Rail Network

HC Deb 11 July 1995 vol 263 cc753-805

Madam Deputy Speaker (Dame Janet Fookes)

I have to announce that Madam Speaker has selected the amendment in the name of the Prime Minister.

3.47 pm

Mr. Paul Tyler (North Cornwall)

I beg to move, That this House deplores the impact of the privatisation threat on investment in the rail network and on deteriorating staff morale; and reiterates the need to retain Railtrack as a crucial public service in order to maintain and develop a co-ordinated national transport policy. This debate is intended as a triple opportunity. First, it is an opportunity for the new Secretary of State, whom I very much welcome to the debate, to state his position on the privatisation of the rail system and on Railtrack in particular. Clearly, the House will want to know whether he shares the enthusiasm and optimism—indeed, the over-optimism—of his predecessors. I note with interest his contribution to a debate on public transport on 23 March 1990, which was introduced by his late colleague Mr. Robert Adley, whose views on privatisation we all recall. The Secretary of State said: more people are writing to their Members of Parliament—certainly those in London—complaining about conditions … they expect part of the greater wealth that has been created to be diverted to the improvement, modernisation and expansion of public transport in London, the south-east and in other parts of the country."—[Official Report, 23 March 1990; Vol.169, c.1395.] In a few moments I shall be able to demonstrate that that simply has not happened. Let us hope that, now that he is in the elevated position of driver in the cab, he may be able to change the way in which British Rail and the rail system are driven.

Secondly, of course, this is an opportunity to help the Labour party off the fence, not just on the subject of strikes, on which they will no doubt want to make a statement, but on the future of the rail network. It is an opportunity to get them on board for a proper policy for the public ownership of the rail network.

Thirdly, and most importantly, the debate is a wonderful opportunity for Back Benchers on both sides of the House to express the concern, frustration and anger that our constituents are expressing to us about the way in which our great rail network is being dismantled before our very eyes.

Mr. Nick Hawkins (Blackpool, South)

My constituents are annoyed and frustrated about the rail unions, which are determined to wreck their travel arrangements. What does the hon. Gentleman have to say about that, or is he an apologist like Labour's Front Benchers?

Mr. Tyler

Of course not. I am sure that hon. Members understand the frustration and anger of the staff in all parts of the rail system who are seeing their industry being dismantled. They are also seeing a huge waste of money which could be invested in better conditions for them, including better pay, as well as in improving the service. However, that is no excuse for taking industrial action and I agree that it is not helpful to the rail system, the rail customers or rail staff to take precipitate action—as, indeed, some other staff have made clear in the past few days. No doubt the spokesmen for the Labour party will wish to dissociate themselves from this industrial action as clearly and precisely as we do.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich)

I hope that the hon. Gentleman will not mind me asking whether it occurs to him that, when negotiations between employers and employees are taking place, the most useless and unhelpful thing that someone can do in the House—especially when he is not party to those negotiations—is to express his views in the terms that the hon. Gentleman has just used?

Mr. Tyler

When the hon. Lady's party was in government, I recall many previous occasions on which Labour Ministers did precisely that. I see no reason not to now.

We believe that a publicly controlled, publicly directed public service is not inherently inefficient. It can be extremely efficient. In particular, I pray in aid the Post Office. As a student of history, Madam Deputy Speaker, you will know that the Post Office was taken into public ownership by that great radical Charles I in 1635. After the disturbances of the civil war, it was re-established as a public service by Charles II by Act of Parliament in 1660.

There is no inherent reason why a useful public service should not continue to be of very considerable use to the public if it remains publicly controlled. However, what we cannot do with a modern railway system is to play trains with it. At present, our rail network in the British Isles is being disintegrated in a socially, economically and environmentally damaging way. No other country in western Europe would dream of doing that at this juncture because there are great opportunities on offer to an efficient public rail system. If it is to become a wholly private concern, even if regulated, we can look to what has happened in the other former utilities as a guide to what would inevitably happen to the railways.

Mr. Jacques Arnold (Gravesham)

Would the hon. Gentleman care to comment on what British Airways was like—a sheer embarrassment to this country—while it was nationalised? Does he think that it is purely coincidental that, as a privatised entity, it is now considered to be the world's favourite airline?

Mr. Tyler

The hon. Gentleman selects but one previous utility. He should consider what ICI says about the cost of electricity. Privatisation does not necessarily result in greater competition or more effective management of a great public service. What is clear about British Rail is that the substantial improvements that were made in the 1970s and 1980s are being put at risk. I know that a number of hon. Members wish to contribute to this short debate, so I should like to make some progress.

Clearly, under the Government's present plans, the franchising director is only partly accountable to the public. Indeed, it is only when there is uproar in the House and among all the parties over issues such as through ticketing, that one is able to influence the way in which the passenger service requirements are implemented.

The role of Opraf is not to be a servant of public policy; it simply provides an opportunity for Ministers to pass the buck and put at arm's length their responsibility to the travelling public. No one is confident that standards will be met, let alone improved. Similarly, the price cap is hardly an effective and sensitive influence on the rail system.

We recognise that the core of an effective rail network is the track—the infrastructure—and therefore Railtrack. I shall concentrate for a few minutes on the role of Railtrack because I and my colleagues believe that it is the secret to the success of our future public transport system. The core must be publicly controlled and directed, and there must be a guarantee of homogeneity in the whole operation.

Privatisation has placed intolerable burdens on Railtrack. They include the corporate plan, which was due this summer—indeed, now—but which is still not forthcoming, and the timetable for modernisation of the west coast main line and the contract for signalling which are to be in place by the end of the year, which is highly unlikely; and enabling European Passenger Services to operate a public service to Manchester and Scotland through the channel tunnel by 1 January 1996. Again, that is a strain. It is asking the impossible while steps are being taken to create new structures throughout Railtrack and the operating companies.

If Railtrack were in private hands, which would be a fundamental fault because it would split the infrastructure from the management of trains and divide responsibility for their operation among many operators, it would fly in the face of the experience of all other member states in the European Union and, indeed, most other developed countries. Accountability would disappear.

Meanwhile, customers and staff are bewildered and confused by the way in which the system is being carved up. As the House knows, there are already some 100 bits to the jigsaw. The little green book, which some hon. Members may have seen, contains the most amazing array of maps which it is extremely difficult to follow. I had occasion to wish to write a complaint about a delayed train a couple of days ago, and it took several minutes to wade through the document to find out to whom I should complain.

Let us consider Gatwick, which is the means of entry into this country for a large number of visitors. Gatwick Airport Services Ltd. runs the station on a lease from Railtrack but there are five train operators going in and out of the station—Gatwick Express, InterCity Cross Country, Network SouthCentral, Thames Trains and Thameslink. Anyone who has been there recently and shared the experience of some visitors who are unfamiliar with our curious signs and curious language and our curious lack of anyone else's language will have discovered that it is impossible to find the appropriate train. Staff simply do not know what services are being provided by other companies. Hon. Members should test it for themselves—I bet that Ministers have not done so recently, unlike one of my colleagues.

The plethora of different information at Gatwick makes it impossible. One enters an apocalyptic world. For example, indicators are non-existent at platform level, and if one goes up to the higher level, one is in danger of missing one's connection. Nobody knows what is happening. With two sets of loudspeakers and conflicting information, it is impossible to know what is going on.

Let us consider another example. I have here a note on the railway services serving a particular constituency in the north-west of England which I visited yesterday and this morning—Littleborough and Saddleworth. The services provided in that constituency are, according to British Rail, partly a joint venture between Regional Railways North West and Greater Manchester PTE … and also between Regional Railways North East and West Yorkshire PTE". The number of companies is so confusing that even the staff do not know who is responsible for the various services. In the past few days, my colleague in that constituency has conducted a survey of passenger opinion and he was not surprised to find that the huge majority of the travelling public in that area believe that services are getting worse as a result of the threat of privatisation. They do not share others' enthusiasm for that change. That survey revealed that nine out of 10 passengers believe that rail privatisation will cause services to deteriorate still further.

It is not just a question of reliability or punctuality, but, of course, of safety. As has been apparent from last week's report from British Rail and Railtrack's answers to questions put in previous weeks, the disintegration of the rail system is causing a reduction in concern about safety. Sadly, recent examples of that may underline that point.

I have already referred to the low morale of the staff. I am not suggesting that that is the sole reason for the current industrial unrest, but it is an important factor. That sense of frustration is not improved by the swathe of consultants, lawyers, accountants and merchant bankers who are picking over the intended structure of the RT operation.

We believe that the cost so far of privatisation is well in excess of £0.5 billion, about £550 million, and others have suggested today that that cost will increase to £700 million by the end of the year. How much better for that investment to be put into improved rail services—perhaps the channel tunnel rail link, which is of considerable importance to many hon. Members who represent the south-east, let alone to the future of freight services all over the country. I note that several Conservative Members have nodded in agreement.

As I said earlier, the background to the problem is that in 1992–93, investment in British Rail, excluding channel tunnel investment, stood at just over £1 billion. In the current year, that investment has fallen to £600 million. The danger is that, once that slide becomes even more exaggerated, it will be extremely difficult to make that investment level, let alone increase it.

Like that other monstrosity, the poll tax, rail privatisation will have to be dismantled, but at a great cost to the taxpayer. That will be a disgraceful waste of resources, which should be spent on investment in a better service.

Mr. Dennis Skinner (Bolsover)

The hon. Gentleman, who speaks on behalf of the Liberal Democrats, is speaking against rail privatisation in almost an evangelical way. I would like to know when the change took place in the Liberal party's approach to rail privatisation, because some of us were opposed to it in principle long before we came to the House. We all know that the Liberal party was in favour of rail privatisation before the general election. The hon. Gentleman has given the impression that his party has always been against that policy, but when did that change take place? When did the Liberals discover the reality of privatisation?

Mr. Tyler

After that diatribe, I am not sure that I should accept the hon. Gentleman's compliment about evangelical fervour. If the hon. Gentleman had attended other debates on transport, he would know only too well that we have always supported the retention of the Railtrack infrastructure.

Mr. Skinner

No.

Mr. Tyler

Perhaps the hon. Gentleman does not understand the difference. If he travelled as often by rail as I do perhaps he would understand it. Railtrack controls the major infrastructure of the system and the Liberal Democrats have always supported it as a public service. If the hon. Gentleman ceases to heckle me, I will repeat that we see an opportunity—

Mr. Skinner

Accept the truth.

Madam Deputy Speaker

Order. I wish to hear the hon. Member for North Cornwall (Mr. Tyler) who has the floor, and not others who do not have it.

Mr. Tyler

I am grateful to you, Madam Deputy Speaker. The Liberal Democrats have always welcomed the possibility of private investment in individual services because we believe that such private finance will offer real benefits to those services. Indeed, the hon. Member for Bolsover may like to stay for slightly longer in the debate than he usually does and hear what the Labour Front-Bench spokesmen have to say, because he will find that they support me on that subject.

Mr. Skinner

I was here yesterday; you were missing.

Mr. Tyler

Railtrack is being sold off as an afterthought of the Government. As Christian Wolmar said in The Independent a few days ago, that was a sharp—and unannounced—change in policy. Railtrack privatisation did not even figure in the 1992 Conservative manifesto". I do not know whether it figured in the Secretary of State's election address; perhaps he will tell us later. Mr. Wolmar continued: It also ties the Government to the type of rail privatisation … which has been widely criticised as unworkable … it seems the quick buck has been too much of an attraction—it may be a fatal one. I suspect that that will not be the case immediately, but in the long run it will undoubtedly be one of the ways in which the public will regard the Government as more interested in private profit than in public service.

Mr. Skinner

Like you were.

Mr. Tyler

There is an argument, which no doubt Conservative Members will suggest is at the root of the issue, that other privatisations have worked, and they may quote examples. Neither assertion is correct.

In the first place, there has been no privatisation of a rail system in the world on that format, and certainly none that has been successful. Indeed, as I said earlier, there is considerable doubt about the effectiveness and the profitability, in terms of the overall public profitability, of the privatisation of many of the other utilities. I quote, for example, the opinion of Mr. Edward Brady of Imperial Chemical Industries in the Financial Times only 10 days ago. He said: We are paying … £50 million a year for electricity at Runcorn, compared with £30 million in April 1991, before the privatisation". Tell him that privatisation is a wild success.

Similarly, the argument that other countries have taken that route is simply untrue. Ministers may have been deluded by comparisons made by Conservative central office, but unfortunately, Conservative central office remains woefully behind the times until the new incumbent reaches his desk. I hope that no hon. Members will quote the last brief prepared by Conservative central office; it is woefully out of date on all subjects, including the opinions of Opposition parties. No doubt, now that the right hon. Member for Peterborough (Dr. Mawhinney) is there, there will be a shake-up.

Sweden does operate a rail network with separate track and operators, but both halves are publicly owned and publicly controlled. It is we who should learn the lessons from abroad. At a recent channel tunnel initiative seminar organised by the Association of Metropolitan Authorities, Professor Reid of Birkbeck university described how French planning uses private and public utility projects, and he described how 51 per cent. publicly owned Societe Economie Mixtes—forgive my French—operates. It is obviously a good model that we could follow in this country with advantage.

We Liberal Democrats have a non-doctrinaire acceptance of mixed public and private investment partnerships. We believe that we should have a non-sectarian interest in seeking secure, well-planned, well-prioritised investment in railways, and we shall have no misgivings about maintaining a 49 per cent. private investment if that is found to be useful in the long term in a publicly owned and publicly controlled Railtrack.

However, I do not understand, I do not believe that the House will understand and certainly the travelling public do not understand, where the Labour party stands on that matter. There appear to be varying theses. The gospel according to St. Dunfermline, St. Holborn, St. Oldham and even St. Sedgefield appears to vary day by day.

I notice that the hon. Member for Oldham, West (Mr. Meacher) has joined us. I am delighted to see him, because I can quote back to him something that he said on BBC Radio 4 on 10 January 1995: If you're asking me to set out at this moment in time exactly what we would do, I cannot sensibly give that answer". I hope that this afternoon he may give that answer, either sensibly or insensibly. I shall return to the Labour party later.

The Tories are obviously split too. Many of them share and have expressed the misgivings of the late Robert Adley, who, as the House will recall, described privatisation as the poll tax on wheels. The enthusiasm for his Conservative successor in Christchurch resulted in a huge Liberal Democrat swing and victory.

Our plans for Railtrack are simple. We want to see the basic railway infrastructure in public hands. Once that statement has been made and once the Labour party come on board, we believe that it is highly unlikely that the Government will be able to pursue, helter-skelter, their present plan to privatise Railtrack by April next year. It will not be an attractive proposition for the City, as there are far better things for the institutions to invest their money in. Why should they take on the liabilities of Railtrack when they can see much more interesting projects in which to invest their money?

The trading value of Railtrack has plummeted since it was first suggested as a privatisation plum. It was originally suggested that it might be £6.5 billion, but now the figure has fallen way down and is more in the region of £1.5 billion—even before the declaration of principle from the Labour party, which I hope and expect this afternoon.

If Railtrack is privatised before the next election, we would support any steps necessary to re-acquire a majority holding at the issue price or the market price, whichever was the less, so there would be no profit to anyone who invests on that risk basis. If the sell-off is postponed, as it is likely to be, there is no cost. The cost to the nation and the Government is nil. That is why it is so important to make that statement now.

The repurchase can be spread over a number of years by means of a bond so that it would not suddenly be a blip in the public sector borrowing requirement over the first year or two of the lifetime of a Parliament. It will then be open to the Government—generally, nationally, regionally and locally—to determine access charges and investment priorities in furtherance of other priorities.

I hope that the Labour party's position will be clarified by today's debate and we are glad to give Labour Members the opportunity to do so. The Labour party's current plans are confused, confusing, and certainly counter-productive to achieving progress. We know that the Labour party faces dissention from among the ranks of its traditional supporters in the unions. A few days ago the RMT president said: The Labour Party should understand and commit themselves in government to a railway, publicly owned, publicly accountable and run in the public interest. Proper forward planning and an expansionist budget would achieve the fully integrated transport system this country needs. However, the Labour party's transport policy has yet to be hammered out. As "Rail Privatisation News" recently reported: When Rail Privatisation News suggested to Party insiders that a commitment to keep Railtrack in the public sector would be both electorally popular and appease the Party's left wing membership, the response was that 'these things are settled in the Leader's office'". The hon. Member for Bolsover (Mr. Skinner) is listening intently—I hope that he is taking due note as he may need to make representations.

