HC Deb 21 March 1994 vol 240 cc1-3
1. Mr. Hawkins

To ask the Secretary of State for Transport what steps he is taking to encourage freight. to be moved by rail rather than by road.

The Secretary of State for Transport (Mr. John MacGregor)

From April, we are introducing an enhanced rail freight grant regime. This, together with privatisation, open access for new operators and substantial investment in the infrastructure, freight terminals and rolling stock for the channel tunnel service, amounting to some £450 million, will provide a significant boost for the rail freight industry.

Mr. Hawkins

I thank my right hon. Friend for his answer. He may know that my constituents and I had the great good fortune to hear our right hon. Friend the Minister of State make an excellent speech covering the issue on Friday night. After that, I spent some time talking to some of the senior management at Preston station. Does my right hon. Friend agree with me—and with them—that the opening of the channel tunnel will provide one of the great opportunities to put more freight on rail?

Mr. MacGregor

Very much so. I think that it will be a big market opportunity, not least for the north-west. As my hon. Friend may know, the opening of the tunnel will greatly reduce the travelling times from, say, Manchester or Liverpool to places on the continent, particularly in Mediterranean areas; travel will also be much quicker than by road. I agree with my hon. Friend that the channel tunnel offers a big opportunity for switching freight from road to rail.

Mrs. Dunwoody

How does the Secretary of State manage to keep a straight face while he says that? How can he seriously imagine that the imposition of astronomical charges on rolling stock and Railtrack can improve any form of transport, let alone encourage anyone to use it?

Mr. MacGregor

I think the hon. Lady will find that Railtrack will seek commercial contracts for freight. As for passenger transport, as the hon. Lady knows, the passenger franchisees will receive a subsidy to meet the Railtrack costs. I am absolutely clear about this; I think that the opening of the channel tunnel offers a major marketing opportunity. If the hon. Lady examines the times involved in travelling from the north-west to major continental centres, she will see that, with the channel tunnel, carrying freight on rail gives just that hope.

Mr. Nigel Evans

As my right hon. Friend knows, Castle Cement is in my constituency. It used to transport much of its freight by rail; now, unfortunately, it has switched to the roads, because they are more competitive. Will my right hon. Friend give the people of the Ribble valley some assurance that, when the new system is in operation in 1995, there will be greater incentives for firms such as Castle Cement to switch their freight transport back on to the railways?

Mr. MacGregor

Indeed; in fact, there are some recent examples of freight going back on to rail. I believe that opportunities for open access, coupled with the rail freight grant regime, which will allow the provision of subsidies to meet Railtrack costs where there is an environmental benefit to be gained—I might have made that point to the hon. Member for Crewe and Nantwich (Mrs. Dunwoody)—will encourage the switch back to rail.

Mr. Wilson

Will the Secretary of State convey our regret that Question 8, concerning the choice of rail privatisation, has been prudently withdrawn?

Does the right hon. Gentleman agree that it is pure nonsense to talk about benefits to Railfreight, or any other rail services, against the present background? From 1 April, railway subsidy will have to be doubled to maintain existing services, solely because of the artificially inflated access charges that the Treasury has forced on Railtrack. Does the Secretary of State accept—

Mr. MacGregor

A third question?

Mr. Wilson

Well, there are many things to accept before anyone can believe this nonsense.

In the light of that settlement, the rate of subsidy may be doubled. The Government are seeking to create the impression of a highly subsidised railway—twice as highly subsidised after 1 April as before that date. Is not the scene being set for the rundown of our railways?

Mr. MacGregor

I expressed surprise only because I understood that I was not expected to answer a large number of questions. I regret more than the hon. Gentleman that Question 8 is not to be asked. I was looking forward to it, and to demonstrating what privatisations have achieved. The hon. Gentleman, by his questions, showed that he does not understand how the new grant and access charging regimes will work.