GENERAL DUTIES OF THE FRANCHISING DIRECTOR

HC Deb 01 November 1993 vol 231 cc79-113

Lords amendment: No. 4, in page 6, line 4, after ("to") insert—("(i)")

Mr. Freeman

I beg to move, That this House doth agree with the Lords in the said amendment.

Madam Deputy Speaker

With this we may take Lords amendments Nos. 5, 32, 34 to 36, 38 to 43, 124 to 130 and 133.

Mr. Freeman

Lords amendment No. 4 is grouped with a number of other amendments for the convenience of the debate. The main purpose of—[Interruption.]

Madam Deputy Speaker

Order. This is not a gossiping session. If hon. Members wish to remain, they should stay silent. If they wish to go, they should do so quietly.

Mr. Freeman

The main purpose of the group of amendments is to deal with the implications of our announcement on the future for railway stations. There are a number of technical amendments on which I shall be happy to respond if there are any especial questions. I am sure that it would help the House if I explain why we need amendments to the Bill to deal with our policy on the operation of stations.

Through franchise arrangements, we propose to allow franchisees, also, to operate—that is to say manage—stations. The scope of that operation could include light maintenance depots, for example, where the railway trains are maintained on a weekly basis. It is clear to us that the Bill needs to be amended to make it clear that a franchisee will be able to operate—possibly under a lease arrangement as we currently intend—the stations along the line of the route or routes that fall within the franchise area.

For some larger stations, of which there probably number no more than two dozen, separate arrangements may be appropriate, but for most stations—there are 2,500 in the British Rail network—the majority will be run by and managed for a period conterminous with the franchise arrangement by the franchisee; the train operating company. Those companies will be responsible not as freeholders of the building, but for car parking and ticket arrangements, for facilities available for passengers and for train, information systems on the stations. That is common sense.

There are some large stations—a number outside the metropolis—where we want to encourage the private sector to be involved in the development of stations, especially in the air rights above stations. Where it might be sensible to bring in separate private sector managers of the commercial facilities such as the shops—

Mrs. Dunwoody

rose—

Mr. Freeman

The hon. Lady has obviously not been to Liverpool Street station or to Victoria or to Waterloo and seen the benefits of the development.

Mrs. Dunwoody

Is not the Minister making it clear that, if no money can be made by running a railway, there can always be development of the air space above the railway which can be leased out to any property developer who wants to build something of the enormous architectural brilliance of Alban Gate?

Mr. Freeman

I am surprised that the hon. Lady doubts that there are opportunities from the development of station premises that would benefit Railtrack, and therefore the rail infrastructure. That seems perfectly straightforward to me.

7.30 pm

Dr. Marek

I accept that some railway stations in metropolitan areas and in the capital could have such developments. What will the Lords amendments do for my constituents who use Wrexham station? The station is rotten and water is seeping through it. It is dank and it has not been repaired for years. Rooms in it have been available for letting for years and years, but there have been no takers. How will the amendments change that?

Mr. Freeman

Certainly the hon. Gentleman's station does not seem to be a good opportunity for major private sector development. I am sure that the hon. Gentleman summarises the position accurately. However, Railtrack will have continuing responsibilities for the maintenance of the infrastructure and, together with the train operating companies—the franchisees—will ensure that facilities are modernised to attract passengers on to the railway. I do not know the hon. Gentleman's station, although I am sure that I shall visit it during one of my travels in his part of the country.

The announcement by my right hon. Friend the Secretary of State for Transport about new opportunities for railway stations made it clear that the freeholds would be retained by Railtrack and that the majority of stations would be leased to the franchised train operators. Railtrack will develop options for the larger stations, including sales on long leases of up to 125 years. There will be safeguards, which are replicated in the Lords amendments, for train operators and passengers through station access. The hon. Member for York (Mr. Bayley) has raised the point on a number of occasions. We must ensure that train operators have proper access to all stations through which they run services, and that is provided for in the amendments.

I shall be happy to respond to any specific points. I hope that I have been helpful to the House in explaining the main policy purpose behind the amendments. I commend them to the House.

Mr. Wilson

The main policy purpose of the Lords amendments appears to be to flog the largest stations at which the greatest amount of public investment has already occurred. That is par for the course. I am sure that all hon. Members were interested in the Minister's less than forthright disavowal of the £2 billion figure—a point that is also relevant to the amendments. It was at least an advance on yesterday's performance by the Secretary of State. He purported to believe that the increase in the poublic service obligation grant to British Rail envisaged in his Department's documents referred to one specific line that would be franchised. On the basis that it could not cost an extra £1.15 billion to franchise a single line, he regarded the whole thing as nonsense. We have obviously moved on. Even if the Secretary of State did not recognise the documents, the Minister recognised them, and the £2 billion figure is all too clear.

The message that goes out from the Minister—we do not yet know how the Government will fiddle around trying to avoid this rather embarrassing figure—is that there will be a massive increase in grant not for the development of railways and not for the development of stations, which we are discussing now, but purely for the restructuring of the railways to accommodate privatisation. That is the message that has come from the Minister this evening.

I point out to Conservative Members who are interested in these matters that the Department of Transport documents, at the highest possible level, envisage a £1.15 billion increase in the PSO grant to the railways to pay for privatisation in the coming year. The former Chancellor of the Exchequer, the right hon. Member for Kingston upon Thames (Mr. Lamont), when he announced the imposition of VAT on domestic fuel in the same year, 1994–95, said that the sum that he envisaged obtaining in that year from that imposition was £950 million.

That is a measure of the folly of the Government's proposals. They will spend an extra £1.15 billion on privatisating the railways, which is in excess of the amount that they will obtain from the most unpopular tax proposed to Parliament since the poll tax. It is phenomenal testimony to dogma that in the present economic climate the Government seriously propose, as testified in the documents and as tacitly confirmed by the Minister tonight, to increase the taxpayers' subsidy to pay for privatisation by a sum greater than that they expect to collect from VAT on domestic fuel in 1994–95. That is absolutely astonishing and the equation will be noted with great interest outside the House even if Conservative Members choose to shut their ears to it.

We are dealing here with the powers of the franchising director. The Minister has chosen to concentrate rather narrowly on the business of stations. The truth is that the franchising director is the buffer who is being put between the Government and the railway system. He will be the fall guy. In his interview yesterday, the Secretary of State said that various matters would be for the franchising director. Of course they will not. The franchising director is the invention of Government and he will be their creature. The franchising director will follow precisely the political guidelines laid down by the Government.

We see the truth of the matter in the issue of stations. The franchising director is not an independent creature who can franchise our stations. He has already been told that the 13 biggest stations in the country will be disposed of privately on long leases. They will be taken out of the general area of railway franchises. It is no surprise to anyone who knows the people with whom we are dealing and their philosophy that these are not the 13 poorest and most undeveloped stations. They are not the regional railway stations which have been starved of investment. They are the most prosperous stations into which taxpayers' money has already been poured and, of course, they are the stations in which the private sector is already fully represented. They are the places where the work has already been done and on which the money has already been spent, so they are in a fit condition to be handed over to private operators who can skim profits off them.

I do not believe that the private operators whom the Minister and the Secretary of State have in mind will be interested in the revenue that comes from boring things, such as trains, using the stations. There is limited revenue from that. I do not believe that they will be interested in a combination of trains and the existing retail outlets which contribute to the use of stations by passengers. Of course they are not interested in that. They will be interested in air space, which will include everything that can be covered over—everything that can be used for commercial development, for retail development and for office development. If the Tories have their way, some areas will be turned into shopping malls.

I was interested in an article in the Evening Standard last week, which I am sure that the Minister has read. It was written by a former colleague of Conservative Members, Mr. Conal Gregory, who had some interesting thoughts on these matters. Mr. Conal Gregory should be an object lesson to Conservative Members. He used to represent the railway constituency of York. He no longer represents that railway constituency and I have no doubt that one of the reasons for his departure from the House was the Government's policy towards the railways.

What did Mr. Conal Gregory, who was heavily billed as a Tory railway and tourism expert, suggest about our great London stations? He suggested that the trains should be moved a mile up the tracks and that whole areas should be covered over and used as shopping malls. That is a bright suggestion and one that has been noted. I saw letters from consumer organisations which said that that was exactly what they had feared from rail privatisation and from the privatisation of stations. The great stations of King's Cross and Paddington, the two that were mentioned specifically, will not be run by people who are committed to the railway industry. They will not be run by people whose primary interest is transport. The great master plan of Ministers is that they will be leased for a hundred-odd years to commercial organisations whose only interest will be in maximising the profit from them.

There will be constant tension between the commercial interests of those operators and the transport interests of the train operators. In those circumstances, I would not bet on the transport interests prevailing for long. Anywhere else that that has been tried—notably the United States—the trains were pushed out, exactly as Mr. Conal Gregory, lately of the Conservative Benches, told us would happen.

There is a parallel with the bus industry. Conservative Members are like parrots when they stand up and tell us about the great successes of privatisation. Have any of them studied what has happened to the bus industry since it was privatised?

The Minister for Transport in London (Mr. Steve Norris)

Yes.

Mr. Wilson

The Minister is welcome to tell us how many town centres he has visited where the first thing that the privatised operator did was sell off the bus station in the town centre for commercial gain. An awful lot more money can be made by selling off town centre property than by using it as a bus station. We have an exact parallel between that and what could happen with our great railway stations for which that fate is predicted.

I shall make a point that is peculiar to Glasgow, as I had discussions last week with the chairman of the Strathclyde passenger transport executive. As a result of public investment, Central station is now magnificent. As the Minister will be aware, every penny that went into the low-level station, which is part of the Argyll line, was paid for by local taxpayers through the Strathclyde passenger transport executive. One hundred per cent. of the trains that use that station are subsidised by it. The Strathclyde passenger transport executive subsidises 65 per cent. of the trains that use the high-level station.

Is the Minister seriously telling us that the Strathclyde passenger transport executive is now to subsidise a private train operator to pay charges to a private station operator for the privilege of using assets and facilities, which, on behalf of the local taxpayer, it has already financed?

Why do the Government have such contempt for taxpayers that they are prepared to see them conned and diddled in every way possible, paying again and again for the assets that they have financed in the first place?

Throughout the country there is an enormous range of qualities in station facilities. By and large, where InterCity has been in charge—there is money in the InterCity system —the public sector stations are good and have excellent facilities. The Minister may dispute that; he may despise anything that the public sector does, but the stations that the Government seek to franchise are good.

One example that was pointed out to me was the comparison between York and Chester. Both cities are the same size, but are on opposite sides of the country. York has an excellent station, which was financed through InterCity; Chester has a pathetic, rundown station because there is no money in the regional railways system. That is the problem. Until now, the railways were given £850 million of subsidy, not £2 billion. That is the contrast.

Where will the money come from? Will it come through Railtrack, through the franchising director or from the franchisees? Is there any guarantee that the stations that have been neglected until now will not continue to decline because of that fundamental lack of money in the system, as proposed by the Secretary of State?

Mrs. Dunwoody

I should like to draw my hon. Friend's attention to the fact that we have an even worse position in Crewe, where, for example, a small fortune is being spent by the taxpayer on maintaining the railway bridge, which is the only direct route used by all emergency vehicles between one half of my constituency and the other.

I am quite clear that no private developer will be prepared to spend the enormous amount of money that is required on that infrastructure. I am afraid that my constituents can look forward to a bleak future.

