HC Deb 02 February 1993 vol 218 cc269-81

Motion made, and Question proposed,

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

  1. (a) the inclusion in licences granted under the Act of conditions requiring the rendering of payments to the Secretary of State or the Rail Regulator;
  2. (b) the inclusion in franchise agreements, within the meaning of the Act, of conditions requiring the rendering of payments to the Director of Passenger Rail Franchising;
  3. (c) the inclusion of provisions under which monetary penalties may be imposed on persons who contravene or fail to comply with conditions or requirements imposed by or under the Act;
  4. (d) the imposition of charges to corporation tax by provisions relating to the taxation of persons who are transferors or transferees in relation to transfer schemes under the Act;
  5. (e) the payment of sums into the Consolidated Fund or the National Loans Fund.— [Mr. Chapman.]

11.10 pm
Mr. Nigel Spearing (Newham, South)

On this not very usual motion for receipt of moneys it is clear that the Secretary of State intends to receive moneys for licences and a good many other issues. I wish to speak on three relatively short matters and I hope that the Minister will be able to give me a reply. I am glad to see that the Secretary of State is also here.

The first matter may not be strictly in order. The question is whether it is. The hon. Member for Mid-Kent (Mr. Rowe) mentioned Union Rail. I take it that in the ambit of the Act-to-be there will be some arrangement between the Government and Union Rail and that the latter will be paying some money into Government funds in respect of licences issued. The hon. Member for Mid-Kent mentioned the fact that Union Rail will be funded by public and private money. He also expressed some dissatisfaction about the relationships between Union Rail and its senior staff and the people in the area. He mentioned a parish council in Kent.

If this money is coming back from Union Rail when it becomes a private, floated firm under the Act, as I presume that it will, can the Minister use his powers to persuade those officials to liaise more courteously with the people on the route of the railway? When it is running, it will be paying money to the Government. At present the route has still to be decided, but I have heard from my local borough council that Union Rail officials are unwilling to go through the usual consultation procedures in a few weeks' time when the route has been made public.

I wish to express the grave dissatisfaction of the people in the Newham and Stratford area about this because it would be a major feature of the area and the Union Rail officials appear not to be very much concerned about the financial arrangements that they would make for such consultation. They will have to deal with the matter ultimately through a statutory instrument rather than a private Bill, which makes public relations on the spot even more important.

The second matter that I wish to raise—I am glad to see that the Secretary of State is here for it—is the question of payments of franchises into the Government funds in respect of this order. The Secretary of State comes from Norfolk. His local depot is, I think, Crown Point, Norwich. I received an answer from the Minister on 28 January which could well apply to that local depot of his. I asked him what would happen when various franchisees of existing services shared maintenance depots and stabling yards, and what arrangements would be made; they would all have to pay money to the Government. The Minister courteously replied: Where the depot concerned is dedicated to a passenger service which is to be let as a single franchise, the depot will usually be leased for the period of the franchise to the incoming franchisee. Where one franchisee will be the predominant user of the depot, he will usually acquire the lease subject to conditions requiring him to make facilities available to other operators. In some cases, it may be feasible to divide a depot into separate parts for use by different operators, or to lease a depot to a third party maintenance operator."—[Official Report, 28 January 1993; Vol. 217, c. 800.] All those involved will be paying money to the Government.

I ask the Secretary of State, who is present today and who represents an important part of East Anglia, what will happen if Crown Point depot, Norwich has no fewer than two or three franchises? It is difficult enough to run as it is, as are those at Cambridge and Ilford. Years ago, they were all run under the single administration of the former Great Eastern railway. The finances and arrangments for lessees, sub-letting, and all the operational problems that will arise under the terms of the right hon. Gentleman's answer, the Bill and the ways and means motion could cause grave difficulty and disrupt the former Great Eastern railway services between InterCity and Regional Railways. Those services are already disrupted and already cause difficulties, as the Secretary of State's constituents know.

My next question on payments is more important than the others put together. As I understand it, under the motion, payments in respect of licences will be made to the Secretary of State or the rail regulator. That money has to come from somewhere. It will come from charges made by the franchiser for the traffic, whether freight or passenger, plus any money that the Secretary of State receives for necessary public services—he currently receives money for the buses. We shall start with the existing timetable, but that could be adjusted. An amount will be paid to Railtrack and an amount to the Secretary of State.

