DUTY OF CERTAIN PERSONS TO FURNISH INFORMATION TO THE FRANCHISING DIRECTOR ON REQUEST

HC Deb 24 May 1993 vol 225 cc649-82

'.—(1) Any of the following persons, that is to say—

1. (a) the Board,
2. (b) any wholly owned subsidiary of the Board, or
3. (c) any person who is the holder of a network licence or a station licence,

shall be under a duty to furnish to the Franchising Director in such form and manner as he may by notice request such information as he may so request, being information which the Franchising Director considers necessary for the purpose of facilitating the performance of any function of his under this Part.

(2) A request under subsection (1) above must be complied with within such time (being not less than 28 days from the making of the request) as may be specified in the request.

(3) If any such request is not complied with, the Franchising Director may serve a notice under subsection (4) below on the person from whom the information was requested under subsection (1) above.

(4) A notice under this subsection is a notice signed by the Franchising Director and—

1. (a) requiring the person on whom it is served to produce, at a time and place specified in the notice, to the Franchising Director or to any person appointed by the Franchising Director for the purpose, any documents which are specified or described in the notice and are in that person's custody or under his control; or
2. (b) requiring that person to furnish, at a time and place and in the form and manner specified in the notice, to the Franchising Director such information as may be specified or described in the notice.

(5) No person shall be required under this section to produce any documents which he could not be compelled to produce in civil proceedings in the court or, in complying with any requirement for the furnishing of information, to give any information which he could not be compelled to give in evidence in any such proceedings.

(6) A person who without reasonable excuse fails to do anything required of him by notice under subsection (4) above is guilty of an offence and shall be liable on summary conviction to a fine not exceeding level 5 on the standard scale.

(7) A person who intentionally alters, suppresses or destroys any document which he has been required by any notice under subsection (4) above to produce is guilty of an offence and shall be liable—

1. (a) on summary conviction, to a fine not exceeding the statutory maximum;
2. (b) on conviction on indictment, to a fine.

(8) If a person makes default in complying with a notice under subsection (4) above, the court may, on the application of the Franchising Director, make such order as the court thinks fit for requiring the default to be made good; and any such order may provide that all the costs or expenses of and incidental to the application shall be borne by the person in default or by any officers of a company or other association who are responsible for its default.

(9) Any reference in this section to the production of a document includes a reference to the production of a legible and intelligible copy of information recorded otherwise than in legible form; and the reference to suppressing a document includes a reference to destroying the means of reproducing information recorded otherwise than in legible form.

(10) In this section "the court" means the High Court, in relation to England and Wales, and the Court of Session, in relation to Scotland.'—[Mr. Freeman.]

Brought up, and read the First time.

Mr. Freeman

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

Mr. Deputy Speaker

With this it will be convenient to discuss the following: Government new clause 13—

Transfers of franchise assets and shares.

Government new clause 23—Powers of the Franchising Director to make transfer schemes.

Amendment (a) to new clause 23, in line 7, at end insert— ', or (d) the Board, or any wholly owned subsidiary of the Board'.

Amendment No. 237, in clause 5, page 6, line 9, at end insert— '(c) to ensure that the levels of fares charged or to be charged under a franchise agreement are reasonable to passengers'.

Government amendments Nos. 110 to 112, 153, 162, 13, 166, 164, 165, 168 to 172, 174, 179, 177, 180 to 182, 184, 72, 80, 85 to 88, and 24 to 28.

Mr. Freeman

I will speak to new clause 4 and the other Government new clauses of which there are a great number. I will explain relatively simply what they are intended to do. They all relate to the powers of the franchising director.

Government new clauses 4 and 13 replace clause 68. They improve the drafting of the Bill. They extend the powers of the franchising director in obtaining information to a much wider range of bodies. At the moment, clause 68 specifically gives the franchising director power to obtain information from BR to prepare information for a bid for a franchise.

New clauses 4 and 13 extend the powers of the franchising director to obtain information from Railtrack and from station licensees to prepare the necessary information to advertise to the private sector what is on offer in terms of a franchise. That will enable the franchising director to prepare proper information. There will certainly be sufficient time for the private sector to bid for the franchise.

8.15 pm

Clause 24 is replaced by Government new clauses 13 and 23. The purpose of those new clauses is to give the franchising director powers of designation, protection and transfer of what are called designated franchise assets. The new clauses provide, in the Government's judgment, a clearer regime. In particular, for the first time, the franchising director will be able to designate leases of rolling stock. As those are clearly rights of the operating companies and assets which do not belong to the franchisee or potential franchisee, the franchising director will have the power to control the continued use of leased rolling stock on a particular line.

An amendment to which we shall come later should be read in conjunction with that new power. It gives the franchising director the right to roll forward leased rolling stock from one franchise to another. The purpose of that amendment is to enable the leasing industry to have sufficient security in writing long-term leases, even though a particular franchise might be for a more limited period.

Under those Government new clauses, the franchising director will be able to designate assets, rights and liabilities. The new clauses also provide for designation of those franchise assets by agreement with the franchisee. We believe that that is important. They will be protected under the franchise and there are provisions in relation to assets, removed at the end of a franchise period from one franchisee and passed to the next, for appropriate values to be paid to the franchisee at the conclusion of his franchise. There is also a provision which places on a statutory footing the obligation of the franchisee not to encumber certain assets.

I hope that that is a concise introduction to the amendments.

Mr. Cryer

Before the Minister concludes, will he describe the circumstances in which the franchising director is given powers in new clause 4 to impose criminal penalties, albeit through the courts? The power will apply if a person fails to provide adequate notice or if he or she alters documents. Does not that suggest that the proposed system is fraught with legal difficulties, arguments and deceit? New clause 4 provides for the standard of production in civil proceedings and it adds on criminal offences. Does not that envisage serious difficulties in the work of the franchising director?

Mr. Freeman

I do not think so. The hon. Gentleman will realise that the franchising director is established as a non-ministerial Government Department, answerable to the House through my right hon. Friend the Secretary of State for Transport. Therefore, he constitutes a public body. It his duty to let by franchise the responsibility for running passenger rail services. Therefore, there should be some compulsion available to him to obtain information. We are not simply talking about BR or Railtrack—and it is intended that Railtrack shall be a Government-owned company. There may also be private providers of infrastructure and, for example, private sector station licensees.

If the franchising director needs to obtain information to enable him to relet a franchise—or to let one initially —it should be within his powers to obtain that information. That is the reason for the sanctions in Government new clause 4, to which the hon. Member for Bradford, South (Mr. Cryer) has drawn the attention of the House. He was right to do so. That does not imply that there is any web of deceit or malevolence among those who seek to provide station services, network services or franchised passenger rolling stock services. It gives the franchising director the essential power that he needs.

I note that the group of amendments includes amendment (a) to new clause 23. I am sure we shall hear a speech on it shortly from the Liberal Democrat Benches. It is important that the House should recognise that it is not intended that British Rail should have any determinate length of responsibility for running franchise services once an initial franchise is let.

As I understand it—I look forward to responding in due course—amendment (a) to new clause 23 provides the power to transfer assets from the franchising director to British Rail for a period to run services if the franchising director decides that that is the best solution. I look forward to hearing the arguments. I shall argue that the franchising director will look to British Rail in certain circumstances. But the franchising director can and will make management arrangements with British Rail to provide the services. There is no need to give British Rail either a formal franchise or for there to be a formal arrangement between the franchising director and British Rail.

Mr. Wilson

We have here a preliminary skirmish on some of the issues that we will return to in more detail during tomorrow's debate. As the Minister said, these new clauses and amendments are to some extent technical. Some piquancy has been introduced to the group of amendments by the amendment tabled by the right hon. Member for Tonbridge and Mailing (Sir J. Stanley) on fares and the franchising director's role in that, and also of course by the hon. Member for, North Devon (Mr. Harvey) who has raised the subject of British Rail's right to do anything after the legislation is passed, if it is passed in its present form.

The amendments also give rise to some discussion of the powers of the franchising director. I see the director as a figure who will be of great convenience to the Government, in that responsibility for everything that happens on the railways will then be transferred to him. The Government are looking for a figure of whom they can say, "It is nothing to do with us. This is the franchising director's job. It is he who has made the decisions and the idea of holding Ministers responsible really is quite ridiculous."

I can tell the Minister that the Government will not get away with that. The creation of the structure is the responsibility of the Government. When things start to go wrong—as they certainly will for the reasons that my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) outlined in the previous debate and for the reasons that we can see in this debate—I assure him that it will be political responsibility that is carried. It will not be the franchising director who does not have the money to sustain the system. It will not be the franchising director's fault when franchises fail and such measures have to be brought into play.

There are things that we can welcome. If the legislation goes ahead, clearly it would create additional difficulties if every time that a franchisee changed, it was all change for rolling stock and everything else. As the principle of leasing, which is a far more rational and intelligent form of private sector involvement than anything that we have heard from the Government, was first suggested by the Opposition, it would be illogical of us to oppose the idea that leasing should be made possible by a recognition that the leased rolling stock would carry over from one franchise period to the other. However, that does not acknowledge the sense of franchise periods. That is a separate story.

We support leasing. It is a sensible way of creating investment in the railways. It is a sensible way of giving work to the railway manufacturing industries. Of course, leasing could have been introduced years ago. It is not in the least dependent on anything else in the Bill. It is remarkable that the Government took so long to come round to our way of thinking.

The rest of the new clauses and amendments are not controversial. We support the amendment tabled by the right hon. Member for Tonbridge and Mailing. We also support the Liberal Democrat amendment, on which we shall vote later. The right hon. Member for Tonbridge and Mailing and his colleagues suggest that the franchise director should have a responsibility to ensure that the levels of fares charged or to be charged under a franchise agreement are reasonable to passengers". I have no wish to pre-empt what the hon. Gentleman intends to say, but if the Government do not accept the amendment as a signpost that many Conservative Members are extremely discontent with the Bill, they will not accept much else.

It is surely reasonable to expect the franchise director to have responsibility and take an interest in the level of fares charged by the operators. All the pressures in the Bill will be to force fares upwards. The financial regime which will be put in place will force fares upwards. The main pressure will come from the profit element, but the structure will depend largely on the level of subsidy. There is no guarantee that in future the subsidy will be maintained at its present rate. Indeed, we believe that a large part of the Government's operation is intended to reduce that level of subsidy, and hence the cost of the railways to the Government.

The Liberal Democrat amendment, which will also have our support, is straightforward. It raises the principle of involvement of British Rail in what happens after the legislation is passed, if indeed it is. The franchise director can apparently transfer assets to virtually anyone in Christendom except the people who at present run the railways. Here we see the Government's prejudice against British Rail. It is further confirmation that the purpose of the Bill is to squeeze British Rail out of existence. The Government intend to erode it steadily. Prejudice is the only word that I can use because it is difficult to see any rationale behind the Government's position.

The Minister's attitude to the Liberal Democrat amendment seems to confirm that anything which sustains or extends British Rail's role is anathema to Ministers. We shall deal with that approach in much more detail tomorrow. The tone of the Minister's remarks must be offensive to some Conservative Members. It will certainly be offensive to people in British Rail who work to make the system function as well as it does. The blinkered focus of so much of the legislation is that British Rail must be squeezed out of existence by whatever means possible.

Like the Minister, I hope that I can catch your eye later, Mr. Deputy Speaker. I give notice that we shall support the amendments. I look forward to much more discussion of the principles which underlie them as we proceed.

