§ '(1) Notwithstanding anything in section 22 of this Act, a public sector operator shall be eligible to be a franchisee if at the date on which this Act was passed—
- (a) that operator, or
- (b) any other body of which that operator was at that date, or is at the time when the franchise agreement is made, the subsidiary or holding company,
was providing or operating services for the carriage of passengers by railway in the exercise of a function conferred by or under any enactment.
§ (2) For the purposes of this section "subsidiary" and "holding company" shall be construed in accordance with section 736 of the Companies Act 1985.'.—[Mr. Prescott.]
§ Brought up, and read the First time.
§ Mr. John Prescott (Kingston upon Hull, East)I beg to move, That the clause he read a Second time.
§ Madam Deputy SpeakerWith this, it will be convenient to discuss also the following amendments: No. 29, in clause 22, page 23, leave out from beginning of line 41 to end of line 19 on page 24.
§ No. 43, in page 23, line 41, after `(1)', insert 'Subject to subsection (1A) below,'.
§
No. 44, in page 24,. line 16, at end insert—
'(1A) The provisions of subsection (1) above shall not apply to any public sector operator who at the date on which this Act received Royal Assent had a statutory power, duty or obligation to provide or operate any public railway passenger service.'.
§
No. 57, in page 24, line 16, at end insert—
'(1A) Nothing in subsection (1) shall prevent—
§
No. 32, in page 24, in clause 23, line 34, at end add—
'(4) The Board shall always be invited to tender by the Franchising Director.'.
§ No. 56, in clause 27, page 28, line 17, leave out from 'the' to end of line 18 and insert 'Board'.
§
No. 47, in clause 72, page 80, leave out line 38 and insert—
' "Public sector operator" means—
§ Mr. PrescottThe debate on new clause 12 characterised the attitude that the Government have adopted throughout the debates on the Bill—immediate changes, a few minutes' consideration without any proper assessment. As usual, the Government are making up policy as they go along. That has been pointed out in a very powerful way. The new clause raises another principle that was endorsed by Robert Adley: if the House is disposed to support an hon. Member's argument on one 776 occasion, it should do so subsequently. Robert Adley felt very strongly about British Rail's right to bid for franchises. The change of mind shown by the Secretary of State's immediate decision was brought about by pressure on the Floor of the House. The Government were totally indifferent to similar pressure in the Standing Committee.
I cannot help feeling that we have here something of a north-south division. It is accepted that there should be a statutory requirement to provide a pensioners pass in London, but not in areas outside London. Action is being taken because of the sensitivities in the southern area. I hope that the Secretary of State recognises that we are dealing here with a national matter. Decisions should not be influenced by geographical or political considerations. I hope that northern Members will fight as hard for their constituents as southern Members clearly have done.
British Rail's right to bid for franchises reflects an ideological position taken by the Government rather than common sense. This is a matter of common sense, and I hope that it will be considered in that light. New clause 24 would give British Rail the right to bid for franchises, of which the House was notified in a statement yesterday. BR should have the same bidding rights as any other operator. It certainly has all the necessary experience.
As drafted, the Bill will not permit public sector operators to bid for franchises. Evidence about the effectiveness of privately owned or privately operated railways is to be found in Sweden. The Swedish counterpart of British Rail was allowed to bid. I understand that of the 21 franchises that have been granted, 17 have been won by the state operation. It appears that the Swedish Government regarded the bid from the most experienced operator as the best one. Unless it is felt that the British public sector is not as good as the Swedish public sector, BR's management should be allowed to bid.
The Secretary of State will probably say that the management may bid if they do so by way of a buy-out procedure. Apparently, managers bidding for franchises will be those who currently run the public sector operation. The essential difference will arise from their introduction to the disciplines and philosophy of the market. As private owners, they will be intent on satisfying their own greed rather than meeting public need.
There is far too much ideology here. It is assumed that private must be good and public must be bad. That is not borne out by the evidence in this country or abroad. The Government seem to think that privatisation encourages a commercial ethos and enterprise which will result in a better service for the public. I concede that there is probably as much bad management in the public sector as in the private sector, but there is little to be gained from point-scoring about the failures of management. The skills of managers, like those of the work force, are much less well developed in this country than they are abroad. That is a sad reflection on our training and on our priorities in management and worker skills.
The Government have taken the view that this is all about competition, but they have not proved that case, either. In fact, competition is not being allowed. In this regard, the practicalities are extremely difficult. What is proposed is the transformation of a public monopoly into a private monopoly. Where franchises are granted, it is unlikely that the operators will have their own rolling stock. The Government have proposed that the rolling stock should be owned by leasing companies. The reason 777 is that the contract time envisaged for franchising is about seven years—considerably less than one would expect for rolling stock leasing. This, the concept of private ownership and competition, is watered down.
This is not competition; it is the granting of an exclusive right to an operator. An undertaking that does not even own its assets will be expected to contribute the essential private managerial flair which, it is argued, will be available in the private sector. It is contended that when public managers go private, they will be much better at managing. Again, that has not been proved.
We have been told that franchising is not now to be limited to the seven services that were announced in 1993. There are to be a further 18, making a total of 25. The additions account for most of the remaining two thirds of the system. The Secretary of State has not yet made up his mind about what should happen to the cross-country systems. He said yesterday that certain services would be exempt from the provisions of the Bill. A very important exemption is the British end of the European railway system through the channel tunnel. I assume that, for reasons connected with joint contracts and complicated European affairs, those services will not be offered for franchise. Presumably, they will remain under the control of British Rail. In other words, British Rail will continue to be an entity in this field. With the exception of the rolling stock on lines connecting with Europe, it may well have to lease back its own stock. That will create problems. In any case, BR will continue to be an important operator for at least the remainder of the century, irrespective of what happens in elections.
British Rail will continue to play an important part in respect of freight, too. Nevertheless, it will almost be the operator of last resort. If an operator does not provide the service, someone will ring up British Rail, almost as though it were the Automobile Association, and say, "Come and operate this system because the private sector operator has gone bust." As distinct from the public sector, if a private sector operator finds that it can no longer meet its financial commitments and is bankrupt, it will be obliged to cease trading and the service may stop. The Secretary of State may argue that the franchising director would take over the service and run it. Presumably, he would become the operator in those circumstances and then readvertise them.
5 pm
A transport system must operate 24 hours a day. The public rely on it because it is a crucial part of any industrial operation. Franchise operation 19, covering south London and the Sussex coast, has been identified by the Secretary of State as one for which private sector operators can bid. It is also the operation in which Mr. Sherwood of Sea Containers was very interested. What happens if most potential operators take Mr. Sherwood's view that the coast run from Southampton to Hastings is not very profitable?
Although it is true that many people travel on that line and that it uses clapped-out stock, Mr. Sherwood still does not want to run it. He offered to bid for the rest of the system, with the exception of the Reigate-Tonbridge line. If other operators are of the same view, either the network will have to be changed or someone will have to come in and pick up the bits that Mr. Sherwood or others judge are 778 not profitable—and that someone will be British Rail. That is not an effective way to run a railway system, because it would break up the whole basis of the network in what would be one of the most congested parts of any railway system. There will be increasing concern about that—particularly among Conservative Members, when they realise the consequences for the rail services in their constituencies.
As the Bill progresses, Conservative Members will not necessarily have the luxury enjoyed by the hon. Member for Ashford (Sir K. Speed) in negotiating with the Secretary of State to save particular travelcards and concessions. They will have to queue up at the door of the franchising operator—not spend time in a smoke-filled room pressurising the Secretary of State, knowing that the right hon. Gentleman has to come to the House and vote for or against a particular proposal. The luxury of accountability will be lost to right hon. and hon. Members, because the House will have delegated to the franchising director the right to make such decisions.
Anyone who complains to the franchising director will be reminded of the objectives that he has been set in the name of competition. He will say, "You placed those obligations on me, and if I do not observe them, I can be sued by another operator." Any chance to make decisions about the transport system and to put pressure on the Secretary of State as an essential part of public accountability will be sacrificed. Although the right hon. Gentleman may hope that there can be bids for the network definition contained in his document, he has already made it clear that much will depend on operators picking and choosing. We must wait and see.
In Committee, the Secretary of State reserved the right to control the franchising director's actions until July 1996—an interesting political period, just before the next general election. The right hon. Gentleman is retaining certain powers so that he can oversee any difficulties with Network SouthEast, with all the political implications that that has, as we have seen recently. The services will not be franchised in the way that the Secretary of State suggests; instead, the network will be broken up, and British Rail will be expected to intervene as the operator of last resort to provide certain services.
Mr. Sherwood made it clear that, apart from not wanting to run certain lines, he expected freedom to charge what he liked. I do not know what decision the Secretary of State has made in regard to the amendment debated yesterday and any capping of fares. I look forward to hearing his remarks later, when the House will have an opportunity to vote on that amendment. Mr. Sherwood asked also for tax relief on season tickets. He clearly knows what he wants by way of a profitable deal—but it would cost taxpayers a lot more, they would get a lot less for their money and fares would be considerably higher. Grave doubts remain about bids being left in the hands of private operators, with no services being provided by British Rail.
In the past few weeks, we have seen how much public opinion is swinging in favour of retaining British Rail, whatever criticisms might be made of it—and despite the fact that everyone knows that it is under-invested compared with European railways. Its financial support is only some 20 per cent. of that in Europe, which puts a great deal more into its railway systems, however one measures that. Europe has the common sense to acknowledge that if one places a rail network in the hands of entrepreneurs, they will be interested only in making a 779 profit. Their whole rationale is to make money, and their profits will have to be financed by a raft of subsidies that would increase the public sector obligation.
§ Mr. RathboneThe hon. Gentleman referred to a part of British Rail's network that affects my constituency. Many people have been deeply worried by scaremongering of the type in which the hon. Gentleman has indulged this afternoon—saying that this line will be closed down, that service will be stopped and fares will be increased. The truth is that Mr. Sherwood made an awful blunder when he made those statements, because he ruled himself out as a franchisee. The people in his company know that. His public relations adviser leapt down Mr. Sherwood's throat the day after he made that announcement on television, because he knew that it wiped Mr. Sherwood out of consideration as a franchisee on those terms.
§ Mr. PrescottI have often been told by Conservative Members not to lecture business men because they know what is in their own interest. I assume that Mr. Sherwood knew what he was talking about. After all, he took the Government to the cleaners when all the ports were privatised and he bought Sealink for about £40 million, and then sold the Isle of Wight services alone for £100 million. Mr. Sherwood made an awful lot of money out of the Government. If I were asked to judge whether the Government or Mr. Sherwood has the best commercial judgment, my money would be on Mr. Sherwood. I quoted him because he was to make one of the bids. Most of the other potential operators that the Secretary of State tells us about dare not raise their heads.
As to Mr. Branson of the Virgin Group, since it was announced that he could not cherry-pick and enjoy open access, he is no longer interested. Stagecoach was also supposed to be interested. The service that it ran from Scotland lasted only four months. A change from public to private ownership brought collapse in four months, and then good old British Rail had to take over and restore the service. The public appreciate that where British Rail does not maintain a service, the private sector will look after its own interests.
The argument is made that public management of British Rail is bad—but according to the White Paper, the Select Committee, and The Economist survey, British Rail's labour productivity is far in advance of any European system. That did not start with the present Government but has been true for 20 years, as studies made in the early 1970s show. As an innovator, British Rail introduced fast trains on conventional tracks and developed container ships ahead of anyone else. It has introduced innovation and techniques of which we can be proud.
The problem is that the Government took £3 billion from British Rail's public subsidy, and it shows. There has been some attempt to regain that ground but—under, I admit, a number of Governments—British Rail has never received enough money to replace clapped-out rolling stock, most of which was ordered in the mid-1950s. That is the reason for its financial problems.
It is argued that privatisation is better, and British Airways is often quoted in that context—but it had a massive writing-off of its debts. There was a change in Treasury rules, and British Airways made most of its profits at a time when it was a private company in public ownership. In many cases, the same management were 780 involved. To that extent, we cannot draw comfort from the suggestion that a change in ownership leads to an improvement. We must change the rules and some of the Treasury's attitudes to the public sector—we have been somewhat stupid about that—and we must recognise that simply changing the ownership is not sufficient to guarantee that the consumer is better off.
Anyone who doubts that should ask Mr. Branson of Virgin whether British Airways is better under private ownership. Under public ownership, we could have sacked the board and chairman of British Airways for some of their deplorable practices and made it clear that such practices are not acceptable. As it is a private company, we cannot do so. The Secretary of State says that we cannot interfere and, despite my protests, the Civil Aviation Authority takes a similar view.
The assumption that privatisation leads to improvements is not borne out by the examples of Tiger Rail and Charterail, which collapsed shortly after opening. Circumstances were difficult for them and their failure might not have resulted from poor management: other factors caused difficulties whether companies are publicly or privately owned.