Mr. Skinner

As I was earlier trying to explain to the hon. Member for North Cornwall (Mr. Tyler), who speaks for the Liberal Democrats, the Labour party has a long tradition of being in favour of public ownership of the railways. When we get back into power, we shall take back the railways. If it was left to me, I should take them back without compensation, and would not give a penny piece of compensation.

Mr. Tyler

I see that the hon. Member for Oldham, West, who is listening intently to the rebellion in his ranks, is amused by that statement.

I believe that this afternoon, by endorsing our guarantee to the travelling public to retain Railtrack as a public service, the Labour party could give one signal and, by so doing, avert the derailment.

I know that other hon. Members wish to contribute, so I shall be brief. In conclusion, let us heed the words of John Welsby, the chairman and chief executive of British Rail, who, last week, in his statement at the front of the annual report, said: investment in the existing railway is not at a satisfactory level, and will not sustain the industry in the long term. We should mark his words. He continued: It is important that fragmentation is not allowed to become an obstacle to worthwhile investment". I submit to the House that they are wise words from the people who carry real responsibility for the rail system in this country. I hope that hon. Members on both sides of the House will support us and them tonight.

4.14 pm

The Minister for Railways and Roads (Mr. John Watts)

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: 'believes that privatisation offers the best opportunity for reversing the historic decline suffered by the railway system under nationalisation; and further believes that the privatisation of Railtrack offers the best future for Railtrack, and for passengers and freight users, by making greater use of private sector skills in managing the network and in providing greater scope for private capital investment in the upgrading of the railway system.'. It is interesting to watch the Labour Front Bench gradually fill up as the debate develops. That is obviously occurring because of the severe challenge to the Labour party's position from the Liberal Benches. If I were the right hon. Member for Sedgefield (Mr. Blair), I would be shaking in my shoes in view of the skilful way in which the Liberal party's stance has changed. While the right hon. Member has been learning Tory phrases, pretending to adopt Tory values and borrowing—I could say "stealing", but that would have no place in the modern Labour party—our clothes, he is being outflanked on the left by the Liberals.

It used to be said that the centre ground was the battlefield of British politics. But as the Labour party has grabbed at our coat tails and tried to scuttle to the right, the Liberals have occupied the vacant turf to the left. The Liberal Party is now the only party that is prepared to stand up for nationalisation. Perhaps it is merely paving the way for even closer union between the Labour and Liberal parties, or perhaps it is simply nostalgia for the halcyon days of the Lib-Lab pact—I leave it to hon. Members to judge.

The motion moved by the hon. Member for Cornwall, North (Mr. Tyler) refers to the privatisation threat on investment in the rail network". Let us examine the facts, as we have done in the past. During the period in office of the last Labour Government—who were sustained in office by the votes of the Liberals—investment in the railway averaged £924 million per year in current prices. In a comparable four-year period from 1990–91 to 1993–94, investment averaged £1,350 million—no less than 46 per cent. higher than under the investment policies supported by the Liberals when they last had an opportunity to contribute to sustaining a Government in office.

Mr. Michael Meacher (Oldham, West)

rose—

Mr. Watts

I shall give way to the hon. Gentleman, although I know what he will say.

Mr. Meacher

I am glad that the hon. Gentleman knows what I intend to say. In looking at the record of recent years, he ended significantly at 1993–94. Would he like to give the House the figure for investment in the rail network—excluding the channel tunnel—in 1994–95? Will he confirm that that figure, at £617 million, is far and away the lowest investment figure in real terms since the war?

Mr. Watts

I am happy to confirm that, following the years to which I have referred, investment last year and in the current year continues at around £1 billion. I will not accept the hon. Gentleman's invitation to ignore the substantial investment in international rail services. Is he suggesting that they are not part of the rail network?

Mr. Jacques Arnold (Gravesham)

As to investment by British Rail, and therefore by the Government, is my hon. Friend aware that the people of Kent are extremely grateful for the hundreds of millions of pounds that are spent on new Networker rolling stock—as my constituents who commute to London prove every day?

Mr. Watts

My hon. Friend makes a very strong point.

I will not be tempted by the hon. Member for Oldham, West (Mr. Meacher) to ignore the substantial investment in international rail services any more than any other business, in announcing its performance, would say, "We've invested X billion pounds, but let's forget about all of our investment in developing a new business. Let's forget about the £400 million spent on upgrading track to provide better freight services through the channel tunnel, which is allowing rail freight to compete with long-distance road haulage—for example, runs from Glasgow to Milan now take 36 hours by rail and 72 hours by road. Let's forget about all of the investment in our new business, and let's pretend that the old business is all that matters and that that is all we must contend with".

In his concluding remarks, the hon. Member for North Cornwall referred to the comment by the chairman of British Rail in his last annual report, that, in his opinion, the level of investment in the year on which he was reporting was insufficient to sustain the rail network. The hon. Gentleman will recognise that the chairman of British Rail was referring mainly to investment, which will remain the responsibility of Railtrack, but let us leave that on one side and consider the regime within the arrangements that we have established for the privatised railway to ensure that there is sufficient funding for the necessary investment to sustain the core network.

Mr. Tyler

Is the Minister somehow suggesting that investment in Railtrack's responsibilities is a lesser priority than investment in British Rail? If that is the case, it is in direct contradition to what Railtrack is saying, which is that it now has a major problem with the hiatus in investment in basic maintenance to ensure that speed and weight restrictions do not have to be imposed on services, and to maintain safety standards.

Mr. Watts

No. On the contrary, Mr. Welsby and I agree with the hon. Gentleman that the major investment priorities for the railway are now in the infrastructure. That is why the regime approved by the regulator provides for access charges to provide funding for Railtrack's investments to run at around £600 million a year—the level judged necessary to maintain the existing core network.

If the hon. Gentleman were to discuss Mr. Welsby's comment with him, he would not suggest that British Rail needs more funding for investment. Indeed, he has told us on many occasions that there is currently no business case for further investment by British Rail in rolling stock, and that the need for investment is in the infrastructure. That is where the major part of the investment is going.

Mr. Hugh Bayley (York)

The manager of the Network SouthEast service that would have got the York trains, had they been ordered, argued strongly with the British Rail Board that there was a business case for investment. The Prime Minister's motion says that privatisation will provide greater scope for … upgrading the railway system. If the Minister believes that to be true, will he explain how the nationalised railway has managed to invest £800 million in electrifying the east coast main line, but the private sector has not been able to bring on stream the channel tunnel link?

Mr. Watts

First, I find it gratifying that, in the new atmosphere running through the rail industry, the directors of train operating companies strongly advocate the needs of their passengers. I am sure that, when passenger operating companies are in the private sector, that advocacy of the standard of service that they want to deliver to their passengers will be heard even more strongly.

Secondly, the hon. Gentleman picks up some points from misleading articles in the press today that the Member for Pendle (Mr. Prentice) sought to raise with Madam Speaker as a point of order. That speculation is totally without foundation. It is far from the case that the private sector will prove incapable of delivering the channel tunnel rail link, but the hon. Gentleman will have to wait for the competition currently under way to be brought to a conclusion. I accept that the hon. Gentleman will probably wish to be a doubting Thomas until I can show him proof.

Mr. Charles Kennedy (Ross, Cromarty and Skye)

As the Minister is dealing with current issues, and particularly as the newly promoted Minister of State, Scottish Office, is on the Front Bench, will he explain the position vis-a-vis the new Secretary of State for Scotland?

In Edinburgh today, the Scottish Office has been briefing the press that the new Secretary of State is to call in John Ellis, director of ScotRail, in a fresh political intervention over the future of Scottish-Anglo sleeper links. Will the Minister confirm that the Secretary of State for Scotland has made that intervention? Is there a change of policy? What discussions, if any, have there been between the new teams under the Secretaries of State at the Department of Transport and the Scottish Office?

Mr. Watts

My right hon. Friend the new Secretary of State for Scotland has picked up on the close interest in the future of Scottish rail services shown by his predecessor, who is now President of the Board of Trade. I understand that my right hon. Friend the Secretary of State for Scotland is having discussions with ScotRail. I doubt that the hon. Gentleman is surprised, knowing my right hon. Friend.

I was referring to the regime of track access charges approved by the regulator, which will provide Railtrack with the funding necessary to invest about £600 million a year to sustain the quality of the existing network. In the current year, Railtrack expects to invest more than £700 million—an increase of one fifth over its expenditure in the past year. The hon. Member for North Cornwall mentioned the west coast main line. This Friday, Railtrack intends to invite tenders for the development of a new state-of-the-art signalling system that is the key to the £900 million project to upgrade the west coast main line.

I have been trying hard, but I have not yet detected where the so-called privatisation threat on investment in the rail network is having an impact. If Railtrack were left as a nationalised industry, as the Liberals clearly want and as some members of the Labour party might want—and the hon. Member for Bolsover (Mr. Skinner) undoubtedly and definitely does want—Railtrack would continue to be subject to the constraints of public expenditure controls. It would have to compete year after year with bids from health, education, social services and so on. We all know that, whichever Government are in power, they never have a bottomless purse. If Governments act as if they do, that has a deleterious effect on our fellow citizens as taxpayers.

One main advantage of a privatised Railtrack is that it will be freed from those constraints, be free to make commercially driven investment decisions and have much wider access to private capital for investment in the upgrading of the railway system.

The hon. Member for North Cornwall expressed doubts about the structure that we have chosen, saying that the pattern was not well received or likely to be adopted in other countries. When I attended the recent European conference of Transport Ministers in Vienna, considerable interest was shown by our partners—to the extent that the Austrian Minister who hosted the conference invited me to give a paper on railways restructuring. It is clear that we are the market leader in setting the structure for a railway system for the 21st century.

The hon. Member for North Cornwall gave his party's views on the future of Railtrack. Our policy is crystal clear. Railtrack is to be sold by stock market flotation within the lifetime of this Parliament. The national railway network will remain as an integrated system, providing the train paths required by passenger and freight train operators.

The right hon. Member for Yeovil (Mr. Ashdown) started his assault on traditional Labour territory, in a recent speech in Perth.

Mr. Charles Kennedy

It was not that recent.

Mr. Watts

It was not that long ago. The right hon. Gentleman said: Unlike the Labour Party, the Liberal Democrats won't just criticise the Government for its plans". There is the challenge for the hon. Member for Fife, Central (Mr. McLeish). He knows what he must say in his reply, because the hon. Member for North Cornwall told him. The right hon. Member for Yeovil continued: We will guarantee that, if privatisation goes ahead, we will put our rail infrastructure back under public control. There were no empty, uncosted promises. He named his price. He is obviously a much more confident forecaster of the stock market than I would want to be. Although he did not use the word, he said that the cost of fulfilling that promise would be a snip: £200 million a year for five or six years.

Mr. Kennedy

He did not say that.

Mr. Watts

He said £200 million a year. If the hon. Gentleman would like to read his leader's speech, I have it here. I accept that "snip" is my word, but I think that it indicates the right hon. Gentleman's attitude. He said that such action would cost £200 million a year for five or six years, and he went on to say: Given that the government's total spending bill is £300,000 million a year, £200 million is perfectly affordable. Indeed, it is cheap". There we have it.

Mr. Tyler

I do not think that the Minister heard my point. If Railtrack does not go into the private sector before the general election, does he concede that the price of buying it back would be nil?

Mr. Watts

In the unlikely event that the right hon. Member for Yeovil formed a Government, and we had privatised Railtrack—as we intend to—the Treasury would have received the money. The net cost in either event would be nil.

In the spirit of conciliation, I shall try to agree with the right hon. Gentleman on one point. He was right to say—I heard his hon. Friend the Member for North Cornwall repeat it—that the key to an integrated rail network is the track. Of course we are maintaining an integrated national system of track in our privatisation plans for Railtrack.

The right hon. Gentleman's reasoning is flawed because of his belief that it is necessary for the state to own the network. Why does he consider ownership such an essential ingredient in delivering integrated transport, whenever he might mean by that phrase? If ownership is the key, why does he stop at the track? Why does he not extend his principle to train operations? Indeed, in hearing the hon. Member for North Cornwall explaining how confusing he found it to be offered a choice of services at Gatwick, operated by five different companies, surely the logic of his argument is that he wants to nationalise train operators as well.

Mr. Kennedy

This is very interesting logic—let us pursue it. From the Government's point of view, if this is the direction in which one wants to go in this hypothetical argument, surely, if one is to privatise at all, one would want to privatise the track alongside the operators who will run the track, instead of splitting it up and making it an accountants' and lawyers' paradise, which is what we have turned it into.

Mr. Watts

I want to privatise the track; I want to keep it as a national system. I want to privatise operators who will run their services over the track and, in some instances, will be able to provide choice for passengers and freight customers, who will make use of their services.

Mr. Nigel Spearing (Newham, South)

Will the Minister give way?

Mr. Watts

Not at the moment, but I might later.

The logic of the argument of the hon. Member for North Cornwall about the confusion that he found in having a choice of services at Gatwick and at Littleborough—I wonder what he was doing there—must be that he would want those services nationalised as well. Why stop there? If ownership and control is essential to the provision of an integrated transport system, whatever that means, do the British Airports Authority and British Airways need to be renationalised so that they can be integrated? Do buses and coaches need to be renationalised? What about the National Freight Corporation?

The logic of the arguments of the right hon. Member for Yeovil leads to the reincarnation of the British Transport Commission, and for every aspect of transport by land, sea and air to be owned and controlled by the state. Having been bold enough to adopt the orphaned policy of nationalisation, abandoned by its Labour family, why is the right hon. Gentleman shy of going the whole hog? This new commitment to state ownership and centralised control sits very uncomfortably alongside his other commitments to local decision-making.

Mr. Tyler

rose—

Mr. Spearing

rose—

Mr. Watts

I shall give way first to the hon. Member for Newham, South (Mr. Spearing).

Mr. Spearing

Irrespective of ownership, does not the Minister's plan hinge on finance? If the rail service is to be as good—or bad—as it is now when it is under private operation, and if Railtrack is to be privatised with some notional return on capital, how will the financial surplus, or rather the deficit which is covered by the nation as a whole, be met? Will it be met entirely by the alleged efficiency of the operators and the alleged efficiency of Railtrack, which does not currently operate? How can the Minister square the financial matters, irrespective of ownership?

Mr. Watts

By continuing public subsidy to support socially necessary services, to which the Government have a strong attachment. But a new structure in which the parts of the railway industry that can operate on a proper commercial footing do so, and in which subsidy is targeted on securing services for passengers—replacing the miasma of cross-subsidy and lack of transparency—will ensure much better value for money for taxpayers.

Mr. Tyler

Will the Minister give way?

Mr. Watts

I will give way one last time; then I must finish my speech.

Mr. Tyler

I now understand better why the Minister's colleague in the Austrian Government is so fascinated by the intricacies that the Minister obviously enjoyed presenting to him.

Why does the Minister say that it is impossible for the infrastructure to be in public control as part of a public transport policy, and for different operators to be allowed to use it, when that is precisely what happens on the roads?

Mr. Watts

I do not say that it is impossible. Indeed, when I spoke in Vienna I said that I believed that substantial benefits could be gained from restructuring so that the functions were separated. We go further, however, believing that there are further efficiencies to be gained from transferring businesses to the private sector.

Nationalisation has not proved a conspicuously successful model for our railways. Over the last 45 years or so, Governments of all persuasions have poured money into British Rail—over £54 billion in current values. Despite all that, the railways have continued to decline. In 1953, 17 per cent. of journeys were made by train and 24 per cent. of goods were moved by rail. Today both figures are about 5 per cent., and they have been dropping.

Why is that? It is because state ownership, and thus state management, has failed the railways. The monolithic monopoly did nothing for the passenger; it did nothing for the freight customer; and it did nothing for the owners—the taxpayers. Because of the structure, the old-style British Rail management was not in a position to be responsive to customers' needs. It had no incentives to improve performance. A giant unitary organisation cannot hope to supply services as well as a competitive private sector operating commercially.

Something had to be done. Someone had to be bold enough to grasp the nettle and create a new approach and a new framework for rail services in the United Kingdom. That is what we did with the Railways Act 1993. We did it for three reasons. First, we wanted to improve the quality of service to the customer. That comes first, because it must: it is the most important thing for everyone connected with the railway industry to remember. Secondly, we wanted to improve the efficiency of the railways. Thirdly, we wanted to halt and reverse the decline in the use of railways.

I cannot believe that more of the same—the failed structure and operation of nationalisation—is the preferred option among Opposition Members, especially given the example of the outstanding success of privatisation in other transport sectors. Let us compare privatised British Airways with loss-making nationalised continental flag carriers such as Air France; or let us consider BAA, which, in the private sector, invests on average three times as much each year as it did as a nationalised industry.