Sir Teddy Taylor (Southend, East)

I wish to put four questions to the Minister. I think that they are relevant to the new clauses. I appreciate that many hon. Members wish to speak. New clause 4 says that any person shall furnish information. Does that information relate to nationality? I was astonished, as I know that you will be, Mr. Deputy Speaker, to hear that while foreign railway companies such as the French or Belgian railway network will be permitted to put in a bid for the Fenchurch Street line, British Rail will not.

I find it unthinkable that British Rail might be able to tender for the Fenchurch Street line only by securing a French subsidiary company. I hope that the Minister will bear in mind our obligations under European Community law, and will ensure that no one is treated unfairly. I hope that he can assure us either that national railway companies will be able to put in a hid, or that they will not. I think he will accept that it would be rather unfair to the people of Southend, and rather alarming for them, if they were subject to control by a French company rather than by British Rail—for which they have a high regard, despite the dreadful service with which they are provided.

8.30 pm

My second point is fundamental. Can the Government assure us that, when the franchises and information are sought, the people—including hon. Members—will be able to see what is being asked for? I think that, if the franchising director decides that he wants the Fenchurch Street line to have two trains—perhaps on Wednesday, every second week—the people of Southend are entitled to have that information. I hope that the Minister will make it abundantly clear that, if the franchising director is looking for bids, the people will know what is being paid for. As he probably knows, there is a certain amount of suspicion about the whole business in some parts of the country.

Thirdly, can the Minister give an assurance that the franchising director will consult the respected rail passenger organisations in Southend and elsewhere? The Government now seem to be setting up quangos constantly. I remember a time when Conservatives used to complain about quangos, describing them as nasty, costly nonsenses created by socialist Governments. In fact, we have set up far more quangos than any socialist Government, and they are becoming more expensive and more bureaucratic. When I look around my own country —including a place called Chelmsford, which some hon. Members may have observed— I find that many people are employed by quangos, and that it costs a fortune. It is all very sad.

I have a high regard for the Minister, and I know that there is no way of preventing the Government from rushing to create a mass of new quangos. I hope, however, that he will at least assure us that the exciting new quango known as the franchising director will have an obligation to consult rail users' associations.

Finally, let me convey a simple request from Southend-on-Sea. Our rail system is wildly out of date. Let me pay a personal tribute to the Minister, along with my right hon. Friend the Member for Southend, West (Mr. Channon): he agreed to new signalling equipment for the line. It is only fair to point out that the signalling at Fenchurch Street station is older than I am: that shows that it is rather out of date. However, we have now been assured that something will be done—and we hope that it will, despite the problems facing the Treasury. My right hon. Friend and I—along with all the travellers of Southend—also hope that this exciting new arrangement will ensure the provision of new rolling stock on the Fenchurch Street line.

We respect the Minister. He has said things that we have found to be correct, which is rather unusual in Ministers nowadays; he has forecast developments that have actually come about—which, again, is commendable and unusual. Given our trust in the Minister, based on what he has done for us in the past, we hope that he can answer the four points that I have made. If he can, it will greatly reassure the people of Southend, who have suffered a great deal and who hope that the Government's exciting new plan will limit their sufferings in the future.

Mr. Nick Harvey (North Devon)

The Minister anticipated that I would want to speak to amendment (a), and I intend to do so. The new clause strays further into the realm of BR's future involvement in the railways, which will clearly be a substantial matter for debate tomorrow.

Only a few minutes ago, we were considering Government new clause 16 and the principle of BR running services that are not franchised—that is, operating services before the creation of a franchise. I wonder why it should be so out of the question for us to discuss BR's involvement after the ending of a franchise. It strikes me as the height of absurdity that, under Government new clause 23(1)(b), the franchising director will apparently have to go to the lengths of setting up his own subsidiary company to run services where there will be no other franchise. As the hon. Member for Cunninghame, North (Mr. Wilson) pointed out, that rules out the obvious party to which the franchising director should turn in such circumstances—the only experienced operator in the land, British Rail.

The amendment would not set up a formal BR bidding process at the end of a private franchise. There would be no obligation to hand everything over to British Rail; that would simply be retained as an option, at the franchising director's discretion. The experience of London Buses is vaguely comparable to what we are discussing. In some cases, at the end of a private franchise, the service has reverted to London Buses.

I agree with the hon. Member for Cunninghame, North: the Government's proposals are based on ideology —on a dogmatic determination to squeeze BR out of existence. If, at the end of a franchise, it is decided that there will not be another franchise for some reason, and the franchising director contemplates handing over the service to BR—the Minister has conceded that that could be done on the basis of, for instance, a management agreement—it must be because something is wrong.

The fact that the existing franchisee is not coming back for more, or there is no queue of potential franchisees waiting to take over, suggests that the franchise is failing. In such circumstances, the option—the right—to hand the service to British Rail would be a valuable tool in the franchising director's armoury.

If, as has been suggested, that could be done simply through management agreements, why not write it into the new clause and enable the assets to be handed over? How, through a management agreement, can BR run a service without being given the franchise assets—the trains and everthing else on the line? How can any management agreement cover BR's ability to operate such a service if it is not given the tools with which to do so?

I admire the conviction with which the Government are planning ahead—burning the bridges behind them; doing without any safety mechanism to catch the pieces if the whole thing falls apart—but I am forced to doubt their judgment. They are impressively buoyant in their approach to a scheme that is almost universally derided by those outside their ranks.

The Government believe that the introduction of the private sector through the franchising set-up that they anticipate will result in a reduction in the cost to the Exchequer; but many of us do not. They believe that a queue of interested parties is champing at the bit to take on these services; but many of us do not. They believe that the private sector whizz kids will come in, improving services and increasing revenue; again, many of us do not. The Minister himself has agreed that, if the private sector is unable to come in and increase the revenue, there will be a disaster. How right he is.

At present, none of us knows who is right. No one can say for certain whether the Government, in their buoyancy, conviction and optimism, are right, or whether the many others who have considered these matters and retain some scepticism are right. Let us just suppose that it is we who are right—we who are sceptical about the potential success of the scheme—and that franchises start to fail. If one private franchise fails, why should another on the same line and service succeed? What would happen if nobody came forward to take it over?

If the amount that the franchise director has to offer to try to tempt people in to save the day in those sorry circumstances is more than it would cost British Rail to run the service, the National Audit Office will probably take an interest in the matter, as it would amount to the squandering of public funds. It would be in the best interests of the Minister and the scheme if that fallback option and safety net could be continued. I sincerely believe that the Government are displaying pig-headed obstinacy and that the British Rail option should remain available to the franchise director.

Sir John Stanley (Tonbridge and Mailing)

I wish to speak to amendment No. 237. Through you, Mr. Deputy Speaker, I should like to express my appreciation to Madam Speaker for selecting the amendment at a late stage. I believe that it is extremely important for the House to discuss the amendment, and Madam Speaker has done the House a service by enabling hon. Members to debate fares policy.

As the House may know, I expressed strong reservations on Second Reading about the effects on fares of my right hon. Friend the Secretary of State's British Rail privatisation proposals. My fears were based on a combination of three factors, which all appeared to me to show that a strong upward pressure on fares would be created. The first was that the private sector franchisees would certainly look for a significantly higher rate of return than is currently being obtained by British Rail and is being sought by the Treasury as a rate of return on capital by British Rail.

Secondly, there is no certainty about the level at which present subsidies will be continued for British Rail, particularly in relation to Network SouthEast. The Government have made a commitment that subsidies will continue, but have declined to say at what financial level. The subsidies might be cut by half, two thirds or three quarters, which would result in further upward pressure on fares. Thirdly, the Bill does not contain a specific provision to moderate the level of fares that can be set under the franchise proposals.

Since I expressed those concerns on Second Reading —concerns that were also expressed in other parts of the House and by a number of hon. Members—there has been remarkable agreement in the comments on the fare implications of the proposals. The House has had the benefit of the Select Committee report, which expressed a similar view.

Outside the House, there has been a host of reports by independent firms, consultancies, independent commentators, transport user groups, consumer interests, including the National Consumer Council, and major local authority associations such as the Association of District Councils, the Association of County Councils and the Association of Metropolitan Authorities. They have all come to the same conclusion: that the pressure on fares will tend to be upwards. Against that background, I urge my right hon. Friends on the Treasury Bench to give the most serious consideration to that substantial weight of opinion from all quarters on the proposals' likely fare implications.

8.45 pm

I tabled amendment No. 237 because, although the Bill has now reached its Report stage, there is still no sign of material moves by Ministers to allay my fears on the fares issue. I had hoped that, in Committee, the concerns that I had expressed on Second Reading would be at least partly met, but unhappily that is not so.

Since I spoke on Second Reading, there have been two policy announcements. At virtually the eleventh hour and 59th minute of the Second Reading debate, my hon. Friend the Minister for Public Transport popped into his wind-up speech a significant statement of policy. I believe that it appeared there for the first time, unless it had previously escaped me. He said: We propose a cap on fares for those services which are a monopoly, and I can confirm that the commuting lines into London constitute a monopoly."—[Official Report, 2 February 1993; Vol. 218, c. 243.] That constituted acceptance of the principle of a cap.

Tucked away in the voluminous documentation submitted to the Standing Committee was a paper entitled, "Draft Objectives of the Secretary of State for the Franchising Director". It contained two paragraphs with the arresting title of "Fare Levels", setting out the draft objectives. But, unfortunately, they contained nothing of great substance, other than stating that only on franchise services which enjoy significant market power—monopolies—could the franchise agreements limit price increases on fares. No such limits would apply on other lines.

To determine whether my right hon. Friend the Secretary of State could say anything more substantial about what he intended to do in relation to fares, I asked key questions about capping: at what level could the cap on fares be set and what would be the criteria for triggering the cap on fares where the franchisee had a monopoly? I also asked whether my right hon. Friend had any further information to supplement the thin information set out in the two paragraphs of the draft objectives to which I have referred. My hon. Friend the Minister replied: Further work remains to be done in developing the draft guidance that I provided to the Standing Committee in relation to fares regulation and other matters."—[official Report, 5 May 1993; Vol. 224, c. 158.] We are none the wiser about what is intended in the way of fare control.

Mr. Mark Wolfson (Sevenoaks)

While I clearly welcome the fact that commuter lines into London are to be regarded as a monopoly, and will consequently be eligible for capping, does my right hon. Friend agree that there are many other cases all over the country in which, in railway terms, the franchisee will have a monopoly?

Sir John Stanley

I am grateful to my hon. Friend, who makes a significant point. In practice, it will be extremely difficult to ring-fence the capping principle on a geographical basis. I am sure that my right hon. Friend the Secretary of State and my hon. Friend the Minister will appreciate the force of what my hon. Friend the Member for Sevenoaks (Mr. Wolfson) has said.

On Second Reading, I said that I felt that I was being asked to sign a blank cheque on my constituents' cheque books for their travel-to-work costs—the second highest item of household expenditure in my constituency after food, runing at about £2,000 per year. The object of amendment No. 237 is to try to place an upper limit on the blank cheque by introducing the principle of reasonableness, inserting in clause 5 an additional statutory duty on the franchising director.

The House may find it interesting to look at the franchising director's existing statutory duties. In many ways, the first two duties are symptomatic of how the Bill is drafted, as they simply put clear obligations on the franchising director to do what the Secretary of State tells him. In other words, the franchising director will follow only the Secretary of State's objectives, guidelines and instructions. Indeed, he is a creature of the Secretary of State.

That is a perfectly reasonable principle, and I do not contest it. But that is where it ends—no further obligation whatever is placed on the franchising director, other than to do what the Secretary of State says. The purpose of the amendment is to introduce an additional statutory duty —the requirement that the level of fares set should be reasonable to passengers.

