HC Deb 02 February 1993 vol 218 cc255-68

Queen's Recommendation having been signified—

Motion made, and Question proposed,

That, for the purposes of any Act resulting from the Railways Bill, it is expedient to authorise—

  1. (1) the payment out of money provided by Parliament of the following, namely—
    1. (a) the remuneration of, and any travelling or other allowances payable under the Act to, the Regulator, the Franchising Director and any staff of the Regulator or the Franchising Director, any other sums payable under the Act to or in respect of the Regulator or the Franchising Director and any expenses duly incurred by the Regulator or the Franchising Director, or by any staff of the Regulator or the Franchising Director, in consequence of the provisions of the Act;
    2. (b) any sums required by the Regulator for the payment of the remuneration of the chairman of a railway users' committee, any travelling or other allowances payable under the Act to such a chairman or to other members of such a committee, any sums payable by way of reimbursement of travelling or out-of-pocket expenses to members of a sub-committee of such a committee and any expenses incurred by such a committee;
    3. (c) any sums required by the Secretary of State for making grants—
      1. (i) to the Board or any wholly owned subsidiary of the Board, towards the expenditure of the Board or the subsidiary, as the case may be;
      2. (ii) to any successor company which is for the time being wholly owned by the Crown, towards the expenditure of that company;
      3. (iii) towards the provision of facilities which are to be provided by any person for or in connection with the carriage of goods by railway or inland waterway or the loading or unloading of goods carried or intended to be carried by railway or inland waterway;
    4. (d) any sums required for the making by the Franchising Director of grants or other payments under or by virtue of the Act;
    5. (e) any sums required by the Secretary of State for making grants or loans to a company in relation to which a railway administration order has been made;
    6. (f) any sums required by the Secretary of State for making any payment in respect of an indemnity given under the Act to a person appointed to achieve the purposes of a railway administration order;
      7. 256
    7. (g) any expenses incurred by the Treasury or the Secretary of State in acquiring securities of a successor company;
    8. (h) any compensation payable by the Secretary of State in respect of compliance with directions given under the Act in time of hostilities, whether actual or imminent, severe international tension or great national emergency;
    9. (i) any sums required by the Secretary of State for fulfilling guarantees given under the Act;
    10. (j) any administrative expenses incurred by the Secretary of State or the Treasury in consequence of the provisions of the Act;
    11. (k) any increase attributable to the Act in the sums payable out of money so provided under any other Act;
  2. (2) the charging on, and issuing out of, the Consolidated Fund of any sums required by the Treasury for fulfilling guarantees given under or by virtue of the Act;
  3. (3) the payment out of the National Loans Fund of any sums required by the Secretary of State by virtue of the Act for making loans to—
    1. (a) any wholly owned subsidiary of the Board; or
    2. (b) a successor company which is for the time being wholly owned by the Crown;
  4. (4) the reduction of the assets of the National Loans Fund by amounts corresponding to such liabilities—
    1. (a) of the Board, in respect of loans made to the Board under section 20 of the Transport Act 1962, or
    2. (b) of a successor company which is for the time being—
      1. (i) a wholly owned subsidiary of the Board, or
      2. (ii) wholly owned by the Crown, in respect of any loans,
as the Secretary of State may by order extinguish.— [Mr. Lightbown.]

10-25 pm

Sir Teddy Taylor (Southend, East)

This is a desperately important point—a small point, but one that the Government must answer. My railway line has been privatised. As other hon. Members will know, the Secretary of State said that, for the first time on a privatisation issue, the Transfer of Undertakings (Protection of Employment) Regulations 1981 would apply. That means that a private undertaking will have to keep every employee whom it takes over, and will have to guarantee the wages of every existing employee. That is being done only because of the regulations, which are a direct consequence of a European directive that the Government were obliged to accept, against their wishes. Hon. Members who become excited about the social chapter should appreciate that, for the first time, we are saying to any privatised firm, "You must keep"—

Madam Speaker

Order. I should be obliged if the hon. Gentleman would identify the part of the motion to which he is referring.