Privatisation will provide passengers with new guarantees that nationalisation has never delivered. Passenger service requirements will protect every station and every route on the network. Competitive bidding for franchises will ensure better value for taxpayers. Subsidy will be targeted more effectively. The fares regime announced by the franchising director will ensure that passengers share in the greater efficiency that privatisation will bring. Controls over key fares on every route will deliver fares 4 per cent. lower in real terms over seven years.

It is because of the outstanding achievements of privatisation in other transport sectors that we can be confident that rail privatisation will deliver for rail passengers what airline privatisation has already provided for airline passengers. That is why we have no fear of the future, and no nostalgia for the failed doctrine of state ownership and state control.

4.39 pm

Mr. Keith Hill (Streatham)

Hope springs eternal, as they say, and it is evident from the somewhat unconvincing performance of the Minister of State that this is one privatisation too far. Despite the twists and turns of a Government increasingly desperate to proffer some crumbs of comfort to a sceptical public—most recently, for example, the highly misleading fare capping announcement and the so-called service guarantee, which is simply a myth—the public remain unpersuaded about the case for rail privatisation, and indeed deeply hostile to it.

Privatisation is undesired by rail passengers, and its structure—the separation of track, signalling and operations—has been condemned by virtually every railway professional at home and abroad. Its passage though Parliament was both time-consuming and profoundly contentious. The great rail sale has been greeted with almost total indifference by the private sector. Meanwhile, however, the uncertainty created by the privatisation has had a devastating affect on the rail manufacturing industry, and has placed a question mark over the 35,000 jobs associated with that industry.

The Railway Industry Association, the representative body of railway equipment manufacturing companies, has pointed to significant shortfalls in the expected investment in both the track and signalling since the inception of Railtrack. There is still no prospect of the urgently overdue modernising of the west coast main line, which will require major new investment in both infrastructure and rolling stock. Rolling stock orders for the west coast main line are dependent—if the Government survive for that long—on the granting of a franchise for that line, and that is unlikely to occur until 1997 at the earliest.

The worst effects have been felt in the rolling stock manufacturing sector as a result of the uncertainty created by privatisation. As my hon. Friend the Member for York (Mr. Bayley) has pointed out, 1,800 jobs in York have been lost as a result of the hiatus in rolling stock orders. That is nearly 2,000 blighted lives and families as a direct result of rail privatisation.

Still, it is an ill wind that blows nobody any good, so let us not forget the real beneficiaries of privatisation. We have heard various estimates of the cost of rail privatisation, but let us go with the modest estimates of the Department of Transport. The Department now estimates that the cost of privatisation to date—for the work of legal experts, property and marketing consultants, accountants, tax specialists and merchant bankers—amounts to a still colossal £240 million. Privatisation has been a gold mine for the Government's mates in the City of London. The City slickers have made a mint from the great rail sell-off, and that is a scandal which must not and will not be overlooked during the whole sorry saga of the railway privatisation.

In all likelihood, rail privatisation will cost us all as taxpayers an extra £500 million a year to run the same level of service—if we are lucky. In 1993–94, before the so-called restructuring of the railway finances, the cost of railway grants to the taxpayer were just over £1 billion. In 1994–1995, after the restructuring, the final outturn figure is £1,560 million.

By 1996–1997—on the basis of the Government's estimates of the likely spending of the rail franchising director and the projections of current costs and revenues of the railway—the total cost to the taxpayer of running the same level of services is likely to stand at £1. 7 billion per annum. If the Minister has any doubts whatsoever about these estimates, I suggest that he consults the trends set out in figures 16 and 17 of the Department's "Transport Report 1995".

There will be an increase of at least £500 million in the cost to the taxpayer for a railway that will in all likelihood deliver the same level of services as before privatisation. It is difficult to see the benefit to the taxpayer or to the rail passenger of that massive growth in costs. What of the other proclaimed benefits of privatisation to the rail passenger?

Mr. Peter Luff (Worcester)

I have considerable affection and some respect for the hon. Gentleman, and I may have missed him refer to this matter earlier on. He is talking about the potential benefits of privatisation to the passenger. I believe that I am right in saying that the hon. Gentleman is sponsored by the National Union of Rail, Maritime and Transport Workers. Could he be more concerned about the benefits to the members of that union?

Mr. Hill

I hardly think so. The members of that union perceive few benefits under the existing conditions on the railway, never mind in the future. I shall anticipate the hon. Gentleman, who may continue by attacking—as is traditional with Conservative Members—the strikes declared in the railway industry. I find those attacks only too typical.

Mr. Jacques Arnold

On a point of order, Madam Deputy Speaker. Is it in order that Members who address the House should declare their interests before speaking in a debate?

Madam Deputy Speaker

I must make it clear to the House that it is incumbent upon each individual Member to decide whether it is necessary to declare such an interest. If an hon Member so decides, he must, of course, declare that interest.

Mr. Hill

I declare an interest in my south London commuter constituents, who are profoundly fearful of the consequences of rail privatisation, for reasons that I am about to spell out in yet further detail.

What of the other proclaimed benefits of privatisation to the rail passenger? The Government's most recent and desperate effort to paper over the cracks of rail privatisation has been the franchising director's commitment to cap fares at the level of inflation over the period of the initial franchise agreement. So far, so good. That is, on the face of it, good news for the captive commuters of London and the south-east, who have suffered fare increases well in excess of the rate of inflation for too long.

Unfortunately, all is not as it first appears. The wrinkles are already showing through the rouge. Individual fares may increase above or below the target range, provided the weighted average remains within it. That depends critically on the basket of fares being truly representative, which it will not be if below-average increases are concentrated on tickets which are, in practice, rarely sold. We must monitor that development very carefully indeed.

Mr. Spearing

I understood that that average was weighted according to the actual volume of transactions, as I believe is the case with the retail prices index. Is my hon. Friend saying that the average is not truly weighted in terms of expenditure?

Mr. Hill

I understand that the average is extracted from a basket of fares over a period. In that context, it is certainly possible—unless we are extremely careful—that the overall average will not be representative of the true level of fare increases.

The key leisure fares for my south London constituents—the one-day travelcard and the cheap day return—are specifically exempted from regulation by the franchising director. The key fare for my constituents, and for most of the constituents in London and the south-east, is the period travelcard. That card, which is indispensable to most London commuters, appears also to be exempted if London Transport and the franchisees can reach an agreement on its price. The temptation to collusion to fix a price for the travelcard at any level they want is obvious. So where is the benefit in that?

From an analysis of the franchising director's "Passenger Rail Industry Overview", which set out the details for the first three franchises, we know four things. First, there will be no protection for existing child fare reductions. Secondly, provision at stations of timetables showing all the services that call there will be required only as far as is practicable". Thirdly, operators will be free to use any type of rolling stock that they like. Fourthly, if VAT were to be levied on public transport, the franchising director would reimburse franchisees, with no provision for passing the relief on to passengers. Again, where is the benefit for rail passengers in all that?

Finally, there are the two jewels in the crown of the announcement by the former Secretary of State on passenger service requirements. The first was his commitment on overcrowding. On 7 February, he said: Because the passenger service requirement specifies maximum load factors for peak services, they"— that is, commuters— will receive a guarantee that the operator will have to put on extra trains if demand for services increases, instead of simply cramming more people into existing trains. However, from the franchising director's detailed guidelines, we now know that peak period overcrowding limits will be based on timetabled services rather than on the services that are actually run. In other words, the operator can run as many short-formed trains as he likes, and can even cancel as many as he likes. Provided that the trains are on the timetable, he will be deemed to be achieving his loading targets.

The detailed guidelines also tell us that, in any case, overcrowding limits are set at a level lower than that currently achieved by most sectors of Network SouthEast. Contrary to the previous Secretary of State's firm expectations, there is no incentive whatever in the guidelines for franchisees to put on extra trains. What benefit does rail privatisation bring there?

In his speech on 7 February, the former Secretary of State also said: Our plans for the railways offer something new for passengers; they offer guarantees. For the first time there will be an absolute guarantee of service levels."—[Official Report, 7 February 1995; Vol. 254, c 210, 211.] But in his guidelines issued in early June, the franchising director said of himself and the franchisee: Either party may propose a change to the passenger service requirement at any time during the course of the franchise". If that can be done at any time, there is no guarantee. What is the point of a guarantee if it can be changed at any time?

Many of the Government's promises on rail privatisation, including guaranteed service levels and reduced rush hour overcrowding, are now seen to be worthless. Rail privatisation is a fraud and a shambles. What is more, it is a more expensive fraud and shambles. If the Government had an ounce of common sense or decency, they would scrap the whole daft lot of it.

4.53 pm

Mr. Richard Tracey (Surbiton)

I have a sneaking suspicion that we have just been listening to the National Union of Rail, Maritime and Transport Workers' brief, or part of it. It would have been a little more honest of the hon. Member for Streatham (Mr. Hill) if he had confessed to being sponsored by that union and to being a long-term member of it.

This is a Liberal day of debate on railways, which are clearly the flavour of the month for that party. I am sure that all my hon. Friends found it interesting to see 12 Liberal Democrat Members in the Chamber at one point, which must be something of a record. Even the leader of the party popped in for a moment or two, although he did not stay to confess to his Perth speech, which was mentioned by the Minister.

It is good that the Liberals have raised the subject of the railways, because clearly the Labour party will not make much of a contribution. I am not sure whether Labour Members have all dashed off, as their Welsh colleagues did yesterday, or whether they are drinking tea somewhere in London.

I have noticed that, in various parts of London, Liberals are now indulging in a fair bit of scaremongering about rail privatisation. I have even seen one or two of the famous questionnaires that they hand out. Out of seven questions, I counted six leading questions that would never have been allowed in a court of law. There were questions such as, "Do you believe that rail privatisation will be a disaster for the railways?" What is one supposed to say?

One questionnaire claimed that £700 million was being spent on legal fees for railway privatisation, and then asked, "Do you think that that money should have been spent somewhere else, such as on the railways?" How is one supposed to answer that? The Liberals always get the answer "yes" from the people they so regularly canvass on the railway stations of London and elsewhere.

The hon. Member for North Cornwall (Mr. Tyler) may say that this is a central office research department plant, but what fascinates me about the Liberals is the fact that the hon. Gentleman's colleagues on the Isle of Wight welcomed the privatisation of rail services there. My hon. Friend the Member for Isle of Wight (Mr. Field) told me that. He has heard that from the Liberal council there, and read it in the local paper. So what is so wrong with rail privatisation according to the hon. Member for North Cornwall and his 11 colleagues, who are not speaking for the Isle of Wight this afternoon?

Mr. Tyler

rose—

Mr. Tracey

Does the hon. Gentleman want to put the record straight or to twist it a bit more?

Mr. Tyler

I warned the hon. Gentleman not to use out-of-date Conservative research department briefs. If he had attended several previous debates, he would have heard his extraordinary statement repeated again and again, and specifically answered each time by my hon. Friends. We support the privatisation of individual services. I went to the Isle of Wight and specifically supported the initiative there, so why does the hon. Gentleman go on about it? The only possible reason is that, unfortunately, the new chairman of Conservative central office has not yet torn up those outdated briefs.

Mr. Tracey

I can easily say in response to the hon. Gentleman that all my hon. Friends and I support the privatisation of every single railway service in this country. As I shall explain, that seems to be working rather well.

Liberals are anti-privatisation—and anti-car too. They do not like too many cars on the road, or any cars that burn petrol and cause fumes, as the hon. Member for Southwark and Bermondsey (Mr. Hughes) has told us many times. The Liberals also oppose road building, except when the bypass in question happens to be in a part of the world where they control the council, or hold one of the seats. It is not long since we heard about a little fracas concerning a bypass in Berkshire that the Liberals as a party support, although they often say the opposite.

Mr. Michael Stephen (Shoreham)

Is not another example of Liberal hypocrisy the way in which they tell environmentalists how much they favour a carbon tax to cut noxious emissions, yet tell pensioners that they do not approve of VAT on gas and electricity?

Mr. Tracey

My hon. Friend is absolutely right. Those of us who have ever had much to do with the Liberal Democrats, especially in the south of England, know only too well that there is often a slight shift of policy between one street and the next, or even between one front door and the next. If neighbours are not at their door at the same moment, it is convenient to tell a different story.

Mr. Charles Kennedy

The hon. Gentleman, uncharacteristically, is almost in danger of sounding embittered. As he is talking about different policies, will he say which ones he supported in the privacy of the ballot box last week? Did he vote for the Prime Minister—the least worst option, as the Minister for Transport in London described the victory—or did he vote for the alternative Conservative policies?

Madam Deputy Speaker

Order. I cannot see how that can be relevant to the debate.

Mr. Tracey

I am grateful for your lesson on that, Madam Deputy Speaker. If the hon. Gentleman had been watching the television last Tuesday night, he would have discovered how I voted, because most of the British nation seemed to do so.

My hon. Friends and I are seeking to show that there are elements of hypocrisy in the Liberal party and in its motion. I fear that, because of its hang-up about rail privatisation, it is seriously misleading the public and, indeed, my constituents. Some Liberal Democrat councillors in the royal borough of Kingston upon Thames have been claiming that railway lines will close because of privatisation. That has been consistently and categorically denied by the managers of South West Trains, the franchising company in the area. Indeed, the passenger service requirement, which has been imposed by the franchising director, shows that there is now scope for an excessive number of trains compared to what we have at the moment.

I very much welcome the development of the franchising director and the PSRs, because it means that my constituents, and everybody else's, will for the first time have guarantees on services, whereas, as we all know only too well, in the heady old days British Rail could change services without telling anybody, without apologising and without doing anything to assist the travelling public.

Mr. Keith Hill

I have in front of me the guidelines for the first three franchisees, in which the franchising director says quite explicitly: Either party may propose a change to the passenger service requirement at any time during the course of the franchise. Where is the guarantee in that?

Mr. Tracey

The point is that either party may propose a change. That does not mean that the franchising director will accept the change. [Laughter] We can listen to the hypocritical laughter from Opposition Members, who are such great friends of the old British Rail, but, as I said earlier, it regularly changed services; it cut services, and very often it did not have the courtesy to tell the travelling public. That situation will not exist in future. I believe that there is a guarantee.

The Liberal Democrats, who at grass roots level are scaremongering about passenger services, are making residents and everyone else sick and tired of it all.

Mr. Charles Kennedy

I am grateful to the hon. Gentleman for generously giving way a second time. He should not rely on out-of-date Conservative central office briefs but do a bit more homework, because those of us from Scotland, who have been ahead in terms of the impact of privatisation, can assure him that the categorical, and no doubt sincere, ministerial assurances that were given about service provision were completely undermined by pre-emptive decisions based on subsidy, which is within the remit of the franchising director. I fear that the guarantees that the hon. Gentleman thinks he has are not worth the paper that they are not actually written on.

Mr. Tracey

I have a great affection for the hon. Gentleman. He, of course, represents a Scottish constituency; I represent a London constituency. I have had my guarantees from South West Trains, the franchising company running the trains on those lines.

I do not want to delay the House much longer, but I must share with it my experience of what is happening where Railtrack and South West Trains operate. I have, for a long time, been asking for refurbishment of Surbiton station, which is in my constituency and which is well known to commuters in south-west London and Surrey, because it is heavily used and was quite clearly in need of it. The greatest success that I had in three or four years was simply to get the clock there working again, which nevertheless was a great success to constituents who rely on it to tell the time. Now, as a result of Railtrack and South West Trains being in operation, £750,000 is being spent on refurbishment of the station. I very much welcome that; I do not believe that anybody can carp about that.

Secondly, on one of my lines, we have had a considerable problem with vandalism, and, indeed, with threats to passengers travelling alone. South West Trains put considerable investment into closed circuit television and into anti-vandal measures on the station concerned in response to the complaints of local residents, including the hon. Member for Thurrock (Mr. Mackinlay), who sits opposite in rather a different role.

Railtrack is investing £27 million in signalling and track work on the main line between Wimbledon, running through my constituency, and Woking. I have had discussions with Railtrack's managers, who now say that they are quite convinced that they have far more flexibility and freedom to invest in the necessary infrastructure improvements than they ever had when they worked under the control of British Rail.

We have had the successful privatisations of British Telecom, British Airways, the British Airports Authority, the freight companies, Sealink and so on—the successes that we all know so well. That is what we are aiming to achieve with British Rail and the privatisation of the railway companies.

For too long, British Rail was a music hall joke in this country—something that would not have changed if the Labour party had been in power for the past few years. The Government are making progress and we shall continue to do so.

