needs of the next two decades. I believe that our ministerial team can provide that if they are given the opportunity and the financial resources. Although I may be guessing, I am sure that my hon. Friend the Minister will confirm that that is the Government's positive attitude.

That policy must be pursued for many reasons, not least to protect the environment. We are aware of the short-sighted policies of the past few decades involving the glorification of the motor car and the attendant problems for cities and country routes. Motorways have not provided the solution as they should have done according to the sacred laws of the famous French economist Jean Say and the provision of extra capacity.

Perhaps we should be more consensual in the House. It is extraordinary that it is considered to be immoral and wicked to have consensus in this Parliament. At every European parliamentary debate I have attended, I have seen people on both sides nodding in agreement, including the Government and Opposition representatives. I am sure that it is difficult for the hon. Member for Kingston upon Hull, East to understand that, because he must always fight. However, consensus is the way forward for such a complicated policy. Agreement produces policy stances as well as management efficiency. That must be led by the politicians.

There is no way in which even a free enterprise-oriented Government can stand back and tell a railway management to do what it likes. Ultimately, the money comes from the public sector and, therefore, the Government are heavily involved. Even if there is more of a stand-off posture, the management must manage, but the guidelines for future railway policy depend on the Government's attitude and support for it among the public.

The channel tunnel project was the greatest transport project in history and it was privately funded. I pay tribute to everyone involved in it, but we now need public sector finance to surround it, especially in the south-east, to ensure that it is a great success. The project shows that the public and private sectors can go together if we strip out ideological prejudices and reach a rational railway policy for the future. The sooner we achieve that, the more we will be able to keep up with the others.

We cannot always insist on being behind other European countries as the single market develops. Do we want to be the only country in Europe with a different currency with regard to the ecu and the single currency?

Mr. Cryer

We are beginning to diverge now.

Mr. Dykes

I am finishing now, so there is no need for the hon. Member for Bradford, South (Mr. Cryer) to become excited.

A foreign visitor might arrive at Dover and discover that he will travel at only 32 mph to London when he has just stepped off the French TGV. Must we be the only European country to have antiquated trains?

Mr. Adley

Will my hon. Friend add to his list the fact that we are the only country in Europe which seems to insist on requiring immigration and customs facilities to be carried out at the terminus? It is possible to travel into and out of the Community—to and from Switzerland and Germany—with all the documentation sorted out on the train. We still do not have such a facility on offer.

Mr. Dykes

The myopic people pursuing the policy for facilities at the terminus will find that the public will not accept it. There will be rioting on a grand scale if they pursue it. I do not suggest that politicians should be involved in the rioting, but the public will not accept such a policy over the next few decades when there is agreement between the other European countries to cross frontiers without any checks. Interpol does not consider that a threat to the prevention of terrorism and drug trafficking.

It must be the message from this new Cabinet, devoted as it is to the development and expansion of BR, that it will keep up with the rest of Europe, and perhaps in a few years' time we can have an all-electric network for long-distance and short-distance routes including regional trains, and which will be a system in which we can, as we did in the past, take pride.

8.37 pm

Mr. Andrew F. Bennett (Denton and Reddish)

I recognise the relief that the hon. Members for Harrow, East (Mr. Dykes) and for Christchurch (Mr. Adley) must feel at the Government's change of heart as the Tory party is officially no longer against the railways. However, there was not much evidence in the speech by the Secretary of State for Transport of a change of heart. There has been a major shift of power in the House this year and increasingly Conservative Members question what the Labour party will be doing in government over the next five years instead of thinking about what they will be doing in opposition.

The Secretary of State's performance was remarkable. He moved the Bill's Second Reading, but spent only one or two minutes considering it. After that, he made what amounted to an Opposition shadow spokesman's speech when he attacked Labour's policy. The ministerial speech was made by my hon. Friend the Member for K.ingston upon Hull, East (Mr. Prescott). He clearly set out authoritatively a policy for rail—over which some of us might raise a few question marks—which the next Labour Government would carry forward. There seems to have been an interesting movement of power in the House over the past few months.

It is a great tragedy that, throughout the 1980s, the Government were against BR and against providing resources for it. During the 1980s, Britain derived a tremendous amount of wealth from the North sea and we should have invested it in major infrastructure and, in particular, in British Rail. It is a tragedy that that opportunity was missed. Although I welcome the Government's conversion, I must point out that it will cost a lot more now to do what should have been done 10 years ago.

I should like to raise some specific constituency points. First, I wish to make a bitter complaint against British Rail which has failed to reach a decision about a freight terminal for Greater Manchester. Tameside local authority suggested a joint venture project for a terminal at Guide Bridge. The original proposals were advanced almost three years ago and British Rail assured the local authority that there would be a decision by January this year. No decision has yet been reached.

I very much regret that the chairman of British Rail has continually fobbed off my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), who has been writing to him to press the case for the terminal on behalf of the three Tameside Members. We want an urgent decision—first, because if we are not to have a freight terminal, the land could be used for something else. Secondly, we want a successful terminal, but if it is to be successful, we must persuade a large number of manufacturers in the Greater Manchester area that if they are to export to Europe in the future, they must have containers that are capable of a short road trip into the terminal, followed by a long rail trip. If those companies are to make plans and to take their freight off the road network on to the rail network, they should be making their decisions now.

At Question Time on Monday, the Minister told me that he hoped that British Rail would make a decision before he visited the north-west. However, when I intervened earlier, he said that he hoped that British Rail would make its decision this summer but summer is an ambiguous word. I plead with British Rail to reach a favourable decision quickly. We need such a decision so that we can carry out the policy of both the Government and the Labour party and transfer a large volume of freight from road to rail.

My second point relates to the developments at Stockport station. I do not know whether my hon. Friend the Member for West Bromwich, East (Mr. Snape) was ever in the signal box at Stockport, but he must be aware that there used to be a large coal yard at the side of the station. During the 1970s and 1980s, the people of Stockport were promised that, when that coal yard ceased to be used for that purpose, the area would provide a new facility, a bus-rail interchange for Stockport. The people of Stockport have seen the way in which imaginative bus-rail interchange facilities have been developed in Bury and Altrincham. We were told that Stockport would have a small bus provision, with the main bus station being sited in the bottom of the valley.

The development is now being completed, but there is only minimal provision for buses. It is almost impossible for buses to enter the station area. There is also minimal provision for taxis. Most of the land has been used for a leisure development and for a McDonald's drive-in food takeaway. That sort of commercial development is the last thing that that land should be used for. Of course, many of the kids in my constituency like the idea of going to a McDonald's and I have no objection to that, but it is a tragedy that, instead of allowing Stockport to have a good bus-rail interchange that would facilitate good public transport in the area, that land has been used for a drive-in McDonald's takeaway.

Mr. Cryer

Does my hon. Friend agree that that represents a change of policy? Whatever the criticisms of the 1974–79 Labour Government, they impressed upon British Rail the need to offer local authorities any of its surplus land that they could use. However, British Rail is now under pressure to maximise revenue from the sale of land to finance the railway service. That is why important schemes, such as the one in Stockport that my hon. Friend has mentioned, are coming to naught.

Mr. Bennett

I fully accept my hon. Friend's point. I had been about to say that British Rail has been pushed into short-term profit instead of being allowed to provide a good integrated transport service.

My third point relates to the way in which British Rail is cheating Parliament in terms of the service that it provides on the Stockport to Manchester, Victoria line. That line runs through my constituency, from Stockport to Reddish, South into Denton, on to Ashton and then down to Manchester, Victoria. In 1966, British Rail outlined proposals to the Transport Users Consultative Committee for the closure of the line, but the case was decided against British Rail. I accept that, since then, the number of people living close to the stations on that line has declined and that Reddish, South and Denton are no longer viable stations. If that line is to be successful, a series of new stations should be built much closer to where people now live.

I would not have complained too much if British Rail had proposed the closure of those stations—that would have been sad, but I could have understood it—but instead of opting for closure, British Rail claims that it is still providing a service on that line. Last year, the service on that line consisted of one train per week on a Monday morning. I was not surprised to learn that, on at least two occasions, the Monday morning train was cancelled. I am told that, on other Monday mornings, the train was absolutely empty. Running a train just once a week is not much of a service. Instead of running a train on a Monday morning, this year British Rail has run it on a Friday morning—no doubt to improve the service. Again, I am told that virtually nobody travels on the train.

