§ Ms Clare Short (Birmingham, Ladywood)
I beg to move,That this House, noting both the public opposition to the privatisation of the railways throughout the United Kingdom and the undertaking given by Her Majesty's Government during the passage of the Railways Act 1993 that Railtrack would remain a publicly owned company for the foreseeable future and believing that the flotation of Railtrack will damage the national interest, lead to short term profits being put before long term investment and to lower safety standards, calls upon Her Majesty's Government to withdraw the present plans for the sale of Railtrack and to conduct a thorough review with the aim of securing for the nation higher levels of rail investment, improved services and the best possible return on taxpayers' money.
The motion points out that the overwhelming majority of the population of the United Kingdom—which of course includes Northern Ireland—are opposed to the privatisation of the railways. It also draws attention to the fact that the House of Commons has never given its consent to the sale of Railtrack, which owns the track, signalling, bridges and stations that lie at the heart of the railway network.
It is notable that, during the passage of the Railways Act 1993, the House was repeatedly assured that Railtrack would remain a publicly owned company for the foreseeable future. Many quotes are available to prove that point, but I will give the House only two today. The then Secretary of State, the right hon. Member for South Norfolk (Mr. MacGregor), speaking on Second Reading, said:Outright privatisation of all the railway is not on the agenda for the foreseeable future, not least because subsidy from the taxpayer is needed, and we have made it clear that we shall continue to provide that."—[Official Report, 2 February 1993; Vol. 218, c. 160.]
The then Minister of State, the right hon. Member for Kettering (Mr. Freeman), speaking in Committee, said:Railtrack will be in the public sector for the foreseeable future".—[Official Report, Standing Committee B, 23 February 1993; c. 400.]
That assurance was repeated time and time again during the passage of the Railways Act 1993.
I am sure that all hon. Members will agree that rail privatisation with the core of the system remaining publicly owned is very different from privatisation with Railtrack as a private company. It is fair to say, therefore, that Parliament was misled about the Government's intention when the Railways Act 1993 was passed.
It is because we believe that the privatisation of Railtrack is deeply damaging to the national interest that we have arranged today's debate. We are aware from the Save Our Railways poll taken some months ago that, when Tory Members of Parliament were asked anonymously whether they supported rail privatisation, 20 per cent. of them said that they were opposed to it. The challenge to them today is to vote for what they know to 721 be right, and to vote for the national interest. It will be very interesting indeed to see the strength of their consciences.
Northern Ireland is also threatened with rail privatisation, although it is on a slower track than that of the rest of the United Kingdom. Rail privatisation will obviously damage the transport system in Northern Ireland, and it will be very interesting to see how hon. Members representing constituencies in Northern Ireland vote today.
Before going any further, I should like to say a word about tax. The cost of privatising the railways amounts to an extra £106.38 for every taxpayer in the country. That is equal to an extra 1p on the basic rate of income tax. Those who are concerned to reduce taxes should therefore vote with us to halt the sale and save the taxpayer a lot of money.
§ Ms Short
I shall not give way on that point.
The costs of privatisation to the taxpayer are shockingly large. It cost the taxpayer £1 billion to prepare British Rail for privatisation. That was one-off spending, but surely the money would have been better spent improving the west coast main line, which is my line and which is falling into ever greater disrepair and becoming more unsafe and unreliable. On top of that, it is costing the taxpayer an extra £850 million every year to run the privatised structure, which is less efficient and more costly than the old British Rail. In other words, the taxpayer is paying more for a lesser service.
Under the privatised structure, the taxpayer is expected to pour £2 billion every year into the top of the system. That trickles down, providing profits for all 100 companies that British Rail has now become, but there is no accountability to the public for the expenditure of that money and no return on taxpayers' investment. As the right hon. Member for South Norfolk said when he uttered the words that I cited earlier, that is a ridiculous set of arrangements.
If we consider specifically the cost of the sale of Railtrack, we come across other major problems. There has been a big fattening up and a creation of sweeteners to get the company sold at any price, no matter the cost to the taxpayer or the damage to our railways. Thus, a company whose modern equivalent value is £6.5 billion is to be sold for an estimated £1.5 billion, which is disgraceful in itself.
In order to get the company sold, £1.46 billion of debt—money owed to the taxpayer—has been written off. An unprecedented £69 million of profits earned while Railtrack was owned by the public is to be given to shareholders who have not yet even bought a share. Nevertheless, that money is being prepared for them. Big bonuses are on offer to the top six executives if they manage to maximise short-term profits. That is the opposite of what rail needs—rail requires long-term thinking and long-term investment.
I am afraid that the damage of Railtrack privatisation goes even further. To get the company sold, track access charges have been set very high. Thus, it costs £170,000 a year in track access charges alone to put one passenger coach on the railways. That compares with £300 to £450 in vehicle excise duty for a coach on the roads. To get 722 Railtrack sold, the costs of using rail have been set so high that there will be no expansion of rail use under the privatised structure. Given the current projections of congestion on our roads, we must get more passengers and freight on to the railways to keep the country moving and breathing in the future. Under the arrangements in place, that cannot be done.
Although the Government babble about increased investment under privatisation, the reality is that the prospectus makes it clear that there is no expectation of growth in the use of rail under the proposals. Page 29 of the prospectus states:Railtrack's passenger access income is unlikely to benefit materially from any increase in passenger use".
Page 30 of the pathfinder prospectus states:The opportunities for expanding rail freight operations are limited.
There we have it; they are the real intentions.
§ The Secretary of State for Transport (Sir George Young)
I am interested to hear the hon. Lady's commitment to higher levels of investment: where will it come from?
§ Ms Short
We have made it clear to the Secretary of State and to others for a long time that we are interested in mobilising public-private partnerships. My right hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) made that recommendation as shadow transport spokesman in order to secure more investment in the rail network. That is occurring in other countries, and it should happen here also.
In addition to the terribly high track access charges that will prevent expansion in rail use, another major worry with the sale of Railtrack is that it controls much valuable land: stations are situated on valuable commercial land at the centre of every town and city in this country. There is a real danger that a Railtrack interested in maximising short-term profits will seek to misuse land that is needed for rail development in order to make a quick profit. That would constitute a major breach of the national interest.
I turn now to the reports in today's press about the serious leak yesterday of the letter from the chairman and chief executive of British Rail, Mr. Welsby—a Tory appointee. He wrote to the permanent secretary of the Department of Transport complaining that the prospectus is significantly misleading. That is a very serious allegation. The issue involves the penalties that Railtrack is required to pay if it fails to keep its agreements with other railway operators. 723 Page 41 of the prospectus explains:at present performance levels, Railtrack will be making significant net payments to the train operators".It goes on to say that Railtrack will have to make those penalty payments to train operators for things that are outside its control, such as severe weather, as well as for things within its control, such as industrial action. The prospectus states that Railtrack has been allowed an additional £75 million per year in access charges in order to cover what it might have to pay out in those circumstances.
Page 41 of the prospectus explains that the company directors, having assessed what improvements they can make to Railtrack's performance, still
do not believe these improvements will be sufficient to matchthe amounts allowed for penalty payments in the Government's figures. That is a very serious point when considering the company's viability.
At the top of page 42—hon. Members may wish to check it—the prospectus says that, under the arrangements, a single day's cessation of train services will cost Railtrack about £12 million. According to my rudimentary calculations—the sum is not difficult: even Conservative Members could do it—Railtrack has enough money put by in the £75 million allowance for fewer than seven days' loss of services. In summer 1994, services were lost for 18 days.
After the first seven days, every additional day's lost service will cost Railtrack £12 million out of its profits. The big question is: how long could Railtrack last in those circumstances? Are Mr. Horton's management skills considered so great that he can do now what he signally—if I may use that word—failed to do in 1994?
Railtrack's profit last year, as stated on page 63 of the prospectus, was £189 million before tax. If one adds to that the whole £75 million additional penalty allowance, I calculate that Railtrack's annual profit would be wiped out in 22 days.
But the position is far worse than that. Page 66 of the prospectus shows that last year, with no days of complete cessation of train services, Railtrack still paid £80 million in penalties—that is £5 million more than the £75 million that is allowed for. If one assumes that the allowance is used up by ordinary disruption—as it was last year—Railtrack's profit would be extinguished altogether after fewer than another 16 days' lost train services. That is a very serious matter.
When the chairman of the British Railways Board—I remind the House that he is a Tory appointee—writes to the permanent secretary to the Department of Transport complaining that "material information for investors" on a desperately important subject has been left out of the prospectus, the country can see for itself that the Government, who have been consistently tainted by sleaze and underhand dealings, are prepared to sell Railtrack on a false prospectus.
I am conscious that the Government are keen to shift attention from the damage that they are doing to the railways to what Labour will do about it, assuming that we win the next election. I have said before that it is rather like a vandal who is about to destroy a monument saying to the caretaker of that monument, "Tell me how you will 724 restore the monument after I have destroyed it." The answer is simple: do not destroy the monument. How dare the Government ask us what we will do to put right the destruction that they are imposing on the nation?
§ Mr. Andrew Robathan (Blaby)
The hon. Lady will be astonished to discover how much we agree about encouraging passengers and freight back to the railways. However, she described British Rail as a monument. Although some people are working very hard to encourage people on to the railways, unfortunately British Rail is a monument to the uselessness of a nationalised industry.
When the hon. Lady and I were born, there were 15 railway stations in my constituency. They have all been closed by nationalised British Rail. In the hon. Lady's constituency, there used to be a railway line from Handsworth towards West Bromwich, and from the centre of Birmingham near New Street station past Winson Green. Those lines were closed by nationalised British Rail. How can the hon. Lady describe British Rail as a monument?
§ Ms Short
The hon. Gentleman will be interested to know that we are about to build a metro on that line, which runs through my constituency. That will be a lovely advancement of public transport provision for Birmingham and my constituency, and we look forward to it very much indeed.
I agree with the hon. Gentleman that the old British Rail was far from perfect, and that we need a higher quality model to achieve the levels of investment and the use of the railway to meet future needs; but it is absolutely clear that the old British Rail was better than the privatised model. That is proved by the fact that, each year, the Treasury has had to find an extra £850 million to provide lesser services from the privatised model than we had under British Rail. If something is imperfect, we should not make it worse; we should try to develop something better.
We in the Labour party are keen to be absolutely clear and straight with anyone contemplating investment in Railtrack. In my Swindon speech, which is printed in full in the prospectus, I set out our intentions. We want to be straight with all potential investors about the intentions of an incoming Labour Government.
I shall not dwell on those plans today, because today's aim is to halt the sale, but we have made it clear that a Labour Government will use all the levers at their disposal. We shall use the power of regulation, the power of the £2 billion subsidy, and the power to acquire ownership to reintegrate the railways under a renewed British Rail and to mobilise public and private partnership to increase investment in rail and secure the increase in passenger and freight use that the country needs.
I should say something about regulation, because many of the commentators on my Swindon speech missed an important point. We want all potential investors to be clear about our intentions.
The power of regulation over the railways is significant. The Rail Regulator is more powerful than any of the other utility regulators and his reach into the heart of Railtrack's business is far deeper. The powers exist now, and they will be useful to the new Government. 725 The existing mechanisms give the regulator considerable powers to secure changes to the regime as it applies to Railtrack. They do not require negotiation with Railtrack or its agreement; they can be effected, if necessary, against the wishes of Railtrack. Those changes may be made to alter Railtrack's obligations, and thus its priorities, in order to achieve the objectives of the public interest rather than those of the shareholders.
To place our hands directly and securely on those powerful levers of control and immediate change, we shall need only a simple amendment to the Railways Act 1993—to make the Rail Regulator answerable to the Secretary of State, and therefore the public interest, to a far greater extent than is now the case.
When that has been achieved, the new Labour Government will have at their disposal all—or substantially all—the means to control the economic behaviour of Railtrack in significant areas. Those include the direction of Railtrack's investment spending, controls on its access charges, restrictions on the disposal of its valuable land assets, and the possibility of a clawback on substantially all its property disposal income. I ask potential investors to look carefully at what I said about regulation in my Swindon speech, because the use of regulation to protect the national interest will change the likely rate of return to shareholders.
There it is. The sale of Railtrack will be deeply damaging to the national interest and terribly costly to the taxpayer.
§ Ms Short
The powers that I described are intended to be used to ensure that Railtrack serves the national interest, and does not seek to maximise short-term profit and damage the national interest. The powers will be used to get more investment in rail and to develop greater use of rail, which is what this country's future and its transport needs require.
§ Mr. Nick Hawkins (Blackpool, South)
Will the hon. Lady explain why she is so proud of nationalised British Rail when, particularly under the last Labour Government in the 1970s, BR was not merely a national but an international joke?
§ Ms Short
That was not a terribly impressive joke, either. I do not know whether the hon. Gentleman was listening when I answered the hon. Member for Blaby (Mr. Robathan).
The old British Rail was not perfect, but the privatised structure is worse. An incoming Labour Government will create something better. If the hon. Member for Blackpool, South (Mr. Hawkins) supports the Government tonight, he 726 will be helping to create something massively more costly and massively worse than the old British Rail. Conservative Members must face that fact.
I was saying that the sale of Railtrack will be deeply damaging to the national interest and terribly costly to the taxpayer. The privatised structure will also prevent any expansion in rail use. It is in the national interest that the sale be halted. If it is not, we are confident that an incoming Labour Government can reintegrate rail, and mobilise higher levels of investment and use. We will do that, but the present Government must take responsibility for the damage and the waste of taxpayers' money that they are causing now. The House has the opportunity today to stand up for the national interest. I hope that that opportunity is taken.
§ The Secretary of State for Transport (Sir George Young)
I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:congratulates the Government on the progress that it is making with privatisation, with the franchising in the last three weeks alone of the InterCity East Coast, Gatwick Express and Network South Central lines, offering the prospects of better services and higher investment at less cost to tax-payers; recognises that this demonstrates that the Opposition's attempt to halt privatisation has failed; and looks forward to the flotation of Railtrack in May as a golden opportunity for the railways to gain access to the private finance necessary for investment, and for people to become real stakeholders in the railways, thanks to the Government's policy of wider share ownership".
How relieved we are that the hon. Member for Birmingham, Ladywood (Ms Short) has been allowed to open the debate and give her overworked deputy a much-needed break. After the events of the weekend, we were concerned that the shadow Home Secretary might have dreamt up some new and terrible punishment for the hon. Lady. I quote the words of a senior Blair aide in The Guardian today:She accepted that she has screwed up big time.
§ Sir George Young
No, because I would like to cover a little of my journey before I pick up my first passenger.
Even the mild-mannered Opposition Chief Whip was obliged to pick up his pen to write an article that also appeared in The Guardian this morning. He used politer language, but none the less delivered a public rebuke under the trendy headline, "Don't rock the roll". We only wish that this debate could take place at 8 am on Sunday, as that is when the hon. Member for Ladywood speaks without restraint.
§ Sir George Young
I shall give way in a moment.
Many Conservative Members can remember the days when Labour Members might have been criticised for suggesting that taxes on middle incomes should be cut. Not long ago, Labour voted against such reductions on a three-line Whip.
§ Mr. Peter Hain (Neath)
On a point of order, Madam Speaker. Could the Secretary of State advise the House what on earth his speech has to do with the subject that we are discussing?
§ Madam Speaker
Order. The Secretary of State should be allowed to develop his speech. He has been on his feet for only one minute.
§ Sir George Young
The hon. Member for Ladywood spoke briefly about tax at the beginning of her speech. I remind the Opposition that Labour's former deputy leader, another distinguished Birmingham Member of Parliament, said:Labour now has a clear choice. It can be either the party of higher taxation and proud of it, or the party of higher taxes which it is ashamed to describe, afraid to admit and incapable of calculating with any accuracy. It cannot be the low taxation party.Those are the words of a former deputy leader of the Labour party.
§ Ms Armstrong
Does the Secretary of State think that it was the press that gave the real comment on Tory tax policies this weekend? Was not it the electors of South-East Staffordshire?
§ Sir George Young
I now regret having given way on that point. [HON. MEMBERS: "Oh."] The criticisms of the hon. Member for Ladywood have not come from Conservative Members: they have come from the Labour leader's office. It is absurd for the hon. Lady to be criticised for articulating a belief that united Opposition Members when they joined the Labour party. One can but contrast the way in which the leadership embraced and protected the hon. Member for Peckham (Ms Harman) for sending her son to a grammar school and silenced the hon. Lady.
§ Mr. Andrew Faulds (Warley, East)
On a point of order, Madam Speaker. Some of us are somewhat bored with this dissertation on other matters. Could we revert to the topic of the debate?
§ Madam Speaker
Order. I see the amendment standing in the name of the Prime Minister. We have had a good bit of knockabout and now perhaps we might revert to the amendment.
§ Sir George Young
I conclude my opening remarks by saying that the hon. Member for Peckham was endorsed for acting like a Tory and the hon. Member for Ladywood was rebuked for speaking like a socialist.
I welcome the opportunity presented by the debate for three reasons. First, I wish to remind the House why the Government believe that their policies for the railways are the right ones to reverse decades of decline. Secondly, now that we have made further progress with those policies—drawing in private sector funds to complement those of taxpayers, attracting into the industry fresh skills and talents to work alongside those already there and restructuring the industry so that it focuses more clearly on its customers—we can stand back for a moment, look at some of the fears that have been expressed, including 728 some of those mentioned by the hon. Member for Ladywood, see whether they are justified and examine the achievements to date. Thirdly, I wish to contrast the clear vision that we have of tomorrow's railway, and our resolution to secure it, with the muddled, divided views of the Labour party and the trade unions that support it and the vagueness of their purpose. Then I wish to ask the House who is more likely to deliver the expanding, confident, well-resourced railway that the whole House wants to see.
§ Sir George Young
In a moment.
Which is more likely to deliver? Is it a party that opposes privatisation and thereby denies Railtrack access to fresh funds and, at the same time, refuses to make similar funds available from the public sector? That party offers no future to the railways.
§ Mr. Grocott
If the Secretary of State is determined to persist with the sale of the land and assets of Railtrack, which currently belong to my constituents, to me and to the whole of the population of this country, against our wills, can he at least tell us when we shall each receive the cheque for the sale of our assets and how much it will be?
§ Sir George Young
The hon. Gentleman knows that Railtrack will be sold at the end of May. There will be a receipt for the taxpayer that goes into the Exchequer. He also knows that under a privatised railway, the costs of funding investment will no longer fall on the taxpayer. They will fall on the privatised railway. I hope to show that investment in the railway will increase at a faster rate than if it had remained in the public sector. That is the kernel of the case for privatisation.
§ Dr. Robert Spink (Castle Point)
Will my right hon. Friend confirm, in setting the context of the debate, that the five franchises that have so far been let will all be run at a lower cost by those who have taken them than the cost at which British Rail runs them, and will all provide better services for my constituents?
§ Sir George Young
No, I shall not give way. I want to make some progress. I shall not give way for the time being.
§ Sir George Young
Even with that kind offer, I am not giving way to the hon. Gentleman for the moment. 729 When the House voted the Railways Bill on to the statute book in 1993, it took a decisive step to reverse the historic decline of the railways. That decline, as my hon. Friend the Member for Blaby (Mr. Robathan) said in an intervention, had seen the industry's share of the market shrink from 17 per cent. in 1953 to 5 per cent. now. Its share of the freight market had dropped even more dramatically. The era of nationalisation was marked by poor industrial relations, low productivity, rising fares and an attitude towards passengers and freight business that was often patronising. It is hardly surprising that those users stayed away.
The old railway was a monolithic, monopolistic, slow-moving nationalised industry, which never had the inclination or the initiative to focus on the needs of its passengers and freight users. Yet it was an industry full of talented and committed people, shored up with vast quantities of taxpayers' money.
How did the industry fail? It failed because it was insulated from commercial pressures. It failed also because, as a public monopoly, it never had to confront long-term competitive challenges from other forms of transport. Similarly, it failed because it looked inwards at itself, not outwards towards its market, both passengers and freight. Taxpayers' money went into the industry and disgruntled users came out.
British Rail failed to recognise the golden rule of service industries: the customer is king. There were several attempts to solve the problem by throwing money at it. But cash alone could not and cannot halt the railways' downward slide. The basic problem was structural rather than financial.
§ Mr. Robathan
My right hon. Friend will have heard British Rail compared recently with a monument. To what does he think British Rail would be a monument?
§ Sir George Young
It is a monument to post-war public industry, a monument that is now out of date. There are better ways of running our railway system than having it as a monument. Our policy, as set out in the Railways Act 1993, was directed to the problem for the first time. Its basic message was that the railway system could revive its fortunes only if it were given commercial incentives to win back passengers and freight. The policy built on the successes of previous privatisations, from British Telecom to British Airways. It adapted the main features of those privatisations to the unique circumstances of the railway industry.
The Act brought in a new era, in which private sector dynamism could replace years of public sector stagnation. It introduced a new regulatory system to protect the public interest. It represented a recognition that investment in a publicly owned body would always have to compete with investment in health and education. By placing the railways firmly in the private sector, we would be able to free investment from that constraint.
§ Mr. MacShane
In the wonderful world that the Secretary of State is describing, why is the franchising director saying that the number of services to Doncaster from London will be cut by half under privatisation? That is a deplorable attack on the business community in South Yorkshire.
§ Sir George Young
The hon. Gentleman has confused the passenger service requirement with the level of service that emerges at the end of the franchising process.
730 Our policy recognised that other transport operators—ferries, buses and airlines—might have skills that could help regenerate an important but declining industry. That was the philosophy behind the 1993 Act. Nothing has happened in the past three years to challenge either our analysis or proposed solution.
I now come to the progress to date. We have been fed a constant diet of scare stories on rail privatisation by the Opposition, and by others: that fares would escalate; services would be cut; investment would fall; the railways would be less safe; people would not bid for the franchises; the Labour party would stop the flotation of Railtrack; and, if it did not, no one would want to buy the shares. I shall go through those accusations and contrast the rhetoric with the reality.
Passengers were told that their services would be cut. The fact is that the franchises awarded so far are all based squarely on existing levels of service. South West Trains has already introduced new co-ordinated bus links to rail stations and embarked on a £3 million programme of improvements to station and passenger facilities such as security, lighting, waiting rooms and information services. It also plans to improve business travel services, to offer new concessions for senior citizens and to restore or expand services to Epsom, West Croydon, Southampton and Salisbury.
Great Western plans to introduce more trains, faster journey times, refurbished rolling stock, a Motorail service between London and the west country, new bus links to rail services, increased capacity for bicycles and a radically improved telephone inquiry service. London and South Coast, which won the Network South Central franchise, plans to introduce new services in south London.
The Gatwick Express franchisee has similar improvements planned: a better passengers charter, new off-peak discounts, and on-board check-in facilities for club class passengers.
§ Mr. David Chidgey (Eastleigh)
I thank the Secretary of State for giving way, as he flashed through my region so fast that I could hardly catch his eye. I refer him back to South West Trains. As some constituency examples have already been given, I hope that he will bear with me. Is he aware that the 8.50 train from Waterloo to Poole, which should have passed through Eastleigh this morning at approximately 9.30, was, unfortunately, mistakenly signalled on to the Salisbury line? One does not have to be a railway buff to know that the line from Waterloo to Weymouth, which goes through Poole, is electrified. The line to Salisbury is not. So, consequently, the train ground to a halt just west of Basingstoke, where the staff on the train led passengers to safety by torchlight. Is that the new, modern railway that the Secretary of State talks about?
§ Sir George Young
The crucial difference between the new regime and the old is that, under the old regime, there would have been no commercial penalty on British Rail whatever. Under the new regime, there are financial incentives on Railtrack and on the franchise operator for trains to run on time. For the first time, we have a 731 commercial structure that will reward operators that run trains punctually and penalise those that do not. That incentive never existed with British Rail.
§ Mr. Tredinnick
Is my right hon. Friend aware that some of the improvements that Great Western proposes were also proposed by the Great Western Railway in 1946, but were never implemented while the industry was nationalised?
§ Sir George Young
My hon. Friend makes a powerful case for the reinvolvement of the private sector in the railways, and I am grateful to him.
Passengers were also told that they would lose key network benefits, but the fact is that through tickets, discount cards for the young, the elderly and disabled people, impartial sales information and the telephone inquiry network are legally safeguarded as a result of privatisation. We were then told that franchising would drive up fares. The fact is that for the first time ever, as an integral part of privatisation, key fares such as saver tickets and standard weekly seasons have been capped. They have been pegged to inflation since January and will begin to fall below inflation in just over two years. Contrast that with a real increase of 22 per cent. under the previous Labour Government.
Everyone has been told by the Opposition that investment would fall off once services were franchised. The fact is that each of the new franchisees plans new investment in the network: refurbished rolling stock, upgraded passenger security and better facilities for disabled people. The National Express group, which will run the Gatwick Express service, plans to have completely new rolling stock by 1999. Great Western will refurbish its entire fleet of high-speed trains. The franchisee on the InterCity east coast line plans to spend more than £17 million on service enhancements, including £7 million on improvements to the reliability of the class 125s, new passenger lounges and passenger security.
§ Sir George Young
I shall certainly not give way to the hon. Lady again. It is nothing personal.
The Network South Central franchisee, London and South Coast, will spend a further £10 million over the next three years on improvements to rolling stock and stations.
§ Sir George Young
Not now; I might do so later.
I am pleased to be able to tell the House that the franchising director announced today that shortlisted bidders for the South Eastern franchise would be asked to bid on the basis of a 15-year franchise, and that their 732 proposals should include the replacement within three years of all 83 of South Eastern's class 411 units, most of which are concentrated on the Kent coast line.
§ Mr. Rowe
Has my right hon. Friend any idea of the number of occasions on which Kent Members have either visited or written to the directors of British Rail demanding the upgrading of rolling stock? Does he realise how much glee will greet one of the first fruits of privatisation—the fact that the rolling stock that British Rail consistently refused to give us has now been promised?