The Secretary of State and the Minister have repeatedly said, publicly and in answer to questions, that the franchiser will be more effective and efficient in his operation than existing British Rail. That is a hope rather than a proven fact. I asked a question, which was again courteously answered by the Minister. I asked him to identify those services or operations which can be made more effective or efficient consequent to the enactment of the Railways Bill"—[Official Report, 28 January 1993; Vol. 217, c. 799.] As a consequence of the ways and means motion, more money will be paid from those services—I see the Minister nodding. I received no precise answer, but was told: All passenger and freight services should be capable of more effective or efficient operation as a result of our reform proposals."—[Official Report, 28 January 1993; Vol. 217, c. 800.] I am a little foxed by that. It is a matter of hope and faith —not accountancy, on which the Minister is a known expert.

I want to ask the Minister an important question about efficiency and the income from which the money will be paid. An experienced railway person recently said to me, "Nigel, they will cut the wages and make the conditions more difficult—that is how they will improve efficiency." According to that experienced person, the only scope for major efficiency increases and the only source for the funds was the efficiency that would result from reductions in labour costs and changes in the conditions of work and service. I do not know whether that is in the minds of the Government or of those currently preparing the franchises. I wondered whether it was, and I asked the Minister a question which he has not answered today.

I asked the Minister what consideration had been given to maintaining a single conciliation service consequent upon the implementation of the Railways Bill and what assessment had been made of the desirability of maintaining a single structure of training and qualifications for various grades of personnel—other than the funding, I said in qualification, of the internal training and supervision which will be required anyway. I presume that that will be done on some railway association basis because one would expect grades of personnel in training and matters of safety to be on a national basis. We would expect there to be a single national bargaining arrangement for those grades of skill, experience, knowledge and training, particularly for people in crucial positions such as signalmen and drivers on whom the lives of others depend.

Otherwise, one railwaycompany—one franchisee—might begin to undercut another. There would be a market, just as there is informally inside British Rail, but on a single level of payment qualification and returns.

That is an important financial matter because the payments which will have to be made to the Secretary of State, Railtrack and all the others, will be crucial to the financial profits that the franchisers are expected to earn. We all know that in railways—my hon. Friend the Member for Bradford, South (Mr. Cryer) will correct me if I am wrong—by far the largest expenditure, other than for Railtrack which is being dealt with separately, will be staff wages and salaries.

At this point, I conclude with a matter which both the Secretary of State and the Minister for Public Transport should bear in mind. In today's debate they have constantly used the word "culture". They are not particularly well informed on railway matters, although the Minister for Public Transport has learnt quite a lot in the past year or two, and I pay tribute to the personal care and attention that he has taken. There is and will be a railway culture. A railway requires those who operate it to have a particular way of life. I speak as a Member who has represented people working in two large railway depots—Old Oak Common on the Great Western, and Stratford on the former Great Eastern. Many of my former constituents and present constituents work in those areas.

Railway workers have 24-hour cycle. The railway is like a factory strung out over hundreds of miles where operatives are not in an office or workshop. They keep it going almost every day of the year except Christmas. That creates the sort of culture that is found among people who work together, sometimes in dangerous conditions, and who depend on one another for their own and their passengers' safety. They often come from families with the proud traditions of those who serve the railways.

There is a railway culture, and I put it to the House that it is a good, proper and useful culture which serves the passeners. I use the word "passengers" because they are passengers and owners, not just customers, as they are referred to on the tannoy. The idea of being customers of a public service that we currently own is one that jars.

Conservative Members mistakenly believe that some of the things that they would like to see—which we would all like to see, but which do not always happen—are the fault of some trade union or Labour plot to hold up progress. There may have been some tiny grains of truth in that in the past, or even in the present, but it is largely a myth and a miasma. As to the culture among the conciliation grades—I use that word advisedly—before the public ownership of railways, the Association of Railway Companies got together and agreed with the National Union of Railwaymen historically as to the conciliation grades. A national machinery existed to deal with such matters.

In my experience—and, I am sure, in that of virtually all right hon. and hon. Members—if one meets railwaymen and their families, one knows of the attitude that railwaymen bring to their jobs. If there is a negative culture, it is with management, who have been forced into adopting certain attitudes and ways which have not been entirely healthy in the past few years. If there has been a negative attitude, it has been found among management, not in the conciliation grades.