It is nonsense for British Rail to claim that it is providing a service between Stockport and Manchester, Victoria to meet its statutory requirements when it runs only one train per week. British Rail should be honest with Parliament and say that it is seeking to withdraw that passenger service. Indeed, it should go ahead and withdraw it because that is what it is effectively doing with that nonsense of one train a week. That is typical of British Rail's lack of interest in the Greater Manchester network. Unless it can get a subsidy from the local authority, British Rail is clearly not prepared to provide a service.

The Minister has proudly said from the Dispatch Box that the Government have increased the number of railway lines. The line from Stockport to Manchester, Victoria will be included in that increase, but how can a service that comprises only one train a week count, especially when it is sometimes cancelled?

Mr. Prescott

Is the service paid for by the local authority?

Mr. Bennett

No, not in this case. The service has no subsidy.

My next point relates to the Brinnington service. Again, we have heard a fanfare from British Rail that that station, for which the Government claim credit although it was provided by the local authority, is to benefit from an improved half-hourly service. I very much welcome that. However, many of my constituents, who travel from Brinnington to Reddish on that line, have found that, instead of there being an improved service at Reddish, alternate trains do not stop there. That means that there is a half-hourly service from Brinnington to Manchester via Reddish, but that Reddish has only an hourly service. I understand that it would take an extra two minutes for the train to stop at Reddish, but British Rail apparently feels that that two-minute delay is not worthwhile. The result is that my constituents who want to travel from Brinnington to Reddish cannot do so.

Many people in Reddish think that, because there is only an hourly service, they might as well forget about using British Rail. The result is more cars going into Manchester, where the parking problems are increasing. If there is only an hourly service, those who are going shopping have to fit in their errands extremely well so that they can be back in time for a train. One can be more flexible with a service that runs every half hour or every 20 minutes because, if one misses one train, one will not have to wait long for another. I plead with British Rail to reconsider the case of Reddish and to provide a good service.

The general level of British Rail's local services in the Greater Manchester area is simply not good enough. There are repeated delays and cancellations and the service is generally unreliable. The result is the people find alternative ways of travelling.

My next point is a personal plea on behalf of Members of Parliament. Ever since I came to the House in 1974, there has been a sleeper service from London to Manchester. British Rail has threatened to withdraw it on several occasions and we have used various devices to try to stop it doing so. We have objected to private Bills and lobbied British Rail hard. Two years ago, it came up with a proposal to run sleepers one way and to send them back empty the other way.

Now we hear rumours from the sleeping car attendants that, from October, the sleeper service to Manchester will be withdrawn. My hon. Friend the Member for Manchester, Withington (Mr. Bradley), on behalf of the north-west group of Labour Members of Parliament, has written to British Rail and a meeting has been set up for the 23rd of this month. But we still cannot get firm information from British Rail about the sleeper service to Manchester. It would be a tragedy if that service were withdrawn—not only because many Members of Parliament use it on a Thursday night to return to their constituencies, but because it is a well-used service.

It is interesting to note the way in which over the years British Rail has slowly eroded the service. In 1974 when I first used the service passengers could stay on the train when it reached London or Manchester until 8 am. In order to save a little money in pay to the sleeping car attendants British Rail cut that and passengers had to be off the train at 7.30 am at both ends. Then that was cut back to 7 am. If someone is going up to Manchester for a day's work, it is not very attractive to have to get off the train at 7 am and find something to do in Manchester for one and a half hours before going to a meeting. British Rail made a small saving but cut the service. It has eroded the service in other small ways.

I simply make a plea that the service should be retained for the benefit not only of Members of Parliament but of many other people who find it convenient. The more that British Rail cuts such services, the more that people who have to go to Manchester will think, "Why not fly up?" If one has a meeting in Manchester at 9 am, one must either fly up or take the sleeper. If one flies up, one might as well fly back.

We have been told that British Rail intends to consider providing sleeper services from the north of England to Europe. If it is considering such a service it seems odd that it cannot maintain a sleeper service from Manchester to London. I make a plea to it to ensure that the sleeper service is continued for the short term. Perhaps, in the longer term, British Rail could consider integrating the sleeper service from Manchester to London with a sleeper service on from London to Europe.

We are debating investment in British Rail. If the nation wants good passenger services it must put the money in. I welcome the Government's conversion in principle to rail, but I argue strongly that they must match that conversion by putting up the money. We need investment, not the stale arguments of the Secretary of State about privatising British Rail. My hon. Friend the Member for Kingston upon Hull, East firmly developed the argument that we would not have alternative railway lines competing with each other as we had last century. The most that we could have would be private firms providing a service on those railway lines. I make a plea for the level of investment in British Rail in the next 10 years which we should have had in the past 10 years.

8.53 pm

Mr. Paul Murphy (Torfaen)

I share the view of my hon. Friend the Member for Denton and Reddish (Mr. Bennett) and of my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) that the Bill is welcome. My hon. Friend the Member for Denton and Reddish referred to the implications of the Bill for the north-west of England. I shall restrict my remarks to how the Bill will affect the Principality of Wales.

My hon. Friend the Member for Pontypridd (Dr. Howells) has already made some interesting references to Wales. Like him, I am a valleys Member of Parliament. Perhaps I should say "velleys", but the public address system at Newport station is not quite as yuppified as it is in the capital city of Wales.

My hon. Friend the Member for Kingston upon Hull, East made a statesmanlike speech. He made some important points about the need for a consensus about the development of policy on the railways. In the past few years there have been some important developments in railways in Wales which I and many of my colleagues in Wales welcome. For example, there are more trains and they are more frequent and more modern. The 1960s stock has gradually been replaced despite some severe teething problems with the new sprinters.

Some new lines, have opened around the Cardiff, area and in the Aberdare valley, while other lines, such as the one from Maesteg to Cardiff have been planned. Despite some problems, the 125 inter-city train from London to Cardiff, and vice versa, is still in general a good service. Some new signalling has been put in and a new pumping station has been built at the Severn tunnel. There have also been several improvements to some stations in both north and south Wales at Holyhead, Queen Street station in Cardiff and Caerphilly.

I must confess that I thought that the Secretary of State's speech was singularly partisan. His points about privatisation did not hit the right note, certainly for Wales. Many of us in the Principality believe that breaking up British Rail into sectors was fattening the calf for privatisation. The effect of that has been many of our services in Wales which are, indeed, under the control of the so-called provincial sector of British Rail have been put in serious jeopardy.

One source in Wales was recently quoted as saying: Trains are available but no staff; staff are available but no trains; and in many areas, neither staff nor trains. Trains are delayed and staff are not used to the best advantage. Several inter-city trains have been rerouted via Bristol Parkway to avoid paying the cost to the provincial sector of going through Lydney to south Wales.

Splitting up British rail into sectors has been nothing but bad news for the Principality. Several of our rail systems, especially in south Wales, have been adversely affected by sectorisation. For example, there are no railway lines in the valley of Gwent. Almost a quarter of a million people reside in those valleys. At the top of the western valley is the town of Ebbw Vale, which next year will be the site of the national garden festival. A line which is used by freight could go from Newport up the valley to Ebbw Vale. Yet the line is not being utilised, despite the obvious need for extra passenger services at the time of the garden festival.

There is no railway line in my valley—the eastern valley of Gwent. There is no proper line in the Vale of Glamorgan, which is becoming the commuter area for the capital city of Wales. There is no link to Wales's airport, the Cardiff-Wales airport close to the capital city. There is a railway line within spitting distance of the airport, but no proper link between the airport and the city.

Some valley services are inadequate. In my constituency, Pontypool station, formerly one of Wales' great junctions, has had its service severely cut in the past few weeks for wholly unacceptable reasons—despite the claim by British Rail that there are improved service patterns, especially in the valleys"— certainly not in my area, but I hope that there will be improvements.

There is still a great need for better signalling, as my hon. Friend the Member for Pontypridd said. Some trains are overcrowded, and there are not enough of them. There are poor luggage facilities at some stations, which suffer from a lack of staffing—even complete destaffing—and the policy of open stations has led to loss of revenue, to poor information and to tragic cases of vandalism and violence.

Wales needs a better north-south link, new lines, improved stations and more facilities for disabled people, as my hon. Friend the Member for Coventry, North-East (Mr. Hughes) said. Waiting accommodation needs improvement, and new stations should be built between Port Talbot and Llanelli and at Magor and Portskewett.

Some of our stations are nothing more than what we in our youth used to call railway halts. Amazingly, when a new halt is built nowadays, it attracts the same sort of enthusiasm as the great stations built by our Victorian grandfathers did in the past century. I sometimes wonder what would happen if those who built the great embankments, cutings, viaducts and railway lines came back and saw what had happened to them—they would be scandalised.