5.8 pm

Mr. Henry McLeish (Fife, Central)

I welcome the new Secretary of State for Transport to his challenging position, and in his absence might I suggest that his first main challenge is to dump privatisation of the railways? It is alleged that he is on the centre left of the Conservative party and that he is interested in transport. He could do nothing better for the nation than to scrap what is now becoming a farce and a fiasco throughout the length and breadth of Britain. I suspect that his predecessor, who has moved on to the chairmanship of the party, will have the profound disappointment of being chairman for two years with the party in government and then for five years with it in opposition. What an ordeal for anyone to have to suffer for the next seven years.

Crucially, the Government will not accept that they are tearing the heart out of the railways. In the past 18 months, issue after issue has shown that they are not achieving any of their privatisation objectives but are destroying much of the morale, the network and initiative that have been built up in the past 30 or 40 years. It seems ludicrous that the Conservative party will not accept that policy, not personalities, lies at the heart of their deep unpopularity.

The Prime Minister involved himself in a vote of confidence and started off by saying that there were a few nutters in his party of whom he had to take care. After 12 days, he had managed to firm them up to 30 per cent. of the parliamentary Conservative party opposing him—a real achievement. [HON. MEMBERS: "What has this to do with the railways?"] It is relevant to the policy issues that are facing the country. If the Opposition have some patience, the relevance will sink in even with them—

Mr. Simon Burns (Lord Commissioner to the Treasury)

We are the Government, not the Opposition.

Mr. McLeish

If I want to practise for the future, it is not incumbent on the Whip to intervene.

In the reshuffle, the new Secretary of State for Transport was brought in and we welcome that change, but the nation is not interested in shuffling heads on the deck of the Tory Titanic. The problem is the crucial policy issues in which it is immersed. Conservative Members may laugh, as the Government Whip is, but we will have the final laugh within 22 months.

Mr. Jacques Arnold

My constituents are already laughing at the pleasure and comfort of travelling in the brand new Networker rolling stock with which the Government have provided British Rail.

Mr. McLeish

I admire the bravery of the hon. Member for Gravesham (Mr. Arnold). Anyone who voted for the right hon. Member for Wokingham (Mr. Redwood) deserves some credit. His intervention was not predicated on the fact that he is a consultant for Thomas Cook Group Ltd.

Mr. Arnold

I am not.

Mr. McLeish

According to the Register of Members' Interests, the hon. Gentleman is a consultant to Thomas Cook Group Ltd. If my hon. Friends can be challenged on their contributions, it is right for the House to appreciate that an interest may be involved.

Mr. Arnold

For the hon. Gentleman's information, I am not a consultant to Thomas Cook. I worked for the company for a number of years and carried out a consultancy for it not so long ago, but I am not at present a consultant.

Mr. McLeish

You may want to give us some guidance, Madam Deputy Speaker. In the Register of Members' Interests dated 31 January 1995, it states Thomas Cook—

Madam Deputy Speaker

Order. As I have explained to the House before, it is incumbent on a Member to declare an interest, if there is one, but matters change. My recollection is that an interest must be recorded in the register within a month. Clearly there will be changes whenever the book is published.

Mr. McLeish

I am grateful for that clarification, Madam Deputy Speaker. Until about six months ago, the hon. Member for Gravesham was a consultant to Thomas Cook Ltd., but I will move on.

It is important to identify the key issues. Despite the contributions of Conservative Members, they will not accept that privatisation is deeply damaging to the fabric of the rail network. We constantly hear this nonsense about rail privatisation being the same as any other privatisation. Was British Airways chopped into 95 pieces and sold off? Of course not. Even if one were prejudiced and ideologically committed enough to privatise British Rail, one could not have picked a more monumentally stupid way to undertake the process.

That is the essential difference between the Government's arguments about this privatisation as compared to previous privatisations. They talk about integration but what a sick joke that is as regards the 95 pieces that the Government are trying to pretend would be a comprehensive and integrated national rail network.

On the timetable for privatisation, as the legislation was enacted in November 1993, why has not one of the 25 franchises been sold off? Who is dragging their feet? Is it the Front-Bench conspirators who are against what the Government are doing? Does the hon. Member for Gravesham want to intervene now? The Government have a target of selling off 51 per cent. by April 1996. Does any Conservative Member think that that can be achieved? I would like to be persuaded. Clearly, the timetable is in disarray, and it is creating tremendous problems for the railways.

The second issue is cost. My hon. Friends have mentioned the serious costs involved. The amount has been estimated at £500 million, £1 billion or more, but the real point is the opportunity that we are losing by squandering taxpayers' money on this futile exercise. Of course, no one mentions the fact that the public service obligation grant was virtually doubled in a year, not to provide extra services or any extra investment but simply to fatten up Railtrack and the rolling stock leasing companies for sale.

My hon. Friends are right to point out that, if privatisation goes ahead, in 1997–98 a privatised Railtrack will be £600 million to £700 million more expensive every year as far as one can see into the future. Will any Conservative Member defend that—a privatisation that costs the taxpayers an extra £600 million to £700 million? I do not see Conservative Members queuing up to intervene. Why not? This is a taxpayers' issue. Are we not always being lectured by the Government that we must be prudent with the nation's taxes and finances? I do not think we will get any volunteers to argue for the sheer lunacy of that policy.

Investment is the basis for this debate. Why is 30 per cent. of rolling stock more than 30 years old? Is that not a criterion on which one would base an investment decision? Not at all. Conservative Back Benchers are now quiet. The argument has hit home. Of course we need investment. Why should people have to endure 30-year-old coaches in the south-east and throughout the network? Modern coaches do not prevent accidents, but one's chances of survival and the chances of minimising threats to passengers will be that much better in a coach that was constructed last year than in one constructed 30 years ago. Investment is crucial for safety, and the Government are running away from their responsibilities.

We have also heard much about the west coast main line. A tragedy is unfolding because the Government promised that that would be a prestigious flagship project costing £1 billion. What are we getting now? We are getting apologies, because all that they are going to spend is £18 million on restructuring the signalling system. Words escape me, but the word "scandal" comes to mind. Are the Government merely breaking their promises, or is a link that would take people from the north of Scotland through the centre of England and on to Europe being abandoned? That is what is happening. Despite the protestations and the fine words from Railtrack chairman Bob Horton and from Ministers, the fact is that £18 million is becoming a substitute for a £1 billion project that is disappearing into the mists of time.

Why are everyone's energies tied up in this most useless of privatisation exercises? Constituencies on the west coast main line want improved passenger safety and quality in our train network. What they cannot stomach is the fact that the Tories are reneging on a promise to reconstruct the line, and the taxpayer is paying hand over fist towards this monumentally stupid exercise. It is difficult to understand how the Government could get it so wrong. Is it because they are dominated by prejudice and ideological extremism, or did they genuinely think that smashing a railway into 95 pieces and starving it of investment was the way forward? Those points must be on the consciences of Conservative Members.

The final point about the state of disarray of the railways concerns freight. The battle for freight is about the survival of the rail freight industry. It is not about building on an industry which is doing spectacularly well—it would be wrong to suggest that—but about working on an industry that has potential. What did the Government do? They created an artificial internal market and turned the rail freight industry into three companies. When will Ministers appreciate that the battle for freight is not within the railways but between rail and road? [Interruption.]

I hear an hon. Gentleman say, "Of course it is," from a sedentary position. I should like that constructive comment to be passed on to Ministers. The capacity of Ministers to pursue dogma through internal market competition is nothing to do with the real battle. They should think again about the three companies. [HON. MEMBERS: "That has nothing to do with it."] It has everything to do with it.

The situation is clear. The Government, like us, are surely committed to creating a better environment beyond the year 2000. One small way in which they can contribute to that is to shift road freight on to the railways.

The key issue should be the competition that we should be generating between rail and road. The Government are not doing that. [Interruption.] Whether the hon. Member for Gravesham likes it or not, he might like to take a more active interest in the issue by persuading Ministers that the real struggle concerns the environment and competition between road and rail, not internal competition within the railways, which is absolute nonsense and merely reinforces the prejudices of Conservative Members and does nothing for the industrial economy in Britain.

Mr. Jacques Arnold

Why does the hon. Gentleman think that, through all the years of nationalised railways, there has been a steady shift—not least by the Post Office—from rail to road freight? Why could not British Rail compete effectively under nationalisation? Surely a number of British Rail franchisees competing to pick up business are highly likely to get it, because they will have the private enterprise ethic to guide them to be successful, to get business and thereby to profit from it.

Mr. McLeish

The realities of the railway do not reinforce the hon. Gentleman's points. It is clear that there has been a decline in respect of both passengers and freight in the usage of rail. No one disputes that.

The Government's answer to problems always involves prejudice and ideological extremism. Their every utterance is about nationalisation and bad management of the national rail network. That is indicative of one of the reasons why the country is in the state that it is. For 16 years, it has been public bad, private good. The hon. Member for Gravesham can sit back in his seat and relax but when confronted with reality at the next general election the smile will be wiped off his face.

Mr. Hawkins

The hon. Gentleman talked of the state that the country is in. This country is now the leading economy in Europe, with profitable and successful businesses; it is not the sick man of Europe that the Labour party left in 1979.

Mr. McLeish

I am encouraged by the hon. Gentleman's anger. His intervention bears no relationship to the reality in Britain or to reality for our European Union partners. His comment was important. I hope that it will be well circulated to his constituents.

It is clear that this whole process is in a state of disarray. I welcomed the new Secretary of State for Transport. His main challenge is to persuade a number of his colleagues in the Cabinet that the whole process should be dumped.

I want to finish on two points that sum up this fiasco. I am sure that the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) will deal with the issue of sleeper services to Scotland. The Government and the British Railways Board were dragged into the courts in Scotland to be exposed for what they had shown to Scots—utter contempt for their rail network. They thought that, through stealth and the incompetence of the director of franchising, Mr. Roger Salmon, they could close services under the guise of consultation on a draft passenger service requirement. They were found out. Is it not a disgrace that railway policy is now going to be partly dictated in the courts of England and Scotland? That is a fiasco and the Government know it.

The second issue is trans-European networks. It is an important issue for Britain because it involves integrating the major routes in Britain with those in Europe. It is absolutely right that that should be done. What did Ministers do when they went to Brussels? They sabotaged the proposals. We find that the European Union is giving no priority to schemes. It has thrown out environmental impact assessments and of course no cash is being provided by the European Union for such developments.

Mr. Jacques Arnold

That is appalling rubbish.

Mr. McLeish

The hon. Gentleman says that that is appalling rubbish, but I put that comment on record. The hon. Gentleman, as part of his education and to gain the knowledge that he clearly lacks, should read the Council of Ministers, report from the Cannes summit, from which he will clearly see that I am correct.

Mr. Tyler

I understood the hon. Gentleman to say that he proposed to conclude in a minute. Before he does so, could he comment on this statement by the right hon. Member for Sedgefield (Mr. Blair): I am not going to spray around commitments as to what we are going to do when the Government carries through its proposals, if it carries them through. I am not going to get into a situation where I am declaring that the Labour Government is going to commit sums of money to renationalisation". I hope that the hon. Gentleman will not sit down without telling us precisely how his party stands and whether he is prepared to give a commitment, alongside ours, to retain Railtrack in the public interest.

Mr. McLeish

The essential difference between us and the Liberal Democrats is that we will form the next Government. As a consequence, we have to take the issues seriously. There is a great contradiction in the hon. Gentleman's contribution. In one breath he says that we do not know what the nature of the sale will be or even whether it will be sold. Will it be 51 per cent. that is sold? What will be the nature of the Government's involvement? It is wise and prudent of my right hon. Friend the Member for Sedgefield (Mr. Blair) to say that. There is no point in a party that will take over Government in less than 20 months making specific financial commitments on any issue that affects every Department.

Mr. Jacques Arnold

The hon. Gentleman said earlier that the Government have been going across to Brussels and somehow obstructing environmental statements on European infrastructure projects. Surely he knows that an environmental statement was produced and published on the channel tunnel rail link last November. Has he not read it?

Mr. McLeish

I can dismiss that comment by pointing out that anybody who voted for the right hon. Member for Wokingham is not in a position to speak about Europe in a positive manner.

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

I do not want to intrude on private grief, but before the hon. Gentleman sits down I would be interested to hear his reply to the hon. Member for North Cornwall (Mr. Tyler). I admit that it is an unlikely eventuality but it might help us to know whether the hon. Gentleman is prepared to go down the rash and extraordinary road that the hon. Member for North Cornwall is prepared to go down and announce now that he is prepared to take Railtrack back into public ownership, for there is no doubt that it will by then be in the private sector. Will Labour take back into public ownership the train operating companies which will by then be in the private sector?

It would help the House to know, given the interest of the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) in sleeper services, what subsidy the hon. Gentleman believes it is appropriate for the Government to inject into such services. A figure—some real commitment and not just waffle—on such matters would be extraordinarily helpful.

Mr. McLeish

It is invigorating from our point of view to be put in the position of a Government—we have the Liberals on the one hand and the Minister on the other. To be fair, the Minister should be congratulated because he survived a remarkable—[HON. MEMBERS: "Here we go."] I think that the Minister would like to hear what I have to say. I speak to him outside the Chamber, although I do not know whether that helps his career. However, despite his remarkable comments about the Prime Minister—[HON. MEMBERS: "They were an endorsement."] They were an endorsement, in a way. In any event, the Minister is back in the transport team—he is a survivor.

However, it would be ludicrous for me to rise to the bait and to get involved in the tension between the Conservative and Liberal parties. At the next election, two parties will be fighting for their political skins—the Conservatives and the Liberals. The natural tension and enmity between them is something to behold.

Mr. Terry Dicks (Hayes and Harlington)

The hon. Gentleman is like a little worm wriggling.

Mr. McLeish

I hope that Hansard caught that, as it is quite an enlightened comment from the hon. Gentleman, who is not known for such comments.

The point is that the Labour party will form the next Government and the Conservatives will be in opposition. We shall have the policies not only to put the country back on its feet but to put the railways back together.

After a series of interventions, I must conclude my remarks by dealing with the trans-European networks.

Mr. Norris

rose—

Mr. McLeish

I shall not give way. The Minister will be winding up, and I have been reasonably generous in accepting interventions.

The trans-European networks are hugely symbolic of the direction that a modern railway should be taking beyond the year 2000. It is a huge disappointment to people who care about the rail network and want a prosperous economy that the Government are dragging their feet on participation in and support for such an innovative venture. However, it illustrates the malaise that affects our railways and which is solely the responsibility of a Government who will not face their investment responsibilities for the next century, but who instead want to indulge in a privatisation which will not be good for Britain or any part of Britain, and which will clearly not be good for passengers who currently use the rail network.

5.31 pm

Mr. Nick Hawkins (Blackpool, South)

The people whom I want to benefit from the Government's plans for the rail network are the passengers, not the rail unions which so dominate the Labour party's thinking or the apologists or second-class socialists on the Liberal Democrat Benches.

Mr. Stephen

My hon. Friend does the Liberals an injustice by calling them second-class socialists. Will he accept that they are first-class socialists? The evidence for that is that they are making a commitment to renationalise the railways, whereas the Labour party is not.

Mr. Hawkins

I am grateful to my hon. Friend for his contribution. I have always been wedded to the idea that the Liberal Democrats could not be first-class anything, but perhaps my hon. Friend is right.

It was no surprise to hear the hon. Member for Fife, Central (Mr. McLeish) defend the traditional, entrenched producer culture of the public sector unions. I notice that his office benefits from Unison, formerly the National Union of Public Employees, which funds a research officer in his department. I notice that, before entering the House, the hon. Gentleman's history included a period as a researcher for the social work department of Edinburgh university and periods as a university lecturer and planning officer. He does not understand the private sector, because he has never worked in it. Like almost all his colleagues and almost all the Liberal Democrats, he has no idea about private sector business. He and those like him do not understand customer service; they are in the pockets of the public sector unions. Labour and Liberal Democrat policies are all bought and paid for.

Let us consider Labour's position on previous privatisations and the accuracy of its predictions. The right hon. Member for Salford, East (Mr. Orme) claimed in 1983: The public telephone box could be threatened with extinction".—[Official Report. 18 July 1983; Vol. 46, c. 41.] Would any Labour spokesman wish to go back to the days of a public sector British Telecom?

Labour's record is equally deplorable on other issues. The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) claimed that bus deregulation and privatisation will not improve the lot of the bus passenger".—[Official Report, 22 May 1985; Vol. 79, c. 1096.] What has happened since deregulation and privatisation went ahead?