I anticipate two possible questions that may be asked with regard to it. The first is whether it is technically and legally satisfactory to base a duty on the principle of reasonableness. I submit that there are ample precedents in statute law, and that it is a familiar legal concept. Obviously, in considering the amendment, I and those associated with it considered other options, such as whether there was a possible formula that could be adopted. We concluded that, given the multiplicity of lines, the different financial patterns and the different social requirements, there was no formula that could conceivably make sense and that therefore the criterion of reasonableness was the best one to adopt.

The second question that I anticipate is whether such an amendment is necessary: is the point that I am making covered elsewhere in the Bill? If my hon. Friend the Minister seeks to draw attention, for example, to clause 4(1)(a), which refers to the statutory duties of the Secretary of State and the regulator, there is a statutory duty to protect the interests of users of railway services That statutory duty is not sufficient to deal with the specific issue of fares—it is an extremely generalised duty.

Indeed, from some standpoints, one could well argue in favour of a substantial increase in fares, possibly in the interests of users of rail services in certain circumstances —for example, if a major investment programme had to take place. I do not believe that the statutory duty in clause 4 in any way provides an adequate answer to the question of protection in the area of fares.

My hon. Friend may seek to draw my attention to amendment No. 111. I appreciate that that amendment enables a franchising agreement to include provisions on fares, but their content is left wholly open and could amount to anything. Therefore, the specific legal point, the specific policy and the specific structure in law that is covered by my amendment is not in any way covered elsewhere in the legislation. If the amendment is accepted by the House—obviously, I hope that it will be—it will be the only specific wording in the legislation biting on fare levels.

The amendment could not be a wrecking amendment. It does not in any way seek to undermine the Government's proposals or stop franchising getting off the ground. It is based entirely on reasonableness.

I put it to my right hon. and hon. Friends on the Front Bench that the only conceivable basis for failing to accept such an amendment is that they wish to keep open the option of fare levels becoming unreasonable. I assume and hope that that is not what they wish to do. The amendment is modest, sensible and necessary, and I commend it to the House.

Mr. Snape

As my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) said, we must pay tribute to the Government for one thing—they have accepted the principle of rolling stock leasing. Before the last general election, they were resolutely against rolling stock leasing. Indeed, during the campaign and for several months after it, the Minister of State said—I do not recall whether it was in the House or outside—that the Labour party's proposal on the leasing of rolling stock was impractical. It is a pleasure to see him, albeit from an odd angle, standing on his head at the Dispatch Box.

For some time, Labour Members have felt that the leasing of rolling stock was sensible because it would allow the newly formed leasing companies to raise private capital for new trains without having an impact on the external financing limits of the railway system. When we put that point to the Government, as we have done in the past few years, we were scorned, so we are delighted that yet another Labour party policy has finally been accepted by the Government.

I listened with interest to the speech of the hon. Member for Southend, East (Sir T. Taylor), who has some reason for not being in his place at present. I appreciate the British Rail versus the SNCF argument. Generally, the hon. Gentleman is not overly keen on foreigners—he has made that plain in many debates in the House. He did not go so far as to imply that the employees of SNCF would trundle up and down through Fenchurch Street station and on to Southend wearing striped jerseys and berets and reeking of onions or garlic, but one got the general drift that he was not overly keen on the prospect of the French railway system intervening or operating trains in his part of the world.

When one looks at the comparative efficiency of British Rail and SNCF, the illogical nature of the legislation strikes one because the Government have admitted that BR's productivity and ability to run a railway system have recently improved dramatically and, indeed, by any benchmark exceed that of SNCF. However, not only will BR not be allowed to bid for railway franchises, but, in the event of a franchisee not renewing his franchise or going bust during the period of the franchise, British Rail will not be allowed to take over. Yet we have heard from Ministers that a less efficient, foreign-owned railway system will be allowed to take over. It is a rum form of Toryism. I always thought that Toryism was a fairly rum creed, but it gets rummer the more one looks at the proposals in the legislation.

The right hon. Member for Tonbridge and Mailing (Sir J. Stanley) understandably expressed concern about the likely impact of the proposals on fares in his constituency and on Network SouthEast. He is right to express that concern because it is the Government's intention to reduce and eventually eliminate subsidies to Network SouthEast commuter trains by 1995. It is no wonder that the right hon. Gentleman is concerned. He has a reputation of being the ultimate Thatcherite in his younger days. However, like most other Thatcherites, he is not overly keen on the plunge in the cold bath of reality when it affects his constituency or—as subsidies are likely to be reduced or eliminated by 1995—his re-election prospects. If the subsidy to Network SouthEast has been abolished by that time, it will at least provide Conservative Members with a ready talking point on the doorsteps during the next election campaign.

It is acknowledged, not least in the latest report on rail privatisation by the consultants Steer Davies Gleave, that fares on Network SouthEast would have to rise by 37 per cent., presumably by 1995, if the Government's intention to withdraw the subsidy were realised. I understand the concern of the right hon. Member for Tonbridge and Mailing and I appreciate the thinking and the feeling behind his amendment. I am not sure whether he has got the right person to whom to appeal for a ruling on the reasonableness or otherwise of the proposed fare rises, given the Government's intention and the duties of the franchising director to allocate routes depending on the quality and level of bids. Is the franchising director the right person to decide on the reasonableness of those fare increases? The right hon. Gentleman might consider the regulator a more suitable person.

9 pm

Not only is it politically reckless for the Government to present such proposals, but they will add considerably to the congestion on south-eastern roads and make it more difficult for Tory Members to be re-elected. That last point will not cause me to lose much sleep, although it is obviously disturbing to the right hon. Member for Tonbridge and Mailing, whose amendment is in this group.

Is it logical to stand by while the increases illustrated by Steer Davies Gleave are implemented? Given the Government's intention to abolish the subsidies, perhaps the Minister of State will tell us whether he thinks that the amendment tabled by the right hon. Member for Tonbridge and Mailing is reasonable.

The hon. Member for North Devon (Mr. Harvey) also said that the proposed legislation was nonsense. He mentioned the refusal to countenance the idea of the expert at running trains, British Rail, taking over a franchise. That is not fair to the management of BR. When I worked at BR, there were good and bad managers and the campaign of denigrating BR management has had an enormous impact on managerial morale. To suggest that people are effective as managers only if they mortgage their homes to put together a buy-out is as insulting as it is untrue. The Minister of State should look again at the whole issue of BR's managerial involvement. If the legislation is implemented with its provisions unscathed, there will be a further deterioration of managerial morale in the railways and the consequences of that will be borne by all our constituents.

The Minister should reply to the issues raised by the hon. Member for North Devon. I welcome the Minister's conversion to the principle of leasing rolling stock, but the amendments address many matters that are eminently unsatisfactory.

Mr. Paul Channon (Southend, West)

I apologise to the House for not being here at the beginning of the debate. The issues that my hon. Friend the Member for Southend, East (Sir T. Taylor) and 11 wish to raise are more apposite to the ammendment tabled by my right hon. Friend the Member for Tonbridge and Malling (Sir J. Stanley) than to some others.

My second apology is to my hon. Friend the Minister of State. It is never wise for ex-Secretaries of State to return to issues after they have been away from them for a few years. They are clearly out of date and probably have everything wrong. No doubt the Minister will politely correct me if I make some mistakes.

I am strongly in favour of the Bill and I hope that I am not the only hon. Member who takes that view. If I were not strongly in favour, I would certainly have landed the Government with a poisoned chalice. Perhaps I have done that. The Bill will bring long-term benefits to my constituents and to rail travellers in my constituency. [Interruption.] I intend to deal not with the macro side but with some of the small problems in my part of the world. I used to have to deal with the macro side and it is a great relief not to have to do that any more.

The point that some of my constituents raise with me is that, although they know perfectly well that over the past 50 years or so their service to London has left a great deal to be desired, they are alarmed by what is proposed in the Bill because they want to hold on to nurse for fear of getting something worse. I hope that my hon. Friend the Minister, when he considers the points raised by me and by my hon. Friend the Member for Southend, East, will consider how we can reassure them—because they are eminently reassurable.

I believe that, before the franchises are awarded, it is important to consult those people in the local community who have strong views and some experience of how those rail services are or should be run. That is why I strongly believe that there should be some form of consultation or discussion with the local railway travellers' associations and perhaps with the consultative committees, so that those who are the leaders on this issue in my constituency —and, no doubt, many others—can be seized of the merits of the case. They will know why Mr. X has become one of the franchisers rather than Mr. Y and what criteria have led the Government or the franchising director to that decision. Such people should know some of the contents of the franchise—perhaps some things will be commercially confidential and will not be able to be revealed, but there will be some things that can easily be revealed. That would go a long way, at the beginning, towards reassuring people who are nervous about what might take place.

My right hon. Friend the Member for Tonbridge and Mailing raised in his powerful speech the most important issue of all—fares. I respect and believe the assurances given by my right hon. and hon. Friends, during the passage of the Bill and before, about what will happen to fares on commuter lines if the new system is adopted. I am not particularly worried about that because I know that my right hon. and hon. Friends will make sure that, on fares, nothing dreadful happens to my constituents. If something dreadful does happen, not only my seat but several hundred seats around London will be lost. The Government would be foolish to try it, so I am confident about that.

It is not surprising that representatives of the commuters in my area, who do not have the experience or the pleasure of knowing my right hon. and hon. Friends as well as I do, are naturally nervous about the matter. My right hon. Friend the Member for Tonbridge and Mailing outlined their anxieties, quite rightly, a few moments ago. I endorse everything that he said, and that may reassure one or two hon. Members who are nervous about some aspects of the Bill.

I would ask my hon. Friend the Minister, when he winds up, to give careful consideration to trying to make sure that, when the changes take place, local people are fully consulted so that they know what they are in for and it does not come as a tremendous surprise. I think that they will find that they are very pleased with what will happen to them when the franchising takes place—that is the Government's intention and my intention, and I am sure it will be achieved—but they need to be helped, reassured and encouraged.

I would echo the tributes paid to my hon. Friend the Minister. He has paid several visits to my constituency, ridden on the notorious misery line, and lived to tell the tale. He does not look too bad for having done so. I, too, have done so, and I can say that in recent months the line has got a great deal better. There is a considerable local problem, but I believe that franchising the service is likely to improve the position.

I ask my hon. Friend the Minister to give sympathetic consideration to the need to consult people, to take note of their views—in particular, the local railway travellers' association—and to give careful consideration to them before the franchises are awarded.

Mr. John Gunnell (Morley and Leeds, South)

Much of the press comment on the Bill recognises that it creates a new class of endangered species—that of the railways system and its dependants. Many of the amendments tabled for consideration seek to protect those dependants. The right hon. Member for Tonbridge and Mailing (Sir J. Stanley) has moved an amendment which clearly seeks to protect passengers and the reference to the consultative system is again an attempt to protect passengers.

Other amendments will be moved which seek to protect freight users, lines from closure and employees—we have already had a debate about protecting employees. I suspect that the Government know well that many aspects of the railway system are seriously threatened by the Bill. The Minister commented on leased rolling stock, which is also affected by new clauses 13, 14 and 18, an issue that we must consider fully, and that has been raised several times in the debate.

New clause 4, on the duty to furnish information, does not specify what information it is expected will be required. Let me suggest to the Minister the information that I think should be known to the franchising director. He should have a view on the historic costs of every service going out to franchise. That view should also be made available to the public. When services are to continue and support is offered by the franchising director, it is important to know what the cost of those services is now so that comparison may be drawn between the cost of the services run by British Rail and the anticipated cost under a franchising system.