The hon. Members for Christchurch (Mr. Adley) and for Harrow, East (Mr. Dykes), in their engaging speeches, referred to the new European dimension, which represents the challenge of the next few years for Wales. We are on the periphery and we need new Euro-terminals with customs clearance for rail freight at Newport, Cardiff, Swansea and Holyhead. We need to re-examine the idea —even though British Rail has dismissed it—of electrifying the main line from Holyhead through north Wales to Crewe and down to London. That is a main European rail route, not only for Wales and the United Kingdom but for the Republic of Ireland.

It is scandalous that Wales will not have a daytime through service from the main centres of south Wales direct to Paris and Brussels when the channel tunnel opens. British Rail and the Government should reconsider that.

Wales should have its fair share of any extra funding that the Bill may provide. One of the greatest villains in modern Welsh history was Lord Beeching, who closed down many lines. Over the past 20 or 30 years we have found to our cost that those lines could have been used for railways, roads and other useful purposes.

We are heading into a new era and another century. I hope that all Governments, whether Conservative or the new Labour Government, will use the opportunity to introduce a modern, integrated transport system to the Principality in which rail will play a major and vital role.

9.2 pm

Mr. Bob Cryer (Bradford, South)

I am a great railway enthusiast and the founder of the Keighley and Worth Valley railway preservation society, which successfully took over a five-mile branch line and undertook the maintenance of engines, rolling stock, track, bridges, tunnels and fencing. So in a small way I have helped to preserve five miles of railway that would otherwise have been turned into a linear tip, just like many other miles of railway. So I have experience of and a background in railway work.

It was wonderful that so many rail workers took part in developing the railway in their spare time. Many rail workers—they are often much maligned—are devoted enthusiasts in the cause of providing the highest standards of railway service. Unfortunately, because of Government-imposed financial limitations, they are often inhibited in that task. Many British Rail managers have the same attitude, but some are critically regarded by the workers who meet the public and run the trains for seeming less in touch than they should be with the needs of the railway.

Conservative Members talk glibly of privatisation, which has never happened to the railways since they began. In 1829, when the Manchester to Liverpool Rainhill trials were held and the Rocket proved such a far-sighted and advanced design, there were moves to allow every railway operator access to the tracks. However, it was realised that that was not possible on safety grounds. There developed more than 100 private railway operators, which means a highly inefficient and badly organised system, although the railways owned clearing houses to move privately owned wagons from one network to another. It was cumbersome and bureaucratic, so the Conservative Government passed a compulsory amalgamation Act to create the London and North Eastern railway, the London Midland Scottish, the Southern railway and the Great Western railway.

On that basis, in the post-war period, the railway system was brought into public ownership. That was much needed, because it has been run down greatly, not as a result of a particularly wayward attitude by the railway owners but because of the enormous tasks that they had undertaken during the war. In the post-war period, there was not the necessary private capital to refurbish railways, and a public effort was needed.

Mr. Gregory

I have been following the hon. Gentleman with considerable interest. The crucial point that he is making about denationalisation is an historic one. However, in modern transport terms, the analogy should be with the airlines. It would be possible to denationalise the railways by having something like the Civil Aviation Authority in control of the track and signalling, and then having private operators to move freight and passengers, just as we have with maximum safety and security with the Orient Express and InterCity.

Mr. Cryer

All sorts of consequences would arise from such a system. Routes would be selected so that favoured customers and friends of the Conservative Government would receive the creamed-off profitable routes. The rural routes would have constantly to struggle for public subsidy, even if companies came forward to take them over.

The only motivation in the system outlined by the hon. Member for York (Mr. Gregory) is profit. Some railway lines will never make a profit, but they provide valuable public services. How will that be calculated? There will be a continual battle, and energy will be wasted when we should be retaining a public service of the highest standard. We should not be arguing over which company has the best routes so as to make the most profit. The argument should be about how to provide the best standard of public service, because that would improve the morale of the workers, managers and the users.

I shall elaborate briefly on the purpose of the publicly owned network. In a privatised concern, who would take over the hundreds of disused railway viaducts, which are part of British Rail's maintenance problem? They are all listed structures and cannot simply be bulldozed out of existence. Often, it would be difficult to bulldoze them anyway, because they straddle reservoirs, so building rubble cannot be allowed to drop on the land because of the catchment areas. British Rail also has hundreds of listed buildings that are stations, which it has to maintain although the funds to do so are in short supply.

It is not true that British Rail has no additional obligations over and above the general one of running a service. That is not to say that British Rail is not trying to dispose of these burdens to local authorities or trusts so that people who are devoted to the preservation of these important structures can concentrate on that. Where it is reasonable so to do, British Rail can discard those obligations and get on with its primary task of providing a decent public service.

Having given that brief background, I wish to focus the attention of the House and, especially, the Minister on the proposal for electrification of the Bradford line. The Bradford chamber of commerce—which I suppose, although I do not know, contains a majority of Conservative rather than Labour supporters—strongly supports the electrification scheme, as does the Labour-controlled Bradford council. The scheme would cover the Leeds, Shipley, Bradford, Foster Square route, the Leeds, Bradford, Shipley, Keighley, Skipton route—the Airedale service—and the Leeds, Bradford, Ilkley route—the Wharfedale service. It would enable a fast, reliable local service to operate on all three routes. Most important, it would allow the InterCity electric services to run on to Bradford from London. In the longer term, it would allow channel tunnel trains to operate from Bradford.

As the Minister knows, Bradford is the primary city of Yorkshire. It is the queen of Yorkshire cities, but it has been pushed down the scale of railway services during the past 10 to 15 years. For example, it no longer has a freight depot of any significance. The Post Office has to use lorries to carry parcels to either Preston or Leeds because loading facilities at the Bradford interchange are not adequate. It is absurd that parcels should be transported by road when there is a railway facility in Bradford which, with a small amount of investment, could accommodate the significant parcels traffic in Bradford—which is the home for a large number of mail order companies. We want money to be invested in that sort of project so that lorry traffic can be kept at as low a level as possible.

Under a £400 million electrification scheme, InterCity trains run from London to Leeds, but they then have to be hauled to Bradford by a diesel electric locomotive. That is uneconomic and inefficient. It slows down the trains and hinders the development of a good, fast, electric service from Bradford to London. That is why electrification is so important.

I shall explain the background to the proposal. In April 1990, the Government said that no decision was possible on the scheme until the public expenditure negotiations were completed in November 1990. British Rail negotiated an option on the trains with fixed terms of purchase until May this year. Last November, the Government gave credit approvals for the infrastructure—the overhead catenary—and lineside structures, but not the trains. The passenger transport authority advised the government that it would use operating leases to acquire the trains because the rental payments would not count as capital expenditure. In May, the Minister wrote to the PTA saying that operating leases may be reclassified by the Government as capital expenditure, with retrospective effect. That ruled out that form of finance.

Councillor Mick Lyons wrote to the Minister on 22 May saying: It is fair to say that we have pursued the acquisition of the trains by means of an operating lease not as a first preference (although competitive terms are available) but because the credit approvals you gave for the scheme last November never made any allowance for the trains. Operating leases were therefore the only form of finance in which resources could be made available. You have now advised me that it would be imprudent to rely on this form of finance because of possible changes by the Government to the regulations affecting borrowing. That means that the delay is entirely the Government's responsibility. Since the Government have ruled out other forms of finance, they must, as a matter of urgency, give credit approvals for trains.

One important aspect that I must mention is that the passenger transport authority is still exploring with the manufacturers whether an order can be delayed until November and whether there will be a cost in doing that. If there is a cost, will the Government meet it, because it will be due to their delay? The concomitant of that is that trains will be built in Leeds by Hunslet. If there is not a continuous programme of carriage construction, that will inevitably lead to redundancies from a team of skilled workers who have the production organised to maintain high standards of output and productivity, which is what I am sure we all want.

I want briefly to mention two other points about credit approvals. When passenger transport authorities borrow to finance investment, they have to pass on the cost of servicing the debt which falls on the revenue account to the district councils as part of the annual levy. Usually the Government allow for that in setting the district councils' standard spending assessments, because the credit approvals given to the passenger transport authority are included in the SSA for servicing debt for each district.

However, one of the problems is that the Government are treating only part of the expenditure as trading and the other part as capital expenditure. In the view of the passenger transport authority, the reality is that the services lose money. They will continue to do so after the investment, but the electrification will reduce the deficit. The services are among the most heavily used in West Yorkshire, and the Government accept that closure is completely out of the question. Electrification shows an 8 per cent. return compared with the base case, but the surplus which it earns is needed to reduce the operating deficit. It is not a profit that can be used to service the debt, so that service will fall on the district councils.