When the Minister replies, I hope that he will give an assurance that neither he nor the franchise holders to whom he will grant licences are seeking greater efficiency not through better services but through lower costs, by providing lower returns to those who give their lives—often to the inconvenience of their families, because of non-social hours—to the service of the public in our great railway industry.

11.25 pm
Mrs. Teresa Gorman (Billericay)

I congratulate my hon. Friend the Minister for Public Transport on offering to franchise the dreadful line that goes through my constituency. It could not possibly be run more inefficiently or unreliably than it is at present, so therefore—

Madam Deputy Speaker (Dame Janet Fookes)

Order. Before the hon. Lady continues. I remind her that the resolution's subject is fairly narrow and does not allow for debate on general policy.

Mrs. Gorman

I was coming to the important point, Madam Deputy Speaker, that my hon. Friend the Minister will be aware that the Government have already promised £50 million to update that line. When my hon. Friend the Minister replies, I would like him to confirm that that money is still on the table and will be in addition to any other moneys allocated to that line.

As to through ticketing—which is another financial issue—will my hon. Friend confirm that the proposal will not in any wary harm bus companies that want to take on a franchise, and that they will not find themselves falling under the auspices of the Office of Fair Trading, which might otherwise consider that a monopoly was being developed?

Madam Deputy Speaker

Order. That issue is beyond the scope of this debate.

Mrs. Gorman

I understand, Madam Deputy Speaker. I have concluded my remarks.

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

I have two questions about the charges that can be imposed under the ways and means resolution. The first relates to the exceptionally large number of small concerns—many of them run voluntarily—embraced by the Bill.

It is not generally appreciated that clauses 6 and 7 of the Bill apply to every railway any description whatsoever—not just to British Rail but to the Tyne and Wear Metro; London Underground; the Ffestiniog railway; the Romney, Hythe and Dymchurch railway; the Tanfield railway; the Heatherstane Law railway; and the Keighley and Worth Valley railway—with which the hon. Member for Bradford, South (Mr. Cryer) is well associated. For that matter, clauses 6 and 7 apply also to the 9in gauge railway capable of carrying passengers that runs through a park or one that is erected on a temporary basis for a particular event, such as a model railway exhibiton. That still constitutes the running of a railway.

It follows that all railways embraced by clauses 6 and 7 can be the subject of charges imposed as part of the licence conditions by the Secretary of State or the regulator. Voluntary railways had no idea until the day that the Bill was published that it would embrace them, and they are concerned to know the charges and licence arrangements to which they will be subject.

From the day of Royal Assent, it will be an offence for those railways to run unless they have an exemption certificate or licence granted by the Secretary of State or the regulator. We do not know the charge that will be imposed for that certificate or licence. Will it be nominal—50p, say—or will it be related to the scale of operation of a big franchise holder, such as that which takes on the east coast main line and be many thousands of pounds? How is a small organisation such as the North Yorkshire Moors railway to find the money to pay such a charge, if it were that kind of figure?

Is it certain that, on payment of the charge, the exemption or licence will be issued immediately? These are railways that organise for the tourist trade each season, and will not necessarily know—even if they have paid the charge specified in the motion—that they will be free to operate when the operating season starts. What will be the position of voluntary model railway organisations that pay the charge but do not know whether they will receive a licence in time for children to ride on their trains on the day of the fete?

Although all that is embraced in the Bill, nothing said by the Minister has explained why all those railways are involved, or why they are to be subject to charges. In fact, I know why they are all involved: they are all involved in the Government's desperate attempt to prevent the Bill from becoming hybrid. The Government have taken every inch of railway track in the country into the scope of the Bill, and said, "Never mind; there will be licences and exemptions. You will be all right." The ways and means resolution, however, allows charges to be imposed with those licences.

In my view, none of those organisations should be charged a penny. What have they done to deserve it? They have simply set up trusts to run railways, often taking over railways abandoned by British Rail. They provide a popular and attractive tourist facility which is much admired by visitors to this country. Now they are being told that they cannot operate unless they obtain the necessary exemption or licence from the Secretary of State or the regulator.

We are not talking here about light railway orders or safety provisions; those are covered separately in existing regulations. We are talking about an Act that will prevent operators from running any such railway unless they have satisfied the Secretary of State that they should have exemptions or licences—and, under this motion, he may impose a charge for a licence. Moreover, for all we know, he may take months to grant it.