§ Sir George Young
My hon. Friend's prayers have been answered. I know that he and many other Kent Members, some of whom are present—my hon. Friend the Member for Dover (Mr. Shaw) is not; he is in a Select Committee—will welcome this afternoon's announcement by the franchising director.
§ Ms Short
The trouble is that reality is completely different from the promises that are made. Can the Secretary of State explain why, if there are so many new orders, there has been a massive slump in investment? The ABB carriage works in York have closed, and all the rail manufacturing companies are laying off skilled workers and are desperately concerned about their future. Reality is not as the Secretary of State describes it.
§ Sir George Young
The key difference between the hon. Lady and me is that I am able to make an announcement that will have no impact on public expenditure. The hon. Lady can make no such commitment, because she is committed to public sector procurement, and her hon. Friend the Member for Dunfermline, East (Mr. Brown) will not allow her to make a commitment such as the one that I have just made to the House.
§ Mr. Bob Dunn (Dartford)
My constituents—Kent commuters—will benefit enormously from my right hon. Friend's announcement. The county of Kent has battled long and hard. When does my right hon. Friend expect the new trains to be in service?
§ Sir George Young
They will be available within three years. I am delighted that the private sector has been able to provide what the public sector could not.
§ Sir George Young
No. I want to make some more progress.
The franchisee will also be required to put forward proposals to replace all the remaining 95 units of slam-door rolling stock. That will mean that, together with the new Networkers already operating on the inner suburban services, South Eastern will have a completely updated fleet. As we have just heard, my hon. Friends who represent the people of Kent have argued for many years that more rolling stock investment is needed on their rail services, and franchising will give them that investment. 733 We have sold the three passenger rolling stock leasing companies to increase the possibility of new and refurbished rolling stock. In the short time during which they have been in the private sector, one of those companies, Angel Train Contracts, has announced a £400 million funding facility for new train building and refurbishment. In addition, on 2 April Porterbrook Leasing announced a £75 million-plus programme of refurbishment to its mark III fleet, which is good news for service on mainly the cross-country, midland main line and west coast main line.
We were told that franchising would cost taxpayers more. In fact—as my hon. Friend the Member for Castle Point (Dr. Spink) implied—the first five franchises alone will be funded in the private sector, by year seven of the franchises, to the tune of £95 million, compared with British Rail's current £300 million. That is over one third of the franchises costing taxpayers over two thirds less. GNR even plans to need no subsidy at all by the end of its franchise. The Gatwick services will pay taxpayers a growing dividend year by year. By any standard, that represents a huge reduction in the cost to taxpayers of running rail services. If savings on that scale are repeated throughout the country, in a few years, the subsidy bill for the railways will be reduced substantially.
§ Mr. Hawkins
Does my right hon. Friend agree that what he has just said once again shows the success that this privatisation will be, in taking the burden away from the taxpayers, producing profits for them and improving services, just as the privatisations of British Telecom and British Airways did? Does he also agree with my prediction that very shortly the Labour party will realise how successful and popular privatisation is, as it did with British Telecom and British Airways, and its policy will change such that it will claim that it was its idea all along?
§ Sir George Young
We might have to wait a year or two before that flash of inspiration. My hon. Friend is right. Not only will privatisation reduce the cost to taxpayers, but it will improve services and there will be more investment by the franchisees. So it is a win-win situation.
We were told that safety would be jeopardised by privatisation. Railways continue to be the safest form of land transport. The independent Health and Safety Commission has confirmed that there is no evidence of any overall decline in health and safety standards since Railtrack was set up. Indeed, recent statistics show some improvement in safety standards. In 1994–95, the number of significant rail accidents fell and total fatalities on the network, excluding trespassers and suicides, fell to their lowest ever level.
Railtrack has made it clear that safety is its first priority. It is in the company's commercial interests to provide demonstrably safe service to attract and retain customers. British Airways' move to the private sector has not compromised safety. I should make it clear once again that I am not complacent about safety. I expect it to remain the paramount concern of everyone in the rail industry.
§ Mr. Tam Dalyell (Linlithgow)
The Secretary of State will know that the Health and Safety Executive has published a report on the Forth rail bridge, the south end of which is in my constituency. Paragraph 100 of its report says: 734While the general condition of the bridge does not give rise to immediate concern in respect of its carrying capacity, some members have suffered a loss of section due to corrosion to an extent which makes repair or replacement necessary as part of a planned maintenance strategy.Apart from the fact that the bridge is the greatest monument to 19th-century civil engineering anywhere in Europe, the entire question of the railway system north of the Forth should be addressed. Will the Minister who winds up give a considered answer about how the Government view the financing of the work that the Health and Safety Executive thinks is of great importance?
§ Sir George Young
I shall certainly see that my hon. Friend the Minister gives the hon. Gentleman the considered reply for which he has asked. As I am sure the hon. Gentleman knows, the HSE report confirmed that the bridge is safe. Railtrack fully accepts that the bridge requires a thorough maintenance regime and it is fully committed to the HSE recommendations.
We were also told that Labour would stop privatisation. It said that it would stop us in the Division after Christmas; it has said that it will stop us today, and it will be wrong again.
Then we were told that nobody would want to buy shares in Railtrack. On Monday, we published the pathfinder prospectus, announcing the sale of substantially all the Government's shares in the company and giving details of the first instalment—
§ Sir George Young
I should like to finish this paragraph before giving way to the hon. Gentleman, and then I must make some progress. We also gave details of the timetable. Further pieces of the jigsaw will be put in place over the next two weeks, culminating in the publication of a price-ranged prospectus on 1 May. The public will then have another two weeks to apply. We expect the start of dealings on 20 May. One million prospective shareholders are now registered with share shops. They are ordinary investors like all those who have followed and supported the Government's programme of privatisations since we took office, which is why there are almost 10 million shareholders compared with fewer than 3 million in 1979.
The Daily Telegraph reported yesterday:One of the largest stockbrokers in the country, Sharelink, said the number of people registering for the sale next month was already twice its expectation".So much for the Labour party's claims that the public are not interested in the privatisation.
§ Mr. Wilson
My hon. Friend the Member for Birmingham, Ladywood (Ms Short) referred to the letter that the chairman of British Rail sent to the permanent secretary at the right hon. Gentleman's Department on 2 April, which stated categorically that the prospectus was deficient and misleading in many highly significant and influential respects. Since then, no alteration has been made to the prospectus. As the chairman of British Rail and the prospectus cannot both be telling the truth, does the Secretary of State agree that a stock exchange inquiry is required to find out the truth?
§ Sir George Young
Certainly not. Mr. Welsby was responding to a request from my Department as part of 735 the process of writing the prospectus. We received a comprehensive response from British Rail, which has been considered carefully as part of the process of finalising the prospectus. For example, the prospectus now contains a full statement by the Rail Regulator, setting out his views on investment. Railtrack has addressed British Rail's specific concerns on the west coast main line modernisation. The directors of Railtrack Group plc have a duty to ensure that, to the best of their knowledge and belief, the information in the prospectus is in accordance with the facts and contains no material omissions. I am confident that the prospectus issued on 1 May will fully satisfy those requirements.
Rail staff will also benefit from share ownership. Railtrack's staff will be offered special share offers, such as free shares, up to £500, plus more for each year of service, and discounts of 20 per cent. Great Western last month offered more than half the shares in the company that won the franchise to all its staff. Those on offer were priced at 50p with a minimum stake of £100, and the company is so keen to encourage its staff that it is matching the first 200 shares purchased. That is what Conservative Members call real stakeholding.
I am sure that many trade union members, who sponsor so many Opposition Members, will take up those offers. As The Guardian put it yesterday,For those prepared, however, to put the moral outrage to one side and consider Railtrack's possibilities in the private sector, the prospects could be quite alluring. It is a classic utility business with possibilities for ratcheting down costs through new technologies such as modem signalling systems; ending Spanish practices in the labour force and outsourcing some services. Who knows, Railtrack, like another transport firm British Airways, could well prosper in the private sector.
§ Mr. Hill
I presume that the Secretary of State is an enthusiastic fan of the £69 million flotation sweetener out of the so-called "profits" of Railtrack. Can he inform the House where those profits have arisen from? Is he aware that, last year, Railtrack salted away £150 million out of its maintenance programme? That money, which should have been spent on maintenance, is now being distributed to potential shareholders. Will not the motto of Railtrack in future be, "Putting profits before passengers"?
§ Sir George Young
The hon. Gentleman knows that Railtrack is heavily regulated, and has been told by the regulator to reduce the access charges that it charges the train-operating companies. The companies will be operating within a tough regulatory regime. No money is "salted away", to use his expression—that money is needed to invest in, modernise and improve the nation's railways. The existence of the dividend will impact on the value of the shares when they are floated, so that the interests of the taxpayer will be fully safeguarded.
§ Sir Michael Grylls (North-West Surrey)
Will my right hon. Friend be gentle with the Opposition, as this is 736 a sad day for them? They are seeing the last of the great state corporations demolished and returned to the private sector. He should be sensitive, if I may say so. It is a happy day for the traveller, but a sad one for the Labour party.
§ Sir George Young
Even sadder is the fact that Labour cannot give a commitment to buy it back, and I shall say a word about that in a moment.
Having disposed of some of the myths, let us look at the reality. Nearly half the rail industry—some £4 billion-worth by aggregate turnover—has been transferred to the private sector. That is made up of 51 businesses, including the five franchises that we have awarded so far. We have sold the three rolling stock companies, as the press has reported, for £1.8 billion. We have made good progress with the sale of BR's freight businesses. Rail Express Systems and the trainload freight companies have been bought by North and South Railways, a consortium led by Wisconsin Central Transportation. Wisconsin has a wealth of railway experience from around the world and will bring new ideas and successes to rail freight in Britain. It has plans to invest heavily in new locomotives. In the private sector, those businesses will have commercial incentives to win freight traffic from the roads.
The public want an improved railway service, and the key to that will be the sustained programme of expenditure on the infrastructure that Railtrack intends to undertake. That expenditure amounts to some £9 billion at current prices over the next five years—a significantly higher level of expenditure than Railtrack has managed under the public ownership and public accountability so beloved of Opposition Members. In practice, that expenditure could not be achieved without substantial private sector finance. I believe that Railtrack's privatisation will unlock the barriers to that private investment in our railway infrastructure. Those are the facts.
§ Sir George Young
No. I said that I had given way for the last time, and I meant it. I have given way fairly generously in the course of my remarks.
Let me return finally to the alternative—to the policy vacuum on the Labour Benches. Last winter, we were treated to the unedifying sight of the Labour party in search of a policy for rail. It was like a tank engine, going backwards and forwards in a goods yard. That culminated in the speech in Swindon last month by the hon. Member for Ladywood, purporting to explain Labour's ideas. That speech was an insult to a great railway town. If her doom-laden analysis of the railways is right, her solution is wholly inadequate. If it is wrong, her solution is irrelevant. Either way, her speech in Swindon was incoherent intellectually and financially.
The rhetoric of old Labour, with its party conference call for public ownership, sits uneasily with the so-called reality of new Labour and the avoidance of commitments. Its policy statement said much about the tensions in the Labour party, but very little about the needs of a modern railway. First, Labour Members talk of an integrated railway system. What do they mean by that? Under this 737 Government, we have increased the integration of the railways into other transport systems. We have opened new lines such as the Robin Hood line in Nottinghamshire. We have opened more than 200 stations, whereas under Labour more than 600 were closed. Thanks to the private train operator, South West Trains, we now have new bus services in Hampshire linking towns to those with train stations. That is what any sensible person would call an integrated transport system. And, of course, we are extending the rail network, and knitting it closer together, with Thameslink 2000 and the channel tunnel rail link, taken forward by a private sector company under our private finance initiative.
Then the hon. Member for Ladywood talks of a "reconstituted British Rail". There will not be much, if anything, left of British Rail to reconstitute by the time of the next general election. Much of what was British Rail Labour has agreed not to buy back. We have already got about £5 billion-worth of the old BR either sold or on the market, with the remainder following on apace.
Let us recall Labour's views on all this. It has already said that it will not break any contracts. That means that, even if Labour was in office, it could not renationalise the franchises, which could remain privately run, for the life of the next Parliament. It has also said that it would not buy back the rolling stock, the freight or the maintenance units. It is now in the absurd position of claiming to be opposed to the flotation of Railtrack, while at the same time refusing to say whether it would buy it back. Under a Conservative Government, it says that Railtrack must be publicly owned. But, if there were a Labour Government, it could remain privately owned. Where is the sense or logic in that?
Then the hon. Member for Ladywood promised tougher regulation. I wonder whether she has seen the article in The Independent on 15 April. Under the headline, "Labour to woo British Gas by scrapping regulator", we see a different line from the hon. Member for Leeds, West (Mr. Battle). The article says:He is keen to stress that those in his party who have what he terms 'a 1940s to 1960s mindset' will have their hopes of possible renationalisation dashed, and that it is crucial that the regulatory framework is simplified to make the companies' lives easier.
He is quoted as saying:I do not want them to be like Gulliver, tied down with millions of little ropes. That is the problem with over-regulation. Provided they maintain their social obligations the size of their profits is up to them.
The hon. Lady is promising more regulation, while one of her colleagues is promising less regulation of another former nationalised industry. It is small wonder that neither the travelling public—
§ Sir George Young
I shall not give way to the hon. Lady as I have already done so—I have given way for the last time.
It is no wonder that neither the travelling public nor the City has taken much notice of the Labour party's rail proposals. Indeed, The Sunday Times reported last week:Labour's transport spokeswoman has huffed and puffed, but has failed to blow rail privatisation down.A lot of people want to know about the Labour party's policies on fares, services, public subsidy and investment. The Labour party talks glibly of higher levels of 738 investment, but it does not say where the money would come from—perhaps from higher taxes on Members of Parliament?
We are the only party with a clear strategy to bring more investment into the railways—from the private sector, not from the taxpayer. Perhaps the hon. Lady would rather have higher borrowing. Or would she do what Labour did before and close branch lines and stations? The hon. Lady clearly admires the French railways. I read a flattering article that appeared in The Guardian today, in which she stated:I have assembled a policy which will give us a better railway … It'll be like the French side of the Channel Tunnel".I wonder whether she is aware that the French railways announced earlier this year that they are £27 billion in debt. Is that a model that we should seek to emulate? Perhaps her investment pledge would be paid for out of higher fares. The Labour party has never said what it would do about fares. Does the hon. Lady think that fares should be higher, to finance more spending on the railways? Or should they be lower, to encourage more people to travel by train? Or will she admit—as she has done with much of the rest of our privatisation policy—that we have got it about right? We hope to get an answer from the hon. Member for Cunninghame, North (Mr. Wilson), a man of less ambition than the hon. Lady—while she wants my job, he just wants hers.
I strongly believe that the railways should have a more important role in tomorrow's transport world, and I believe that our policies will secure that role. I have no confidence that the Labour party knows what to do with the railways. The Labour party is ashamed of its past, silent on its future and not fit to govern. I urge my hon. Friends to join me in voting tonight to ensure a better future for the railways, for taxpayers and for Britain.
§ Mr. Tam Dalyell (Linlithgow)
I shall concentrate on one narrow but desperately important aspect: the future of the Forth bridge. It is not just any bridge—it is the greatest monument to engineering of the 19th century. The whole railway network depends on the Forth bridge—to Fife, Dundee, Aberdeen, the North sea oil industry, Inverness and points north. This is not a trivial matter.
I am glad to have the Secretary of State's attention because I do not put this issue forward in a partisan way. I recall that it was action in the House that shamed the Health and Safety Executive and Ministers into having a report that was conducted under distinguished engineers. I shall make my points from the results of the report. My hon. Friend the Member for Midlothian (Mr. Clarke), the former Secretary of the National Union of Miners, Scotland, who knows a good deal about engineering, and my hon. Friend the Member for Cunninghame, South (Mr. Donohoe), who was a steel worker before he came to the House of Commons, and I were cautiously taken over the bridge by Paul Prescott, the director of Railtrack. One just cannot wander on to the bridge—the up trains and the down trains have to be stopped. We were treated most courteously in being taken over to see for ourselves.
I have loved the bridge since childhood and I was shocked by whole globules of paint coming off and by rust setting in—after all, rust never sleeps. I was shocked when I went up to the Jubilee, or South tower to examine the mess—which is called the guano in the report—in 739 many of the nooks and crannies. It may be that no damage has been done yet, but cosmetic damage soon ceases to be cosmetic.
First, I shall concentrate on the condition of the bridge. The report states:Although some corrosion was found on the primary structure members, it was judged that the level of corrosion found was not significant in the structural analysis.
I do not want to be alarmist—and here I share the view of the Secretary of State—butThe level of corrosion on some of the secondary members which brace the main structural members, was found to be higher with significant section loss having occurred. Although not critical to the present structural integrity of the bridge, these damaged members need to be repaired or replaced. Repairs of this nature have routinely been carried out to the bridge in the past.
The expression "being painted like the Forth bridge" has crept into the language but there is a problem. For 90 years, painting was done in the traditional way with slings. The hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) will know that several families around South Queensferry, which he knows well, for generations devoted their lives to the maintenance of the bridge. The Marshall family of Dalmeny station lost both husband and son on different occasions in painting the bridge. A good deal of blood has been spent, not only by the builders but by the maintainers.
I am the first to say that the Health and Safety Executive was justified in introducing new regulations but, of course, they make maintenance of the bridge more difficult and more expensive than when it was done by the old ways. My reply is that, with modern materials—especially fibreglass materials—it should, with money, be possible to conduct that maintenance. I must impress on senior Ministers that once rust gets a grip of any of the major structures, heaven knows what the cost would be of repairing it or whether it could even be done. If ever a domino theory were to operate, it would be in that complicated structure.
§ Mr. Dover
Does the hon. Gentleman accept from me, as a civil engineer and Chair of the Select Committee that considered the Severn second bridge, that much more extensive repairs were necessary on the Severn bridge? They were done by Laing-Entrepose, a private sector UK-French joint consortium, at a cost of tens of millions of pounds which was obtained by charging river crossing tolls. That paid not only for the repair work but for a new crossing, which is to be handed back to the Government after 20 years. Is there any difference between that and what the Government propose for the Forth bridge? A privatised company will levy the Railtrack charges to make sure that the repairs are done more than effectively.
§ Mr. Dalyell
The hon. Gentleman rendered a service to the House in his studies of the Severn bridge. The Severn bridge is not unlike the Forth road bridge. I am told by Professor Paul Jowett of the department of engineering at Heriot-Watt university and some of his colleagues that it would be much easier to repair the Forth road bridge—and, therefore, a bridge of the Severn type—than it would be to repair a structure of the 1880s and 1890s, when techniques and materials were very different. Perhaps the hon. Gentleman will accept that it is a different problem. It is certainly an exceedingly expensive problem.
740 The report also referred to the problem of access to the tubes, which is through small inspection hatches. It continues:the tubes themselves are confined spaces. In the areas inspected by Pell Frischmann"—
the firm that carried out the work—the steel was found to be in good condition and it is considered that there is no significant corrosion inside the tubes. The inspection hatch covers were removed some time ago and, as a result, there is an accumulation of guano and other detritus which needs to be removed.
I gather that removal would be quite expensive.
I have a greater concern, which has arisen since publication of the report. Rightly or wrongly, Scottish Power had the idea of floodlighting the bridge. A number of holes had to be bored in the old structure to arrange for floodlighting. I have not seen the holes because access is impossible, but I am told by John Watson, the ferryman, who has an honourable record of campaigning for the maintenance of the bridge, and his successor Colin Aston that it is likely that rust is forming in the holes drilled for the wiring of the floodlights. Since I have this unexpected opportunity, I ask the Government formally to produce within a month or two at least some considered opinion from the Health and Safety Executive on that new development.
Paragraph 94 of the report continues:From the consideration of fatigue loading by Pell Frischmann, the HSE was satisfied that the structural integrity of the primary bridge structure was not being adversely affected by fatigue and a considerable fatigue life still remained. Any damage which was occurring was to the railway track supporting structure or to deck plates both of which are capable of being repaired.
In his reply, I want the Minister to make it clear who will be responsible for that work in the short term.
I am not in the habit of criticising individuals on the Floor of the House and I will certainly not criticise Paul Prescott, who is well known to Ministers, for saying so, but he told my hon. Friends the Members for Midlothian and for Cunninghame, North, "If money is available, you had better understand that the Forth bridge is my third or fourth priority. My top priority is the signalling system outside Bearsden and the bridge is rather far down the list". If that is Railtrack's view, given the HSE report, where do the Government think that the bridge should come in the list of priorities?
I will list a few of the HSE's conclusions.
§ Mr. Wilson
On the question of who is going to pay, will my hon. Friend join me in rejecting the idea that the Forth rail bridge, which has been maintained as railway property for generations, should become a monument to be financed, not by the railway authorities but by some organisation responsible for historic buildings and monuments, which is another idea that has been floated by Railtrack?
§ Mr. Dalyell
I do not want to be too personal, but my wife is a member of the Ancient Monuments Board and the Royal Fine Art Commission, which will certainly not have the resources. They do think that it is their job to finance out of their limited funds work that could be extremely expensive.
It has to be made clear to prospective purchasers of Railtrack that the organisation has the obligation of spending a great deal of money—we are not talking 741 peanuts—on the bridge over the next five years. That ought to be made clear in any prospectus. I must tell my hon. Friend the Member for Cunninghame, North that I hope that it will be made very clear that the financial obligation for the Forth bridge should be included in any prospectus put to prospective shareholders.
I do not want to abuse the time of the House, but I must draw the Minister's attention to the following recommendations. Recommendation 99 states:The condition survey revealed a significant deterioration in the paint coating on the bridge. A more satisfactory protective coating system to the traditional paint needs to be developed and the protection restored as part of a planned maintenance strategy.Has Railtrack—and Bob Horton in particular—accepted that there will be a planned maintenance strategy such as that envisaged by the HSE?
When the Secretary of State courteously gave way, I raised recommendation 100, so we can take that as read and in Hansard. Recommendation 101 concerns the principal roller bearings. I am told by engineers—I think that the hon. Member for Chorley (Mr. Dover) will bear this out—that the bearings are crucial in the life of the whole structure. The HSE recommendation states:The principal roller bearings at the north and south portals do not appear to be functioning as intended and there is some evidence of past damage and repair. The structural analysis indicates that this does not at present affect the integrity of the structure. Further consideration needs to be given as to how these bearings are actually functioning and how they may be restored to an acceptable condition. HSE recommends that a system for monitoring the movements of all bearings should be instituted.
Is that going to be Railtrack's responsibility? Some Railtrack personnel have told me that the bearings have not been functioning for some time and so it is a historic obligation that should be taken on using Scottish Office funds. I asked the Scottish Office if it had the money to do the work and it said that it was not in its budget. Who is responsible for the bearings?
Recommendation 102 continues:Although the knuckle pin bearings at the 'fixed' ends of the suspended spans are not correctly aligned to the structure by modern design, the structural analysis indicates that this does not compromise the structural integrity of the bridge. The 'rocking posts' at the 'free ends' of the suspended spans appear to be capable of functioning but no means of lubrication was observed. Further consideration needs to be given to what action is required to ensure the continued acceptable operation of these bearings.I do not suggest that it is the business of the Secretary of State to go out with a lubricating can or to be personally responsible for the lubrication of a particular bridge, but it is fair to ask Ministers how that work is to be done and whether they are prepared to ensure that it is.
Recommendation 103 states:The bearings at the base of the skewbacks appear to be seized. Analysis has demonstrated that this lack of movement has no significance with regard to the structural integrity of the bridge.
But, recommendation 104 continues:The lubrication system of the bearings on the approach viaducts does not appear to be functioning and further consideration of this aspect is necessary.
I am told by other engineers that, in terms of the long-term life of the bridge, the position and functioning of the bearings along the lines that the builders intended has been somewhat underestimated by the HSE inspectors and that that ought to be considered.
742 Recommendation 105 states:Cracks identified in the rail troughs should be repaired in the near future. The integrity of the previous repairs should be investigated. Any repairs and the repositioning of the longitudinal timbers over the transoms should be undertaken as part of a planned maintenance strategy. Similarly the tears in the deck plates need to be repaired.
Again it is the same question: who will finance the repairs? I hope that the Minister will say at 9.30 tonight that the hon. Member for Linlithgow and his colleagues need have no worries that Railtrack is undertaking the total financial responsibility of the HSE report.
In the hours that the Minister has between now and making his closing remarks, I hope that he will take the opportunity to get on to Railtrack, which has been well appraised of the problem, and ask Bob Horton, or whomsoever, what they are prepared to undertake. I think that the House of Commons is entitled to know the future of what is not only a vital link to the north of Scotland but the greatest monument to British, European or world engineering of the 19th century.
I thank hon. Members for their courtesy in hearing me.
§ Sir David Madel (South-West Bedfordshire)
It is a pleasure to follow the hon. Member for Linlithgow (Mr. Dalyell). Later in my speech I should like to say something about safety on the railways, although not so much in relation to the topics that he mentioned.
Railway privatisation, as has been said by hon. Members, has been the most difficult and complicated privatisation ever undertaken, although it has been one of the smallest. Rail travel affects many people's lives daily, but, in view of the furious political controversy over privatisation, it is bound to be some time before the public can judge whether they think that it has been a success.
The Government have quite understandably drawn attention to the fact that they will save money in the short and long terms, not only because of the sale but because of the declining subsidies that they will have to pay.
As a start, I suggest that the public would strongly support the proposal that the money that is saved should be recycled back into other parts of the transport system. I am in no sense advocating more motorways or the endless widening of existing ones. We have known for some time that there is virtually no new road-building programme planned for London.