That information is necessary because the invitation to tender, which comes from the franchising director, must contain the best available information so that bidders can respond appropriately, bring forward cost-effective proposals and have an idea as to about where their bid should be pitched. We do not expect that there will be an excessive number of bidders. It is clear that there are likely to be few and only a few services may go out to franchise in the first instance. It is important that we set down and make public the costs and that they form part of the tendering process. It is also important that the franchising director has information on aspects of the track so that he is able to inform Railtrack of where new investment will be necessary. He will have to have much information that will need to be disclosed.

Amendment No. 237, to which the right hon. Member for Tonbridge and Mailing spoke, concerns the fare levels that will be required and imposed. They will be affected by the amount that the franchising director is willing to pay for services. He will make a judgment about fares if he knows the current usage and costs of operating that line. He will be able to set the subsidy, which will enable bidders to draw a relationship between the passenger throughput and the possible rate of return on investment. It is important not only that his judgments are based on information, which he can obtain through new clause 4, but that that information is given to the public.

Rolling stock was mentioned in the debate that preceded Second Reading and on Second Reading. It came up frequently during our debates. We recognise that the Bill threatens the railway engineering industry in a way that passengers, freight users and the environment are not threatened at this stage. They will be affected only when the Bill comes into operation and we find out whether it works. The railway engineering industry began to suffer as soon as the whiff of privatisation was in the air. That is made clear in the Select Committee report.

The report literally illustrates the point graphically. It sets out the levels of the order books of the railway engineering companies and suggests that by the end of 1995 there will be no orders on those books. The report clearly shows how long it has been since orders were placed by British Rail and others. The fall-off in business has been significant. When speaking to the Select Committee, Lord Prior said that £150 million over three years was nothing like sufficient and that unless there were more orders there would be no industry left in three years.

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I and other hon. Members who served on the Standing Committee acknowledge that the Minister is a good listener and that he responds constructively whenever possible. We welcome the fact that he has included in the new clause the ability for the franchising director to pass on rolling stock. That is a constructive move, because without it no one will want to acquire rolling stock for relatively short leases. The ability to pass on leased rolling stock is essential if the railway engineering industry is to get orders.

I want to ask some questions about the way in which the franchising director's ability to pass on rolling stock links with new clause 14, which deals with the ability to form finance companies, and new clause 18, which also refers to financing. The three hang together—

Mr. Deputy Speaker (Mr. Michael Morris)

Order. I hope that the hon. Gentleman will not use new clause 14 as a key element in his argument, but will wait until we reach that new clause. The same applies to new clause 18. The hon. Gentleman's argument must be centred on the new clause before the House.

Mr. Gunnell

I thought that this was the time to raise points about the rolling stock aspects because three other hon. Members, including the Minister, have done so. However, on the question of the financing of that stock I shall happily wait until we reach new clause 18 and make a brief contribution then.

Mr. Alan Williams (Swansea, West)

On a point of order, Mr. Deputy Speaker. I draw your attention to new clause 23, which refers to schemes relating to the transfer of assets. It is in that context that the Minister and other hon. Members referred to the transfer of rolling stock and that is why my hon. Friend referred to it.

Mr. Deputy Speaker

I am grateful to the right hon. Gentleman. I heard the other contributions to which he referred. The hon. Member for Morley and Leeds, South (Mr. Gunnell) specifically referred to new clauses 14 and 18 and said that he would develop his argument. I am saying that he must concentrate his remarks on the new clauses before us. If he wishes to speak later on new clauses 14 and 18, that is appropriate—but he cannot develop his argument on those new clauses now.

Mr. Gunnell

I shall rest my case at this stage by saying only that I recognise that the financial aspect of leased rolling stock is part of the franchising director's ability to pass on that stock. However, I must say that that is necessary as a protection for the railway engineering industry only because of the threats resulting from privatisation. I am not saying that the new clause is necessary in itself—it would be better to be without the Bill and then we would not need the new clause.

Mr. James Couchman (Gillingham)

My right hon. Friend the Member for Tonbridge and Mailing (Sir J. Stanley) opened up the question of fares very elegantly, supported by my right hon. Friend the Member for Southend, West (Mr. Channon). The latter and I are in competition for representing the worst commuter line into London. Those from Essex maintain that the line from Southend is the worst; we in Kent believe that the run from the Kent coast and the Kent link, along the north Kent coast, are worse than the Essex run. Either way, we compete for the worst rail link in Network SouthEast.

That is why I am on my feet this evening. Although I have not been deluged with letters about the Bill by my constituents, they have raised justifiable concerns about what may happen to them. They travel into London along a line of about the same length as the one from Tonbridge and they pay about £2,000 a year to stand in filthy carriages being transported from the Medway towns. My constituency includes a station on the Kent link and one on the Kent coast line. Although the Kent link trains are beginning to improve, the Kent coast trains are still dreadful. My constituents fear that they will end up travelling on the same clapped-out rolling stock but paying a good deal more for the privilege.

I think that it was the hon. Member for West Bromwich, East (Mr. Snape) who mentioned the much-vaunted Steer Davies Gleave report which makes an even more horrific suggestion—that fares on London commuter services would have to rise by at least 58 per cent. if the Government went ahead with their plans to halve Government grant over the next three years.

My constituents considered that the increase that they suffered in January this year—because of poor standards of service on the north Kent line, it was limited to between 5 and 6 per cent., compared with the average 8 per cent. —was unreasonable. They would consider an increase of 10 times that amount extremely unreasonable. They are particularly worried that the sort of investment which will be needed on the Kent coast lines into London over the next decade will be so large that, to achieve the return of 8 per cent. for the Treasury, heavy fare increases will be required. My constituents have some aspirations to an improvement in their service when the channel tunnel fast link is built, because commuter trains may be allowed to travel on the line, joining it somewhere close to Dartford. But even then, they will be expected to pay a premium for the privilege of shortening their journey.

I support my right hon. Friends the Members for Tonbridge and Mailing and for Southend, West. Like them, I should like to hear from the Minister of State what sort of fare increases he would consider reasonable for my constituents, who daily pay a high price to travel on a very poor service from north Kent and the Medway towns.

Mr. Cryer

The new clause gives the impression that the Government are anticipating dealing with a gang of crooks. This will not be a decent organisation in which franchisees compete with one another to provide excellent services: A person who intentionally alters, suppresses or destroys any document which he has been required by any notice under subsection (4) above to produce is guilty of an offence and shall be liable—

1. (a) on summary conviction, to a fine not exceeding the statutory maximum;
2. (b) on conviction on indictment, to a fine."

So the Government anticipate that some dubious people will engage in the franchising process—so much so that they feel the need for criminal sanctions to make sure that people provide information to the appointed director. That is a peculiar attitude to adopt. Some Conservative Members say that, save for a few minor reservations about fares and other such matters, they agree with the principle of the Bill. It is an odd principle to embrace in which criminal sanctions will be used to provide information on which to base judgments about awarding franchises.

Also, much energy and time will need to be devoted to awarding franchises, but that will not help passengers. We are talking not about any improvement to the service or new rolling stock but about documentation. The Department of Transport suggest that as many as 14,000 contracts could he created. There is no doubt who will benefit from that—Messrs Sue, Grabbit and Runne. Enormous fees will fall payable to lawyers as arguments about franchise contracts run riot.

Experience of British Rail privatisation so far suggests that there will be confusion. The only examples of privatised services on British Rail have gone into liquidation, such as Yeoman and Stagecoach. Those services have gone by the board. Another is apparently not in a good financial state but the Secretary of State has asked British Rail not to foreclose on that operation during the passage of the Bill because it would embarrass the Government. That does not augur well.

When people become involved in drawing up contracts, arguing about the amount of information provided, and threaten legal action to obtain such information, that energy is not being devoted to running a railway service, running clean trains into stations on time, timetabling to the convenience of passengers, and the multiplicity of other aspects that go into running a railway.

It is not easy to run a railway, particularly given the highly intensive services that operate in the United Kingdom. They take much effort, and many men and women, in providing services that run on time. The Bill undermines those people, and that will add a crazy bureaucracy, with threats of legal action of one sort or another, civil or criminal—as new clause 4 stipulates.

The scope of the new clauses indicates a lack of Government preparation. They produced a White Paper and took the Bill through Committee, but still they are introducing mammoth new clauses. That is hardly the action of a Government who have considered the legislation and are well prepared to put it before Parliament. It is the action of a Government making a last-gasp attempt to arrive at a vaguely workable solution. Throughout the nation, the public are deeply apprehensive about the Government's proposals. I am pleased that the Government have at long last acknowledged, in clause 23, rolling leases—so that as one franchisee collapses into liquidation, leases can continue to provide a degree of security for leaseholders.

As the Minister well knows, that arrangement was requested two years ago for electrification of the Airedale and Wharfedale lines. The Government could not agree and as a result there is still an argument about the provision of new rolling stock on the lines that are currently being fitted with overhead electrification. There is still a possibility that second-hand and third-hand rolling stock that has cascaded down from other services will be used on a brand-new, electrified railway providing an intensive commuter service.

Incidentally, on occasions the Airedale and Wharfedale uses four-wheel rail buses, which do not provide the best ride, coupled together to provide a barely adequate service that is highly overcrowded at peak times. I wish that the Minister had adopted the ideas in new clause 23 about 18 months ago, because then we could have arranged leases. That would have obviated the problem that arose when, because of the uncertainty surrounding the Government's proposals, the Royal Bank of Scotland refused to provide the cash to introduce new rolling stock under a leasing system. It is a belated conversion. That is recognised in new clause 23. If it provides some degree of certainty that new rolling stock will be provided, it is a step in the right direction, although it is a minor one when one considers the chaos that the Bill will cause.

Mr. Alan Williams

Because of the way in which they have been reported, hon. Members misunderstand the leasing arrangements. Is my hon. Friend aware that British Rail will not be allowed to take on leases? It was made clear in Committee by the Scottish Office Minister that if British Rail takes on any leases it will be under an obligation to pass them on at the first opportunity to a franchisee.

9.30 pm

Mr. Cryer

I am grateful to my right hon. Friend. In the case of the Airedale and Wharfedale line, it happened to be the passenger transport authority that would have undertaken the leasing. As the Government had not produced clear proposals, financial institution after financial institution said, "Because we do not know what the future will bring, there is absolutely no guarantee. Therefore we shall not support the passenger transport authority." A lamentable position was created by these nutty proposals.

Amendment No. 237, which stands in the name of several Conservative Members, is a reasonable proposal, but, unlike them, I am completely opposed to the principle of the Bill. It spells chaos and uncertainty and in the worst set of circumstances it means that services will not run. Those Members of Parliament with Southend constituencies cannot get across the virtues of the Bill to the people of Southend, so they are begging the Minister for a titbit to persuade their constituents that everything is all right. They will find, however, under the worst possible confluence of circumstances, that trains do not arrive at Southend. If a firm goes into liquidation overnight, there will be absolutely no possibility of services running the following day if the receivers are called in and they say that they cannot authorise further activity by that company. The franchising director has the power to arrange for services to continue, but it remains a real possibility that in the worst possible confluence of circumstances, services will not run.

Any amendment that suggests that some regard should be paid to fares should be incorporated in the Bill. A few hon. Members have said that it could be argued that higher fares are necessary because of the need to invest. Those arguments were used when water was privatised. However, even some Conservative Members who voted for water privatisation now say that charges are too high and that a balance has to be struck between the need to invest and the ability of water customers to pay the bills. One Conservative Member of Parliament who voted for water privatisation even went to the extent of introducing a ten-minute Bill that would have brought about a change in the structure in either Kent or one of the south-western counties. It would have led to that county being exempt from the increased charges that the water company had justified, on the basis of the need to invest.

