Rail Services (Competition) (Hansard, 20 June 1994)

§ 5. Mr. Hawksley
To ask the Secretary of State for Transport what assessment he has made of the effect of competition on rail services.

§ Mr. MacGregor
Evidence from previous transport privatisations shows that the introduction of competition encourages the development of better-quality services. I am confident that customers—passengers and freight—will benefit from more services of higher quality, improved efficiency and better value for money.

§ Mr. Hawksley
I thank my right hon. Friend for that encouraging answer. What effect will the industrial action by signalmen, who are asking for 11 per cent. without increased productivity and are supported by the Opposition, have on competition in the future?

§ Mr. MacGregor
One must bear in mind the fact that the competition is road and air, so it is important that Railtrack and British Rail be thoroughly efficient and competitive. The demand for a no-strings increase of at least 11 per cent. in signalmen's basic pay is inflationary and will not help the competitive position of Railtrack or the railway services. On Monday, the Railtrack board offered a 2.5 per cent. annual pay increase, which is in line with many other pay offers in both the public and private sectors. It also offered, and is keen to have, talks on major reforms and restructuring of signalmen's terms and conditions. It is irresponsible and damaging to the railways for the unions to undertake a series of strikes on an 11 per cent., no-strings pay claim. It is important that the talks begin again and I am anxious that that should happen. The real question, however, is for the Opposition, who have been notable for their silence on this issue. Does the hon. Member for Holborn and St. Pancras (Mr. Dobson) approve of the strike for an 11 per cent., no-strings pay increase? Yes or no?

§ Mr. Harvey
Does the Minister believe that potential bidders for the franchise to run trains on the south-west line have an accurate picture of what they are letting themselves in for, given the reliability figures compiled for the passengers charter? Is not the Minister concerned that as important a flagship of Government policy as the citizens charter should compute inaccurate figures and measure wrong times? Some of the punctual trains are recorded as having gone twice and some less punctual ones are recorded as never having arrived. Should not a search party be sent out for the passengers who are in official limbo and compensation be given to season ticket holders?

§ Mr. MacGregor
I agree entirely with the hon. Gentleman that it is important that the figures be accurate. If they are not, we shall certainly look at the matter.

§ Sir Anthony Durant
Is my right hon. Friend aware that the commuters of Reading are completely fed up with the strike, as a result of which many are now climbing on buses that run from Reading to London, which is an efficient service at about two thirds the cost? Does he agree that commuters will not return to the railways unless the railways wake up to the problem?

§ Mr. MacGregor
My hon. Friend is right. That is the danger for jobs in the railway industry of a pay increase of at least 11 per cent. without any productivity improvements. However, I emphasise again that the chairman of Railtrack has said that he wants to achieve a settlement on the restructuring—which is separate from the immediate pay offer—which rewards the signalmen for their skills and gives them a modern employment package. That restructuring must offer value for money, for the reason that my hon. Friend gives, but it is quite separate from an 11 per cent. demand with no strings attached. That is why I call on the hon. Member for Holborn and St. Pancras to condemn that demand and, above all, to condemn a strike that is damaging to the railways.

§ Mr. Dobson
If, as the Secretary of State asserts, it would be inflationary to find the £5 million that it would cost to pay the 5.7 per cent. increase that was offered by Railtrack and later withdrawn, what does he think the £7 million that Railtrack has expended on refurbishing its offices is? Is that inflationary or is it deflationary?
Was the offer withdrawn because the newly appointed bosses of Railtrack are incompetent, stupid and act in bad faith, or was it because the Secretary of State intervened and prevented them from making the offer, despite the fact that his departmental press office was lying and saying that there had been no ministerial interference?

§ Mr. MacGregor
I have made my position clear every time that I have been asked. I have frequent discussions with the board of Railtrack and members of the board of British Rail about public sector pay policy and I shall continue to do so. People would expect me to have a clear view about the Government's general position on public sector pay policy.
It is a pity that the hon. Gentleman did not establish the facts about Railtrack's premises. I understand that the actual cost of the premises is £1.8 million, which is a very modest arrangement for a very important body.
The whole House will have noticed that, once again, the hon. Gentleman has not made clear his position on the strike. Once again, if he is silent, he is condoning a pay increase with no strings attached of at least 11 per cent., causing great discomfort to passengers and potential damage to the railways—a pay increase that few other people in the country in the public or private sector are receiving. I take it that he will now take the opportunity to condemn that strike as irresponsible.