INCREASED LIMIT RELATING TO COMPENSATION (Hansard, 11 July 1991)

§ Mr. Prescott
The Minister will know that money has been used from the PSO grant for safety measures at level crossings. The Health and Safety Executive is undertaking an inquiry into problems with the doors on some inter-city trains. The Government have always said that money will be provided if that is necessary for safety reasons, so if the inquiry finds that work must be done on the doors for safety reasons, will the money be forthcoming?

§ Mr. Freeman
In the past financial year British Rail spent about £140 million on safety, and it is likely to spend more than £200 million on it in this financial year. When we receive the results of the HSE's investigations into the various tragic accidents, I can confirm on behalf of British Rail that if expenditure is needed to save lives, it will be given a very high priority. The Secretary of State is on his sleeper en route to Edinburgh now, and I apologise on his behalf for his absence from the final stages of the debate, but, on his behalf, I assure the hon. Gentleman that my right hon. and learned Friend will certainly look supportively on any such investment.

§ Mr. Gregory
There are international agreements in respect of compensation for air and sea travel, but not for rail travel. The Government have been in the forefront of extending the Athens and Warsaw conventions—

§ The Chairman of Ways and Means (Mr. Harold Walker)
Order. I must ask the hon. Gentleman to confine his remarks to the clause stand part debate.

§ Mr. Gregory
I was under the impression, Sir, that clause 2 deals with compensation. I wanted to ask my hon. Friend whether he was thinking of following the aviation and maritime examples rather than resorting to civil litigation methods. Might we have a code of practice or guidance under the clause to assist those who lose loved ones or who are injured on the railways?

§ Mr. Freeman
I shall certainly look into that and write to my hon. Friend.

§ Mr. Beith
I apologise for having had to leave the Chamber to deal with a query from an hon. Member who occupies a position of great power and influence in the building—he deals with accommodation matters.
Will the Minister look again at the public service obligation covered by the clause and at the extraordinarily illogical position in which the Government and British Rail find themselves? The Government say that they are not concerned about the service on any particular part of the network covered by the PSO; they are concerned about whether the aggregate of service overall corresponds with the total service provided in 1988, now the base year for the public service obligation. If the only issue is how many miles are run by trains on the regional railway network, why do we have to pay this money at all? What is the point of the PSO as set out in the clause?
If the invitation is thus extended to railway managers to attract as many people as they can by putting the trains where the largest number of people are, and reducing the mileage that they have to travel and thereby reducing the costs by running twice the number of trains between close 1204 urban points, rather than providing, at greater expense, a service to rural areas, why should the taxpayer subsidise that? Why should we pay for that? Why should it not be subject to the same requirements of breaking even as other parts of the railway network, or be subsidised only so far as it is a means of making the infrastructure costs correspond to the level of those borne by road services?
Surely the purpose of the public service obligation is to ensure that the railway system continues to provide services over a wide area of the country, particularly rural railways. The Minister must take account of what the Central Transport Consultative Committee told him, which is that in rural areas, 48 per cent. of the services were running on reduced services. That is 48 per cent. of services for which the grant under this clause will be paid. That is almost half the services. In some cases, as the committee pointed out, reductions were to the point at which closure was being avoided by the technicality of running a single train.
What sense does that make? The Minister must tell BR that if it wants to close the line, it should come to him with closure proposals. It should not ask him to give it taxpayers' money so that it can spend it somewhere else, while pretending that it is running a service on one of the many lines covered by the network as it was in 1988. The Minister has not answered this question. He cannot regard the CTCC as a firebrand hooligan body that never makes sensible proposals. This is a serious criticism of the Government's attitude to the PSO.
I ask the Minister again. Why have a PSO if its purpose is not to maintain the broad totality of the rail network? Why not measure the money that he is handing out against some kind of performance indicator that examines whether the service is provided over the whole of the network? If it is his view that the 1988 network is no longer appropriate, and that some of the services should not be there at all, why is that issue not considered by closure proposals and the normal process of advice? Why does he allow BR to run services down to the point of one train in one direction a day? Ought not BR to be encouraged, where it has a network to run under a PSO, to run one that meets local needs and is marketed to maximise the support for it in that area? That is not happening. If the service were marketed, that might reduce the call on the PSO for the regional railways as a whole.
There is a crisis in regional railways, and the Minister cannot dismiss it by saying that the measure is the aggregate number of miles run. This process could go a lot further. It would not be difficult for the managements of regional railways further to concentrate all the existing rolling stock in a limited number of urban areas, where there are additional passengers to be obtained. By that means, they might attempt to meet the target to reduce the PSO money referred to in the clause. Is the Minister content to let that happen?