The current situation, however, leaves one aspect of transport policy still requiring urgent attention. If the House will excuse me for a few seconds, I shall of course refer to the bypasses that are vitally required round so many of our towns.
Transport Ministers, who have listened to me very patiently over the years, will understand why I shall take this opportunity to make a short, sharp further plea to get started on Dunstable's bypass. I know that it cannot be started overnight, but the sooner we at least start the pre-public inquiry conference and then the public inquiry into that bypass, the sooner morale in the town will be lifted—not least because of the current acute local economic difficulties that are much tied up with our transport system.
I should also like to raise briefly another local matter, which is of direct relevance to Railtrack. I hope that Railtrack, once floated, will want to expand its asset base 743 by re-opening disused railway lines and generating business and profits from them. We have such a disused line in my constituency, between Dunstable and Luton, with track and rails already there and a powerful local campaign in place to get it re-opened.
Re-opening the line will of course cost a bit of money, and I agree that it cannot be accomplished overnight. I hope, however, that Railtrack will do an early feasibility study on the value of opening that railway so that people in Bedfordshire can know whether it has any plans or desire to make use of that existing infrastructure. I cannot think of a more environmentally friendly way in which to try to solve some of our problems in Bedfordshire than to get this railway line re-opened and used.
As I said at the beginning of my speech, I should like to say something about rail safety and the west coast main line modernisation. There has of course been much talk about how Railtrack will steadily improve its financial performance and build up its profits. There has also been much talk about cost cutting and the potential for cost cutting, which has inevitably led to fears about safety. Those fears must be allayed. In the chapter on work force safety, on page 10, the "Railway Group Safety Plan 1996–97", which was published by Railtrack, states:Organisations new to the railway also work at the trackside and the management of the arrangements to manage such contracts will be key to sustaining the improvement in trackside safety that has been achieved.
That sentence is self-explanatory, because it refers to new companies in the railway business that will get new contracts to improve and modernise the track. As the companies are obviously very new to the business—otherwise the document would not mention that they are—it is vital that the Health and Safety Executive becomes involved with them at a very early stage to ensure that safety rules are drawn up, which are new to those companies because they have never engaged on railway work before.
A second, equally important paragraph on page 10 refers to work force safety. It states thatorganisations should develop their objectives aimed at reducing that risk to as low as reasonably practicableand refers to other groups of workers who are exposed to risk.
Those organisations obviously must define what the other risks are, but they must also do something more. They must build up a joint management-work force committee that can identify and minimise the risks to safety to the lowest level that is practicably possible.
We all want to benefit from a new system of awarding contracts for railway work and to see new companies getting railway business and, hopefully, taking on more people, but the philosophy must always be value for money plus safety—the two simply must not be separated.
As a Member of Parliament representing a constituency in the south-east of the country, I should like to see the earliest possible start on the Bedfordshire-Euston section of the west coast main line, not only for the benefit of current users but for the benefit of future users who want to get to work in London or to stations down the line.
I have one comment to make on the document produced by Railtrack on the west coast main line modernisation. There is a section on page 33 of the document entitled 744 "The Core Investment Programme". In relation to the new signalling arrangements, which is the subject of the section, the document states:Staff from each of the control disciplines would be co-located to reduce costs and optimise flexibility in the event of an incident, allowing the possibility of multi-skilling in the future.That statement must raise some anxiety among the work force because the statement is—understandably because of new technology—hinting at the possibility of job losses in that part of the industry.
As we know, Railtrack had an extremely unhappy beginning because of the dispute with the signalmen. A wider point to be made in relation to technology is that some, though not all, privatisations have created real public disquiet and because of insensitive remuneration packages for directors and senior staff. The management of Railtrack must take the work force with it and work with the grain if it is successfully to make changes in the industry for the good of everyone.
I have always felt that one of the reasons why the possibility of privatising the Post Office was stalled was that the management simply could not get across to the work force the benefits of privatisation. Railtrack is about to float. It is incumbent on Railtrack management and of vital importance that it really does get across to the work force the benefits of privatisation.
Complicated and difficult though this privatisation has been, it can succeed because investment is at last freed from unnecessary, fiddling Treasury control. At last, we can get an increased volume of investment, which can transform the industry.
Years ago, Rab Butler used to stress to Conservatives the need to practise the patience of politics. We are going to need plenty of patience before the fruits of privatisation become apparent, but become apparent they will.
§ Mr. David Chidgey (Eastleigh)
Reflecting on the opening contributions to today's debate, it would be easy to regard the debate as an adversarial contest between a dying Government clinging desperately to their dogma and an Opposition bursting with condemnation but somewhat short on conviction. However, the debate goes far deeper than that and that first impression was surely false.
This debate goes to the very heart of whether Britain is to have an efficient modern transport system to boost our economy into the next century or whether we shall be left with the bare bones of a transport network, fought over by private interests motivated only by their personal and corporate profit.
The future of Railtrack and rail privatisation is vital to our economy and the environment. Incidentally, so far very little has been said about the environment, but I hope that other hon. Members will say something about an element that is so important to our transport system. Strategic investment and the decisions that go with it cannot be made in isolation. We have to consider the whole transport system—rail and road—as one. The various elements cannot be separated from each other when making strategic investment decisions.
If Railtrack is to become a linchpin in a revitalised transport system, we should be considering a series of key objectives and assessing how privatisation would or 745 would not meet them. We need to create an investment culture to modernise, develop and expand the railways within an integrated transport system. Passenger and freight—especially freight-patronage has to be greatly increased to take up the spare capacity on the railways, which is running at about 50 per cent.
The railways need new customers, attracted by fast, efficient, frequent and, above all, cheap services. We need a modern and efficient rail system that delivers good value for money to the taxpayer. Above all, customers for the new modern railway must be able to use the system in the certain knowledge that it is maintained and operated to the highest safety standards. I believe that we have to set the proposals for the privatisation of Railtrack in the context of achieving those aims and examine the impact of privatisation so far. Perhaps we can forecast what is likely to happen with the privatisation of Railtrack.
Franchise after franchise has been let with no requirement for a commitment to invest in desperately needed rolling stock. There are one or two exceptions, which the Minister cited, but the vast majority of franchises have been let with little or no requirement to invest in rolling stock. Rail privatisation seems to have been driven by a sort of manic belief that competition and market forces are the ultimate goal if one is trying to provide an efficient railway system, yet a combination of the Government's desperate need to raise cash as quickly as possible and the Treasury's insistence that franchises should be limited to the minimum period that the Government can get away with has stifled investment in our railway system and, in fact, lost the very benefits that could have been gained from a partnership between the private and public sectors.
I shall cite one example. Last week, it was announced that the Network SouthCentral franchise has been let. As many hon. Members know, that part of the system has some of the oldest rolling stock in the country still trundling around. That rolling stock still has some of the notoriously dangerous slam doors, which have been the subject of so much condemnation by the Health and Safety Executive.
The franchise winners are not committed to invest a penny in new rolling stock. That is hardly surprising, because their franchise runs for only seven years. How can they be expected to invest substantially in new rolling stock, which has a life of at least 30 years, when, after seven years, they could lose out and see their investment disappear?
To date, the major impact of rail privatisation seems to have been to squeeze the life out of the rail industry. Not one new rail locomotive has been ordered in the United Kingdom for more than 900 days. The UK rail industry is on its knees and in danger of going into terminal decline.
Franchises should be renegotiated and not just allowed to run out, as the Opposition believe. I know that many rail franchise winners are eager to renegotiate and may already be talking to the Secretary of State about the possibilities that would provide the opportunity to invest in new rolling stock and improve rail services. One of the first jobs of a new Government should be to reconsider the franchises to update, renegotiate and widen them and make them attractive to the investor and the user.
Figures on investment in Railtrack are bandied about in all directions and plucked out of various pockets of air, but they rarely add up. The Rail Regulator's report to the 746 Select Committee on Transport stated that, in 1994–95, Railtrack spent £150 million less than the average £483 million required in its asset management plan to maintain the rail network. That is probably an accurate statement. In its 10-year plan, Railtrack proposed investing less than Britain Rail had planned. Railtrack proposed £1.03 billion a year compared with British Rail's £1.11 billion a year. That seems to make sense to me. Of course—
§ Mr. Watts
The hon. Gentleman is citing past figures for investment by British Rail, but will he acknowledge that he is talking about investment in infrastructure and rolling stock? In previous years, there was heavy investment—£4 billion over 10 years—for 4,000 new pieces of rolling stock. Therefore, the hon. Gentleman is not comparing like with like, even if the total figures that he is citing are correct.
§ Mr. Chidgey
I thank the Minister for that comment and I shall return to it later when comparing the subsidy paid by the taxpayer to British Rail in the past with the subsidy that the taxpayer is now expected to contribute under the privatised system. Perhaps the figures taken together will give us a greater insight into the overall cost of our railways.
§ Mr. Peter Luff (Worcester)
Do the figures that the hon. Gentleman gave for British Rail's investment in infrastructure and rolling stock include the cost of works associated with the channel tunnel and the upgrading of the line to the tunnel?
§ Mr. Chidgey
The figures that I am using are those for maintenance and do not include investment in the channel tunnel rail link.
Setting aside the lack of investment, what hope is there that a privatised Railtrack will increase patronage? What steps will be taken under the new system to attract more passengers, and especially more freight, on to the railways which, as I said, are running at only 50 per cent. capacity? With the Rail Regulator's guidelines set firmly to maximise competition, there seem to be very few incentives to increase patronage. In fact, Railtrack seems perversely to be bent on driving away custom.
Railtrack's charges are so high that train operators are now moving rail vehicles and even locomotive fuel by road because it is cheaper to do so. The marginal costs of adding one extra coach to a train are £170,000, as I think the shadow Secretary of State for Transport said. The operator could provide a fleet of buses to move passengers around the country for less than that.
Railtrack's approach to attracting freight customers beggars belief: it is widely reported that Railtrack is erecting barriers to companies that would prefer to switch to rail. Developers hoping to build rail terminals and sidings accuse Railtrack of exploiting its monopoly and demanding excess sums for links with the rail network. Complaints are rife that Railtrack demands fat 747 consultancy fees up front to carry out freight link feasibility studies instead of sharing the initial risk and recouping its fees if the project is successful; that is the standard way of operating in business and in every other sector of industry of which I am aware.
I emphasise my point by referring to an article that appeared in the Financial Times on 14 February this year. Railtrack was accused of demanding excess wayleave payments from developers who needed to build roads and bridges over railway land, even though it was not involved in those projects. A classic case is the £380 million freight terminal that PowerGen is building at Hams Hall near Birmingham. Before allowing PowerGen to build a road bridge over the track, Railtrack demanded a half share in the full profit from the £380 million development in which it was not involved and had not invested. That is the ransom that it demanded for granting wayleave over its land.
Instead of nurturing a culture aimed at creating and increasing business, developers are faced with monopolistic exploitation that will only worsen under the current privatisation programme. What hope can we have that a privatised Railtrack will provide a modern, efficient rail system that delivers good value for money to the taxpayer? I think that there is little hope of that.
I return to expenditure on the railways. I examined the Government's transport report while preparing my speech, and compared the figures in that report with those provided by people with knowledge of British Rail's performance. I found that, according to British Rail's figures, the taxpayer provided some £930 million in 1993–94 to support passenger services and £105 million to support passenger transport executives—a total of about £1 billion.
In 1994–95, under the Government's new regime, the Office of Passenger Rail Franchising—Opraf—support grants had risen to £1.74 billion, together with PTE support of another £340 million. Public support for the railways rose to £2 billion. Government expenditure plans show that, by 1995–96, Opraf will provide a support grant of £1.7 billion to which must be added the PTE support—that figure has not been produced, but one could reasonably expect it to be about £300 million. Therefore, public support for the railways would again be around £2 billion. It is likely to be the same in 1996–97. As a result of privatisation policy, the taxpayer's support for railways has doubled to £2 billion since 1994–95 and will continue to increase at a rate of £1.5 billion a year into the next century.
While the new rail companies remained in public hands, there was no great impact on public expenditure because the profits earned by the train operating companies, the ROSCOs—the rolling stock companies—and Railtrack were recycled to the Treasury. However, as the railway is fragmented and sold, the profits—paid for with taxpayer subsidies—will go not into vital investment in the railways but into the pockets of directors and shareholders, with a minimal commitment to expanding services and increasing passenger numbers and freight.
So we come to the flotation of Railtrack: the ultimate giveaway of public property, garnished with profits rightfully due to the taxpayer. We are told that Railtrack shares are likely to fetch some £1.5 billion on the stock 748 market. Yet the net book value—never mind the replacement cost—is calculated in the prospectus at some £4.3 billion.
It is enlightening to see how financial advisers are marketing the share sales. I am pleased that the Minister is still in the Chamber, as he may not have had the opportunity to receive this sort of feedback. I refer him to one so-called "share shop" and its pamphlet which one can buy for an annual subscription of £40—I hasten to add that I did not buy it; it was given to me as an example. It is interesting to see how it is marketing the Railtrack shares. The pamphlet states:Railtrack is essentially a property company and the land that Railtrack will own could be regarded as one of the most valuable pieces of real estate in the United Kingdom".
It goes on to describe how the track passes throughvaluable commercial and industrial sites all over the UK".It refers to those as being ripe for exploitation—they are not my words, but those of the salesmen—with retail developments at main line stations competing with major department stores up and down the country. The pamphlet then describes how stations can havea captive audience of passengers who are all potential customers".
It refers to the passengers who either arrive too early and have time to spare or, better still, whoarrive at the last minute, missing their train, and have possibly an hour or so to wait until their next train.This waiting time is valuable selling time for retailers and food providers".So now we know: the aim is not to run a fast, frequent and efficient railway; it is to capture passengers at railway stations that have been redeveloped into shopping centres. That is the hidden agenda. It is no wonder the article is entitled "Railtrack—could this be the end of the privatisation gravy train?".
It may be good business for Railtrack to act as a property developer, but it is emphatically poor value for taxpayers, who have the right to expect that the billions of pounds that they pay in subsidy will be invested in a modern, busy railway. Taxpayers have the right to use a railway system that is maintained and operated to the highest safety standards. Under Railtrack, there has been a catalogue of failures to maintain safety standards which experts forecast will only worsen if it is privatised.
§ Mr. Chidgey
I am about to conclude. The hon. Gentleman will have a chance to speak later in the debate.
The Health and Safety Executive report on Railtrack's formal management systems concluded that the weaknesses in those systems could eat away at safety margins and increase the risk of harm.
§ Mr. Chidgey
Madam Deputy Speaker, I will not give way; I shall finish my speech. I am sure that, in time, the hon. Gentleman will have an opportunity to contribute.
§ Mr. Tredinnick
On a point of order, Madam Deputy Speaker. I seek your guidance. In a debate in which all hon. Members have given way generously, is it not a breach of normal behaviour in the House for the hon. 749 Gentleman to refuse to give way, despite the facts that there are no restrictions on the debate and he has ample time in which to do so?
§ Madam Deputy Speaker (Dame Janet Fookes)
The rule is very clear and I expected the hon. Member for Bosworth to know it: it is entirely at the discretion of the hon. Member who has the Floor to decide whether to give way.
§ Mr. Chidgey
It is clear that overall responsibility for safety has become confused and that a culture of blame is developing. When something goes wrong, it is a case of, "It's not my fault, it is someone else's." A classic example was the recent Stafford rail crash.
Railtrack's immediate response was to claim that the accident had nothing to do with it. In its haste, it wrongly advised one family that a relative had been killed.
I recently questioned the Minister about a derailment at Euston station last December which paralysed a major part of the network. It has emerged that Railtrack ignored three earlier warnings from its contractors about the condition of the track. Under the old British Rail regime—that old monument, as we were told earlier—the manager responsible for such dereliction would have been sacked on the spot. Railtrack did nothing, and the Minister has yet to tell me why. Is it any wonder that more than 80 per cent. of Railtrack's middle managers are opposed to the sale of Railtrack, stating as one of their major reasons the fact that safety standards are declining as commercial pressures start to drive the business?
In terms of investment, attracting new customers with fast, efficient and frequent services, providing modern, efficient rail systems delivering good value for money and providing a well-maintained and, above all, safe railway, Railtrack is failing, and it will fail faster under privatisation.
If we are to combat the growing congestion on our roads and the increasing pollution of our environment, we have to transport more people and freight by rail. The railways have a great unused capacity. Investment must be a priority to allow faster, more frequent and more convenient rail travel. The choice between investing in major new roads and investing in railways is vital to our economy and our environment. It is not acceptable to allow a private company to take such decisions solely in the interests of its shareholders.
The Liberal Democrats are prepared to pledge that, in the next Government, we would issue fresh guidelines to the Rail Regulator. He would no longer be required to promote competition; instead, he would be obliged to set ambitious targets for maximising patronage, to cap the dividends of Railtrack and to prevent it from exploiting its property assets at the expense of the taxpayer. Development profits would be used to invest in the railway rather than to benefit the shareholders and Railtrack would be forced to use its asset base as a financial instrument to raise capital to reinvest in the railway. Perhaps most significantly in terms of the operation of the railway, the Rail Regulator would have guidelines that forced Railtrack to charge freight operators only the marginal wear-and-tear costs of access to make sure that we brought freight back to the railways.
Our vision offers simplicity—fewer lawyers, fewer accountants, more passengers and less pollution—a busy, expanding railway giving value for money to the taxpayer.
§ Mr. Gary Waller (Keighley)
The public are fed up with the old arguments about privatisation. They deserve a more intelligent debate in which it is not always claimed that every conceivable human activity must be run in the private sector. At the same time, however, the Labour party must learn that it need not inevitably resist it to the death, as it invariably has done and is doing today.
I start from the position that commercial activities are better run by free enterprise than by Ministers and civil servants. That is unarguable, but even after 17 years and many benefits arising from previous privatisations, the Government cannot assume that the public will always see an overwhelming case for the private sector to run such activities. In each instance, the case must be made on its merits and I believe that in this case the merits are very great indeed.
What makes privatisation successful? What makes it work more effectively? In a word, it is competition. That is why the Government have sought to introduce genuine competition where it does not exist or exists only to a limited extent. Where competition is absent or very limited, it is necessary to substitute a strict regulatory regime. However, regulation has its limits. The more successful a company becomes at running its business, the more a regulator may find it necessary to intervene. Thus, the share price of a private enterprise may be affected more by investors' perception of a regulator's determination to exercise his powers than by almost any other factor.
Rail is a natural candidate for privatisation because it offers considerable opportunities for competition. The method of rail privatisation adopted by the Government certainly involves greater risks—especially political risks—than a straightforward single privatisation of the industry, but it also offers much greater opportunities for the future.
The franchise method means that many potential operators are competing for the right to run services over a period of years. If they are successful, they will operate a commercial enterprise with considerable potential to compete effectively with other domestic modes of travel, particularly road and air. As competition will exist when the franchises are awarded and then throughout the term of each franchise, I believe that it will not be necessary for the Rail Regulator to exercise his responsibilities with a heavy hand. That is why the operation of rail services falls naturally into the private sector. We still have to prove that case. Far from having difficulty in doing so, I welcome any opportunity to argue from that position.
Whatever criticisms may have been made of British Rail in the past, the fault lay mainly with the system under which it operated. Rigorous control of the railways by the Treasury has produced disastrous results for British Rail over many years. The franchising director, Roger Salmon, has explained that whereas capital expenditure often demands 30 and 40-year time horizons, the British Railways Board could often look forward only a few months. Capital expenditure had to be controlled until quite late in the year in case revenue fell short of what had been anticipated. If capital expenditure is managed in such a way, it becomes impossible to plan effectively and sensibly. I maintain that, ultimately, the success of privatisation can be properly assessed only by rail customers, and in those terms some of the benefits that 751 ensue from the ability to plan on a longer-term basis are already apparent. I refer in particular to the guarantees that have been given about rail fares over the next seven years and about service levels, both of which are entirely new concepts. In relation to those factors, to access charges and to extending competition, the franchising director and the Rail Regulator can use their powers to benefit passengers in a way that Ministers never could or would.
The variety of train operating companies inevitably means that there will be variations in management style and practice. To some extent that will reflect the differences between the businesses that they run, but I believe that there will be opportunities to emulate best practice in a way that could not be secured in a monolithic structure.
Train operating companies will be able to plan ahead in a way that rail managers never could because of the confidence that there will be a steady flow of investment by Railtrack in renewal, maintenance and new capital investment. Those in British Rail who ran the trains could never be confident that their colleagues who provided the tracks on which the trains ran would be able to deliver. It was not that they did not want to do so, but it was possible that they might not.
The need to plan spending on an annual basis in the public sector meant that projects were subject to frequent interruptions. British Rail could not take advantage of supplier discounts and contractors had little incentive to invest in the most modern equipment. I understand that one project cost double the initial estimate because of frequent interruptions to work when annual funds were exhausted.
The only appropriate way to measure the success of rail privatisation is via customer satisfaction, but in time I am sure that there will be a repetition of the benefits to the taxpayer and the customer which have characterised previous privatisations.
In 1979, the borrowings and losses of state-owned industries were costed at some £3 billion a year. A decade later, newly privatised enterprises were making a contribution in terms of tax paid to the Treasury of some £2 billion. To anyone who claimed that we were selling off the family silver, I would respond that it was a strange analogy to use if having it on our shelves cost us good money whereas its use by others produced a handsome return.
§ Mr. Tredinnick
My hon. Friend will recall that the hon. Member for Eastleigh (Mr. Chidgey), who spoke on behalf of the Liberal Democrats and who is not in his place at the moment, argued against the utilisation of land at stations and against the improvement of facilities. Does my hon. Friend agree that it is better to use those assets effectively and that it is in the public interest to do so, although it is obviously against Liberal policy?
§ Mr. Waller
I entirely agree. There has been a desire in the city of Bradford for many years to provide a shopping centre at Forster square station. I believe that that would be easier to do in future.
§ Mr. Wilson
On a point of order, Madam Deputy Speaker. In fairness to the hon. Member for Eastleigh 752 (Mr. Chidgey), I want to point out that he left the Chamber only to give his speaking notes to Hansard. That was an extremely cheap point by a rather expensive hon. Member.
§ Mr. Tredinnick
I said that the hon. Member for Eastleigh was not in his place, which was correct. I did not say that he had left the Chamber. He was sitting at the other end of the Bench.
§ Mr. Waller
I believe that it will be easier in future to provide a shopping mall of the sort to which I referred, which has taken so long to develop in Bradford. Far from regretting that land will be developed, I think that is to be welcomed. The assets in question have been underdeveloped in the past. British Rail often wanted to develop them but was unable to do so because of limitations on its activities. The hotels that British Rail used to own remained underdeveloped compared with hotels in the private sector until the time that they were sold, which preceded this privatisation exercise. The sale of those hotels has been good for their customers and for taxpayers, who previously had to bear the hotels' losses incurred but who subsequently saw some benefit.
State ownership limits an industry's ability to look elsewhere for loans and investment. When a state-owned enterprise borrows money, the Government underwrite the loans, which make them indistinguishable from all other forms of public sector borrowing. Demands of enterprises such as the railways have often been fairly low on the list of priorities. Any Government first have a responsibility to the economy as a whole. As there are times when the needs of individual state enterprises must inevitably take a back seat to macroeconomic requirements, politicians often have to curtail the ability of state enterprises to borrow. Railways, like other industries, have never been able to achieve their potential under state control.
A recent editorial in the Financial Times stated: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 encumbrance to the running of the railway, rather than the reason for it… Privatisation has already raised investment levels and transformed management in other industries… If the Government gets it right, its plan presents the best prospect of providing Britain with the attractive and well-run railway it needs.I note that The Guardian has also acknowledged the potential in privatisation and that one should not discount that potential, which Labour Members are again doing tonight.
Other countries are not immune to the imperatives that drive privatisation forward in this country. Britain's record of investment in a nationalised rail sector is often unfairly compared with that of Germany and France. If the comparison is related to investment per mile of route, Britain by no means does badly.
The true cost of state ownership is now more fully appreciated in other countries, especially as losses increase. My right hon. Friend the Secretary of State for Transport referred to the losses already accrued in France. Suggestions that the French Government intended to make a significant cut in the scale of their subsidy to the railways as a possible prelude to privatisation were sufficient last autumn to drive mollycoddled rail workers to strike action. France is watching closely what happens 753 in Britain, because France appreciates that it cannot ignore the advantages that we are now grasping. The German Government have adopted a 10-year programme to transfer a major part of the rail network to the private sector, and many other countries are following the logic of that process. We are in the forefront of the process, but we are far from alone—other countries are waiting to learn from our success. Everywhere, competition is seen as the way forward.
Railtrack has announced that in the 10 years after privatisation it will spend more than £1 billion a year on maintenance and renewal of the rail network. When the sale of Railtrack is complete, it will have access to new sources of finance, enabling it to proceed with major projects. In the last 10 years, rail fares have risen more than 22 per cent. above inflation. I do not think that the customer has had a good deal for the money that he or she has spent. In the new privatised railways, key commuter and leisure fares will be pegged to the rate of inflation for the next three years, and they will be frozen below inflation for four years thereafter. Through tickets and railcards will still be available. Many of the scare stories that have been bandied about are simply not true.
In the past three weeks, the InterCity East Coast franchise has been awarded to Great Northern Railways, a subsidiary of Sea Containers. Judging by the plans announced by GNR, that looks like a good deal for users of the east coast main line, including myself. The outcome must be judged by deeds, not words. It is certainly good news for the taxpayer that GNR plans to change InterCity East Coast to a business that no longer relies on public money. Passengers—certainly from the north of England—will primarily be concerned with assessing the service that they receive.