I think, and the passenger transport authority has made representations along these lines to me, that the Government should agree to give credit approvals to cover the full capital cost of the scheme and classify the credit approvals as non-trading. Otherwise, if district councils are required to pay for the cost of electrification—this is a great danger, as the Minister knows—they will face capping and cuts in their services. If that happened, the district councils would naturally be presented with an invidious set of priorities and might feel bound to refuse to pay their contribution.

British Rail has to make a contribution to the cost of the electrification scheme. That is under negotiation, but does the Bill enable British Rail to make its contribution to the electrification scheme? There has been some suggestion of a moratorium imposed by the Treasury on British Rail's investment plans. As my hon. Friend the Member for West Bromwich, East (Mr. Snape) pointed out, the Bill is to stop British Rail drifting to a point of virtual bankruptcy. Public corporations do not go into bankruptcy, but that would be its technical position. Therefore, this will be extra investment. Does the Bill allow for investment by British Rail in the Bradford electrification scheme, so that its proportion of the scheme can be retained and maintained? If it does not, the scheme could well be in jeopardy.

There is a great deal of good will in Bradford, Leeds and the surrounding area towards the electrification scheme. The Minister also has good will towards the scheme, but he must realise that the Government will look extremely foolish if they give consent only for the overhead wiring, but not for the stock to run under it.

I will tell the Minister what it is like to travel from Leeds to Bradford at peak times on the existing diesel multiple unit services. The trains are so crowded that people have to press together to allow the doors to be closed. Once the doors are closed, passengers can step down into the well and breathe a little more easily. It is not possible to move along the gangways of the coaches because they are absolutely packed. Trains start out from Leeds in that way, and passengers get off and on at the stations up the Aire valley line and from Leeds to the Bradford interchange. Those passengers should know that the overcrowding is caused by the Government's failure to give the electrification scheme authorisation.

With electrification, a more rapid service would be provided. Electric traction has a greater acceleration than diesel multiple units. There would be a cleaner and more comfortable service, and the diesel multiple units already in operation could be cascaded down on to services that are not electrified in the West Yorkshire region, which would provide a better standard of service there. All the railways in the area would have a better standard of service and would generate extra passenger use and revenue. The Minister must recognise how important it is for him to battle with the Treasury, or with anyone else who is to hand and who is blocking the authorisation, so that the electrification scheme can go ahead. That will ensure that West Yorkshire has the train service that its people need and deserve.

9.21 pm

Mr. Peter Snape (West Bromwich, East)

This has been an interesting debate, which started off in a somewhat surprising way. As my hon. Friends have said, the Secretary of State spent the first five or six minutes of his speech in outlining the basic thinking behind the Bill—the need to increase the borrowing powers of British Rail—and then spent an extra 35 minutes cross-examining my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) about the Labour party's policy and what we will do when we come into government. That is rather a role reversal. I hope that the Minister will tell us something about the Government's plans in the last few remaining months in which he occupies his post and in which the Government remain in power.

My hon. Friend the Member for Kingston upon Hull, East set out in some detail the Labour party's policies and philosophy towards the railway industry. He surprised and pleased a few hon. Members, both Conservative and Labour, by the radical nature of those policies, although I appreciate that for certain Conservative Members yesterday's ideological battle is all important whereas the reality of running a railway in the 1990s and planning railway policy does not matter very much.

In some ways, it is surprising that the Bill has been so long in coming. Although I may have a few harsh words to say about certain British Rail managers and certain policies, I should pay some tribute to their financial acumen. They have kept things going, albeit on a shoestring, for many years. British Rail has survived since 1982 on the Transport (Finance) Act 1982. It has survived, if not prospered, at a time when inflation has increased costs by 75 per cent. through an ingenious system of increasing efficiency, a dramatic increase in real terms in fares, a reduction in manpower and, at least during the short-lived boom years, the sale of property assets.

In many respects, the Bill represents a watershed—a central and inherent failure in Government policy. What price privatisation now? According to the Secretary of State's figures and some of the statements made by BR's newish chairman, BR needs investment of more than £1 billion per annum: in the chairman's opinion, it will need £2 billion per annum over the next few years. I shall not argue about the odd billion, because I do not wish to disturb the tranquillity with which the debate has largely been conducted.

Mr. Gregory

Will the hon. Gentleman give way?

Mr. Snape

No, no, I have not even started yet. I shall, however, be dealing in some detail with the hon. Gentleman's remarks later. They elevated parliamentary buffoonery to a fine art, and I want to refute all the factual errors that he made—although I fear, Madam Deputy Speaker, that I may detain the House for far too long if I do so. I shall deal with the hon. Gentleman's contribution —if I may dignify it with that description—in a moment.

The Government still claim that the privatisation of the railways is, like the poll tax, a flagship of their policy. No doubt it will go the same way as that earlier flagship, but no matter. According to the figures that we have been given, the industry needs some £600 million of support per annum. Indeed, InterCity is the only sector that is in profit, and it is in profit only because of the financial regulations that force it to charge the highest passenger rail fares in western Europe.

As my hon. Friend the Member for Kingston upon Hull, East pointed out, the fact that InterCity's receipts have held up so well in recent years can be credited partly to the quality of the service that is sometimes provided —although it is not provided often enough for me—but also to the disadvantages of road travel, which, to say the least, is also a frustrating and congestion-ridden business.

Perhaps the Minister will tell us—if he cannot, perhaps the Secretary of State will whisper in his ear how this great flagship, privatisation, will set sail, given the stormy financial seas that I have just described. I want to ask the Minister one or two more specific questions. In the eight years for which I have been doing this job, I have listened to and participated in many railway debates. As well as witnessing the yah-boo politics typified by the Secretary of State's speech today, I have heard from successive Secretaries of State—and, my goodness, they have come and gone like subalterns on the western front—about all the great improvements that the Government have made.

Normally, when Opposition Members ask what has happened to a particular investment proposal or improvement scheme, the parrot cry comes back, "No such proposal is on my desk. I clear my desk regularly, and investment proposals are on and off it in a matter of days." We all know how true that is, because, after 12 years of Conservative government, we know how the game is played.

Mr. Gregory

rose—

Mr. Snape

The hon. Gentleman must contain himself. I shall be round to give him a verbal box on the ears in no time at all.

Mr. Gregory

rose—

Mr. Snape

No, I will not give way, and I will tell the hon. Gentleman why. He made a speech that was riddled with factual errors, with which I shall deal in a moment; he then walked out, and was subsequently seen skulking in the Tea Room, having not even waited for the speech that followed his to finish.

Mr. Gregory

No.

Mr. Snape

That is exactly what the hon. Gentleman did: I watched him. Then, about 11 minutes ago, he returned to the Chamber, and immediately intervened in the speech of my hon. Friend the Member for Bradford, South (Mr. Cryer). The hon. Gentleman may think that we are all desperately hanging on his every word. I know that he will not be here much longer, but I must tell him that such is not the case. I shall give the hon. Gentleman a chance in a few moments. I must not be sidetracked, in railway parlance, by the hon. Gentleman's infrequent appearances in the Chamber.

Can the Minister for Public Transport provide details of the investment submissions that are in the pipeline, whether or not they are on his desk? Would approval for the Bill lead to the go-ahead for the inter-city 250 scheme for the west coast main line? Those of us who regularly use the train service between Birmingham and Euston are aware of its deficiencies. Like other hon. Members on both sides of the House I, too, have suffered during the last two weeks. The Monday before last, I missed Transport questions owing to a derailment the previous day and a signal failure—the usual hurdles one has to jump, again to mix metaphors, on passenger journeys from Birmingham. Having been diverted via Coventry and Nuneaton and arriving at Euston an hour and a half after I expected, I was unable to hear the customary soothing words of wisdom of the Secretary of State and the Minister for Public Transport.

I should appreciate it if the Minister could tell me whether approval for the Bill will lead to progress towards electrification of the line and modernisation of the signalling system that dates back to the 1960s. Can he tell us about the Heathrow express link, the Civil Aviation Authority report notwithstanding, and whether there is to be progress on that in the near future? Can he also tell us about the Manchester airport link, approval for which was given in the House, largely thanks to the campaign fought by my hon. Friends with constituencies in the north-west of England, two years ago? No doubt we shall be told that the proposal is not yet on the Minister's desk. If it is not on his desk, it is under some civil servant's desk. Perhaps the Minister will reach under that civil servant's desk, extract the proposal and tell us about the likely fate of the project.

