HC Deb 26 July 1993 vol 229 cc735-7
5. Mr. Barnes

To ask the Secretary of State for Transport when he next plans to meet representatives of the British Railways Board to discuss the privatisation of the railways; and if he will make a statement.

Mr. MacGregor

I meet the chairman and other British Rail representatives regularly and will be doing so again this week.

Mr. Barnes

Most work on the railways has never been well paid, but at least it used to be secure and, after it, people received a pension. Is there to be a guarantee of job security in future and will there be a guarantee of the solvency of pensions when the dreaded day of rail privatisation arrives?

Mr. MacGregor

We reached agrement with British Rail and with the British Rail pension trustees last week on the final arrangements in relation to a solvency guarantee, following pretty long discussions in which we dealt with all the other issues. Arrangements have been drawn up and I answered a parliamentary question on the subject last week. In a generous way, I think that that gives the assurance that the hon. Gentleman seeks.

Mr. Channon

Before privatisation takes place, would my right hon. Friend agree that there are still many lines in Network SouthEast that require new rolling stock? Will he therefore strongly encourage the new leasing deals? Will he also comment on the prospects of Network SouthEast being allowed to lease trains for that purpose in the near future?

Mr. Macgregor

As my right hon. Friend knows, a £150 million leasing deal, which was agreed and announced in the autumn statement last year, is currently out to tender, and BR will make its decision on it within the next two months. One of the possibilities there is for Network South East. I hope that we shall be able to continue that kind of arrangement in the future. As to privatisation, the opportunities for leasing will be substantial.

Mr. Trimble

Will the Secretary of State assure me that the privatisation of railways will not prejudice investment in the west coast main line, which is of major importance to us in Northern Ireland, as the Larne-Lochryan-Carlisle route is the major route used to carry the commercial traffic of Northern Ireland—[Interruption.]

Mr. MacGregor

I thought that other Opposition Members were also interested in the west coast main line —it is not just of interest to Northern Ireland. I can tell the hon. Gentleman that there is no reason why privatisation should in any way adversely affect the proposals for the west coast main line. I hope that some of the preliminary work on that will start shortly. We are investigating also the possibility—we are out to consultancy on it at the moment—of involving the private sector in the construction and financing of the modernisation of the west coast main line.

Mr. Jonathan Evans

Will my right hon. Friend please note that there will be a warm welcome in Wales this week for his right hon. Friend the Minister of State when he travels with me on the heart of Wales line from Swansea to Shrewsbury? Will my right hon. Friend take this opportunity to say that that is a demonstration of the commitment of the Government to socially necessary lines in rural areas, just like the central Wales line, and give lie to the fear that has been built up by Opposition Members that services of that kind, which are so essential in my constituency and other rural areas, will in some way be diminished by the Government's proposals?

Mr. MacGregor

I entirely agree with my hon. Friend. My right hon. Friend is doing a great deal of travelling around the country and is making clear, as we shall in Wales and as we have made clear throughout, that the subsidies will continue for socially necessary lines. I am happy to give my hon. Friend that assurance and I am sure that my right hon. Friend, who is looking forward to his visit very much, will do so as well.

Mr. Wilson

Will the Secretary of State accept that there is absolutely no need for the spurious and divisive contest between the west coast main line and Network SouthEast and that it is perfectly well within the gift of Government to allow both rolling stock schemes to proceed under the leasing procedures, which they have belatedly acknowledged as feasible?

Will the Secretary of State address himself also to the question of where the money is to come from to fund the profits that operators will look for under privatisation? Will he particularly address himself to the report by Price Waterhouse to BR, which has been commented on in today's Glasgow Herald, which shows that private investors are being encouraged to believe that they should seek a 30 per cent. return on their investment?

Will the Secretary of State tell us, after many months of discussing those issues, where that 30 per cent. is to come from in a subsidised, loss-making railway system? It can come only from increased subsidy, which is clearly not the Government's intention, or from cuts in services, increasing fares and the loss of jobs. Would not the Secretary of State be doing his Back Benchers and his candidate in Christchurch a great favour if he were now to draw one of those famous lines in the sand and forget all about railway privatisation during the summer recess?

Mr. MacGregor

I was in Christchurch recently and have to tell the hon. Gentleman that there was not a great deal of concern about railway privatisation, because the aasurances that I was able to give were clear. As to his other two questions, the leasing arrangement was feasible only because of the prospect of privatisation. It is only that which has made it possible. But, of course, one cannot do everything at once. One has to make choices among priorities. There must be a limit to the levels of public expenditure—it would be as well if the hon. Gentleman recognised that. As to the Price Waterhouse report, I have not yet seen it, let alone read the Glasgow Herald.

Mr. Wilson

Here is the newspaper.

Mr. MacGregor

I would rather read the Price Waterhouse report in full, if I may, and will certainly look at it.

The hon. Gentleman will know that there will be considerable opportunities for franchisees through efficiency gains, better marketing, increasing passenger returns and so on. I would also tell him that the Price Waterhouse report is premature, because, until the Bill is given Royal Assent, we will not be going out positively seeking franchisees and marketing the opportunities. It is not possible to make such calculations at this stage.