Sir Teddy Taylor

I am referring to paragraph (2), which refers to the extra cash that will be involved. It is a simple point on which we must receive an answer. The Government will be faced with an enormous additional cost.

As you will know, Madam Speaker, infraction proceedings were taken against us because formerly this applied only to commercial undertakings, but it now applies to local services and privatisation ventures. According to the proceedings, we had to agree that transfers not involving the transfer of property were covered, that non-commercial undertakings were covered, and that compensation for failure to consult could not be offset against wages or presented in lieu of notice. The only point not accepted by the Government is that those rights should apply to all employees. I think that that is amazing. Here we have a Conservative Government saying that rights forced on us by the European Community against our wishes should apply only to trade unionists. What that means to the Southend line—

Mr. Eric Martlew (Carlisle)

Is the hon. Gentleman suggesting that everyone who works on the railways in his constituency should join a trade union?

Sir Teddy Taylor

The hon. Gentleman must accept that this is a serious point. We are being forced, whether we like it or not, for the first time to use extra public funds to ensure continuity of employment and guaranteed wages for a privatisation venture, and it is relevant to paragraph (2) of the motion.

Although we have no social chapter, the Government are saying that the only people to whom they will not give the money are those who are not members of trade unions. What do I tell the workers on the Southend line in my constituency? Presumably I am to tell them, "If you are a trade unionist, you need not worry about your job; it is guaranteed. You need not worry about your wages either. But, if you are not a trade unionist, we will kick you out of the door and offer you nothing"—and that will be that.

Mr. Martlew

I repeat the question: is the hon. Gentleman telling his constituents that if they are not members of the rail trade unions, they should join—and quickly?

Sir Teddy Taylor

This is not funny but desperately serious. We are talking about a new law that is being forced on Britain against our wishes. Instead of what happened under previous privatisations, which allowed the new employer to employ whom he wanted and to introduce new techniques, the employer is now being forced to take existing workers and to guarantee their wages.

What am I to say to my workers on the Southend line? Because of a statement made in Committee last Thursday by the Minister of State for Employment, I must tell them that if they are trade unionists, their jobs will be guaranteed with the new employer and their wages guaranteed, but if they are not trade unionists, we can offer them nothing. Am I therefore to tell my workers that, under paragraph (2) of the money resolution, the Conservative Government are saying that we shall pay for them if they are trade unionists but that if they are not trade unionists, they have no rights or prospects.

This is a desperately serious point. Public funds are involved. The Government are saying that, with these funds, they will subsidise the guarantee of employment and wages if workers are trade unionists but that they will not give the same rights to people who are not.

Mr. Brian Wilson (Cunninghame, North)

Will the hon. Gentleman give way?

Sir Teddy Taylor

I shall not take an intervention from the hon. Gentleman, who merely wants to make trouble and is not interested in people or rights.

How much money will be involved in guaranteeing the jobs, wages and conditions of my trade union members working for the Fenchurch Street line? How much money will be saved by telling people who are not trade unionists that the Conservative Government will do nothing for them and are not prepared to accept the final proposal?

In my 28 years in the House, I never thought that I would live to see the day when a Conservative Government would say that they will guarantee everything to trade unionists and pay extra cash, but that people who are not trade unionists have no rights or future. While I accept that the Bill will probably do some good for the Fenchurch Street line and that the Minister of State is a conscientious and sincere Minister who is doing his best, how can we, as Conservative Members, agree that trade unionists will have rights but that people who are not have no rights at all? That is wrong and completely contradicts everything that the Conservative party stands for. Why on earth should we agree to pass a law which goes against all that we stand for?

The Secretary of State passed over the issue with one sentence, saying that the transfer of undertakings regulations will apply. The Minister of State must deal with this matter. How much money is involved, and why should we, as Conservative Members, give rights to trade unionists but none to people who think that they can protect their employment in other ways?

10.38 pm
Mr. Bob Cryer (Bradford, South)

If the assertions made by the hon. Member for Southend, East (Sir T. Taylor) are correct, I am sure that my party will welcome the proposal. However, I suspect that they are not true. They sound superior to the provisions of the social chapter in the Maastricht treaty. I shall look forward with great interest to the Minister's response.