The same argument could be used regarding fare increases. Passengers in an area that depends heavily on commuters are entitled to be able to make a judgment between the amount of money spent on investment and the amount of money that they can afford to pay when they have to travel between 50 and 60 miles to get to work.

I should have thought that amendment No. 237 had some merit in that it does not impose an absolute obligation on the Minister. However, if a group of passengers, some of whom are extremely well organised, believed that the franchising organisations were charging too high a fare, it would give them the reserve right of a possible application for a judicial review at the worst of the confrontation, or would at least make the franchising operators conscious of a statutory obligation to passengers which, as the right hon. Member for Tonbridge and Mailing (Sir J. Stanley) said, is only sketchily outlined in the Bill.

It is worth reminding the House of something that we all know. Once the Bill has passed all its stages in this place, gone to another place, returned and has been given Royal Assent, it will be out of our hands. If it does not contain a safeguard for passengers, any protection will be well and truly gone.

I wish to ask the Minister about the line from Leeds to Bradford, up the Aire valley, through Keighley to Skipton, which is being electrified. It is a monopoly line as there are not two lines running up the Aire valley but only one.

Sir Donald Thompson (Calder Valley)

What about the hon. Gentleman's railway?

Mr. Cryer

It does not run up the Aire valley. The hon. Member is referring to the Keighley and Worth Valley line. It was discarded by British Rail many years ago, but I am happy to say that it is now running extremely well. The line to which he refers does not run up the Aire valley, but up the Worth valley which is a tributary to the Aire valley.

The Aire valley railway is a monopoly. When it is electrified, will the Aire valley route be treated as a monopoly and will fares be capped? If so, we should know about it and we should also know what form the capping will take. The Government say that capping is very popular with local authorities, although there is not much evidence of that. They say that they cap local authorities because they do not want local authorities to place too heavy a burden on local council tax payers. The same argument will surely be applied to rail fares so that franchisees are not allowed to become too greedy.

The Minister may expatiate on the virtues of the water and telephone privatisations, but no one, other than the blind and ideologically foolish, could say that people on the boards of privatised concerns have not exhibited greed in levering their salaries to heights which have invoked derision and contempt from the customers who have to pay. There is nothing to make us suppose that that could not happen with the franchising operators if they could get away with it.

It will be interesting to know whether the lines in the area that I represent will be subject to fare capping limitations so that people who have to commute in and out of Leeds and Bradford will not suffer enormous burdens as a result of the legislation. We want to find out what improvements we can make to the legislation because, as drafted, it is a recipe for utter railway chaos, degradation and gloom. We are merely trying to improve what is hopeless, wholly ideologically daft legislation which should have been thrown out at the beginning.

Mr. Terry Dicks (Hayes and Harlington)

I declare an interest because I am a consultant to Hertz Rent a Car. I wish to raise one issue, and I believe that this is the correct group of amendments under which to raise it.

I am worried about the fact that the Bill does not mention protection for people who provide services at stations. Hertz Rent a Car has a contract with British Rail, which enables it to provide such a service. The Bill contains no mention whatever of what will happen to its arrangements after privatisation. The Minister may say that, when an operator takes over the running of a station, a new arrangement or agreement can be made but the Bill contains no recognition of that.

The hon. Member for Kingston upon Hull, East (Mr. Prescott) will remember when we debated the Airports Act 1984. The same situation arose because it was suggested that the only people who used the facilities at airports were the airport owners and airline operators. We raised an issue similar to the one that I am raising now. There are others besides British Rail who use the stations. The franchisees, as in airports, earn a living from that facility.

When my hon. Friend replies, will he explain with some clarity exactly where the people who operate on the stations—in newspaper stands, Tie Rack shops or car rental—will stand under the new proposals and whether there will be any benefits for or guarantees of their future operation from those stations?

Mr. Alan Beith (Berwick-upon-Tweed)

My hon. Friend the Member for North Devon (Mr. Harvey) has already dealt with amendent (a). I shall voice some support for amendment No. 237, tabled by the right hon. Member for Tonbridge and Mailing (Sir J. Stanley). It raises issues that relate not only to the south-east and London commuter area, which the right hon. Gentleman described, but to other parts of the country.

Anxiety about levels of fares is found in many parts of the country and monopoly, as other hon. Members have said, exists in many areas. I take the example of the Berwick to Penzance train. Just after 9 am every day, a train departs from Berwick for Penzance. It is used by many people travelling to the west country and to the midlands along a route that may involve numerous different franchisees in the future. I notice that the list of franchises published today has still not been able to crack the problem of what to do with the Berwick-Penzance train. People using that train often travel on a combination of railcards, apex fares and whatever other bargain they can put together so that they can visit their relatives in another part of the country. They see themselves as potential victims of large fare increases on cross-country journeys.

I ask the Minister to take a sympathetic view of amendment No. 237 and to recognise the importance of declaring from the start that the franchising director has a responsibility on fares. He should not merely have, as the Government propose in the new clause, a right to concern himself with fares; he should be charged with the responsibility of promoting low fares.

The hon. Member for Bradford, South (Mr. Cryer) touched on the immediate consequences of receivership. I remain extremely concerned about what will happen when a contractor on a major route goes into receivership, which is quite possible as recent experience demonstrates. I believe that the trains will stop and that all action by the employees of the franchise holder will be immediately stopped. Notices will go up at stations saying that no further trains can be run, that announcements will be made in due course, that meetings are taking place, that approaches are being made and that the franchising director is having discussions with bodies that might run the franchise. In the meantime, there will be an interrupted service.

I am reminded of what can happen by the experience of a friend who sought to prevent a major company of which he was a director going into receivership. He was travelling on a train and making calls from his mobile telephone to set up meetings to try to get more orders for the company. At 9 am precisely, he ceased to be able to make any further calls. The message came on his mobile telephone, "Your mobile telephone service has been disconnected." It was disconnected because at 9 am the receivers walked in and gave immediate instructions that anything that might incur a charge or liability was to be stopped immediately. That is exactly what is likely to happen in the immediate aftermath of receivership.

I hope that the Minister can now give us some explanation about what will happen. Ministers have rightly used the argument in relation to strikes and industrial disputes that an interrupted service is a service that destroys itself. If trains are withdrawn, people will have to make other arrangements and transfer to some other form of transport. Through the possibility of receivership, which has not existed in the railway system before, Ministers are introducing the possibility of interruption of service every bit as damaging as strike action in that it will lead people to believe that the service is unreliable and one on which they cannot depend.

I have a question for the Minister about the powers of the franchising director. The previous assurance given by the Secretary of State has been questioned by people who have put the following point to me. The Secretary of State has said that passengers travelling from stations such as Berwick and Alnmouth will have confidence that their InterCity services will continue because the franchising director has the power to insist that the existing timetable forms the basis of the franchise.

It has been put to me that that power will effectively he non-existent where the franchise does not involve an element of subsidy. Where no subsidy is being offered and where there is a commercial franchise in which maximum commercial freedom is being offered, that guarantee will not exist. I hope that that is not the case. If it is, that would destroy the assurance given in terms by the Secretary of State during Question Time a month or two ago. Perhaps the Minister will address that.

My final point about the franchising director relates to what he does in relation to the boundary lines of the system. For example, I looked at the maps that were issued today and discovered from the Scot Rail map that Scot Rail is not allowed to run a train to Dunbar. It has no power to run a train there. It has no access to the railway line that leads to Dunbar which is an InterCity route. So far as I can see, Dunbar is the only station in Scotland to which Scot Rail cannot run a train.

9.45 pm

In addition, ScotRail cannot run a train to Berwick, which is the rail head for much of the borders, and into which subsidised bus services feed. What does the franchising director do if the franchisee with the service from Newcastle to Berwick, which is a local and minimal service with two trains a day, does not improve that service and the franchising director believes, as I believe, that it will be better to have a through service between Newcastle and Edinburgh picking up passengers at several stations including Berwick, Dunbar and Alnmouth? The franchise system that has been set out would not permit that to happen because ScotRail has no access to Berwick or Dunbar. The regional franchise holder in the north of England has no access beyond Berwick, as the maps make clear. Only InterCity can provide that service. I presume that an InterCity contractor would not regard it as its role to provide a service stopping at smaller stations to which InterCity does not provide a service at the moment, for example, stopping at stations like Chathill, Acklington and Drem.

I do not understand what the franchising director will do in those circumstances, particularly if the InterCity contractor does not provide an adequate service, even to existing InterCity stations. I hope that the Minister can assist us in respect of some of those matters when he replies.

Sir Keith Speed (Ashford)

I should begin by declaring an interest as, for a number of years, I have been a consultant to InterCity. Perhaps, the right hon. Member for Berwick-upon-Tweed (Mr. Beith) and I can get together in order to help him with his problem.

The amendments and new clauses that we are discussing encapsulate some of the problems to which my hon. Friends have alluded. Reference has been made to the leasing of rolling stock. Following the initiative of my right hon. Friend the Chancellor of the Exchequer in his autumn statement, we know that £150 million was up for grabs for leasing. Unfortunately, the west coast main line, the London-Tilbury-Southend line and the Kent coast line require that money and £150 million between those three lines will go very little distance.

I believe that I am correct to state that the west coast main line needs £750 million to £800 million to improve rolling stock. The Kent coast main line desperately needs £550 million for new rolling stock. My hon. Friend the Member for Gillingham (Mr. Couchman) referred to that. In addition, the London-Tilbury-Southend line needs hundreds of millions of pounds for rolling stock and the infrastructure and signalling that the line so desperately needs.

We are talking about large sums of money and there seems to be a large lacuna in the Bill in relation to where the investment will come from in the short term, over the next two or three years, to at least maintain the present railway service and, hopefully, to improve it.

My right hon. Friend the Member for Tonbridge and Mailing (Sir J. Stanley) has tabled a very good amendment about fare structures. We know that there will be capping where there are monopolies such as in respect of many commuter lines into London. However, many right hon. and hon. Members have reminded us that many lines are not necessarily monopolies, but are essential to certain local communities. In some cases they require investment in new rolling stock and perhaps new track and other equipment which would justify quite considerable increases in fares.

My right hon. and hon. Friends from Kent will be aware that the Kent coast line requires a massive injection of investment and that could be used as an excuse to hoick up fares to service that £550 million worth of investment. Many commuters could then be priced out of the market. There is a real problem. I echo the calls for my hon. Friend the Minister to give a fair wind to the demands made by my right hon. Friend the Member for Tonbridge and Mailing for measures to be built into the Bill. That is terribly important. Exhortations from Secretaries of State or the House are insufficient. If a franchise decides at some stage to hoick up fares unreasonably, Parliament has made the decision and must be reported to. I hope that we get a positive response.

Mr. Wolfson

Does my hon. Friend agree that there is no comparable role—as in other privatisations—to that of the regulator for the interests of the consumer? Does he also agree that the amendment, about the role of the franchise director, who must take into account reasonableness of fare increases, would go some way to rectify that?

Sir Keith Speed

I accept that, and go further. We should be learning from the lessons of some of the previous privatisation legislation to see whether Ofgas and Ofwat, for example, were given sufficiently wide powers. At least we are determined not to make the same mistake. I accept the point that my hon. Friend makes. I hope that we can learn from experience.