Can anybody say that bus privatisation has improved the bus industry? Five-year studies show that buses are older and that fares are twice as high. Services are poorer and the network is smaller. A privatised bus company has not met the requirements of a public network service.
§ Mr. David MartinWill the hon. Gentleman give way?
§ Mr. PrescottNo, I do not have time.
Interestingly, the Government did not deny the publicly owned bus service the right to bid for franchises. Much evidence tends to show that it is possible to allow public or private management to operate such services.
We have a good opportunity to measure public management against private management. If the Secretary of State wants to go ahead with the privatisation of the east coast line, which may be more attractive to an entrepreneur, why not inject the £1 billion into the west coast line, where it is desperately needed, in the way that I have suggested—through a combination of leasing and different financing arrangements—and let the public sector run it? Let us have a competition between the strategic east and west coast lines to see which management performs best. I could readily accept that spur of competition, but it is not proposed under the Bill.
One of the great difficulties is that British Rail may feel that it has no further role and that there is no need to improve because it will eventually be completely eliminated. That is wrong and the absurdity of it is emphasised by the fact that under European regulations French and other European rail companies will be exempt from franchise agreements and will be able to take over franchises on the east or west coast line. French rail companies can run our railways, but British Rail cannot. If that is not ideological nonsense from the Government, I do not know what is.
The Government will not be able to prevent such takeovers because they are at the heart of decision making in Europe. They believe in a free market and competition and believe that French or German rail companies should be allowed to bid, yet they will not extend that right to British Rail, which is absurd.
§ Mr. Nigel Spearing (Newham, South)Will my hon. Friend give way?
§ Mr. PrescottNo, I cannot; other hon. Members wish to speak.
§ Mr. SpearingWhat about Union Rail?
§ Mr. PrescottI am sure that my hon. Friend will have an opportunity to deal with that. As my hon. Friend suggests, Union Rail could make a bid because it, too, is exempt.
The new clause is a measure of good sense and I hope that the Secretary of State will consider it. It was well supported by Robert Adley, who constantly asked why British Rail cannot be allowed to bid for the franchise. If the Secretary of State wants to improve the Bill, the new clause is a useful and simple propositon. It would allow British Rail—which has the expertise, management skill and ability—the opportunity to show that, given the chance, it can operate services as well as anyone else. That is a fair opportunity for it, and without it British Rail will eventually become a second-class operation, offering only the services that other companies do not want. That is not a fair way to treat it. It would not be good for passengers and it certainly would not be good for British Rail. If the Secretary of State believes in competition, the least he can do is give British Rail an opportunity to compete.
§ Mr. MacGregorWe know what the Labour party is seeking under the new clause—no change. It wants to continue with British Rail as it is. [HON. MEMBERS: "Hear, hear."] I am glad that some of them acknowledge that.
Labour wants to continue with a monolithic, large state industry, with all the constraints and bureaucracies that that imposes, without the sharp incentives constantly to seek more customers—passenger and freight—that the private sector, through market pressures and disciplines, offers. That is what it hopes to achieve under the new clause.
The hon. Member for Kingston upon Hull, East (Mr. Prescott) gives the impression that Labour would spend much more taxpayers' money on British Rail, but we all know that it would not.
I am the first to acknowledge the considerable improvements that have been made in British Rail in recent years and the organising for quality initiative and the move to profit centres have helped. A new group of senior managers have benefited from those changes and are keen to take advantage of the opportunities that privatisation offers and to take up franchises under management buy-outs. [Interruption.] I acknowledge that that has to happen. I have said that throughout, but most people acknowledge that there is a need for further change and for further improvement. A monolithic nationalised industry imposes restraints on thrusting managers, and most people recognise that change is needed.
But for the Labour party, the status quo is all very well, and that is what it aims to achieve under the new clause.
§ Mr. PrescottWhat status quo?
§ Mr. MacGregorThe status quo of British Rail remaining entirely in the public sector and operating all the franchise areas.
I have discovered from discussions with my hon. Friends that their position is different, and I should like to 782 deal with their concerns. Their first concern was about what would happen if no bid was made for a franchise or if no acceptable bid was made. I believe that the question of there being no bid is hypothetical, but the franchising director may conclude that a bid is not acceptable.
Their argument is: do we not need British Rail to ensure that services in a franchise area continue to operate? The system that we have designed ensures that there will be no problem, because if the franchising director does not grant a franchise in response to the invitation to tender British Rail will continue to operate that service. That is the fail-safe.
§ Mr. Stephen Day (Cheadle)I am grateful to my right hon. Friend for giving way, although I suspect that I will be less than helpful, for which I apologise. It is bizarre that apparently the Government do not think that British Rail is fit to tender, yet we shall rely on it if the franchise system breaks down. Surely there is some contradiction in that. Should not BR at least be given the option of bidding for services?
§ Mr. MacGregorI shall deal with those concerns later.
If no bid is made for a franchise, there is not only the fail-safe; the position is better than that. We propose to set up shadow franchises. I announced yesterday what we think will be the remaining 18, but I made it clear that the figure is not set in stone. That fulfils our commitment to franchise the whole operation, but that will take place gradually with seven shadow franchises initially.
The purpose is to ensure that the franchise area makes good operational sense and to establish a financial track record. After the shadow franchise has been set up, it will have to operate for a period before the franchise director issues invitations to tender. That is fairly obvious. People need the financial track record and information before marshalling their bids. It means that the bids can be measured against British Rail's existing operations and financial track record.
If, in a particular case, the franchising director concludes that the bids do not give sufficient value for money compared with the existing British Rail operation, he will not grant the franchise. It will be a matter for the franchising director, and I do not want to interfere. Whether bids offer good value for money will be one of the conditions that the franchising director will have to bear in mind in granting franchises.
It could be argued, therefore, that the British Rail operation—what it is already achieving—is effectively a bid. If British Rail is allowed to bid separately, there will be other consequences, with which I shall deal in a moment. However, that is how the scheme will operate, and that is where there is a difference between this country and Sweden.
Sweden did not split the operation, thereby establishing a financial track record, so the basis for the bids was not the same. We have made it clear from the beginning that we are trying to inject private attitudes, discipline, marketing expertise and capital into the system. The existing Swedish railway had a huge advantage in making bids, with the result that only 3 per cent. of the bids went to the private sector.
Secondly—
§ Mr. Andrew Rowe (Mid-Kent)If one of the people showing interest in one of the shadow franchises is involved in an alternative form of transport, he will have 783 access to all the information—that is the purpose of setting up a shadow franchise. However, our experience of the channel tunnel rail link negotiations has been that, whenever the public have asked for any information of the slightest use in working out how much money is available for amelioration or other purposes, they were told that such information was commercially sensitive.
What is sauce for the goose is sauce for the gander and, if potential franchisees are allowed access to the information, so should the unfortunate people who are trying to defend themselves against the worse excesses of the channel tunnel rail link.
§ r. MacGregorWe are talking about two different things. In relation to the British Rail reforms, we want competition for the franchises, so we must provide the information to ensure a fair competitive basis on which bids can be made. That will be one of the franchising director's responsibilities.
The second issue raised by my hon. Friend is very reasonable. The people who have over the years acquired the experience and skills to run the railways and who have delivered many of the recent improvements should have the opportunity to bid. In fact, they will have that opportunity and, I believe, to do so in a more attractive way than if they were operating simply as part of the monolithic British Rail structure. The opportunity will arise through management-employee buy-outs. In addition, we want to encourage such buy-outs and, as the House will know, we have arranged for financial assistance up to a limit of £100,000 to be provided to facilitate them.
Therefore, those who have been operating the railways will have opportunities. It is not surprising that we have received 30 expressions of interest; we cannot have bids at the moment, because there is nothing for which to bid. However, I assure the House that, as I have moved around the country, I have met a considerable number of British Rail senior managers—as have my hon. Friend the Minister for Public Transport and the franchising director—who are keen to bid on the basis of a management-employee buy-out. I want them to have the suppprt and backing of British Rail, which will come through the financial assistance, and not have British Rail as a competitor.
§ Mr. PrescottI have received notice of a management buy-out seminar, which encourages managements to believe that the moneys available for the buy-outs or for the redundancies that could come with privatisation would be financed from the British Rail pension fund. Will the Secretary of State assure us that that will not be the case?
§ Mr. MacGregorThe money that would be used for financial assistance for the buy-outs would come from the British Rail pension fund?
§ Mr. PrescottOr be used for the redundancies that may occur.
§ Mr. MacGregorYes, I can give that assurance.
I was saying, that I believed that management-employee buy-outs are a more attractive proposition with added benefits, because they enable those who were formerly or are currently working for British Rail to make their bids. Many will form consortia with the private sector, which will bring real advantages.
784 I have dealt with two of the issues which my hon. Friends have raised with me. I hope that what I have said makes it clear that their fears about both can easily be met and that, in fact, there is a real advantage in turning the experience of those in British Rail into a management-employment buy-out.
There are several key points to the new clause. The purpose of our reforms is to get better passenger services by removing the constraints and bureaucracy of a huge nationalised industry, by adding private sector attitudes, approaches, disciplines, skills and experience to the commitment, skills and experience, of which there is an abundance among many British Rail staff.
It will be achieved by going into the private sector and restructuring passenger services into smaller units. Briefly, they are the ways in which we seek to get better passenger services. We shall not achieve that aim merely by allowing British Rail to bid knowing that it will have huge advantages in framing its bid. I shall deal with that point in a moment.
In relation to private sector involvement, invitations to tender are not only about getting more cost-effective services. Some people have referred to competitive tenders in local authorities as a parallel and said that people working in local authorities have been able to tender for services that they are already running. That was designed to achieve, and has achieved, considerable savings in local authorities by producing more cost-effective services.
We certainly seek savings in the competitive tenders for the franchise—I am confident that we shall get more cost-effective services—but there is another purpose, which is to develop new opportunities and create new markets for passenger services, an opportunity that does not exist in the tendering for local authority services. Those new opportunities are better achieved by going to the private sector.
In our debates I have frequently referred to the important issue of culture change. I continue to be struck by the fact that, when I meet managers who were formerly in nationalised industries and who now operate in the private sector in the same businesses, they frequently say that one of the most striking benefits of the privatisation process has been the culture change of having to operate in the marketplace and not within the public sector. That is why we seek to encourage management-employee buy-outs involving the private sector and to encourage competition with the private sector—management-employee buy-outs mean breaking the habits of a lifetime locked into a nationalised industry, public sector culture.
If the nationalised industry bids against management-employee buy-outs on terms that inevitably favour the nationalised industry, one jeopardises the change of culture.
§ Mr. PrescottWhat about the French railways?
§ Mr. MacGregorThe hon. Gentleman keeps talking about French railways, but that is not a model that we wish to follow. The TGVs are very effective, but I have two points to put to him. First, many people draw attention to the inadequacies of the French railways, apart from the TGVs, and many pay tribute to our InterCity services. It is not a case of French railways being so much better than ours right across the board.
Secondly, the French taxpayer currently pays £1.3 billion a year to service the colossal debts carried by 785 SNCF. The equivalent latest figure for British Rail is £81 million, so it is not surprising that France's new Minister for Transport said that the French would have to tackle that problem. It is a heavy burden, and it is questionable whether that is the best use of scarce public expenditure.
§ Mr. Peter BottomleyI wonder whether my right hon. Friend would recap so that I could try again to understand why managers who want to make a bid or to propose an even more efficient way of running a service should not be allowed to do so from within British Rail.
My right hon. Friend has convinced the House that it is reasonable to allow managers help to enable them to make a bid from outside BR, but we have not yet fully understood—at least, I have not fully understood—why they should not be able to make a competitive bid from within BR if they think that, within the organisation, they can make a better fist of it than they are allowed to do at present.
§ Mr. MacGregorI am not sure whether my hon. Friend means that such people should be allowed to bid while they are still part of BR but as part of an independent management-employee buy-out, or that they should be allowed to bid because they are BR.
§ Mr. BottomleyIt seems to me that there are three options. The first is that people can leave BR completely and bid from outside. The second is that they can get some kind of help—my right hon. Friend said that up to £100,000 per bid would be available—to enable them to bid as if in future they would not be within BR. The third option would be for managers to be able to say, from within BR, that that is the way in which they would like to run the service within the organisation. I have not yet been able to understand why that third option is excluded, and why such bids cannot be tested against the others.
§ Mr. MacGregorCertainly the first two options are clear. People can leave BR; and people can be outside BR once the system is in operation. Managers will be allowed to remain within BR while they make their management-employee buy-out bid, but if the bid is successful, obviously they will have to move to a franchise outside BR.
The real distinction is between those options and the third option. My hon. Friend suggests that BR itself should be allowed to bid for the franchise, as the Opposition want—
§ Mr. PrescottHe has got it right.
§ Mr. MacGregorOf course I have got it right; of course I understand it.
§ Mr. PrescottBrilliant.
§ Mr. MacGregorThank you very much.