7.45 pm

Mr. Wilson

Many Labour Members and, if they are honest with themselves, Conservative Members, could tell the same story. But we have a completely untested area, where we have no idea what the operator will be asked to pay via the franchising director to Railtrack. We have no idea what assets Railtrack will have. All we know is that it must make a profit. On that basis, we are asked to believe that there will be additional money in the system and that, as part of the franchises, station facilities will be improved. There is no guarantee of that. There is no doubt that private operators will see stations as halts. They will not see them as a crucial part of their responsibilities. I believe that we shall see further destaffing and not the development of facilities, to which the Minister pays lip service.

We now know more about the franchising director, as we have his draft objectives. The picture becomes clearer about how he will be used as the guard—the fall guy—for what Ministers impose on the railways. The franchising director does not yet know what he will have to charge. I think that the Minister can confirm that. The Minister says that progress has been made on that, but freight is the easy part. Part of the constraint that is placed on the franchising director is precisely that freight is to travel for very little on the tracks because of the belated lip service to the idea of putting more freight on to the railways.

The difficult part, the part that Coopers and Lybrand has so far failed to address, is what the franchise operators will have to pay to the franchising director. Until that is known, the whole thing is simply a charade. The idea that there can be shadow franchises without the shadow franchisee knowing what the principal cost will be is nonsense. Yet already the Government have gone down that road by pressing ahead with the ludicrous and already discredited Gatwick Express experiment—not a shadow franchise, because nobody knows what the shadow franchisee is paying for the use of the tracks and signalling, which is clearly its major overhead.

Many of my hon. Friends wish to participate in the debate. They are concerned about stations and the maintenance depots, which are also covered by the amendment. They are concerned by the idea that the franchising director is a complete unknown quantity, and that the powers that have been given to him are unlikely to produce anything of the kind of railway system that we want to see.

The Opposition will oppose the powers, because we believe that the Minister is seeking to use the franchising director in that way. It is clear from what has happened in stations that the franchising director will not be an independent creature; he will be very much the creature of Government. That will become even clearer when the first few franchises are attempted. The franchising director will be told clearly how much of his budget will go to those private operations to get them up and running. That will be done with a blatant disregard to the interests of the network as a whole.

The idea that that will be the action of the franchising director acting independently, as opposed to acting politically on behalf of the Government who have created him, is something which, at this stage of the debate, should be exposed as pure myth and a fallacy.

We will vote on one of the amendments in order to signify our opposition to the whole system and recognise that the franchising director will not be an independent operator. When he acts against the interests of an integrated national rail network, he will be doing so exclusively in the name of the Government, as clearly presaged by the Bill.

Sir Teddy Taylor (Southend, East)

I have only one brief point that I want to raise with the Minister in all the amendments.

It seems to me that clause 26(3)(c), as proposed in Lords amendment 42, was the most appropriate. I have endeavoured to play a constructive role in the Railways Bill. The Minister will confirm that, when I heard that the Government were in deep trouble about amendment 31, to which we shall come shortly, which concerns British Rail participating, I tried to propose a way of solving it all by suggesting that we say that no subsidised national operator, whether it be French, German, Italian or British, should be able to participate, which I thought was a helpful compromise. However, as the Minister will confirm, we discovered that a Euro-directive exists which prevents us from doing that, so it unfortunately fell by the wayside. I hope that the Minister will at least pay tribute to the fact that I have endeavoured, so far as I can, to assist him throughout the proceedings of the Bill.

My question relates to the Fenchurch Street line and the relevance of 26(3)(b) to that. First, I should like to say that the Minister who opened the debate has done a great deal for Southend-on-Sea. He has travelled on the line himself, as I do—I was on it this morning. He has spoken to the passengers and to the staff and given the impression that, for the first time in years, there is a Minister wo is interested in one of the most important lines in commuter land—that between Southend-on-Sea and Fenchurch Street station. That busy line is known as the misery line because, as my right hon. Friend the Member for Southend, West (Mr. Channon) will confirm, the signalling in the station is older than me. [HON. MEMBERS: "No!"] It is possible. Over the years, our constituents have suffered a lamentably bad standard of service.

My right hon. Friend and I were delighted to be told some time ago that new signalling would be installed on the line. That was a great breakthrough because many of the delays result from breakdowns in the ancient signalling system. The Minister also gave us an assurance, when he visited Westcliffe station, that the new operator would be obliged, as part of the deal, to provide new trains on the line. We know that the Minister is an optimist, and it may be that the serious economic situation has made that promise rather less than we hoped, but at least the thought was there, and we appreciate it.

The Minister has tried to bring hope to the commuters of Southend-on-Sea, who have suffered a great deal. Other places may have organisations that oppose rail privatisation, but that is not the case in Southend: we are looking to the future with some hope, as it could not be so bad as the past.

Mr. Bayley

Is not new rolling stock the one thing that would turn misery into joy on the line to Southend? Has the hon. Gentleman any idea whether privatisation would make it more or less likely that the commuters on his line would benefit in that way as people in Kent and other parts of Network SouthEast have recently been fortunate enough to do?

Sir Teddy Taylor

I can only say that the Minister told us—we were thrilled to hear him—as we were coming down from Westcliffe station that the new operator will bring in new trains. The line has never before had new trains. That promise may have to change because of the economic situation, but at least the thought was there, and we now have a much better chance of getting new trains. British Rail has told us that the best that we could hope for was 12-year-old trains. Although the staff are very nice, and British Rail has some delightful people, because of the system, and because of the priority given to the constituency of the hon. Member for Cunninghame, North (Mr. Wilson), the Southend constituencies have been sadly neglected.

Mr. Wilson

My constituency does rather well because a Labour council runs the Strathclyde passenger transport executive. Perhaps if Southend-on-Sea followed that example, it could share equally.

The hon. Gentleman said that nobody in Southend-on-Sea opposed privatisation. That rang a bell, and I dug up an interesting booklet called, "Rail Privatisation: a cause for concern". It lists various comments—from such radical sources as the Daily Mail and The Daily Telegraph—which are deeply hostile to rail privatisation. Lo and behold, one of the sponsors of the booklet is the Southend-on-Sea rail users association. To give a general flavour, I will give the first comment in the booklet—from Lord Peyton, former Conservative Transport Minister—who said, "Absolutely dotty." Perhaps the hon. Gentleman should check his local information.

Sir Teddy Taylor

I do not want to take up too much time, but I assure the hon. Gentleman that I live in Southend-on-Sea, and I travel on the trains, as I did this morning. I am afraid that the hon. Gentleman is one of those chaps who speaks as an expert on everything. I know Southend. There was hostility, and my right hon. Friend the Member for Southend, West and I are well aware of that, but the Minister has taken a great deal of trouble. We have the promise of new signalling. It is unfortunate that I am being diverted when I am trying to make a simple and sensible point. I wish that the hon. Gentleman would not divert me.

My right hon. Friend will confirm that there is a far more positive feeling in Southend because of the trouble and the measures taken by the Minister, which we very much appreciate. If only other Ministers had the time and inclination to show the same consideration for difficult cases, we should get on better than we are. The hon. Member for Cunninghame, North should be aware that there are Labour councils on the Fenchurch Street line, but things do not get better or worse depending on the political complexion of the council through which the line travels, although in Southend-on-Sea things are usually better because the council is excellent.

My question arising from subsection (3)(c) concerns money. The Minister will be aware that, time and again in correspondence—I always get extremely courteous replies from him—I have asked him how the Southend to Fenchurch Street line is doing financially. My constituents have worries about fare charges, and they would be reassured if they knew the answer. If the amendment goes through, matters will be even more complicated, because the franchisee will have to take a lease on the offices, the railway station and the shops.

I have been the Member of Parliament for Southend, East for 13 years, and I have never yet found out whether the line pays for itself. My right hon. Friend the Member for Southend, West is even more conscientious than I, but he does not know either. The reason is that the accounts of British Rail are drawn up in a strange way. The busier a line is, the more overheads are imposed on it, so 10 passengers will result in more overheads than five. That is a busy line and could become even busier. We should like some idea of how it would perform if it were operated independently, or how it would perform now if overheads were not applied. The Minister has kindly said that he will let us know at an appropriate time. Could this be that appropriate time?

The Minister may say that he wants a trial period, with an independent operation in embryo form, to see how the line performs. That would give us an idea, but once we had got to that stage, we should be over the cliff. We would be there. We should like the Minister, British Rail, or anyone, to give us the information. We think that the line will perform well. The fares are pretty high. Those on the line to Victoria are even higher because the service is better and there are sometimes nicer trains.

After all the Minister's generous concessions and offers to the hard-pressed travelling public of Southend-on-Sea, will he take the further step of giving us a broad idea of how the line performs financially? If it is a bad performer, running at a huge loss, our constituents, and even Lord Peyton, who is a nice chap, would be worried that the fares would rocket up and up, which would be terrible for us.

As the Minister is aware, Southend gets nothing from anyone. For example, we get nothing from the EC nonsense. Everywhere else round about gets money. We do not get Government grants. We were to get something under what is called assisted area status, but unfortunately a man called Mr. Van Miert decided to take 1 per cent. off the budget, and that included Southend-on-Sea. We do not take a penny from the Government. We are the prime example of Conservative capitalism. We try hard to co-operate with everything, but we want a good train service. Unemployment is high and people can sometimes find employment in London, but for that they need a reasonable service at a reasonable cost.

My right hon. Friend the Member for Southend, West and I greatly appreciate the Minister's efforts, and the time that he has taken. He has gone out of his way to answer our problems and questions and to speak to passengers and staff. However, there is a gap. We should like him to give us some idea how the line performs financially. If he cannot do that tonight, will he tell us at the appropriate time? When would be the appropriate time? It was not last year or the year before, six months ago or last week—I tried again last week. If he cannot give us a general idea, will he at least give some reassurance to the good people of Southend by telling us when the appropriate time would be?

I can assure the Minister that that is the only question that I want to raise. Southend-on-Sea is, by and large, far less apprehensive than other places about privatisation, and some are looking forward to it. We hope that it will bring better service.

Mr. Paul Channon (Southend, West)

Does my hon. Friend agree that, although there has been a welcome improvement in the Southend line during the past year, the history of the line leads many to believe that it may be a good thing if the line is put into other hands than those of British Rail? Those other hands may well give a better service to our constituents.

Does my hon. Friend also agree that the Minister has on many occasions given assurances about the level of fares and that it would be helpful if the Minister would repeat those assurances? Is my hon. Friend aware that I strongly support him in his belief that we ought to know what the financial arrangements are on the line which, I believe, makes a profit?

Sir Teddy Taylor

I also think that it would be a help if we knew the figures. My right hon. Friend and I have acted as a genuine popular front on the matter, fighting together vociferously and toughly in the interests of our commuters. We hope that the Minister will therefore give a reply on the vital issues to the two hon. Members who represent Southend. We assure him that, if he does reply, we shall simply sit back and believe that the privatisation exercise will give a good deal to the commuters of Southend. I hope that the Minister will give us the guidance that we are looking for, and will fill the one tiny gap in the great efforts that he has made for us until now.

8 pm

Ms Glenda Jackson (Hampstead and Highgate)

There are essentially just two subjects on which I would like the Minister to comment. First, who will have the responsibility for stations post-privatisation? Is it incumbent upon the franchising director to insist that a company which wishes, for example, to manage a stretch of stations along a particular line—although the company will not run trains upon that line—will have to ensure that those stations are manned?

The north London line runs through part of my constituency and is, I believe, now totally unmanned at stations. If part of the thrust of the Bill is to increase the use of existing rail networks and expand the use of trains throughout the day and beyond the rush hours—as is particularly the case in London and the south-east—that is a vain hope if the Minister and the Government cannot guarantee that stations will be manned.