I welcome the commitment to an improved passengers charter and upgraded facilities—especially at stations, with particular emphasis on passenger security measures and improved access for disabled passengers. It should prove possible to improve existing scheduled travelling times on Sunday, bearing in mind that InterCity East Coast has regularly allowed at least an extra 20 minutes on scheduled arrival times to allow for possible delays, usually enabling the claim to be made that the train has arrived up to 20 minutes ahead of time.
I hope that Great Northern Railways, in considering new business opportunities, will talk to Railtrack about the possibility of operating at least one London-bound train a day from Skipton, because many people believe that there is considerable potential for additional patronage from stations in the Aire valley. It is a great advantage that the line is already electrified, but I understand that additional work must be done to accommodate InterCity rolling stock—such as lengthening platforms and upgrading overhead power lines. I am afraid that they are the wrong kind of wires.
Many of the trains operated on the Airedale line and all those running on the Wharfedale line in my constituency are supported by West Yorkshire passenger transport executive under section 20 agreements. I welcome the Government's intention, stated in their response to the Transport Select Committee's report on railway finances, to use the standard spending assessment mechanism to provide support for PTE-secured rail services, which will enable them to deliver sufficient funding to maintain existing services in future years. Bearing in mind that, 15 years ago, the Wharfedale line in particular was 754 threatened with extinction, it is welcome that local rail travellers can now look forward to a much more encouraging future.
The future for regular users of the Airedale and Wharfedale ultimately depends on the acquisition of new trains. We need to make up for a grievously shortsighted approach by the Treasury which, following electrification of the track infrastructure, was unwilling to give guarantees to the banks that were putting up the finance for new trains to be leased, and which were deterred by a number of uncertainties at the time—including the future of passenger transport authorities. The acquisition of second-hand trains that previously operated on the London-Tilbury-Southend line was the best deal that could be done in the circumstances, but slam-door stock—which first came into use in the 1950s—is a hopelessly unsatisfactory alternative to the acquisition of new trains. It is inadequate in safety terms and it comes nowhere near the standards that we should rightly expect on behalf of disabled people. For instance, it is impossible to get wheelchairs into those trains. I know that my right hon. Friend the Member for Kettering (Mr. Freeman), then the responsible Minister, did his best to tie up a deal, but unfortunately he was not successful.
Despite money being spent on refurbishing the old LTS trains, serious technical failures occurred last November—fortunately without injury to passengers. The need to take all the electric rolling stock out of use and for it to go back to ABB at Crewe has resulted in an inadequate service for rail users in recent weeks. That has been a severe setback because patronage had increased following electrification of the line.
The problems have given a new impetus to talks that had already begun to discover whether an order could be submitted to bring new trains to those lines by around 1998. Some of the uncertainties that prevented the deal from being concluded some time ago, including the question whether the PTEs had a future, have now been resolved. Other matters, such as the length of a franchise for the operation of trains on the lines, have yet to be determined. I believe that a 15-year franchise term would provide a better prospect of securing a satisfactory leasing arrangement. As in the past, the best possible deal could be done by tying the acquisition of new trains to others being ordered elsewhere so that the benefits arising from economies of scale can be grasped.
I hope that it may be possible for an order to be submitted this year, enabling the new trains to be delivered in 1998. Unfortunately, recent setbacks may have led to a loss of confidence by some passengers and everything possible needs to be done to reassure them. For commuters, students and shoppers travelling to Leeds and Bradford, the train should be a convenient, comfortable and environmentally friendly alternative to the car. We must do everything we can to make that so. I agree with the hon. Member for Eastleigh (Mr. Chidgey), who referred to the importance of the environment. If we can encourage the use of trains, it can do nothing but good for the environment. I know that my hon. Friend the Minister for Railways and Roads is aware of my local situation and I hope that we can rely on his support in achieving our objectives.
Privatisation is designed to halt and reverse the decline in railway use. As has been pointed out already in the debate, £54 billion has been invested since 1948 but, as my right hon. Friend the Secretary of State said in his 755 speech, the share of journeys by rail has fallen from 17 per cent. in 1953 to just 5 per cent. now. That has been bad for everybody. Privatisation offers a great opportunity for change. We already have some encouraging signs that many individuals and enterprises in the private sector want an opportunity to show that they can do better. We owe it to rail passengers, to the environment, to the companies and to the future of this country, which depends greatly on a good transport infrastructure, to give privatisation every encouragement.
§ 6.2 pm
§ Ms Glenda Jackson (Hampstead and Highgate)
The Secretary of State attempted to convince the House—with a marked lack of success—that the Government's plans for the privatisation of our railways and the creation of Railtrack were already an unqualified success. That has not been the experience of my constituents, certainly from the beginning of this year. [Interruption.]
I seem to be causing some concern to the hon. Member for Castle Point (Dr. Spink). If he would like me to give way, I would be happy so to do. He is checking in the list of Members' interests, and I have little doubt that he is about to accuse me of not declaring an interest as a Member sponsored by the rail drivers union, the Association of Locomotive Engineers and Firemen or ASLEF.
The situation has changed since the House has reconvened. I, in common with all my right hon. and hon. Friends, am no longer sponsored by trade unions. Such sponsorship as the trade union movement continues to devote and dedicate to the Labour party is via the constituency parties and not to individual Members of Parliament. I hope that I have set the hon. Gentleman's mind at rest. [Interruption.] I clearly have not, so I will give way.
§ Ms Jackson
Would that Conservative Members spoke sufficiently frequently for the vested interests of their constituents and the public. If Conservative Members spoke for those interests, I have little doubt that they would join us in the Lobby tonight and vote against the flotation of Railtrack.
The point that I was attempting to make leads directly from the contribution by the hon. Member for Castle Point. The privatisation of our railways and, indeed, the formation of Railtrack have not been in the interests of my constituents, especially those living in two roads in the Cricklewood area. Since the beginning of this year, necessary work—I have no doubt that the work is necessary—on the tracks that run alongside those roads has been causing problems.
I have received a letter from one of my constituents, on behalf of the Fordwych Residents' Association, which states: 756I write … to advise you of the very considerable discomfort, inconvenience and apprehension of danger to their homes and properties experienced by many of the residents in this area as a consequence of the very much increased vibration from the railway track which runs parallel
to those roads. He continues:people … have lived for many years adjacent to the railway line and have become inured and habituated to the normal level of traffic"—
but he says that they regarded the current level of vibration to be abnormal. That letter was dated 14 March.
A response to that letter, dated 1 April, came from the infrastructure services manager of Railtrack Midlands to my constituent. The reply states:Your fear that vibration from the railway may lead to long term structural damage to your house must be denied.
There is no reason why my constituent must deny the experience that he, his family and neighbours are living through at the moment, but the most important paragraph of the letter is the last one. The letter is signed by Mr. K. B. Humphrey and states:The above may not be what you want to hear but I am afraid Railtrack do operate their railway with the benefit of statutory authority and in the absence of proof of negligence they are not liable to adjoining landowners for noise, vibration or otherwise.
Many Conservative Members, in our debates on the channel tunnel rail link, have voiced the concerns of their constituents about the possible vibration and noise that may be contingent upon the construction of that high-speed line. The letter is a fairly clear proof that Railtrack is not putting the customer first. We are told that that is the basic overriding priority of any privatised company—the Secretary of State said it today. The phrase he used was that the customer is king. Clearly Railtrack does not regard its customers as king.
For me, there is another cause for concern in the exchange of correspondence on that issue, and I am sure that all hon. Members would share that concern. There has been much correspondence between myself and my constituents, and between Railtrack and myself on behalf of my constituents, since the beginning of this year. On 12 April, I received a letter from Railtrack East Anglia, from Miss Sandra Jones, the public affairs manager. Her letter states:The line in question is in Railtrack's Midland zone. I have forwarded your letter for them to deal with. To speed up these matters in the future"—
clearly Railtrack believes that such difficulties will not abate—would you be pleased to mark on a map which railway lines in your constituency are ours and which belong to other Railtrack zones?I find it bewildering that Railtrack does not know what it is supposed to be in charge of—it seems not to know which are its lines, where they are and what responsibilities it has.
We have heard about the overall benefits that must inevitably arise for the travelling public from the Government's privatisation plans. The hon. Member for Keighley (Mr. Waller) talked about closed circuit television, which has been a proven success in reducing crime, whenever the Government have managed to find the funding to assist local authorities, for example, to install it. The automatic presumption, indeed assumption, that privatisation will bring about many necessary 757 benefits—over the past 17 years, successive Conservative Governments have markedly failed to consider them—is not realistic.
I visited Edmonton Green earlier this week. There, the local Labour-controlled authority, Enfield council, had been in consultation with the West Anglia and Great Northern railway to install closed circuit televisions in the four stations in the area. I should say that in one of the stations, Bushill Park, CCTV has already been installed. There were three other stations, however, where the Labour-controlled local authority and the railway company were wishing to install CCTV. These were Edmonton Green, Silver Street and Angel Road.
Only on Tuesday of this week, I believe, the West Anglia and Great Northern railway had to put the scheme on hold, due to uncertainty about its future after privatisation.
§ Dr. Ian Twinn (Edmonton)
It was kind of the hon. Lady to announce that she had been to my constituency, although she did not have the grace to say beforehand that she was going to do so. I am glad that she has acknowledged that it was Tory action that led to the installation of television at Bushill Park station.
Do not the hon. Lady's remarks confirm that we need to ensure that British Rail is in the private sector, so that there is freedom to invest and so that uncertainty can be removed? The hon. Lady is suggesting that there will be further Treasury cuts and stop-starts in providing funding for BR under her scheme, which means that my constituents would be even more disadvantaged if she were ever to be in power.
§ Ms Jackson
I cannot think of a greater disadvantage for any constituent in any part of the country than to be represented by a Conservative Member. If they have failed consistently for 17 years to bring basic improvements into the railway system, such as safety—[Interruption.] Conservative Members have voted consistently for reductions in services generally.
In the railway industry, over the past 33 months during which the Government have been introducing privatisation, there have been job losses for 24,872 people, at a cost to the taxpayer—to Conservative Members' taxpayers—of about £500,000 a day in redundancy payments. Yet Conservative Members have the audacity and the temerity to attempt to convince the House and the country generally that the Government's policy of privatising the railways has brought benefits to the taxpayer.
As my hon. Friend the Member for Birmingham, Ladywood (Ms Short), who speaks from the Opposition Front Bench on transport matters, had occasion to say this afternoon, the actual costs to the taxpayer of the Government's attempt to privatise the railways, and the flotation of Railtrack, is approaching £2.6 billion. Not one penny piece of that sum has gone into improving track and signalling. None of that sum has been used to install CCTV in the three remaining stations in the constituency of the hon. Member for Edmonton (Dr. Twinn). Services have not been improved.
Constant and consistent unmanning seems to be the first step that every franchise operator takes. When a franchise has been awarded, unmanning will do nothing to attract people on to the railways. As the hon. Member 758 for Keighley said, it is virtually impossible for people with disabilities to use our railways, as they would undoubtedly wish to do, if stations are unmanned. It is equally highly unlikely that women will consider travelling late at night on our railways if stations are unmanned and the only other person on the train is probably the driver. The dangers are too well reported for that to be a possibility.
Will the Government's policy attract people from their cars on to the railways? My hon. Friend the Member for Lady wood stressed how grossly unbalanced is the present structure for those freight operators who would like to move freight from the roads on to the railways. There is nothing in the Government's privatisation plans or in the flotation of Railtrack that will balance the current basic inequity. Yet we must acknowledge that the way forward, both economically and environmentally, is to attract greater passenger use of our railway system, and certainly greater freight movements by rail.
Privatisation and the flotation of Railtrack, far from expanding the use of railways and improving the presently integrated system, will lead to the break—up of the system. It is nonsense for the Government to argue that the £2.6 billion that the taxpayer has already spent on a benighted policy will improve investment in our railways.
Railtrack has announced, I understand, after the publication of its prospectus, that it perceives spending £10 billion over the next 10 years as investment in our railway infrastructure. I believe that it was three years ago that Mr. Horton trumpeted with some pride that Railtrack intended to spend £800 million over the next 10 years on the west coast main line alone. That £8 billion would, over the 10 years to which he referred, have brought the west coast main line to the level at which it stood in 1973. That amount of investment would have produced a west coast main line that was 30 years out of date.
Apparently the magic door that will open to the treasuries of the world after Railtrack is privatised will produce for the entire network—not one line—only £10 billion over the next 10 years. There are already massive lengths of track along which trains must run slowly. There are speed restrictions because the lines have not been maintained to enable trains to run at the speeds of which they are capable.
We have heard much about the possibility of new rolling stock. If memory serves me correctly, Network SouthCentral, the most recent franchised line, stated categorically that it had no plans to provide new rolling stock on its lines. Network SouthCentral has 60 per cent. of the old slam-door trains. At the end of three years, the majority of its rolling stock will be 50 years out of date.
Network SouthCentral acknowledges that, over the next three years, it intends to invest £10 million in the line. That is £3.3 million a year. That is entirely inadequate, as anyone who knows anything about railways would agree.
There is no possibility, as we have seen ever since the Government introduced privatisation, 0that their proposals will create a railway fit for the 21st century and fit for the people. The only privatisation that our railway needs after 17 years of less than benign neglect by successive Conservative Governments is, as the Labour party has consistently argued, a public-private partnership. That is not, as the Government clearly wish, to wash our hands of the whole affair and push the railway system into the private sector. 759 I believe that it was the Secretary of State who said this afternoon, in attempting to rubbish—with no success whatever—my hon. Friend's commitment that the Rail Regulator would have infinitely more powers, that he had read in The Independent that the Labour party had argued for dispensing with the regulator in the gas industry. I do not remember the newspaper in which it appeared, but there was a report that the Government intended to abolish the Department of Transport, so one either believes what the newspapers say or one does not, and the Secretary of State was somewhat selective.
By their marked failure to create a properly integrated public transport system for this country, with the railways as the central pillar of a properly integrated public transport system, the Government have done nothing but unmitigated damage. Morale of those dedicated people who have worked all their lives in the railway industry, and who would wish to see out the rest of their working lives in the railway industry, has never been lower.
If Conservative Members really are concerned with the vested interests of their constituents, they should know that the electorate and the nation as a whole have consistently argued against rail privatisation. Every opinion poll has shown that more than 69 per cent. of people in this country are totally opposed to it, and I have little doubt that they are totally opposed to the flotation of Railtrack, particularly when it is their money that is being given as sweeteners to people who will take it out of the railway system and put it into private pockets.
I strongly urge Conservative Members to consider voting with Labour Members tonight. Perhaps they will do so out of self-interest, because one of the most recent opinion polls on the privatisation of the railways highlighted the fact that one in five people who voted for a Conservative Member of Parliament at the previous election stated categorically that they would seriously reconsider that decision on the single issue of rail privatisation.
As the South-East Staffordshire by-election showed only last Thursday, there is virtually no issue that the people of this country believe a Conservative Government could do anything to improve, and in the main they regard the problems of this country, quite rightly, as the exclusive prerogative of an incompetent and, as they say, arrogant and uncaring Government.
Here is an opportunity for Conservative Members to refute that argument, although that it is virtually impossible now, by arguing for once for the interests of the nation and their constituents by voting against the privatisation of Railtrack.
§ Mr. Den Dover (Chorley)
The key issue before us is whether it is better to take the rail system forward in privatised hands or whether it should remain nationalised. After 50 years of nationalisation, we have seen a lack of investment, a reduction in safety standards and no way forward.
I challenged the hon. Member for Birmingham, Ladywood (Ms Short), the shadow Secretary of State for Transport, to say how she should increase passenger movements and the carriage of freight. She was unable to 760 say, other than by investment. My right hon. Friend the Secretary of State challenged her on where that investment would come from. The answer was that it would have to come from taxpayers, and that it would cost an enormous amount, increasing taxation, borrowing, interest rates, inflation—the old socialist dogma, which, as we have seen, has failed over so many decades.
We have this evening a chance to break out and ensure that the management of Railtrack continues to provide a much better system, investing where people want them to invest and improving the infrastructure. I was surprised by the hon. Member for Eastleigh (Mr. Chidgey)—a civil engineer like me—who seemed to be opposed to the investment in stations and land. Surely that is where Railtrack's assets will increase enormously, to the benefit of shareholders who will buy into Railtrack in the coming months.
We want better facilities at our stations. We want the travelling public to be better catered for. We want facilities that are more in line with our European competitors, because having served on the Select Committee that considered the channel tunnel rail link, I know only too well that the high-speed rail system on the French side is much better than any system that exists over here, unless Railtrack is privatised and improves facilities throughout the country.
The Opposition motion calls forhigher levels of rail investment, improved services and the best possible return on taxpayers' money.We shall get that through privatisation. Railtrack's plans have already been announced. It will spend billions of pounds over the next 10 years, and will have to show that to its shareholders in terms of improvements to the whole rail infrastructure. The improved services will come from the rail operating companies. I am delighted that franchises have already been awarded for quite a large percentage of the rail system, and that percentage will improve and become more than 50 per cent. in the not too distant future.
The best possible return on taxpayers' money will be achieved by privatisation, and the taxpayer will benefit by almost £2 billion. Instead of writing off enormous sums by way of large subsidies, subsidies will be dramatically reduced in the coming years. Added to that, corporation tax will be paid, as it has been in every other privatisation in the past 17 years. Huge corporation tax income will flow to the Government. Indeed, the Government's amendment talks aboutthe prospects of better services and higher investment at less cost to tax-payers.We need private finance for that investment.
I shall briefly instance some of the disadvantages that we have seen in my constituency from the rail system being in nationalised hands. Parbold station—a village station—on the way from Southport, which is on the coast, to Manchester, has never had access for the disabled. We were promised disabled access before the 1992 general election, and that we would have it within two months. It took three years of my chasing—often weekly and monthly—to ensure that we had disabled access.
I am certain that, under the privatised regime, disabled access will be a right at all our stations. Chorley station, which I opened some 10 years ago, has never had a telephone or a toilet. Surely, in privatised hands, we would see better facilities. 761 I liken the plans for privatisation between Railtrack and the operating companies to our proposals for health, which have been carried through to fruition, where we have the purchaser-provider breakup. In this case, the purchaser, the operating companies, require from the provider, Railtrack, the right facilities: terminals, stations, rail track, signalling systems, and high levels of safety. They will be able to demand and obtain those from their franchises.
After privatisation, Railtrack will be completely free to make long-term investments, as was so ably pointed out by my hon. Friend the Member for Keighley (Mr. Waller). At the moment, having to compete with education, health and the myriad Government priorities is impossible on such a short-term basis. We want long-term investment, in the interests of shareholders and taxpayers. We will see that in the private enterprise.
I am delighted to support the Government's amendment. I look forward to this country having a first-class rail system with more investment. I have total confidence in Bob Horton and his team. The idiotic criticism by the shadow Secretary of State for Transport was totally uncalled for. Bob Horton has proved over the years in the private sector that he knows how to run a show in the interests of shareholders.
I look forward to ensuring that there are fewer subsidies over the years, and a return to the investors in the shares. I look forward to buying some of those shares myself, and I would strongly recommend that to any hon. Member or any member of the public listening to the debate this evening. That is the way forward.
According to the opinion polls, most people think that the rail system will become less safe and reliable, and that there will be fewer services. We hear the same criticisms of every privatisation, but every privatisation has been a success, and I look forward to the resounding success of rail privatisation in the capable hands of Bob Horton and Railtrack.
§ Mr. Peter L. Pike (Burnley)
I am pleased to be able to speak in the debate. It follows the publication of the pathfinder prospectus earlier this week, which was a further step in the privatisation of Railtrack.
The Secretary of State did not say much about the Government amendment, and, having read it several times, I am not surprised. Let me draw attention to one little word in it—"prospects". The amendment refers tooffering the prospects of better services and higher investment at less cost to tax-payers".I believe that the word "prospects" suggests a lack of certainty, even on the Government's part, that privatisation will deliver what is claimed for it. I have "prospects" of winning the national lottery—I buy a ticket every week—but as yet I have failed to win more than £10. Nevertheless, I think that my chance of winning the lottery is higher than the Government's chance of winning the next general election.
I do not believe that the Government are very confident about their proposal. They know that the opinion polls show that the public are opposed to rail privatisation. I shall not refer again to figures that have been cited several times today, but the fact remains that the public continually demonstrate their opposition to the 762 privatisation of the railways. Even more important, having been on the doorstep in South-East Staffordshire trying to get their people to vote for them in the recent by-election, the Conservatives must know that even the potential Conservative voters who remain are opposed to privatisation. They must also know that the majority of those who may have some sympathy with the proposal consider the method—the fragmentation—nonsensical. The general view is that we need an integrated, co-ordinated public transport system, and an integrated, co-ordinated rail system within that.
The one thing on which there has been broad agreement in the House is the need for investment in the railways. Everyone agrees that there has been a lack of investment—in varying proportions—over the past 50 years. Opposition Members believe that such investment should be made by a partnership: that public and private sectors should work together. We should not have the privatised nonsense that the Government propose; the public sector must play a major role.
As my hon. Friend the Member for Hampstead and Highgate (Ms Jackson) pointed out, it is not just a question of investment. If we want people to use the railway system, we must employ more people. A few months ago, I travelled by rail to Tooting, which is not so far from the House of Commons. Although the station is manned during the day, it is unstaffed in the evening. On both platforms, people who clearly had no intention of travelling were throwing bottles and stones from one platform to another. It was late in the evening, and I was returning to the House to vote. I waited anxiously for my train, feeling somewhat wary and cautious. If I had been an old-age pensioner or a woman, I would have been terrified and would not have gone near the station. That is one reason why people are not using the railways: they are often afraid to.
Hon. Members on both sides of the House have mentioned access to trains and stations for the disabled. It needs to be improved. I accept that that cannot be done overnight—the cost would be astronomical—but passengers should be able to know where they can get on and off trains, and to expect assistance from staff whenever they choose to travel, not just until 6 pm or 7 pm. I do not think that the privatisation of Railtrack will provide the necessary investment.
In response to two interventions, my hon. Friend the Member for Birmingham, Ladywood (Ms Short) said—quite fairly—that British Rail was not perfect. She also said, however, that it was better than what the Tory Government now proposed. Conservative Members should remember that their party has been in government for 30 of the 50 years in which British Rail has been in the public sector, and that in a couple of weeks they will have been continuously in government for 17 years. They have a good deal of responsibility for the faults in the system. Yes, British Rail is not perfect. The Government may have to accept that they have failed in their duty as the nation's shareholder, controlling it without improving the position.
I accept that there are faults in British Rail. I am currently pursuing two issues with Railtrack. They may sound very simple. One involves litter on the track throughout the country. The track opposite Sefton terrace in Burnley was cleared only when we had a royal visit a few years ago, and has not been cleared since: it is currently an appalling eyesore. Must we arrange another 763 royal visit? Another eyesore is the track on the line to Padiham, where a power station has closed. The track has not been used for a couple of years.
Railtrack has responsibilities for such matters. I have not examined the Pathfinder prospectus, and I do not know what it says about Railtrack's responsibility for litter and fencing on the land that it owns following privatisation; but safety is currently Railtrack's responsibility, and it must clearly remain its responsibility following privatisation.
Why are the Government changing their policy? I accept that, when the Railways Bill was passed in 1993, it gave the Government the power to do what they are currently doing; no one suggested that they could not take such action. But did not the Government repeatedly say that Railtrack would be in the public sector for the foreseeable future? Did not the present Chancellor of the Duchy of Lancaster, the right hon. Member for Kettering (Mr. Freeman)—then a Transport Minister—say exactly those words during debate on the Railways Bill? What, at that time, was "the foreseeable future"? Was it only a couple of years, or was the Government's statement misleading? We are not allowed to accuse them of being deliberately misleading, but was what they said misleading? Has it been accepted that there has been a move to the right, and that the Government now believe that they must privatise something whose privatisation they formerly did not consider necessary?
Perhaps the Government need the cash for pre-election tax cuts. Perhaps that comment really hits the nail on the head. Perhaps they need the money. Perhaps they want to try to bribe the electorate. Would it not be a very expensive bribe to sell assets that are worth £6.5 billion for a potential income of £1.8 billion? It is outrageous if that is what the Government are going to do, because they are the custodians of the nation's assets.
We all remember Harold Macmillan accusing the Government of selling the nation's silver. With this privatisation, the Government are selling the nation's assets, and they are not going to get anywhere near the value for them that they should. They are failing the nation if they go ahead with the privatisation. If the £6.5 billion is not the true value of the assets, why are track access charges being based on a Railtrack value of £6.5 billion? The Government cannot have it both ways; one thing or the other must be wrong.
My hon. Friend the Member for Ladywood said that the annual taxpayers' subsidy to a privatised Railtrack would be £850 million more than it was prior to privatisation. The Secretary of State never responded to that. Is that correct or not? The Minister needs to clarify it. If it is correct, what will we get for that extra £850 million subsidy? Who will benefit from it—top management or shareholders?
The Secretary of State referred to employee shares and gave some detail on that proposal. We have seen it all before. Under the privatisation of PowerGen, National Power and others, special shares were provided for employees, but the employees did not get a director with those shares or any say in management. Although what happened with the Trustees Savings bank is slightly different because the Government did not get the proceeds of its privatisation, what happened to it is relevant. It also 764 said that it would ensure employees' interests through rights to discounted shares and that small shareholders would be protected. Within a very short period, once the protection under the relevant Act had passed away, the very small number of shareholders at the top were able completely to outvote the mass of small shareholders. Towards the end of last year, the TSB was no longer an independent body. It is now part of the Lloyds group.