The Minister may think that that is no problem. He may say that the Government had to include the provision to prevent the Bill from becoming hybrid. But he should know bureaucracies well enough to realise that that could become a significant obstacle to a great many organisations running the railways to which I have referred.

My second question about the charges that will be imposed under the ways and means resolution relates to operators who take on franchises for the main routes—for example, the east coast main line. Will the imposition of charges and the monetary penalties mentioned in paragraph (c)—penalties imposed on persons who contravene or fail to comply with conditions or requirements imposed by … the Act"— be used by the regulator as a means of maintaining quality of service? That is an important question.

We understand that Mr. Richard Branson is willing to take on the east coast main line if he can run a non-stop line from London to Edinburgh. That may be fine for people who wish to travel from London to Edinburgh, or vice versa; but it is not much consolation to the inhabitants of Berwick-upon-Tweed, Alnmouth, Newcastle, York, Northallerton, Durham or anywhere else between the two cities.

This afternoon, the Secretary of State made an important and relevant statement: he said that the franchises would be based on the existing timetable. From that we must conclude that all the stops that now exist at such places as Alnmouth and Berwick must be maintained by the franchisee. But what happens if the franchisee says, "I have had enough of this; I do not want my trains to stop at these places. I think that I might be able to get some more Edinburgh passengers if I go flying through all these stations"? Will he incur a monetary penalty under paragraph (c)? If not, has the regulator any other way of controlling a franchisee who starts to depart from the existing timetable?

I an not arguing that existing timetables are sacrosanct; indeed, the best argument for bringing private contractors on to the railways is the possibility of their adding services that are not on the existing timetable. We all know, however, that the reverse could easily happen: under these arrangements, stations that now have services may lose them. I want to know whether Ministers see the penalties referred to in the motion as a way of ensuring that franchisees provide services to all the stations that now have services on the line. If not, what will be the mechanism for ensuring continuing compliance with the responsibility to maintain the existing timetable?

11.33 pm
Mr. William Cash (Stafford)

Will my hon. Friend the Minister be good enough to deal with some of the matters that I raised on the previous motion, as they apply to the ways and means resolution?

11.34 pm
Mr. Bob Cryer (Bradford, South)

I too want to deal with the private railways established from the 1960s onwards. Some Tory Members may not think that the legislation is needlessly bureaucratic or that it will impose another layer of administration, but they are wrong.

The Keighley and Worth Valley light railway in which I happen to own five £10 shares, which have never paid a dividend—and I should reject it if they ever did—was established as a preservation society in 1962. It obtained a light railway order in 1967 and a transfer order in 1968. An inspection of the operation and rules of operating the railway was carried out under the chief inspecting officer, then Colonel J. R. H. Robertson. From 29 June 1968, that five-mile branch of railway has been operating safely in the metropolitan borough of Yorkshire. Over the years, it has developed a relationship with British Rail which gives it access to traffic that it obtains via the British Rail network. For example, it sometimes runs excursions from the Worth valley to various destinations, hauled in part by steam trains which are attractive and delight many people.

What will happen under these arrangements when the Rail Regulator will be responsible for administering railway licenses and approving access agreements? Clause 6 states: No person shall … provide or operate any services for the carriege of passengers or goods by railway … own a network, a station or a light maintenance depot, or … provide any network services, station services or light maintenance services … unless he is authorised to do so by a licence or is exempt, by virtue of section 7". The railway to which I referred has been operating for many years, largely on a voluntary basis. It will have made 25 years' of payments this year and will finally be purchased from British Rail. It would have been an abandoned line if it had not been taken over, and that is true for many railways, as the right hon. Member for Berwick-upon-Tweed (Mr. Beith) said.

I cite as examples the railway that runs from Sherringham to Holt, the North Yorkshire Moors railway, the Severn Valley railway and a dozen others. Incidentally, those railways followed the form of agreement negotiated between the Keighley and Worth Valley railway and British Rail way back in the early 1960s in order to bring to a successful conclusion the aim of reopening the lines.