The third option would mean that people would bid not as a management buy-out or as a separate management, but as part of BR. [HON. MEMBERS: "Hear, hear."] That is precisely why the Opposition want that third option. That is what I have been saying all the way through.
The Opposition want no change. They want BR to be able to manipulate the bids for the individual franchises 786 —they will not all come at once—so that it will always be able to undercut the competition. The interesting question is how BR can justify the claim that it will carry on as it is under the system, yet will be able to make a bid at a much lower level than it is currently achieving in its financial track record. That is the interesting question.
§ Mr. PrescottYes.
§ Mr. MacGregorI am glad that the hon. Gentleman is following me, because we are now coming to the crunch.
The answer to that question is that private sector bidders, including management—employee buy-outs, will make a realistic assessment of the business prospects for each franchise. They will have to, because that will be in the nature of the bid. They will know how much subsidy they will get for the next five years if they are successful, and they will know the risk that they are taking.
They will know that they have to deliver what they believe they can achieve, and run a more cost-effective service according to all the terms of the contract, providing all the services, but at the same time increasing revenue. That is how the benefits will come. If BR were to bid against them—
§ Mr. MacGregorLet me finish my sentence.
If BR were to bid against such a bid, it would always tend to make the most optimistic assumptions, believing that, if its forecasts proved unrealistic, somehow or other the taxpayer would be there in the background to bail it out. That is not the way to achieve either the cultural changes or the improvements. That is the fundamental difference, and that is why I cannot accept the amendments.
Furthermore, if it were felt that BR as a whole could bid for each franchise, that would undoubtedly undermine City interest. If BR were allowed to bid on every occasion, there would be a fear that it would be able to undercut every bid by one means or another. That is a crucial difference, and it is the reason why I cannot accept the amendment.
§ Mr. Nicholas WintertonMy right hon. Friend has talked about the reasons why BR should not be able to bid for a franchise. Will he answer a specific question which he has been asked before in private meetings but to which, so far as I know, he has not yet given a full reply—he has certainly not given me a full reply? Is it not technically possible for the French railways to bid for a franchise within the United Kingdom? My right hon. Friend may say that that is unlikely, or that the French railways has suggested that it does not intend to make a bid, but is it technically possible?
§ Mr. MacGregorThat is technically possible, but I should stress that the purpose of our policy, as we have made clear, is to introduce private sector management and expertise into the operation of the railways.
§ Mr. MacGregorWill the hon. Lady let me finish?
At this stage, the draft guidance to the franchising director—there will be further drafts, but there will eventually be guidance and instructions to the franchising director—makes it clear that his principal objective will be 787
to secure as soon as reasonably practicable … that the function of providing passenger railway services in Great Britain is performed by private sector operators".The franchising director will therefore want to examine most carefully any proposed bid involving a foreign public sector railway operator in order to find out whether that bid will assist him in meeting his primary objective.
§ Mr. MacGregorIt is for all of those reasons that I believe that the Labour party—
§ Mr. Hugh Dykes (Harrow, East)rose—
§ Mr. MacGregorI can answer questions later in the debate. I believe that the Labour party—
§ Mr. MacGregorThere will be plenty of opportunitiy for my hon. Friends and other hon. Members to make their contributions, and I shall reply later.
The Labour party seeks to perpetuate British Rail exactly as it is now. That is a fundamental difference, and that is why I cannot accept the amendments.
§ Mr. MacGregorYes.
§ Mr. DykesDoes my right hon. Friend agree that the difficulty in his argument is that, both under our national laws and under European Community rules and regulations, SNCF could perfectly legally establish a genuinely private public limited company in Britain—10 per cent. of which would be owned by SNCF, or whatever —which would be able to bid on that basis? Theoretically, could not such a company win all the franchises?
§ Mr. MacGregorIf SNCF decided to take a 10 per cent. stake in a company that made a bid, it would have to be clear that no state aid was involved in its contribution. Then the company would be able to bid. Presumably such a consortium would involve many United Kingdom participants, including some managers and employees attempting a buy-out. It would be for the franchising director to decide whether such a bid produced the best value for money.
§ Madam Deputy SpeakerOrder. May we be clear? Has the right hon. Gentleman concluded his speech, or is he giving way?
§ Mr. MacGregorI have finished.
§ Mr. SnapeWe are all left thoroughly confused, Madam Deputy Speaker. I wanted to ask the right hon. Gentleman a question, having watched him bog himself down in that way—it had nothing to do with the French, although I appreciate the dilemma in which questions from his hon. Friends place him.
788 It seems a strange proposition to say that when it comes to buy-outs managers still within BR will not be allowed to make a bid because their bid would be lower than it would be if those same managers were to mortgage their homes and attempt a management buy-out. I realise that I am no great intellectual in such matters, but I find the Secretary of State's proposition hard to accept intellectually. I should be grateful if he would enlarge on it when he sums up. He does not have a reputation as one of the great ideologues in the Government; he is known more as a number cruncher. I do not know whether he regards that as a compliment or an insult, but when he gives us all that stuff about a monolithic nationalised industry, and talks about the public sector in a derogatory way—
§ Mr. MacGregorIndicated dissent
§ Mr. SnapeThat is what the right hon. Gentleman said. Those were the reasons behind his refusal to allow British Rail to bid for any franchises. It is a disgraceful insult to hundreds of thousands of people—managers as well as rank-and-file railway workers—who have spent many years working in the public sector for fairly low pay. Many of the managers have earned lower rates of pay then they might have been able to earn in the private sector. They did so because they felt that there was some public service ethos in running the railway system. For them to be written off and to be described as being part of a monolithic, nationalised industry does the right hon. Gentleman no credit. It is a totally inaccurate way in which to describe the diligent efforts of many thousands of people, including my own father who spent most of his working life on the railway system under both private and public ownership. He did not notice any dramatic change to a monolithic industry. It seems that Conservative central office may be writing the right hon. Gentleman's briefs in this debate because he has trotted out philosophical nonsense as a justification of a policy that. I find incredible.
I do not know whether Conservative Members understand the basis on which railway franchises are to he allocated. I noticed some puzzled looks. The fact that the hon. Member for Harrow, East (Mr. Dykes), among others, had a few things to say and thoroughly confused the Secretary of State suggests that the right hon. Gentleman should go back to the drawing board.
Surely it is a fundamental tenet of Conservative faith that the public sector should bid against the private sector. After all, as we have heard from the Secretary of State, Conservatives believe that the private sector is inherently more efficient. What are they so frightened of? The fact that those with the greatest experience of running the railway industry will be excluded on the spurious ground that they will undercut the private sector will not benefit the consumer, the passenger or the freight user in the long term, even if it were true. There is not a shred of evidence that it is true. To exclude the very people with the experience of running the railway industry goes to show how daft the whole Bill is.
§ Mr. Nick Hawkins (Blackpool. South)Surely the whole point of my right hon. Friend's remarks is that the people with experience will not be excluded. They will be encouraged to participate in management-employee buy-outs. What will be excluded will be the monolithic structure. I am glad that the hon. Member for West Bromwich, East (Mr. Snape) has just mentioned the most 789 important people—the passengers. What we are trying to do in the Bill is to improve customer service. The people who most matter on the railways are the passengers. The railways are not run for the benefit of the employees. To listen to most Opposition Members, one would think that it was only the employees who mattered.
§ Mr. SnapeThe future of a once-great industry should not be decided on the basis of the personal ambitions of a callow youth from Blackpool. We are talking about the dismemberment of a railway industry. Let the hon. Member for Blackpool, South (Mr. Hawkins) think of this. We shall deal with the passengers and the benefits in a moment. Who exactly among the managers who run the railway now will run the railway while all this bureaucratic claptrap is being put together? Does the hon. Gentleman know, as he rushes to defend his own silly piece of legislation, no doubt in the hope of preferment in the future?
The hon. Gentleman is the secretary of the all-party railways group. For him to defend this legislation suggests that at the group's annual general meeting we should have a serious look at his qualifications for the job. My goodness, the sooner he is an Under-Secretary of State at the Department of Health and therefore gagged and prevented from taking part in these debates, the sooner we shall have a bit of common sense brought into them.
§ Mrs. DunwoodyCome on. That is a bit much.
§ Mrs. DunwoodyNorthern Ireland?
§ Madam Deputy SpeakerOrder. What has this got to do with the new clause and the amendments under consideration?
§ Mr. SnapeIt has a great deal to do with the fact that those of us who know something about the railway object to the claptrap to which we have had to listen this afternoon, Madam Deputy Speaker. However, if you can contain the hon. Member for Blackpool, South and prevent him from making long interventions, I shall do my best to confine my remarks to the new clause—
§ Mr. SnapeThat is very wise, if I may say so, Madam Deputy Speaker.
Another fallacy peddled by the Secretary of State is that British Rail is the monopoly provider of public services. Where is the monopoly in the railway system? What is the monopoly against internal air services? We have privatised long-distance coach services. We in the United Kingdom are addicted to the company car. Where is the monopoly? This monopoly exists only in the minds of some of the sillier Conservative Members—
§ Mr. MacGregorWill the hon. Gentleman give way?
§ Mr. SnapeI realise that I may have provoked the right hon. Gentleman into rising to his feet by saying that. I hope that this will be a very short intervention.
§ Mr. MacGregorThe hon. Gentleman has pointed to other methods of transport in which there is competition within and competition between them. There is competition between all of them and within them in the private sector. Why does the hon. Gentleman think that the railways should be the main area of transport that can be run only by a single organisation and in the public sector?
§ Mr. SnapeI do not think that. That is not what the Bill is about. The Opposition have acknowledged that there is a place for the private sector in the provision of transport. Of course, we have admitted that the state cannot possibly provide everything. The new clause and associated amendments are about giving British Rail under its current structure the opportunity to demonstrate that it can compete against the private sector on, to use an overworked phrase, a level playing field. There is nothing ideological about that. If the right hon. Gentleman is so sure of his facts, he has nothing to worry about because the private sector will win hands down anyway. To avoid facing the fact that there may be managers within the public sector who are every bit as well qualified, if not more so, than their private sector counterparts to make these bids, the right hon. Gentleman has to invent stories about them deliberately undercutting the private sector to preserve their own empires. There is not a shred of evidence for that.
The right hon. Gentleman referred to 30 managers who had already expressed—
§ Mr. MacGregorThirty-five.
§ Mr. SnapeThirty five? The figure has gone up already. A note has obviously come from the Box. One of the 35 managers who have expressed an interest wrote to me recently. He told me that he wrote to the Secretary of State saying that he thought that his plans to dismember the railway industry were extremely damaging and that they would have grave long-term consequences for the economy. He said that he received a letter back thanking him for his interest and enclosing all the documents necessary for him to make an application for one of the franchises. If the other 34 managers are like that, the right hon. Gentleman's case becomes even more questionable. From listening to him, I believe that it is pretty questionable already.
Where are the parameters against which the bids are to be measured? There is none if British Rail management are to be excluded from the whole process. The right hon. Gentleman said that the regulator will, of course, look at how much the service costs under the existing British Rail network and will measure the quality of the bids against that cost. That presupposes that one can break up a national railway industry financially into 25 nice little compartments and that one can say that if running trains within one twenty fifth of the railway costs £X million, the franchise should be around £X million. I am not sure how well qualified the right hon. Gentleman is in accountancy. Again, it will be, to say the least, a fairly elastic process if that is how it will be done.
We all know that the franchising director will accept the lowest bid for a particular group of services. I hope that the right hon. Gentleman and the Minister for Public Transport, the faithful Sancho, will agree at least on that. 791 Let us suppose that there was a bid of £20 million for a hypothetical group of services in the west midlands. Let us suppose that the existing BR managers, whether they had mortgaged their homes or not and whether they had decided to be capitalists rather than railway workers or not, said that instead of a £20 million bid for a half-hour service, they would bid £22 million for a 20-minute service. With their knowledge of the railway industry, they could perhaps do that with one extra unit and with two extra crews. Such a bid would be disqualified under the Bill.
§ Mr. MacGregorindicated dissent.
§ Mr. SnapeThe Secretary of State shakes his head. He has already said that if the bid came from within the public sector, it would be disqualified. To throw away all that expertise purely for ideological purposes is nonsense.
I appeal to Conservative Members, many of whom are here today, who have taken an interest in railway matters over the years to tell the Secretary of State that once again he has got it wrong. Not everyone—managers, employees or people in the salaried or wages grades—in the railway industry believes in what the Secretary of State calls an inefficient monolithic organisation. Many believe in the future of the industry to which they have given their lives. It is totally nonsensical and unfair to exclude those railway men and women from the whole tendering process. For that reason, Conservative Members—at least, those who care—should support this group of amendments.