Other projects are in the pipeline. My hon. Friend the Member for Kingston upon Hull, East referred to Ashford international station, which I understand is to be included in the British Railways (No. 3) Bill which the House is to debate next Tuesday. Can the Minister say when building is likely to commence, once parliamentary approval has been granted? Apart from King's Cross and the Kent coast Networker, my hon. Friend the Member for Bradford, South talked about the Aire valley electrification scheme. Finally, there is crossrail.

The public service obligation limit of £3 billion will last only for five years at the current rate of expenditure. Does the Secretary of State expect to increase it, or is the Government's original intention to phase it out to be adhered to during that five-year period? If so, can the Government provide us with some facts? My hon. Friend the Member for Kingston upon Hull, East provided us with many facts and policies that will be adopted by the Labour party.

If the Government intend to phase out the PSO, they ought to have the courage to say so. They ought to say to the, regrettably, largely Conservative-voting populace who use the various former southern region stations—now part of Network SouthEast—that that commitment will mean, according to our estimate, a 45 per cent. increase, in real terms, in rail fares if Network SouthEast is to break even.

I hope that the Minister will come clean and tell us whether that is still the Government's intention. Will he and his Conservative party colleagues be honest enough to say that on the doorsteps of Network SouthEast voters during the forthcoming election campaign? I shall let him into a secret. If they are not prepared to do that, we are. If that is the Government's policy, the Minister should say so tonight. If it is not, it will mean that there has been a U-turn. That would enable the Opposition to comment upon it. Then we should know exactly where the Government stand.

What is the Minister's and the Department's position regarding the chairman of British Rail's reasonable request for an additional £340 million external financing limit for this year? Will the Department make that sum available? The chairman of British Rail made that request to the Select Committee on Transport only last week. All of us are familiar with the refrain that some British Rail managers have used over and over again during the last few years: that they have enough investment money to be going on with and that they cannot cope with any more. Obviously the chairman of British Rail feels that he could cope, because he requested that extra £340 million only last week.

My hon. Friend the Member for Kingston upon Hull, East talked about British Rail's borrowing powers and about a future Labour Government's anxiety to involve private sector capital in some of the projects, as is done in other EEC countries. If our figures are correct, British Rail's asset base is about £12 billion. I wonder whether the Minister agrees that borrowing powers of about £3 billion are relatively modest in relation to that sum and it would not by any stretch of the imagination break the bank if British Rail was allowed greater borrowing powers.

The Secretary of State talked about the value of competition. I am always interested when the Conservative party talks about competition. It is a doctrine that it espouses frequently but practises rarely. Conservative Members make great play of the effects of their privatisation proposals. However, those proposals have rarely brought about any additional competition. In fact, the reverse is often the case.

As many people have commented, the public monopolies have been replaced by private ones. The Secretary of State mentioned the London-Birmingham route. The hon. Member for Christchurch (Mr. Adley) is a great fan of the former Great Western railway. No doubt his eyes clouded over at the thought of kings, halls and castles making their way along the former Great Western line.

However, that competition led to great financial problems for the former railway companies. It is what Mr. Alfred Barnes, the first Labour Minister of Transport, described as the pretty poor bag of assets that the nation inherited after nationalisation in 1948. That sort of ruinous and outdated competition brought the railway companies to such a sorry state.

I do not believe—and .I am sure that the Secretary of State does not believe—that the restoration of kings, halls and castles is the way forward for British Rail's inter-city services in the 1990s. Perhaps the minister will clarify what the Government mean by competition now.

I have put to the Minister some specific questions about investment in new rolling stock. I hope that he will answer them and once again announce the Government's new found conversion to the principle of transferring freight from road to rail. The Minister could do one or two things to bring that pious hope towards reality. As long ago as 1977, the Leitch committee recommended that investment criteria for road and rail should be judged on the same basis. Fourteen years later, we still have the cost-benefit analysis system for road building that I am not sure anybody understands, including successive permanent secretaries at the Department of Transport. Any railway project must be justified on the ground of an 8 per cent. return on the capital investment. I return to that subject in the vain hope that the Government will do something about the criteria for both modes of transport.

In many city councils the road builders, road repairers, borough surveyors and directors of technical services—to give them their proper and suitably salaried title—reign supreme. However, even there there is a growing knowledge that building more and more roads in the hope of catering for more and more cars and road transport is not the way forward and cannot continue for much longer. The city engineer in Birmingham, Mr. Derek Rawson, told me recently that he had met some regional officials from the Department of Transport to suggest that Birmingham should look at its transport requirements in various parts of the region on a corridor basis to decide how best expenditure on road, rail, park and ride, and so on could tackle the problems of congestion.

That is a progressive view from someone who, for understandable reasons, has spent most of his highly qualified working life in the road building and repair business. He told me that not only did the Department of Transport's regional office show little interest in such an approach but almost said, "It is not our business to worry about such things; our business is to decide what needs to be done to the road network and to get on with it." We have often said that the Department of Transport is a misnomer. There is no way of considering transport requirements on a corridor basis or of deciding how best to provide a transport system that will prevent a city from seizing up.

One of the reasons why Birmingham is so concerned is that the opening of the M40 has attracted much extra traffic to Birmingham, yet because of the half-baked way in which we plan—or do not plan—such matters, when traffic leaves the M40 it is the city council's job to disperse or to dispose of it. There is no coherent method of planning park-and-ride stations, so that after leaving the M40, motorists can leave their cars at the first convenient point and take public transport into the city. It is British Rail's responsibility to provide and to fund such facilities. That is exactly why we are here today.

The Secretary of State trotted out a few supposed facts and figures about new lines and stations. He should check his brief better before he reads it. I make allowances for the fact that somebody else wrote it. If he wrote it himself, he is more worthy of castigation than my hon. Friend the Member for Kingston upon Hull, East suggested—no Observer mace for him. Although his delivery was excellent, I cannot give him more than two out of 10 for content.

Mr. Gregory

rose—

Mr. Snape

I will deal with York shortly; I am dealing with the more important speeches.

The Secretary of State made great play of the railway lines that had been opened under the Government.

Mr. Gregory

And country stations.

Mr. Snape

Country stations as well, yes.

In the 1980s, several former freight-only lines were opened or restored for passenger use. Apart from one stretch of line provided by British Coal, all the other services have been paid for by British Rail from its own resources or, more usually, by BR and local authorities. None of the lines has received any direct support from the Government. If the Secretary of State, who I notice is getting a little restless, has contrary information, he should give it to us.

The Secretary of State said that about 163 stations had opened or reopened since the sad day when the Government were elected. More than half have been paid for in whole or in part by passenger transport executives. Most of the other stations were paid for by county councils and a handful of British Rail. None has been opened thanks to any direct Government help, so although it is a fine debating point, and perhaps worth three out of 10 in the debating competition, it is not valid in debates on financing railway lines and stations.

The hon. Member for Berwick-upon-Tweed (Mr. Beith) talked about the teething troubles on the east coast main line—at least, I hope that is what he talked about. It is early days, and we hope that the investment in that line will result in faster and more reliable services. He also spoke of cuts in rural services and of the dilemma that we face in trying to obtain information from the Government and that British Rail's management face in running services despite an ever-declining PSO grant. I hope that the Minister will reply to that.

My hon. Friend the Member for Pontypridd (Dr. Howells) spoke of bus substitution and early and late services. Regional railways must save money on the periphery of their operations simply because it is so tight. I hope that the Minister of State will tell us whether the passing of this financial measure will ease that burden.

The hon. Member for Dulwich (Mr. Bowden) understandably talked about the channel tunnel and the high-speed link. I hope that he will not feel that I am being unduly cynical if, while congratulating him on the assiduous way in which he represents his constituents' interests, I say that, if everyone behaved as he did, there would never be a tunnel rail link. The general view appears to be that such a link is necessary but not in one's own constituency.

Mr. Gerald Bowden

Although I and my constituents do not think that the link should run through south-east London because that is the wrong route, other districts are saying, "Please come through our constituency," because they can benefit from it. This is not a NIMBY syndrome but a PIMBY syndrome—please come through my backyard.

Mr. Snape

Transport planning cannot be decided properly on the basis of which hon. Member wishes the rail link to pass through his constituency, although I appreciate the hon. Gentleman's case that the link should not pass through his part of London. The sooner there is a statement and the sooner we are put out of our misery the better, so I hope that the Minister of State will give us some idea of when a statement will be made.

I deal now with the contribution of the hon. Member for York (Mr. Gregory), who I know is anxious to intervene again to give us the benefit of his great knowledge, which was no doubt acquired while playing trains with his nanny in the nursery many years ago. The facts and figures that he trotted out were united by one factor—they were all wrong.