All those railways are now subject to a licence. Will they operate as they do now? What if they have access to part of another railway? What does "access" mean? Does it mean running into goods yard as happens at Keighley and picking up wagons or coaches which have been transferred from British Rail to the Keighley and Worth Valley railway? That is access of a sort. It means that a separate licence will have to be given unless, under clause 7, the Secretary of State, who must consult the regulator, by order grants exemption from the requirement to be authorised by licence to carry on such activities falling within section 6 to which I referred earlier.

It is fair to ask the Minister to say whether the Secretary of State is minded to produce an order once, or if, the Bill is passed, to grant exemption for all the existing privately operated railways which have been established for a long time and after a struggle.

The Bill establishes an administrative superstructure which the privately operated railways can do without. They do not need the superstructure, because they come under the Health and Safety Executive. Any accidents must be reported.

The rules and operation of the railways are to the highest standards. There are no other standards. Railways cannot afford to be 50 per cent. safe. They must be 100 per cent. safe when they deal with passengers, four or five coaches weighing 120 tonnes and a locomotive weighing 50, 60 or 70 tonnes. They cannot afford half-measures. They have passed the test.

Mr. Paul Tyler (North Cornwall)

Is the hon. Gentleman aware that the Prime Minister announced today his wish to reduce the amount of bureaucracy? Are not the proposals a clear case of increased bureaucracy?

Mr. Cryer

I was about to make that point. Hon. Members might be interested to know that the Government produced 3,359 statutory instruments in 1992. The Government are supposed to be lifting regulations off the backs of people, although they produced more regulations in one year than any other Government in parliamentary history.

Will this ways and means motion, which is the ways and means of raising revenue for which the legislation provides, extract money from private railways which are run on a voluntary and democratic basis, in the case of the Keighley and Worth Valley light railway and many others, for the pleasure of those who run them and those who see them? I am sure that all hon. Members will agree that they are reasonable organisations. They are run properly and have the best aspirations. Why then should they be burdened?

Even if the Secretary of State makes an order, such an order is still highly qualified. The whole of page 7 and half of page 8 of the Bill relate to the qualifications which apply to the exemptions. I hope that the Minister can give an unequivocal guarantee tonight that, if the Bill is passed and the order-making powers are granted to the Minister, he will produce another instrument. Such regulations are required only under the terms of the Government's legislation. As a result of the ideological perversity of the Government, more regulations will be produced to keep the bureaucracy off the backs of railways which do not need it.

Mr. Spearing

Does my hon. Friend agree that the matter can be disassociated entirely from the general attitude on both sides of the House to the Bill? It is conceivable that such a proposal would result in British Railways staying intact.

The Association of Railway Preservation Societies is made up of charitable, educational and heritage organisations. There is no political difference across the House about them. I suggest that we all want to encourage them, within reason. Can my hon. Friend tell me whether there has been much consultation between the Association of Railway Preservation Societies and the Government, who pride themselves on consultation, before the matter was dealt with in the way he has described.

Mr. Cryer

So far as I am aware, there has been no consultation on the ways and means motion. That contrasts very much with the Transport and Works Act 1992. One of the curiosities of the proposals in the ways and means motion is that, according to the Government, the Transport and Works Act 1992 was designed to simplify the position for light railways—small railways with a gauge up to 4 ft 8½ in. Railways now have a gauge of about a metre or whatever.

I would be interested to hear the Minister's comments on the licensing and the revenue that derives from that. How can the Government reconcile this legislation with the Transport and Works Act 1992, which was designed to provide the Secretary of State with order-making powers to simplify the procedure and avoid private Bills being promoted to secure the operation of minor railways?

I hope that the Minister will reassure us on that point. I am not referring to the kernel of the Bill, the whole of which remains objectionable, but it would be valuable if the Minister gave an indication that it was not the intention to use the fee-levying power to impose an additional burden on the light railways.

I emphasise that many people have struggled hard to get the railways operating; they are not rich men and women's playthings. People have worked their guts out in their spare time—sometimes without much enthusiastic support from British Rail or anybody else. That was certainly true of the Keighley and Worth Valley railway. Local people thought that the idea of a group of people taking over a railway was barmy, but now everyone thinks that the whole thing is marvellous.

I hope that the Minister shares the view those railways are marvellous a chievements, that he will strive to the best of his ability—the Secretary of State can nod his head while the Minister is saying this—to avoid putting any further burdens on them, and that an order will be forthcoming.