I shall make four brief points. First, paragraphs (1)(a) and (b) of the money resolution relate to the financial provisions of the rail regulator and the franchising director. The Government's extraordinary position is that they will be paying out up to £15 million a year on an increase in bureaucracy. The money resolution and the explanation at the beginning of the Bill mean that the Government will be paying up to £15 million a year and employing 300 extra people but no additional benefits are specified for the passengers about whom the Minister spoke when winding up.

It is worth considering the £15 million per year that the Government are so lightly casting away. The Minister of State refused to provide a guarantee for the leasing of rolling stock on the electrified section from Leeds to Bradford and the Aire Valley. As a result of that lack of guarantee, the Minister knows full well that the rolling stock on the electrified section will be not second-hand but ninth or tenth-hand. The threat of privatisation means that financial institutions are not prepared to provide finance for the building of the electrified rolling stock on that section of railway. The lack of finance means that the first job losses are in the offing at the Hunslet Engineering Company, which would have built the rolling stock if the privatisation proposals had not been forthcoming and the Treasury had provided a guarantee. The Bill that the Minister is supporting tonight is the means whereby jobs will be lost in the railway industry at Leeds and, as was shown clearly during the main debate, throughout the rest of the rolling stock and locomotive-building industries. The £10 million to £15 million provided for in paragraphs (1)(a) and (b) of the money resolution for the rail regulator and the franchising director is real money.

As outlined by the Secretary of State, the east coast main line will be one of the first lines to be franchised. The electrification of the east coast main line has cost the taxpayer about £500 million. It is no wonder that it is on the first list of sections of railways to be franchised. It is the most modern and most invested section of British Railways and provides an excellent service. It is doing perfectly well. There is no need to franchise it, unless the friends of the Tory party want to line their pockets from increased passenger fares. [Interruption.] There is no other rational explanation. The service cannot be improved. The Minister of State made it clear in his speech that the Government had no criticisms of British Rail. The service on the east coast main line has received investment of £500 million and is first rate. We are talking about extension of a service which could not be financed because of the threat of privatisation. The money provided for in the money resolution is being thrown away on increased bureaucracy in the offices of the rail regulator and the franchising director.

My second point relates to clause 122 in the Bill, which covers financial assistance to employee buy-outs. That financial assistance covers a wide range of activities, including the preparation of an employee buy-out. I have no doubt—the Minister of State may confirm this—that when employees get together they will employ consultants. Consultants are a growth industry. Some consultants want fees of £250,000 or £500,000. Such fees will be paid by the taxpayer. Clause 122 covers the whole cost of financial assistance to employee buy-outs. Such financial assistance might well cover vertical buy-outs such as buying the track, the rolling stock, the maintenance depots and all the infrastructure complete.

What sort of money is envisaged under clause 122? Will it be £10 million, £20 million or £30 million, or even £100 million, £200 million, £300 million or £400 million? What sort of limit is being set? There is no indication of that in the money resolution. Where an assisted bidder is successful, the money will be recoverable, but where an assisted bidder is not successful, it will be lost in a big black hole of expenditure financed by the taxpayer. That is the position. I am very concerned about taxpayers' money—more so than the Government, it seems—and I want to know what sort of limit is to be set on expenditure under clause 122 and the associated provisions of the money resolution.

Mr. William Cash (Stafford)

Has the hon. Gentleman noted that, under clause 118, which relates to financial provisions, the power to give directions with respect to public service obligations would enable payments of up to £3,000 million or such greater sum not exceeding £5,000 million as the Secretary of State may by order specify to be made under those directions?