The rejection of rail transport because of that aspect is not limited to women, who clearly dislike travelling late at night and having to wait on long and empty station platforms where there are no staff within eyesight or earshot. The impact is also grave for the disabled, whose ability to move around their country and community is excessively limited if there is no one at a station to assist them in alighting or mounting a train.

Who will have the responsibility for stations? Will there be a two-tier system of station facilities depending on which company's train one is travelling on? My hon. Friend the Member for Cunningham, North (Mr. Wilson) referred to InterCity. There are stations which presumably must facilitate passengers travelling by InterCity or on rural and local networks.

Will that mean that, if one travels by InterCity, one will be able to use all the facilities provided—waiting rooms, cafes, restaurants, lavatories and such shops as are available? I am excluding from that inquiry the large stations and terminuses which are clearly attractive to anyone who wishes to run a retail outlet or an office. I have a slight concern that it may at some point be impossible for passengers to catch a train, as there will be so many people on the major station concourses buying knickers, ties, pain au chocolat and coffee to take away.

If I were to join a rural train at a station where the majority of the finance has gone into the station infrastructure, will I be denied the use of the public lavatories, waiting rooms or refreshment facilities? Are we looking at the possibility of a two-tier or even a three-tier system for station networks?

My overriding concern is that there is an increasing movement towards the unmanned stations. That seems to cut directly at what the Government claim to be the main thrust in the privatisation of British Rail—to attract more and more passengers to service outside rush hours.

Mr. John Denham (Southampton, Itchen)

The Minister said that amendment No. 5 refers to the powers of the franchising director over other railway assets. Those will include maintenance depots and—although it may not be the Government's intention at the moment—British Rail Maintenance Ltd. at Eastleigh. The company is an important employer, and although it is not in my consituency, it employs several hundred of my constituents.

I believe that the powers that the Bill will give the Secretary of State and the franchising director pose a serious and severe threat to the future of BRML in Eastleigh and to the hundreds of my constituents who work there.

The achievements of BRML are well known locally. It employs just under 1,350 people, and it has of course had a significant reduction in employment during recent years, because the technology and the demands of the railway system have changed. Nonetheless, BRML is a major industrial employer. Productivity at BRML, and its contribution to the activities of British Rail, has increased significantly. The company is—within the structured competitive framework of an integrated railway system —profitable, and that is important.

The company is marked by good industrial relations. The most important aspect for the workers at BRML is its long-term commitment to the quality of its work and the undoubted contribution that it makes to safety on the railway system, and Network SouthEast—its major customer—in particular. It is obviously of local concern that, through BRML, about £24 million a year is brought into the economy of the Southampton area.

Mr. Deputy Speaker (Mr. Michael Morris)

Order. I do not think that the whole history of BRML can be covered under the selection of amendments. The hon. Gentleman must relate his remarks to some of the amendments, which are concerned with miscellaneous franchising matters.

Mr. Denham

Amendment No. 5 amends the clause that refers to the duties of the franchising director in relation to the operation of additional railway assets. I understand that the amendment and the Minister's comments mean that to include the possible franchising of maintenance depots.

It is clear that the Minister does not intend under the Government's policy to include BRML in franchising. However, as I understand it, it is quite possible for BRML to be franchised under the Bill just as the level 4 depots are to be franchised. With respect, Mr. Deputy Speaker, I believe that the effect of the Bill on the potential franchising of BRML is an issue of great significance.

Mr. Freeman

I am sorry if I was in any way ambiguous. I stated that the group of amendments dealt with stations and light maintenance depots. That does not include BRML or the heavy maintenance depots, which are totally outwith the activities of the franchising director.

Mr. Denham

Will the Minister clarify whether he is saying that the amendment to the Bill does not include BRML, or is he merely saying that it is not the Government's intention to include BRML within the franchising process?

I am willing to be corrected, but I believe that, under the Bill as amended, it would be quite within the powers of the Secretary of State and the franchising director to franchise the operations of BRML. It might not be the Minister's intention to franchise, but surely the House is dealing with the Bill as it is before us and as amended. The House is not dealing with what the Government might happen to do with the Bill if it were passed.

Mr. Freeman

I have already explained the subject, but obviously I failed to make the point. The group of amendments deals only with stations and light maintenance depots. I have defined what that means, and it specifically excludes heavy maintenance depots such as BRML. Those involve a separate policy issue, and the franchising director will have no direct responsibility for the ultimate movement into the private sector of BRML. That has nothing to do with franchising.

Mr. Denham

rose—

Mr. Deputy Speaker

Order. The hon. Gentleman had better try a little harder if he wants to bring his speech within order.

Mr. Denham

I bow to the Minister's interpretation, although that is not my understanding of the Bill. The Minister accepts that the Bill covers the light maintenance depots. If franchised as part of the development of the franchising system, those depots will be given powers to expand their operations and compete for the work currently done by works such as BRML at Eastleigh. Therefore, the effect of the legislation is, indeed, to put a potential threat over the 1,350 jobs at Eastleigh and the total £24 million contribution of BRML to the local economy.

At this point, as we extend or clarify the role of the franchising director, I question the failure of the Minister to take into account the implications of the policy on other parts of the rail network, and in particular on the safety and quality of operations undertaken by maintenance depots, including BRML, and the future of that work. I believe that the powers which the Government are taking under the amendment pose a threat to both my local railway works and the quality and safety of operations on the railway system.

The Government's approach to the franchising of maintenance depots is mistaken. It is a view widely shared in my area that those who currently provide maintenance services in the railway system and who may well lose that work under the new arrangements have been left as an afterthought or after-afterthought in the preparation for rail privatisation. That is not an adequate approach to an important rail maintenance facility and engineering works in the Southampton area.

In Committee, I asked the Minister whether it would be possible under the franchising arrangements to link BRML to one of the operating companies that would take over the operation of Network SouthEast activities. Network SouthEast is by far the largest customer of BRML. I also asked whether it would be possible to link the works directly with the leasing companies which are to be established for the provision of rolling stock.

I do not have the quotation with me, but I believe that my memory is correct on this point. In Committee, the Minister did not rule out the possibility of grouping BRML with either a leasing company or one of the companies that would franchise rail services. It is a mistake that we have come so far and yet those options have still not been ruled out. It is clear to me that the best way of retaining the activities at BRML and ensuring that they are not undercut by the franchises which are under discussion in the amendment would be to make that engineering works an integral part either of one of the franchise operators or of one of the leasing companies.

I know that discussions have taken place between the trade unions, the local council and Ministers on the matter. I know that certain liaison arrangements have been reached and that the possibility of negotiating contracts has been discussed, but a short-term guarantee of work for BRML would not be sufficient.

If the Government push ahead with their wider proposals, a structured approach which builds that maintenance depot into one of the leasing companies will be required. In that way, the expertise of the work force and their contribution to the quality and safety of the rail system can be maintained. I hope that, even at this late stage, the Minister might give some undertaking that he will implement that option and ensure that possibly half or more of the 1,350 jobs in Eastleigh are not lost.

8.15 pm

Mr. Tim Rathbone (Lewes)

I should like to raise three matters with my right hon. Friend the Minister. Before doing so, may I add to the comments made by my right hon. Friend the Member for Southend, West (Mr. Channon) and my hon. Friend for Southend, East (Sir T. Taylor) and echo their thanks to the Minister for his consideration in listening to the points made and for spending an awful lot of time in our part of the country down in Sussex, as he has done elsewhere. He studied the track and the operations and listened to people's concerns. Not only I but all local Sussex Members and local travellers in Sussex are immensely grateful to him for that.

My three questions relate to the operation of stations. First, how will the station leases be operated? It will not be outside the Minister's own experience that the British Rail Property Board can be somewhat conservative in its attitude to real estate development. Over the years, it has held up the clarification of extremely important developments in the county town of Lewes, which I am proud to represent. I hope that hard-edged commercial know-how and push will be injected into the disposal of the leases on the stations to which the Minister referred.

Secondly, can the Minister give reassurances yet again about closures? It would be good to hear a reassurance from my hon. Friend that when a lease on a station has been sold off, it will not be open to the lessee to close that station with greater facility than that which British Rail can close stations at present. I think that I am right in believing that exactly the same closure requirements will be established in the future as in the past, but it would be good to have that reassurance.

Thirdly, it would be good to have a reassurance that, in the development of stations, especially in towns and villages in the countryside the planning laws will be applied, monstrosities will not be put up and changes will not be made to structures which, if not listed as of historical value, are a loved part of the character of the towns and villages in which they have long been located. I hope that the Minister can give reassurances on those points. I should be grateful if he would do so.

Mr. Snape

I congratulate the hon. Member for Lewes (Mr. Rathbone) on the succinct and relevant points that he has just made. We shall all listen with interest to the Minister's reply.

I reiterate the comments made by my hon. Friend the Member for Southampton, Itchen (Mr. Denham) about the future of light maintenance depots. I am not sure whether Saltley depot near Birmingham falls into that category, but I suspect that it does. It was featured in a recent issue of Railnews, the staff magazine of what is left of British Rail. The article said that the depot provided a vital service to various sectors of British Rail in the Birmingham area—for example, it refuels hundreds of locomotives each working month.

It worries me that if depots such as Saltley are disposed of by the franchising director regardless of their operational necessity, they might be so disposed of because of their value on the property market—always supposing that the property market ever picks up again under the present Administration. The people who work at such depots would appreciate some assurance from the Minister that safeguards will be provided to ensure that the franchising director cannot dispose of useful operational assets solely for their property value.

In passing, I wish to reflect on the line to Southend. I listened with interest to the comments of the hon. Member for Southend, East (Sir T. Taylor). He made his customary passionate defence of the interests of his constituents. I do not complain about it. I commend him on it. Unfortunately, the London-Tilbury-Southend line was modernised before it became part of the London midland and Scottish empire. To demonstrate to the southerners that the London-Tilbury-Southend line was sound, it was electrified and resignalled to the highest possible standards many years ago. The problem is that, when so much of the Victorian signalling of British Rail still remains, lines such as London-Tilbury-Southend go the back of the queue when it comes to modernisation in later years.

The hon. Member for Southend, East specifically asked the Minister whether the London-Tilbury-Southend line was profitable. I am not sure whether the Minister, who answers most questions as ably as he possibly can, is in a position to answer that question. The hon. Gentleman might be aware that, under the Railways Act 1974, the financial performance of individual stretches of railway lines ceased to be compiled—in my view, it was a fairly inexact science before the 1974 Act came into force—and the overall subsidy paid to British Rail since 1974 has swamped the sort of detailed information that the hon. Gentleman requested.

Under the terms of the amendments, it appears that the Minister might be in a position to answer that question some time in the future. Indeed, as far as the future of the London-Tilbury-Southend line is concerned, he might well say that it will be profitable.

Sir Teddy Taylor

indicated dissent.

Mr. Snape

The hon. Member for Southend, East will not get any more exact answer than that. If the London-Tilbury-Southend line is profitable, it is because the track and signalling costs have been stripped and given to Railtrack.

I hope that I do not have to convince the hon. Gentleman that carrying lots of passengers to London in the morning and taking them home again at night is not a profitable way of tying up assets worth millions of pounds for 24 hours a day. Under the proposals, if the track and signalling are given to the regulator, the lines may well be profitable.

The hon. Gentleman did not commend the taxpayer generally and the public sector as a whole on providing new signalling on the London—Tilbury—Southend line. I do not think that he received a satisfactory reply from the Minister about the prospects for new rolling stock. Under existing ownership, I understand that 10-year-old or 12-year-old rolling stock is to be cascaded—that is the beloved word of senior management of British Rail—from other parts of the country. That may or may not fit the bill under the new arrangements, but I think that it is the best that the Minister will be able to promise.