It is absolute nonsense to fragment the railways in the way that the Government are proposing. Some of my constituents have already had difficulties travelling. One travelled from Burnley to London and back, leaving Burnley Central station on the East Lancashire line, which is owned by one company, going on to the west coast main line at Preston for the InterCity part of the route, and returning by InterCity on the same part of the route. The journey ended not at the same railway station in Burnley, but at Burnley Manchester Road station on the Roses line, which was opened a few years ago and has been extremely successful. It must be said that the line was financed jointly by the National and Provincial building society, which is sadly disappearing into the Abbey National, and Lancashire county council, which supported it very much.
My constituent's journey involved three different railway companies, and there was a problem on each part of the journey as well as at Preston station. Four people will have to deal with the complaint in four different sections of the newly privatised, glorified system of nonsense that the Tory party will force on us if it does not draw back from the privatisation of Railtrack. What a way to run a railway system; what a way to run a country.
The prospectus confirms that nothing will be gained in the improvement of train services by privatising Railtrack. It says:Railtrack's passenger access income is unlikely to benefit materially from any increase in passenger use".It also admits that increases in freight by rail are unlikely, stating:The opportunities for expanding rail freight operations are limited.The previous Prime Minister, Lady Thatcher, once responded to an intervention by saying that it was a funny old world. It is a funny old prospectus that says that even if passenger use is increased, not much money will be made by it, and that the only dividends will be those that the public provide in subsidy. That is why it is such nonsense to create an initial profit to give to shareholders almost as soon as Railtrack is privatised. What a bribe to get people to buy shares. What a fiddle. I call it that because that is what the majority of people believe it to be. That is not the way to do things.
Debt has been written off from every privatised industry. If anybody else takes over a company, they have to take over any debt as well. Yet when the Government privatised water, the debt was written off, and a massive debt will be written off when Railtrack is privatised. Why should not the privatised company be liable to pay that debt back to the nation in years ahead? Orange was recently floated. It was a completely new flotation, so I am comparing one new flotation with another. It has made no profit to date, yet the Government would not give it any money to give to its shareholders or say that they would subsidise its first dividend for anyone who decided to respond to its prospectus. 765 Safety is important, and there are growing concerns about it on the railways partly as a result of the state of the infrastructure. Fifty sections of track on the west coast main line are now subject to speed restrictions as a result of the state of the track. There was none when the British Rail infrastructure was transferred to Railtrack. Already, within a couple of years, it has deteriorated.
The west coast main line is in need of investment—we all know that. I recognise the difficulties and, to be fair to the Minister, I know that he recognises the need for investment and is sympathetic to it. We all know that investment concerns not only signalling, track, overhead cabling or rolling stock. Those things must all be invested in to produce the type of rail service that we need on the line, which, with all respect to the east coast, carries much more traffic and is much more heavily used. Major investment is needed.
We recognise the difficulties, especially for parts of the track on which high-technology signalling and a low-technology system for local services that use some of the same parts of the track will be needed, such as the track feeding into Preston, and so on. There would be such difficulties, whoever owned Railtrack. What the Government are proposing offers no speedier solution to the need for improvements to the west coast main line. The Minister will disagree, but the Government have got it wrong. We need a publicly owned railway transport system.
We need a combination of private and public sector investment, to ensure that we can improve the track and rolling stock to give us the service that we need as we move towards the 21st century. I believe that the way in which the Government are moving is totally wrong, and that the Labour party is showing the right way ahead. If the Government do not heed us and change their mind, they will find that this one issue will add even more nails to their coffin when they finally have the courage to face the electorate.
§ Mr. Bob Dunn (Dartford)
The hon. Member for Burnley (Mr. Pike) has been extremely frank tonight—not least in his last few words. He said that he is in favour of a publicly owned rail service. He is at odds with the Government, but also with Opposition Front Benchers and we await the speech from the shadow Minister to see whether that gulf exists.
I begin by welcoming the announcement by the Secretary of State about the requirement placed upon the successful bidder for rail services in the south-east to make a clear and unequivocal commitment to replacing all of the 40-year-old rolling stock on one of the busiest rail routes in the country. That is something that Members of Parliament representing Kent constituencies—including myself—have made representations about for some time, and I am delighted that my right hon. Friend has met the concerns of commuters in the county of Kent.
§ Mr. Bayley
The hon. Gentleman will realise that I have a constituency interest in the matter. The Chancellor of the Duchy of Lancaster—when he was a Transport Minister—said that the rolling stock would start to be delivered in 1995. Had the Government stuck to their commitment, the carriage works in York would still be in business. I agree that it is good that the rolling stock is 766 coming, but it is a shame that, under public sector control, the Government blocked the provision of that rolling stock, leading to the closure of the carriage works in my constituency.
§ Mr. Dunn
If called, the hon. Member for York (Mr. Bayley) can make his own speech later. All I say is that we have received an undertaking from the Secretary of State today that new rolling stock will be in place within three years. I will hold all concerned to that date, given that commitment by my right hon. Friend.
Hon. Members from both sides of the House have said what they want from the rail service. We all want a punctual and reliable service, and—from the consumers' point of view—we want as low cost a service as possible, but constant emphasis has been placed on the safety of the service. I resent the notion that in future under a privatised scheme there will be more examples of bad practice, dangerous accidents and damage to people and services. It is not beyond the recollection of many hon. Members—I do not want to make a political point on this—that there have been major disasters in the past, such as at Hither Green and Harrow and Wealdstone. We must be careful about making points about safety, as that can be deemed to be scaremongering. I am sure that Opposition Members would not wish to do that, and we must be careful about the extent to which we refer to safety.
§ Mr. Wilson
If postulated in that way, such claims can be deemed to be scaremongering. Does the hon. Gentleman not understand the distinction between saying that private operators are less likely to operate a safe regime—which is not the argument—and saying that a fragmented railway is inherently less safe than an integrated railway? If he needs further evidence of that, he should look at the Health and Safety Executive's report on rail privatisation, which said that a fragmented railway was likely to lead to more serious accidents than less. The report then made 38 serious recommendations to counteract that possibility. Is it responsible for a Government to put in place a railway that is inherently less safe than the one we have at present?
§ Mr. Dunn
The point that I was trying to make is that however much every hon. Member hopes for the minimum number of accidents, the fact is that—in its earlier nationalised state—there were accidents on the rail network. It is wrong to pretend that there was a golden age, and I hope that Opposition Members are not trying to pretend that there was.
Any debate on privatisation is bound to show clear blue water—the clear philosophical difference between the Conservatives and the Opposition. This debate on rail privatisation is no different from many of the debates that we have had in this House in the past 17 years, with—I am sorry to say—the same predictable estimates of gloom and doom, full-blown rhetoric, half-facts and scare stories from the Labour party. Why does Labour do it? It is fed partly by Labour's deep-rooted hostility to free enterprise and partly as a result of instructions from the vested interests—the trade unions that sponsor many Opposition Members.
I am sorry that the hon. Member for Hampstead and Highgate (Ms Jackson) is not here, as I was going to refer to her statement that she is no longer sponsored by ASLEF and is therefore able to speak in any way that she 767 likes. Her constituency party, however, is now sponsored by that union. The extent of that sponsorship is there for all to see. When she last registered her sponsorship, her constituency party received £5,500, and 80 per cent. of her election expenses were paid by the union.
§ Mrs. Gwyneth Dunwoody (Crewe and Nantwich)
Will the hon. Gentleman tell us who contributes to his election expenses, what firms he is connected with and what speeches he has made in this Chamber that vaguely reflect some of his involvement in industry?
§ Mr. Dunn
The hon. Lady knows that I am a great admirer of her—from afar. If she checks the Register of Members' Interests, she will see that I am sponsored by no one. I receive no sponsorship, and I have no outside interests. I speak entirely for the people who elected me—the people of Dartford. I understand her point, as clearly union sponsorship is a huge embarrassment to Labour. It is clear that any sponsored hon. Member is bought—not in the direct sense of money changing hands, but indirectly. Undue influence—or due influence—is brought to bear on individual Labour Members who have representatives from the unions that sponsor them sitting on their general management committees. If the hon. Member does not do what the union likes, he is called to account.
I was referring to scare stories, and I shall give two examples from the past. The House may recall the debates in the early 1980s on the privatisation of BT. During one such debate, the right hon. Member for Salford, East (Mr. Orme) said:The public telephone box could be threatened with extinction."—[Official Report, 18 July 1983; Vol. 46, c. 41.]The truth is that the number of BT call boxes has increased by more than 50 per cent. to 127,000, 96 per cent. of which work at any one time compared with 75 per cent. in 1987.
The second example concerns British Airways. The hon. Member for Glasgow, Garscadden (Mr. Dewar)—who has just walked into the Chamber—said in a debate on the Civil Aviation Bill that British Airwayswill be the pantomime horse of capitalism if it is anything at all."— [Official Report, 19 November 1979; Vol. 974, c. 125.]
§ Mr. Dunn
It may have been 16 years ago, but the hon. Gentleman is as wrong now as he was then. British Airways is the world's favourite airline, and carries more international passengers than any other carrier—some 6 million more than its nearest competitor in 1993. We know what the Labour party wants. As the hon. Member for Burnley said—with the characteristic honesty and frankness that has made him famous throughout Burnley—Labour wants a state-controlled rail monopoly, run for and by the trade unions. We want a rail service that is modern and dynamic, run for and responsive to the needs of the British travelling public.
Opposition Members have referred to opinion polls. We can all quote opinion polls in aid of our argument. The Guardian of today's date contains two interesting articles. 768 One is about the leaked letter from Mr. Welsby. The one underneath, which I would like to know more about, is headed "Short taxed again by Blair lecture". If that relates to the meeting between the shadow spokesman and the Leader of the Opposition, I really would like to know what commitment she had to give to him, but alas I am sure that we will never know what went on.
The first article refers to the leaked letter dated 2 April to Sir Patrick Brown from Mr. John Welsby. It outlined a number of concerns about the prospectus. The article says that a spokesman for the Department of Transport said:Sir Patrick has responded to Mr. Welsby and is satisfied that all his fears have been allayed.The article goes on to refer to an ICM poll that was taken between 12 and 13 April last. It asked 1,200 adults aged 18 and over whether they thought that when British Rail was fully privatised services would be better or worse or they did not know. The result was that 33 per cent. believed that services would be better, 20 per cent. did not know—they were neutral—and 47 per cent. believed that services would be worse. My arithmetic is as good as anyone else's and I conclude that 53 per cent. were either neutral or thought services would be better and a minority—albeit a substantial one—of 47 per cent. thought that services would be worse.
The next question was whether those interviewed thought that when British Rail was fully privatised services would be safer, less safe or did not know. The result was that 34 per cent. thought that services would be safer, 24 per cent. did not know and therefore must have been neutral and 43 per cent.—still a significant minority, but fewer than in response to the previous question—believed that services would he less safe. It is interesting that the opinion poll commissioned by The Guardian—a paper not sympathetic to my point of view—gave that result.
§ Mr. Dunn
I have some difficulty with the next question because, unfortunately for The Guardian, not all the figures add up to 100 per cent. For the first question the figures add up to 100 per cent., for the second they add up to 101 per cent. and for the third—whether services would be cheaper, dearer or they did not know—they add up to 99 per cent.
§ Mr. Dunn
I must be in control of my own track on this matter rather than respond continually to the hon. Member for Cunninghame, North (Mr. Wilson).
Opinion polls play a significant part in the thinking of the Labour party today. If Labour Members are motivated in their desires by an opinion poll of this sort, which they would say gave some credence to their ideas, what about the opinion polls in which 75 per cent. of those polled say that they believe that there should be a return to grammar schools? Why do they not take that into account? Labour Members are making highly selective use of opinion polls on this occasion. If they ignore opinion polls that call for the return of grammar schools and the restoration of capital punishment or come out against a federal state or a single currency—all the things that any hon. Member may care to adumbrate in a speech—why do they single 769 out this example? Why do we have the Labour party wholly run by opinion polls on this issue? It makes out that it responds to every issue on which the public express an opinion.
§ Mr. Dunn
No. I am about to make an entirely new point.
Not too much mention has been made today about the fat cats. I thought that we would get a certain amount of that. I wonder why. It is interesting. I think there is a problem here. Fat cats in the former privatised industries are one thing, but what about the fat cats in the private sector per se? The Labour party complains about those who receive large salaries for having huge responsibilities. It does not complain about the chairman of ICI or the chairmen of the boards of J. Sainsbury or Marks and Spencer, but they complain about people who have huge responsibilities elsewhere. It is a fair point and they can make it as often as they like, but what about the fat cats who support the Labour party?
What about Maureen Lipman, Melvyn Bragg and Ken Follett, who earn hundreds of thousands of pounds a year? We have to be careful in our attitude to fat cats. The Labour luvvies, whom Labour Members love to adore, are the fat cats who pay for the champagne parties that they all go to.
§ Mr. Dunn
I do not know about that. I am sure that my hon. Friend can make that point in a different way. It all comes down to the fact that the Labour party has not changed. It is still being run for the unions and by the unions; Labour Members' links to the unions are their Achilles' heel. Do not claim victory yet. There is a long way to go to the next general election. When people start to see the traditional links between the Labour party and the trade unions and the range of activities that will count against it, it may well be in deep trouble.
A little has been said today about the esteem of the workers. A newly privatised rail service would give those who work in the railway service a chance to be proud of the work that they do. Railway workers will not be the music hall joke of the past. They will not be the butt of the joke at the dinner party. They will be given a real chance to show that they can work with efficiency, pride and determination in a privatised system. I am sure that they will do that.
Labour opposes privatisation for the railways today, as it opposed every other privatisation. It believes in nationalisation, public control, levers of power and giving more powers to the regulator—about which the hon. Member for Birmingham, Ladywood (Ms Short) made a thin point. I am not sure what all these levers are going to do and what these notions will bring about. Nationalisation is Labour's only policy and it has proved a failure. Therefore, I urge all my hon. Friends to support the Government's amendment tonight.
§ 7.5 pm
§ Mrs. Gwyneth Dunwoody (Crewe and Nantwich)
I must begin with an apology to you, Madam Speaker, and to the House. As the Government refuse to debate 770 transport in their own time, Her Majesty's loyal Opposition frequently have to use the time allocated to them for debates on transport. Those of us who have a specific interest in transport were upstairs in the Select Committee on Transport when this debate began. I apologise to the Secretary of State for not having heard his speech. I hope that the Minister for Railways and Roads, as well as the Secretary of State, will not think that I am being unduly familiar if I say that I have heard them once or twice before on the subject. I can quote almost verbatim most of the well-worn excuses that they trot out on every occasion.
§ Mrs. Dunwoody
I am happy to continue the relationship until the Minister leaves us at whatever point, either because in his Department the only thing that is certain is that there will be a rapid changeover or because the electorate finally get the opportunity to express too plainly their views on the Government's policies on transport and on every other aspect of their political programme.
The reality is that tonight we have one simple and important case. It is nothing to do with the absurdities that we have heard this evening. It is a charge of bad faith. That is the simple, essential charge against the Government. They came to the House of Commons, not in one debate but in many weeks of debates in Committee, and said consistently that they would privatise the railways and bring enormous benefits to the customer and everyone working in the system, but that in order to do so they would not privatise Railtrack. Railtrack, we were told—the core of the system—would remain within state control. That was the constantly reiterated argument.
The Government admitted that they intended to fragment and flog off all the other bits, always to the advantage of the people buying the assets, and every known piece of land to a private company, but they said that that should not worry anyone because Railtrack would remain within the state system; it would not be immediately privatised. The Government soon discovered that from their point of view that was not an acceptable plan. The reason was terribly simple. The privatisation had been forced with indecent haste. It had so little to do with the subject matter that sometimes it gave a certain legitimacy to suggest that the Government were doing it because they cared about transport. The reason they were doing it was very simple: they wanted to fill their coffers before the next general election. There are still Conservative Members—not many—who have a sense of responsibility to their constituents and who know that what is proposed is totally unacceptable and unworkable. Tonight they will have their last chance to vote against it.
The reasons against privatisation have been adduced so often and in such clear terms that we do not have to say to people, "Look at what has happened since privatisation, look at the problems with the safety case, look at the difficulties with people who we were sure were going to produce new rolling stock and improve facilities, and look at what is already becoming clear," because those things are already plain to the travelling public. People who use Euston station have no doubts about the problems and difficulties that arise as a result of privatisation. They can tell us that every train is late—up to 94 minutes late. 771 It is far worse than that. In their period in office the Government have consistently followed one plan in relation to the railway system—to capitalise on the assets and to get rid of the amount of money paid from the Treasury for the maintenance of the transport system. That is why it is quite funny to listen to Conservative Members saying, "Look at the other side of the channel and at what is happening in France. They have got a good system—we do not have one like that." Of course we do not have a system like that in France—it has a socialist Government who put money into infrastructure.
In my constituency, British Rail Engineering Ltd. was sold—a firm that not only was capable of producing high-quality rolling stock but had a long experience of doing so. All the information structures—information services that provide high-quality management control to the British Rail network—were sold off to private departments. A series of small depots were hived off in a way that somehow showed that they were expected to take vast amounts of maintenance work from the old workshops. Of course, because the Government reneged on their promises about the amount of money that they would make available—both for the rolling stock and for the development of new systems—all the people who bought state assets have been faced with the reality that the Government did not mean what they said.
The firm that bought BREL in my constituency was assured that because it was a private firm it did not have to worry—there would be a big order book and there would be a lot of new rolling stock. They were told by the Transport Select Committee that there would be a hiatus for a minimum of three years if privatisation went ahead. However, that was ignored. The private buyers were told, "Don't worry—all the new rolling stock is needed, all the new contracts will be placed and all the new private buyers will find that they are making a large amount of money."
That did not happen at all. Not only was my constituency decimated in terms of jobs, but the constituency of my hon. Friend the Member for York (Mr. Bayley) was so badly damaged that thousands of people lost their jobs. Derby is in the same situation as Crewe. I am referring to rolling stock, which is just one side of it.
The Government have created a highly complex system of financing and they are not prepared to remind the electorate that at the end of all this—when the Government have sold off every platform, every station and every square yard, when they have managed to cheat all the existing employees out of their rights to have any say in the future of their industry—they will still come back to the House and demand more than £600 million extra subsidy for the private system. That is what is happening—that is total effrontery.
The Government are not concerned with creating a modern transport system and they never have been. Their simple aim was to cut down the amount paid by the Treasury in subsidies and to rearrange it in such a way that when it went to the private sector it was not nearly as obvious how much their colleagues in the City were going to walk away with. That is what they have done—and very successfully.
772 The Government have deprived my constituency of trained jobs, they have deprived the railway system of rolling stock and they have fragmented the basic core railway in such a way that there are real problems with safety, development and management. They have undermined the morale and the future of the people working in the industry and, in return, they have assured us that we do not have to worry about it and it will all be marvellous in the future. That is not only dishonest but unacceptable.
The hon. Member for Dartford (Mr. Dunn) said that we should look at what happens when people give their views to opinion polls and assess whether that is something that we should worry about. I remind him of an opinion poll that was much more effective: the one for the by-election last week. If that does not make him and his colleagues think seriously, there is absolutely no hope of their treating this subject with the importance that it deserves.
When we go into the Division Lobby tonight, Conservative Members ought to consider strongly the charge of bad faith. It is something that their constituents will hold against them. People are not stupid. They can work out that if the Government sell off Waterloo international station, plus all the land around it and all the benefits of the Euro-line and rolling stock, they are not handing away a debt but giving a positive benefit to a private developer. People do not have to be told that privatisation is a great success—they have only to look at the water service utilities and at the Japanese flag flying over the Greater London council building to know what the reality of privatisation is under this Government.
I am deeply angered by the Government's cynicism and their refusal to take the interests and the needs of their constituents into account. I find it difficult to behave as though Parliament can accept the totally superficial and embarrassing level on which some speeches have been made tonight. To me what is important is that the transport system is being wrecked for purely ideological, purely unacceptable and deeply ignorant reasons. I can only say to Conservative Members: on their heads be it. Frankly, the electorate have noticed what they are about and they do not like it.
§ Mr. David Tredinnick (Bosworth)
Towards the end of her speech, the hon. Member for Birmingham, Ladywood (Ms Short) accused the Government of creating something far worse than the old British Rail. As she said that, I had a vision of her standing at the Dispatch Box when we debated the gas privatisation legislation. I heard her saying, "Today the Government are creating something far worse than the gas board"—we can now look back and see that the price of gas has gone down 25 per cent. for domestic users. I then saw the hon. Lady speaking on the electricity legislation; domestic prices for electricity have fallen substantially—and they fell in the first three years post-privatisation.
§ Mr. Wilson
I am not sure whether the hon. Gentleman is interested in historical accuracy, but he will get some. Will he confirm that the price of gas is higher than it was when the Tories came to office in 1979 and started to force gas prices up pre-privatisation? I pre-empt his next 773 remarks and ask him to confirm that, since privatisation, the electricity industry has given less to the Exchequer in tax proceeds than it did prior to privatisation in profits.
§ Mr. Tredinnick
I shall not trade statistics with the hon. Gentleman, but the gas control centre for the southern part of England, which I visited recently, is in my constituency. There is general agreement that consumers have benefited from gas privatisation and that prices have come down.
Consider the privatisation of British Airways, a remarkable global company. My hon. Friend the Member for Dartford (Mr. Dunn) quoted what was said by the hon. Member for Glasgow, Garscadden (Mr. Dewar). What would the hon. Member for Ladywood have said then—that the Government were creating something far worse than the old British Airways? That is nonsense. All the privatisations that have been conducted under my right hon. Friends the Prime Minister and Baroness Thatcher since 1979 have benefited the consumer and cut the drag on the taxpayer. The old industries imposed enormous costs of about £55 million a week at one time, but they developed into profitable industries and many of them are taking on employees.
What about British Telecom? What would the hon. Member for Ladywood have had to say about "Post Office Telephones"—or was it "Post Office Telegraphs"? I forget. Where would Britain be today if our telecommunications network were still run by the Post Office? I remember selling computer and fax equipment in the 1970s when one could not get telephone lines. My hon. Friend the Member for Dartford referred to the problems with telephone boxes, but one could not even get lines installed.
§ Mr. Tredinnick
It took weeks. Businesses and private subscribers used to bribe Post Office engineers to stay in during their lunch breaks to put the lines in. The argument that privatisation has failed the consumer is simply not true. The hon. Member for Ladywood has got into a lot of trouble in the past few days over her proposal to put up taxes for the middle classes. She spoke with conviction, and the attempt of Labour party minders to muzzle her was not completely effective. She tried to commit the Labour party in its next election manifesto to a massive further increase in spending, because she talked about getting a high level of services by high investment. We know that she is against privatisation, because she has spoken against it this afternoon. Where will the high level of investment come from? It will come from the taxpayer. Taxes will have to rise if the sort of the investment that she outlined is to manifest itself.
This is one of the most important denationalisation debates in the four terms of this Government. Privatisation will vastly improve the quality of passenger services. I hope and believe that it will improve the distribution of freight, although there is a much work to be done on that. If we get freight right, the cost to businesses across the board will be reduced. I agree with the hon. Member for Eastleigh (Mr. Chidgey) that the Bill is important from an environmental perspective. Environmental issues are, generally speaking, of greater concern to the public than they were a few years ago, and that concern will increase.
774 What about the quality of service for passengers? When I went to buy a ticket from British Rail, I always felt—especially at main line stations—that I was doing the man behind the counter a favour. The attitude was that I was jolly lucky that he was selling me a ticket. I always resented that and it was quite wrong. Under British Rail, the railways have been run as much for the employees as for the passengers. I do not dispute what the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) said about the case for looking after employees. She and the hon. Member for York have argued that case eloquently over the years. Nevertheless, in considering the national railway system the passenger and related issues must be the overriding concern.
My right hon. Friend the Secretary of State outlined the improvements that have already been provided under the privatisation proposals that have been implemented so far. I will not run over all his points, but he mentioned that South West Trains had introduced new bus services and new waiting rooms. The hon. Members for Hampstead and Highgate (Ms Jackson) and for Burnley (Mr. Pike) complained about the lack of facilities and waiting rooms. The truth is that the newly privatised companies are proposing to put in new waiting rooms on those lines. That is how to attract ladies to travel at night and stop the fear to which the hon. Member for Burnley referred.
I will go further and say that privatised services will reintroduce conductors in certain carriages to ensure that people travelling at night feel secure. Other improvements have been mentioned, such as the new motorail services that Great Western has in mind and the South West Trains proposal to put services through to Salisbury and Epsom. Great Western has a significant proposal to put brand-new rolling stock on its express trains.
Labour Members have argued that there will not be any rolling stock improvements and we have heard a lot about banging doors. The facts are different; they are in the public domain and available in the Library. Already some of the services, including Great Western and the Gatwick express, are committed—by 1999 for the Gatwick express—to have completely new rolling stock.
Isambard Kingdom Brunel would have been proud of the newly privatised Great Western. He built that railway to a higher standard than those in the rest of the country with a 7 ft ¼ in gauge. It is a lasting sadness that Parliament decided that that gauge should go. If Great Western decides to run an improved service to the west country, it has the benefit of wider tunnels. The tunnel under the Bristol channel was built to the 7 ft¼ in gauge for two lines; Sonning cuttings is built for the same gauge. It is possible to run wider trains out of Paddington into Bristol Temple Meads. There are many possibilities of taking ahead Brunel's vision on the west country lines.
I mentioned the possibility of conductors being used on services. Consider the rail infrastructure in New York. On the line that runs from 666 Fifth avenue in the middle of the midtown commercial residential area, the E train that goes to the major airports has guards and special facilities to help passengers. That was done to build confidence in the system. The way forward is the flexibility of the newly privatised companies that will enable additional services to be provided—not a reduction in services.