Mr. Cryer

I am grateful to the hon. Member for Stafford (Mr. Cash) for raising that matter, to which I was coming but with which I shall not now deal in detail. It is a matter of great importance. First, the directions should come before Parliament—there is no provision in the Bill for that—and should be subject to the affirmative resolution procedure. That would at least provide some degree of parliamentary accountability. Instead of that, the Government are granting a huge open-ended sum of money on the basis of a money resolution which, in the ordinary course of events, would go through on the nod. Most Conservative Members were hoping that that was exactly what would happen tonight. There were the usual moans and groans when I rose to exercise some degree of scrutiny. Conservative Members talk about wanting to protect taxpayers' money, but in reality they are prepared to let billions of pounds go through on the nod. The hon. Member for Stafford has made a perfectly good point, but will his name be on the list in Hansard tomorrow of those who voted against the Bill? That is the acid test of an hon. Member's determination to protest at the flaws in a Bill.

My third point concerns railway administration orders made under clause 53 and covered by paragraph (1)(e) of the money resolution. Railway administration orders are the result of recognition by the Government that competition implies a race: the losers are the companies which are forced into liquidation and the winners are those which pick up the small companies, take them over, close them down or force them to the wall. That is the system that the Government appear to like, but in this instance things will not work in quite the same way. The Government know full well what competition means and, in the ordinary course of events, they do not mind. They do not mind if DAF goes to the wall, with 5,000 engineering jobs and a further 10,000 associated jobs at stake. That is part of competition. People will pick up the pieces. The company will be bought. The President of the Board of Trade told us that some jobs will be recoverable, but the rest will go to the wall.

In the case of the railways, however, such circumstances would result in a break in service. That does not happen with British Rail, which is bound to provide services. There has been continuity of service. If British Rail wants to close a line—even a link line on which a passenger service operates perhaps half a dozen times a year—it must use the long-established procedure and go through the Transport Users Consultative Committee. BR cannot close a line without the approval of the committee and the Secretary of State. So far, the system has worked pretty well, but the Government know that they are introducing a system under which a guarantee cannot be given, so railway administration orders are to be introduced. If a company cannot carry out its franchise—in other words, it is broke—the Government will provide loans and grants to enable the services to continue. It is a very curious system, and a complex negation of the philosophy that the Government apply outside this highly complex, difficult and crazy situation. The system that was applied to Leyland DAF is not to be applied to British Rail, where the Government are to give guarantees.

I hope that the Minister will reply comprehensively to the points raised at this stage. The ways and means motion has still to come and, as the Ministers knows, it is open-ended as regards time. If we decide that it should be examined in detail, the Government may have to resort to a closure motion. It depends entirely whether the Minister gives comprehensive answers at this stage. I hope that he has some idea of how much he is going to spend. The House of Commons is giving him authority to spend money. I do not believe that Governments should be given open-ended authority to spend. We should be told just what sort of expenditure the Government have in mind.

Mr. Barry Field (Isle of Wight)

The hon. Gentleman has said that things have been run fairly well so far. He might be interested to look at the reply to a parliamentary question that I received last Friday, which reveals that more than 500,000 people are entitled to concessionary travel on British Rail by virtue of present or past employment. I was told that British Rail does not know the cost of that scheme. If the cost of each journey were £5, £6 or £10, that would represent many millions of pounds per annum. I cannot accept the hon. Gentleman's assertion that things have been run fairly well so far, or that there has been proper accounting.

Mr. Cryer

It is very interesting and curious that the hon. Member is so concerned about expenditure by British Rail. No doubt he, like me, wants to know the expenditure involved under all the headings in the money motion—but neither is there any doubt that if there is a Division the hon. Gentleman will go into the Aye Lobby as instructed by the Whips. We do not need the hon. Gentleman's lessons about control of expenditure and whether British Rail is subject to such control, as it ought to be. Has the hon. Gentleman ever tabled a question about the mileage that Ministers cover each year in their concessionary cars? That would be a very interesting figure, but it might be too costly for the Minister to find out. Ministers like to hide information of that sort, whereas I am all in favour of rooting it out. I hope that, in this respect, the hon. Gentleman's zeal is as extensive as mine.

Mr. Nigel Spearing (Newham, South)

rose—

Mr. Cryer

I do not want to be dragged too far down these byways, but I shall give way to my hon. Friend.