11.46 pm
Mr. Andrew Mackinlay (Thurrock)

I wish to draw the attention of the House to paragraphs (b) and (c) of the motion. It seems legitimate to draw attention in particular to the absurdity of paragraph (b)—which deals with the rendering of payments to the Director of Passenger Rail Franchising—as it relates to at least one of the prospective franchises that were announced by the Secretary of State earlier today. I refer to the Tilbury-Southend line, in which my constituents have some considerable interest.

I say that that part of the motion is absurd because there will be no prospect whatever of payments being made to the Director of Passenger Rail Franchising by the people who are successful in landing—or who receive as a gift from the Government—the franchise for the line. It is, by general agreement, a totally clapped-out line which cannot generate revenue. To all intents and purposes, the Government will have to give it away. They will dress up the exercise, of course. They will no doubt find someone to take it off their hands.

Mr. Spearing

Public money.

Mr. Mackinlay

As my hon. Friend says, they will have to make public money available to keep the line ticking over. The tragedy is that it needs major public investment on a scale that the Government are not prepared to fund. The consequence is that commuters from Essex to London will continue to have a totally inadequate form of transport for their recreation and to get to their work.

It should be made clear that a fraudulent prospectus is being offered to commuters on the Essex line. Their line cannot generate moneys to be paid to the Director of Passenger Rail Franchising. A public asset is to be given away so that the Government can shed their responsibilities and hide their failure to fund that railway line over a decade or more.

Both the Bill and the ways and means resolution disguise the fact that the Government are probably already scurrying around trying to cobble together something that they will describe as a management buy-out so that they can shed the line. The Director of Passenger Rail Franchising will not receive money as a consequence of the franchising of the Tilbury line—far from it. It is clear that the Government intend to exercise the right, provided in the Bill, to make money available to the managers of lines—including this one, I suspect—so that they may put together a cosmetic buy-out.

Mrs. Gorman

Does the hon. Gentleman know that at least three organisations have expressed an interest in taking over this line, which I understand makes £60 million a year?

Mr. Mackinlay

The second part of the hon. Lady's news is breathtaking. If the line makes so much money, the commuters will ask where it is all going and why some of it is not being invested in the line to provide a modern system of transport from Southend, via Tilbury, into Fenchurch Street. Clearly that is not happening.

The hon. Lady alleges that three bodies are interested in taking over the line. It remains to be seen, but I expect that the interested parties will turn out to be of the James Sherwood variety—people interested in franchising lines provided that they can do so on their own terms. I shall be very surprised if anyone, other than managers, is prepared to take on this line. No one could fund it to the extent required by the commuters. It is a matter of simple arithmetic.

While I am thinking about Sir James Sherwood and others, I should say that there are people who are interested in privatisation of the railway network but make it abundantly clear that they are not interested in the Government's proposed methods. Only time will tell, but I believe that the hon. Lady will find—

Madam Deputy Speaker

Order. It is clear that the hon. Gentleman is wide of the ways and means resolution, the scope of which is fairly narrow.

Mr. Mackinlay

I accept your ruling, Madam Deputy Speaker. I succumbed to temptation following the hon. Lady's intervention.

Paragraph (c) of the ways and means resolution refers to penalties that may be imposed on franchisees who fail to comply with conditions or requirements imposed on them. It seems to me that, in terms of ensuring that franchisers fulfil their obligations, the Bill is fatally flawed, and the motion is inadequate. It is time the Minister told the House how he intends to guarantee the continuation of services when a franchiser fails. Monetary penalties will not get people home from a central London station if a company fails at 3 o'clock in the afternoon. The passengers will be stranded. There is no indication that there will be any system of bonding, any guarantee that money will be available for continuation of the franchise should there be a failure.

The Bill contains explicit requirements regarding safety. It is clear from the Bill, as well as from replies to parliamentary questions that I have received, that there is no mechanism to ensure compliance with safety requirements in the event of a train failure or crash. It seems to me that the Government intend to reply on some cosmetic monetary penalty to give the impression that there will be sufficient sanctions to guarantee continued service and safety standards once a line is franchised or privatised. This is wholly inadequate. As several of my hon. Friends have said, there is great danger in this respect. Much more needs to be done. Monetary penalties will be wholly insufficient to guarantee safety and quality of service on the lines that are franchised.

11.55 pm
The Minister for Public Transport (Mr. Roger Freeman)

I shall be concise but clear in responding to what has been a brief debate.

