Rail Reforms (Hansard, 9 May 1994)

9. Stephen
To ask the Secretary of State for Transport what opportunity for non-transport industries will be created by the rail reforms.

§ Mr. Freeman
A wide spectrum of opportunities for non-transport industries will be created by the Government's rail reforms, including, for example, bidding for the infrastructure service units and British Rail Telecoms and developing the commercial potential at some of our larger stations.

§ Mr. Stephen
As my hon. Friend knows, I have had the good fortune to be a Industry and Parliament Trust fellow with British Rail for the past year. Will he accept from me that a positive attitude exists throughout the industry to the introduction of private sector capital and management techniques, not least among the men and women who maintain the track and signal infrastructure? Can he give a suggestion of the timetable for the restructuring of British Rail infrastructure services?

§ Mr. Freeman
I am grateful to my hon. Friend. There is a widespread enthusiasm among the staff of British Rail—[Interruption.] There is a widespread enthusiasm for our reforms among those people who look forward positively to developing a better rail system. If hon. Gentlemen are not aware of that, I will introduce them to some of the management of British Rail. Therefore, I agree with my hon. Friend.
On the infrastructure units, I expect that the process of sale will commence at the beginning of the next financial year and will be concluded by Easter 1996.

§ Mrs. Dunwoody
Is the Minister aware that there is every reason why private consultants should be delighted with the opportunities offered by British Rail, because they are costing the taxpayer £344 million and not one single 8 penny is going to improving either the rail structure or jobs? What is happening with those people who are flying round in helicopters, and how can we obtain some value for money from those people who are publishing articles calling it a "gravy train"?

§ Mr. Freeman
On privatisation costs, the Government do not recognise the type of figures that the Opposition have been speaking about—£300 million, £400 million, £500 million and £600 million. The hon. Member for Holborn and St. Pancras (Mr. Dobson) has been including the cost of redundancies of more than £300 million. That would have occurred anyway and improved the efficiency of British railways.

§ Mr. Hawkins
Does my right hon. Friend agree that the opportunities provided by the rail reforms will be enormously enhanced by the success of the channel tunnel, which he, the Secretary of State and many other Conservative colleagues enjoyed, which was built as a result of the success of private sector finance, and which would never have been built had we followed the transport policies of the Labour party?

§ Mr. Freeman
It was the Labour party which cancelled the channel tunnel project in the 1970s. It is under the present Government that private sector capital has brought off a major engineering feat.

§ Mr. Dobson
Is not the Minister being a trifle modest in his list of non-transport industries that have benefited from rail privatisation? Has not between £250 million and £300 million of taxpayers' and passengers' money been paid out by his Department or British Rail to merchant bankers, management consultants, lawyers, accountants, public relations advisers and even—God help us—parliamentary consultants?

§ Mr. Freeman
The truth is that British Rail and Railtrack, the Department of Transport, the Office of Rail Passenger Franchising and the regulator have spent money well on preparing the railway industry for privatisation. Last year, British Rail and Railtrack spent about £50 million together. That is 1.5 per cent, of the turnover of British Rail and it is money well spent.