I shall ask the Minister some specific questions about the main railway station in the west midlands, Birmingham New Street. He will be aware that, under the existing fragmented, albeit publicly owned, railway system, virtually every sector of British Rail, including Network SouthEast services, serves Birmingham New Street. That station is regarded as the rail crossroads of western Europe. It is possible, although not always convenient, to get from virtually anywhere in England, Scotland and Wales to anywhere else by changing at Birmingham. Surely it should worry the Minister that, under the terms of the amendments, it would be possible to flog off Birmingham New Street to the highest bidder.

My hon. Friend the Member for Hampstead and Highgate (Ms Jackson) referred to some of the commercial outlets at other railway stations. Under the current arrangements, it is possible to buy a whole range of commercial goods, including socks, ties, knickers, hot dogs, Coca-Cola, hamburgers and cheese rolls at outlets at Birmingham New Street. Under the wonderful system proposed, we will have separate booking offices for the different privatised companies.

Under this fragmented, albeit publicly owned, system, it is possible to imagine that there will be a while range of booking office windows at Birmingham New Street, like an airport check-in lounge. If we have such booking office windows and commercial outlets as well, and if the station is privately owned, it is not difficult to imagine the sort of chaos that could ensue. Under the present system, although one can buy a whole range of goods at Birmingham New Street if one wants to, one cannot travel from England's second city, Birmingham, to England's third city, Manchester, and back after 6 o'clock in the evening. It was Sir Bob Reid mark one who gave the reason for that. He said: It is not our role or function to run trains that are desirable. It is our role and function to run trains that are profitable. Under the brave new world of the privately owned railway, it is difficult to believe that such services will be restored and that once the station is sold to a private operator, the main concern of the operator will be the welfare and safe passage of rail passengers, as against the interests of the commercial outlets that already exist and those that the owner of Birmingham New Street will seek to attract in the future. I hope that the Minister can give me some reassurance on that matter.

I have a couple of other facts that the Minister should bear in mind. Although it is possible to drink Coca-Cola by the gallon at Birmingham New Street, it is possible to get to the toilets only if one pays lop for a platform ticket. Toilets on stations are not open around the clock, although the outlets often appear to be. Will the new owners be compelled to provide the sort of lavatory facilities that we expect the public sector to provide, albeit at a price, under the present system, or will they be free to make as much money as possible commercially without worrying too much about the welfare or comfort of future passengers?

Mr. McAllion

I was delighted to hear that the Minister recently visited Southend and received a warm reception. I recommend that he revisit Southend next Friday when the civil service trade unions will be demonstrating in opposition to the Government's market-testing proposals. I am sure that he will receive an even warmer reception if he shows up at the Customs and Excise building next Friday.

Sir Teddy Taylor

Does the hon. Gentleman accept that Customs and Excise has won every one of its market tests and that is has won every proposal put out for tender? Therefore, does he accept that, far from Customs and Excise in Southend being a threat, it has shown that it is so efficient that no one else can beat it?

Mr. McAllion

If the hon. Gentleman really believes that, he should go to the meeting next Friday and explain his position to the civil service trade unions in Southend.

At least the Minister was honest when he said that the main purpose of the amendments is to deal with the Government's proposals for railway stations. I shall concentrate mainly on that. The Minister drew a distinction between what he called "large stations" and the remainder of the stations. He said that large stations were those that were on commercially valuable sites close to the centre of large cities. For example, 188,000 passengers pass through Victoria station in London every day, and the station has retail space of some 47,500 sq ft.

It is easy to understand why the private sector would be interested in obtaining a long-term lease for one of the large stations. People will be falling over each other to get their hands on such valuable property. I am sure that the Minister will have no problem in selling large stations to the private sector, but, by his own admission, he said that there are only about two dozen such stations around Britain.

There are 2,500 stations around Britain, so what about the other 2,476? Will the private sector be equally interested in them? The Minister must give us more details about the proposals that are likely to be put in place for the remainder of the stations in Britain, other than the large, valuable and strategically placed stations.

A number of key stations are more middle sized. I am referring to stations that might be described as having a substantial or significant commercial potential—I hope that we can at least agree on what we mean by "substantial" or "significant"—or those that are in important passenger centres. I understand that the private sector might be interested in those stations as well. Indeed, train operators might be interested in taking out franchises for such stations. Will all the remaining 2,476 stations be classed as middle-sized stations, or will some stations fall outside either those two categories?

What will happen to the very small stations which count passengers in hundreds rather than thousands, or possibly even less than hundreds? What will happen to stations that are located not just far from the centres of cities but far from the cities all together? For example, ScotRail has been put out to franchise as a single bid. Will ScotRail be required to take on the franchise for every existing railway station in Scotland? If that is not a requirement, when it takes on the franchises for the services, will it be able to say that it is not interested in taking over some stations because they are too small, require too much investment and do not have enough passengers? Will it be able to say that in its commercial judgment those stations cannot be run properly?

Under the Government's proposals, what will happen to such stations? The Minister has not made that clear and I hope that when he replies to the debate he will mention the small stations that do not have commercial potential. Will train operators be required to take on such stations as part of their franchise? I understand that train operators will lease the station from Railtrack and will operate it for the same duration as the franchise for the train service. I also understand that franchises are to be for seven, 10 or 15 years.

Will an operator who is required to take on a station for, say, seven years make a significant investment in that station when, at the end of seven years, he may lose the franchise for the service and, therefore, for the station? Any train operator who is told that he has to take on 25, 30 or 40 small stations will not be prepared to invest in them if he has a franchise of only seven years.

8.30 pm

Mr. Wilson

I am sure that my hon. Friend will remember that in Committee the Minister said dismissively that it would be ridiculous for the franchising director to lay down when lights were to be switched off at Basildon station—for Basildon, we can read anywhere else in the country. My hon. Friend will remember that, in Committee, the Opposition said that an operator who wanted to get rid of off-peak or inconvenient services could use power over stations as a powerful, manipulative weapon.

Mr. McAllion

My hon. Friend makes a valuable point. If an operator is required by his franchise to run a series of small rural stations, he may close them at 6 o'clock in the evening, thus making it unnecessary to stop at them. Such services could be completely undermined by the franchisee, who would have the power to say that the stations would not be kept open after a certain time at night. Will such matters be negotiated with the operator, will there be give and take, or will the franchiser be able to agree with the franchisee about closing stations because no one is prepared to take them on?

I should like a reassurance that the two stations in my constituency, Dundee Central and Broughty Ferry, will be required to be kept open by whoever takes over the ScotRail franchise or the east coast main line franchise, the only two services which run through there. A train operator who takes on a franchise for any station will also be required to meet agreed and specified responsibilities on routine maintenance at the station. Will a train operator who is running the service to make a profit be interested in taking on the routine maintenance of an isolated small rural station? I do not think so.

Will there be an independent station operator, separate from the train operator and from Railtrack, for large stations? In the consultation document which was issued on this matter, the Minister states: It is vital that there is a single chain of command to deal with emergencies, and this will be a requirement of the station operators safety case. The station operator will have to demonstrate to the Regulator that he has the management capacity to operate a station efficiently and safely. As part of this process he will need to prepare a satisfactory safety case. Is there not a danger that the people who are best placed to exploit the commercial trading potential of a station—for example, Hanson or Marks and Spencer—may not be the best people to whom to give the responsibility for the safe operation of that station? Conversely, if the franchise is given to those who are best qualified to run the station safely, they may not be the best people to make the most money out of the station. Under the Government's proposals it is not impossible to surmise that Group 4 will bid for the operation of a large railway station, and that would not be regarded by anyone as a welcome development.

The cost of operating a station could be recouped by means of the charges that are placed on operators and others who use the station. If a station operator passes his costs on to the train operators who are using the station, the train operators will simply pass the costs to the customers, the fare-paying travellers. That is why some Conservative Members have spoken about assurances that there will be no implications for fare rises. Such an assurance is essential.

Lords amendment No. 37, which is not in this group, deletes clause 25(4), which states: A franchise agreement may include provisions with respect to the fares to be charged to persons using the franchised services. Therefore, the Minister is removing from the franchise agreement the ability of the franchiser to say that fares cannot be increased beyond a certain level. That seems to be giving freedom to those who operate the services and those who operate the stations to charge whatever they like to ensure profits, irrespective of what that may mean for people using the stations, their services and the trains that run through them.

Mr. Gunnell

I have some questions about clause 5, which deals with the general duties of the franchising director. Those duties were illuminated by the advice and objectives that were sent by the Secretary of State to the franchising director. That fits fully into the part of the Bill that we seek to amend. Subsection (1)(b) states that any payments to which the paragraph applies will have to achieve those objectives "economically and efficiently". The franchising director will have to assume that the person who receives the franchise will achieve any objectives given to him by the Secretary of State economically and efficiently. Those objectives have been spelt out.

I presume that the term "economically" applies to the person who is willing to bid the most to take on the job; therefore, it is about how much income there will be. From whose perspective will efficiency be considered? The efficiency of the train operator is clearly important, but it is slightly different from the passengers' view of efficiency. The operator will want to get his passengers dealt with as efficiently as possible, but facilities are important to the passenger, as hon. Members have said.

What guidance will be given to those who take on the franchises of stations on what should be provided for the benefit of passengers? Uniformity of service will be valuable. That is not to say that stations should have a uniform appearance or should apply a uniform total service. However, one would expect a minimum level of service in all stations.

Hon. Members will be concerned about parking arrangements at stations. I am sure that they have noted that our passes for British Rail, which sometimes affect the efficiency of our travel arrangements, expire on 31 March next year. What advice will be given, through the franchising director, on the minimum level of service that passengers can expect? How will the different needs of operators, expecially muliple operators, be reconciled? I am concerned about the definition of "efficiency" when applied to the franchising of stations.

The Minister has sent out a wider consultation note. Bids are to be judged on efficiency and economy. We know a great deal about British Rail's unique position, a matter that we shall discuss shortly. If I have interpreted the Minister's consultation note correctly, it appears that British Rail's actual record will be given great weight. I presume that that record, as described in the general duties and objectives set for the franchising director, would include the sort of information referred to by the hon. Member for Southend, East (Sir T. Taylor).

It would be necessary to know the cost of providing services, adjusted to take account of the new financial and charging arrangements. Can I assume from the paragraph headed "The transfer of risk" that any private sector operator's bid cannot be comparable with that of British Rail because the risk will have been transferred from the public sector to the private sector?

The consultation note contains a fair amount on investment and what, under the general duties of the franchising director, the Secretary of State expects in investment. The Minister is aware that I am especially concerned about investment in rolling stock. Throughout the summer I have raised with him and his Department the question of moving forward the ordering of rolling stock for the newly electrified West Yorkshire line. The cascading process, which hon. Members have referred to and defined, is occurring in West Yorkshire and old rolling stock is to be refurbished at a cost of more than £3 million.

When the franchising director takes up his post, what initiatives can he take to ensure that there is investment and that the ordering of rolling stock is proceeded with? I pay tribute to the Minister for his efforts—with others, with myself, with the company concerned and with the West Yorkshire PTA—to solve the dilemma of how to push forward the current rolling stock order. It is significant that, under the Bill, even the Minister's best efforts—it is clear that he has made considerable effort—could not solve the problem. I want to know how the franchising director, under the general duties laid down for him, can break the impasse in West Yorkshire which is hindering the private sector railway engineering industry in doing its job and thriving.