§ Mr. HawkinsThe concern of those whom I represent, who care about the railways as deeply as I do, is to ensure that the legislation works in practice. The importance of the new clause, and the reason why the Government are right to maintain their position that management and employee buy-out bids should be allowed but British Rail should not be allowed to bid, is that the railways should benefit from the skill and expertise of the people who understand the running of them and who can be encouraged to be involved in management-employee buy-outs. However, there should be every opportunity for customer service to be improved without the danger of the whole purpose of the Bill—to bring in private sector management and skills—being undermined. It will be undermined if, as my right hon. Friend the Secretary of State rightly said, the monolithic British Rail, as it has been for so many years, is allowed to bid in its own right.
Labour Members seek to undermine the whole basis of the bid by allowing British Rail to undercut private competition. That change is unacceptable because it would ensure that all the customer complaints up and down the country about the unacceptable quality of British Rail services continue in the years ahead. We want to see an improved railway service. It is no good hon. Members such as the hon. Member for West Bromwich, East (Mr. Snape) talking about ideology. We are interested in serving the public. It is not possible for Labour Members to ignore the voluble and voluminous complaints that they get, as I get, about the appallingly low quality of many British Rail services. It is simply not acceptable for them to ignore the volume of customer and passenger complaints about so many lines, which have resulted from the mismanagement of so much of British Rail over so many years.
I welcome the fact that, for the first time in a debate on rail —I have been a regular attender of such debates—the hon. Member for Kingston upon Hull, East (Mr. Prescott) said that he accepted that there had been both 792 management and employee failures in British Rail. One welcomes a sinner who repenteth and a conversion on the road to Damascus, however late it is. It is to be welcomed that at long last there is some acceptance on the part of Labour Members that there have been many things wrong with British Rail in the past. That is why it is so extraordinary that they are still arguing that British Rail should be allowed to bid. That would undermine the whole purpose of what the Government are doing, which is to bring in the fresh air of private sector management to improve customer service. Labour Members will be taken seriously on this issue only when they start talking about the volume of customer and passenger complaints.
I shall refer to a point made by the hon. Member for Hampstead and Highgate (Ms Jackson). She suggested that the Government's response to new clauses tabled this afternoon was the result of pressure from an organisation called Save Our Railways. I have examined carefully the heavily hyped media launch of a Save Our Railways press release issued yesterday, which talks about a number of Conservative Members, including me, and the reaction of the public—in the view of Save Our Railways—in those Conservative seats. When one looks carefully at the press release—clearly, those members of the media who concentrated on it heavily in the past 24 hours did not look at it carefully enough—it makes it clear that 5,300 people in 53 seats were surveyed. The briefest acquaintance with statistics would show that that means that precisely 100 people in each seat were surveyed. That is hardly a statistically significant sample.
The Save Our Railways survey referred to the feelings of a percentage of the people in each Conservative seat. The figures of 79 per cent. and 6 per cent. suggest that a large number of people were surveyed. However, if only 100 people in each seat were surveyed on their views of the various clauses, the figures of 6 per cent. and 9 per cent. show that only six people and nine people respectively were surveyed.
Before the hon. Member for Hampstead and Highgate readily adopts a rail union-funded campaign, which claims to be all-party on the basis only that a single former Conservative Member, however distinguished, was involved in the launch of that campaign, she should examine the survey more carefully. When I look at the figures relating to my seat, I have the endorsement of 79 per cent.—79 of the 100 people surveyed agreed with my views on rail privatisation. That is a ringing endorsement and it is one of the reasons why, at the local elections last week, a rail union councillor was defeated and we won a seat from Labour.
§ Madam Deputy SpeakerOrder. Passing reference is one thing, but to expand it to an entire speech is another. The hon. Gentleman must return more closely to the new clause being debated.
§ Mr. HawkinsI am grateful for your guidance, Madam Deputy Speaker. I simply wanted to make the point that, despite the remarks of the hon. Member for West Bromwich, East, 79 per cent. of the people in my constituency who were surveyed by Save Our Railways agreed with me. That is a ringing endorsement of the Government's opposition to clauses such as new clause 24. It is one of the reasons why I support so readily my right hon. Friend's opposition to these suggestions.
§ Dr. MarekIt is always a tell-tale sign that, when the Secretary of State is on a weak footing, he attacks Labour Members, and he did so on this occasion. He is shaking his head—he should look at the Official Report. During debates on other amendments, perhaps when he was about to give way or he was sure of his ground, he did not attack Labour Members.
The Secretary of State said that the Labour party wants no change. I do not think that any Labour Member holds that view, because we all know that there are problems with the railway system in the United Kingdom—it is grossly underfunded, the rolling stock is old, the capacity to build rolling stock is in doubt unless action is taken and the system is understaffed. Frankly, one wonders how the industry ever gets a train to leave and arrive on time as it does. The staff manage to do that, despite all the handicaps under which they must work.
The Secretary of State said that Labour Members want a large monolithic organisation to continue. I cannot subscribe to that. But I subscribe to the proposition that the railway system is a network, a system and a unity of its own. Wilfully dismembering the system without producing the slightest shred of evidence that the way in which the Government intend to do it is right is not in the interests of the country or of the passengers and customers.
The Secretary of State did not mention the customers or the passengers. I agree that the hon. Member for Blackpool, South (Mr. Hawkins) eventually mentioned them, but the Government Front Benchers certainly did not. The Secretary of State should look at the Official Report tomorrow—and I shall do the same.
Labour Members are worried that, if the changes come about—we can make general speeches on Third Reading —customers and passengers will not be able to undertake journeys from one station to another. Will passengers and customers have the security of knowing that, if they know that they must get up early tomorrow morning to catch the 7 o'clock train to somewhere, the train will run? I admit that trains do not always run on time now, but why add the extra danger that a franchising company that has bid too much or has not produced the figures that it expected when it was first given the franchise will go bankrupt or walk away from the operation at a moment's notice?
If British Rail could bid for franchises, that would keep other franchise operators on their toes. Under the present circumstances, that would not happen. I would go a little further: I believe that there is a certain amount of dogmatic malice on the part of the Government against a nationalised industry such as British Rail and against the people who have run the service. The service has been understaffed and underfinanced. Employees have been attacked by the Government during the 10 years that I have been a Member of Parliament. The Government want to see the end of the nationalised industry and it does not matter to them how that is done. If the country has to suffer, so be it. I am afraid that that is how I look at it. That is why the Government are so keen to ensure that the new clause and amendments in this group are defeated.
6 pm
My hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) has tabled a new clause. I have tabled five amendments in this group. I suggest two ways in which British Rail could be brought into the operation to keep the private operators on their toes. The hon. Member for Ashford (Sir K. Speed) has tabled some amendments in 794 the group. I hope that the new clause or one of the amendments will be accepted today. Of course, we shall support the new clause tabled by my hon. Friend the Member for Kingston upon Hull, East, if he decides to press it to a vote. I should also be happy to support the amendment tabled by the hon. Member for Ashford.
I am amazed at the lack of information that is sometimes given in the press. The leader in The Independent today is entitled "A concession to speed BR's sale." It talks about two questions and says:
The second of these questions is easier to answer. Far from being the leap into the dark its critics allege, private railways have yielded impressive dividends in Japan, Sweden and elsewhere.The leader makes no further reference to Japan, Sweden or anywhere else, but it is held up as an answer that the reader of The Independent can accept as the editors's judgment of whether the privatisation proposals are worth anything.We all know that in Sweden any success that has been achieved has depended crucially on Swedish railways being able to bid. It has been successful in about 79 per cent. of the bids. In many cases, it has turned loss into profit. What is wrong with that? If a national operator that is kept on its toes by private competition can turn lines from loss making into profit making in another country, why does the Secretary of State for Transport intend to prohibit that in the United Kingdom? There is only one answer to that question: it is because of dogma, malice and hatred of public service and public industry.
I wrote down a few comments that the Secretary of State made. He said that he wanted to encourage management buy-outs. There is no difficulty in understanding why he wants to do that: it is because no one else can run the railway industries. So railway managers who have been slated by the Secretary of State in the past few years will suddenly be lauded by him because they will buy out the industry. Suddenly, they have a private entrepreneurial ethos. They will be completely different creatures. It is beyond me to understand why that should be the case and why, if there are constraints on British Rail, the Secretary of State cannot remove them.
I admit that the Secretary of State is removing some constraints—for example, in freight operations. However, he could remove many of the constraints on British Rail without this dreadful Bill. If there were a referendum, I am sure that 90 per cent. of people would vote against the Bill. The Secretary of State also said that he wanted to restructure the industry into small units. If that happens, it will be more difficult for passengers to take a train from one station to another. The smaller the number of units, the more difficulty for the passenger and the customer.
The Secretary of State also said that he wanted a culture change. My thoughts immediately went to the water companies, which are now charging outrageous amounts and cutting off the supply of water from more desperate people and families than ever before. That is the culture that the Secretary of State wants to introduce. He wants to sweep away the idea of public service. That may be possible in other circumstances, but it is not possible for the major, necessary utilities or for transport systems. An integrated national railway service is certainly one of those. Therefore, it should be kept together.
If the Secretary of State were prepared to move some way, I would be prepared to accept that private capital and private interests should be brought in to keep the major provider of the network on its toes, as has happened in 795 Sweden. Sadly, that will not happen here. It is a great pity. The Secretary of State shows his dogmatic malice by refusing to accept any argument. For the sake of the country—and for the sake of his party, which will reap the rewards if the clause is accepted; but that is not a matter for me—I hope that there are enough Conservative Members who have not clone a deal. I hope that they have not done deals. I have not been party to the negotiations and talks which have been held. I hope that Conservative Members will have sufficient integrity to vote for the new clause or one of the amendments. If they do, it is just conceivable that they can rescue an awful Bill and turn it into one that might work.
§ Sir David Mitchell (Hampshire, North-West)The new clause and amendments would allow British Rail to tender for franchises. I am glad that my right hon. Friend the Secretary of State intends to resist them. At first sight, the case for allowing British Rail to tender is superficially attractive. British Rail has all the resources needed to be a successful operator. It has a world of experience and expertise. It will be a continuing operator in other spheres of the railway service.
However, the new clause and amendments would wreck the Government's purpose. They would fight off most private franchise operators for fear of unfair competition. British Rail would have disproportionate resources and much bigger muscle than any new franchise proposed operator. There is no way in which one could avoid cross-subsidisation between one set of contracts and another in a giant organisation such as British Rail.
I remind my hon. Friends who may be considering supporting the new clause or amendments that one could not persuade potential private franchisers that there would not be artificial competition in a particular bid which it was preparing and spending money on. I am well aware that assurances would be given that the system could be policed, but it could not. I wish to give the House a read-across which illustrates that it would not be possible to iron out and prevent cross-subsidisation.
I ask my hon. Friends to consider what has happened in local government. We all know that there are many examples where in-house bids have been made by local authority departments for contracts which have been put out to competitive tender. In many of those cases there have been artificially cross-subsidised bids. The Department of the Environment has issued 45 notices where it has suspected anti-competitive behaviour in the bidding. So far, it has had to issue 21 directions for either anti-competitive behaviour or failure to achieve financial targets set for the department concerned.
In other words, we have a direct read-across where, in local government, insider bids, so to speak, have resulted in artificial competition. Everybody knows that, if British Rail were allowed to bid in similar circumstances, the same artificial competition would result.
§ Mr. John Spellar (Warley, West)To me, 21 does not seem to be a bad average when one considers that in this country there are tens, if not hundreds, of thousands of contracts let every day under competitive tendering. To find only 21 with which something is wrong seems very good odds to me.
§ Sir David MitchellI said that, so far, there had been 21. The hon. Gentleman must recognise that it takes quite a 796 long time for these things to work through the machinery of assessment as to whether, as suspected, an artificial bid has been put in.
Quite apart from the possibility of a deliberate intention to have cross-subsidisation, one has to consider whether British Rail would know whether there were cross-subsidisation. There are a huge number of areas in which there would be opportunity for judgment on the allocation of central overheads and servicing costs; judgment on the period of write-off and how long rolling stock will last. All these matters of judgment will have a considerable impact on the level of the bid put in by British Rail in competition with a private operator.
§ Mr. DykesWhy could that not all he handled adequately by the franchising director? Why does my hon. Friend have so little confidence in that operation?
§ Sir David MitchellSimply because, in a vast organisation such as British Rail, it would be possible to hide those costs. Let me give my hon. Friend an example.
When I had the honour of serving as a Minister in the Department of Transport, British Rail came forward with a proposal to close the Settle-Carlisle railway line. We asked British Rail to give us its costs and takings. It was a monumental task to try to unravel the facts and get to basic figures upon which to form a judgment. At one point, British Rail said that it was very sorry, but it could not read the till rolls, so it could not tell us what the takings were.
Against that background, I have to say to my hon. Friend that anybody from outside who seeks to investigate whether cross-subsidisation is going on will not have a snowflake's chance in hell of getting to the bottom of it.
§ Mr. Harveyrose—
§ Madam Deputy SpeakerMr. Nick Harvey—or is the hon. Gentleman giving way?