He talked first about the progress that Amtrak had made when compared to British Rail. The hon. Member for Christchurch put him in his place rather cruelly, although what he said was true. If Amtrak demonstrates the financial prowess of the private sector railroad system in the United States, the hon. Member for York is turning reality on its head. If the hon. Gentleman could tell me between which two American cities Amtrak provides a service that is even remotely comparable to that between York and King's Cross, I should be surprised.

Mr. Gregory

rose—

Mr. Snape

The hon. Gentleman then spoke about British Rail's disability panel and said that there was no blind person on the panel. That is wrong: there is at least one blind member. He went on to speak about punctuality and stated that inter-city trains that arrive within 20 minutes of the book time are regarded as being on time. That is also wrong, because the time allowed is 10 minutes—it used to be five minutes, but it is now 10.

The hon. Gentleman also mentioned compensation and the citizens charter, and said that the Prime Minister was the first person to think of such a charter. However, we strongly suspect that he had not thought of a citizens charter until he read about it in a Labour party policy document. The hon. Gentleman was wrong about money. He said that all inter-city trains must have two men in the cab, which is true only for trains travelling at, I think, more than 100 or 110 mph. It was largely at the insistence of the railway inspectorate that there must be two qualified drivers in the cab, because it is said that that is a safer way to proceed.

Finally, the hon. Gentleman talked about the need for more commercialism at railway stations. He is such a philistine that I can hardly wait for Mr. Hugh Bayley to be elected as the Member of Parliament for York, and I have a feeling that that will not be too long. York station is one of the few to have survived the architectural nonsense of the 1960s and 1970s. The original building is largely intact, and the fact that the hon. Member for York wants to fill it with shops selling ties, knickers and hot dogs to the detriment of those of us who wish merely to buy a ticket and catch a train—these days, we are usually the last people to be considered at railway stations—merely illustrates the depth of the intellectual buffoonery in which the hon. Gentleman indulges.

Mr. Gregory

I shall be as brief as I can, and I shall not descend to personal abuse. The hon. Member for West Bromwich, East (Mr. Snape) will shortly be returning to the signal box which he left to come here.

I shall answer his questions as quickly as I can. He asked for an example of a good service provided by Amtrak, and I commend to him the journey between Boston and New York, which would honour any two inter-city stations. I am afraid that, on the matter of punctuality, the hon. Gentleman cannot have been following parliamentary questions very carefully. I refer him to the parliamentary answers given on 20 March 1991 and 8 December 1988, which refer to 10 minutes on either side. That comes to a total of 20 minutes, which is on time.

The hon. Gentleman referred to commercialisation. We are debating the Second Reading of an important Bill dealing with the further funding and financing of British Rail. I trust and hope that a happy partnership between the private and public sectors will be in the best interests of York aned other cities. Finally, I hope that I shall continue to represent the great city of York for many years to come—long after the hon. Gentleman has retired from the House.

Mr. Snape

I was fascinated by that intervention. Two 10s do make 20; it is perfectly true. But if I am to return to my signal box, I must say that, with clock-watching like that, I am certainly not having the hon. Member for York as my signal box lad. I fear that the train register book would be conspicuous by its inaccuracy if I passed the hon. Gentleman a biro and let him anywhere near it.

Mr. Cryer

My hon. Friend gave a comprehensive account of the faults of the hon. Member for York (Mr. Gregory). Does he recall that the hon. Gentleman referred to the sole cafeteria on York station? That does not suggest a close or intimate knowledge of York station. I have no doubt that the hon. Gentleman goes more frequently by road when he makes his somewhat tardy journeys. There are two cafeterias on York station, both of which provide a decent service to those who trouble to go to the station in the first place.

Mr. Snape

It would seem that the hon. Gentleman's arithmetic regarding the number of cafeterias is at least as good as his clock-watching capability.

Mr. Prescott

Perhaps it is in two halves.

Mr. Snape

The restaurant is probably in two halves, and that makes only one in the quaint system of mathematics that the hon. Gentleman uses.

Mr. Cryer

They are six platforms apart.

Mr. Snape

They are six platforms apart, as my hon. Friend said.

The hon. Member for Harrow, East (Mr. Dykes) who, alas, is not with us, gave us a proper definition of the EC proposals, which are not about rampant privatisation, as the Secretary of State suggested earlier.

My hon. Friend the Member for Denton and Reddish (Mr. Bennett) also asked some questions about the provision of freight facilities in the north-west. We understood that an announcement was imminent in respect of Guide Bridge or any other site in the north-west. I should be grateful if the Minister could let us know exactly what the situation is with regard to channel tunnel freight facilities.

My hon. Friend the Member for Torfaen (Mr. Murphy) gave us a comprehensive list of the railway deficiencies in Wales and, again, I hope that the Minister will bear it in mind that, welcome though iris, the Bill will go only a small way towards remedying those deficiencies. We need far more.

I hope that, given the comprehensive nature of the reply that my hon. Friend the Member for Kingston upon Hull, East gave to the Secretary of State earlier, we shall hear from the Minister a little less of the politicking of which his right hon. and learned Friend was guilty earlier and a little more detail of exactly how the money that we are to approve tonight will be spent. It is a new departure for a least some of us to be united about the need for the proper financing, both public and private, of Britain's railway network.

Notwithstanding the attitude of some of the neanderthals on the Government Back Benches, there was much cross-party agreement about the necessity for the Bill. That is why Opposition Members welcome and support the Bill and hope that, in the Government's last few months in office, we shall get some more sensible and comprehensive plans for the future of our railway industry than we have had for the past decade or more.

9.53 pm

The Minister for Public Transport (Mr. Roger Freeman)

Let me reassure some of my hon. Friends that I do not intend to seek to compress my reply into six minutes. Given that the 10 o'clock business motion will be moved, I am sure that the House will want me to deal properly and succinctly with the points raised. That is precisely what I intend to do. The hon. Member for Kingston upon Hull, East (Mr. Prescott) chided me earlier, saying that, at a recent conference, I had spent all my time trying to answer the points that had been raised—in a sense, winding up the conference. I make no apologies for that, or for seeking to answer the points that have been raised tonight. That is the purpose of a parliamentary debate.

The hon. Member for Kingston upon Hull, East asked about investment projects. It might be for the convenience of the House if I remind hon. Members that on order at the moment for delivery within the next three years are 112 locomotives, 1,361 coaches and 700 container wagons. With regard to major infrastructure projects for completion within the next three years, there are the platform extensions and other works in preparation for the introduction of Networker trains amounting to about £100 million; the construction of the Waterloo international terminal and the North Pole maintenance depot near Willesden amounting to £200 million; new sections of track and improvements to the existing track and signalling for the Waterloo approaches which will cost about £38 million. There will also be resignalling between Paddington and West Drayton. Those are some of the investment projects that will be covered by the Bill.

Mr. Roger Moate (Faversham)

With regard to investment projects, will my hon. Friend the Minister help me and other Kent Members and explain why it is taking so long to get the Networker express project under way? I have campaigned for the project for months, yet my hon. Friend informed me in a written answer the other day that British Rail has still not even presented a formal investment proposal to the Government. We can see no reason why there should be a delay. Is there something wrong with the procedures which have caused us to become tied up in endless bureaucracy before that important project can get under way?

Mr. Freeman

The investment programme for the Kent link trains—trains from the suburbs and the towns closest to London—is likely to cost about £700 million. Most of the carriages are on order, although some vehicles remain to be approved by my right hon. and learned Friend the Secretary of State. Once the ordering programme is complete, BR can, and I am sure will, consider the Kent coastal trains. It will take about two years to build the rolling stock. Even if the order was placed within the next few months, the trains would not come into service much before 1993–94.

I can confirm that the project is a high priority for British Rail. I have visited some of the stations and met some of my hon. Friends and I know how important the improvement of the service is to them. However, it is for British Rail to prioritise its investment. I hope that in reviewing its investment programme following this year's autumn statement, British Rail might be able to make more positive progress with that particular project.

The hon. Member for Kingston upon Hull, East asked where we stood on several important projects. British Rail has made good progress in negotiations with other European railways on a consortium order of intermodal wagons for the channel tunnel. I expect an investment proposition in the autumn, when negotiations are complete. Most of the freight terminals for the channel tunnel will probably not require investment approval by my right hon. and learned Friend the Secretary of State.

The current cost estimate for Ashford is £150 million. British Rail is looking very carefully at whether it is possible to separate that part of the expenditure needed in anticipation of the high-speed rail link and that part which is needed simply to service trains when the channel tunnel opens. That work has not finished yet. The sum of £150 million for a terminal to allow trains simply to stop at Ashford as soon as the tunnel opens is a very expensive proposition. We could not allow BR to begin the programme without knowing whether it could finish it.