Mr. Spearing

The hon. Member for the Isle of Wight (Mr. Field) gave the impression that British Rail did not know the cost of a scheme. I hope that it was not the hon. Gentleman's intention to give an impression of inefficiency. Does he agree that, as trains are running anyway, it is likely that the actual cost of additional passengers is impossible to calculate? The accountant on the Front Bench may be able to confirm that, while an estimate is possible, an exact computation is not. That is the economy of British Rail.

Mr. Cryer

I am grateful to my hon. Friend for his elucidation.

I should like now to refer to the fact that the board's business is to be taken over by successor companies. The money motion gives the Minister power to provide, from the national loans fund, loans that the Secretary of State may then extinguish. That is a matter for concern. If the successor companies receive significant amounts of money by way of loans, the taxpayer will yet again have to foot the bill for realisation of the ideological fantasies of the railway lunatics on the Treasury Bench. Assets will be improved. The successor companies will take them over in pristine condition, not because of private investment—the wonderful icon of the Government—but by virtue of taxpayers' investment through the concession authorised by this money resolution.

Before the House is one of the longest money resolutions that I can recall seeing. Because this is a complicated Bill designed to apply a complicated, not to say daft, set of organisational attitudes, the Government have been anxious to cover every eventuality. I hope that the Minister will give a proper reply because we are not here just to cover the Government's idiosyncratic views. We are also here to ensure that they are not running away with taxpayers' money. Because the Government are accountable, albeit to a limited degree, the Minister must answer the questions that hon. Members have asked.

10.51 pm
Mr. Andrew Rowe (Mid-Kent)

I wish to raise a few points for clarification, or consolation. Will the railways, as a result of the Bill and the money resolution, be freed from the tyranny of the annual accounting which has made it difficult for investment? I recall the chairman of British Rail saying that the biggest change from the private sector, from which he had come, was that whereas if, for whatever reason—even the weather—it did not suit a private company to invest, that was all right, but if he could not make an investment when he was running BR, he stood a chance of losing the money because of the way in which the Treasury did its accounting. Perhaps the Minister will comment on that.

There is much reference in the resolution to assets. The asset that worries my constituents most is that which is involved in keeping their local stations open. May we be assured that large numbers of local stations will not be closed because of the company's intention to maximise the use of the assets in non-railway ways?

There is power under the resolution to provide subsidy, which is essential to the commuters of Kent. On the other hand, there is anxiety locally lest we become a subsidy Cinderella and be an unglamorous part of the railway system, as we are at present. Does the Minister see better times ahead in that connection?

I was pleased to hear the Secretary of State take what I hope will be the first bold steps towards levelling the playing field between railways and motorways. Life for my constituents is almost intolerable just now because we have works on every road and on railways throughout the county. Hundreds of millions of pounds are being spent by BR on the railways and equal amounts are being spent by the Department of Transport on the motorways. The difference is that BR's money comes out of the total stock of BR's money—and the railways must choose between spending it that way or buying rolling stock—whereas money for the motorways comes from the taxpayer. In the latter case, people do not have to choose between buying motor cars and buses.

I think I heard the Minister say that the freight facilities grant will now take account of a notional sum for the number of lorries removed from the roads. That is an enormously welcome development, if it is true, and it is regrettable that it was not available when RailEurope's plans for the Kent rail link were under discussion. It would have had a considerable effect on the sums in that case. It is essential to Kent to have this equalisation of the playing field. We desperately need to take lorries off the roads. Some 70 per cent. of United Kingdom trade will pass to mainland Europe and by the end of the century the great majority of that will pass through Kent.

Finally, I ask my hon. Friend the Minister whether some of the money under this resolution will be made available to engineer the channel tunnel rail link, when it comes to environmentally protected standards. I understand that there is a good chance that the Kings Cross low-level station is about to be removed from the agenda. If that is so, there will be a massive saving, and I hope that I can be assured that some of that saving will be spent on making the channel tunnel rail link environmentally friendly, because all the rumours I have heard suggest that the link will be anything but environmentally friendly because it will be stripped to the bone.