§ Sir David MitchellYes, Madam Deputy Speaker. My hon. Friend wishes to intervene.
§ Madam Deputy SpeakerI am sorry. I thought that the hon. Gentleman had concluded.
§ Dame Elaine Kellett-BowmanWe were very delighted that the Minister did not allow the wool to be pulled over his eyes, and the Settle-Carlisle railway survived.
§ Sir David MitchellI will close by saying that this is a very powerful argument, which I hope will be found persuasive by my hon. Friends, for supporting the Secretary of State by resisting this amendment; it would frighten away prospective franchisees from bidding, thus defeating the Secretary of State's purpose.
§ Mr. HarveyFrom time to time, I am asked to explain to people what rail privatisation is all about and how it will work. When I inform them that the only operator in the country with any experience of running the railways is the one body that is explicitly barred from taking part in the franchise competition, they move from concern and doubt to complete astonishment and incredulity. Anyone—a butcher, a baker or a candlestick maker—with no 797 experience of running a railway, can bid; the only people who are specifically barred are the only people with any experience of running the railway.
The hon. Member for Southend, East (Sir T. Taylor), who is not present, managed, ingeniously as ever, to get the European dimension into this argument, as did the hon. Member for Harrow, East (Mr. Dykes), from a rather different perspective, perhaps. But the fact is that an operator from anywhere in Europe can bid to run these franchises, while our own national railways are debarred from doing so.
What will happen when there is only one bidder? Are the taxpayers not entitled to know that the cost of the franchise or the revenue from it will be preferable from their point of view to what British Rail could have achieved? British Rail, for all its faults, is a success story of a kind. In terms of train kilometres per staff member, it is half as good again as the European average. The Treasury support for it, at 0.14 per cent. of gross domestic product, is less than one quarter of the European average. It has more 100 mph-plus train services than virtually any other European country. The bidding process could improve this further, if the Swedish experience is anything to go by. In Sweden, the acceptance of the national railways' bids has improved the costs by 30 per cent.
The whole idea that management buy-outs are the shape of things to come is nonsense. The picture that we were originally painted by the Secretary of State was that hordes of would-be private operators were being held back at the gates, such was their enthusiasm. But, as this debate has gone on over the months and we have smoked them out and distilled a little more clearly who the people are who have expressed this interest, upon which the hon. Member for West Bromwich, East (Mr. Snape) has already commented, it has emerged that the Government are pinning their hopes at this stage on management buy-outs.
If these teams of managers have to take out second mortgages on their homes and stretch themselves to the limit to pay for the franchise, and then have to lease the rolling stock, where on earth will they find the money to make the investment that everybody realises the railways need to take us into the new century? They will be hamstrung in capital terms, in just the same way as management buy-outs in any other industry have been. They will not have the capital to make the investment that is needed, and they will not have any assets against which to borrow that capital.
The hon. Member for Eltham (Mr. Bottomley) would want to see that the current British Rail operation could be beaten. He wanted them, as the amendment proposes, to put forward a formal tender. I have another amendment, which will come up presently, that looks at similar matters to these. In that, I call for the bidders to have to show that they can beat the projected British Rail operating costs. Supposing operators from abroad—SNCF, or whoever it might be—undercut the bids made by the private sector here: will the Government, for ideological reasons, insist on accepting an inferior bid from a British private sector bidder?
The taxpayer and the National Audit Office have the right to ask serious questions if the bids coming in cannot beat the existing British Rail operating costs, or any bids 798 that come from a public sector, whichever public sector that might be. At a time when the Chief Secretary to the Treasury is canvassing the possibility of pensioners having to pay for prescriptions, or people having to pay for hospital beds, any suggestion that these franchises should be awarded on the basis of bids that cannot undercut the current British Rail operating costs is completely unacceptable.
Why should the taxpayer have to pay for the ideology of a Government hellbent on pushing these things into the private sector? There may be a market there for the private sector to come in and run railway operations, and there may be not. It will evolve at its own speed. Surely keeping British Rail in the picture as an alternative in each and every case would enable the process to develop at its natural pace. It may be that the market will be able to take on the network over the next 20 or 30 years, but the Government are hellbent on doing it much more quickly.
Keeping British Rail in the picture, making it quote for running the service and insisting on behalf of the taxpayer that anyone else must beat that would be the best way of running the system.
§ Sir Keith SpeedThis is an interesting debate, which goes to the heart of the Bill. When my right hon. Friend responded, he described some of my fears and those of some of my hon. Friends, but he did not deal with them all.
I have a worry, which has been echoed on both sides of the House, that management buy-outs, excellent though they are—and I entirely support them—may run into financial problems. I am sure that there will be corporate plans and very good people. As hon. Members on both sides of the House have said, British Rail managers are very good, and I am sure that they would make a good fist of a management buy-out. However, if there is not the finance, and we are talking about seven-figure financing at least for most of these franchises, there could be real problems.
I heard the powerful argument by my hon. Friend the Member for Hampshire, North-West (Sir D. Mitchell), but perhaps I could take it a stage further. If British Rail is not allowed to bid up front at the start, his fears about frightening off management buy-outs and the private sector will have been addressed.
Let us take the London-Tilbury-Southend line, where, as I understand it—my hon. Friend the Minister for Public Transport will correct me if I am wrong—from 1 April next year there will be a form of shadow franchise by British Rail which will provide a yardstick against which the director of franchises will be able to judge the bids. Let us also assume that either one or two bids come in that are nothing like as good as British Rail, or no bids come in at all.
My hon. Friend the Minister referred to such a possibility in reply to the hon. Member for North Devon (Mr. Harvey) in Standing Committee on 2 March, when he said:
I agree with the hon. Gentleman for North Devon in what was clearly a useful debate, which helped my understanding of what might happen in 1994. The franchising director should take into account the prospective results of the lines to be franchised. At the end of the day, the franchising director will be accountable to the NAO and the PAC for achieving value for money. The bid that he accepts will have to be compared with what the public sector British Rail would have cost the taxpayer to provide a comparable 799 service. That is a reasonable point which I have accepted." —[Official Report, Standing Committee B, 2 March 1993; c. 506.]So far so good; if we have either unsuitable bids or no bids, the service goes back to British Rail.However, what is there to give the management and staff the motivation to say, "Now we have this faute de mieux, we have to make a really good fist of it, because we have seen off the private sector or they are not interested"? We also have to consider the stability of the line and the services, so that services are not cut and fares do not go rocketing up.
It is important that we at least devise a formula so that, without a shadow franchise or open bidding, where the private sector is unable or unwilling to take on a line, rather more motivation should be given to the people who made it possible—the managers and staff of that region.
If my hon. Friend could address that point in a way that will make sense, presumably through the franchise director, some of us might be more easy. Otherwise it appears to me that, whatever happens, we are being ideological, and, at the end of the day, like many hon. Members who have spoken, I want a better rail system, particularly for the passengers, and the right motivation for the staff so that they can improve still further where they have the opportunity.
In that spirit, when my hon. Friend winds up, I hope that he will be able to address not only those fears, but the real opportunities that exist for British Rail.
§ Mr. Hugh Bayley (York)I start by declaring an interest: I am sponsored by the RMT union, but I speak on behalf of my constituency and all its rail employees. York is above all else a railway town. Until some four years ago when the BREL carriageworks were privatised, British Rail was the city's biggest employer by a considerable margin. Even now, one in 12 of the work force in my constituency work in the rail industry. either for British Rail of for ABB Transportation Ltd.
The proposals in the Bill are likely to affect my constituency, my constituents and the prosperity of the city I represent as much as any other city in the country. At the moment, York is the headquarters location of two of British Rail's 10 zones. Within York itself, Regional Railways North-East employs 630 people; 400 of them are employed in the headquarters operation, so their jobs quite literally are on the line. If they are unable to make a bid to preserve their own jobs, they will have to take their luck with whoever it is, private sector operator or managment buy-out, that wins the franchise.
The other zonal headquarters is the InterCity east coast main line headquarters which employs 1,400 people. It is a highly successful railway, something I wish those on the Conservative Front Bench would acknowledge without equivocation. The Government's franchising consultation and information document pointed out that the east coast main line made a profit of £220 million in the last year for which we have figures, a major achievement for any railway, public or private, and one which should not be just written off as a public sector incompetence that needs to be replaced by private sector initiative, if one is to believe the Conservative rhetoric, at the earliest opportunity.
Despite building up the east coast main line into a highly successful and profitable service, the employees who have achieved that will not be allowed to bid for the business that they have built. The question, "Why not?" 800 has been asked by a number of Conservative Members. The only reason that the Secretary of State can give is that he does not believe that within the public sector there is the right attitude or culture to allow for the running of a successful rail service, despite one which is a showpiece for the whole of Europe having come about under British Rail's public sector management.
If the Secretary of State believes, as I am sure he does because he would not have proposed the Bill and taken it this far if he did not, that competition will improve the performance, the quality and the cost of rail services in Britain, he should go for competition. He should let British Rail compete with allcomers. He has hardly been knocked over in the rush by private sector operators desperate to run rail services. If he does not allow British Rail to compete, in many cases he will have only one single bidder, one insider management buy-out bid. They will know that they are the only people running after the franchise, they will know that they are in a monopoly position and they will not have to put in a competitive bid. Who will have to pay the additional costs of running a service which has been won on franchise without there being any competition?
One need look only at the ITV franchise bids to see that television companies which knew that they were up against competition had to make multi-million pound bids to win the franchise, whereas one, Central Television, discovered that it was the only competitor, bid —2,000 and got the franchise. That is not in the public interest in television terms, and it will not be in the travelling public's interest in railway terms.
The staff working for British Rail, my constituents, do not want a silver spoon in their mouths. They simply want a chance to bid so that they can continue doing the jobs that they are now doing. They believe that they can provide a better service more cheaply for the passengers than can anyone else. I urge the Government to put that to the test.
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The Secretary of State says that British Rail cannot be allowed to bid because it might undercut the competition. In whose interest could it possibly be for a lower price not to go in for the same service? British Rail is not, as is suggested, a huge, bureaucratic, monolithic whole. It has already, with its organising for quality initiative, split itself into separate businesses that account financially for their activities in a businesslike way.
If BR puts in a bid that is too low and it loses money, it will be under the same financial pressures as any private sector bidder. It would be absurd for BR, having won a bid, to come cap in hand to the Government and expect them to respond in any way different from the way that the Government would respond to Stagecoach, Sea Containers or any other company that underbid. The company in question would have to live with the financial consquences of a bad business decision. That is what the framework of the Bill is intended to achieve, and there is no reason why it should not apply equally to private and public sector entrepreneurs.
Why allow, on the east coast main line, Richard Branson, Stagecoach, National Express Coaches or any other company to bid but not BR? The only answer seems to be that given by the Secretary of State this afternoon 801 —that he is afraid of public sector competition. The right hon. Gentleman shakes his head in dissent. Let him test his theory in practice and allow BR to bid.
The same should apply to Regional Railways North-East. It is not a profit-making railway, but it provides a good public service at low cost. It is possible that another company could provide a better public service railway at lower cost. The Bill says that that must be tested by a competitive franchise bid. If there is to be competition, let BR put in a bid in its own right. If the Secretary of State does not allow that to happen, he will never know whether he has been sold a pup by the private sector franchise bidder which wins the franchise, because he will not have seen that bidder operate against the full range of competition.
York city council recently commissioned a firm of transport consultants, a company which has become a household name during the consideration of the Government's privatisation proposals, to undertake some work. It commissioned Steer Davies Gleave to examine the employment implications of the Government's proposals on York. It concluded that, of the present 4,700 railway employees in York, privatisation would put 2,400 BR and ABB jobs at risk and would put 1,400 additional jobs locationally at risk.
In other words, if, for example, the winner of the Regional Railways North-East franchise were to decide to locate its headquarters in the constituency of my hon. Friend the Member for Morley and Leeds, South (Mr. Gunnell), those other jobs would not be lost to the country but would be lost to the city of York. We are speaking not simply of British Rail jobs that would be going. Netted off against the figures are the private sector jobs in York.
The proposals would have a devastating effect on the economy of York. What does the Secretary of State think that that is doing for the morale of railway employees in my constituency? The result of debarring BR from bidding to continue running railway services against the competition will, I suspect, be that the best staff will progressively leave BR and go through management buy-outs or be head-hunted by private companies. They will leave and the expertise in running rail services that resides in those people will be lost to BR.
The rump of British Rail will be left with a lower quality of leadership, management and perhaps even a lesser quality of engineering expertise. Yet the rump of British Rail will be expected to step in and save the railways when the franchise-winning private sector companies fail. British Rail will be expected to retain the expertise to save the Secretary of State's face if and when there is a private sector franchise failure. That is a possibility which the right hon. Gentleman must face.