Privatised railways tend to attract passengers. Two lines run from the centre of Tokyo, the capital of Japan, to the airport. The nationalised railways, which we know are 775 wonderful, include the Shinkansen high-speed rail system which runs around all four islands of Japan. It is one of the finest in the world, but there is also a private line that runs on a snake-like route through the suburbs. I travelled on that line a few years ago. It is a miracle of inventiveness because it is a terrible piece of track, but it is managed in such a way that it is run as a non-stop service despite going through level crossings right through the Tokyo suburbs. It has proved to be a better service and is more popular because it is more carefully managed. It provides what the people want.
One surprising, although significant, aspect of rail privatisation is that the companies that are taking over parts of the network have decided not to create new names, logos or brands, but are using names that go back at least 50 years. Great Western and Great Northern are a return to the groupings that existed before the London and North Eastern railway. Another is Great Eastern. They are names from 50, 60 or 70 years ago.
Why do people still look back to that era as a model to emulate? The straight answer is that those railway companies were run by people with immense pride—by the families who were associated with them. Lord Portman was the last chairman of the Great Western railway and he rode on the footplate at least once a week on his main line—[Interruption.] I will give way to the hon. Lady if she disputes that.
§ Mrs. Dunwoody
I think that the hon. Gentleman has just encapsulated the seriousness with which the Conservative party treats the debate on transport in 1996.
§ Mr. Tredinnick
I am glad that I gave way to the hon. Lady. I was pointing out that the most important person in the company used to ride on the footplate with the engine driver and the fireman to find out how the service was running. I do not believe that that is happening in the nationalised railway of today.
§ Mr. John Heppell (Nottingham, East)
Can the hon. Gentleman tell us how many times Bob Horton has been working on the footplate in the past year?
§ Mr. Tredinnick
The hon. Gentleman is trying to make a point, and I do not blame him for that, but I said riding on the footplate, not working.
Why were those railway companies held in such high regard? Why did they have that esprit de corps? I am provoking Opposition Members. I will give way to the Labour Front-Bench spokesman.
§ Mr. Wilson
The merest twitch of a muscle and the hon. Gentleman offers to give way. It is very encouraging. We are on a serious point. Let us get a little consensus. Will the hon. Gentleman join me in condemning any of the franchisees that reduce the two-man operation of trains to single-man operation by removing the guard?
§ Mr. Tredinnick
The hon. Gentleman is very ingenious in somehow linking the good name of the Great 776 Western and Great Northern railways with the two-man system of driving and guarding trains. I do not want to be drawn into a debate.
§ Mr. Tredinnick
We are, and the facts are that some trains can now be run without two men—that happens on the underground in London because of the improved signalling system.
There will be a different level of service on the new railways because of the new blood that is coming in. I shall give two examples of that new blood. A French company is buying in—I should say investing—as is an American company with much experience. That transfusion of new ideas is in no way detrimental to the interests of passengers or of anyone else in this country, and I foresee extra employees on trains.
On the Japanese Shinkansen system, a trolley of food and drinks is constantly taken up and down the carriages and there are telephone services. I understand that Virgin is going to introduce telephone and even television services in the first class section. That is the way to get passengers back. Those needs have to be serviced with such facilities.
My hon. Friend the Member for Chorley (Mr. Dover) and I had the honour of serving on the Select Committee on the Channel Tunnel Rail Link Bill. As you will be aware, Mr. Deputy Speaker, consideration of that Bill took longer than the Great Western Railway Bill in the 19th century. I think that the Committee sat for 300 hours. In fact, we sat for a year—long enough to walk from here to Madrid at a leisurely pace across the Pyrenees with a short stop in Paris. It was an instructive experience considering the difference between the French and British rail networks and the problems of the network in Britain.
Looking to the future, if we imagine Britain's rail network coming into London as the branches of a tree, the channel tunnel rail link, when it is built—and it will be—represents the trunk. As people and freight travel down that high-speed rail link, it will become increasingly important for Britain's links with Europe and its prosperity. That new and vital railway is to be built, not by the state but with private money and to a very high standard. That is another reason why the railways should be privatised. It is incompatible to run the east coast, west coast, midland, Great Western and southern main lines—the five main groupings—as state industries when there is a tendency in Europe towards private systems, which are more effective.
The principal hub in London will be at St. Pancras and there will be another at Waterloo. With the privatisation of our railway companies and the new CTRL line, we will have a dramatically improved service for everyone. Bringing the west coast main line into St. Pancras—the Channel Tunnel Rail Link Bill Select Committee did not recommend that, but the company that is to build the line has volunteered to do it—is significant and important for all hon. Members whose constituencies lie on or near that line.
I must refer to two more issues, freight and the environment. First, one of the great catastrophes of the post-war British rail network has been the decline—one might say the demise—of freight. It is appalling that so little freight is carried on British Rail. In fairness to 777 British Rail, it has been difficult. The improvement in the road network has been a disincentive, but British Rail's pricing policy and the quality of the service has been poor. If we are to be competitive in Europe and to get our goods over there, we need the enhanced system that the channel tunnel rail link will bring. I certainly welcome the proposed new freight terminals—the one near the M1 and A5 near my constituency will be significant. Through privatisation, I hope that we will not only enhance passenger services but make it easier, cheaper and of greater interest to businesses to put freight back on to rail.
Secondly, on the environment, people are increasingly concerned with environmental matters. The road programme is being cut and there is huge concern about fumes and congestion, as well as worries about protecting our countryside. I do not think that we will see improvements in the scale of the network, which is expanding again, or in the quality of rolling stock and equipment in a nationalised industry. For example, one notices quite a lot of pollution when travelling on diesel trains and I think that the denationalised private companies will start to filter the air on trains—[Interruption.] It is perfectly possible and the public will demand it.
My hon. Friends have referred to improved facilities for the disabled—I think that my hon. Friend the Member for Dartford did so. People demand and expect better facilities for disabled people, and that is absolutely right.
The midland main line goes through Leicestershire and I hope hon. Members will forgive me if I briefly refer to the importance of that line. National Express is the preferred bidder and I understand that the bid is with the Office of Fair Trading. To understand the possibilities for the midland main line when it is privatised, my constituents must consider what has happened with Great Western, South Western and the other lines that have already been privatised.
A betting person would have to say that, given the new facilities that have been introduced, many benefits will flow to the midland main line, which goes from London St. Pancras to Leicester and on to Sheffield. I expect a much enhanced service. Having served on the Select Committee on the Channel Tunnel Rail Link Bill and having always taken a great interest in railways, I look forward to pressing National Express, if it wins the franchise, to provide the kind of service that my constituents expect. If it wins the franchise, that company will have a wonderful opportunity in that the service will finish at the new and soon to be much improved St. Pancras terminus.
Privatisation is the only way forward for Britain's rail system. It will greatly benefit passengers and will enormously enhance their lives and the quality of travel. Privatisation is also vital if we are to get freight back on to the network. It is a disgrace that so little freight is carried by rail. We need to attract it back to the railways to take the pressure off the motorway or road system. The public now have a greater awareness of and interest in environmental matters, and privatisation of the railways will improve the environment, something to which we all aspire.
§ Mr. Hugh Bayley (York)
The hon. Member for Bosworth (Mr. Tredinnick) concentrated more on the railways and associated matters than many Conservatives 778 who have contributed to today's debate. He spoke of freight, but the pathfinder prospectus for the sale of Railtrack states that the carriage of freight on the railways has declined for several reasons. One is the collapse of heavy industry in this country—it is mainly heavy materials that are more suitable for carriage by rail rather than by road—and another is the Government's decision to increase to 44 tonnes the size of lorry allowed on our roads.
To say that privatisation will magically shift freight from road to rail, which needs to happen for environmental reasons, and to say that without any evidence of the policy changes to make it happen, is simply to express a pious hope. We need those policy changes, but it will be harder to introduce them when the freight companies are not run by the Government.
The hon. Gentleman said that the quality of service on a publicly owned system is poor and inevitably poorer than on a privately run system, but that is not so. His examples of what a private company could do are already being done by a public sector British Rail. There are telephones on trains—I use them every week going up and down to York. I say "telephones" because there are more than one. A trolley service goes up and down the train offering tea and coffee, and there are complimentary seat reservations.
The man who used to run the east coast main line service travelled on it every day. Unfortunately, he has not won the franchise to run the service. When he ran it as a British Rail service, it made a profit of £76 million a year, which went to the Treasury or to British Rail's coffers and was recycled to provide other services that needed a public subsidy. The person who has won the franchise to run the east coast main line will be paid a similar sum to run the service but he will be subsidised by the Government instead of contributing the profits to the rail network.
It is not true that all public rail services are bad and all private rail services are good. Rail services in which decent investment is made are good and those in which it is not are bad.
The Independent yesterday carried an article stating that Railtrack's executive directors will pick up bonuses this year that could double their salaries. That will cost almost £1 million a year. According to The Independent, the bonuses will be paid in Railtrack shares.
From the hon. Member for Dartford (Mr. Dunn), who has now left the Chamber, we heard the new politics of envy—the Conservative party saying that it is deeply upset that a number of successful business people are contributing to the Labour party. The hon. Gentleman felt that that was a disgrace.
The public in general are angry about the telephone number salaries of directors of recently privatised companies. They are surprised because those directors are doing broadly the same jobs as they did when they ran public sector water companies or various public sector utilities. In the main, their jobs are substantially different from those of directors in sections of the economy that have always been in the private sector.
If a company is manufacturing a product in competition with another company manufacturing the same product, it is perfectly reasonable for someone to be rewarded if he takes market share from the competitor, but the vast majority of the newly privatised utilities are private monopolies. 779 A senior manager of a big food company in my constituency recently told me that he was seething with anger at the way in which the bosses of the privatised industries had inflated their salaries two, three or fourfold. He was angry because he said that they are not engaged in competition. They work in monopolies and can simply abuse that monopoly to pay themselves more.
The public will therefore perhaps not be surprised by the news in The Independent that Railtrack's executive directors are getting on the gravy train with which we have become so familiar. However, I am surprised because of the answer to a question that I asked on 23 October last year. I asked the Secretary of State:how many shares and share options will be issued free or at a reduced price to Railtrack directors when the company's shares are put on the market; what he estimates the total value of directors' free shares and discounts will be; and how many directors will be eligible".
I received a simple, straightforward answer from the Minister for Railways and Roads:There will be no share options for Railtrack directors."—[Official Report, 23 October 1995; Vol. 264, c. 581.]However, we now find that the directors are to double their salaries and that that doubling will be paid in shares.
The pathfinder prospectus, which was issued on Monday, is meant to promote the sale that we are debating, but it reads more like a dodgy estate agent's list of property particulars. We all understand the technique. Such particulars say, "This property has panoramic views", which means that the sunlight is blocked by the gasworks; or they say, "This property has excellent letting potential", which means that it is not suitable for owner-occupation. That very technique is used in the pathfinder document.
The important thing about the 250-page document is not what it says but what it skates over, weaves around, or leaves out. For example, page 15 states:It is Railtrack's policy to develop its property portfolio with a view to maximising the benefits to Railtrack's customers and shareholders.One might have thought that that was a good thing and that perhaps customers might benefit, but the customers are not the passengers. According to the small print, the customers are the 25 train operating companies. In other words, the privatised train operating companies and Railtrack shareholders will get the benefits of the sale of Railtrack's property assets; the travelling public will not.
Railtrack's relationships with the train operating companies were graphically illustrated last autumn by the pathetic pantomime of the publication of BR's winter timetable, which was found to be so riddled with errors that Railtrack was forced to print a 400-page revision. It contained so many errors that Railtrack then published a further 91-page correction. Hon. Members may think that I refer to that incident to make a gratuitous sideswipe at the way in which Railtrack has been run, but I do not raise it simply for that reason. The implication is obvious: Railtrack failed to do the job that British Rail, as a public sector company, managed to execute perfectly twice a year for a long time.
§ Mr. Hawkins
Surely the hon. Gentleman will concede that British Rail, as a nationalised organisation, was 780 forced to publish substantial corrections to its timetables on several occasions. It certainly did not always have a perfect timetable. If he wishes, I can give him chapter and verse of the many occasions on which British Rail was forced to publish supplementary corrections.
§ Mr. Bayley
I have seen supplementary corrections to the BR timetable: they are usually quite small and printed on newsprint-type paper. British Rail never published a 400-page correction so riddled with errors that it was followed by a further 91-page correction.
That was a classic failure by Railtrack and it is important to the debate because the timetable is the core document in Railtrack's business. The timetable is enormously important to passengers, who are having difficulty working out when trains will run because of that fiasco.
Page 10 of the prospectus states that Railtrack's principal customers are the train operating companies. It says also that 94 per cent. of Railtrack's income is derived from track access charges, which are based on train movements. The overwhelming majority of train movements—about 99 per cent.—are set out in the timetable. If Railtrack cannot specify train movements correctly in its timetable, it cannot bill the train operating companies correctly.
As the timetable is central to Railtrack's business, the regulator takes an interest in how it is prepared. The regulator has produced track access conditions requiring Railtrack to publish six times a year a timetable—upon which the public timetable is based—for those working in the industry. Linked with the six editions of the working timetable are three consultation and bidding rounds for the train operating companies. As required by the regulator, they receive a draft timetable and they may then bid for changes to it.
As Railtrack is completely unable to run the system properly, the Rail Regulator has been forced to reduce Railtrack's obligation temporarily from six working timetables per year with three bidding rounds to two timetables per year with two bidding rounds. He describes that as an interim measure. However, if one refers to page 31 of the prospectus, one can see that Railtrack believes that it will never manage to meet the Rail Regulator's timetabling conditions. Therefore, it intends to ask for the interim measure to become permanent.
Why is that necessary? As Labour Members warned when the Railways Bill passed through the House, Railtrack has found that a fragmented railway—with many different, competing companies reaching agreements and billing each other for services—is much more difficult to organise and to operate than the vertically integrated, single national railway that existed under the BR system. Therefore, at the heart of Railtrack's business is the computer system into which the train operating companies enter bids for train paths and by which Railtrack bills companies for the paths that they use.
That computer system is ready to crash: it cannot meet the Rail Regulator's requirements for 18 bidding rounds a year and six working timetables. Railtrack intends to ask the Rail Regulator to reduce the 18 bidding rounds to four, as that is all that it can cope with. It also wants to reduce the number of working timetables from six to two. 781 The old system BR operated was relatively simple: the Protim software system managed train paths in each of the eight BR regions. Information was fed into that system and the timetable was produced. As the operation of the rail system is much more complicated nowadays—companies do not simply register a single journey, but are billed for a journey stage by stage—and as rebates must be paid when the service provided by Railtrack does not meet the specifications agreed with the train operating companies, Railtrack has contracted a computer software company, SEMA, to design a new software system to run its computerised heart.
The system is called A-Plan. Railtrack has spent about £10 million on it, but it does not work. As a result, Railtrack has been forced to go to the regulator and say, "The bidding process that you have specified cannot be met. We must change to a much simpler system not temporarily, but permanently". Page 32 of the prospectus states:In producing each working timetable, information is transferred between Railtrack and the train operators, usually on paper.It is transferred in that way because Railtrack's computer system cannot perform the task electronically. The prospectus continues:New computer systems which will allow more data to be transferred on electronic media within Railtrack and between Railtrack and the train operators are currently being developed and tested".They are the computer systems that Railtrack was required to have in place and up and running before the sale, but it has failed to meet that requirement. Those are the sorts of dodgy, estate agent-type particulars in the prospectus. I am sure that lawyers have pored over it in detail and that the prospectus contains no information that is untrue. However, I am sure also that many points have been omitted and that many others are intended to mislead.
The Government do not seek to warn prospective investors of the dangers that they face if they invest in a project that has run behind schedule ever since the passage of the Railways Bill and has been devised as it went along. Despite running Railtrack as a public sector company for two years, the teething problems have not been resolved. Railtrack is being sold not as a going concern but as a body that cannot meet the Rail Regulator's requirements.
The computer system is not the only thing that is not ready for the sale. On Monday this week the Transport Salaried Staffs Association released the results of a survey of Railtrack managers. Some 82 per cent. of middle managers working for Railtrack oppose the privatisation of Railtrack and 51 per cent. of senior managers oppose its sale. Almost three quarters of Railtrack managers—73 per cent.—say that the Government should delay the sale. Many of the managers who responded to the survey wrote to explain their views. One of them wrote:Asset condition surveys and record updates won't be completed by April.
The prospectus admits that, albeit in a very roundabout way. On page 35, it states in relation to the asset condition of the track:Although Railtrack has limited data on ballast renewal requirements, the Directors believe that, based on the knowledge and experience available to Railtrack, they have been able to make a reasonable assessment of the likely rates of renewal of rail sleepers and ballast over the ten years from 1 April 1994.782 The prospectus includes some figures, but admits that they are based on guesswork, not an engineering survey of the condition of the track.
In relation to route structures such as bridges, culverts, cuttings and tunnels, the prospectus states:Railtrack has undertaken a review of … the information it has on the condition of its assets. The Directors are satisfied that, notwithstanding the variable quality of the data currently available … they have been able to make a reasonable assessment of the likely requirements for the maintenance and renewal of route structures.Again, that is based on guesswork.
People are buying into a business where the long-term costs are unknown and unquantified. That applies not only to route structures but to the backlog of maintenance of buildings, stations and signalling. All those issues were meant to have been spelt out before Railtrack reached the point of privatisation. That has not happened. Even to those who are in favour of privatisation it is clear that Railtrack is being privatised before it is ready.
In their response to the survey, the managers said that there were serious safety implications. One wrote:Safety systems are not ready.
Another said:No safety systems are in place. There is total chaos in my area—possession planning.That is the business whereby Railtrack takes over the train path from the train operating company in order to carry out maintenance. He continued:It is an accident waiting to happen.We should bear in mind that that was not a small survey; it covered 559 Railtrack managers.
The Government should heed the advice of managers in the industry that they are trying to privatise. If they do not do so, at least some Conservative Back Benchers—some of the 20 per cent. who say privately that they now have doubts about rail privatisation—should vote to delay the sale. In the words of a senior Railtrack manager, the saleis an accident waiting to happen.
I represent an important railway town that has been grotesquely affected by rail privatisation. York has lost some 3,000 out of the 4,700 railway jobs that existed when the Railways Bill was presented to Parliament. Many hon. Members have heard me talk about the loss of rolling stock manufacturing jobs, but jobs have been lost throughout the railway industry. There have been substantial job losses affecting those who maintain the track and infrastructure, the managers of rail services and skilled design engineers.
Despite that, and despite the serious consequences of rail privatisation on the economy of my constituents and the livelihoods of thousands of men and women and their families, I do not have a blinkered ideological view of the railways. I do not believe that public is right and private is wrong. I support partnerships between the public and private sectors.
The Labour party is not squatting on the ground of a private finance initiative. My right hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) proposed such a partnership and said that the Ryrie rules on public sector capital investment were an anachronism. When Ministers said that those rules were sacrosanct and 783 could not be changed, the Labour party argued for change. Eventually, the Government saw the sense of that argument and introduced the private finance initiative.
The way in which the Government are going about rail privatisation will not bring extra investment into the railways; it will simply substitute private sector money for public sector money. The Government hope to raise £1.8 billion from the sale. Presumably, they assume that owners of private capital will want to invest £1.8 billion in railways in Britain. Why do we not encourage them to invest in our railways—in new rolling stock, new signalling systems, new lines, repairing the backlog of maintenance, putting right the repairs that are needed and improving the system and the quality of service to the public?
The £1.8 billion will not be spent on improving the railway system. It will simply buy the railway system that we have at the moment and any investment to improve it will have to be additional to that.
One might ask where that £1.8 billion will go if the rail flotation goes ahead and the money comes in. It will go to the Treasury and it will not be invested in the railways. It will be frittered away on one-off bribes to the electorate at the next general election in a desperate—and, I believe, forlorn—attempt by the Conservative party to garner enough votes to stagger on for another term in order to push through even more desperate privatisations of the Post Office and the few public sector investments and endeavours that remain after four Conservative terms in office.
If the Government really believe what they say and want investment in the railway and an improvement in rail services, they should invite the private sector into partnerships to invest in new schemes and improvements, instead of inviting it simply to take over the existing railway without a penny of the proceeds being spent on improvements and frittering away the resources that will be raised.
Instead of being spent on new infrastructure, the huge private sector investment that the Government are encouraging will be spent on maintaining the status quo. If one tenth of that £1.8 billion had been invested in new rolling stock, it could have paid for the new carriages that Kent commuters require and their representatives in the House have promised, and it would have provided them three years earlier. It would have provided two years' work at the York carriageworks, producing 250 new carriages. Why did the Government not go for private investment to provide a better railway? I have given an example of what could have been achieved with just one tenth of the money. If it had all been put into rolling stock it could have bought 2,500 new carriages or created the west coast main line.
Money can be spent only once. Once it has been invested in the existing railway system it will no longer be available to invest in a new system. Railtrack managers are saying that they are not ready for privatisation. Some of them are saying that safety is being compromised by an early sale. If Conservative Members are concerned about the quality of the railway for the travelling public, they should think before they vote tonight and vote to delay the sell-off.
§ 8.9 pm
§ Mr. Peter Luff (Worcester)
I begin by declaring a lack of interest and an interest. As to the former, the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) complained that the Government all too rarely allocate time to debate transport issues in general and railway issues in particular. The hon. Lady should cast her mind back to the various Supply days on the subject of rail privatisation during the course of this Parliament. Consistently in those debates, more Conservative than Labour Members have attended, and Conservative Members have expressed more passion about and interest in the railways. At one stage today, not one Labour Back-Bencher was in the Chamber except the individual who was speaking. That is the answer to the hon. Member for Crewe and Nantwich. The Opposition's lack of real interest in the railways should be registered.
I cast an anxious eye over the hon. Member for Cunninghame, North (Mr. Wilson), who makes a special point of picking up on hon. Members' interests. I declare my own. I have interests in organisations outside the House, but as far as I am aware, none of them has any link with railways. I advise one transport interest, the Chamber of Shipping, and I am extremely proud of that link. I also have shares in the Severn Valley Railway, which give me two third-class tickets each year.
I have shares in Eurotunnel, which I should probably have sold—but some false romantic attachment to the concept of the tunnel meant that I kept them. I used them for the first time for my free tickets to use the shuttle at the Easter weekend. Next time, I speak in the House, I will have shares in Railtrack to declare.
The hon. Member for Hampstead and Highgate (Ms Jackson) tried to get off the hook in respect of the accusation that she had failed to declare her interests when speaking in the debate. It is worth recalling that nine members of Labour's shadow Cabinet are sponsored by transport trade unions.
The hon. Member for Hampstead and Highgate told the House, in an ingenious piece of sophistry, that such support is no longer sponsorship because moneys are paid to constituency Labour parties rather than to Labour Members as individuals. I do not see the distinction. As I read the rules of the House, if a constituency association or party receives more than £500 from any outside body because of an individual hon. Member's candidature, he or she is obliged to declare it. That declaration must be made in exactly the same way as any other interest.
§ Mr. Peter Bottomley (Eltham)
Is it true also that the Hastings agreement, from which many Opposition Members benefit, pays up to 80 per cent. of election expenses—which can be a sum of up to £3,000 or £4,000? As there are only two legal entities in an election, the agent and the candidate, does that not mean that they receive vast sums of money that are not specified in their declarations?
§ Mr. Luff
Sensing the mood of the Chair, I will not respond to that comment—except to say that I agree.
I welcome the debate as a good opportunity to get across the truth about the benefits of rail privatisation in general, and of the privatisation of Railtrack in particular. I shall quote several sources to prove the growing tide of realisation that the change will bring real benefits to the 785 travelling public. There is an increasing belief in the value of rail privatisation and that the Government will achieve their objective of getting the bulk of the railways into private ownership or management before the next general election, and increasing disbelief in Labour's ability to deliver or develop any credible rail policy. The hon. Member for Cunninghame, North must answer that charge when he winds up.
I read the motion in the name of the Leader of the Opposition in amazement. It states that the flotation of Railtrack willlead to short term profits being put before long term investment.Do not the Opposition understand that the history of the railway system is that investment in it has been put second, often for reasonable reasons, to all the other many calls on the public purse, and that privatisation will exactly reverse that situation, allowing Railtrack, train operating companies and rolling stock companies to make the investment they deem commercially necessary—and to plan long-term for the first time since nationalisation?
I read with joy the confident words in the Government's amendment, which refers toa golden opportunity for the railways to gain access to the private finance necessary for investment.That is the truth about privatisation, and we must confidently trumpet that truth.
The hon. Member for York (Mr. Bayley) spoke at great length, and about as slowly as some west coast main line trains have to go because of the engineering work needed on that line. The hon. Gentleman seems to think that privatisation will achieve only some kind of delayed status quo. He could not be more badly wrong.
As to the so-called fragmentation of the railways in preparation for privatisation, I see no such fragmentation. The network has been reduced to units that are more responsible to customers, which is a good thing. Lord Hanson is busy splitting up his conglomerate, to make it more responsive. He recognises that it is not necessarily a good thing to have a large company trying to do too many things in too many different spheres.
I have the highest regard for the members of the individual management teams that serve my constituency—particularly Roger Macdonald of Thames and Brian Scott of Great Western. Thames has not been privatised yet, but the bids are in, and I believe that the franchise is due to be awarded in November. The increased responsiveness of Thames to the travelling public in preparation for that change is a joy to behold. Some status quo.
I quote from the Evesham Journal of 4 April:It's all change on Sunday's trains.Sunday morning trains are to be restored to the Cotswold Line from Easter Sunday, April 7.Three extra trains each way between Worcester, Oxford and London will be introduced in a two-month earlier start to the summer Sunday timetable.And more services are planned for the main summer timetable which will be launched in June.
Under the old nationalised, monolithic British Rail that Labour is so keen to protect, we were told for years that it was impossible to run Sunday morning trains, for all kinds of reasons to do with the expense of employing signalling staff on Sunday on what is, sadly, a rather under-invested line in terms of signalling infrastructure. 786 Now Thames is providing that service, to the great benefit of the travelling public and of tourism in the Vale of Evesham and Worcester.