I commend the amendments tabled by my right hon. Friend the Member for Southend, West (Mr. Channon) and by my hon. Friend the Member for Southend, East (Sir T. Taylor). Local consumer groups and rail travellers' groups are terribly important. My right hon. Friend and my hon. Friend talked about the need of those groups to be informed by Ministers, but there is a great role for the groups to play, certainly in Kent, Essex and elsewhere, to inform Ministers and franchise operators. They have local knowledge, and know what is required. In Ashford, where new timetables have been drawn up, there has been much controversy. The role of the commuter groups in saying what they want, the stations they want to go to and the sort of timetable they want has been of immense value to British Rail and made a lot of commercial sense. The railway company is providing the service customers want rather than the service the railways want to operate. It is very much a two-way movement and I hope that the amendments tabled by my right hon. Friend and my hon. Friend can be accepted. They would make a positive contribution towards getting even better rail services, particularly in commuter areas.

Mr. Alan Williams

I want to take two minutes to focus attention on an anomaly to which the right hon. Member for Tonbridge and Mailing (Sir J. Stanley) drew the attention of the House earlier. He did the House a favour in doing so. We have been hearing about a fare cap. I served with some hon. Friends for more than 100 hours on the Committee stage of the Bill. Not only did the Committee not focus particularly strongly on the fare cap, but the matter did not even surface during the whole Committee stage. One wonders what the fare cap is all about. Is it about railways or divisions? Is it anything to do with real delivery or is it an attempt to lure the lambs on the Conservative Benches into the Lobby behind the Minister?

There is a basic incongruity in the argument. It is not possible to argue that subsidies will go on Network SouthEast. It is not possible to argue that there will be cuts in subsidies on the line mentioned by the right hon. Member for Tonbridge and Mailing and to argue that there will be a cap. As has been said, if there is a cap, there will be a 37 per cent. gap between the present fare structure and viability. Who is to take on the line mentioned by the right hon. Gentleman, which has a 58 per cent. viability gap? Why have not we heard about the capping before? The Secretary of State has not said much about the Bill. He did not come to the Committee to give us the benefit of his thoughts on capping. There were more than 100 hours of argument in Committee, but not once did the Minister to my recollection shelter behind the defensive position that a cap would have given him when fares were referred to.

Sir David Mitchell (Hampshire, North-West)

Has the right hon. Gentleman failed to take account of the £300 million subsidy that goes into Network SouthEast and the £700 million that goes into the other regional railways? If the right hon. Gentleman took that sum of some £1,000 million into account, I think that his argument would be rather different.

Mr. Williams

The hon. Gentleman has just made my case foir me. That money must be made up with capped railway fares, because, according to the Minister, the railways will not receive those subsidies in future. The objective is to phase out the subsidies for Network SouthEast. The right hon. Member for Tonbridge and Mailing cited his area.

I do not mind how the Minister squares the circle. Conservative Members obviously want to be persuaded and I shall be fascinated to hear what he has to say; but —I say this particularly to hon. Members who have been in the House for a while and are not too dewy-eyed about ministerial assurances—it is strange and puzzling that a fare cap should suddenly appear at the same time as a mini-rebellion. I suspect that, ultimately, the fare cap will prove to have as little reality as the rebellion.

Mr. Tim Rathbone (Lewes)

Let me say a little about amendment No. 237. There is no doubt that many of our constituents who use British Rail frequently—whether to commute, to shop or for pleasure—are very concerned about the effect of privatisation on fares. We have heard a number of arguments today about how their concern will be met, but it seems almost certain that costs will increase, at least in the short term.

One possibility is capping fares on the one hand and increasing Government subvention on the other. As the right hon. Member for Swansea, West (Mr. Williams) pointed out, there is room for doubt about how long that subvention will continue, which points to an increase in fares. The Select Committee's report advocated a strict limit to fare increases, tied to the retail prices index. The Government replied that they would give guidance to the Franchising Director on this matter. Amendment No. 237 was tabled in an attempt to elicit just that guidance.

It is unreasonable to expect people to accept that the Government's proposals will lead to improved efficiency and improved services if they cannot take advantage of those improvements because of extraordinary increases in costs. I urge Ministers to bear the consumer interest in mind, especially in regard to amendment No. 237.

Dr. Marek

The two amendments that have caught the House's attention in the past hour and a half are amendment (a) to new clause 23 and amendment No. 237. Let me make a general point. Neither amendment would do grave damage to the Bill; in my view, they would both improve it no end. Notwithstanding the Government's political dogma, the amendments would not drive a coach and horses through it and might even make life easier for the Government at the end of the day.

What is the franchising director to do when a company goes bust and services are withdrawn or likely to be withdrawn at a moment's notice? He can try to form a company himself—under some of the Government's new clauses he will have various possibilities to consider. But the easiest way would be to ask the British Railways Board to run the service again. It may take the franchising director five minutes or half an hour to decide, but I am sure that the board would be prepared to take on that duty as it would have the skills, expertise and capability to do so.

Why are the Government resisting amendment (a)? The only answer to that can be political dogma—

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

Motion made, and Question put forthwith, pursuant to Standing Order No. 14 (Exempted business), That, at this day's sitting, the Railways Bill may be proceeded with, though opposed, until any hour. —[Mr. MacKay.]

Question agreed to.

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

Dr. Marek

The Government must be resisting the amendment purely on the grounds of political dogma. They are not interested in running a proper railway service with a proper national timetable with connections that will enable people to transfer from one train to another. They are more interested in divesting themselves of the responsibility of running the railway services. If that is not the case, the Minister must put a lucid and persuasive case to the contrary, and I do not believe that he can. If the Bill is ever enacted, amendment (a) will help the Government, rather than hinder them.

Amendment No. 237 will not shake the Bill to its foundations and the Government should not resist it. The amendment should be properly considered by the House.

Clause 4 imposes a number of duties on the regulator. There are seven duties, (a) to (g), which are somewhat conflicting. The first duty, (a), is to protect the interests of users of railway services". That duty will not always run in tandem with (f), under which the regulator has to impose on the operators of railway services the minimum restrictions which are consistent with the performance of his functions under this Part". In individual cases, the regulator will have to decide which of the duties assigned to him is most important. Clearly, the functions contain nothing about the fare levels, although clause 4(1)(a) contains the general statement: to protect the interests of users of railway services"— [Interruption.]

Madam Speaker

Order. The House must come to order. The hon. Gentleman is having difficulty making himself heard.

Dr. Marek

Thank you, Madam Speaker. I shall not speak for too long. [HON. MEMBERS: "Oh."] Hon. Members must not tempt me as I could introduce more issues that need to be raised. However, for the convenience of the House, I shall try to keep my remarks brief.

In Committee I tried to introduce an amendment that would raise the level of clause 4(1)(a) to make it more important than (b) to (g), but the Government refused to entertain any such amendment, and persuaded their Back Benchers to vote against it. Amendment No. 237 is a sensible amendment. The amendment will not wreck the Bill or drive a coach and horses through it. It is in the interests of consumers and railway passengers—I speak as a railway passenger. Before Conservative Members troop into the Lobby, I hope that they will examine the proposals carefully. The Government's life is not at stake. The Minister's hair shirt should not be at stake over something like this. However, passengers and railway users will benefit if the regulator is able to exercise some of his power in favour of consumers by keeping down unwarranted and unnecessary fare increases.

If the hon. Member for North Devon (Mr. Harvey) and the right hon. Member for Tonbridge and Mailing press their amendments to a vote, they can be sure that they will have my support.

Mr. Wilson

We are moving towards a vote and I certainly do not want to detain the House for long. However, some of the points raised require a little elaboration.

The right hon. Member for Tonbridge and Mailing (Sir J. Stanley) said that the cost of transport is the second biggest household item. It is worth noting that hon. Members are privileged to be spared at least one item from which many of our constituents suffer—the cost of parking at stations. We all have our little passes. Sharper-eyed Members in the House may have noticed that the new passes run from May 1993 to March 1994 instead of May 1993 to May 1994. The reason is that no one knows who will own the car parks, run the trains, own the stations, and so on after March 1994.

It is rare to find Tory Members voting against self-interest—they will vote for the abolition of these little passes as well as the fragmentation of the system. I do not care about the passes, but I care very much about the loss of network benefits to pensioners, young people and all the other constituents who will suffer as a result of the Bill.

The hon. Member for Southend, East (Sir T. Taylor) asked about the railway companies that will be able to bid for franchises. We know that British Rail will not be able to bid. It will be written out of existence—it will be given the airbrush treatment. It will be excluded from all its present roles as rapidly as the Government can achieve that. As the hon. Gentleman said, it is not only state-owned railways that will be excluded, because the state railways of Germany, France, Ireland or any other EC country will be able to bid for franchises. The only state railway that will not be able to bid or play a proper part in our nation's affairs is that of Britain. That is not a measure born of rationality or one excluding the public sector; it is a specific act of prejudice against British Rail which cannot be dressed up in any other way.

As the right hon. Member for Tonbridge and Mailing said, there are three elements that lead with all certainty to substantial increases in fares if the legislation is passed. The first element is that private companies will reasonably be looking for a profit—they would not be in the business if they were not looking for a profit—so that new element will have to be extracted from somewhere.

The second element is subsidy. Earlier, it was said that the subsidy for the current year has been reduced by 23 per cent. It might increase next year and come down the year after that, but the overall expectation is that it will be a decreasing subsidy. The ability of franchisees to make ends meet will depend on that element, which is entirely in the hands of the Government. If franchisees cannot get the money from subsidy in any given year and are making insufficient profit, the only other source of revenue is fares. No hon. Member should disguise from himself the inevitable consequence of fare increases.

The existing railway will not be the only one to bid for subsidy, even if it continues at the present level. In Committee, the Minister for Public Transport said that more services might qualify for grant than at present, but that that did not mean that the total cost of subsidy need be more. More services will bid for subsidy because, for reasons that defy logic, InterCity is to be broken up. Therefore, a railway which currently does not require subsidy, which makes a small profit, will lose its profitable parts to the private sector. Overnight, that will create a new subsidised railway. The loss-making parts of InterCity will be added to the other loss-making railways which will also be bidding for subsidy.

Even if there is the same amount of money as at present, which I doubt, more services will compete for a share. There will be only one other source of revenue to bridge that gap—fare increases. The right hon. Member for Tonbridge and Mailing rightly spoke about the complete lack of control over fares. The three elements that lead to substantial fare increases are profit, subsidy and lack of control.

The most recent statement of Government policy on the matter was issued last week in response to the Select Committee report. The tone of the Government's response to that unanimous report was derisory and weak on almost every point and it failed to give the satisfactory responses that the report demanded. The unanimous recommendation of the Select Committee was that the franchising director should not be able to permit fares that went beyond the retail price index for fare increases on all franchised services. The Government's response to that is instructive. They said: The extent to which fares will be controlled will depend on the degree to which a franchise operates in a competitive market. So far, so good, but the response continues: Where real competition exists from other modes of transport, then the market will determine the level of fares which an operator can charge. That sentence removes the possibility of intervening in a large swathe of services because there are few services on which there is competition between modes of transport. That next sentence in the response states: Where an operator could use significant market power to the detriment of passengers, the franchising agreement will limit fare increases. That sounds reasonable, but the response continues: On the other hand, where passengers are expected to benefit from investment to improve the quality of service, then higher increases in fares may be justified. Every route that has been mentioned in the debate will require massive investment, and all those routes are excluded from the protections supposedly offered by that reply. Every line in the country is subject to market forces on the basis of that Government response. The assurances are not worth the breath used to utter them because the caveats in the response ensure that the guarantees are meaningless. Whatever is given with one hand is always taken away with the other.

How can the right hon. Member for Southend, West (Mr. Channon) and the hon. Member for Southend, East oppose the amendment on the basis of the response from the Government? Those right hon. and hon. Members argue that huge investment is needed on the line, yet the response from their Government is that if that investment is made, market forces will determine the level of fares. They can take nothing from the debate.