I hope that under this resolution no more money will be given to Union Rail, whose chairman has produced what is probably the most insulting remark that even the arrogant British Rail and its subsidiaries have been able to produce over the past few months: they have said that their project is so important that no parish council should be allowed to have an effect upon it. That is the kind of contempt for democracy that means that Union Rail should cease to have any money from the Government.

10.56 pm
Mr. Simon Hughes (Southwark and Bermondsey)

I should like to put several questions to the Minister. One was asked by the hon. Member for Mid-Kent (Mr. Rowe): whether the Government will undertake, if they are to authorise by this money resolution the expenditure or borrowing of so much money, to guarantee in every case that the highest environmental requirements will be met. The hon. Member referred to reports that, for example, on the channel tunnel rail link and elsewhere on these routes, there would not be the environmental safeguards originally proposed. If we are to commit so much money additionally, and to give the opportunity to borrow it, there is no excuse for not having the highest environmental standards.

There is an even shorter point which Ministers will anticipate from me. If it is expedient to spend so much money on doing something that most people in Britain do not want, and to borrow so much money for a proposal that they do not support, why is it not expedient either to give or to borrow money to make up the £70 million necessary to give the go-ahead for the Jubilee line?

If we are asked to authorise this expenditure, it seems to me mere peanuts to ask the Government to put their hands in their pockets for the money to give the Jubilee line extension the green light. It is a mere bauble. I will reserve my position on the money resolution until I have seen that green light and heard the chinking of cash from the Government. It could be a loan, if necessary. This money resolution provides an opportunity for the Minister to be popular in one bound.

10.58 pm
Mr. William Cash (Stafford)

First, I should like to endorse the remarks of my hon. Friend the Member for Southend, East (Sir T. Taylor) about the employment provisions. There is absolute absurdity in a Conservative Government, in a nutshell, ending up protecting trade unionists at the expense of those who are not trade unionists.

I cannot for the life of me understand, even if one wanted to protect trade unionists, the idea that, with these liabilities contained in schedule 6 to the Bill, and under clause 118, in the transfer of undertakings provisions that go right to the heart of the money resolution, we should be protecting one kind of worker as compared with another. It does not make any sense. If it is going to be done at all, it should be done equally.

Having said that, I should like to refer to the way in which the subsidies will operate in relation to the money resolution. I have already raised the issue with my hon. Friend the Minister. Although we have become used to not getting answers on Maastricht, perhaps we can have an answer on the money resolution about the implications of the new privatised rail system for the subsidies from the European Community under the European regulations.

My hon. Friend knows that the arrangements which are made through the European Community go back to the Transport Act 1968 and the European Council regulation of 1969, which was amended in 1991. They raise the question of the public service obligation, which is at the heart of the financial status of the privatised rail system.

I said in an intervention in the speech of the hon. Member for Bradford, South (Mr. Cryer) that directions given by way of compensation under the relevant clause would enable sums of between £3 billion and £5 billion to be given not merely by the Secretary of State, as has been the case so far, but also by the franchising director. That is a new dimension.

It struck me as interesting, to say the least, that the amount that the British Railways Board is allowed to borrow at the moment under the British Railways Board (Finance) Act 1991 is precisely the same as the amount of money that the franchising director is able to give by way of directions—the limit being £3 billion at the lower level and £5 billion at the upper level. If the franchising director is allowed that degree of power, we need to know how accountable the system will be. It is not simply a question of whether the Secretary of State has the power; the franchising director has it too.

I should also like an answer on what the European Transport Commissioner had to say about the privatisation of our rail system. I can assure you, Madam Deputy Speaker, that I am not going outside the money resolution, because the question of moneys payable to us through the European Community arises not only by way of borrowing but also by way of grants. Grants can come from the European Community to fulfil our public service obligations.

As I understand it, the European Transport Commissioner issued a threat that, if we privatised our rail system, we could not expect the same subsidies as other member states. That is an intolerable state of affairs. I may not be an enthusiast for subsidies, but I am damned if this country should receive an unfair allocation of its share of European moneys when the French, the Germans and the other countries in the European Community are receiving subsidies, and we, as a result of going down this route, are put in an unfair and unreasonable position vis-a-vis the other member states. I raised this point in the trans-European networks debate, and I received no reply. The Minister was on the Front Bench on that occasion, and I would like some clarification.