Mr. Charles Kennedy

Is the hon. Gentleman aware of the warning in lavatories and sleepers on British Rail trains, which states that one should not drink the water? I fear that he may not have heeded that advice, judging by his condition this afternoon. I am really intervening to give him a break so that he can catch his breath. Does he agree that the singular practical and fundamental difference—not a difference of political philosophy—between rail privatisation and all the others that he has mentioned is the difficulty caused by having an infrastructure and operators who pay an access charge to it? The hon. Gentleman is comparing apples with oranges.

Mr. Hawkins

The hon. Gentleman has failed to understand that I am going through the history of Labour's Front-Bench spokesmen and their inaccurate predictions about privatisation. I promise that I shall deal with the issue that he has raised because it is also important for my constituency.

The hon. Member for Crewe and Nantwich was proved wrong, because bus mileage outside London has increased by almost a quarter since deregulation and operating costs—crucially—have come down by a third.

Mr. Keith Hill

Will the hon. Gentleman enlighten the House as to how bus privatisation has benefited the 13 million bus passengers a year who have ceased to use the buses?

Mr. Hawkins

The hon. Gentleman's intervention does not relate to the quotation that I read out. The hon. Member for Crewe and Nantwich said that bus deregulation and privatisation would not improve the lot of the passenger, but bus mileage has gone up and operating costs have come down by a third.

Mr. Jacques Arnold

Is not the answer to the question asked by the hon. Member for Streatham (Mr. Hill) that passengers who no longer travel on the buses now travel in their personal cars which, thanks to the prosperity created by the Government, they can afford?

Mr. Hawkins

I am grateful for my hon. Friend's intervention. However, I must return to the catalogue of incorrect predictions made by Labour's Front-Bench spokesmen.

The hon. Member for Glasgow, Garscadden (Mr. Dewar) described British Airways as the "pantomime horse of capitalism" in November 1979. As my hon. Friend the Member for Gravesham (Mr. Arnold) said earlier, British Airways is now the world's favourite airline. The Opposition were wrong about buses, wrong about British Airways and wrong about British Telecom. They have been wrong about every privatisation.

Mr. Stephen

Does my hon. Friend agree that, if the hon. Member for Fife, Central (Mr. McLeish) and his colleagues were to set up in business as clairvoyants, they would risk prosecution under the Trade Descriptions Act 1968?

Mr. Hawkins

I agree with my hon. Friend. I represent one of the towns that has rather more accurate clairvoyants, and I suggest that some could advise Labour Front-Bench spokesmen in future.

Mr. McLeish

I hate to split up the double act, but will the hon. Gentleman consider the most important difference between the various privatisations, which is that British Rail is going to be axed into 95 bits and then sold? Does not that alter slightly the frame of reference within which he might wish to evaluate his comments?

Mr. Hawkins

What my constituents want out of privatisation is an improvement in their rail services. I am interested in the lot of the passenger. Many of the hon. Gentleman's Front-Bench colleagues were claiming that privatisation would not benefit the passenger—[Interruption.] I am seeking to answer the hon. Gentleman's question. Long before privatisation, and before pre-privatisation work started, British Rail axed the direct through services between Scotland, part of which he represents, and my constituency, and between London and my constituency.

The hon. Gentleman cannot claim a link between privatisation and the cutting of services. British Rail axed those services at the beginning of a Labour party conference some three years ago. I said then that, when the private sector had the opportunity to be involved in the railways, we should get back those through services. I can tell the hon. Gentleman that a private sector operator is proposing to reintroduce direct through services, which will benefit the passenger.

The result of the Government's policy, and the method that they have used, is bringing back to passengers services that the nationalised system got rid of. That is the answer to the hon. Gentleman's question. In part, it is also the answer to the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy).

The hon. Member for North Cornwall (Mr. Tyler) spoke about the £200 million—a mere bagatelle—that it would cost to take part of Railtrack back into the public sector, as is suggested by the right hon. Member for Yeovil (Mr. Ashdown). The Liberal Democrats propose imposing that cost on the British taxpayer for up to six years. If the hon. Member for North Cornwall believes that the pursuit of that Liberal Democratic dogma represents good value for the taxpayer, I beg to differ. The problem with the Liberal Democrats, as I think Winston Churchill previously said about another Liberal, is that he has sat on the fence so long the iron has entered his soul.

Mr. Charles Kennedy

I think that the hon. Gentleman is getting his historic allusions mixed up. At the next general election, the public will obviously have a political choice to make, based on what we have to offer and our list of spending priorities. No one in the House should take any lecture from any Conservative, when a Conservative Government have presided over the billions of lost public money which was the poll tax—its invention, destruction and replacement. We will take no lectures about the Conservatives' prudential fiscal approach, given that track record.

Mr. Hawkins

The most important current factor about the rail network, and what is best for its customers and passengers, is the damaging proposals of the Associated Society of Locomotive Engineers and Firemen to disrupt rail services yet again. That will cost the taxpayer even more money and damage services to passengers, just as last year's signal workers' dispute led to the loss of £173 million.

Mr. Bob Dunn (Dartford)

I was not in the Chamber for the early part of the debate, so can my hon. Friend please remind me whether any member of the Labour Front-Bench team took the opportunity to condemn the proposed rail strike?

Mr. Hawkins

No such opportunity was taken, but that is not surprising, because the Labour party has always been an apologist for the rail unions, which dominate it. Every member of the shadow Cabinet receives research help or sponsorship from a trade union, so it is hardly surprising that they simply support their union paymasters.

Mr. Keith Hill

Can the hon. Gentleman explain why the Conservative party always defends the right of workers to strike in a free society yet invariably condemns them when they make the effort to do so?

Mr. Hawkins

The point about the proposed strike is that many of the train drivers and ASLEF members either did not vote, or voted against a strike. Well under half of those entitled to vote supported the strike. The proposed dispute is damaging not only to passengers' interests but to those of the taxpayer. The hon. Gentleman's friends in the rail unions support that strike call, as they have others on many occasions, because they see it an opportunity to fight a political, ideological battle. It has nothing to do with anyone needing any more money.

The train drivers are being offered a 3 per cent. pay increase while many of my constituents, who are struggling in the private and the public sectors, have been offered nothing like that. Many people have taken a pay cut to keep their businesses going. If the hon. Gentleman believes that the 3 per cent. offer is inadequate, I invite him to stand up as an apologist for the train drivers. I note that he does not want to accept that invitation.

We have sensible rail workers, including many who learned lessons from last year's dispute involving the National Union of Rail, Maritime and Transport Workers. When the leader of that union recently called on his members to support the proposed strike, 9,503 staff voted against industrial action and just 8,980 voted in favour. I am sure that all the passengers who were delighted with that result are disappointed that ASLEF drivers, despite being offered a 3 per cent. pay increase, are calling for an unrealistic increase of 6 per cent. That is double the rate of inflation. They plan to damage passenger interests and to bring the rail network to a halt.

We need to provide continuing opportunities to attract private sector companies to the rail network because they would offer good services to passengers by introducing competition and investing in the rail infrastructure and new rolling stock. That is in the interests of the customers and the passengers, and that is why I support the Government's policy of privatising the rail network.

5.44 pm

Mr. John Greenway (Ryedale)

As this is a Liberal Democrat Supply day, and reference has been made already to a by-election in another constituency, it is worth recalling what happened during the 1986 Ryedale by-election. The then successful Liberal candidate—in the old days of the Alliance—made it clear during the campaign that the privatisation of the buses would be a complete and utter disaster. What has happened since? The bus service in the Greater York area is now recognised, even by Labour-controlled York city council, as the best it has been for years. That is the consequence of that successful privatisation.

People may say, "Oh well, there are few rural bus services," but that was always so, and just a few passengers use them. At least people are aware of the commitment to continue the public subsidy of those socially desirable rural bus services. Those same principles underpin what the Government are seeking to achieve with the railways.

I am a strong supporter of privatisation generally, but it must be recognised that it is difficult to accommodate and accomplish it in some industries. Without doubt, privatisation has been a success in the transport sector. One need only consider long distance coaches, the road haulage business, buses, the British Airports Authority, National Freight and British Airways—an undoubted success—to recognise that. Those companies have done considerably better in the private sector than in the public sector, to the point where they have become world leaders, which is undoubtedly true of British Airways. We must ask whether that same success could be achieved for the railways. What benefits would privatisation bring to the railways'? Is it even reasonable to compare the success of those other transport operators with the railways?

Even the most avid enthusiasts of British Rail would acknowledge that the railways do not work as well as they should. That was even truer before the Government announced their privatisation policy five years ago. It is a paradox, but, if anything, the most notable improvements in railway performance have occurred in the past four years, since the Government's commitment to privatise the railways was established.

Many of those improvements were achieved after significant increases in investment, especially in new rolling stock. My part of the world, Yorkshire, has benefited from the successful completion of the electrification of the east coast main line, which now provides far better services than those to which we were used. Sadly, that does not mean that the trains always run on time, but the service has improved and it is recognised as an international leader.

If there is a link between investment and improvement in railway performance, it suggests, as many hon. Members, particularly those from the Opposition, have sought to do today, that if we could only attract more investment, all the problems would be solved. I am sorry that the hon. Member for North Cornwall is not in his place, but I am sure that his colleagues will recount my following remarks. He referred to the annual report of British Railways Board, published just a few days ago, in which Mr. John Welsby, the chief executive, said that the current level of investment was not satisfactory.

Mr. Welsby is in a good position to know that as he is the chief executive of the British Railways Board. He has told us that there is a need for more investment. Yet in January, as recently as six months ago, as the House heard earlier from the hon. Member for York (Mr. Bayley), the British Railways Board said that there was no commercial case for replacing old rolling stock on South Eastern Railways, especially in Kent, despite the fact that some of the trains are more than 30 years old.

I believe that part of the reason why there was no commercial case was the constraint of trying to meet Treasury rules, in order to make out a case for leasing new trains, even by a private finance initiative. The House knows from previous debates that the decision by the British Railways Board, on one hand saying that there is not enough investment but on the other effectively rejecting a privately funded opportunity to acquire new trains, has had devastating consequences for the people of greater Yorkshire, in the form of the announcement in May that the ABB carriage works in York is to close.

I remind the House that, even though the chief executive of the British Railways Board said that there was no commercial case for new rolling stock, as recently as December 1994 the head of South Eastern Railways told Conservative Members who represent Kent constituencies that new trains could be expected to be ordered fairly soon.

As you are probably aware, Madam Deputy Speaker, I have taken a great interest in that matter because the carriage works has been local to many of my constituents, and I have tried, as has the hon. Member for York, to save the carriage works in his constituency from closure. We have considered carefully the possibilities of using private finance to get new trains on the railway by means of the private finance initiative, but, sadly, it has not come to pass. I am left with the overall conclusion that, the railway remaining in the public sector, the rules of public finance by the Treasury are too stringent.

The British Rail chief executive, Mr. Welsby, said in his annual report that the current demand and emphasis should be on infrastructure. Despite the fact that I would much prefer more new rolling stock to have been built and ordered from the York carriage works, I believe that he is right about that. Indeed, the success of the electrification of the east coast main line is an example of what can be done when we are bold and when the funds are available to bring our railways up to date and make them the modern infrastructure that they need to be. The news that the west coast main line is to be re-electrified and modernised is very welcome.

I was an avid train spotter as a young lad, and I remember when the first electrification took place. It is staggering to consider that it is probably the best part of 35 or 40 years ago. All the steam trains disappeared, and we did not believe that there was much fun in watching the electrics go by; they were not the same.

I say to my hon. Friend the Minister, when we speak about infrastructure, please do not neglect the need to repair and renovate some of the rural lines, because they provide an extremely important service to local people. A privatised railway will continue to require a subsidy for those services from Government.

That argument for more capital investment—the debate has partly been characterised by that—always appears to be based on the assumption that only more public money can succeed in achieving that. The Government are blamed for not having invested enough money in the railway, but, as my hon. Friend the Minister of State said in his opening remarks, the Government's record on rail investment in recent years is very good. We should do more, but I fail to understand where in the public purse that new money will come from.

The fact that the hon. Member for Fife, Central (Mr. McLeish) could not, in answer to my hon. Friend the Minister, answer directly what a Labour Government, God forbid, might do if they were in office about, for example, renationalising Railtrack or making a further commitment to capital investment in the railway as a public sector operation—the fact that no amounts can be pledged—is a clear recognition that the Labour party knows that money does not grow on trees for that type of investment.

The House must face up to the reality that, if we want a truly modern railway, the amount of moneys that we need to make that a reality will come only from the private sector, not the public sector.

Any successful business reinvests out of retained profits or it seeks capital, whether by borrowing or in the form of share capital on which it expects a proper return. That is the basic economic fact of life. However, the key to the problem that we have with our railway is that, in the past 40 years, there has been a steady, gradual decline in rail passenger numbers. That has come in parallel with a dramatic increase in the use of the motor car and of road freight.

Mr. Stephen

They are more prosperous.

Mr. Greenway

That has been accompanied, as my hon. Friend the Member for Shoreham (Mr. Stephen) said from a sedentary position, by many people having greater prosperity and the opportunity to buy their own cars and exercise their freedom. As my hon. Friend the Minister said recently, they can exercise their freedom to get into their own car and go where they want to in their own transport.

There is, however, the opportunity for a dramatic change of public attitude and public behaviour, an opportunity to reverse that trend—to have more rail passengers, not fewer, and to get some of those cars off the road, especially for long journeys.

I shall always regard this period in the House as one of great sadness, because that opportunity to reverse passenger numbers must mean more railway trains, more carriages on our railway and more newly built modern trains, such as the Networkers, which are now being built in York for the Kent coast, and it is tragic, and sad for ABB York, that all that will happen too late.

I invite any Member of the House who is in the York region in the next few months to go and watch the gleaming new trains in the sidings being finished off—they will be running on lines in the constituency of my hon. Friend the Member for Gravesham (Mr. Arnold) before too long—and to realise that, by Christmas, the carriage works will be silent and, just as we are about to embark on a period when we need more new trains, that modernised carriage works will be closed.

I mentioned earlier the need for more infrastructure investment and the fact that, in my eyes, that can come only from the private sector rather than the public sector. There is a parallel with what has happened in other privatisations in the past 10 years.

The water industry is perhaps the best example to draw attention to because, undoubtedly, for 25 to 30 years there was chronic under-investment in the water industry by successive Governments. That has not meant that putting that right has been popular with customers, who now must pay greater water charges for the improvement in infrastructure that must take place. However, had we left the water industry in the public sector, we should not have had the investment programme currently in place through the private sector, which is now so necessary. Those hon. Members who scream and shout about the extra charges to customers must recognise that there is a public demand for higher standards in water and in sewerage.

The same argument applies to the railways. The public want a better rail system—of that I am in no doubt. But the funding for it will not come out of the Treasury, whichever party is in Government.

Mr. Jon Owen Jones (Cardiff, Central)

The hon. Gentleman is making an interesting comparison between British Rail privatisation and the water industry. Does he agree that a more accurate comparison would be with the deregulation of buses? During the deregulation of buses, there has been little evidence of huge investment in better and improved buses, and no evidence of extra passengers on those buses.

Mr. Greenway

I am not sure whether the hon. Gentleman was in the Chamber when I began my remarks, and I am not sure that you, Mr. Deputy Speaker, were listening at that time. I was saying that, in the Greater York area, the privatisation or deregulation of buses has led to the best bus service that York has had for years. There has been an increase in the number of passengers and there have been new buses—big, medium and small. The Labour-controlled York city council is now proud of the service that is being provided. I do not think that the hon. Gentleman's argument stands up.

Mr. Charles Kennedy

I was at one with the comments on the Treasury made by the hon. Gentleman before the intervention of the hon. Member for Cardiff, Central (Mr. Jones). There is no doubt that, whichever political persuasion holds power in this country, the Treasury sees its remit as being to release as few funds as humanly possible, and it always will do.

I do not understand another aspect of the approach of the hon. Gentleman and his colleagues. By all means we can give the management of the railways more commercial freedom and flexibility to raise money and invest—I see no difficulty with that and it is not an ideological issue. The problem is that hiving the railways off into a multitude of individual companies and separating them from Railtrack goes way beyond the rational realisation of the policy that I think the hon. Gentleman, as a constituency Member, would want to see, and on which I agree with him.

Mr. Greenway

I am not totally out of sympathy with what the hon. Gentleman says. If he waits until the end of my remarks, which I am coming to shortly, he may hear me say what he has been saying, but in a different way.

We have a structure which has been agreed upon, whether or not it is the right one or could have been better. I am not an expert in such matters and am not in a position to make a judgment. However, the hon. Member for York and I set up the York Railway Forum. In the early stages of that forum, it was clear to us, certainly to me, that a great deal of work and effort by British Rail employees, from board level to shop floor workers, had been put into creating the new structure. To stop it now and tear it up would create an even bigger hiatus than the hon. Gentleman alleges has resulted from privatisation.