I meet regularly senior railway managers in my constituency. I assure the Secretary of State that there is no great enthusiasm for management and employee buy-outs. If it must happen, it will happen, but it will happen with a heavy heart because the people who have built up and managed the railway services, with their headquarters in York, want to carry on running them. If they have no other option, they will take the plunge, but they feel loyal to their present company. Why should that loyalty be chucked aside? Why should the staff and the team not continue to run the railway that they have built up into the excellent east coast main line?
On the international front, the Secretary of State said that there was nothing in practice to stop SNCF or the 802 Belgian or German railways from bidding for a British railway franchise. Perhaps when local government refuse services were privatised people did not expect French companies to come in and scoop up the business. But they did, and while the Secretary of State says that he does not expect public sector railway companies from other EC states to come in and scoop up franchises, he acknowledges that that could happen because they have the right to do so.
Where is the sense in allowing some less efficient European public sector railway operators to bid for franchises when highly efficient British Rail managers who have built up showpiece services are denied that opportunity? Indeed, if what is proposed is approved, I would expect it to be challenged in the courts under the rules of the single European market. I hope that judgment would go in favour of creating a real single market with a level playing field in which British Rail could compete against the competition on equal terms.
On that basis, if British Rail could provide a better deal for the travelling public it would win, and if it provided a poorer deal, it would lose. That is provided for in the Bill, so it is a right that should go to British public sector railway companies in the same way as it will be going to foreign public sector railway companies.
The position in Sweden bears examination because it is the only other country that has done what the British Government are proposing, namely, splitting the operation of track and infrastructure from the operation of trains. Track and infrastructure in Sweden remain in public hands, as is proposed for Britain under Railtrack, with independent operators bidding to run services. Nine out of 10 franchises have gone to Swedish state railways, but with cost savings to the public purse of about 30 per cent.
The Government have said that the whole point of privatisation is to inject competition so that there is no monopoly—one set of rail managers will have to bid against another. Whoever puts together the best deal, in terms of quality and the cost to the travelling public, will get the work. That is all we are arguing for. Let us forget the rhetoric about trying to leave British Rail unchanged. We may have differing opinions on that, but we recognise that the Bill will go through. For goodness sake, let us give the BR managers who have built the east coast main line and competitive regional services such as Regional Railways NorthEast the opportunity to carry on doing the job that they have been doing.
§ Mr. DykesI shall be brief, partly because I was not a member of the Standing Committee—a fact that I know will be greeted with enthusiasm in Scotland. Nevertheless, I have some important points to make.
My hon. Friend the Member for Ashford (Sir K. Speed) should be credited with our gratitude for making some helpful suggestions and with the skill with which he has tabled amendments which we enthusiastically support. I also congratulate him on the dignified and intelligent way in which he has handled the campaign in the media.
There has been a lot of interest in this subject, in part due to both a sentimental and an objective feeling about our late lamented colleague, Robert Adley, who knew so much about the railways. He was both a lover of the railways and a great expert in the nitty-gritty of the railways. The Government would be right to think meticulously about the importance of making concessions, 803 partly for this reason. It is not enough on its own, however, despite the eminence and skill of our former colleague, who was widely respected inside and outside the House.
The Select Committee recommendations which our late lamented colleague produced with others amounted to a masterly series of suggestions for the Department of Transport. I am sorry if I sound naive—I probably always do—but it is quite wrong that Governments should always feel obliged to regard Select Committees as pestilential nuisances to be resisted at all costs. To think in that way is absurd and immature.
My right hon. Friend the Secretary of State has often been credited not only with being courteous to the House but with other qualities. We sympathise with him, because we suspect that he is taking this legislation through with limited enthusiasm—particularly for the part of the Bill that excludes British Rail. I and many others fear that we are still living with the tail end of the Thatcherite Centre for Policy Studies era, which has given us so many of these bizarre ideas.
However, in my Adjournment debate on 14 May I urged on the Government second thoughts about privatisation and deregulation—I was not referring to a bonfire of controls either. My fears in this respect were allayed by the excellent response that I received from my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh); who replied to the debate on behalf of the DTI by saying that the Government were not run by the Centre for Policy Studies. I was so moved by that truthful admission that I immediately realised that the Secretary of State for Transport was the ideal man to accept intelligent amendments to the legislation, including our amendment No. 57.
My right hon. Friend is entitled to be irritated, as we are, by the fact that the lead amendment in this group takes the form of an Opposition new clause. I hope, however, that that will not rule out intelligent consideration of these matters and that he will be persuaded seriously to consider accepting amendment No. 57. I believe that my hon. Friend the Member for Ashford has not gone far enough with his appealing arguments that try to meet some of the Government's objections to British Rail being given an equal role in bidding for franchises.
I must declare a general interest at this point, although it is wholly different from that declared by the hon. Member for York (Mr. Bayley). I am a founder shareholder of a City financial and communications company which, over the years, has been involved in most of the privatisations, together with other City institutions, the Treasury and Departments of State. Although this country has effected more privatisations than any other, I believe that enough can be enough. There is no shame for a Government in saying that we have come to the end of the privatisation period and that they will think twice before making any more such proposals.
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These days I am only a passive shareholder in the company—I have no executive role in it—although my wife is an executive employee. The company may be involved in giving advice to the Treasury, the Government and the Department of Transport on this proposal. It is not a privatisation in the conventional sense, and for that we are grateful. It aims to bring in franchising and to grant certain companies the franchises in question. That being 804 so, I find it illogical and offensive that British Rail should be excluded. The illogicality of the situation has emerged in our debate, and I believe that BR must be reincluded.
Perhaps we could go for a compromise mechanism. My hon. Friend the Member for Ashford mentioned the problem of the motivation of BR management and employees if they are left in charge of some lines, areas or routes. British Rail would not necessarily bid on the same basis as management/employee buy-outs, and such employee buy-outs too must also be considered, and as private applicants. We would welcome them. There is general agreement about that. British Rail, however, should be allowed to be a bidder on the same basis as everyone else, bearing in mind the tremendous improvements that it has made in its operations and management, despite having been underfunded for years by a malevolent and mean Treasury. [Interruption.] I have said that often enough in the past; it is hardly a new utterance. If British Rail were permitted to bid as part of a segmented approach—its regions or local departments, as representing BR, might be entitled to bid—that might be one way around the difficulty.
In a recent article in "The House Magazine" I mentioned the late lamented Member for Christchurch, and what I had to say bears repetition. I said that Robert Adley and his Committee colleagues
had already begun in the form of sensible advice to the Government on BR legislation. How nice it would be if just for once a Government could be seen to be really listening to the sagacious counsel that can come from select committees, instead of always resisting them".Members of the Select Committee and Opposition Members, if they were all obliged, however reluctantly, to accept this legislation, as amended in Committee and on Report, would probably agree that the single most important area in which the Government's mind had to be changed was this one: the exclusion of British Rail. I hope that my right hon. Friend can bring himself to reverse that tonight, perhaps by allowing localised components of British Rail, not British Rail as a whole, to bid. If he can, he will generate enormous gratitude on both sides of the House. He will not lose face; this is the new era of moderate conservatism, and a change of mind would fit in well with the return to Cabinet government and a listening Government. I hope that he will meet some of the legitimate objections that have been expressed by Conservative Members.
§ Mr. MacGregorI will reply briefly to some of the points, because I know that we have a great deal more to do tonight.
The hon. Member for West Bromwich, East (Mr. Snape)—who is not in the Chamber—accused me of basing my opinion of culture changes on some ideological material from Conservative central office. That is not the case. It is based on talking to a great many business men and people who have been through the process of changing from the nationalised industries to the disciplines of the marketplace in the private sector. Time after time, I have met representatives of companies and organizations—PowerGen, National Power, British Airways, BAA and Eastern Electricity, to name but a few, and many representatives from the transport world such as long-distance coach companies—and they have told me that they have seen the benefits very clearly. It is one of the crucial reasons why we believe that the structure that we are proposing for British Rail will secure better services for 805 passengers and freight customers. My hon. Friend the Member for Ashford (Sir K. Speed) and I have talked through these matters and he has a very good understanding of them. Like my hon. Friend, I am not taking an ideological approach, in a political sense. What I am seeking is a system that will provide better services and better opportunities for staff.
Taking my hon. Friend's example of the LondonTilbury-Southend line, he is right that the starting point will be that a shadow franchise will demonstrate the track record and financial results of British Rail's current operations. Many Opposition Members tend to think that the only way to improve the railways is to pour in huge amounts of taxpayers' money. The London-Tilbury-Southend line is a good example of where better management is already yielding better services. With the extra investment that has recently been agreed, it will be able to build on that. My hon. Friend is right: it is on the basis of an operating record under the shadow franchise that bids can be judged. That will be the yardstick.
Let us take a hypothetical example and assume that the franchising director concludes—this may well not be the case—that the bids that he has received from the private sector do not give good value for money compared with the operating performance of London-Tilbury-Southend. He may decide not to grant a contract to any franchisee. It may also be that the management have decided not to bid for a management-employee buy-out at that time, for a number of reasons, but would like to do so in the future when they think that they might be able to make a better bid. My hon. Friend is right in identifying as one of the difficulties the possible demotivation of the existing management if they felt that another bid from someone else could come through within three months. I think that we are in a dynamic situation and that there will be all sorts of different circumstances in the franchises as we gradually move them around the country.
There has been some misinterpretation in the press of my announcement yesterday. I want to make it clear, yet again, that, although we have announced all 25 potential franchises, we have also said that these will be gradually undertaken. This is a gradual process of franchising, as I made clear in the debate yesterday.
I certainly do not wish to set a condition meaning that, for some time in the future, management and employees in, say, the London-Tilbury-Southend line could not bid for a management-employee buy-out, which might well be what they really wanted to do. I do not think that a clause or amendment could be constructed to deal specifically with my hon. Friend's point, but I accept it nevertheless: motivation for existing management and the stability of the operation are both very important in circumstances such as those that he described.
My hon. Friend has raised the point in discussions with me and I have discussed it with my special adviser on franchising, who I hope will become the franchising director. He entirely agrees with my hon. Friend that this is an important point for him to take into account. I suggest that I give the franchising director guidance and instructions under clause 5, placing weight on the need to ensure motivation for existing management and the stability of the operation. I do not want to be stuck with the specific wording; obviously, we shall have to consider 806 the wording very carefully. I assure my hon. Friend, however, that we shall produce a second draft of the guidance and instructions before the end of our parliamentary debates.
Let me tell my hon. Friend the Member for Harrow, East (Mr. Dykes) that, in my experience, the findings of Select Committees are not always resisted. If I am convinced that someone else has had a good idea, I will certainly take it on board. If my hon. Friend looks at the many recommendations in the Select Committee report, he will see that about four fifths of them have been accepted by the Government or, indeed, were met before final publication of the report. Of course, we disagree with some of them: the crucial one relates to vertical integration. I cannot go into it now, but there are good arguments on both sides.
We have accepted many of the Select Committee's recommendations. Yesterday, for instance, I based my remarks about the remaining franchises on exactly the approach that it had recommended. In paragraph 419, the Committee expressed the following view on the issue that we are now debating:
There is a case for allowing BR, as well as individual groups of managers, to bid for franchises.I have explained why I cannot accept that case. However, the report continues:At the least we recommend that the level of subsidy required by BR to operate a particular service should be weighed against any other franchise bids received.We have made it clear that that will be—in the words of my hon. Friend—a yardstick.My hon. Friends the Members for Blackpool, South (Mr. Hawkins) and for Hampshire, North-West (Sir D. Mitchell) made telling and powerful speeches. I know that my hon. Friend the Member for Saffron Walden (Mr. Haselhurst), who was a member of the Select Committee and was very much involved in our discussions, wanted to be present. I am sure that he would have made similar points about, for example, unfair competition, the disproportionate resources that British Rail would have and the huge disincentive for other bidders.
§ Mr. DykesI would be grateful—as, I am sure, would others—if my right hon. Friend would answer the point about British Rail being allowed to bid, not as a single national organisation but on a localised structural basis.
§ Mr. MacGregorI have explained why I cannot accept bids from British Rail as a single national organisation and my hon. Friend the Member for Hampshire, North-West explained tellingly how difficult it would be to accept them on any other basis. I prefer to follow the points raised by my hon. Friend the Member for Ashford.
We are talking about encouraging existing employees —management and staff—to participate in the bidding process. We are encouraging them to take the opportunity to continue to do the job. Of course, the new franchisees, having been selected, would want to employ and give new opportunities to many employees and of course the provisions of the Transfer of Undertakings (Protection of Employment) Regulations 1981 will apply. We are encouraging existing management-employee buy-outs. We want British Rail to establish an operating record against which bids should be judged: that means putting it to the test. We want to improve passenger services through a new structure—and that is what the Opposition are trying to prevent.
§ Mr. WilsonIn the previous debate the Secretary of State gave something. We might disagree about how much he gave and whether it justified the withdrawal of the Tory new clause, but I do not quibble about what Tory Members did. In this case it is much more clear-cut because the Secretary of State has given nothing. Therefore, the position is clear for those who put their names to the new clause and, I should have thought, also for those who signed the report of the Select Committee, chaired by our late lamented colleague.