We are not talking about peanuts but about the payment of a massive amount of money from the European taxpayer, which is directly related to the manner in which the privatised rail arrangement is being worked out.

I take something of an interest in such matters, not least because my great great grandfather founded the London to Brighton railway in 1830—a great privatised railway, in the days when we did not have to unscramble the situation. Just as he inquired into the finances of George Hudson, the railway king and great monopolist, I should like to be sure that we are going to make everyone, whether in the House or in the European Community, accountable for the vast sums of money that are being used in relation to the Bill.

I shall reserve my decision on the vote on the money resolution until I have heard the answers to those questions. I am as interested as the hon. Member for Peckham (Ms. Harman) in the Jubilee line, because my constituency is equally—

Madam Deputy Speaker (Dame Janet Fookes)

Order. If the hon. Member wants to hear answers, he will have to give the Minister time to give them.

Mr. Cash

I am grateful, Madam Deputy Speaker. I have concluded my remarks.

11.5 pm

The Minister for Public Transport (Mr. Roger Freeman)

My hon. Friend the Member for Southend, East (Sir T. Taylor) asked about the Transfer of Undertakings (Protection of Employment) Regulations 1981, which deal with the transfer of conditions of employment. I can confirm that British railways are in exactly the same position as any other industry or employer. The regulations apply to the franchising of railway operations in the same way as they apply to changes in the private sector—for example, when one company is reorganised or merges with another. The provisions apply to all staff, whether or not they are members of trade unions.

My hon. Friend the Member for Southend, East is right when he draws a distinction between those staff who have a right to consultation and those who have not. I understand that the Minister responsible in the Department of Employment has recently made it clear that, in the Government's judgment, those consultation rights should only be extended to the recognised trade union.

As far as the Railways Bill is concerned, the railways are no different from any other enterprise, industry or business. The regulations apply across the board. I have noted carefully what my hon. Friend the Member for Southend, East had to say on the matter. If he will permit me, because it is important, I shall correspond with him after I have discussed the matter with my colleague in the Department of Employment.

The hon. Member for Bradford, South (Mr. Cryer) spoke about four issues. I shall see if I can answer him in the order that he mentioned them.

First, he pointed out that the £15 million for the cost of the franchising director, his staff and the regulator would cover approximately 50 per cent. of the cost of the new rolling stock. He and I both agree that new rolling stock is needed for the Leeds-Bradford electrification system. He may not have been in the Chamber when, in response to the speech by the hon. Member for Morley and Leeds, South (Mr. Gunnell), I gave an undertaking that I would meet the chairman of the West Yorkshire passenger transport authority, because it is possible that British Rail could use part of the new £150 million leasing facility to lease new rolling stock to come on to the electrification system. That is a matter for BR.

The hon. Member for Bradford, South asked about management and employee buy-outs. I confirm that the limit is £100,000 per management-employee group interested in organising a bid. Obviously, the total expenditure, which must come out of British Rail's external financing limit, depends on the number of groups, but I said earlier—the hon. Gentleman may not have been here—that about 20 groups had expressed interest. Whether they will all move to the stage of requiring financial assistance for professional advice remains to be seen.

The hon. Member for Bradford, South also asked me about the budget under the railway administration orders. That will fall to the franchising director's budget, which is essentially the total of the passenger service obligation grant. The hon. Gentleman knows that that is approximately £1,000 million. We shall shortly set the sum for 1993–94. The franchising director—distributing public subsidy and accountable to this House through the Secretary of State—will have to find all the moneys that he provides for subsidised services, and he is accountable for them.

The hon. Gentleman asked me about loans to British Rail. There may be occasions when it is necessary to consider extinguishment. The channel tunnel preparations are an example. For various reasons—my hon. Friend the Member for Mid-Kent (Mr. Rowe) knows this better than anyone—British Rail has been engaged during the past three or four years in some abortive work. Debt moneys have accumulated because British Rail has had to spend money on acquiring properties and preparing for routes that are not being taken forward. It may be sensible under this Bill—I give no guarantees—to extinguish that debt because it carries interest and is a burden on the railways. British Rail itself made a decision about properties purchased and preparations made.