Many of the present problems, such as the closure of the ABB carriage works, have occurred because the process has taken far too long. It is six years since we privatised the British Rail engineering carriage works. There is no question—even ABB itself says—that, three to five years down the line, there will undoubtedly be a huge increase in demand for new trains in the private sector. I should like to have seen the process speeded up, which is why I feel that the situation at ABB is so sad.

I have taken up quite enough time, but I want to make one more point. In essence, far from blaming the current difficulties on the privatisation process on which the Government have embarked, the House and Parliament as a whole should now, as they should have done before, recognise the inevitability of what is happening and embrace it with far more enthusiasm. Even in this debate, the House cannot obtain a clear message from the Opposition about what they would do with the railways were they in Government. That is a clear recognition that they know that, were they to form the next Government, there is no blank cheque for the railways or for any other public sector industry.

To conclude and to put the final cherry on the cake of my argument, I referred a minute or so ago to the York Railway Forum, which we established three years or so ago to talk about York's future as a railway centre. York city council commissioned a report from railway consultants Steer, Davies and Gleave. The report's chief recommendation was that York—the city council, the chambers of commerce and all the industries represented in that great city—should embrace privatisation with enthusiasm. The report suggested that York should be promoted as a railway centre, but we are not doing that.

I can only commend that philosophy to the House, because I fervently believe that if we want a railway in the future of which we can be proud, we can achieve that only through private sector finance. I simply say to my hon. Friend the Minister for Transport in London, "For goodness, sake, let's get on with it."

6.5 pm

Mr. Peter Luff (Worcester)

This afternoon's debate has been interesting for at least two reasons. First, I thought that it was a Liberal debate, but Government Members have made all the constructive contributions—indeed, virtually all the contributions. One Back-Bench Labour Member has spoken and no Back-Bench Liberals—there have been only three of them in the House throughout the debate. It must be a Government debate after all.

Mr. Tyler

I am grateful to the hon. Gentleman. Had he been longer in the House, he would know that, in a three-hour debate such as today's, we are not entitled to more than one speech at the beginning and one at the end. We could not intervene even if we wished to do so.

Mr. Luff

At least the Liberal Democrats could have come to listen to the hon. Gentleman, but they did not even do that.

The other interesting feature about this debate was the disappointing speech of the Labour Front-Bench spokesman, the hon. Member for Fife, Central (Mr. McLeish). It was long on waffle and short on facts. His speech consisted largely of a series of assertions in which he suggested that the reason for the debate was the Government's ideology. I should remind him that the reason for the debate is not the Government's ideology, but an attempt to correct the failures of the Labour party's ideology.

As I said in the House in April last year, it was the Labour party whose approach to the nationalisation of the railways created all the difficulties in the first place. The Labour party created that ugly monster, the British Transport Commission, on 1 January 1948. Under Labour's Transport Act 1947, it had a duty to provide an integrated system of transport in Britain. But, as "The Great Western Railway History"—the official history, published in 1984—reveals: Sir Cyril Hurcomb, Chairman of the BTC … made the mistake of organising rail, road and water in five separate Executives and … selected incompatible people for the Railway Executive, which left him with no hope of integrating road with rail, and no chance of integrating the four railways. Nationalisation destroyed the hope of an integrated transport system in this country. The Government are setting about trying to correct that, which I welcome.

Declaring interests seems to have been the flavour of this debate. My interest is rather modest: I am a shareholder in two private railways, in which I take pride. The first is the Severn valley railway, in which I am a founder shareholder and where I recently took my first course in learning to drive a steam locomotive. The second is Eurotunnel, which is the most dramatic example of the contribution that can be made by private capital towards providing transport infrastructure for the next century.

I am a reasonably regular rail user and have benefited from the investment made in the Worcester to London services, which has transformed the use and quality of that line. I also look forward to benefiting from the upgrading of the west coast main line, which will be brought about by this Government's policies, using the private sector in imaginative ways. I believe that the railways should be allowed to benefit from privatisation in just the same way as all the other privatised utilities have benefited.

I recently gleaned intelligence from a journalist that the Labour party intends to target me because of my support for rail privatisation. I look forward to deriving some benefit from that in my constituency. I welcome anything that the Labour party can do to stimulate debate about rail privatisation in my constituency. We will win that debate, because the services will improve while Labour Members continue their foolish policy of support for industrial action that will only undermine the railway's long-term future.

My real concern is the interests of my constituents—particularly those who do not have access to private transport. The interests of the passengers are at the forefront of my mind when I offer the Government my unqualified support on rail privatisation. We have heard the figures about the declining usage of the railways, but they are worth repeating. In 1953, 17 per cent. of all passenger journeys were by rail; in 1963, the figure was 12 per cent.; in 1973, 8 per cent; and in 1995,5 per cent. Something is going wrong, and the problem must be corrected. We need a new policy approach; not more of the same tried, tested and failed policies of the Labour party.

The same decline has occurred in the transport of goods by rail. The percentage of goods carried by rail has declined from 28 per cent. in 1953 to only 5 per cent. in 1995. That is not good enough, and we must do something to correct the imbalance.

I am not one who believes that everything is wrong with our railways; I believe that we have many reasons to rejoice in the way that our railways are functioning at present. The railways have an excellent record of coping with the needs of disabled passengers. There is no legislation in place, but ours is probably the best railway in the world in terms of the accessibility of its rolling stock to the disabled. All InterCity coaches are now accessible to people in wheelchairs, and I am told that there are more toilets for disabled people on British Rail trains than on all the trains in Europe combined. We should recognise that good things are happening on our railways.

There is much talk about trains in this country running late. If I could arrive as reliably at my destination by car as I can by train, I should be a happy man. We think nothing of adding half an hour or three quarters of an hour to our estimated journey times by car, but the same thing is viewed as an abject failure when it occurs on the railways. The Eurostar receives appalling treatment whenever its service fails. It does not happen often, but it receives an incredible amount of press coverage when it does. How often do those who travel to Paris by air—I do not do it often, Mr. Deputy Speaker—face an hour or two-hour delay from air traffic control? There is no coverage by the tabloid press in those circumstances, but it is a scandal whenever a train breaks down. We do not serve our railways well, and they deserve better treatment.

InterCity is the only main-line railway in Europe that makes a profit and I think that it still has more trains running at more than 100 mph than any other railway in Europe. I concede that there is a lot to be done if we are to build on existing strengths. Labour Members referred extensively to through ticketing. I do not think that the marketing of our railways is adequate. The ticketing structure is extremely complex—it is so complex that Labour Members obviously do not understand that through ticketing does not exist at present—and interoperability is a real problem.

There is a complex framework of savers, supersavers and awayday tickets. One can see the notices at Paddington which say that a certain ticket is not allowed on this or that train; it is a complex issue. I do not believe that the railways are getting their marketing right, and that is one of the central reasons why I strongly support privatisation.

We have heard about the track record of other privatised industries, each of which has improved the quality of the service that it offers to customers. The same thing will happen with the railways. On 23 January 1994, the Financial Times wisely said: If the railways were working well, there would be an argument for leaving them alone. As it is, even with some of the highest fares in Europe they are under invested; passengers are still too often made to feel as though they are an incumbrance to the running of the railway, rather than the reason for it; and the trains do not run on time. I think that the Financial Times is being a little hard on British Rail with that last remark. The railways need the injection of enterprise, flair, marketing expertise, management skill and new sources of capital that privatisation will bring.

In his opening remarks, the hon. Member for North Cornwall (Mr. Tyler) talked about accountability. The accountability that matters for the railways is its accountability to its passengers. That accountability is sadly lacking at present. I believe that privatisation will make the train-operating companies accountable to their passengers.

I believe that the passenger service requirements and brand-new contractual conditions on operators will also play a vital part in improving accountability. At present, British Rail can run down its services on a line without being accountable to anyone. Now we have guarantees of service—I know what the hon. Member for Streatham (Mr. Hill) said, but I still see them that way—never before enjoyed by the people of Worcester.

When the PSRs were initially put out to consultation, scare stories were circulated by people who claimed to be friends of the railways but who only undermined them. They said that the service would be reduced from three to two InterCity trains per day. That is nonsense; for the first time, we will have a guaranteed InterCity service. Someone living in Worcester who wants to travel to London reasonably regularly will now know that a rush-hour train will travel in each direction. That is guaranteed under the PSR, and it is a huge step forward.

Mr. Charles Kennedy

I am fascinated by the hon. Gentleman's logic. Is he saying, as a Member of Parliament and a rail commuter, that he is happier knowing that there will definitely be one fewer train per day than having one more train per day? He seems to be applying some bizarre logic.

Mr. Luff

There they go again. Two trains are guaranteed, the existing trains will still run and the Great Western managing director has said that he plans to run more services, not fewer. I will quote from the press release. [Interruption.] The hon. Gentleman asked a question, so he should at least have the decency to listen to the answer. The Great Western Trains press release of 31 January this year states: The timetable plan for May 1995 maintains the current level of services and consideration is being given to the introduction of additional ones". It may come as a surprise to the hon. Gentleman, but these things must be planned. I know that Labour Members do not understand the private sector, but it is a little embarrassing when they reveal their ignorance so spectacularly.

Levels of service are important, but the small things matter as well—they show that the railways care about their passengers. The standard of service is improving locally as the rail network prepares for privatisation. The new Thames timetable for the service operating between Worcester and London is a radical improvement on everything that went before it. It lists the stations and states what facilities are available at each. It sets out the route very clearly and, most interestingly—Labour Members would do well to listen to this—it lists the times of buses connecting with the rail service. The so-called fragmented railway has produced an integrated timetable which bears testimony to the success of the Government's plans.

There have been other improvements, such as better on-board service on the 125s—all first-class passengers are treated as though they are actually wanted on the train, and receive newspapers and a free drinks trolley service. The new timetables that are on display at my local stations enable people who do not understand how the railways operate to learn what trains go where. Those improvements are a direct result of the Government's plans.

Things will only get better. Some problems need to be addressed, but the Government have fostered a creative tension in the railways, rather than a complacent, monolithic bureaucracy. It means that individual companies are fighting for market share and for customers—and hopefully they will fight Railtrack from time to time. Railtrack still has a lot to answer for locally. The weeds at Shrub Hill station are a disgrace.

Mr. Keith Hill

Will the hon. Gentleman give way?

Mr. Luff

No, I will not give way again. I am winding down my remarks and I wish to allow my hon. Friends time to speak in the debate.

Visitors to Worcester would not know that Shrub Hill is a railway station because there is no sign outside it. That will not be good enough for the new train-operating companies, and they will demand improvements to Worcester Shrub Hill station. That is one of the reasons why I welcome rail privatisation.

Investment and the alleged failure of investment has been discussed. I believe that the Labour and Liberal parties must bear a heavy share of the responsibility for that problem. Their attacks on the privatisation process are creating uncertainty and frightening passengers, and they should cease. We have the policies necessary to revive the railways, and those policies have my unqualified support.

6.18 pm

Mr. Jacques Arnold (Gravesham)

The debate is fascinating because the enthusiasm for the future of the railways among Conservative Members is conspicuously absent among the Opposition, even in getting Back-Bench Members to speak. The other fascinating aspect of the debate is the fact that the Liberal party has at last managed to crawl to the left of the Labour party. We heard a diatribe against privatisation from the hon. Member for North Cornwall (Mr. Tyler), while the hon. Member for Fife, Central (Mr. McLeish) sat on the fence, giving no commitment and no policy. There is not even a Labour amendment to the motion on the Order Paper. Almost all Labour Back Benchers appear to have fled the field of battle during the debate, and we have heard nothing from them.

We should put the privatisation of the railways into context and the best way to do that is to compare it with the last great transport privatisation—that of British Airways. I went to the Library and looked up the Second Reading debate on the Civil Aviation Bill on 19 November 1979. It was the first step towards privatising British Airways. On that occasion, the Labour spokesman had something positive to say. Mr. Stanley Clinton Davis wound up the debate and it is instructive to examine what he said on that occasion: The Bill is yet another example of the Government's doctrinal spasms. It is an ill-conceived scheme. It does nothing to engender confidence in the airline, it provokes great anxiety and puts a question mark over the future of British Airways. It does not ensure that the investment programme of British Airways can be satisfactorily completed, which should be a condition precedent to any sensible aviation policy."—[Official Report, 19 November 1979; Vol.974, c. 153–54.] What has happened to British Airways in the 16 years since then? It has expanded its network and its services, and it has gained the accolade of being the world's favourite airline. It has carried out a vast multi-billion-pound investment programme. One has only to look at the dozens of Boeing 747s and brand new airbuses that it has taken on to provide improved services to its customers. It is now the first European airline to have taken delivery of the new Boeing 777. So much for Labour's predictions. It is not surprising that the hon. Member for Fife, Central did not dare make any predictions today.

Mr. McLeish

Will the hon. Gentleman address the fundamental point about how British Rail is being privatised? Does he agree that, if an organisation is privatised as a single entity, it will differ in a number of ways from an organisation that is chopped into 95 pieces and then flogged off to the highest bidder? Let us have a specific answer on that point.

Mr. Arnold

I shall turn to precisely that point, having first commented on the great Liberal speeches in the debate in 1979. I searched through Hansard for that date, and what did I find from the Liberal party, as it then was? I found no speech, and no vote. Not one Liberal Member spoke or voted. The Liberal Democrats are absent from the Chamber this afternoon. Then, as now, they were part-time Members of Parliament, with not too much to say about privatisation.

Mr. Tyler

Even the hon. Gentleman should be able to calculate that a far larger proportion of the Liberal Democrat parliamentary party than of the Conservative party has been here throughout the debate.

Mr. Arnold

That does not say much for the number of Liberal Democrats who are elected—which is not surprising, in view of what we have just heard.

In 1979, the Labour party went flat out against privatisation and the Liberals sat on the fence. Today, the Liberals are flat out against privatisation and the Labour party has not much to say of any significance.

As for the point raised by the hon. Member for Fife, Central, British Rail is being carved up into more sensible chunks, so that it can be managed better and deliver a better service in the private sector. To draw the analogy with British Airways once again, more than 100 airlines come into Heathrow and Gatwick. Each one is a separate company. When the railways are privatised, a multiplicity of franchisees will provide a service, some of them on exactly the same lines and passing through exactly the same stations.

All the airlines land at airports which represent yet another successful privatisation. British airports are managed not only by the British Airports Authority, which also manages other airports, but by other private companies. Railtrack will operate the railway stations and the signalling and lease them to appropriate operators. The same has occurred in air transport, where air traffic control is another separate agency.

What about ticketing? Only a few months ago, the Labour party put out the most magnificent scare stories about ticketing. Almost immediately after privatisation, British Airways set up Galileo, the computerised ticketing service, so that outlets for information and the purchase of tickets on different airlines increased in multiples by hundreds and thousands. The idea that private railway operators would not make the greatest effort to increase the outlets for tickets shows how much a part-time lecturer understands about private enterprise.

Mr. McLeish

As the hon. Gentleman is developing that argument, he should address the fundamental flaw in its foundations. When he talked about British Airways, did he mean the British Airports Authority? The simple premise of the argument that must be addressed is that British Railways is being broken up into 95 parts, whereas British Airways was not.

Mr. Arnold

That is the whole point. I was comparing the rail industry in Britain, which is traditionally one vast monolith, with the civil aviation industry, part of which was nationalised in British Airways and BAA.

In civil aviation, equipment is owned or leased. Likewise, the franchise operations for rolling stock will either get rolling stock from the rolling stock leasing companies or they will buy it.

A singularly important aspect is the prospect for the transfer of traffic from road to rail. I have always thought it extremely odd that we have a wide and integrated network of railways managed by one entity, but it has been unable to provide an infrastructure of freight farms for moving freight around the country. Despite all the advantages of the wide scale of the network, the nationalised British Rail has completely failed to get its act together to move freight around the country, and it failed to do that during a period in which the Government have put £54 billion into the railways since nationalisation.

Why has that not been achieved? British Rail argues that it is impossible to achieve it in such a small country as Britain, because the distances are so short that there is no point in loading freight on and off the railways. However, the channel tunnel makes that excuse no longer valid. As my hon. Friend the Minister said, freight can be carried from Glasgow to Milan by rail through the channel tunnel within 36 hours whereas it would take 72 hours by road. I believe that there will be a massive switch from road to rail, particularly for international traffic, harnessing the channel tunnel. However, any suggestion that that could be achieved by the nationalised monolith that is so fondly considered by the heart of the Labour party is absolutely hopeless. We need the flexibility of the private sector.