The hon. Member for Newham, South (Mr. Spearing) raised a number of points. I assure him that, when Union Rail, with permission from the Secretary of State for Transport, goes out to consultation on the rail link, there will be thorough consultation with his local authority. If there is not, I am sure that the hon. Gentleman will let me know.

He asked about depots in Norfolk where there are more than two or three franchisees. That seems most unlikely, but as my right hon. Friend said when moving the Second Reading, he will publish a map in due course showing the nature of the franchises throughout Great Britain, and I am sure that any problems will then be identified.

Mr. Spearing

It was an example.

Mr. Freeman

The hon. Gentleman says from a sedentary position that he was giving an example. That is why I have answered in general terms. The map will show where the franchises overlap.

The hon. Member for Newham, South next asked about franchisees paying money back under the resolution. That is the way in which, on profitable lines, the state will receive money on an annual basis for running a franchise, and the hon. Member for Kingston upon Hull, East (Mr. Prescott) referred to the east coast main line. That will, in essence, enable the public sector to cross-subsidise, for example, InterCity lines that lose money.

I was then asked about the industrywide conciliation and training service. The Health and Safety Commission report on safety recognised the importance of staff qualifications and training. It recommended high level core standards set on an industrywide basis, possibly by the Railway Training Council.

The hon. Member for Newham, South went on to speak about what he called a danger of wage-cutting. I think that the reverse is true, that we will see greater wage flexibility and the introduction of performance and bonus pay. I would expect to see an industry with better trained and better paid staff.

My hon. Friend the Member for Billericay (Mrs. Gorman) was out of order for part of her remarks, but in respect of the beginning of her comments that were in order, the re-signalling contract has been signed and is going ahead. We would welcome the bus companies bidding for franchises. If there is concern about anti-competitive legislation, we invite the bus companies to talk to the Director General of Fair Trading.

The right hon. Member for Berwick-upon-Tweed (Mr. Beith) and the hon. Member for Bradford, South (Mr. Cryer) referred to preservation railways. I was fascinated to read of the authorship by the hon. Member for Bradford, South of a document entitled "Steam in the Worth Valley," volume 1 of which he wrote in 1969 and volume 2 in 1972. We now know where his sympathies and interests lie, and I am delighted to learn it.

I have a simple answer to the points that were made at considerable length, although I appreciate the need to express them in that way. The Secretary of State intends to exempt preservation railways from the licensing system under the provisions of clause 7. That is a clear assurance.

In relation to franchising, the right hon. Member for Berwick-upon-Tweed asked about penalties for failure, and the hon. Member for Thurrock (Mr. Mackinlay) raised essentially the same point. If a railway train run by a franchisee fails in the technical sense, Railtrack is responsible. That is the safety authority, and it will ensure that the train is removed from the station or tracks.

Mr. Mackinlay

How?

Mr. Freeman

Because Railtrack will have the necessary equipment. Obviously, as the safety authority, it will have to do that. If a franchisee loses financial standing and credibility, the franchising director shall step in and ensure that service continues. If the franchisee fails to meet the performance standards, financial penalties will be incurred and there may be receipts by the franchising director.

My hon. Friend the Member for Stafford (Mr. Cash) asked about the European Transport Commissioner and an alleged threat not to support with European money the privatised system. We are not aware of such a threat, but in any case, Railtrack, which will be the consumer of large amounts of public sector money, will still qualify to receive money from the European investment bank and from other Commission sources.

We are determined to ensure that this country receives its fair allocation of funds that are contributed by the taxpayers of this country, and I commend the resolution to the House.

Question put and agreed to.

Resolved,

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

  1. (a) the inclusion in licences granted under the Act of conditions requiring the rendering of payments to the Secretary of State or the Rail Regulator;
  2. (b) the inclusion in franchise agreements, within the meaning of the Act, of conditions requiring the rendering of payments to the Director of Passenger Rail Franchising;
  3. (c) the inclusion of provisions under the monetary penalties may be imposed on persons who contravene or fail to comply with conditions or requirements imposed by or under the Act;
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  4. (d) the imposition of charges to corporation tax by provisions relating to the taxation of persons who are transferors or transferees in relation to transfer schemes under the Act;
  5. (e) the payment of sums into the Consolidated Fund or the National Loans Fund.