§ Mr. Andrew Mackinlay (Thurrock)
I have been listening carefully to some of the hon. Gentleman's claptrap, and it occurs to me to ask him how he can utter such remarks now when he put his name to a Transport Select Committee report produced under the late Robert Adley that came out profoundly and unequivocally against the crackpot method of privatisation chosen by the Government. What has changed since the hon. Gentleman, as a new Member of Parliament, put his signature to that thoroughly researched report? Is it promotion?
§ Mr. Luff
I was foolish to give way to an hon. Member who has not been present for the debate but who made an opportunist intervention to prove to his constituents that he was representing their interests.
The hon. Gentleman is completely wrong. I put my name not to the report by the late Robert Adley but to a different report produced under the chairmanship of my right hon. Friend the Member for Southend, West (Mr. Channon). If the hon. Member for Thurrock (Mr. Mackinlay) will read the succession of speeches that I have made in the Chamber on the issue, he will see that my support for rail privatisation has been unshaken.
§ Mr. Luff
I will not give way to the hon. Gentleman, because he made a cheap slur against me the last time we debated rail privatisation. I do not feel inclined to give way to him again.
There are other changes for good on the railway that serves my county and constituency. They include improved timetables and better marketing, because there is for the first time an incentive to increase the number of passengers. There was no such incentive in the cosy old world of nationalised British Rail. The passenger service requirement for Thames currently out for consultation looks extremely encouraging.
As for Great Western, I share the joy that the spirit of Isambard Kingdom Brunel is being resurrected in my part of the country. The staff of Great Western share that pleasure. My right hon. Friend the Secretary of State for Transport, responding to the shadow Cabinet spokesperson, mentioned the share offer being made by Great Western to its staff. I am delighted to tell my right hon. Friend that 60 per cent. of Great Western's staff have put up their own money to buy shares in their train company.
The offer is one third over-subscribed. That means that 51 per cent. of that company is now in the ownership of the management or the employees. Those are the real stakeholders of the modern railway that we are building in this country.
§ Mr. Luff
No. I have made it clear to the hon. Gentleman that, after last time, the answer is no.
What else has Great Western done? It has achieved—it is an important achievement in itself—a smooth transition to the private sector. None of the passengers 787 would be aware that the transfer had even happened were it not for the smiling presence of my right hon. Friend the Secretary of State on the footplate of one of the first 125s into Paddington station at the time of the privatisation. The totally seamless transition proved how easy the process is for people who know what they are doing, as the Great Western management team clearly does.
New products have been designed to make the railway more attractive, including business standard and business first. As a family man, I am especially keen on the new family carriage that is being introduced on Saturdays on Great Western trains. Parents with young children will be encouraged to travel, and it is hoped that the children will play with the other children. Activity packs will be provided from the buffet car, there will be a special children's food menu, and the company is considering the possibility of providing an entertainer on the trains.
§ Mr. Luff
I would not mind volunteering for the job, because I would quite enjoy it. I have always wanted to volunteer to be Santa Claus on the Severn Valley railway, and I will do that one of these years, when I have the time.
I have given some examples of the way in which services are being improved. That is not the status quo of which the hon. Member for York spoke, but a better railway that is being built and promoted. A new Cotswold business manager is being appointed to promote the railway.
Great Western is refurbishing the railway stock. It is undertaking extensive refurbishment, not just putting a coat of paint on the outside of trains, as Opposition Members have sometimes tried to suggest. It is carrying out a substantial upgrade of the 125 stock, and it is considering the possibility of further investments in the fleet, improving service frequencies and increasing the number of trains. I suspect that the only constraint on the managers of Great Western trains will be the availability of 125 units, and they may have to consider more imaginative solutions to meet the demands that will be put upon them as they build a better railway.
I appreciate that the Opposition will want to dismiss what I am saying, because I am a Tory, and I would say it. But it is not just Conservative Members making such comments. Third party endorsement—by which I do not mean the Liberal Democrats—from individuals not directly connected with the railways or the House is growing. For example, Jonathan Prynn in The Times on February 7 this year, wrote:Impressive local managers, who for decades have laboured under the stifling corporatism of a state monopoly, are suddenly finding themselves liberated … Proper financial accountability is being established for the first time since nationalisation. Performance contracts set up to provide incentives for the train operators, Railtrack and the maintenance firms should deliver improvements in service.
He continues:Once the flotation
of Railtrackis a fact, Labour's game is up. Railtrack is the keystone of privatisation, and once in the hands of millions of private investors, the sell-off will become a legal and financial nightmare to 788 dismantle … If it succeeds, privatisation will deliver higher levels of investment, private/public sector partnership, "stakeholder" employee share ownership and improved public services after 50 years of underperformance—all Labour aims. The case for yet another round of upheaval in an industry that has suffered permanent revolution for the past decade"—
probably for the past century—would be unsustainable.
I have not always agreed with Andrew Neil, but he wrote an article for the Sunday Times on 11 February. He starts the article with an interesting quotation. He says:'Call us about rail privatisation,' pleaded BBC television's new Breakfast Extra programme on the day privately owned trains ran on Britain's railway network for the first time in nearly 50 years. 'We want to hear your fears about the future.'That has been the attitude of the media to privatisation.
I vividly remember receiving telephone calls from radio companies, television companies and newspapers asking for my views on rail privatisation. When I said that I was in favour of it, the phone was virtually put down at the other end. The callers did not want to hear the good news. A BBC programme—I think it was "You and Yours", but I do not want to malign the producers of that programme, and it may have been another one—before any rail service had been privatised, invited listeners to telephone with their complaints about the privatised railway.
I rang and lodged a complaint with the BBC about that gross misrepresentation of the truth about the railways. People were being invited to complain about the nationalised railway, not the privatised railway.
Andrew Neil continues:Fears? What fears? That the trains might now run on time? That somebody might have cleaned them before passengers boarded? That there is more to eat on board than a stale sandwich? That the buffet might actually be open? That surly staff might be replaced by people who welcome our custom? That clapped-out rolling stock might be replaced by spanking new carriages? That the railways henceforth might not be run entirely for the benefit and convenience of Jimmy Knapp's members or the jobsworths on the board of British Rail?
He concludes his article by saying:Investment in public transport. New technology. Passenger protection. Penalties for the poor performance of private enterprise. Social subsidies. Even stakeholding. It reads like a new Labour tract. It is part of the absurdity of our party politics—borne of the public's phobia about privatisation—that the government is likely to get no credit for it, while Labour will continue to win cheap cheers by throwing bricks on the lines in an attempt to derail it.I intend to ensure that Government get some credit for the undoubted success that rail privatisation will be.
How will the reorganisation work in practice? Contrary to suggestions by the hon. Member for York, it is working well. In my region, in addition to the two excellent managers of train operating companies, we have an excellent regional manager of the Great Western sector of Railtrack in Martin Reynolds. The new train operators and Railtrack are working well together, and they have no complaints about each other. That is as it should be. Railtrack is clearly achieving its objectives with the train operating companies, and ensuring that trains run safely and on time.
The great advantage of the new system is that Railtrack will focus on its customers, and train operators will focus on theirs. Privatisation of both halves of that equation can only sharpen that focus. Both halves of the equation have, for the first time since 1948, an incentive to increase 789 custom. That is what I passionately want, and a nationalised railway will never have an incentive to increase custom.
It was delightful to hear the hon. Member for Eastleigh (Mr. Chidgey) talk about setting targets for increased custom on the newly renationalised railway. Does he really expect us to believe that setting targets generates custom? It does not. Serving the customer well generates custom, and that is done effectively only by a private company. There are now two pressures to increase the use of railways and to replace the cosy, genteel and totally unacceptable decline of the old system.
Sadly, all too often in such debates, the focus is on passengers and we do not discuss the important role of freight traffic on railways. I am proud of the fact that, when I served on the Railways Act 1993 Committee, I secured the first amendment to that piece of legislation when I imposed on the Secretary of State and on the regulator a duty to promote the use of the rail network for goods. The word "goods" was missing from the Government's original clause. Rightly, the Government accepted that amendment, and now the Rail Regulator has a duty to promote the carriage of goods. I am delighted about that.
§ Mr. Luff
That question rather misses the point. Wisconsin Rail, which now owns the freight services of British Rail, is determined to increase the carriage of goods. I am delighted that 90 per cent. of the inward demands for metal of Carnaud Metal Box, a company in my constituency, come by train. That is some 40 to 50-lorryload equivalents each week that do not travel along Worcester's narrow roads. That company tells me that Railtrack continues to give an excellent service, and it is delighted with that facility.
Other companies in the Vale of Evesham are now considering the possibility of putting more freight on to rail. The Vale of Evesham has a crucial role as an importer and exporter of horticultural produce. Two different proposals, one at Honeybourne and one at Blackminster, are currently under active consideration, and the proponents of both schemes tell me that they have excellent relationships with Railtrack and no complaints about the service they receive from it.
Opposition Members have derided the investment record and intentions of Railtrack. That record compares immensely favourably in the immediate past and in the future with anything that the British Railways Board could ever have managed. The list in the interim report for the six months ended 30 September 1995 of major improvements to the network is startling; it includes electrification of Heathrow Express trains; Ashford international station; Birmingham's new £28-million Jewellery line, which provides a significantly enhanced rail service for my constituents from Worcester; the Robin Hood line; and the Leeds north-west electrification.
The list continues. It sets out improvements that have been achieved. Crucially, Railtrack states: 790Following flotation we will, for the first time, be able to implement long-range investment programmes, free from the short-term limitations of public sector finance. We look forward, with great enthusiasm, to showing what Railtrack can accomplish in the private sector".
§ Mr. Hawkins
Does my hon. Friend agree that the sort of investment to which he has referred should reverse especially the historic decline of freight traffic on the railways and correct the problems that he and I and other Members who were members of the Select Committee on Transport heard described by companies such as Castle Cement, which told us that it had to invest in a huge fleet of lorries because nationalised British Rail could not deliver trains on time to pick up loads of cement to take them throughout the country? That is what Railtrack, in a privatised form, will correct.
§ Mr. Luff
I have nothing to add to my hon. Friend's entirely accurate observation.
It is interesting that the hon. Member for Cunninghame, North (Mr. Wilson) chose to give one of his major statements on his attitude to railways to the Morning Star on 1 February. I hope that the brothers read only the first two thirds of his article, which contained all the traditional sops, such as itis not railway engineering, but financial engineering.
The hon. Gentleman stated:The proposed sale of Railtrack is an audacious rip-off on a very grand scale.It is all there. It is great stuff in the first two thirds of the article.
I hope, however, that the brothers did not read the last third of the article. The hon. Gentleman wrote:Perhaps too much time was wasted on empty rhetoric about `taking back' when it was never our intention to take back every bit of the railways which had been sold off.
The hon. Gentleman added:We … never intended to bring the rolling-stock back into public ownership … We won't take back the freight companies if they are sold … Our message to potential franchisees is that we will respect legally binding contracts … but … there will be no coming back to the trough either for more money or derogations in terms of the level of service.I should hope not. I hope that my right hon. Friend the Secretary of State would not accede to such requests. I am sure that he would not.
It is incredible. The hon. Gentleman criticises the Government for wanting to privatise the railways, but he set out a list of measures that he accepted. As I have said, I hope that the brothers did not read the end of the article. It is fair to say that it contains nothing about Labour's policies. It merely refers to the bits of our policy that Labour accepts.
Later in the article, the hon. Gentleman wrote:In summary, Labour's policy towards the railways is positive, imaginative and utterly at odds with the present follies.I do not know how the hon. Gentleman can justify that ridiculous claim.
We all know that these issues are splitting the Labour party from top to bottom. In a way, I feel sorry for the hon. Member for Birmingham, Ladywood (Ms Short), who speaks from the Opposition Front Bench on transport matters. I am very fond of her. I know that she is not fully at home with new Labour. She makes that clear, and I am 791 grateful to her for doing so. I appreciate her integrity and honesty. Nevertheless, Labour does not have a coherent policy to offer.
I rather enjoyed a piece of imagery which I read in The Sunday Telegraph of 14 April, last Sunday. The authors wrote:In the film North West Frontier, a fearless Kenneth More"—I suppose that they mean my right hon. Friend the Secretary of State—plays an army officer who commands a train half-way across India, battling his way through repeated attacks by be-turbaned rebels, fiendish spies"—they must be Opposition Members—and across half-ruined bridges. Against all the odds the train limps to its destination in the final reel and delivers its rather bewildered passengers to safety.It may feel rather like that on occasions to Ministers in the Department of Transport. I have every confidence, however, that the train, the Government's policy, will reach its destination safely and deliver a much better railway in the process.
§ Mr. John Heppell (Nottingham, East)
The hon. Member for Worcester (Mr. Luff) gave us a good example of "Alice in Wonderland" adventures. He presented us with selective quotations from newspapers. For every person who wrote to him saying, "I am in favour of privatisation," I could provide the hon. Gentleman with a dozen letters of complaint.
When I travelled down to London by train today, a woman sitting in a seat in front of me was complaining that trains were late because of the various changes that had been made leading up to privatisation. She was complaining that there were more train failures. Some failures are extremely serious.
The hon. Member for Dartford (Mr. Dunn) told us that he was a member of the Committee that considered the channel tunnel rail link. I sat on that Committee for 300 hours, and rather more hours than the hon. Member for Dartford because at the time he was not allowed to take his place in the House for various reasons. I note that the Government Whip seems confused. The hon. Member for Dartford was suspended for a certain period.
§ Mr. Heppell
I am sorry. If I have referred to the wrong Member, I shall make my apologies after the debate has come to an end.
I dispute the claim of the hon. Member for Dartford that the channel tunnel rail link was privately financed. More public money is finding its way into the rail link now than when the project was envisaged. The Government said that they would not allow the scheme to go ahead with public money. I forget whether twice or three times the amount of public money is being provided now compared with the sum that was made available originally. To use the rail link as an example of the Government's commitment to railways is probably just about right.
792 I recall a little story that was recounted by my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson), who is the shadow Secretary of State for the Environment. Many Members will have read about the illegal immigrant who escaped from a train as it went through Kent. He jumped off the train. My hon. Friend said, "He wouldn't have done that in France." The French already have a railway in place of which they can be proud. We still have not completed the legislative process, which must be finalised before we can build our railway on this side of the channel.
I apologise to the Secretary of State because I missed his opening remarks. I apologise also to my hon. Friend the Member for Birmingham, Ladywood (Ms Short) for missing her comments. I had an arrangement to meet some carers of disabled people, and I could not get out of it. I did not want to get out of it, to be honest. I understand that the Secretary of State, as well as the hon. Member for Worcester, talked about the Robin Hood line and what a great achievement it is.
The Secretary of State might want to say, "Yes, I have built a railway," and will not go on to say, "Buddy, can you spare me a dime?" I remember, however, why the Robin Hood line was built. I am grateful to the Government for giving support to the line. Effectively, the Government were pretty much railroaded into the project. I remember the decision being taken that the line should go ahead. It was an historic decision.
I should explain that, for years, I had sat on Nottinghamshire county council and had seen road schemes costing £10 million, £15 million and £20 million being nodded through. It was the council's policy to nod through road schemes. When it came to anything to do with railways, the response was, "No. That is a matter for British Rail. The council cannot possibly put any money into railways." With the Robin Hood line, however, the council decided that for the first time it would put money into a new railway. It put aside £6 million and went on to persuade the district councils to make money available so that stations could be built. The county council tried to get money from the private sector. It went also to the Government and to Europe. The Secretary of State would probably agree that the Robin Hood line was the initiative of Nottinghamshire county council. A tunnel was opened, for example.
Privatisation of the Robin Hood line is scuppered. Patronage was double what was expected. Even so, there were difficulties because of privatisation. Access charges increased, and the cost of rolling stock almost doubled. Do not quote the Robin Hood line as an example of how Railtrack privatisation is working.
Perhaps I have raised secondary issues. I did not intend to speak in the debate—
§ Mr. Heppell
No, I do not always make that comment. I usually say, "I shall be brief." I am told, however, that I never am. I did not say that today.
I decided to speak, however, because I was a member of the Committee that considered the Railways Bill, along with the hon. Member for Worcester. I remember the White Paper of 1992. I remember also the full discussion that took place in Committee. We discussed the relationship between British Rail and the regulator, the 793 relationship between the regulator and the franchising director and the relationship between the franchising director and the train operating companies. The hon. Member for Worcester nods and laughs. I remember seeing a diagram—I am sure that I have mentioned this before—of all the different lines of communication criss-crossing a page to show how things were supposed to operate. It was very confusing. I could not understand it, and I worked for the railways before I came here.
As I said, we discussed the consequences of investment and the effect of privatisation on fares and on discounted fares. We had long discussions on safety, and I shall come back to that in a while. We also discussed competition. We do not seem to discuss competition any more. I remember when the former Minister of State, Department of Transport, the right hon. Member for Kettering (Mr. Freeman), had to get up in Committee and, to the laughs and derision of Labour Members, admit that for a number of years there would be no competition between the train operating companies, which would be running on the same lines and bidding against each other, so that people would take up the franchises. Competition was shoved to one side. Before that, the assertion was that this was not some Orwellian concept. It was not that private is good and public is bad. It was to inject competition into the railway industry. But out it went at a stroke. If somebody can tell me where competition comes in with regard to Railtrack, I shall happily listen.
My main point is that we discussed all those aspects of privatisation in depth, and I feel that we did a good job, even with the Government's limited information that was provided at the time. Never at any time were we told that Railtrack would be privatised. It was the exact opposite. The Government told us that they would privatise the train operating companies and that there might be 13 stations that they would asset-strip and sell off. We complained about that, but we were not told that Railtrack would be sold.
I do not like it, but the Government have a right to pursue a privatisation policy. They are wrong, and the way in which they are privatising the railways is laughable. No one, except the new accountants who have been brought in, believes that privatisation can really work. I see Conservative Members shaking their heads, but I bet that they cannot find anybody—someone whom I would consider to be a railway person—who is not buying in to make a cheap profit and who believes that the system will work.
I emphasise that we were not told about the Railtrack privatisation. I have two quotations, the first of which is from the then Secretary of State for Transport, the right hon. Member for South Norfolk (Mr. MacGregor), who did not have much involvement in Committee. He said:Outright privatisation of … the railway is not on the agenda for the foreseeable future, not least because subsidy from the taxpayer is needed, and we have made it clear that we shall continue to provide that."—[Official Report, 2 February 1993; Vol. 218, c. 160.]In other words, he was saying that the railway would not be privatised as long as we are paying subsidy.
In Committee, the then Minister of State, Department of Transport said:Railtrack will be in the public sector for the foreseeable future".—[Official Report, Standing Committee B, 23 February 1993; c. 400.]
Conservative Members seem to have identified a new definition of "foreseeable future". I suppose that we should have heard last week that Labour would not win 794 South-East Staffordshire in the foreseeable future. I think that before the local council elections on 2 May we shall hear that there will be no Labour gains in the foreseeable future. The best one will be when the Government tell us that there will not be a Labour Government in the foreseeable future, because now I understand exactly what that means.
I am not asking the Government to abandon their ideas about privatisation, but at least we used to discuss it. We did not just have one day to debate it in the Chamber; we sat for hours and hours and went through it in detail. No one can tell me that a publicly owned Railtrack, which owns the stations, bridges, tracks, lines and all the other bits that will be privatised, is the same as a privatised Railtrack, with all the bridges, land and so on. It seems to me that when Railtrack is privatised, there will be two possible sources of income. The first will be access charges. Where will the money come from? The train operating companies. Where will the train operating companies get the money from? Government subsidy. Is not that the way in which access charges work? I know that it is the way in which they are supposed to work.
Just this week, the Secretary of State for Social Security told us that there is no such thing as poverty. If he believes that, he should visit my constituency, which has the eighth highest level of unemployment in the whole of Britain; higher even than any Scottish or Welsh constituency. He would see real poverty there. Perhaps the Conservatives still believe in the trickle-down theory. In this case, it trickles down from the taxpayer, through the train operating companies, into Railtrack and then into shareholders' pockets. Nobody can tell me that that is justified.
There is another way in which Railtrack can raise finance—asset stripping.
§ Mr. Heppell
The hon. Gentleman shakes his head. Initially, the proposals were that 13 stations would be sold off to the private sector and the rest would stay with Railtrack in the public sector. In Committee, we said that that was asset stripping. Individual private companies that took over those stations would be able to sell off the land around stations and make a healthy profit. Now it is worse, because it is possible to asset-strip not just 13 stations, but the lot.
I am worried not only about asset stripping but about the consequences for the future, because I have seen the asset stripping of railway lines before, after Beeching. I shall tell the House what happened. The land that was bought up and used for development blocked off possible future transport links into the city of Nottingham and many other cities across the country. Once land has been built on, one cannot put a railway through it. That is not just asset stripping, but tying up land for the future.
When Conservative Members come to their senses—sorry, I am wrong, because I am fairly sure that they will not. When we have a Labour Government, who decide that we really do want to ensure that the railways expand, with more passengers and more freight, we shall not block off the corridors to allow that expansion by asset-stripping under the present proposals. That is the only way in which Railtrack can raise money. The Government are talking 795 about the sale of the century. They are to give profits to shareholders who do not even own the shares yet. They will be guaranteed £69 million in the autumn—"Buy your shares and get your profit."
How can anybody tell me that that is a sensible proposition, that taxpayers' money should be given to people in that way? I could understand it in some respects if the Government's dogma worked, and if privatisation allowed them to pull back on the subsidy to be given to the railways, but the reverse is true. One ends up paying more subsidy, but getting a worse service than before.
I shall touch quickly on safety. Earlier, I heard an hon. Member—I think that it was the hon. Member for Worcester, but perhaps it was the hon. Member for Dartford—say that there was no reason—I am getting a signal from the Government Whips. I am not too sure whether I am supposed to take notice of them, but now I am getting a signal from my own Whip.
In Committee, I looked at the brief produced by the Health and Safety Executive. My hon. Friend the Member for Cunninghame, North (Mr. Wilson) is right: there were 38 recommendations suggesting ways in which rail safety could not be improved, but could stay at the same level. The recent railway safety case lists 10 actions, many involving substantial cost, which would not make the railways safer but would attempt to make them as safe as they are now.
There is no doubt that the cobweb of confusion that will be created by the new arrangements will lead to more accidents. I am a former railwayman, and, believe me, the "fail-safe" concept was drummed into us. Nowadays I just read the newspapers, but I am certain that the accidents that happen currently did not happen as often in my time. I read about fuel tanks and traction motors dropping off trains; apparently, there are fires on trains and no one can get off because the access has not been worked out. I read about axles snapping. Before that recent instance, when did an axle last snap on a British Rail train? We would have to go back hundreds of years—to the time of Isambard Kingdom Brunel, and the man in a top hat sitting on the footplate. It may seem funny, but I believe that there is something fundamentally and radically wrong with the current safety arrangements.
If Conservative Members do not agree to a review, or at least a discussion in a committee, they have only one option if they are to save the railways: they must vote Labour.
§ Mr. Stephen Day (Cheadle)
I apologise for not being present at the beginning of the debate; I was serving on the Select Committee on Social Security.
First, let me deal with certain issues on behalf of the Parliamentary Advisory Council for Transport Safety, of which I have the honour to be joint chairman. For about two years the council has had a rail working party, which has made a number of recommendations and observations about rail safety. I am sure that members of that working party, who have a keen interest in—and vast experience of—both the rail industry and the academic aspect of railway matters, would not want me to say anything on their behalf that could be construed as scaremongering. 796 The advisory council does not take such an approach to rail safety issues; indeed, it takes a responsible and positive approach to transport safety issues in general.
Hon. Members have made some rather over-excited comments about safety. 1 hope that what I shall say on behalf of the advisory council will not be viewed in that light; I intend to offer some positive suggestions. This is nothing new for the council. It has nothing to do with the fact that we are discussing the privatisation of Railtrack, or with the privatisation of the railways. As my hon. Friend the Minister will know, the council has a long history of working with, and campaigning to change the mind of, the Department of Transport.
My hon. Friend the Minister will also know that a number of organisations are currently responsible for safety in the new structure. Each train operating company must submit a safety case to be approved by Railtrack; Railtrack's safety case is approved by the Health and Safety Executive, which includes the railway inspectorate. Although the office of the rail regulator has no safety brief, it can act as independent arbitrator in the event of disputes between Railtrack and train operators. I understand that those arrangements were proposed in an HSE report entitled "Ensuring Safety on Britain's Railways", published in 1993—before the Government's decision to privatise Railtrack.
I want to raise two aspects of safety management, which merit more attention than some of the scaremongering that we heard earlier. The first—about which both the parliamentary advisory council and I are concerned—relates to communication and liaison. The council believes that we must ensure that safety lessons that have been learnt can be easily transferred from one company to another. The previous structure of vertical national ownership had the weakness of inflexibility; the new structure, based on competing units, does not naturally lead to the sharing of knowledge and solutions.
Secondly, much good work has been done on safety in recent years. Both staff and resources have been allocated to improve the safety of both passengers and work force. Will my hon. Friend the Minister consider reviewing the 1993 HSE recommendations?
Let me give my own views on the whole question of rail privatisation. I do not deny that I have expressed reservations about aspects of it in the past; indeed, I still think that it would have been better to "regionalise" the railways and sell them as a separate unit. Despite those reservations, however, I will not accept the invitation issued by the hon. Member for Crewe and Nantwich (Mrs. Dunwoody).