Dr. Marek

I was recently in the constituency of my hon. Friend the Member for Morley and Leeds, South (Mr. Gunnell) and I noted the number of class 142s at Leeds station. They are most unsatisfactory vehicles and I sympathise with my hon. Friend because his whole region has them in and around it. Other regions have managed to get rid of them.

We must not forget that stations exist to help passengers to go about their business—from where they want to start to where they want to finish. A station does not exist as an end in itself; it is something that helps passengers. It may be true that facilities are needed on stations as people should be able to buy tickets and refreshments and to obtain information. However, there is a line to be drawn between that sort of provision and turning stations into shopping malls, markets and places where developers and others with capital seek to make a return on that capital, irrespective of whether that helps the passenger to go about his business.

8.45 pm

There is a danger that stations could be so built up and clogged up that during busy times passengers could be impeded. Victoria station, although a little better now, was like that. It has always been claustrophobic on the high numbered platforms because there are too many shops. I do not blame British Rail, because it has to get money from wherever it can under the present system, but it has allowed too many shops. When the Bill becomes an Act, as I fear it will, and private interests take over stations, the criterion under which they operate will not be that of seeking to aid the passenger to go about his business.

There is already a nonsensical position under which Regional Railways does not want to pay to stop at one platform but might pay to stop at another platform; InterCity does not want to stop at one platform but will stop at another, provided that it is for no longer than is absolutely necessary. The convenience of the passenger does not come into play when it comes to trains stopping at stations, especially where passengers want to make connections.

Once a station is in private hands, different charges can be made for different trains to stop at different times on different platforms. The market, which the Government think knows best, might know what is best for the market and for those who want to make money out of passengers, but that might not be the same as providing the best possible service with the least inconvenience to passengers. I am worried about what the Government are doing through the clause. I shall wait and see what happens.

There will come a time when there is a different Administration. This incompetent Government are on their last legs because they have introduced such stupid Bills —[Interruption.] The Minister for Transport in London laughs, but the public know that they were had in 1992. People will not forget that the Government said, "Vote Conservative on 9 April and the recovery will begin on 10 April." People in my constituency have certainly not forgotten that.

When the Opposition are in government, I hope that we will take as our criterion the convenience of passengers. If any clause in any lease goes against the spirit of that criterion, we should either introduce legislation to take away such leases—without allowing the lessees to make any gain—or impose conditions on those leases to ensure that certain criteria are met; in that way, passengers could conveniently change trains and have convenient access to or exit from stations. If, at a suitable time, the Opposition can lay down those criteria clearly and succinctly, that will give pause for thought to any get-rich-quick cowboy developer or speculator whom the Government have in mind to take over the stations once the Bill becomes an Act.

Mr. Freeman

I shall seek to answer the points that have been raised.

The hon. Member for Cunninghame, North (Mr. Wilson) mentioned a number of issues, which I shall take in sequence. First, he referred to the possibility of double payment by, for example, local authorities or PTE authorities, for the use of stations where they had in the past been responsible for investing and improving the station facilities. I pay tribute to what the PTEs have done. Strathclyde was cited as an example where there has been sustained investment in rolling stock and I hope sincerely that that continues. The Strathclyde PTE—

Mr. Prescott

The Strathclyde authority.

Mr. Freeman

The Strathclyde authority will have my continued support in ensuring that it can place further orders for rolling stock, which I know that it is negotiating.

Mr. Prescott

At least it is not the Minister's money.

Mr. Freeman

It is the taxpayers' money.

I shall now reply to the argument that was made about investment in station assets. We are ensuring that, when the PTEs fund infrastructure improvements from debt they have incurred on their own books, they will not have to pay twice—the financing costs of the debt and also infrastructure charges. We intend that Railtrack will create an obligation on its books and repay the PTE, over a suitable period, sufficient funds to enable those additional charges for the use of assets to be financed by the local authorities. When we discuss the group of amendments about PTEs I will be glad to explain the arrangements that we have in mind.

The hon. Member for Cunninghame, North also asked where the money is to come from for stations. Railtrack is the freeholder and will have ultimate responsibility for all the assets that it owns. It may be that, for franchises where there is responsibility over five, seven or 10 years for running trains on a group of lines and the franchisee wants responsibility for operating and managing the stations, an agreement will be made with the franchisee as to what improvements, repairs and maintenance will be done at the stations. The responsibility will not fall between the two—in other words, on neither Railtrack nor the franchisee.

The hon. Gentleman asked me about allocation of cost to the shadow franchises. From 1 April 1994, with Railtrack established, the 25 train-operating companies will have a proper apportionment made of the cost of track. We hope to have financial information generated properly for the first seven franchises that we have nominated, from 1 April 1994, in a form which provides a true and accurate record of the cost of operating trains on those lines.

My hon. Friend the Member for Southend, East (Sir T. Taylor) asked me many questions. I can now be more precise about when financial information will be available about the Fenchurch Street line—the London, Tilbury and Southend line—because we intend that it should be shadow running from 1 April 1994, and that therefore, after the first six months, properly prepared financial information will be available. We shall know what the track charges are; we shall know what the operating costs are because we shall know the size of the payroll; we shall know which rolling stock is being used and accurate information will become available. It certainly will be available in 1995–96 to the potential franchisees of the line, and I would expect that we shall start franchising that line in early 1995.

Therefore, when the hon. Gentleman tables a question asking me what has been the financial record of the line, I shall be able to answer in due corse, although certainly not before the first six months of the line, and, I would expect more accurately at the end of the financial year because when the franchising director lets the franchise that will be public information. In other words, the degree of subsidy required will be publicly known. I hope that that is a clear answer. My right hon. Friend the Member for Southend, West (Mr. Channon) and my hon. Friend the Member for Southend, East are interested in the line and we can see whether it is profitable.

I believe and expect that some fares on the London, Tilbury and Southend line will be reduced.

Sir Teddy Taylor

Hear, hear.

Mr. Freeman

I expect that franchisees for certain off-peak services will experiment with lower fares to increase patronage. I travel on the line in both peak and off peak and I know that there is a capacity available on the line. I would expect the private sector to experiment accordingly.

The hon. Member for Hampstead and Highgate (Ms Jackson) asked me about the manning of stations. I know that she is especially concerned about that, and she is right to be so. British Rail, over the years, has felt constrained by the limitation of its resources—inevitably, in the public sector—to reduce the manning at certain stations.

I would expect that, when we franchise rail services, there will be an improvement in the situation of stations which are either unmanned or partially manned, for two reasons. First I would expect the franchisees, and certainly Railtrack, to experiment with introducing greater commercial activity at some stations. Even quite small stations can benefit from shops, or perhaps even restaurant facilities. [Laughter.] The hon. Member for West Bromwich, East (Mr. Snape) laughs. Let me explain why British Rail cannot do that at the present time.

The hon. Gentleman has not had the experience of setting BR's external financing limit. That is broken down by line of route. The managers have a sum to spend—not a penny more, not a penny less. Many managers find it difficult to experiment, for example, with rent-free accommodation in order to attract the private sector, in what has been a depressed property market, to come on to the stations to develop them. I expect that, as one of the advantages of privatisation, the private sector, without those constraints, will experiment to create more activity at the stations. More activity means greater safety, and greater safety means more passengers.

Mr. Wilson

I am interested in the scenario which the Minister outlines, as it is imaginative and it may happen somewhere. His idea is that restaurants will be opened at stations which are currently unmanned in order to attract more people on to the stations while trains which are under-used run through them. It may happen, but I am sure that the Minister will also want to consider the scenario that I mentioned to my hon. Friend the Member for Dundee, East (Mr. McAllion) and which the Minister brought into the debate in Committee.

He made it quite clear that it would not be the Minister's or the franchise director's job to lay down the times when there would have to be lights on stations, far less a range of restaurants available to the public on a rent-free basis. Will the Minister consider that other scenario, and will he confirm that it will be at the discretion of the operator, not just whether there are restaurants on the stations where now there are none, but whether there are lights on in the stations and whether the operator of the stations and the route will be allowed to run down the service to get rid of off-peak services?

Mr. Freeman

The hon. Gentleman proceeds from the assumption that the private sector is there to cream off the profits, make the service deteriorate, increase fares substantially and cut investment. I do not proceed on that basis. All the evidence of privatisations during the past 14 years flies in the face of his assertion. I do not expect the private sector to do anything other than encourage more passengers to use railway trains. That will perhaps answer the hon. Member for Morley and Leeds, South (Mr. Gunnell). The rooted hostility of the hon. Member for Cunninghame, North towards the private sector is irrational. I expect it to want more patronage, not less.

I was in the middle of trying to answer the hon. Member for Hampstead and Highgate. In certain cases, the private sector will want to experiment to encourage patronage, by hiring additional staff to work on platforms or on trains. I believe that Network SouthEast has lost a share of the market—although I do not blame it—because it has had to operate within cash limits under Labour and Conservative Governments, as I have described. There is evidence, however, that more people would travel by train if they felt that they were more secure—especially women late at night. I believe that such investment by the private sector would be repaid.

The hon. Member for Southampton, Itchen (Mr. Denham) asked about British Rail Maintenance Ltd. at Eastleigh. There has been a remarkable change in the technology involved in building trains. Whatever happens —whether British Rail is privatised or not—we must acknowledge that that change will reduce the amount of work available for heavy maintenance depots. We must face the fact that considerable surplus capacity is likely in that section of the industry. It is important that we do not limit the opportunities open to the workers at Eastleigh or the amount of business that they can bid for.

In Committee, I considered whether it was sensible to assign each BRML depot to one of the rolling stock leasing companies. I have come to the firm conclusion—one that I think is shared by those who work at Eastleigh—that that would be wrong, because one would be limiting its work.

Mr. Denham

rose—

Mr. Freeman

I shall give way to the hon. Gentleman on that subject, but perhaps I may finish my argument first. Eastleigh would then be limited to perhaps only one third of the total rolling stock maintenance market. The more efficient the plant, the more business it can obtain, and if Eastleigh is right that it is one of the most efficient plants, as I believe it is, it should wish to bid for work from all the rolling stock companies.

The present arrangements are not satisfactory, because work is essentially assigned by British Rail. Eastleigh should have the opportunity to compete across the board. As the hon. Member for Itchen said, it is true that we plan to establish contracts between British Rail and Eastleigh—and probably the rolling stock leasing companies, although not necessarily—to guarantee a work load for some years. I cannot be specific about how much and for how many years. Those contracts would ensure the viability of the business before it passes into the private sector.

Mr. Denham

Although it is perhaps a contradiction of what the Minister has just said, does he accept that last week the council and the trade unions representing workers from BRML asked that it be allocated to a leasing company? The evidence therefore suggests that BRML workers favour that option. Does the Minister also accept that 90 per cent. of its work derives from Network SouthEast rolling stock, largely because of the third rail electrification system, which means that it has a specific type of rolling stock and therefore of maintenance? The allocation of BRML to the leasing company most likely to provide such rolling stock would be the best way to secure its future.

9 pm

Mr. Freeman

We are dealing with the livelihoods of many people, and I am happy to keep an open mind on the final structure. I do not want to do anything that would needlessly put anyone's jobs in jeopardy. I have already given a commitment to my hon. Friend the Member for Eastleigh (Mr. Milligan)—I am happy to extend it to the hon. Gentleman—that I shall stay in close touch so that we do not needlessly complicate what is already a difficult situation due to the over-capacity in the industry. I hope that the hon. Gentleman will take those words in the spirit in which they are offered.