In answer to the point made by the hon. Member for Harrow, East (Mr. Dykes) about the irritation of voting on a new clause tabled by the Opposition rather than an amendment tabled by Tory Members, we would have been happy if the vote had been on a Government new clause, but to ensure that there was a debate and that the issue was voted on, we tabled a new clause which in substance, content and spirit is no different from amendments tabled by Tory Members.
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As to the point about other state railways being allowed to bid, the Secretary of State blustered over it but essentially could not deny it. He is legislating for circumstances in which the French state railway, the Belgian state railway and the Irish state railway will be able to operate services in Britain. The only European state railway which will not be able to tender for the services is the British state railway. I find it very odd that a Secretary of State in a United Kingdom Government should legislate in that way.
If the French state railway starts to run services into the heart of rural England, I am sure that the hon. Member for Harrow, East at least will join me in the hope that points such as Stafford and Southend will be included in the network. What an extraordinary thing for a British Government to legislate for. They cannot legislate against other state railways, but they are prepared to do so against their own, out of prejudice and spite.
We went to the heart of the debate when the hon. Member for Eltham (Mr. Bottomley) stood up in genuine puzzlement and said that he could not understand why it should be possible for private companies to bid or for management buy-outs to take place, yet British Rail is not to be allowed to bid as an entity. The classic exercise in prevarication from the Secretary of State, as he shuffled around for his notes to find out how that was to be explained, told us more than anything he said.
Eventually the right hon. Gentleman came up with two explanations: in summary, first, British Rail would be the lowest bidder and, secondly, the City would be deterred. Those are not convincing explanations. The Government want competition. Having gone through the exercise, if British Rail was the lowest bidder, would not that be a plus? Having regard to what the Government want to do, would not it be an advantage? British Rail would have to compete. It would have to prove itself the most competent and cheapest operator. The disciplines of competition would be imposed upon it and passengers would get the best possible service from among the bidders. What is wrong with that in the opinion of the Tory party, never mind the Opposition? Yet that option is to be closed, specifically because it would result in the terrible evil of British Rail winning by being the cheapest and most efficient.
808 The second reason was that the City would be deterred from investing in potential buy-outs because it would be constrained by the fact that there would be a cheaper bidder. In other words, the calculations of investors will not be based on the market or on competition, but on what they can get away with bidding for franchises in the absence of the most competitive alternative bidder. What a set of criteria on which to dispose of national assets.
As to the alibi on management buy-outs, every Opposition Member agrees that if privatisation is to go ahead there should be attempts at management buy-outs. There is very little enthusiasm for them, but in many places the second last thing that people who have given their lives to the service of the railway want to see is the legislation going ahead. The last thing they want is that people with no previous connection with the railway and no experience of it should walk past them to take over what they have built up and their jobs.
Inevitably, management buy-outs will be prepared and expressions of interest will be screwed out of managers in every area. The idea that there is a positive will for management buy-outs throughout the BR network is a fallacy. The Conservative party brief to its members told them to say that 30 management buy-outs bids were in course of preparation. They have had to retreat from that because it is untrue. The figure of 30 applies not to bids in preparation, for which the figure is zero, but to expressions of interest, which includes even that of Brian Scott in Great Western, who said specifically that he would not be interested unless there was vertical franchising. Having scraped together all the expressions of interest, the Conservative party misrepresented them as bids in course of preparation.
There are three essential reasons why the management buy-out argument fails. The first is out of a sense of duty which should be felt on the Tory side to people who have worked within the public sector industry. Why, in order to participate in the brave new future, should managers, perhaps with young families and many responsibilities, have to mortgage their homes and get into debt? Why cannot they continue to act through the public service provided by British Rail?
The second argument is that buy-outs are not for ever. Indeed, they can last for only a short time before being bought out again, so that we end up with straightforward privatisation. Many analogies have been drawn with the bus industry. I can quote a recent one in Scotland where Citylink bus company, the main arterial operator, which was the product of a management buy-out two and a half years ago for a bargain basement price, has been sold to a private operator to produce a monopoly. So in many cases management buy-outs do not last. They are bought out and become part of the private sector, with the result that many people who were involved originally and who gave their lives to the service are no longer involved. That is another argument against the management buy-out alibi.
Thirdly, management buy-outs would lead to fragmentation of railways. While privatisation is a daft policy, fragmentation is a dangerous and potentially destructive one. The Government's determination to break up an integrated network into dozens of companies, to separate track from operators and then to separate those who are operating on the track, is the truly destructive aspect of the legislation. It is not addressed through the so-called solution of management buy-outs.
809 If French and Belgian railways can bid, let us speak for Britain. British Rail should be allowed to bid because it is likely to be the lowest bidder and the most experienced and efficient operator. If anything in Tory philosophy runs counter to that, it will be expressed in the Division Lobby. Let us put Britain first and let us support the right of British Rail to bid. Let us prevent the fragmentation of the railways on the basis of political dogma, with services being run by people who have no experience or qualifications to do the job.
My hon. Friends and I, as well as some Tory Members, are fighting for the railways. If the legislation is passed and things go wrong, it is not to the Opposition alone that Tory Members will have to answer but to their constituents who, in overwhelming numbers, are opposed to and concerned about the destruction of British Rail for ideological reasons. Let the Government give us investment in the railways rather than ideology. That is the message from the country which should be listened to now and reflected in the Division Lobby.
§ question put,That the clause be read a Second time:—
§ The House divided:Ayes 290, Noes 309.
813| Division No. 281] | [7.8 pm |
| AYES | |
| Abbott, Ms Diane | Clwyd, Mrs Ann |
| Adams, Mrs Irene | Coffey, Ann |
| Ainger, Nick | Cohen, Harry |
| Ainsworth, Robert (Cov'try NE) | Connarty, Michael |
| Allen, Graham | Cook, Robin (Livingston) |
| Alton, David | Corbett, Robin |
| Anderson, Donald (Swansea E) | Corbyn, Jeremy |
| Anderson, Ms Janet (Ros'dale) | Cousins, Jim |
| Armstrong, Hilary | Cox, Tom |
| Ashton, Joe | Cryer, Bob |
| Austin-Walker, John | Cummings, John |
| Banks, Tony (Newham NW) | Cunliffe, Lawrence |
| Barnes, Harry | Cunningham, Jim (Covy SE) |
| Barron, Kevin | Cunningham, Rt Hon Dr John |
| Battle, John | Dafis, Cynog |
| Bayley, Hugh | Dalyell, Tam |
| Beckett, Rt Hon Margaret | Darling, Alistair |
| Beggs, Roy | Davidson, Ian |
| Beith, Rt Hon A. J. | Davies, Bryan (Oldham C'tral) |
| Bell, Stuart | Davies, Rt Hon Denzil (Llanelli) |
| Benn, Rt Hon Tony | Davies, Ron (Caerphilly) |
| Bennett, Andrew F. | Davis, Terry (B'ham, H'dge H'l) |
| Benton, Joe | Day, Stephen |
| Bermingham, Gerald | Denham, John |
| Berry, Dr. Roger | Dewar, Donald |
| Betts, Clive | Dixon, Don |
| Blair, Tony | Dobson, Frank |
| Boateng, Paul | Donohoe, Brian H. |
| Boyce, Jimmy | Dowd, Jim |
| Boyes, Roland | Dunnachie, Jimmy |
| Bradley, Keith | Dunwoody, Mrs Gwyneth |
| Bray, Dr Jeremy | Dykes, Hugh |
| Brown, Gordon (Dunfermline E) | Eagle, Ms Angela |
| Brown, N. (N'c'tle upon Tyne E) | Eastham, Ken |
| Bruce, Malcolm (Gordon) | Enright, Derek |
| Burden, Richard | Etherington, Bill |
| Byers, Stephen | Evans, John (St Helens N) |
| Callaghan, Jim | Ewing, Mrs Margaret |
| Campbell, Mrs Anne (C'bridge) | Fatchett, Derek |
| Campbell, Menzies (Fife NE) | Field, Frank (Birkenhead) |
| Campbell, Ronnie (Blyth V) | Fisher, Mark |
| Campbell-Savours, D. N. | Flynn, Paul |
| Canavan, Dennis | Forsythe, Clifford (Antrim S) |
| Cann, Jamie | Foster, Rt Hon Derek |
| Chisholm, Malcolm | Foster, Don (Bath) |
| Clapham, Michael | Foulkes, George |
| Clark, Dr David (South Shields) | Fraser, John |
| Clarke, Eric (Midlothian) | Fyfe, Maria |
| Clarke, Tom (Monklands W) | Galbraith, Sam |
| Clelland, David | Galloway, George |
| Gapes, Mike | Mallon, Seamus |
| Garrett, John | Mandelson, Peter |
| George, Bruce | Marek, Dr John |
| Gerrard, Neil | Marshall, David (Shettleston) |
| Gilbert, Rt Hon Dr John | Marshall, Jim (Leicester, S) |
| Godman, Dr Norman A. | Martlew, Eric |
| Godsiff, Roger | Maxton, John |
| Golding, Mrs Llin | Meacher, Michael |
| Gordon, Mildred | Meale, Alan |
| Gould, Bryan | Michael, Alun |
| Graham, Thomas | Michie, Bill (Sheffield Heeley) |
| Grant, Bernie (Tottenham) | Michie, Mrs Ray (Argyll Bute) |
| Griffiths, Nigel (Edinburgh S) | Milburn, Alan |
| Griffiths, Win (Bridgend) | Miller, Andrew |
| Grocott, Bruce | Mitchell, Austin (Gf Grimsby) |
| Gunnell, John | Molyneaux, Rt Hon James |
| Hain, Peter | Moonie, Dr Lewis |
| Hall, Mike | Morgan, Rhodri |
| Hanson, David | Morley, Elliot |
| Hardy, Peter | Morris, Rt Hon A. (Wy'nshawe) |
| Harman, Ms Harriet | Morris, Estelle (B'ham Yardley) |
| Harvey, Nick | Morris, Rt Hon J. (Aberavon) |
| Hattersley, Rt Hon Roy | Mowlam, Marjorie |
| Henderson, Doug | Mudie, George |
| Heppell, John | Murphy, Paul |
| Hill, Keith (Streatham) | Oakes, Rt Hon Gordon |
| Hinchliffe, David | O'Brien, Michael (N W'kshire) |
| Hoey, Kate | O'Brien, William (Normanton) |