Another aspect worthy of rapid consideration is the channel tunnel rail link. My constituency has suffered from this ghastly business for the past eight years, but recently the rail link has passed from being a figment of the imagination of rail enthusiasts to a viable proposition. At the moment, we have rail capacity across Kent, but early in the next century we shall not. It is therefore sensible to build a brand new railway line which can carry high-speed traffic. If that is done, it should remain a passenger-only service and not extend to freight, which should stick to the lines that travel through southern Kent, which the Government rightly invested more than £1 billion in upgrading in recent years.

One Opposition Member mentioned a rumour that he was glad to put about, that Ebbsfleet station and the channel tunnel rail link onwards into London St. Pancras is not to be built. I have quizzed my hon. Friend the Minister, and I shall be grateful if, when he winds up, he will confirm yet again that the Government view Ebbsfleet station and the line onwards into St. Pancras as absolutely vita! and will not be cut. Ebbsfleet station would be most welcome. It would cut commuting time from 50 minutes to 19 minutes. It would mean new developments which will create thousands of jobs in the area and new roads—if only Kent county council will get on with them. Scaremongering by Labour about Ebbsfleet station is extremely unhelpful and damaging.

6.30 pm

Mr. Michael Stephen (Shoreham)

The other day, a constituent of mine stopped me in the street and said, "I've got a bone to pick with you. I travelled on the railway to London recently. The train was slow, the carriages were dirty, the service arrived late and the staff were rude. You should never have privatised the railways." I had to remind him that the railway of which he was so critical was the good old nationalised railway that we all know and love. If it worked as well as it could and delivered the service that our constituents expect, there would be no need for the House to consider the matter—but clearly that is not the case.

I was not surprised to hear the usual negative speeches from Opposition Members, who have criticised every one of our privatisations—British Airways, the British Airports Authority, British Steel, British Telecom and British Gas. They were all wonderful industries, but they were costing the taxpayer £60 million a week before we started to privatise them. Today they deliver the same amount of money to the Exchequer every week.

The trouble with Labour is that it always sees things from the side of the producer, not the consumer—particularly if the producer happens to be a unionised worker. Labour Members criticise shareholders but do not seem to realise that most shareholders in today's privatised or nationalised industries are the pension funds of their own constituents. They complain about the family silver being sold off, but they were put up to that by a mischievous old gentleman from the Conservative side of the House: in fact, the family silver is still there and working for us better than ever before.

One is surprised to note that this is a Liberal Supply day, as two Liberal Members are all that can be mustered.

Mr. Tyler

Three.

Mr. Stephen

I apologise, but the Liberal leader has not been in the Chamber during the debate. No doubt he has been off studying the railways in Bosnia, and we shall have a full report from him when he returns. The Liberals have come out in their true colours as a first-class socialist party. It is they and not Labour who are threatening to renationalise the railway.

I had the privilege to spend a year as an Industry and Parliament Trust fellow with British Rail, so I can tell the House that we have a very good railway. I do not agree with the constituent who criticised that nationalised industry, but we can make it better. None of the managers I met is afraid of the private sector techniques and capital that will come to the industry—they want them. Managers told me that, in a nationalised industry, one can never manage or plan ahead, because one has to wait for the man from the Ministry to make up his mind: he does not often say no—the trouble is that he will not make up his mind at all. One cannot manage a business with such restraints. The managers said that, when they went to the Department for money to invest in new trains, track and stations, they were told to get in the queue behind the national health service, the schools and everyone else.

Strikes are another reason that the railway has not delivered as a nationalised industry. The latest shenanigan by the rail unions that is about to disrupt the lives of the travelling public is a good example of the unrestrained and irresponsible use of national union power, which must be broken in the public interest. That is a good reason, if there were no other, for privatising the railway and breaking it up into the 92 parts of which the hon. Member for Fife, Central (Mr. McLeish) constantly reminds the House.

As for subsidy, Opposition Members are trying to scare our constituents by suggesting that uneconomic lines will be closed. In fact, the opposite is true: the uneconomic lines are most likely to be attractive to private sector operators because they will be paid for operating them, whereas they will have to pay for the privilege of running economic lines. Opposition Members claim that we are pursuing privatisation out of pure political dogma, but it is they who are being dogmatic in refusing to put privatisation to the test. They refuse to give our constituents the opportunity to ascertain whether private sector capital and management techniques can improve Britain's railway.

The Opposition regale us with silly ideas of private sector operators cramming our constituents into cattle trucks and sending ticket prices through the roof. Do the Opposition not realise that private sector operators will want the public to ride the railway and pay for the privilege of using their trains? That is all I have to say.

6.36 pm

Mr. Charles Kennedy (Ross, Cromarty and Skye)

It has been an interesting debate. The hon. Member for Shoreham (Mr. Stephen) said it all, in a prophetic statement. He was referring to this debate, but his remark could apply equally well to the Government. He said that we were running out of time.

That is very much the case, because the Government are running out of time in terms of both the parliamentary calendar as the next general election approaches, and their leadership options, which the Conservatives semi-resolved last week with the "least worst option"—as the Minister who will be winding up described the Prime Minister in ringing tones. The Government's privatisation policy, which a number of Conservative Back Benchers have endorsed to various extents, will prove an increasing nightmare for the Government as the next general election approaches.

I will begin with a friendly sideways comment on the hon. Member for Fife, Central (Mr. McLeish). He and I have been happy to share a number of public platforms in Scotland on rail anti-privatisation issues. I have also shared platforms with the hon. Member for Cunninghame, North (Mr. Wilson), and we have had some political effect in the broad-based campaign that we have fought.

I was a little disappointed at the paucity of contributions from Labour's Back Benches. It is a sad reflection on the procedures and customs of the House that a Liberal debate on the important issue of rail privatisation is considered a lower-grade affair. If the issue is important, Labour Members should be campaigning on it, and not leave so much of the debate to Conservative Back Benchers.

It is also a shame that the problem for Labour is not north of the border, where our positions have been clear and robust. I suspect that the difficulties or constraints confronting the hon. Member for Fife, Central emphatically arise south of the border. I have no doubt that mainstream Labour opinion would endorse the Liberal Democrat motion. If there was an unambiguous political signal from the Opposition parties that a golden share or a controlling public interest would be secured if and when Railtrack disappears completely into the private sector, that would have an important business as well as political effect on Railtrack's saleability.

Although Labour was unable to be unequivocal in its support for us tonight, I hope that the fact that Labour was not wholly dismissive of our arguments is an encouraging sign for the future, and that we may yet see Labour's leader being rather more emphatic than he has felt able to be hitherto. I believe that that is one case that we could win.

It is not the fault of the hon. Member for Fife, Central, because it is not his remit, and I know that he will be relieved by that, but the one transport issue—that of London taxis—into which the Labour party has ventured and boldly gone, proved to be an unambiguous fiasco. The leader of the Labour party intervened, and the entire policy had to be turned upside down. I think that the Labour Front-Bench team are endorsing that view.

Mr. McLeish

indicated assent.

Mr. Kennedy

I say in a friendly way to the Labour party that we live in hope. Clause IV still lives in the hearts of some people, and perhaps the Front-Bench members of the Labour party should remember that.

I comment on where, as usual, most of the entertainment came from this afternoon: the Conservative Back Benches. The most friendly thing that I can say to the hon. Member for Blackpool, South (Mr. Hawkins) is that there seemed to be some philosophical confusion in his arguments about the merits of privatisation. He seemed to argue that, because direct services to his constituency had been withdrawn and there was no guarantee that they would be restored, the uncertainty that at least one day they could be restored was in itself an emphatic endorsement of rail privatisation.

Mr. Hawkins

rose—

Mr. Kennedy

I shall give way, but I am terribly tight for time.

Mr. Hawkins

The matter that I raised was that—already—a private sector company plans to reintroduce direct through services from Scotland to my constituency and from London to my constituency as soon as it is able to do so. That would replace a withdrawal of service from the old nationalised British Rail.

Mr. Kennedy

We will watch that space with interest—as, I am sure, will the hon. Gentleman's constituents. They may be looking to fill a space with a different personage at the next general election. There might be a triumph of hope over experience.

The hon. Member for Surbiton (Mr. Tracey) has accepted lock, stock and barrel all the assurances issued by the Regional Railways managers, but he does not seem to appreciate how the system works. The one prediction that I shall risk is this: as this Parliament goes on, we shall see at Prime Minister's Question Time, Transport questions and other occasions such as this debate, more and more Conservative Back Benchers getting to their feet to protest about the fact that effective local consultation has been short-circuited by the rail passenger franchising director, and that they, as local Members, do not have the opportunity to put the case vigorously and rigorously, as their constituents will want them to, for the retention of rail services. The penny is just beginning to drop with some Conservative Members, but clearly, judging from the speeches, not with as many as it will do in due course.

I commend the hon. Member the Worcester (Mr. Luff) for his practical support for the railways, both private and public. He speaks with great enthusiasm and passion. I agree with him about the need for better marketing and promotion. There is an attitude problem in this country towards our railways, and a debate such as this provides an important opportunity to underscore it.

The hon. Member for Gravesham (Mr. Arnold) spoke with great, burning support and enthusiasm for the Government. I can only assume that that is why he resigned as a member of it last week. So enthusiastic is he that he voted for the person who stood against the present leader of his party.

We now have a ray of hope, because the hard man who was in charge of the Department of Transport has been moved to the hard place of Conservative central office and been replaced by the bicycling baronet himself. I regret that we did not hear from the Secretary of State for Transport this evening, but he is present.

The right hon. Member for Ealing, Acton (Sir G. Young) has commendable independent spirit, which is why he got himself sacked under his previous leader and then reappointed. All of us interested in the future of our railways hope that he will follow what appear to be the discussions that he was having with the Secretary of State for Scotland earlier this afternoon, not least because the consultation on the passenger service requirement for Scotland ends tomorrow.

The franchising director, Roger Salmon, and Ministers must be impressed by the quality and the quantity of the submissions—which include one from the likes of Highlands and Islands Enterprise, which is, after all, a Government agency—that the threatened services should be reprieved. It is healthier at the end of day for such strategic, political decisions to be taken by politicians and Ministers. They should not be farmed off and taken by bureaucrats.

Although we have had to resort to the Scottish courts, it is scarcely ideal either that such decisions are taken by judges on the bench. As somebody with a sense of the constitution, I think that the Secretary of State for Transport will share that view privately. I hope that he and his right hon. Friend the Secretary of State for Scotland can therefore come to a sensible arrangement as a result of discussions which have already taken place.

At the centre is the question of responsibility. There is no doubt that the Government, as in some other areas—the health service being an obvious example—have sought to move the stigma of rail rundowns or closures away from Transport Ministers and, indeed, the Scottish Office or territorial Ministers generally.

It is now farcical when one wants to complain about a threatened reduction or withdrawal of service. One raises a question in the House and asks the Minister concerned, who says that it is an operational matter for British Rail or ScotRail management. When one talks to them, they say that it is a question of subsidy, which is decided by the franchising director. When one talks to Roger Salmon, he says that the budget is decided by the Ministry of Transport.

It is chaotic, circular nonsense, in place of what used to be something approximating coherent decision making and a sense of ministerial accountability, for what is, after all, something still emphatically in the public domain. That is the great contradiction and weakness at the centre of the entire privatisation process.

In the course of this short debate, we have not learnt a lot more about what the Labour party stands for, we have learnt a little more about the Liberal Democrats' view, and we know that there is a variety of opinion on the Conservative Back Benches. I shall end on an optimistic note, because inevitably in such a debate the focus is on the negative.

The channel link is a marvellous engineering achievement. Any hon. Member who has recently used either the Paris or the Brussels link for business or parliamentary activity could not have failed to be impressed by it. The days of being stacked above Charles de Gaulle airport or stuck on the M4 going out to Heathrow are behind us because of the convenience and the quality of travel that the rail link affords. It is therefore something to celebrate, and it is an important signal for the vibrant future of this country's railways, especially as we are plugged into the continent of Europe.

There is also an awful metaphor at the centre of that achievement, as any hon. Member who has travelled on the service will know. It is galling to trundle through the south of England's green and pleasant land at a certain rate, only to cross the channel and accelerate to a fantastically greater rate as one passes through France, Belgium or wherever.

In the words of our motion, that is surely the central point. On this side of the channel, under this Government's policy, there has been a fundamental lack of investment in a rail infrastructure. That will not be improved by privatisation, and I hope that wiser counsels may yet prevail, given the change in ministerial personnel.

6.47 pm

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

I want to start where the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) has just left off. His last statement demonstrated the patent absurdity of the motion. He seems to have forgotten that the channel tunnel rail link is being constructed by private sector finance, and that a Labour Government cancelled a channel tunnel project which was to have been taken forward by the taxpayer. It is precisely the inadequacy of the state in such circumstances that leads Conservative Members to their fundamental belief in the advantages of privatisation.

I congratulate all my hon. Friends, who followed the excellent lead of my hon. Friend the Minister for Railways and Roads, on making this an interesting debate. My hon. Friends the Member for Worcester (Mr. Luff), for Ryedale (Mr. Greenway), for Blackpool, South (Mr. Hawkins), for Gravesham (Mr. Arnold), for Shoreham (Mr. Stephen) and for Surbiton (Mr. Tracey) all made valuable contributions to the debate. I shall comment on them later, but first I want to deal with a few detailed points.

The hon. Member for Ross, Cromarty and Skye referred to Anglo-Scottish sleeper services. As he knows, the consultation period ends tomorrow. All the representations which have been made will be carefully considered by the franchising director. I know that he is aware—I want to make it clear, as the House should also be aware—that, in the intervening period, those services will continue. I should also make it clear that—beyond sleeper services—the PSR for ScotRail as a whole essentially protects the entire May 1995 timetable. That is a new guarantee of services for the next seven years.

Mr. Tyler

Will the Minister give way?

Mr. Norris

The hon. Gentleman is intruding on his own time—which may be why he wants to intervene.

Mr. Tyler

I am grateful to the Minister. I think that this point is important.

The Minister just said that all sleeper services to Scotland would continue. Does he include the sleeper service from Plymouth, which has already been withdrawn?

Mr. Norris

I understand that services that are not in being will not continue. My statement was straightforward: I made it clear that, while the franchising director is considering the representations that he has received in relation to Anglo-Scottish sleeper services, existing services would continue.

The hon. Member for Streatham (Mr. Hill) is a great transport buff, and always makes an interesting and, indeed, emotional speech; but he really must not let hyperbole run away with him in support of an already thin argument. He presented an extraordinary notion of fees and the cost of privatisation. That is one of the great fairy tales of British political life: the hon. Gentleman decides on a figure, and then doubles it.

Mr. Keith Hill

What figure?

Mr. Norris

I will tell the hon. Gentleman the exact figure: indeed, that was my purpose in referring to his remarks. The hon. Gentleman should not worry about doubling the figure, however; the hon. Member for North Cornwall (Mr. Tyler) multiplied it by four. Whatever the figure advanced as the cost of this extraordinarily complex exercise, the Opposition parties generally add a nought and know that they will be on the safe side.

In fact, the figure is neither £240 million nor £700 million. Between April 1991 and May 1995, Department of Transport consultancy fees amounted to £29.9 million, costs of the Office of Passenger Rail Franchising to £16.9 million and the rail regulator's costs to £4.4 million. That gives us a total of £51.2 million.

It is fair to include the costs borne by British Rail and Railtrack, which will probably account for some £72 million. My maths tells me that the figure is around £123.2 million, not the £240 million mentioned by the hon. Member for Streatham or the £700 million that the hon. Member for North Cornwall implied would be spent by the end of the year.

Opposition Members, however, roll into the extraordinary figures that they present every part of the restructuring of an industry that is desperately trying to drag itself from the nationalised mess of the last half century into the modern world. Conservative Members, who made that point themselves, were perfectly clear about the value of the exercise.

The hon. Member for Streatham mentioned the travelcard. He really should know better. He is aware of the value that Conservative Members have consistently placed on the card, but he has allowed me to say just one more time that we remain entirely committed to its value and to the millions who benefit from it in London. He knows that, during the time—more than three years—that I have been Minister for Transport in London, I have made it clear that that commitment will continue. We have no hidden designs on the travelcard.

The hon. Gentleman also knows perfectly well that there can be no change to the PSR without the franchising director's approval, and that any proposal for a significant alteration in the level of service would have to be subjected to consultation with the rail users consultative committee and local authorities.