My hon. Friend the Member for Lewes (Mr. Rathbone) asked me three questions. I thank him for his kind comments. I know of his great commitment, both in his constituency and throughout the south-east, to ensuring that we have a good railway system, and that services improve rather than deteriorate. First, he asked who would have responsibility for stations and for their maintenance, development and so forth. He asked whether it would be the British Rail Property Board or some other body.

Railtrack, as the freeholder, will be responsible for all stations and will decide when it is appropriate to delegate any financial responsibility to the franchisees, who will be responsible for maintenance and development for a relatively short period in the life of a station—five, seven or 10 years. I am already impressed with Railtrack's plans. A competent management is being put in place, and I look forward to Railtrack pursuing a positive policy to improve stations. I can assure my hon. Friend that the Secretary of State for Transport and I will watch carefully to see that that policy is applied.

I assure my hon. Friend, too, that the closure policy, which my hon. Friend the Minister for Transport in London will deal with shortly, will cover stations. Neither Railtrack nor a franchisee will be able to close a station precipitously. We set out at length our policy on that aspect. That process will take up to 12 months.

As to towns and villages having railway stations which might not be covered by listed building consents, I give my hon. Friend the assurance that planning law will continue to apply to any change of use away from the main business of the statutory undertaking—that is, running a railway station—to some other purpose, such as the running of a supermarket. Listed building consent already applies and will continue to do so. We want to maintain our excellent railway stations, particularly those in Sussex.

The hon. Member for West Bromwich, East (Mr. Snape) asked about disposing of assets for commercial value. That will be the responsibility of Railtrack as the freeholder. As to Birmingham New Street, I see nothing wrong in having a single operator of that station being responsible for the station's commercial redevelopment and improvement, with several different franchisees operating through it. Birmingham New Street is already showing its age and I see no objection to a sole operator with many different train operators providing services.

The hon. Member for Leeds, East (Mr. Mudie) asked what is meant by the transfer of risk in the draft document which sets out the franchising director's objectives. It means that when the franchising director considers bids from the public and private sector, he will take into account that a public sector bid does not involve the transfer of risk. If the public sector gets its bid wrong and more subsidy is required, the taxpayer has to pay, so there may be some premium, advantage or benefit attached to a private sector bid which takes the risks.

I was asked about the role of the franchising director in West Yorkshire passenger transport executive rolling stock. He will be able to designate assets so that they roll over from one franchise to another. They will continue in use for the full length of a lease. The director will also be able to give assurances about the operation of the railway administration orders. I look forward to making further progress on the rolling stock lease. I am determined that it will come to fruition.

Mr. Andrew Welsh (Angus, East)

The Minister dwelt on the commercial prospects for larger stations; but will he comment on the rule for smaller stations? How will his plans affect them? Will he answer the questions put by the hon. Member for Dundee, East (Mr. McAllion)? What future does the Minister see for smaller, rural stations?

Mr. Freeman

I apologise for not dealing with that point, which was also raised, by implication, by the hon. Member for Wrexham (Dr. Marek). Smaller stations will almost invariably be run by the franchisees and will remain under the ownership of Railtrack, the freeholder. It will not be within the gift of the franchisee operating the train services or Railtrack to close any particular station. We have an elaborate, clear and comprehensive closure procedure which involves not only the consultative committees but the regulator and my right hon. Friend the Secretary of State for Transport.

Mr. McAllion

The Minister said that smaller stations will almost invariably be run by the franchisees". That suggests that ScotRail, for example, will be required to take on all the small rural stations in Scotland and continue to run them as part of the franchise that it assumes on 1 April. Will the Minister confirm that that is the case?

Mr. Freeman

I think that by implication that is the case, for the simple reason that when we come to franchise ScotRail, it will be franchised on the basis of all the rail services running in Scotland. By definition, that will involve the active use of all the stations, small and large, at which rail services call. Therefore, the practical implication is yes. I commend the amendment to the House.

Amendment agreed to.

Lords amendment: No. 5, in page 6, line 5, at end insert ("or ((ii) the operation of additional railway assets under or by virtue of any franchise agreement or any provision of sections 26 and 32 to 42 below;").

Motion made, and Question proposed, That this House doth agree with the Lords in the said amendment.—[Mr. Freeman.]

Question put:—

The House divided: Ayes 319, Noes 231.

Division No. 379]	[9.09 pm
AYES
Ainsworth, Peter (East Surrey)	Coombs, Anthony (Wyre For'st)
Aitken, Jonathan	Coombs, Simon (Swindon)
Alexander, Richard	Cope, Rt Hon Sir John
Alison, Rt Hon Michael (Selby)	Cormack, Patrick
Allason, Rupert (Torbay)	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)
Ashby, David	Davis, David (Boothferry)
Aspinwall, Jack	Day, Stephen
Atkins, Robert	Deva, Nirj Joseph
Atkinson, David (Bour'mouth E)	Devlin, Tim
Atkinson, Peter (Hexham)	Dickens, Geoffrey
Baker, Rt Hon K. (Mole Valley)	Dicks, Terry
Baker, Nicholas (Dorset North)	Dorrell, Stephen
Baldry, Tony	Douglas-Hamilton, Lord James
Banks, Matthew (Southport)	Dover, Den
Bates, Michael	Duncan, Alan
Batiste, Spencer	Duncan-Smith, Iain
Bellingham, Henry	Dunn, Bob
Bendall, Vivian	Durant, Sir Anthony
Beresford, Sir Paul	Dykes, Hugh
Biffen, Rt Hon John	Eggar, Tim
Blackburn, Dr John G.	Elletson, Harold
Body, Sir Richard	Emery, Rt Hon Sir Peter
Bonsor, Sir Nicholas	Evans, David (Welwyn Hatfield)
Booth, Hartley	Evans, Jonathan (Brecon)
Boswell, Tim	Evans, Nigel (Ribble Valley)
Bottomley, Peter (Eltham)	Evans, Roger (Monmouth)
Bottomley, Rt Hon Virginia	Evennett, David
Bowden, Andrew	Faber, David
Bowis, John	Fabricant, Michael
Boyson, Rt Hon Sir Rhodes	Fairbaim, Sir Nicholas
Brandreth, Gyles	Fenner, Dame Peggy
Brazier, Julian	Field, Barry (Isle of Wight)
Bright, Graham	Fishburn, Dudley
Brooke, Rt Hon Peter	Forman, Nigel
Brown, M. (Brigg & Cl'thorpes)	Forsyth, Michael (Stirling)
Browning, Mrs. Angela	Forsythe, Clifford (Antrim S)
Bruce, Ian (S Dorset)	Forth, Eric
Budgen, Nicholas	Fowler, Rt Hon Sir Norman
Burns, Simon	Fox, Dr Liam (Woodspring)
Burt, Alistair	Fox, Sir Marcus (Shipley)
Butcher, John	Freeman, Rt Hon Roger
Butler, Peter	French, Douglas
Carlisle, John (Luton North)	Fry, Peter
Carlisle, Kenneth (Lincoln)	Gale, Roger
Carrington, Matthew	Gallie, Phil
Carttiss, Michael	Gardiner, Sir George
Cash, William	Garel-Jones, Rt Hon Tristan
Channon, Rt Hon Paul	Garnier, Edward
Chapman, Sydney	Gill, Christopher
Churchill, Mr	Gillan, Cheryl
Clappison, James	Goodlad, Rt Hon Alastair
Clarke, Rt Hon Kenneth (Ruclif)	Goodson-Wickes, Dr Charles
Clifton-Brown, Geoffrey	Gorman, Mrs Teresa
Coe, Sebastian	Gorst, John
Colvin, Michael	Grant, Sir A. (Cambs SW)
Congdon, David	Greenway, Harry (Ealing N)
Conway, Derek	Greenway, John (Ryedale)

Griffiths, Peter (Portsmouth, N)	Mayhew, Rt Hon Sir Patrick
Grylls, Sir Michael	Mellor, Rt Hon David
Gummer, Rt Hon John Selwyn	Merchant, Piers
Hague, William	Milligan, Stephen
Hamilton, Rt Hon Archie (Epsom)	Mills, Iain
Hanley, Jeremy	Mitchell, Andrew (Gedling)
Hannam, Sir John	Mitchell, Sir David (Hants NW)
Hargreaves, Andrew	Moate, Sir Roger
Harris, David	Molyneaux, Rt Hon James
Haselhurst, Alan	Monro, Sir Hector
Hawkins, Nick	Montgomery, Sir Fergus
Hawksley, Warren	Moss, Malcolm
Hayes, Jerry	Needham, Richard
Heald, Oliver	Nelson, Anthony
Heathcoat-Amory, David	Neubert, Sir Michael
Hendry, Charles	Newton, Rt Hon Tony
Heseltine, Rt Hon Michael	Nicholls, Patrick
Higgins, Rt Hon Sir Terence L.	Nicholson, David (Taunton)
Hill, James (Southampton Test)	Nicholson, Emma (Devon West)
Hogg, Rt Hon Douglas (G'tham)	Norris, Steve
Horam, John	Onslow, Rt Hon Sir Cranley
Hordern, Rt Hon Sir Peter	Oppenheim, Phillip
Howard, Rt Hon Michael	Ottaway, Richard
Howarth, Alan (Strat'rd-on-A)	Page, Richard
Howell, Rt Hon David (G'dford)	Paice, James
Howell, Sir Ralph (N Norfolk)	Patnick, Irvine
Hunt, Rt Hon David (Wirral W)	Patten, Rt Hon John
Hunt, Sir John (Ravensbourne)	Pawsey, James
Hunter, Andrew	Peacock, Mrs Elizabeth
Hurd, Rt Hon Douglas	Pickles, Eric
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, Rt Hon 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)
Kirkhope, Timothy	Robinson, Mark (Somerton)
Knapman, Roger	Roe, Mrs Marion (Broxboume)
Knight, Mrs Angela (Erewash)	Ross, William (E Londonderry)
Knight, Greg (Derby N)	Rowe, Andrew (Mid Kent)
Knight, Dame Jill (Bir'm E'st'n)	Rumbold, Rt Hon Dame Angela
Knox, Sir David	Ryder, Rt Hon Richard
Kynoch, George (Kincardine)	Sackville, Tom
Lait, Mrs Jacqui	Sainsbury, Rt Hon Tim
Lang, Rt Hon Ian	Scott, Rt Hon Nicholas
Lawrence, Sir Ivan	Shaw, David (Dover)
Legg, Barry	Shaw, Sir Giles (Pudsey)
Leigh, Edward	Shephard, Rt Hon Gillian
Lennox-Boyd, Mark	Shepherd, Colin (Hereford)
Lester, Jim (Broxtowe)	Shersby, Michael
Lidington, David	Sims, Roger
Lightbown, David	Skeet, Sir Trevor
Lilley, Rt Hon Peter	Smith, Sir Dudley (Warwick)
Lloyd, Peter (Fareham)	Smith, Tim (Beaconsfield)
Lord, Michael	Soames, Nicholas
Luff, Peter	Spencer, Sir Derek
Lyell, Rt Hon Sir Nicholas	Spicer, Sir James (W Dorset)
MacGregor, Rt Hon John	Spicer, Michael (S Worcs)
MacKay, Andrew	Spink, Dr Robert
Maclean, David	Spring, Richard
McLoughlin, Patrick	Sproat, Iain
McNair-Wilson, Sir Patrick	Squire, Robin (Hornchurch)
Madel, David	Stanley, Rt Hon Sir John
Maitland, Lady Olga	Steen, Anthony
Major, Rt Hon John	Stephen, Michael
Malone, Gerald	Stern, Michael
Mans, Keith	Stewart, Allan
Marland, Paul	Streeter, Gary
Marlow, Tony	Sumberg, David
Marshall, John (Hendon S)	Sweeney, Walter
Marshall, Sir Michael (Arundel)	Sykes, John
Martin, David (Portsmouth S)	Tapsell, Sir Peter
Mates, Michael	Taylor, Ian (Esher)
Mawhinney, Dr Brian	Taylor, John M. (Solihull)