| Hogg, Norman (Cumbernauld) | O'Hara, Edward |
| Hood, Jimmy | Olner, William |
| Hoon, Geoffrey | O'Neill, Martin |
| Howarth, George (Knowsley N) | Orme, Rt Hon Stanley |
| Howells, Dr. Kim (Pontypridd) | Parry, Robert |
| Hoyle, Doug | Patchett, Terry |
| Hughes, Kevin (Doncaster N) | Pendry, Tom |
| Hughes, Robert (Aberdeen N) | Pickthall, Colin |
| Hughes, Roy (Newport E) | Pike, Peter L. |
| Hughes, Simon (Southwark) | Pope, Greg |
| Hutton, John | Powell, Ray (Ogmore) |
| Illsley, Eric | Prentice, Ms Bridget (Lew'm E) |
| Ingram, Adam | Prentice, Gordon (Pendle) |
| Jackson, Glenda (H'stead) | Prescott, John |
| Jackson, Helen (Shef'ld, H) | Primarolo, Dawn |
| Jamieson, David | Purchase, Ken |
| Janner, Greville | Quin, Ms Joyce |
| Johnston, Sir Russell | Radice, Giles |
| Jones, Barry (Alyn and D'side) | Randall, Stuart |
| Jones, Ieuan Wyn (Ynys Môn) | Raynsford, Nick |
| Jones, Lynne (B'ham S O) | Redmond, Martin |
| Jones, Nigel (Cheltenham) | Reid, Dr John |
| Jowell, Tessa | Rendel, David |
| Kaufman, Rt Hon Gerald | Richardson, Jo |
| Keen, Alan | Robertson, George (Hamilton) |
| Kennedy, Charles (Ross, C&S) | Robinson, Geoffrey (Co'try NW) |
| Kennedy, Jane (Lpool Brdgn) | Robinson, Peter (Belfast E) |
| Khabra, Piara S. | Roche, Mrs. Barbara |
| Kinnock, Rt Hon Neil (Islwyn) | Rogers, Allan |
| Kirkwood, Archy | Rooker, Jeff |
| Leighton, Ron | Rooney, Terry |
| Lestor, Joan (Eccles) | Ross, Ernie (Dundee W) |
| Litherland, Robert | Ross, William (E Londonderry) |
| Livingstone, Ken | Rowlands, Ted |
| Lloyd, Tony (Stretford) | Ruddock, Joan |
| Llwyd, Elfyn | Salmond, Alex |
| Loyden, Eddie | Sedgemore, Brian |
| Lynne, Ms Liz | Sheerman, Barry |
| McAllion, John | Sheldon, Rt Hon Robert |
| McAvoy, Thomas | Shore, Rt Hon Peter |
| McCartney, Ian | Short, Clare |
| Macdonald, Calum | Simpson, Alan |
| McFall, John | Skinner, Dennis |
| McGrady, Eddie | Smith, Andrew (Oxford E) |
| McKelvey, William | Smith, C. (Isl'ton S & F'sbury) |
| Mackinlay, Andrew | Smith, Rt Hon John (M'kl'ds E) |
| McLeish, Henry | Smith, Llew (Blaenau Gwent) |
| Maclennan, Robert | Smyth, Rev Martin (Belfast S) |
| McMaster, Gordon | Snape, Peter |
| McNamara, Kevin | Soley, Clive |
| Madden, Max | Spearing, Nigel |
| Mahon, Alice | Spellar, John |
| Steel, Rt Hon Sir David | Wareing, Robert N |
| Steinberg, Gerry | Watson, Mike |
| Stevenson, George | Wicks, Malcolm |
| Stott, Roger | Wigley, Dafydd |
| Strang, Dr. Gavin | Williams, Rt Hon Alan (Sw'n W) |
| Straw, Jack | Williams, Alan W (Carmarthen) |
| Taylor, Mrs Ann (Dewsbury) | Wilson, Brian |
| Taylor, Rt Hon John D. (Strgfd) | Winnick, David |
| Taylor, Matthew (Truro) | Wise, Audrey |
| Thompson, Jack (Wansbeck) | Worthington, Tony |
| Tipping, Paddy | Wray, Jimmy |
| Turner, Dennis | Wright, Dr Tony |
| Tyler, Paul | Young, David (Bolton SE) |
| Walker, Rt Hon Sir Harold | |
| Wallace, James | Tellers for the Ayes: |
| Walley, Joan | Mr. Peter Kilfoyle and Mr. Jon Owen Jones. |
| Wardell, Gareth (Gower) |
| NOES | |
| Ainsworth, Peter (East Surrey) | Coombs, Simon (Swindon) |
| Aitken, Jonathan | Cope, Rt Hon Sir John |
| Alexander, Richard | Cormack, Patrick |
| Alison, Rt Hon Michael (Selby) | Couchman, James |
| Amess, David | Cran, James |
| Ancram, Michael | Currie, Mrs Edwina (S D'by'ire) |
| Arbuthnot, James | Curry, David (Skipton & Ripon) |
| Arnold, Jacques (Gravesham) | Davies, Quentin (Stamford) |
| Arnold, Sir Thomas (Hazel Grv) | Davis, David (Boothferry) |
| Ashby, David | Deva, Nirj Joseph |
| Aspinwall, Jack | Devlin, Tim |
| Atkins, Robert | Dickens, Geoffrey |
| Atkinson, David (Bour'mouth E) | Dicks, Terry |
| Atkinson, Peter (Hexham) | Dorrell, Stephen |
| Baker, Rt Hon K. (Mole Valley) | Douglas-Hamilton, Lord James |
| Baker, Nicholas (Dorset North) | Dover, Den |
| Baldry, Tony | Duncan, Alan |
| Banks, Matthew (Southport) | Duncan-Smith, Iain |
| Banks, Robert (Harrogate) | Dunn, Bob |
| Bates, Michael | Durant, Sir Anthony |
| Batiste, Spencer | Eggar, Tim |
| Bellingham, Henry | Elletson, Harold |
| Bendall, Vivian | Emery, Rt Hon Sir Peter |
| Beresford, Sir Paul | Evans, David (Welwyn Hatfield) |
| Biffen, Rt Hon John | Evans, Jonathan (Brecon) |
| Blackburn, Dr John G. | Evans, Roger (Monmouth) |
| Body, Sir Richard | Evennett, David |
| Booth, Hartley | Faber, David |
| Boswell, Tim | Fabricant, Michael |
| Bottomley, Peter (Eltham) | Fenner, Dame Peggy |
| Bottomley, Rt Hon Virginia | Field, Barry (Isle of Wight) |
| Bowden, Andrew | Fishburn, Dudley |
| Bowis, John | Forman, Nigel |
| Boyson, Rt Hon Sir Rhodes | Forsyth, Michael (Stirling) |
| Brandreth, Gyles | Forth, Eric |
| Brazier, Julian | Fowler, Rt Hon Sir Norman |
| Bright, Graham | Fox, Dr Liam (Woodspring) |
| Brooke, Rt Hon Peter | Fox, Sir Marcus (Shipley) |
| Brown, M. (Brigg & Cl'thorpes) | Freeman, Roger |
| Bruce, Ian (S Dorset) | French, Douglas |
| Budgen, Nicholas | Fry, Peter |
| Burns, Simon | Gale, Roger |
| Burt, Alistair | Gallie, Phil |
| Butcher, John | Gardiner, Sir George |
| Butler, Peter | Garel-Jones, Rt Hon Tristan |
| Butterfill, John | Garnier, Edward |
| Carlisle, John (Luton North) | Gill, Christopher |
| Carlisle, Kenneth (Lincoln) | Gillan, Cheryl |
| Carrington, Matthew | Goodlad, Rt Hon Alastair |
| Carttiss, Michael | Goodson-Wickes, Dr Charles |
| Cash, William | Gorman, Mrs Teresa |
| Channon, Rt Hon Paul | Gorst, John |
| Churchill, Mr | Grant, Sir Anthony (Cambs SW) |
| Clappison, James | Greenway, Harry (Ealing N) |
| Clark, Dr Michael (Rochford) | Greenway, John (Ryedale) |
| Clarke, Rt Hon Kenneth (Ruclif) | Griffiths, Peter (Portsmouth, N) |
| Clifton-Brown, Geoffrey | Grylls, Sir Michael |
| Coe, Sebastian | Hague, William |
| Congdon, David | Hamilton, Rt Hon Archie (Epsom) |
| Conway, Derek | Hamilton, Neil (Tatton) |
| Coombs, Anthony (Wyre For'st) | Hampson, Dr Keith |
| Hanley, Jeremy | Mills, Iain |
| Hannam, Sir John | Mitchell, Andrew (Gedling) |
| Hargreaves, Andrew | Mitchell, Sir David (Hants NW) |
| Harris, David | Moate, Sir Roger |
| Haselhurst, Alan | Monro, Sir Hector |
| Hawkins, Nick | Montgomery, Sir Fergus |
| Hawksley, Warren | Moss, Malcolm |
| Hayes, Jerry | Needham, Richard |
| Heald, Oliver | Nelson, Anthony |
| Heath, Rt Hon Sir Edward | Neubert, Sir Michael |
| Heathcoat-Amory, David | Newton, Rt Hon Tony |
| Hendry, Charles. | Nicholls, Patrick |
| Hicks, Robert | Nicholson, David (Taunton) |
| Higgins, Rt Hon Sir Terence L. | Nicholson, Emma (Devon West) |
| Hill, James (Southampton Test) | Norris, Steve |
| Hogg, Rt Hon Douglas (G'tham) | Onslow, Rt Hon Sir Cranley |
| Horam, John | Oppenheim, Phillip |
| Hordern, Rt Hon Sir Peter | Ottaway, Richard |
| Howard, Rt Hon Michael | Page, Richard |
| Howarth, Alan (Strat'rd-on-A) | Paice, James |
| Howell, Rt Hon David (G'dford) | Patnick, Irvine |
| Howell, Ralph (North Norfolk) | Patten, Rt Hon John |
| Hughes Robert G. (Harrow W) | Pattie, Rt Hon Sir Geoffrey |
| Hunt, Rt Hon David (Wirral W) | Pawsey, James |
| Hunt, Sir John (Ravensbourne) | Peacock, Mrs Elizabeth |
| Hunter, Andrew | Pickles, Eric |
| Hurd, Rt Hon Douglas | Porter, Barry (Wirral S) |
| Jack, Michael | Porter, David (Waveney) |
| Jackson, Robert (Wantage) | Portillo, Rt Hon Michael |
| Jenkin, Bernard | Powell, William (Corby) |
| Jessel, Toby | Rathbone, Tim |
| Johnson Smith, Sir Geoffrey | Redwood, John |
| Jones, Gwilym (Cardiff N) | Renton, Rt Hon Tim |
| Jones, Robert B. (W Hertfdshr) | Richards, Rod |
| Jopling, Rt Hon Michael | Riddick, Graham |
| Kellett-Bowman, Dame Elaine | Rifkind, Rt Hon. Malcolm |
| Key, Robert | Robathan, Andrew |
| Kilfedder, Sir James | Roberts, Rt Hon Sir Wyn |
| King, Rt Hon Tom | Robertson, Raymond (Ab'd'n S) |
| Knapman, Roger | Robinson, Mark (Somerton) |
| Knight, Mrs Angela (Erewash) | Roe, Mrs Marion (Broxbourne) |
| Knight, Greg (Derby N) | Rowe, Andrew (Mid Kent) |
| Knight, Dame Jill (Bir'm E'st'n) | Rumbold, Rt Hon Dame Angela |
| Knox, David | Ryder, Rt Hon Richard |
| Kynoch, George (Kincardine) | Sackville, Tom |
| Lait, Mrs Jacqui | Sainsbury, Rt Hon Tim |
| Lamont, Rt Hon Norman | Scott, Rt Hon Nicholas |
| Lang, Rt Hon Ian | Shaw, David (Dover) |
| Lawrence, Sir Ivan | Shaw, Sir Giles (Pudsey) |
| Legg, Barry | Shephard, Rt Hon Gillian |
| Leigh, Edward | Shersby, Michael |
| Lennox-Boyd, Mark | Skeet, Sir Trevor |
| Lester, Jim (Broxtowe) | Smith, Sir Dudley (Warwick) |
| Lidington, David | Smith, Tim (Beaconsfield) |
| Lightbown, David | Soames, Nicholas |
| Lilley, Rt Hon Peter | Speed, Sir Keith |
| Lloyd, Peter (Fareham) | Spencer, Sir Derek |
| Lord, Michael | Spicer, Sir James (W Dorset) |
| Luff, Peter | Spicer, Michael (S Worcs) |
| Lyell, Rt Hon Sir Nicholas | Spink, Dr Robert |
| MacGregor, Rt Hon John | Spring, Richard |
| MacKay, Andrew | 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 |
| Malone, Gerald | Stewart, Allan |
| Mans, Keith | Streeter, Gary |
| Marland, Paul | Sumberg, David |
| Marlow, Tony | Sweeney, Walter |
| Marshall, John (Hendon S) | Sykes, John |
| Marshall, Sir Michael (Arundel) | Tapsell, Sir Peter |
| Martin, David (Portsmouth S) | Taylor, Ian (Esher) |
| Mates, Michael | Taylor, John M. (Solihull) |
| Mawhinney, Dr Brian | Taylor, Sir Teddy (Southend, E) |
| Mayhew, Rt Hon Sir Patrick | Temple-Morris, Peter |
| Mellor, Rt Hon David | Thomason, Roy |
| Merchant, Piers | Thompson, Sir Donald (C'er V) |
| Milligan, Stephen | Thompson, Patrick (Norwich N) |
| Thornton, Sir Malcolm | Wells, Bowen |
| Thurnham, Peter | Wheeler, Rt Hon Sir John |
| Townend, John (Bridlington) | Whitney, Ray |
| Townsend, Cyril D. (Bexl'yh'th) | Whittingdale, John |
| Tracey, Richard | Widdecombe, Ann |
| Tredinnick, David | Wilkinson, John |
| Trend, Michael | Willetts, David |
| Trotter, Neville | Wolfson, Mark |
| Twinn, Dr Ian | Wood, Timothy |
| Vaughan, Sir Gerard | Yeo, Tim |
| Waldegrave, Rt Hon William | Young, Sir George (Acton) |
| Walker, Bill (N Tayside) | |
| Waller, Gary | Tellers for the Noes: |
| Ward, John | Mr. Sydney Chapman am Mr. Timothy Kirkhope. |
| Wardle, Charles (Bexhill) | |
| Watts, John |
§ Question accordingly negatived.
§ Sir John StanleyOn a point of order, Mr. Deputy Speaker. Yesterday, the House had an extended debate on fares in relation to amendment No. 237. Winding up, my hon. Friend the Minister said:
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 our right hon. and hon. Friends tomorrow with appropriate assurances."—[Official Report, 24 May 1993; Vol. 225, c. 678.]I should be grateful if you, Mr. Deputy Speaker, would confirm that it will be open to my hon. Friend the Minister of State, in the context of the debate on amendment No. 109, to fulfil the assurance that he gave yesterday and to respond with the outcome of the considerations that he and my right hon. Friend the Secretary of State gave to amendment No. 237.
§ Mr. Deputy Speaker (Mr. Michael Morris)The Minister can certainly address the broad issues involved.