My hon. Friend the Member for Mid-Kent asked me specifically about the freight facilities grant. I can confirm to him that what we have announced tonight is the extension of the grant to cover the removal of freight from the roads, motorways and trunk roads, so it is a valuable addition. At the moment, as my hon. Friend knows, it covers only urban and rural roads, but if it is extended to motorways and trunk roads there is a possibility that more shippers of freight will be persuaded to ship by rail rather than by road.

The hon. Member for Southwark and Bermondsey (Mr. Hughes) talked about the highest environmental standards.

It being three quarters of an hour after the commencement of proceedings on the motion, MADAM DEPUTY SPEAKER put the Question pursuant to Standing Order No. 14 (Exempted business).

Question agreed to.

Resolved,

That, for the purposes of any Act resulting from the Railways Bill, it is expedient to authorise—

  1. (1) the payment out of money provided by Parliament of the following, namely—
    1. (a) the remuneration of, and any travelling or other allowances payable under the Act to, the Regulator, the Franchising Director and any staff of the Regulator or the Franchising Director, any other sums payable under the Act to or in respect of the Regulator or the Franchising Director and any expenses duly incurred by the Regulator or the Franchising Director, or by any staff of the Regulator or the Franchising Director, in consequence of the provisions of the Act;
    2. (b) any sums required by the Regulator for the payment of the remuneration of the chairman of a railway users' committee, any travelling or other allowances payable under the Act to such a chairman or to other members of such a committee, any sums 267 payable by way of reimbursement of travelling or out-of-pocket expenses to members of a sub-committee of such a committee and any expenses incurred by such a committee;
    3. (c) any sums required by the Secretary of State for making grants—
      1. (i) to the Board or any wholly owned subsidiary of the Board, towards the expenditure of the Board or the subsidiary, as the case may be;
      2. (ii) to any successor company which is for the time being wholly owned by the Crown, towards the expenditure of that company;
      3. (iii) towards the provision of facilities which are to be provided by any person for or in connection with the carriage of goods by railway or inland waterway or the loading or unloading of goods carried or intended to be carried by railway or inland waterway;
    4. (d) any sums required for the making by the Franchising Director of grants or other payments under or by virtue of the Act;
    5. (e) any sums required by the Secretary of State for making grants or loans to a company in relation to which a railway administration order has been made;
    6. (f) any sums required by the Secretary of State for making any payment in respect of an indemnity given under the Act to a person appointed to achieve the purposes of a railway administration order;
    7. (g) any expenses incurred by the Treasury or the Secretary of State in acquiring securities of a successor company;
      8. 268
    8. (h) any compensation payable by the Secretary of State in respect of compliance with directions given under the Act in time of hostilities, whether actual or imminent, severe international tension or great national emergency;
    9. (i) any sums required by the Secretary of State for fulfilling guarantees given under the Act;
    10. (j) any administrative expenses incurred by the Secretary of State or the Treasury in consequence of the provisions of the Act;
    11. (k) any increase attributable to the Act in the sums payable out of money so provided under any other Act;
  2. (2) the charging on, and issuing out of, the Consolidated Fund of any sums required by the Treasury for fulfilling guarantees given under or by virtue of the Act;
  3. (3) the payment out of the National Loans Fund of any sums required by the Secretary of State by virtue of the Act for making loans to—
    1. (a) any wholly owned subsidiary of the Board; or
    2. (b) a successor company which is for the time being wholly owned by the Crown;
  4. (4) the reduction of the assets of the National Loans Fund by amounts corresponding to such liabilities—
    1. (a) of the Board, in respect of loans made to the Board under section 20 of the Transport Act 1962, or
    2. (b) of a successor company which is for the time being—
      1. (i) a wholly owned subsidiary of the Board, or
      2. (ii) wholly owned by the Crown, in respect of any loans,
as the Secretary of State may by order extinguish.