I expect an investment proposition for night trains to be put before the Department of Transport very shortly. Negotiations with GEC Alsthom continue for the seven day trains north of London that will be required. There has been no investment proposition yet from British Rail for the west coast mainline 250 service, although it is working on it. That is a programme for the mid-1990s.

British Rail pays 20 per cent. of the cost of the Heathrow express project, and I hope that construction will begin very shortly. It is intended to deposit a Bill on the crossrail in November.

The hon. Member for Kingston upon Hull, East also referred to Treasury rules. As it is a most important point and I am sure that he would like there to be clarity on the subject, I have refreshed my mind about the speech that he made on the channel tunnel at the conference of the Association of Metropolitan Authorities on 4 July, when he said: We will change the constraining Treasury rules to allow BR to raise money on the commercial markets". The House needs to know precisely what the hon. Gentleman, the shadow Chancellor and the shadow Chief Secretary have in mind—[Interruption]. I am trying to answer the question that the hon. Member for Kingston upon Hull, East asked me about Treasury rules. He argued that at present there is constraint in the Treasury rules on borrowing—

It being Ten o'clock, the debate stood adjourned.

Ordered, That, at this day's sitting, the British Railways Board (Finance) Bill may be proceeded with, though opposed, until any hour.—[Mr. Wood.]

Question again proposed, That the Bill be now read a Second time.

Mr. Freeman

I am glad to have the support of the hon. Member for Bradford, South (Mr. Cryer) on the business motion.

The question whether British rail is allowed to borrow in the private market is not the central issue. It has that power today and borrows overdraft moneys from the private sector. It can borrow long term from the national loans fund because that is the cheapest form of gilt-edged borrowing. It is cheaper than borrowing in the market. I hope that the hon. Member for Kingston upon Hull, East can answer my question. If he cannot do so tonight, I shall write to him and seek his response in writing. The question is: if there was private sector borrowing of financing leases, which would be included in British Rail's balance sheet, would those be counted as public sector obligations and therefore controlled by the normal external financing limit rules?

Mr. Prescott

The Minister must be aware of the Commission's recommendations on this point. It has stated that railway companies must have a compatibility in their financial frameworks and technical competency. Like all other European railways, British Rail should be able to go to the private market for finance. The Minister is trying to change the structure of those public sector industries by adjusting the equity capital base so that he knows the true asset value. The Minister may have to make those changes, and that may involve joint venture projects. As the Minister knows, I have mentioned two or three different schemes in various speeches.

More importantly, are the Government saying that they are not prepared to adopt or even to think about any of those alternative ways of raising money from the private sector? British Rail is prevented from raising that money at present because of Treasury rules with which no other European railway has to contend. Those are the constraints that I want to change. Are the Government not prepared to consider that possibility?

Mr. Freeman

The Government are anxious to promote —and do promote—true joint venture projects with the private sector. There are many examples of that, ranging from the extension of the docklands light railway to the construction of toll bridges.

The hon. Gentleman did not answer my question. I asked him specifically: if British Rail borrowed from the private sector and that debt was on its balance sheet, would the shadow Chief Secretary and shadow Chancellor count that as a public sector obligation? Yes or no? The hon. Gentleman cannot answer that question—[Interruption.] The hon. Gentleman should answer the question—yes or no?

Mr. Prescott

It is not a matter of a strict yes or no —[HON. MEMBERS: "Answer the question."] Those who know anything about financing such matters know that it is a question of judging whether such expenditure is considered to be part of the borrowing requirements that the Treasury is obliged to finance. It is a question of interpretation. It is not necessary for some arrangements because if British Rail was privatised completely and wanted to borrow [Interruption.] Does the Minister want to listen, or is he content just to look around proudly? It is strange that an accountant should think that questions about the financing of British Rail can be answered with a straight yes or no, when the very body to which he has referred has produced 40-odd pages to explain it. That work has been carried out by the top 100 firms of accountants in this country. It is all there if the Minister wants to read the technical jargon. He could, of course, read what I stated in the document, "Moving into Europe", which deals with the financing of the channel tunnel link, and which his Department bought off me for £75.

Mr. Freeman

I am afraid that the House is still not enlightened. Perhaps I can enlighten the hon. Gentleman. The report to which he has referred does not answer the question. That is why it is wrong—

Mr. Prescott

No.

Mr. Freeman

But the report does not seek to answer the question. That is why I am answering the question that the City and taxpayers will ask and which the hon. Gentleman cannot answer.

Let me make progress and answer some of the other points which have been made. My hon. Friend the Member for Christchurch asked for a clear statement on the role of the railways. I am glad to repeat on behalf of my right hon. and learned Friend the Secretary of State that we believe that rail has an important role to play in this decade, in not only relieving congestion on the roads but moving the freight of industry. It is a vital artery for the movement of our products abroad through the channel tunnel. We believe that rail has a most important part to play.

My hon. Friend raised the investment appraisal regime. Now is not the time to go into the detail of the pros and cons of the present system of appraising rail investment projects versus road investment. The Department will publish shortly an academic paper which will explain how the present procedure works and why it is not possible to compare road investment programmes directly with rail investment programmes. I hope that the paper will help my hon. Friend.

If we appraised road investment on a cost-benefit basis and appraised rail investment on exactly the same basis, what would happen? We would substantially increase the amount of road building. That is not what my hon. Friend wants and, I suspect, not what the House wants. At the end of the day, the balance between road and rail investment is a matter of ministerial judgment. For the next three years, as my right hon. and learned Friend has already announced, the balance is clearly on the side of rail investment. In the next three years, it is possible that British Rail, London Underground and light rapid transit systems will invest more than the total investment in the trunk road programme in England for the first time in 25 years.

Mr. Snape

On the Minister's last point, is he telling us that, if the notional value of the time saved by every public transport passenger was treated in exactly the same way as the notional value of the time saved by every car driver, we would still spend far more on roads than railways?

Mr. Freeman

The straight answer is yes. When one evaluates road investment, one evaluates both user and non-user benefits. One seeks to ascribe to all motorists benefits in speedier journeys. The plain fact is that, if one appraised rail investment on exactly the same basis as we presently appraise roads and ignored the fare contribution by passengers, we would build more roads.

Mr. Adley

Will my hon. Friend give way?

Mr. Freeman

If my hon. Friend will permit me, I will answer the points that he made in the debate before I give way. That will be the last time that I give way, because the House is anxious to make progress. [HON. MEMBERS: "No."] At least the House is anxious to make progress so that I can deal with the other relevant points that were raised.

My hon. Friend the Member for Christchurch drew a distinction between the various sectors of British Rail and the different competitive forces that act on it. He was right to do so. The competitive pressures on InterCity are great. It faces competition not only from aircraft but from long-distance coaches and cars. Network SouthEast is virtually a monopoly and the competitive forces are different. If one seeks to create competitive pressures on British Rail, one must think about different solutions for different sectors. It may be difficult, if not impossible, to introduce competitive pressures on a mass transit railway such as Network SouthEast. Yet for InterCity, it is important to appreciate that there are healthy pressures on it as an operation.

My hon. Friend also asked me about the citizens charter and its relevance to rail transport. He will have to await the publication of the citizens charter in due course, but we and British Rail accept the importance of improving the quality of information available to passengers, the accountability of management, the reward for good performance by management, redress procedures and, indeed, compensation.

Mr. Adley

My hon. Friend's officials will have told him, as they have told all his predecessors, that it is not possible to establish an honest and fair comparison of the true costs of rail and road. Why do the German Government seem to have found no difficulty in doing that? The Government railway commission set up by Chancellor Kohl is specifically charged with bringing out all the facts of this matter, so that German politicians can make decisions based on honest and straightforward comparisons.

Mr. Freeman

I, too, have talked to officials and politicians in Germany about this. They are very worried about the parlous financial state of the German railways' excessive debt structure and about the sizeable subsidy, which is much larger than ours. Part of the remit of the commission is to determine whether it can emulate the experience of other countries, including our own.

The hon. Member for Coventry, North-East (Mr. Hughes) read a speech about the disabled, which I shall study and discuss with officials responsible for our disablement unit. Our public transportation leads Europe in what we do for the disabled. It is not good enough yet, but we have a good record. I shall write to the hon. Gentleman after I have studied his speech and taken advice on it.

I am grateful to my hon. Friend the Member for York (Mr. Gregory) for reminding the House of the investment record—£800 million in the year just ended, and about £1 billion for the year just begun. It is useful to remember that British Rail already compensates people in certain circumstances. Under its ex gratia scheme, £2.5 million a year in cash and vouchers for rail journeys is paid out, and £4 million a year is spent on extending season tickets.

