HC Deb 06 March 1995 vol 256 cc11-2
12. Ms Glenda Jackson

To ask the Secretary of State for Transport what costs were incurred by rail privatisation up to and including January 1995; and what are the projected costs to his Department until January 1996.

Mr. Watts

The total cost of rail privatisation from 1991–92 until the end of January 1995 was £209 million, including costs of new financial and information systems. Estimated costs of the Department from February this year to January 1996 are £26 million. Projected figures are current estimates and exclude the main sale costs for the flotation of Railtrack, which are yet to be determined.

Ms Jackson

I thank the Minister for that reply. Will he tell the House what percentage of that figure can be attributed to consultancy fees paid to firms which make financial contributions to the Conservative party?

Mr. Watts

I have no knowledge of which consultancy firms make contributions to my party or to any other political party. As the hon. Lady knows from answers to earlier questions that she has tabled, the total expenditure on consultancy is £22.5 million, which is included in the total that I gave in reply to her initial question.

Sir Donald Thompson

My hon. Friend will know that the Calder Valley line is a most important east-west line and that my constituents look forward to rail privatisation. Will my hon. Friend spend whatever money is necessary to ensure that they receive fair and honest information about every aspect of privatisation?

Mr. Watts

I agree that it is vital that people receive true, factual and honest information about rail privatisation. If they have that information, they will be as enthusiastic about it and about the benefits that it will bring to the travelling public and to freight users as my hon. Friend and I.

Mr. Meacher

Is the Minister aware that, in addition to the quarter of a billion pounds cost of preparing for privatisation that he quoted, it is also reported that the Secretary of State intends to write off £1.5 billion in debts as a sweetener in order to secure the sale of Railtrack? Is the Minister also aware that senior officers have been offered up to double their present salaries—up to six-figure levels, excluding additional share options—to secure their co-operation in the run-up to privatisation? Is it not the ultimate absurdity that the cost to the public purse of selling off British Rail is now likely to exceed the total revenues from that sale? Does it not speak volumes for the Government that they can suddenly find billions of pounds to subsidise the privatisation programme when they have starved British Rail of desperately needed cash investment for years?

Mr. Watts

Investment in railways is running at £1 billion this year, it is planned to be at £1 billion next year and it was at an all-time high of more than £1.5 billion very recently. I make £209 million rather less than a quarter of a billion pounds. As to the other figures which the hon. Gentleman adduced, we know how good he is at conjuring figures out of the air and how bad he is at substantiating any of them.

Mr. Duncan Smith

Does my hon. Friend agree that the purpose of privatisation is to remove burdens from the taxpayers so that the system will ultimately deliver benefits to them, as occurred with British Airways and with all of the other privatisations that have taken place? Instead of taking from the taxpayer, privatisation contributes benefits to the taxpayer.

Mr. Watts

My hon. Friend is right to say that we wish to remove unnecessary burdens from the taxpayer. However, I remind him that we are planning to give the Franchising Director a budget of £1,800 million to secure the socially necessary services which the Opposition claim, quite falsely, will be abolished under privatisation.