My hon. Friend the Member for Gravesham mentioned Ebbsfleet in connection with the channel tunnel rail link. I can confirm that the Government's position has not changed; they continue to regard Ebbsfleet as an important part of the rail link project. My hon. Friend also raised an important point, provoking the hon. Member for Fife, Central to his feet several times: he spoke of the great socialist belief in the monolith—the idea that, universally, bigger must somehow be better.

In some businesses—aviation is arguably one—size is indeed a virtue, but I believe that my hon. Friend was entirely right. In British Rail, the monolith has too often proved inflexible, unmanageable and unresponsive to customer demand. We must deliver the system into manageable units that offer a specific, focused, user-friendly service, maximising value for money and seeking out new markets and investment opportunities and more effective management.

Mr. McLeish

Will the Minister give way?

Mr. Norris

No, I do not have time.

The hon. Member for North Cornwall presented an extraordinary sight. As several of my hon. Friends have pointed out, we are now faced with the remarkable prospect of the Liberal party rushing far to the left of new Labour—as I believe we are now entitled to call it. The Liberal party is now the only party that calls for renationalisation. I noted, as the House will have noted, that the hon. Member for Fife, Central squirmed to avoid the very commitment that Liberal Members invited him to make. What an extraordinary proposition.

Just when we thought that a Conservative might be speaking, however, the hon. Member for Bolsover (Mr. Skinner) intervened in his own pithy way: "But you lot were in favour of it a few years ago, weren't yer?" I can assist the hon. Gentleman. Earlier today, I turned to a speech made in 1990 by the right hon. Member for Yeovil (Mr. Ashdown), in the aptly named Empress ballroom in Blackpool. He was extolling the virtues not of nationalisation, but, on this occasion—for goodness knows which way the weathervane of Liberal opinion was swinging on the afternoon in question—of privatisation.

The right hon. Gentleman said: In some parts of the US, citizens who use, for instance, solar panels to generate electricity have the right to put any excess they generate back into the grid, reversing their meters"— and odd phrase, that, but we will not dwell on it— cutting their bills and providing power for industry. So free competition there makes each citizen a power generator"— my, there is a Liberal phrase to conjure with— saving costs, capitalising on the potential of alternative energy and protecting the environment—all at the same time. And if we bring competition to the utilities, why not to British Rail? I have the words before me. They are in a Liberal press release, so I suppose the party was proud of them at the time.

In the words of my right hon. Friend the former Secretary of State, however, there is more. The right hon. Member for Yeovil went on to say: Nothing would increase the volume of rail freight more than allowing private industry to compete on the same basis as road freight.

Mr. Tyler

Will the Minister give way?

Mr. Norris

No.

The right hon. Member for Yeovil went on: Competition … is not an ideological talisman, still less an economic gimmick. It is simply a way of ensuring that the customer—the citizen—comes first. Amen to that, say Conservative Members.

As we all know, however—I suspect that Labour Members know it too—the Liberals will say whatever they consider appropriate and convenient at the time. We are now confronted by the extraordinary spectacle of a Liberal leader—a man who has, on occasion, suggested that he might actually take a rein or two of office—saying that Liberal Democrats will buy back 51 per cent. of shares in Railtrack at the issue price, or the market price. How much will it cost? Half the value of Railtrack: a little more than £1 billion, or probably a good deal less.

Given that the Government's total spending bill is £300,000 million a year £200 million is perfectly affordable, according to the right hon. Gentleman. It is cheap, he says. The right hon. Gentleman reminds me of the noble Lord Healey, who once said, "A billion here, a billion there, and soon you are talking about quite serious money."

The reality is that the leader of a party which seriously pretends to office is so cavalier with public funds as to produce such an extraordinary statement. That is the leader of the Liberal Democrats' commitment, which he believes to be is clear, costed and responsible. The right hon. Gentleman will forgive me if I quibble with that last description.

The Government support the privatisation of the railways because we know the benefits that privatisation has brought, particularly to transport. Several of my hon. Friends have referred to the historic change which has been brought about in the fortunes of British Airways, a company which was a basket case but which has been transformed into a world leader. What is more, BA is operating in the harshest environment of all—that of free international competition—and still manages to out-perform its rivals, who often receive literally billions of pounds of state handouts.

BA's performance owes considerably to its privatisation, as does the performance of the British Airports Authority. The BAA is wreaking a huge change in the environment of airports, and is now winning contracts in the United States.

Mr. Charles Kennedy

Mr. Deputy Speaker, I beg to move that the question be now put.

Mr. Norris

That was an interesting intervention from the hon. Gentleman, and seems to suggest that the Liberal Democrats have decided that perhaps this debate was not a good idea after all. Perhaps the hon. Gentleman hoped that we might glide smoothly into the area of health policy, so that the Liberal Democrats could then grab every shroud and follow every ambulance they can as they think up yet another farrago of nonsense which they can dress up as some commitment to policy.

The truth may hurt, but the reality is clear. Whether we are referring to BA, BAA, National Express, the privatisation of ports or—as my hon. Friend the Member for Ryedale properly said—bus privatisation, the reality is that, in every case, privatisation and deregulation have brought substantial advantages.

It is extraordinary that we are debating this issue tonight. No serious economy anywhere in the world would move the kind of motion that we have seen from the Liberal Democrats tonight. The Russians are now perfectly clear that they believe in privatisation. In Nicaragua and El Salvador, one can hear the virtues of the free market expounded. But in Yeovil and in Ross, Cromarty and Skye, it is back to nationalisation and all its evils. One of my right hon and noble Friend Baroness Thatcher's greatest achievements was to set in motion a move towards the liberation of state industry which has been followed the world over, and with good reason.

We will go on to deliver the privatisation of rail services because that will liberate investment opportunities in a way unfettered by the public sector borrowing requirement. Privatisation will liberate management and will allow it, as my hon. Friend the Member for Blackpool, South suggested, to offer rail services that have been removed by the nationalised railway. Private operators are keen—not just in Blackpool, but in many other areas of the country—to restore such services, and they know how to run them profitably.

A change is already happening in terms of the way in which the train operating companies are showing concern for customers—which is, of course, at the heart of the private sector. They are building a modern railway that is efficient and responds to customers' demands, and is not dominated, as the nationalised railway has been, by the producers rather than by the consumers. If hon. Members from both sides of this House want to see the development of a railway fit for the 21st century, they must reject the motion and support the Government amendment.

Question put, That the original words stand part of the Question:

The House divided: Ayes 49, Noes 262

[7.04 pm
AYES
Ashdown, Rt Hon Paddy	Foster, Don (Bath)
Banks, Tony (Newham NW)	Harvey, Nick
Barnes, Harry	Home Robertson, John
Beith, Rt Hon A J	Jackson, Helen (Shef'ld, H)
Bermingham, Gerald	Jones, Ieuan Wyn (Ynys Môn)
Bruce, Malcolm (Gordon)	Jones, Lynne (B'ham S O)
Callaghan, Jim	Jones, Nigel (Cheltenham)
Campbell, Mrs Anne (C'bridge)	Kennedy, Charles (Ross, C&S)
Campbell, Menzies (Fife NE)	Lewis, Terry
Carlile, Alexander (Montgomery)	Livingstone, Ken
Chidgey, David	Loyden, Eddie
Corston, Jean	Lynne, Ms Liz
Cunningham, Roseanna	Mackinlay, Andrew
Dafis, Cynog	Maclennan, Robert
Dalyell, Tam	Madden, Max
Dunwoody, Mrs Gwyneth	Maddock, Diana
Ewing, Mrs Margaret	Mahon, Alice

Marek, Dr John	Steel, Rt Hon Sir David
Michie, Bill (Sheffield Heeley)	Timms, Stephen
Michie, Mrs Ray (Argyll & Bute)	Tyler, Paul
Parry, Robert	Wallace, James
	Wareing, Robert N
Rendel, David	Wigley, Dafydd
Salmond, Alex
Simpson, Alan	Tellers for the Ayes:
Skinner, Dennis	Mr. Archy Kirkwood and Mr. Simon Hughes.
Spearing, Nigel

NOES
Ainsworth, Peter (East Surrey)	Evans, Nigel (Ribble Valley)
Alexander, Richard	Evans, Roger (Monmouth)
Alison, Rt Hon Michael (Selby)	Faber, David
Amess, David	Fabricant, Michael
Arbuthnot, James	Field, Barry (Isle of Wight)
Arnold, Jacques (Gravesham)	Fishburn, Dudley
Arnold, Sir Thomas (Hazel Grv)	Forman, Nigel
Ashby, David	Forsyth, Rt Hon Michael (Stirling)
Atkins, Rt Hon Robert	Forth, Eric
Atkinson, David (Bour'mouth E)	Fowler, Rt Hon Sir Norman
Atkinson, Peter (Hexham)	Fox, Dr Liam (Woodspring)
Baker, Rt Hon Kenneth (Mole V)	Fox, Sir Marcus (Shipley)
Baker, Nicholas (North Dorset)	Freeman, Rt Hon Roger
Banks, Matthew (Southport)	French, Douglas
Banks, Robert (Harrogate)	Fry, Sir Peter
Bates, Michael	Gallie, Phil
Bellingham, Henry	Gardiner, Sir George
Beresford, Sir Paul	Gare-Jones, Rt Hon Tristan
Booth, Hartley	Garnier, Edward
Boswell, Tim	Gill, Christopher
Bowis, John	Gillan, Cheryl
Boyson, Rt Hon Sir Rhodes	Goodlad, Rt Hon Alastair
Brandreth, Gyles	Goodson-Wickes, Dr Charles
Brazier, Julian	Gorman, Mrs Teresa
Brooke, Rt Hon Peter	Gorst, Sir John
Brown, M (Brigg & Cl'thorpes)	Grant, Sir A (SW Cambs)
Browning, Mrs Angela	Greenway, Harry (Ealing N)
Bruce, Ian (Dorset)	Greenway, John (Ryedale)
Burns, Simon	Griffiths, Peter (Portsmouth, N)
Burt, Alistair	Grylls, Sir Michael
Butler, Peter	Gummer, Rt Hon John Selwyn
Carlisle, John (Luton North)	Hague, William
Carlisle, Sir Kenneth (Lincoln)	Hamilton, Neil (Tatton)
Carrington, Matthew	Hampson, Dr Keith
Carttiss, Michael	Hanley, Rt Hon Jeremy
Cash, William	Hannam, Sir John
Chapman, Sydney	Hargreaves, Andrew
Clappison, James	Harris, David
Clark, Dr Michael	Haselhurst, Sir Alan
Clarke, Rt Hon Kenneth (Ru'clif)	Hawkins, Nick
Clifton-Brown, Geoffrey	Hawksley, Warren
Coe, Sebastian	Hayes, Jerry
Colvin, Michael	Heald, Oliver
Congdon, David	Heathcoat-Amory, David
Conway, Derek	Hendry, Charles
Coombs, Anthony (Wyre For'st)	Heseltine, Rt Hon Michael
Coombs, Simon (Swindon)	Hicks, Robert
Cope, Rt Hon Sir John	Hill, James (Southampton Test)
Couchman, James	Hogg, Rt Hon Douglas (G'tham)
Cran, James	Horam, John
Currie, Mrs Edwina (S D'by'ire)	Hordern, Rt Hon Sir Peter
Day, Stephen	Howard, Rt Hon Michael
Deva, Nirj Joseph	Howarth, Alan (Strat'rd-on-A)
Dicks, Terry	Howell, Rt Hon David (G'dford)
Dorrell, Rt Hon Stephen	Howell, Sir Ralph (N Norfolk)
Douglas-Hamilton, Lord James	Hughes, Robert G (Harrow W)
Dover, Den	Hunt, Rt Hon David (Wirral W)
Duncan, Alan	Hunt, Sir John (Ravensbourne)
Duncan Smith, Iain	Hunter, Andrew
Dunn, Bob	Hurd, Rt Hon Douglas
Durant, Sir Anthony	Jack, Michael
Elletson, Harold	Jackson, Robert (Wantage)
Emery, Rt Hon Sir Peter	Jenkin, Bernard
Evans, Jonathan (Brecon)	Jessel, Toby

Johnson Smith, Sir Geoffrey	Riddick, Graham
Jones, Gwilym (Cardiff N)	Robatnan, Andrew
Jones, Robert B (W Hertfdshr)	Roberts, Rt Hon Sir Wyn
Key, Robert	Robertson, Raymond (Ab'd'n S)
King, Rt Hon Tom	Rowe, Andrew (Mid Kent)
Kirkhope, Timothy	Rumbold, Rt Hon Dame Angela
Knapman, Roger	Sackville, Tom
Knight, Mrs Angela (Erewash)	Sainsbury, Rt Hon Sir Timothy
Knight, Greg (Derby N)	Scott, Rt Hon Sir Nicholas
Knight, Dame Jill (Bir'm E'st'n)	Shaw, David (Dover)
Knox, Sir David	Shaw, Sir Giles (Pudsey)
Kynoch, George (Kincardine)	Shephard, Rt Hon Gillian
Lait, Mrs Jacqui	Shepherd, Colin (Hereford)
Lamont, Rt Hon Norman	Sims, Roger
Lawrence, Sir Ivan	Smith, Sir Dudley (Warwick)
Legg, Barry	Smith, Tim (Beaconsfield)
Leigh, Edward	Soames, Nicholas
Lester, Jim (Broxtowe)	Speed, Sir Keith
Lidington, David	Spencer, Sir Derek
Lightbown, David	Spicer, Sir James (W Dorset)
Lloyd, Rt Hon Sir Peter (Fareham)	Spicer, Michael (S Worcs)
Lord, Michael	Spink, Dr Robert
Luff, Peter	Spring, Richard
Lyell, Rt Hon Sir Nicholas	Sproat, Iain
MacGregor, Rt Hon John	Squire, Robin (Hornchurch)
MacKay, Andrew	Stanley, Rt Hon Sir John
McLoughlin, Patrick	Steen, Anthony
McNair-Wilson, Sir Patrick	Stephen, Michael
Madel, Sir David	Stem, Michael
Maitland, Lady Olga	Stewart, Allan
Malone, Gerald	Streeter, Gary
Mans, Keith	Sweeney, Walter
Marland, Paul	Sykes, John
Marlow, Tony	Taylor, Ian (Esher)
Marshall, John (Hendon S)	Taylor, John M (Solihull)
Marshall, Sir Michael (Arundel)	Taylor, Sir Teddy (Southend, E)
Martin, David (Portsmouth S)	Temple-Morris, Peter
Mawhinney, Rt Hon Dr Brian	Thomason, Roy
Merchant, Piers	Thompson, Sir Donald (C'er V)
Mills, Iain	Thompson, Patrick (Norwich N)
Mitchell, Andrew (Gedling)	Thornton, Sir Malcolm
Mitchell, Sir David (NW Hants)	Thurnham, Peter
Moate, Sir Roger	Townsend, Cyril D (Bexl'yh'th)
Monro, Sir Hector	Trend, Michael
Montgomery, Sir Fergus	Trotter, Neville
Needham, Rt Hon Richard	Twinn, Dr Ian
Nelson, Anthony	Viggers, Peter
Neubert, Sir Michael	Walden, George
Newton, Rt Hon Tony	Walker, Bill (N Tayside)
Nicholls, Patrick	Waller, Gary
Nicholson, David (Taunton)	Wardle, Charles (Bexhill)
Nicholson, Emma (Devon West)	Waterson, Nigel
Norris, Steve	Watts, John
Onslow, Rt Hon Sir Cranley	Wheeler, Rt Hon Sir John
Oppenheim, Phillip	Whitney, Ray
Ottaway, Richard	Whittingdale, John
Paice, James	Widdecombe, Ann
Patnick, Sir Irvine	Wiggin, Sir Jerry
Patten, Rt Hon John	Wilkinson, John
Pattie, Rt Hon Sir Geoffrey	Wilshire, David
Peacock, Mrs Elizabeth	Winterton, Mrs Ann (Congleton)
Pickles, Eric	Winterton, Nicholas (Macc'f'ld)
Porter, David (Waveney)	Wolfson, Mark
Portillo, Rt Hon Michael	Wood, Timothy
Powell, William (Corby)	Young, Rt Hon Sir George
Rathbone, Tim
Redwood, Rt Hon John	Tellers for the Noes:
Renton, Rt Hon Tim	Mr. Bowen Wells and Mr. David Willetts.
Richards, Rod

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments) and agreed to.

Question accordingly agreed to.

Mr. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved, That this House believes that privatisation offers the best opportunity for reversing the historic decline suffered by the railway system under nationalisation; and further believes that the privatisation of Railtrack offers the best future for Railtrack, and for passengers and freight users, by making greater use of private sector skills in managing the network and in providing greater scope for private capital investment in the upgrading of the railway system.