I apologise for missing the speech by the hon. Member for Berwick-upon-Tweed (Mr. Beith). He and the hon. Member for West Bromwich, East (Mr. Snape) asked me to deal with the public service obligation. We do not agree with the CTCC's argument that the PSO can be disaggregated into line-specific grants. It is a grant made in aggregate for a level of service provided by the supported sectors, Network SouthEast and the regional railways. We measure it using the best available yardstick, which is the number of train miles run. I accept that that means that British Rail can vary the level of service on some lines—it can reduce services if there is a lack of demand, but, as my right hon. and learned Friend said, it sometimes increases services too.

My hon. Friend the Member for Dulwich (Mr. Bowden) advanced arguments for the Ove Arup route which I well understand. The Government will take decisions as soon as possible on the right route to recommend for further consideration. King's Cross is not a buffer station, and whichever route is chosen to come into King's Cross it is intended to run services beyond King's Cross to the north, up the east and west coast main lines.

The hon. Member for Pontypridd (Dr. Howells) talked about running buses to supplement rail services—an interesting and constructive point on which I shall reflect. If it is impossible for legal reasons for British Rail to offer such bus services, I shall pursue the matter further.

My hon. Friend the Member for Harrow, East (Mr. Dykes), who is not in his place, mentioned the length of time taken to reach a decision on the channel tunnel rail link. But the hon. Member for Kingston upon Hull, East is arguing the case for another six months in a new Parliament to reach a final decision on the link. The Government, taking the matter more seriously, will try to reach a decision as quickly as possible, and we shall certainly not defer it for as long as the hon. Gentleman implied.

The hon. Member for Denton and Reddish (Mr. Bennett) referred to the Guide Bridge terminal. I shall repeat the assurance that I have already given him. I understand the significance for British Rail of making a decision between Stafford Park and Guide Bridge, and I repeat what my right hon. and learned Friend said—the decision will be taken by BR by the summer. I shall be visiting Manchester later in the summer, and I am sure that a decision will have been taken by then. I was not aware of the sleeper train problem, but I shall look into the matter and perhaps even use the service myself. I shall examine the problems raised by the hon. Member on behalf of himself and his colleagues and write to him.

The hon. Member for Torfaen (Mr. Murphy) implied that the reorganisation of British Rail into business sectors was aimed at fattening up British Rail for privatisation. He is wrong. The process was begun by the first Bob Reid in the early 1980s, and it has been continued logically by the present chairman. The reorganisation of British Rail is inconsistent with some of the forms of privatisation suggested for British Rail. The Government have not yet reached a decision on the timing or the form of privatisation but the reorganisation is not tied up with privatisation.

The hon. Member for Bradford, South raised a number of points, and I shall deal briefly with the most important, Bradford electrification. We provided £26 million resource cover for the infrastructure on the assumption that the West Yorkshire passenger transport authority would be happy to proceed with leasing. For understandable reasons, it chose not to run the risk that, when the stock was bought, the lease would be classified as debt. Because there was a slight risk of that, it preferred, although there would be a delay, to seek the credit approval route. I understand that there may be an increase in the cost of the rolling stock, and I shall take that into account. I hope that there will not be. I hope that the tender price will be extended to October. I am prepared to consider the balance between trading and non-trading credit approval for the balance of the rolling stock, which I hope that the West Yorkshire PTA will be able to proceed with.

Mr. Cryer

When will the Minister tell the West Yorkshire PTA when he will make a decision about the rolling stock? As he knows, with the question mark over leasing, it is important for the PTA to know when it can go ahead. It has already incurred almost £200,000-worth of .design expenditure for the electrification scheme, and it always seems to be hanging in the balance. It wants certainty pretty soon. Furthermore, the sooner that it can get cracking, the sooner the scheme can be completed and put into operation.

Mr. Freeman

I have already told the West Yorkshire PTA that I cannot give it any assurances until the public expenditure survey round is completed, and that comes to fruition at the time of the autumn statement in the first week in November. I can do nothing about that timetable.

The hon. Member for West Bromwich, East asked about the public service obligation grant. This was increased to £600 million in 1990–91. It was up to £100 million in the year. This year, it will be at least £775 million. If the hon. Gentleman had read the summer supplementary estimate, he would have seen provision for an increase in the PSO. It may be higher. The balance of the division of the increase in the external financing limit between the PSO and debt has not been decided. It depends on agreement between BR and the Government. We are prepared to increase the PSO where that is justified. As we have made clear over the past six months, Network SouthEast's PSO is a target. It will be extremely difficult to achieve break-even by March 1993. Therefore, my right hon. and learned Friend, in the context of this year's autumn statement and as settlement of the internal:finance round for the next three years with British Rail, will discuss with British Rail what is a realistic target. If changes have to be made, they will be made.

Mr. Prescott

There is no point in saying that we must wait for the public expenditure round, because the Secretary of State changed that a few weeks ago by going for the extra money.

Some of what has been said today is to be welcomed and shows a serious approach to the problem. However, can I press the Minister on an issue that is important to both sides of the House? He said that the Opposition had claimed that the review of the channel tunnel plans would lead to a delay. That is a bit cheeky, because, when we advocated that all the routes should be looked at before a decision was reached, the previous Secretary of State said that that would cause a delay, so he would not do it. However, now there is to be a review. It is important that the reports on the review are made available so that we understand the judgments. We reserve the right to look at the judgments, because there has been a great deal of controversy about the cost structures involved.

Will the Secretary of State make a statement before the House rises for the summer recess on the channel tunnel investment? Am I correct in believing that at the Association of Metropolitan Authorities conference, which the Minister and I attended, the hon. Gentleman said that the environmental assessment of the route would take the best part of two or three years, and that the Government would not have to make a decision before then? If that is so, a six-month review within that period is not such a big deal, especially if we get the decision right.

Mr. Freeman

The hon. Gentleman did not listen to what I said at the conference. I cannot give him the assurance that my right hon. and learned Friend will make a statement before the end of July. It is important to get the decision right. I said at the conference that the environmental impact assessment of the western portion of the route would take about a year. An environmental impact assessment can be written only when we know which route we are assessing.

The hon. Gentleman withdrew the earlier Labour party support that the newspapers thought it was giving for the route through Stratford. The hon. Gentleman reserved his position on all the preferred routes, which is to be welcomed, as it shows that he has an open mind.

Sir Philip Goodhart

On the question of rail freight and the channel tunnel, I know that my hon. Friend is aware of the problems that face my constituents; indeed, he has taken a great deal of trouble in considering them. The impact for my constituents will come as soon as the channel tunnel is opened. Under current arrangements, much of the rail freight is due to rumble over the already congested lines through my constituency. Has British Rail carried out a proper survey of the length of line between Tonbridge and Reading, which would provide an alternative route for a great deal of the freight?

Mr. Freeman

British Rail is well aware of the Tonbridge-Reading route for freight. When a decision is taken on which preferred route to recommend for further study, including planning permission, the transportation of freight will be an important consideration that my right hon. and learned Friend and his colleagues will take into account.

I commend the Bill to the House. The Conservative party has the right policies for railways. We have clearly declared our policy for transferring more freight from road to rail, and we have confirmed the emphasis that we are placing on combined transport. We have said that we want to end BR's monopoly over both passenger and freight services. We have policies for the privatisation of British Rail, and they are supported by even more of the electorate than was evident six or 12 months ago. We welcome that support.

We have a massive investment programme, which I have outlined tonight. Some £500 million per year was spent by the Labour party when it was in government in the 1970s, but expenditure is now running at £1 billion per year—a substantial increase.

Mr. Cryer

The Minister said that the Government want to transfer freight from road to rail whenever possible. What does he think about British Rail's policy on Speedlink, and is it not ironic that the demise of Speedlink comes just as we are having this debate?

Mr. Freeman

The hon. Gentleman's point is a fitting one on which to end, because the attitude to Speedlink separates the parties. Speedlink, with a revenue of £45 million this year, would have lost £40 million—[Interruption.] It was £30 million last year, and it would have been £40 million this year. Speedlink was a service intended to take single wagons from terminals through marshalling yards to other destinations. It was a service more appropriate to the 1950s than to the 1990s—similar to the ideology of some Labour Members. British Rail must now convert that freight into train load freight, which is much more competitive than road freight. I am glad to tell the hon. Gentleman that 70 per cent. of the Speedlink services have been converted into train load profitable freight. That reflects not only British Rail's positive attitude, but the Government's positive attitude towards rail. I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House. —[Mr. Wood.]

Further proceedings postponed pursuant to Order [5 July]