10.15 pm

Mr. Geoffrey Dickens (Littleborough and Saddleworth)

rose—

Mr. Wilson

No, I shall not give way. The House is impatient for the debate to be concluded and I cannot imagine that anything that the hon. Gentleman could contribute would diminish that impatience.

The Steer Davies Gleave report cannot be dismissed by the Government, because it was presented by the same consultants who advised them on bus privatisation. It is worth considering the three categories to which it referred. On InterCity, it stated that the projected 15 per cent. increase in costs meant that, whatever one did to fares, it would be impossible to make that service, once again, an unsubsidised one. The fares on InterCity journeys will increase, but even that money will not be enough to make that an unsubsidised service.

The report also states that, to cover the 15 per cent. increase in costs, it would be necessary to increase Network SouthEast fares by 37 per cent. on current levels. One can play with figures and mention 17 per cent, 27 per cent., 37 per cent. or above, but the message is clear: to generate the necessary returns, fares must increase greatly. The Bill provides no protection against that and hon. Members should not attempt to hide that fact from themselves.

Mr. Dickens

Will the hon. Gentleman give way?

Mr. Wilson

No, I shall not. The hon. Gentleman was not present for the debate and he cannot turn up now for a spoiling act. He cannot turn up for his sound bite, or, in his case, a large lunch.

Mr. Dickens

The hon. Gentleman is afraid to give way.

Mr. Wilson

Conservative Members do not like facts. They do not like to be told by the consultants' report and every other authoritative source—not by me—that the price of privatisation will be massive fare increases for all their constituents. They must learn to live with that if they pass the Bill.

The other category of services to which the Steer Davies Gleave report referred was regional railways. It stated that a 45 per cent. revenue increase was needed to offset the projected 15 per cent. increase in costs. Those are the facts.

If one passes legislation that will, inherently, increase the costs of running the railways—for reasons well understood by Conservative Members—the only way to pay for them is through increased fares.

On that basis, the Opposition would like to have the opportunity to vote for the amendment tabled by the hon. Member for North Devon (Mr. Harvey), but unfortunately it was not selected. In due course, we will vote for amendment No. 237, but, in the meantime, I ask hon. Members on both sides of the House to vote against new clause 4. Many Conservative Members have spoken a lot of sense about the issue, and if they voted against the new clause, they would record the feeling of the clear majority in the House and in our constituencies.

Mr. Freeman

The debate has lasted for about two and a half hours and it has concentrated, quite rightly, on fares and the report of Steer Davies Gleave. I hope that hon. Members will forgive me if, in the interests of time and my intention to be concise, I do not cover all the points made in the debate. I shall, of course, write tomorrow to those hon. Members whom I do not answer.

My right hon. Friend the Member for Southend, West (Mr. Channon) and my hon. Friend the Member for Southend, East (Sir T. Taylor) sought an assurance that consultations would be held between the franchising director, the public and rail user groups. I can give that assurance. It is important that the franchising director bears in mind what the public wants.

The hon. Member for West Bromwich, East (Mr. Snape) spoke about the report by Steer Davies Gleave. I categorically reject the conclusions in the report. The assumptions are flawed because the consultants assumed substantial increases in the cost of leasing existing rolling stock which did not occur. They also assumed that Railtrack's charges will disappear outwith the subsidisation of passenger services, which will not happen.

As to subsidies, I can tell the hon. Member for Cunninghame, North (Mr. Wilson) that we have not fixed the passenger service obligation grant for next year or the year after. That subsidy is fixed close to the beginning of the financial year and it is incorrect to assume that the Government intend to reduce the subsidies of Network SouthEast or any other part of the railway system.

Mr. Snape

Is it or is it not Government policy, already announced, to reduce the overall subsidy for British Rail by 50 per cent. in the next three years?

Mr. Freeman

No decisions have been taken on the subsidy level for the simple reason that the only figure that is put into the Government public expenditure survey is the external financing limit. The level of subsidy has not been determined. The hon. Gentleman will know that, for the past three years, the Government have had to go back in the middle of the year to increase the subsidy because of the consequences of the recession on fare income. We have responded positively and constructively to the subsidy needs of British Rail.

Amendment No. 237 was tabled, and spoken to, by my right hon. Friend the Member for Tonbridge and Malting (Sir J. Stanley). The right hon. Member for Swansea, East (Mr. Williams) and my hon. Friends the Members for Ashford (Sir K. Speed), for Lewes (Mr. Rathbone) and for Gillingham (Mr. Couchman) also referred to it. The Government understand the concerns expressed about fare levels. In Standing Committee, a great deal of time was spent debating how the franchising director would control fare levels on monopoly services.

I understand the concerns of my right hon. Friend the Member for Tonbridge and Mailing on the matter. The amendment was selected relatively late. I assure him that, before we come to amendments Nos. 239 and 244, which relate to much the same issues, my right hon. Friend the Secretary of State and I will reflect on the debate. We look forward to answering the points and, I hope, satisfying my right hon. and hon. Friends tomorrow with appropriate assurances. The Government and my right hon. and hon. Friends share the same aims—to control fares on monopoly services and to demonstrate to our constituents, the electorate and passengers that we are serious and mean to control fare levels where it is appropriate.

I hope that, given those assurances, the House will support new clause 4.

Question put, That the clause be read a Second time—

The House divided: Ayes, 308, Noes 275.

Division No. 279]	[10.24 pm
AYES
Ainsworth, Peter (East Surrey)	Deva, Nirj Joseph
Aitken, Jonathan	Devlin, Tim
Alexander, Richard	Dickens, Geoffrey
Alison, Rt Hon Michael (Selby)	Dicks, Terry
Amess, David	Dorrell, Stephen
Ancram, Michael	Douglas-Hamilton, Lord James
Arbuthnot, James	Dover, Den
Arnold, Jacques (Gravesham)	Duncan, Alan
Arnold, Sir Thomas (Hazel Grv)	Duncan-Smith, Iain
Ashby, David	Dunn, Bob
Aspinwall, Jack	Dykes, Hugh
Atkinson, David (Bour'mouth E)	Eggar, Tim
Atkinson, Peter (Hexham)	Elletson, Harold
Baker, Nicholas (Dorset North)	Emery, Rt Hon Sir Peter
Baldry, Tony	Evans, David (Welwyn Hatfield)
Banks, Matthew (Southport)	Evans, Jonathan (Brecon)
Banks, Robert (Harrogate)	Evans, Roger (Monmouth)
Bates, Michael	Evennett, David
Batiste, Spencer	Faber, David
Bellingham, Henry	Fabricant, Michael
Bendall, Vivian	Fenner, Dame Peggy
Beresford, Sir Paul	Field, Barry (Isle of Wight)
Biffen, Rt Hon John	Fishburn, Dudley
Blackburn, Dr John G.	Forman, Nigel
Body, Sir Richard	Forsyth, Michael (Stirling)
Booth, Hartley	Fowler, Rt Hon Sir Norman
Boswell, Tim	Fox, Dr Liam (Woodspring)
Bottomley, Peter (Eltham)	Fox, Sir Marcus (Shipley)
Bottomley, Rt Hon Virginia	Freeman, Roger
Bowden, Andrew	French, Douglas
Bowis, John	Fry, Peter
Boyson, Rt Hon Sir Rhodes	Gale, Roger
Brandreth, Gyles	Gallie, Phil
Brazier, Julian	Gardiner, Sir George
Bright, Graham	Garnier, Edward
Brooke, Rt Hon Peter	Gill, Christopher
Brown, M. (Brigg & Cl'thorpes)	Gillan, Cheryl
Browning, Mrs. Angela	Goodson-Wickes, Dr Charles
Bruce, Ian (S Dorset)	Gorman, Mrs Teresa
Budgen, Nicholas	Gorst, John
Burns, Simon	Grant, Sir Anthony (Cambs SW)
Burt, Alistair	Greenway, Harry (Ealing N)
Butcher, John	Greenway, John (Ryedale)
Butler, Peter	Griffiths, Peter (Portsmouth, N)
Butterfill, John	Grylls, Sir Michael
Carlisle, John (Luton North)	Hague, William
Carlisle, Kenneth (Lincoln)	Hamilton, Rt Hon Archie (Epsom)
Carrington, Matthew	Hamilton, Neil (Tatton)
Carttiss, Michael	Hampson, Dr Keith
Cash, William	Hannam, Sir John
Channon, Rt Hon Paul	Hargreaves, Andrew
Churchill, Mr	Harris, David
Clappison, James	Haselhurst, Alan
Clark, Dr Michael (Rochford)	Hawkins, Nick
Clarke, Rt Hon Kenneth (Ruclif)	Hawksley, Warren
Clifton-Brown, Geoffrey	Hayes, Jerry
Coe, Sebastian	Heald, Oliver
Congdon, David	Heath, Rt Hon Sir Edward
Conway, Derek	Heathcoat-Amory, David
Coombs, Anthony (Wyre For'st)	Hendry, Charles
Coombs, Simon (Swindon)	Heseltine, Rt Hon Michael
Cope, Rt Hon Sir John	Hicks, Robert
Cormack, Patrick	Higgins, Rt Hon Sir Terence L.
Couchman, James	Hill, James (Southampton Test)
Cran, James	Hogg, Rt Hon Douglas (G'tham)
Currie, Mrs Edwina (S D'by'ire)	Horam, John
Davies, Quentin (Stamford)	Hordern, Rt Hon Sir Peter
Davis, David (Boothferry)	Howard, Rt Hon Michael
Day, Stephen	Howarth, Alan (Strat'rd-on-A)