§ Mr. Freeman
There is clearly a difference between the hon. Member for Berwick-upon-Tweed (Mr. Beith) and the Government about how one fixes the PSO grant. I have made it plain that we disagree with the CTCC's view that there should be route or line specific PSO grant system. The hon. Member for Newham, South (Mr. Spearing) will remember that that was how the system was organised about 15 years ago. It was hopelessly bureaucratic and complicated. The hon. Gentleman must be saying that that is the way that he wishes to go, because that is the only 1205 alternative to the present system, in which the setting of the PSO is an iterative process. Perhaps I should briefly explain that. We do not set the PSO grant at the beginning of the year and say to British Rail, "Fix a service that suits that." British Rail has an obligation to run a system measured, broadly speaking, in train miles, as was provided on 1 April 1988. That gives BR the ability to change services and increase or decrease them on any particular line.
11.30 pm
On the question of marketing services and how we might change the PSO grant, I ask the hon. Gentleman to await our announcement on the way forward with privatisation, as we envisage it, and the way that it might affect regional railways. It is bound to involve a rediscussion of the whole issue of how the PSO grant—the social subsidy—is fixed and determined. I suspect that the hon. Gentleman wants a system not too dissimilar to the subsidising of rural bus services, where there is a specific subsidy to protect a specific service, including frequency. We have not reached that stage yet, but I hope that we will have an opportunity to debate that in greater detail on another occasion.

§ Mr. Beith
I must press the Minister. What is the point of paying millions of pounds to British Railway so that it can run X thousand train miles? What social purpose, what public good is served, by expending a subsidy on the achievement of a certain number of train miles? It is not a social purpose; it is not an assessment that the community needs X thousand train miles.
The PSO grant was devised on the assumption that the country needed a rail network, providing trains between various places. When Fred Mulley first set out the provision, he did not say to the House, "What this country needs is for 50,000 train miles to be run every few months." 1206 His concept was for an overall network. It does not make sense to pay out money to BR simply to achieve a mileage target. It would make sense if it were to retain a network with a reasonable level of services. It might make sense to do it in a number of other ways. I can see logic in changing the system in various ways and I can see logic in the way that the system was being run, but I cannot see any logic in saying to the taxpayer, "We will spend your money so that a certain number of miles per year will be achieved by BR."
I think that the Minister is a sensible enough economist and accountant—we both read economics in the same place at the same time—to realise that that is nonsense. It certainly does not meet the needs of those in rural areas whose services are being whittled away. I am confident of one thing—that the one train that now runs from Chatshill northwards will remain in the timetable.—[Interruption.] It is the normal custom for an hon. Member to ask another hon. Member to give way, rather than to make the intervention first. The hon. Member for West Bromwich, East (Mr. Snape) must have pulled the signal levers early sometimes—[Interruption.] If the hon. Gentleman is not careful, I shall recall his days with the railways at Macclesfield.
That one train a day will remain in the timetable not because it is sensibly timed, not because anyone who uses it can get back from wherever he has gone, but because the only alternative is for BR to put forward closure plans. BR is dodging the requirement for closure proposals and using PSO money to run railway services where it can get the largest number of people on to them. That is not a sensible way to manage a public subsidy, and I cannot imagine that the Minister can, in any sincerity or seriousness, defend that.