Taylor, Sir Teddy (Southend, E)	Ward, John
Temple-Morris, Peter	Wardle, Charles (Bexhill)
Thomason, Roy	Waterson, Nigel
Thompson, Sir Donald (C'er V)	Watts, John
Thompson, Patrick (Norwich N)	Wells, Bowen
Thornton, Sir Malcolm	Whitney, Ray
Thumham, Peter	Whittingdale, John
Townend, John (Bridlington)	Widdecombe, Ann
Townsend, Cyril D. (Bexl'yh'th)	Wiggin, Sir Jerry
Tracey, Richard	Wilkinson, John
Tredinnick, David	Willetts, David
Trend, Michael	Wilshire, David
Trimble, David	Winterton, Nicholas (Macc'fld)
Trotter, Neville	Wolfson, Mark
Twinn, Dr Ian	Yeo, Tim
Vaughan, Sir Gerard	Young, Rt Hon Sir George
Viggers, Peter
Waldegrave, Rt Hon William	Tellers for the Ayes:
Walker, A. Cecil (Belfast N)	Mr. Timothy Wood and
Walker, Bill (N Tayside)	Mr. Robert G. Hughes.
Waller, Gary
NOES
Abbott, Ms Diane	Denham, John
Adams, Mrs Irene	Dixon, Don
Ainger, Nick	Dobson, Frank
Ainsworth, Robert (Cov'try NE)	Donohoe, Brian H.
Alton, David	Dowd, Jim
Anderson, Donald (Swansea E)	Dunwoody, Mrs Gwyneth
Anderson, Ms Janet (Ros'dale)	Eagle, Ms Angela
Armstrong, Hilary	Enright, Derek
Ashton, Joe	Etherington, Bill
Barnes, Harry	Ewing, Mrs Margaret
Battle, John	Field, Frank (Birkenhead)
Bayley, Hugh	Flynn, Paul
Beckett, Rt Hon Margaret	Foster, Rt Hon Derek
Beith, Rt Hon A. J.	Foster, Don (Bath)
Benn, Rt Hon Tony	Fraser, John
Bennett, Andrew F.	Fyfe, Maria
Bermingham, Gerald	Galloway, George
Berry, Dr. Roger	Gapes, Mike
Betts, Clive	Garrett, John
Blair, Tony	George, Bruce
Blunkett, David	Gerrard, Neil
Boyes, Roland	Gilbert, Rt Hon Dr John
Bradley, Keith	Godman, Dr Norman A.
Bray, Dr Jeremy	Golding, Mrs Llin
Brown, Gordon (Dunfermline E)	Gordon, Mildred
Burden, Richard	Grant, Bernie (Tottenham)
Byers, Stephen	Griffiths, Nigel (Edinburgh S)
Callaghan, Jim	Gunnell, John
Campbell, Mrs Anne (C'bridge)	Hain, Peter
Campbell, Menzies (Fife NE)	Hall, Mike
Campbell, Ronnie (Blyth V)	Hanson, David
Campbell-Savours, D. N.	Hardy, Peter
Canavan, Dennis	Harman, Ms Harriet
Cann, Jamie	Harvey, Nick
Carlile, Alexander (Montgomry)	Hattersley, Rt Hon Roy
Chisholm, Malcolm	Heppell, John
Clark, Dr David (South Shields)	Hill, Keith (Streatham)
Clarke, Eric (Midlothian)	Hinchliffe, David
Clarke, Tom (Monklands W)	Hoey, Kate
Clwyd, Mrs Ann	Hogg, Norman (Cumbernauld)
Coffey, Ann	Home Robertson, John
Cohen, Harry	Hood, Jimmy
Connarty, Michael	Hoon, Geoffrey
Cook, Frank (Stockton N)	Hoyle, Doug
Corbett, Robin	Hughes, Kevin (Doncaster N)
Corbyn, Jeremy	Hughes, Roy (Newport E)
Corston, Ms Jean	Hutton, John
Cryer, Bob	Illsley, Eric
Cummings, John	Jackson, Glenda (H'stead)
Cunliffe, Lawrence	Jackson, Helen (Shef'ld, H)
Cunningham, Jim (Covy SE)	Jamieson, David
Dafis, Cynog	Janner, Greville
Darling, Alistair	Johnston, Sir Russell
Davidson, Ian	Jones, Barry (Alyn and D'side)
Davies, Rt Hon Denzil (Llanelli)	Jones, Jon Owen (Cardiff C)
Davies, Ron (Caerphilly)	Jones, Lynne (B'ham S O)
Davis, Terry (B'ham, H'dge H'l)	Jones, Martyn (Clwyd, SW)

Jones, Nigel (Cheltenham)	Pope, Greg
Jowell, Tessa	Powell, Ray (Ogmore)
Kaufman, Rt Hon Gerald	Prentice, Ms Bridget (Lew'm E)
Keen, Alan	Prentice, Gordon (Pendle)
Kennedy, Charles (Ross,C&S)	Prescott, John
Kennedy, Jane (Lpool Brdgn)	Primarolo, Dawn
Kilfoyle, Peter	Radice, Giles
Kinnock, Rt Hon Neil (Islwyn)	Randall, Stuart
Kirkwood, Archy	Raynsford, Nick
Leighton, Ron	Redmond, Martin
Lestor, Joan (Eccles)	Rendel, David
Lewis, Terry	Robertson, George (Hamilton)
Livingstone, Ken	Robinson, Peter (Belfast E)
Lloyd, Tony (Stretford)	Roche, Mrs. Barbara
Llwyd, Elfyn	Rogers, Allan
Loyden, Eddie	Rooker, Jeff
Lynne, Ms Liz	Rooney, Terry
McAllion, John	Ross, Ernie (Dundee W)
McAvoy, Thomas	Rowlands, Ted
McCartney, Ian	Ruddock, Joan
McCrea, Rev William	Sedgemore, Brian
Macdonald, Calum	Sheldon, Rt Hon Robert
McFall, John	Shore, Rt Hon Peter
McGrady, Eddie	Short, Clare
Mackinlay, Andrew	Simpson, Alan
McLeish, Henry	Skinner, Dennis
Maclennan, Robert	Smith, Andrew (Oxford E)
McNamara, Kevin	Smith, C. (Isl'ton S & F'sbury)
McWilliam, John	Smith, Llew (Blaenau Gwent)
Madden, Max	Snape, Peter
Maddock, Mrs Diana	Soley, Clive
Mahon, Alice	Spearing, Nigel
Mandelson, Peter	Squire, Rachel (Dunfermline W)
Marek, Dr John	Steinberg, Gerry
Marshall, David (Shettleston)	Stevenson, George
Marshall, Jim (Leicester, S)	Stott, Roger
Martlew, Eric	Strang, Dr. Gavin
Maxton, John	Taylor, Mrs Ann (Dewsbury)
Meacher, Michael	Taylor, Matthew (Truro)
Michael, Alun	Thompson, Jack (Wansbeck)
Michie, Mrs Ray (Argyll Bute)	Tipping, Paddy
Milburn, Alan	Tyler, Paul
Miller, Andrew	Walley, Joan
Mitchell, Austin (Gt Grimsby)	Wardell, Gareth (Gower)
Moonie, Dr Lewis	Wareing, Robert N
Morgan, Rhodri	Watson, Mike
Morley, Elliot	Welsh, Andrew
Morris, Rt Hon A. (Wy'nshawe)	Wicks, Malcolm
Morris, Estelle (B'ham Yardley)	Williams, Rt Hon Alan (Sw'n W)
Mowlam, Marjorie	Wilson, Brian
Mudie, George	Winnick, David
Mullin, Chris	Wise, Audrey
Oakes, Rt Hon Gordon	Worthington, Tony
O'Brien, Michael (N W'kshire)	Wray, Jimmy
O'Brien, William (Normanton)	Wright, Dr Tony
O'Hara, Edward	Young, David (Bolton SE)
Paisley, Rev Ian
Parry, Robert	Tellers for the Noes:
Patchett, Terry	Mr. Gordon McMaster and
Pickthall, Colin	Mr. Alan Meale.
Pike. Peter L.

Question accordingly agreed to.

Lords amendment: No. 6, in

page 6, line 20, after ("35") insert ("Proposals to close passenger railway facilities operated on behalf of the Franchising Director")

The Minister for Transport in London (Mr. Steve Norris)

I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker (Mr. Michael Morris)

With this, we will take Lords amendments Nos. 70, 71 to 123, 325, 326 and 453.

Mr. Norris

The amendments build on the existing closure procedures. Those procedures will apply, as at present, to the complete cessation of passenger services to a station or on a line. Consumer committees will continue to report on any hardship arising from a proposed closure and may, of course, hold public hearings. Some changes will be made to the procedures, mainly to reflect the new structure of the railways. The operational control of certain facilities, networks, stations and light maintenance depots may not in future rest with train operators, so the closure procedures will also need to apply to proposals to terminate the use of such facilities. Decisions on closures will be for the regulator, but there will be a right of appeal to the Secretary of State. There will also be a simplified procedure for minor infrastructure closures.

The amendments would substantially improve the closure provisions of the Bill. The majority are drafting, technical and consequential amendments, but one or two are of substance. I emphasise that most of the proposals were tabled by Opposition Peers, or introduced by the Government in response to Opposition concerns. Let me detail the most significant of them.

Amendment No. 108 is the most important in the group. It removes the 26-week limit on any further period that the Secretary of State may allow the regulator to make his decision. We have repeatedly said that the restructuring of railways does not lead to more closures but, inevitably—as has always been known on the railways—there will be a few over time as railways adjust to changing demand, just as there will be additions to the network for the same reason. Most of the closures will not be particularly important but it is conceivable that there may be controversial closures and the closure procedures have to cater for that eventuality, too.

The Bill as drafted permits the regulator a maximum of one year in which to make his decision. It is acceptable to argue that, in an especially controversial case, that limit might be tested severely. Amendment No. 108 will remedy that potential difficulty.

Amendments Nos. 107, 112 and 325 would enable the rail users consultative committees to publish their reports to the regulator; would ensure that the RUCCs were informed of the designation by the franchising director of those services that were experimental; and would permit the Secretary of State to place conditions on consents to closure given under the alternative closure procedures set out in schedule 4. All those amendments followed representations made on behalf of the Central Transport Consultative Committee, and I am sure that hon. Members on both sides of the House will agree that they would improve the Bill.

Amendment No. 453 would make transitional provision for closure proposals—that is, provision for closure proposals which might be in the pipeline when the new procedures replace the old. It provides that such a proposal should be processed under the old procedure. It also ensures that the channel tunnel services are included in the consumer committees' responsibilities.

Amendments Nos. 97 and 104 introduce the new clauses that are needed to cover a particular circumstance in which a closure might be proposed that was not covered by the Bill as amended in this House. If consent to close a network or a facility such as a maintenance depot is refused, the franchising director must secure its continued operation, and is likely to do so by engaging someone to do it on his behalf. The new clauses will simply enable him to repropose closure of those networks or facilities if in later years he wishes to do so.