Howell, Rt Hon David (G'dford)	Patten, Rt Hon John
Howell, Ralph (North Norfolk)	Pattie, Rt Hon Sir Geoffrey
Hughes Robert G. (Harrow W)	Peacock, Mrs Elizabeth
Hunt, Rt Hon David (Wirral W)	Pickles, Eric
Hunt, Sir John (Ravensbourne)	Porter, Barry (Wirral S)
Hunter, Andrew	Porter, David (Waveney)
Hurd, Rt Hon Douglas	Portillo, Rt Hon Michael
Jack, Michael	Powell, William (Corby)
Jackson, Robert (Wantage)	Rathbone, Tim
Jenkin, Bernard	Redwood, John
Jessel, Toby	Renton, Rt Hon Tim
Johnson Smith, Sir Geoffrey	Richards, Rod
Jones, Gwilym (Cardiff N)	Riddick, Graham
Jones, Robert B. (W Hertfdshr)	Rifkind, Rt Hon. Malcolm
Jopling, Rt Hon Michael	Robathan, Andrew
Kellett-Bowman, Dame Elaine	Roberts, Rt Hon Sir Wyn
Key, Robert	Robertson, Raymond (Ab'd'n S)
Kilfedder, Sir James	Robinson, Mark (Somerton)
King, Rt Hon Tom	Roe, Mrs Marion (Broxbourne)
Kirkhope, Timothy	Rowe, Andrew (Mid Kent)
Knapman, Roger	Rumbold, Rt Hon Dame Angela
Knight, Mrs Angela (Erewash)	Ryder, Rt Hon Richard
Knight, Greg (Derby N)	Sackville, Tom
Knight, Dame Jill (Bir'm E'st'n)	Sainsbury, Rt Hon Tim
Knox, David	Scott, Rt Hon Nicholas
Kynoch, George (Kincardine)	Shaw, David (Dover)
Lait, Mrs Jacqui	Shaw, Sir Giles (Pudsey)
Lamont, Rt Hon Norman	Shephard, Rt Hon Gillian
Lang, Rt Hon Ian	Shepherd, Colin (Hereford)
Lawrence, Sir Ivan	Shersby, Michael
Legg, Barry	Sims, Roger
Leigh, Edward	Skeet, Sir Trevor
Lennox-Boyd, Mark	Smith, Sir Dudley (Warwick)
Lester, Jim (Broxtowe)	Smith, Tim (Beaconsfield)
Lidington, David	Soames, Nicholas
Lightbown, David	Speed, Sir Keith
Lilley, Rt Hon Peter	Spencer, Sir Derek
Lloyd, Peter (Fareham)	Spicer, Sir James (W Dorset)
Lord, Michael	Spicer, Michael (S Worcs)
Luff, Peter	Spink, Dr Robert
Lyell, Rt Hon Sir Nicholas	Spring, Richard
MacGregor, Rt Hon John	Sproat, Iain
Maclean, David	Squire, Robin (Hornchurch)
McLoughlin, Patrick	Stanley, Rt Hon Sir John
McNair-Wilson, Sir Patrick	Steen, Anthony
Madel, David	Stephen, Michael
Maitland, Lady Olga	Stern, Michael
Major, Rt Hon John	Stewart, Allan
Malone, Gerald	Streeter, Gary
Mans, Keith	Sumberg, David
Marland, Paul	Sweeney, Walter
Marlow, Tony	Sykes, John
Marshall, John (Hendon S)	Tapsell, Sir Peter
Marshall, Sir Michael (Arundel)	Taylor, Ian (Esher)
Martin, David (Portsmouth S)	Taylor, John M. (Solihull)
Mawhinney, Dr Brian	Taylor, Sir Teddy (Southend, E)
Mellor, Rt Hon David	Temple-Morris, Peter
Merchant, Piers	Thomason, Roy
Milligan, Stephen	Thompson, Sir Donald (C'er V)
Mills, Iain	Thompson, Patrick (Norwich N)
Mitchell, Andrew (Gedling)	Thornton, Sir Malcolm
Mitchell, Sir David (Hants NW)	Thurnham, Peter
Moate, Sir Roger	Townend, John (Bridlington)
Monro, Sir Hector	Townsend, Cyril D. (Bexl'yh'th)
Montgomery, Sir Fergus	Tracey, Richard
Moss, Malcolm	Tredinnick, David
Needham, Richard	Trend, Michael
Nelson, Anthony	Trotter, Neville
Neubert, Sir Michael	Twinn, Dr Ian
Newton, Rt Hon Tony	Vaughan, Sir Gerard
Nicholls, Patrick	Waldegrave, Rt Hon William
Nicholson, David (Taunton)	Walker, Bill (N Tayside)
Nicholson, Emma (Devon West)	Waller, Gary
Norris, Steve	Ward, John
Onslow, Rt Hon Sir Cranley	Wardle, Charles (Bexhill)
Oppenheim, Phillip	Waterson, Nigel
Ottaway, Richard	Watts, John
Page, Richard	Wells, Bowen
Paice, James	Wheeler, Rt Hon Sir John
Patnick, Irvine	Whitney, Ray

Whittingdale, John	Wood, Timothy
Widdecombe, Ann	Yeo, Tim
Wiggin, Sir Jerry	Young, Sir George (Acton)
Wilkinson, John
Willefts, David	Tellers for the Ayes:
Winterton, Nicholas (Macc'f'ld)	Mr. Sydney Chapman and Mr. Andrew Mackinlay.
Wolfson, Mark

NOES
Abbott, Ms Diane	Davis, Terry (B'ham, H'dge H'l)
Adams, Mrs Irene	Denham, John
Ainger, Nick	Dewar, Donald
Ainsworth, Robert (Cov'try NE)	Dixon, Don
Allen, Graham	Dobson, Frank
Anderson, Donald (Swansea E)	Donohoe, Brian H.
Anderson, Ms Janet (Ros'dale)	Dowd, Jim
Armstrong, Hilary	Dunnachie, Jimmy
Ashdown, Rt Hon Paddy	Dunwoody, Mrs Gwyneth
Ashton, Joe	Eagle, Ms Angela
Austin-Walker, John	Eastham, Ken
Banks, Tony (Newham NW)	Enright, Derek
Barnes, Harry	Etherington, Bill
Barron, Kevin	Evans, John (St Helens N)
Battle, John	Ewing, Mrs Margaret
Bayley, Hugh	Fatchett, Derek
Beckett, Rt Hon Margaret	Faulds, Andrew
Beith, Rt Hon A. J.	Field, Frank (Birkenhead)
Bell, Stuart	Fisher, Mark
Benn, Rt Hon Tony	Flynn, Paul
Bennett, Andrew F.	Foster, Rt Hon Derek
Benton, Joe	Foulkes, George
Bermingham, Gerald	Fraser, John
Berry, Dr. Roger	Fyfe, Maria
Betts, Clive	Galbraith, Sam
Blair, Tony	Galloway, George
Boateng, Paul	Gapes, Mike
Boyce, Jimmy	Garrett, John
Boyes, Roland	George, Bruce
Bradley, Keith	Gerrard, Neil
Bray, Dr Jeremy	Gilbert, Rt Hon Dr John
Brown, Gordon (Dunfermline E)	Godman, Dr Norman A.
Brown, N. (N'c'tle upon Tyne E)	Godsiff, Roger
Bruce, Malcolm (Gordon)	Golding, Mrs Llin
Burden, Richard	Gordon, Mildred
Byers, Stephen	Gould, Bryan
Caborn, Richard	Graham, Thomas
Callaghan, Jim	Grant, Bernie (Tottenham)
Campbell, Mrs Anne (C'bridge)	Griffiths, Nigel (Edinburgh S)
Campbell, Menzies (Fife NE)	Griffiths, Win (Bridgend)
Campbell-Savours, D. N.	Grocott, Bruce
Canavan, Dennis	Gunnell, John
Cann, Jamie	Hain, Peter
Chisholm, Malcolm	Hall, Mike
Clapham, Michael	Hanson, David
Clark, Dr David (South Shields)	Hardy, Peter
Clarke, Eric (Midlothian)	Harman, Ms Harriet
Clarke, Tom (Monklands W)	Harvey, Nick
Clelland, David	Hattersley, Rt Hon Roy
Clwyd, Mrs Ann	Henderson, Doug
Coffey, Ann	Heppell, John
Cohen, Harry	Hill, Keith (Streatham)
Connarty, Michael	Hinchliffe, David
Cook, Robin (Livingston)	Hoey, Kate
Corbett, Robin	Hogg, Norman (Cumbernauld)
Corbyn, Jeremy	Hood, Jimmy
Corston, Ms Jean	Hoon, Geoffrey
Cousins, Jim	Howarth, George (Knowsley N)
Cox, Tom	Howells, Dr. Kim (Pontypridd)
Cryer, Bob	Hoyle, Doug
Cummings, John	Hughes, Kevin (Doncaster N)
Cunliffe, Lawrence	Hughes, Robert (Aberdeen N)
Cunningham, Jim (Covy SE)	Hughes, Roy (Newport E)
Cunningham, Rt Hon Dr John	Hughes, Simon (Southwark)
Dafis, Cynog	Hutton, John
Dalyell, Tam	Illsley, Eric
Darling, Alistair	Ingram, Adam
Davidson, Ian	Jackson, Glenda (H'stead)
Davies, Bryan (Oldham C'tral)	Jackson, Helen (Shef'ld, H)
Davies, Rt Hon Denzil (Llanelli)	Jamieson, David
Davies, Ron (Caerphilly)	Janner, Greville

Jones, Barry (Alyn and D'side)	Powell, Ray (Ogmore)
Jones, Ieuan Wyn (Ynys Môn)	Prentice, Ms Bridget (Lew'm E)
Jones, Jon Owen (Cardiff C)	Prentice, Gordon (Pendle)
Jones, Lynne (B'ham S O)	Prescott, John
Jones, Martyn (Clwyd, SW)	Primarolo, Dawn
Jones, Nigel (Cheltenham)	Purchase, Ken
Jowell, Tessa	Quin, Ms Joyce
Kaufman, Rt Hon Gerald	Radice, Giles
Keen, Alan	Randall, Stuart
Kennedy, Charles (Ross, C&S)	Raynsford, Nick
Kennedy, Jane (Lpool Brdgn)	Redmond, Martin
Khabra, Piara S.	Reid, Dr John
Kinnock, Rt Hon Neil (Islwyn)	Rendel, David
Kirkwood, Archy	Robinson, Geoffrey (Co'try NW)
Leighton, Ron	Roche, Mrs. Barbara
Lestor, Joan (Eccles)	Rogers, Allan
Litherland, Robert	Rooker, Jeff
Livingstone, Ken	Rooney, Terry
Lloyd, Tony (Stratford)	Ross, Ernie (Dundee W)
Llwyd, Elfyn	Rowlands, Ted
Loyden, Eddie	Ruddock, Joan
Lynne, Ms Liz	Salmond, Alex
McAllion, John	Sedgemore, Brian
McAvoy, Thomas	Sheerman, Barry
McCartney, Ian	Sheldon, Rt Hon Robert
Macdonald, Calum	Shore, Rt Hon Peter
McFall, John	Short, Clare
McKelvey, William	Simpson, Alan
Mackinlay, Andrew	Skinner, Dennis
McLeish, Henry	Smith, Andrew (Oxford E)
McNamara, Kevin	Smith, C. (Isl'ton S & F'sbury)
Madden, Max	Smith, Rt Hon John (M'kl'ds E)
Mahon, Alice	Smith, Llew (Blaenau Gwent)
Mandelson, Peter	Snape, Peter
Marek, Dr John	Soley, Clive
Marshall, David (Shettleston)	Spearing, Nigel
Marshall, Jim (Leicester, S)	Spellar, John
Martlew, Eric	Steel, Rt Hon Sir David
Maxton, John	Steinberg, Gerry
Meacher, Michael	Stevenson, George
Meale, Alan	Stott, Roger
Michael, Alun	Strang, Dr. Gavin
Michie, Bill (Sheffield Heeley)	Straw, Jack
Michie, Mrs Ray (Argyll Bute)	Taylor, Mrs Ann (Dewsbury)
Milburn, Alan	Taylor, Matthew (Truro)
Miller, Andrew	Thompson, Jack (Wansbeck)
Mitchell, Austin (Gt Grimsby)	Turner, Dennis
Moonie, Dr Lewis	Tyler, Paul
Morgan, Rhodri	Vaz, Keith
Morley, Elliot	Walker, Rt Hon Sir Harold
Morris, Rt Hon A. (Wy'nshawe)	Wallace, James
Morris, Estelle (B'ham Yardley)	Walley, Joan
Morris, Rt Hon J. (Aberavon)	Wardell, Gareth (Gower)
Mowlam, Marjorie	Wareing, Robert N
Mudie, George	Watson, Mike
Murphy, Paul	Wicks, Malcolm
Oakes, Rt Hon Gordon	Wigley, Dafydd
O'Brien, Michael (N W'kshire)	Williams, Rt Hon Alan (Sw'n W)
O'Brien, William (Normanton)	Williams, Alan W (Carmarthen)
O'Hara, Edward	Wilson, Brian
Olner, William	Winnick, David
O'Neill, Martin	Wise, Audrey
Orme, Rt Hon Stanley	Worthington, Tony
Parry, Robert	Wray, Jimmy
Patchett, Terry	Young, David (Bolton SE)
Pendry, Tom
Pickthall, Colin	Tellers for the Noes:
Pike, Peter L.	Mr. Peter Kilfoyle and Mr. Gordon McMaster.
Pope, Greg

Question accordingly agreed to.

Clause added to the Bill.