Other amendments in the group include a recasting of clause 33, which deals with proposals to close franchise services, so as to align it with the new clause introduced by amendment No. 97—proposals to close networks operated on behalf of the franchising director—and amendments to ensure that the removal of track is not treated as a closure provided that at least a single track remains. That last amendment carries forward the position under the existing closure procedures and ensures that routine track alterations can take place without triggering any part of the new closure procedures.

All the amendments are fairly technical and I again emphasise that the majority were either introduced by Opposition Peers or by the Government in response to demands from groups such as the user committees or Opposition Members.

Lords amendment No. 123 adds a new clause to the Bill which deals with exclusion of liability for breach of statutory duty. The new clause is exactly the same as the provision in section 3(4) of the Transport Act 1962 which provides that nothing that is contained in sections 3(1) or 3(2), which places a duty on BR to provide railway services in Great Britain, shall impose any form of duty or liability enforceable by proceedings before any court to which the Board would not otherwise be subject. In broad terms, the duties of the franchising director in respect of securing continuity of service are not to give rise to any liability for breach of statutory duty. That fairly straightforward principle is in the 1962 Act and is simply replicated in this legislation. However, to avoid doubt, that does not mean that we are seeking to exclude any proceedings for judicial review in respect of those duties of the franchising director.

9.30 pm

Similarly, any obligation on an operator not to discontinue services or the operation of a network, station or light maintenance depot without giving due notice, is not to be enforceable through proceedings for a breach of statutory duty. Those obligations will be enforceable by the regulator who will use his enforcement powers in the Bill.

It is also important to recognise that, in moving that the House doth agree with Lords amendment No. 123 and the new clause to ensure that nothing contained in sections 3(1) and 3(2) of the Transport Act 1962 places a duty on the franchising director analogous with the duties on the British Railways Board under the 1962 Act, we are not excluding liability of operators for breaches of contract or negligence. All those powers remain in place should it be appropriate for them to be used.

As I said earlier, the other amendments in the group are largely technical. It is reasonable to say that they all improve the Bill by common agreement, having received the support of Opposition Members when moved, and I trust that the House will agree to them.

Mr. Bayley

The Opposition welcome Lords amendment No. 108, which deletes the 26-week cut-off period for extensions of consultation in respect of closures. However, unlike the Minister and Conservative Members, we fear that it will have to be invoked because the privatisation is not just a sale of the railways, it is likely to be a closing down sale of the railways.

It is disingenuous of the Minister to say that the closure procedures set out in the Lords amendments simply build on the existing procedure. It is also misleading to say that the Government are introducing a simplified procedure for dealing with minor closures. The minor closure procedure, which we have not had before, reduces the public's right to object if they are to be disadvantaged by a closure. In the past, the transport users consultative committees decided whether a closure was so minor that they had no comment to make. In future, the committees will not have that choice and the regulator will make that decision.

Nothing illustrates better the way in which the Government have approached privatisation, by making it up as they go along, than the way in which they have dealt with the closure procedures. We had a full day's debate on the matter in Standing Committee and ended up with 17 pages of legislation on the issue in the Bill that we sent to another place. A further 14 pages of legislation have come back. They are changes which were not thought of by the Government in Committee. They have arisen subsequently.

It all seemed so easy in the White Paper. The closure provisions were summed up in two very short paragraphs. Paragraph 71 stated: There is no reason to believe that the Government's proposals will lead to closures of services. But if in future, as a result of change in demand, the Franchising Authority decided that a service was no longer socially necessary and there was no case for continuing that service then the same statutory closure procedures would apply as now. In such cases the final decision about whether a service should be retained or withdrawn will continue to be taken by the Secretary of State. Sadly, those commitments were not to be. First, the commitment to the social railway has been deleted—it does not appear in the Bill. Secondly, the commitment to provide the same statutory closure procedures as we had previously does not appear. We have tighter time limits and a new concept of a "minor closure". There used to be a requirement to advertise in two local newspapers. That is now changed to one local newspaper, although in another place an amendment was passed that there had to be two advertisements in one newspaper.

If, as seems likely with privatisation, in respect of services from Seamer to Bridlington to Beverley to Hull, if that east coast line were to close, where would one advertise? Would it be the Scarborough Evening News, the Hull Daily Mail or the Bridlington local newspaper? It is not good enough to limit it to one newspaper.

In the White Paper, we were promised that the decision on the closure would be made by the Secretary of State, as now. In fact, it is not the Secretary of State but the regulator who will make the decision. In some cases, there is a right of appeal to the Secretary of State, but what we were promised in the White Paper is not in the Bill.

The threat of closure is real. Regional Railways has published a map on which it highlights a wide range of lines that are threatened with closure. Apart from the Scarborough to Hull service, there is the Middlesbrough to Saltburn service, the Middlesbrough to Whitby service, the Grimsby to Cleethorpes service, and the Sheffield to Barnetby service. Apart from Yorkshire, the Carlisle to Barrow service is marked in red on the map as threatened with closure. Other services include Barrow to Silverdale, Aberystwyth in Wales to Shrewsbury, Llanelli to Craven Arms and so on throughout the country, including Lowestoft to Ipswich, and, in the south-west, the Exeter to Barnstaple and the Par to Newquay services. All those services are highlighted as at risk.

Those lines do not make a profit, they provide a public service, and their future depends on whether the franchising director's budget, after other calls on it to make main franchise services profitable for private operators, will contain enough money to maintain services. British Rail currently has 10,600 miles of passenger track. On Second Reading, the Secretary of State said that, after privatisation, the extent of the network would remain nearly the same as it is now. In Committee, the Minister said that there would not be a significant reduction in the franchised services compared with the May 1994 pre-privatisation timetable.

I should like the Minister to reiterate the commitment that the basis of services post-privatisation—the basis of the franchising agreement—will be the same as the services set out in the May 1994 timetable. I should like him also to comment on use of the phrase "substantially the same as in the timetable". Time and again, we have asked for a definition of what "substantially" means in that context, but we have never received one. Does it mean that 90 per cent., 95 per cent. or 99 per cent. of services will be protected?

What about the quality of service that is provided to the travelling public? The service can decline quite substantially without the closure procedures being introduced. I notice that in amendment No. 90, which the Minister described as a small technical tidying-up matter, there is a specific new provision that, if a line is changed from dual-track working to single-track working, it will no longer count as a closure at all. So the service can be radically reduced and undermined in a major way, which, in the past, would have resulted in a full and proper closure procedure, and, with the appointment of a regulator, even the Secretary of State can now get off the hook.

The commitments that we were offered in bland and breezy terms in two paragraphs of the White Paper have not been met in the relevant 17 pages of the Bill that went to the Lords or in the further 14 pages of amendments that have come back to us. What does the Minister say about the failure to honour the commitments contained in the White Paper?

Mr. Norris

It always strikes me as quite extraordinary that one of the more incredible flights of fancy indulged in by Opposition Members when considering this Bill is that they assume that somehow the pattern of railway services in Britain has remained immutable, unchanged and as written on tablets of stone for the past 45 years. If that had been the case, it would be worrying if the Government proposed anything to suggest that in the future those tablets of stone might be shattered.

The hon. Member for York (Mr. Bayley) is obsessed with that notion. He meanders constantly around this complex Hornby OO service—an immutable service which has not altered since time began—and he believes that the slightest movement on it will upset terrestrial equilibrium. Of course, that is and always has been nonsense.

The hon. Gentleman purports to know something about railways, but I have not been able to judge whether he does know anything in the 150 hours of debate that we have had, and I remain to be convinced. The hon. Gentleman should know that the pattern of railway services has altered in every year that the railways have been in operation.

Mr. Alex Carlile (Montgomery)

Mostly for the worse.

Mr. Norris

That is a matter for the hon. and learned Gentleman and others to judge. Railway services have altered under Governments of both complexions—bits have been added to and removed from railway services —which is exactly what one would expect to happen as railway patterns reflect changes in demand.

Mr. Carlile

Will the hon. Gentleman give way?

Mr. Norris

If I may finish the sentence, the hon. and learned Gentleman will be welcome to enliven our proceedings, as he always does.

Let us take the extraordinary proposition that what might happen in the future is exactly what has happened in every year that the railways have existed. There will, no doubt, be minor closures and minor openings. The local press will make more of the closures than of the openings, but that is in the nature of things. We want a procedure to deal with the closures, to ensure that whenever a closure is proposed it is exhaustively debated, and all the relevant information about a service's usefulness to the local community is taken into account.

The Bill not only takes forward the current provisions for closure, but makes them wider and more comprehensive-sive. It gives the user committees more powers in relation to the publication of their reports, the disclosure of the information that they have and the observations that they can make on the closures. It is illogical and absurd to argue that because the Bill contains provisions for closures it breaches a new dyke in railway administration.

Mr. Carlile

Of course one cannot exclude the possibility of closures from time to time—that is an ordinary incident in the commercial life of a nationalised or private industry—but does the Minister not agree that, after the railways have been privatised, inevitably it will be the rural lines that are forced into closure? A privatised regime, by its own hypothesis, will be opposed to the continuation of railways in areas where there are not many customers. Should not the Government address the issue of the social need for railways and their affect on rural areas, some of which have important towns, such as Aberystwyth, on their periphery?

Mr. Norris

I have a great deal of respect for the hon. and learned Gentleman, but I do not honestly believe that any sensible reading of the Bill could lead one to conclude that the privatisation of services proposed in it has any relevance to decisions on the closure of rural or busy lines.

My reasoning is straightforward. I am sure that the hon. and learned Gentleman would agree that, in the past 40 years, there have probably been more line closures than openings, but I remind him that those took place in a nationalised industry.

9.45 pm

Dame Elaine Kellett-Bowman (Lancaster)

When my right hon. Friend the Minister for Public Transport was good enough to visit Lancaster, he made it quite clear that socially necessary lines and rural ones would receive a subsidy. He has since confirmed that assurance in writing to me. That means that it is highly probable that the west coast main line will be eligible to receive a subsidy. That line covers many rural areas.

Mr. Norris

I am grateful to my hon. Friend for making that point, because her remarks underline the heart of the Bill. I understand that it is in the political interests of Opposition Members not to understand that point or to take it on board, because the minute they do so three quarters of the debate in which they have been engaged for the past months will explode.

The hypothesis is straightforward. The franchising director sets out a pattern of services that he requires the franchisee to undertake. In answer to the hon. Member for York, the timetable on which that pattern is based will, as has frequently been stated, be that operating at the time the franchise is offered. It may be the 1994 timetable or one for a later date. The important thing is that it will offer a replication of the current services.

We have used the word "substantially" according to its straightforward English meaning. In other words, the new service will be the same in every material respect as that currently on offer. That is why the hon. and learned Member for Montgomery (Mr. Carlile) should understand that the issue of the vulnerability of rural lines is not affected by the Bill. On the contrary—there will now be an open incentive to a private operator, who has already contracted with the franchising director to provide a range of relevant services, including services to some rural stations, to think about how to maximise his or her profits. The operator will wish to do that by looking at services which are currently under-used to see what can be done to make them more attractive, thus attracting extra revenue to those lines.

The franchise operator is already contracted with the franchising director, and in so doing has presumably built in the basic rate of return that would be required by his shareholders. Any improvement in the take-up of services will be to the benefit of the franchising operator. The hon. and learned Member for Montgomery would agree, of course, that that will also benefit passengers.

I must make it clear that I do not accept the argument put forward by the hon. Member for York. The new regime is a substantial improvement on the one which currently operates. It will not detract in any way from the ability of local communities to object to the closure of lines. On the contrary, it replicates and expands the existing system. On that basis, I have no hesitation in commending the amendment to the House.

Lords amendment agreed to.