When the House has voted on rail privatisation issues in the past, not only have I stood on my feet to express the view that I have expressed again tonight, I have on occasions voted with the Opposition. Indeed, I remember well supporting the so-called wrecking amendment to allow BR to bid for franchise. That does not alter the fact that, at that stage, the House was debating legislation, amendments were before it and the debate would have had some practical effect. Tonight, we are not dealing with the Opposition trying to bring influence to bear on the Government's policy or their attitude towards the nature of rail privatisation. We have heard not helpful suggestions but hostility to the concept of privatisation in any form. That is where I differ from Opposition Members. 797 I am also aware that this Opposition debate has nothing to do with the issue itself and is all about something else. It is about trying to persuade Conservative Members such as myself who have expressed reservations in the past to join the Opposition in the Lobby in the hope that they can inflict an embarrassing defeat on the Government that would have no practical effect whatever. I am not going to be tempted.
I have every respect for the Opposition. Indeed, it is their duty on every occasion to try to embarrass the Government. But I am sorry, when I speak on rail privatisation in this Chamber and cast my votes on it, I want them to be cast on the issue. I am not here to help the Opposition do their job in merely trying to embarrass the Government. People in the great wide world should understand the difference between when we debate legislation and when the Opposition are merely trying to play politics with such an important issue. There is no way in which I shall support the Opposition this evening.
I hope that Opposition Members will stop accusing the Government of being purely dogmatic in their approach to rail privatisation. I have views on the alternative ways in which rail privatisation could have been brought about, but I am in no doubt that some form of privatisation is necessary for British Rail. That is fairly obvious to anybody who has travelled on it over the years. They recognise that improvements must flow from privatisation, as they have from the range of privatisations pursued by the Government.
The Opposition are not interested in what sort of privatisation we propose—they would oppose privatisation of British Rail whatever its nature. Labour talks about Conservative Members approaching the matter on a purely ideological basis, but Labour is the ideological party in this respect. The Opposition have opposed every privatisation. Privatisation in general has been a great success for the people of this country, and I know that the only way in which that success and its benefits can be maintained is to ensure that the party that pretends that it will not overturn privatisations and that it has accepted the change in the culture does not take office. In its heart of hearts, as it has proved tonight, Labour is still bitter about everything that privatisation represents and against the private sector in general. I shall do all in my power to ensure that it never takes office.
§ 9.2 pm
§ Mr. Andrew Mackinlay (Thurrock)
I listened carefully to what the hon. Member for Cheadle (Mr. Day) said, and I agree with him in one respect. It should be said in the Chamber that, like him, I was serving on a Select Committee this afternoon, along with my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody). Time and again, the people who run this House—the Leader of the House and perhaps others—arrange transport debates or Opposition Supply days when hon. Members who want to participate and who demonstrably have an interest in participating are in Committee, and hon. Members who perhaps do not have a bona fide excuse for not participating do not attend. Parliament is serving the fare-paying public badly when such an important debate is so poorly attended.
I hope that the party managers will in future get their act together so that members of the Transport Select Committee can attend such transport debates and hear the 798 arguments advanced by my hon. Friend the Member for Birmingham, Ladywood (Ms Short) and by the Secretary of State. We were denied that opportunity today because of the way in which the people who manage the House have acted.
Having got that off my chest, I want to say that a lot of rubbish was spoken by some hon. Members, who diverted this important debate on rail privatisation into avenues relating to trade union sponsorship and so on. Some Conservative Members receive thousands of pounds from trade unions—quite legitimately—for acting as consultants, but that is not deemed to be inappropriate. That is a matter of fact—one such Member is in the Chamber at present.
There is some agreement among the political parties about the parlous state of our railways. We agree that the railways are clapped out, that staff are demotivated, that we have a shortage of staff, that we have high fares and that the fare-paying public are sick and tired of our deteriorating rail transport system. The public want remedies, and that is where the parties differ. The fare-paying public believe that the parlous state of the railways is a result of the repeated starvation of resources by successive Governments, but particularly by the present Government who have been in power for a long time. They know that our railways are clapped out because of the failure of the Conservative Government to provide proper funding. That is the real problem.
The Government are now trying to extricate themselves from their embarrassment and kick into touch the problem by flogging off this important infrastructure asset in such a way that the damage will not occur in the time in office of the current occupants of the Treasury Bench. The public want investment in our railways, and they want a modernisation of our railways. They understand that the fragmented scheme that the Government are proposing is a prescription for disaster, and will bring us to the brink of a second Beeching. If it goes ahead, the result will be higher fares, a diminished service and the closure of intermediate stations—particularly as the real estate is flogged off by the new owners of Railtrack. There will be a different map of our railway network a decade from now because of the actions of the Government. There is an opportunity tonight for Conservative Members—those who are in the Chamber—to stop the Government going down this foolish path. I hope that, even at this stage, they will join us in the Lobby and put the freeze on this crackpot course.
The hon. Member for Cheadle said that he thought the proposed method of privatisation was foolish, as did the late Robert Adley. The scheme was not designed that way, however. The previous Secretary of State for Transport said that the Government were not going to privatise Railtrack for a long time. But the Government are running out of resources, they are running out of a legislative programme, and there have been changes on the Treasury Bench. The Government should have disposed of Railtrack in the way proposed by both the late Robert Adley and the hon. Member for Cheadle—if they had to privatise, they should have sold off the track and the trains on a regional basis. But that plan was abandoned by earlier Tory Secretaries of State, and the Government are now compounding their errors by selling off this important infrastructure because it is valuable real estate. 799 My constituents have suffered from the franchising process already. They have seen the halting of the London-Tilbury-Southend line franchise—the misery line—at the 11th minute of the 11th hour, and we do not now know what is going to happen. One thing revealed by the aborted LTS franchise was that the passenger service requirement was not worth the paper it was written on. When Enterprise Rail was creating its shadow franchise in the build-up to the sell-off, we were told that there would be four trains an hour at peak hours. At first glance, one would think that that broadly matches the present situation. But if one cross-examines and probes that statement, one finds that it means two trains one way and two trains the other way—there is no guarantee that the existing inadequate service will be maintained following rail privatisation. We have in a sense looked into the abyss, and we know that what happened to the LTS line is likely to happen elsewhere.
The hon. Member for Dartford (Mr. Dunn), who is not in his place, spoke a lot of humbug about trade unions. He also raised the question of safety. He alleged that Opposition Members were scaremongering. On my London-Tilbury-Southend line I already have a number of important privatised junctions to various industries along the river frontage. Lines go off at junctions with signal boxes to an Esso plant, car freight depots and Vandenburgh and Jurgens. I am concerned because we are already suffering from the fragmentation of control and the training and employment of staff, to which my hon. Friend the Member for Cunninghame, North (Mr. Wilson) has referred in interventions.
On 10 April an incident occurred on a private track off the LTS line in my constituency. A freight train was going in or out of a private yard and there was an incident on the crossing. The private train, going into a private yard, was left sticking out on the main line and the fare-paying public on the LTS line were left stuck, not in stations, but on trains for two and a half hours because the privatised signalman, or his crossing, was not operating properly. There was absolute chaos and a potentially enormous hazard was created. That scenario will be compounded as track and operators are privatised. We will find that the frustration of people who pay fares will increase because their trains will not run. Various organisations will blame each other and argue about who should remedy the situation. I believe that dangers will be created as a result of the fragmentation of control.
I am about to conclude, but I am grateful to see that some more Tory Members have come into the Chamber. On the last occasion when I spoke, I referred to all the stations on the south-west lines. I shall not go through the litany again. In a few years' time when their constituents are complaining, Tory Members of Parliament here tonight, if they are still Members of Parliament, will put the violin music on in the background and say how dreadful it is that their stations have closed, there are no trains at weekends, fares have gone up, and so much has changed on the railway network. Some branch lines will have closed. Tory Members will put on a phoney act of weeping and gnashing of teeth saying that it was not them. We shall remind them that it was they who went into the Division Lobby prepared to sell off this public asset to the disadvantage of their constituents. If and when it happens, they will be to blame.
800 I hope that when my right hon. and hon. Friends get on the Treasury Bench, they will be able to minimise the impact of this foolish privatisation and, with some boldness, bring back into public control, if not public ownership, our railway network.
§ Mr. Brian Wilson (Cunninghame, North)
We have heard some valuable speeches from Labour Members. I particularly recommend that Conservative Members, if they are capable of listening and learning, listen with respect to my hon. Friend the Member for Nottingham, East (Mr. Heppell), who spoke about safety. It takes someone who has worked on the railways, as he has, to understand the complexities and the folly of what is being done and to set aside on the basis of that reality the trite reassurances that Tories offer to themselves. They are playing with fire in this privatisation.
Just as important, as I have said throughout this process, and just as wrong as the privatisation, is the process of fragmentation on the railways. As my hon. Friend the Member for Thurrock (Mr. Mackinlay) said, the Government can take no comfort from anything that the Health and Safety Executive has said at any stage in that process. It has said specifically that an inherently less safe, more dangerous railway is being created. It has made recommendations to counter the fragmentation process. If the Government are prepared to put in place an inherently less safe railway network, what kind of responsibility to society does that show? Steps of enormous complexity have had to be taken to guard against what the Government are doing.
Let us get rid of one of the international canards and be absolutely clear that no Government or country has embarked on anything remotely resembling the process of rail fragmentation in which the Government are now engaged. I would suggest that no other country has done that not for ideological reasons but for safety reasons; other countries have realised and accepted that a fragmented railway system is inherently less safe.
I shall quickly refer to the speech of my hon. Friend the Member for Linlithgow (Mr. Dalyell), because I would be in terrible trouble if I did not. I have great respect for what he said and I share an interest in the subject. I call on the Minister to address the important concerns about the Forth bridge, to which my hon. Friend referred today and which he has pursued tenaciously over many months.
I refer to the speeches of Conservative Members. Today I thought—not for the first time in this long process of debating rail privatisation—would that Robert Adley were with us at this hour. I have noticed the empty Government Benches. I refer to the Tory Members who signed the amendments that Robert Adley drew up, which included measures to give British Rail the right to bid for franchises. Where are they tonight? They have escaped to their tents with their knighthoods—and I hope also with their consciences. They signed the amendments and they knew the wrongness of what was being done. As soon as the leadership and the courage of that one Tory Member disappeared—for the most tragic reasons—they deserted the cause to which they lent their names.
§ Mr. Wilson
I am glad to hear that the hon. Gentleman voted for that— and I am not sure whether he was one of the Conservative Members who signed the amendments. I remember very well that the last time I met Robert Adley in this place was in the Members Lobby. He told me with great pride that he had six Tory names on the amendments. I asked him whether they included the right to bid and he said, "Of course, that is the one that matters. That is the one that will scupper the whole thing."
Six Tory Members put their names to the amendments—and they have disappeared like snow on a dyke or cowards off a battlefield. That amendment was won in this place and the Ministers sitting here tonight have reneged on it shamelessly. I am afraid that the hon. Gentleman puts himself in the same category as other Conservative Members if he votes for the wrongdoing that is continuing and that is in direct contradiction to the amendments that he claims he voted for in the past.
We have heard a lot of fantasy politics tonight—about all, about the wondrous gifts that will be bestowed on the railways through this fantastic process of fragmentation and privatisation. There is absolutely no evidence in that regard—it is fantasy politics, it is a wish list of all the things that the companies will do. All we are asking tonight is that the process be slowed down so that what has happened thus far can be reviewed.
Of course, to Conservative Members, we are asking for the impossible. They are not interested in the arguments about what has happened so far. They are not interested in the implications for the taxpayer or for the passengers. They are interested only in rushing this measure through before a general election as part of the general scorched earth policy. Asking them to slow down is asking them to abandon the policy because they know that they will not be here in office to live with the consequences.
That is part of the immorality of what has been done. There is no interest in the implications, because other people, other politicians and other generations will have to clean up the mess that will be created. They are politicians without responsibility for they are legislating for a period when they will not be in office to live with the consequences.
§ Mr. Wilson
My hon. Friend is right. Many of the assets, and the people, will have been squandered as part of this reckless wrecking process. I have said before that people who believe in Tory rebellions probably also believe in the tooth fairy, but I am told that some of the Tories who might have rebelled give as a reason, strangely enough, for not voting with us tonight the South-East Staffordshire by-election. Tory Members come up to us quietly and say, "We would love to, but it is too dangerous now to vote against the Government because it could bring the whole pack of cards tumbling down." That is the new line of rationalisation. That is one way of interpreting the lesson of South-East Staffordshire; but if they had started re-examining policies such as this, they would not have been in the mess they were in there.
I listened to the right hon. Member for Peterborough (Dr. Mawhinney) this morning—before he was carried off by the men in white coats—reacting to questions on the 802 "Today" programme. He was asked in the mildest of manners by Miss Sue MacGregor what would be the equivalent of the dramatic action before the last general election when Thatcher was disposed of and the poll tax dropped. He chose to concentrate on the parallel—I can understand his mind being active on this—between the fate of Baroness Thatcher and the current position of the Prime Minister. He might have concentrated on what legislative measure should be dropped before the next general election. If he had done, rail privatisation might have occurred to him, because the one is as unpopular as the other.
Instead of the dreams of Conservative Members about top-hatted managers travelling on footplates—at one point we had refreshment cars going up and down the engines—let us consider what is really happening. The smugness, complacency, ignorance and contempt that they display in the name of privatisation are beyond belief. There is a private railway industry in Britain; it is called manufacturing. There are hundreds of splendid privately owned and operated companies that work in the railway industry—and good luck to every one of them. Many are doing well in the export field, which is what is saving them.
What have the Government done in the name of privatisation to private manufacturing industry in the railways? Some 8,000 jobs have gone. The great railway town of York will never build another train. The Government have ignored all the warnings about the blight on investment in the railways. They brushed it aside and said that it would never happen. For 160 years, Britain led the world and built trains for the world. In every one of those years, Britain built trains for our national railway network. Since the lunatics were put in charge of the asylum, there have been three solid years without a single train being operated, and the existing private railway industry—the manufacturing industry—is bleeding to death. That is their first achievement in the name of privatisation.
What about the record on employment so far? Eight thousand jobs gone in railway manufacturing. They do not care about that. Jobs have started to go at South West Trains. They will start to go in every franchise. That is not because the railways are overmanned—there have been massive efficiency gains in the past few years, especially through the organising for quality programme. It is not because those people are not needed for a safe, good railway or to deliver a service to the disabled and to elderly passengers. It is simply because the franchisees have entered into contracts from which they have to work backwards in financial terms. They cannot control the costs of access charges or of leasing trains. The only variable cost worth talking about is the cost of labour. To make it pay, they have to get rid of people. That has implications for service and safety and is the inexorable logic of this privatisation.
§ Mr. Wilson
It is an interesting philosophy, and productivity is the name of our game, but—this is where the two sides of the House differ—it is not the name of the only game. It is certainly not the name of the only 803 game when one is delivering a public service. A safe and efficient public service is also part of the game, but that is neglected in all this privatisation because, within seven years, the companies have to squeeze their profits out of franchises that they have entered into on the basis of fixed figures. I would expect the hon. Gentleman to understand that distinction.
We are told that hundreds of companies have been busting a gut to get hold of railway franchises. Look at the London-Tilbury-Southend line fiasco—the Government did not do very well there, did they? What about the Resurgence Railways fiasco, when Ministers were prepared to give away Great Western to a failed double-glazing salesman? We have heard several hon. Members say what a wonderful job the Great Western management are doing under the privatised franchise. As the Government are well aware, the management owe to the Opposition the fact that they are doing the job at all. Their bid had been chucked out. The franchise was going to be given to the double-glazing salesman and the vice-chairman of the Huntingdon Conservative association, until the Opposition managed to establish, by the simple process of looking at the records at Companies House, what a shower of shysters they were. It was only at that point that the Resurgence Railways bid was thrown out and Great Western management brought back in.
Stagecoach appeared on the scene as a white knight, with its 22 references to the Monopolies and Mergers Commission behind it. On Network SouthCentral, it was the Compagnie Generale des Eaux—described in the most flattering terms by a French judge as one of the two most corrupt companies in France. Doubtless, as we meet, Ministers are desperately trying to attract the interest of the other.
The east coast main line has been handed over to James Sherwood within weeks of his saying that the franchising formula was a formula for a no-investment railway. He went to the only place in the country where £1 billion of public money has been invested in the railway and was given that franchise instead. That meets his criteria—he does not have to invest—and it meets the Tories' criteria, as they have managed to give away the most valuable piece of the British Rail network.
The hon. Member for Keighley (Mr. Waller) had something important to boast about. He said that, within seven years, the east coast main line would be a service that no longer required public money. He must be suffering from a serious loss of short-term memory because, two years ago, the east coast main line not only did not require public money but was such a profitable piece of railway because of the public money that had gone into it that it cross-subsidised the remainder of the inter-city network. That is what we believe in. Where there is investment, there is profit and east can subsidise west, day can subsidise night and urban can subsidise rural services. That is the way to run a railway network.
If it is Tory management of the economy to take out of the network the part that has had the bulk of public investment in the past 10 years and then wave a flag saying that in seven years' time it will not need a subsidy, no wonder the Government are in a dire plight.
We heard a miraculous statement about South Eastern Trains today—there will be investment in trains for the line. That is great. The trains are 50 years old, so let us 804 hope that there is going to be some investment. I wonder why, last week, when the Government announced a parallel contract that has been awarded for Network SouthCentral, which has exactly the same conditions and age of rolling stock, there was no mention of any new trains. Where are the Members of Parliament who represent that area? A couple of the usual suspects have been waving their flags today and welcoming the prospect of new trains for South Eastern Trains, but where are the Tory Members for the Network SouthCentral area? Their commuters have been told that, because of the glories of the franchising system, there will not be any new trains for another seven years.
I can tell the hon. Member for Dartford (Mr. Dunn) and whoever else was cheerleading today that they should not count their chickens. If I were told by any of the jokers on the Government Front Bench that there would be new trains in three years' time, when even the most simple arithmetic told me that that is two years the other side of a general election, I would not put that assurance into the election address just yet, particularly because that contract has not yet been awarded. That is the difference—the one that has been awarded contains no mention of new trains for Network SouthCentral, whereas the one that has not been awarded represents another promise to be added to the wish list.
I could go on about the details of franchising, but I am a mere artisan; let us leave it to the master, to the man who has recognised the real potential of franchising, the saviour of the Tory party who represents the symbiotic relationship—the back scratching—between the Tories and Stagecoach. I see that Mrs. Gloag is now the second richest lady in the country; perhaps she will now be applying for the position and the money of the richest.
Probably unaware that he was being reported addressing what is jokingly called the British Venture Capital Association, Mr. Brian Souter, the chairman of Stagecoach, got on to the subject of rail privatisation. His comments combine the issue of franchises with the question of what kind of deal the taxpayer is getting. In his after-dinner speech to the British Venture Capital Association, Mr. Souter spelt it out in terms with which I would not begin to compete. He is reported as saying:There was a £4bn integrated rail business which had £800m of government subsidy. Now there is a desegregated £9.5bn rail business with £1.8bn of subsidy. While everybody else was taxing themselves about the structure of privatisation, we stuck with a very simple question: what happened to the £1 billion?According to the report, there was "approving laughter" from the assembled entrepreneurs.
I can tell the House what happened to the £1 billion. It is coming out of the Treasury, not to create a single extra service or to run an extra train£far less to order a new one£but to be the extra raft on which the whole superstructure of privatisation is to be floated. Two years ago, £800 million of taxpayers' money was going into the railways; now £1.8 billion is going into the railways, not for an extra service or an extra train but solely to sustain the profits and superstructure of privatisation. That is what it is all about.
Let us now deal with investment. We hear investment spoken of as if it were something new and as if it had never been made in the railways before. Let us consider the evidence of Richard Hope, a well-known authority in the railway industry. Railtrack came out with a statement 805 about a £10 billion—£1 billion a year—investment programme, on which Richard Hope's comment was "Big deal!" Railtrack's own written evidence to the Select Committee on Transport on 2 February 1995 says thatannual steady state maintenance should be £800m which"—these are Railtrack's words—'does not provide for any catching up of outstanding work' … Renewals are given as £570m … so steady state spending on the rail infrastructure should be not less than £1370m.To maintain the current condition of the railway requires £1,370 million a year. Despite the ballyhoo, Railtrack is offering £1 billion a year.
The proof is in the pudding. If Railtrack were offering some new investment instead of a reduction, it would be talking about electrification schemes and Tory Members would be able to return happily to their constituencies, whether in Blackpool, Aberdeen or any of the other places where there have been good, credible campaigns for rail electrification. However, unless a Tory Member lives within a three-mile radius of Heathrow, he cannot promise his constituents electrification because there will not be any for at least the next 10 years. The word "electrification" does not appear in Railtrack's 10-year investment plan. That is the reality of its investment programme.
For all that the Tories despise the public sector, I know that, in my constituency and in every part of the country to which I travel where electrification has taken place, it has been of immense benefit to the routes and communities that have it. It was delivered by the public sector, but we are now told that, for the next 10 years, there is to be no electrification by the private sector. To be parochial for a moment, I hope that the two Tory Members from the north-east of Scotland who won their seats by promising that the only way to deliver electrification to the north-east of Scotland was through privatisation will lose their seats, because they now have to say that the only way to guarantee that there will be no electrification is through privatisation. What they said was the reverse of the truth.
§ Sir Roger Moate (Faversham)
The hon. Gentleman's problem is that most people remember that, for all its good intentions and commitments, the last Labour Government reduced investment in the railways not for one or two years, but year after year. The hon. Gentleman derides our investment plans through the private sector, but will he confirm what commitment a Labour Government would make to investing in the railways? How much would a Labour Government invest in a public railway system?
§ Mr. Wilson
Why look in the crystal ball when one can read the book? Two years ago, investment in the railways was at its lowest level in real terms since nationalisation in 1948. I can point to a record of investment, but the Tories can point only to dreams of investment. They now have an investment bible which, by their own admission, will yield no new electrification schemes around the country.
I shall run through some of the flotation arguments. The hon. Member for Eastleigh (Mr. Chidgey) has already drawn attention to a grubby little document that tells every unsolicited recipient of it that 806Railtrack is not an operator of trains … It is essentially a property company and the land that Railtrack will own could be regarded as one of the most valuable pieces of real estate in the UK".That is how the sale of Railtrack is being marketed. I ask the Secretary of State what action the Government have taken against one of their official share shops for describing Railtrack as a property speculation company. If he intends to pursue it over that matter, he can also inform it that, when Labour comes to power, we will quickly take regulatory action to ensure that every penny in property proceeds from the railways is reinvested in the railways, as occurred in the past. The Tories are yet again selling their product in a manner that is in breach of the Trade Descriptions Act 1968.
I refer briefly to the £69 million of taxpayers' money. We must understand what is going on. I thought that, according to the theory of capital, investment is about risk; yet taxpayers' money is being recycled as Railtrack's profit. It will be sprinkled like confetti among Railtrack's shareholders£not one of whom was a shareholder when the money was raised. Where is the morality in that and where is the risk?
Some £69 million will be given as a bribe to potential shareholders. It could have paid for major electrification projects such as the Glasgow, Queen Street to Edinburgh line or the north trans-Pennine Leeds to Manchester and Liverpool line. It could have been used to replace the remaining Kent coast rolling stock. There are no ifs, buts or talk about in three years' time: that is what the £69 million could have achieved. Will Tory Members of Parliament representing Kent constituencies take that message to their constituents instead of the bogus one that they were peddling?
I turn to the last of the great incentives and the letter from Mr. John Welsby. I would love to scrutinise it in great detail, but time is pressing. The Tories' deceit is again writ large: if the letter had not been leaked, we would never have known that the chairman of British Rail had written to the permanent secretary at the Department of Transport, with copies to Mr. Roger Salmon and Mr. Robert Horton, saying that the Railtrack prospectus contains several fundamental untruths. The prospectus is seriously misleading. It fails to inform potential investors of Railtrack's performance as manager of the rail infrastructure network and it fails to provide them with "material information", in the words of Mr. Welsby.
Investors have not been told the truth because Ministers will do anything to carry through the privatisation, irrespective of the taxpayer, the travelling public, of decency and of promises made to the House. That is what the Tories are about. They may win the vote tonight and privatise the rail industry, but they will pay the electoral price every day until the general election.
§ The Minister for Railways and Roads (Mr. John Watts)
Those who rely on leaked documents are unlikely to get to the whole truth. The letter from which the hon. Member for Cunninghame, North (Mr. Wilson) was quoting was written in response to a request to the British Railways Board to comment on the first draft of the prospectus.
One of the points that Mr. Welsby made in the letter was that there should be a clearer exposition of the role and powers of the regulator. The letter from the Rail 807 Regulator containing the statement that is now printed in the pathfinder prospectus was sent by Mr. Swift the day after Mr. Welsby's letter. As the reply from the Permanent Secretary indicates, all the concerns expressed by British Rail have been taken fully into account in the final version of the prospectus, which the hon. Member for Birmingham, Ladywood (Ms Short) has not seen because it has not yet been published.
§ Mr. Watts
That is the pathfinder prospectus and I am not saying that it is misleading. The hon. Lady has difficulty in putting the right words in her own mouth. She should not try to put words into mine.
This is probably our sixth rail privatisation debate in 15 months. The Labour party is obviously over-ambitious in trying to fill a full day's debate. Although the hon. Member for Thurrock (Mr. Mackinlay), who is not in his place, had difficulty squeezing into the debate, throughout the afternoon Opposition Members struggled to find anything new or relevant to say. Even the hon. Member for Ladywood could manage only a 20-minute speech.
§ Mr. Watts
I shall respond to the hon. Gentleman's point later. If I give way now, I shall have less time to do so.
It is clear that, after all this time, the Opposition are still trying to fill their policy vacuum in transport, as in much of their approach to politics. What should they do if they have a policy vacuum? The Labour motion suggests that the answer is to call for "a thorough review". Is its alternative to a policy to fill the vacuum with calls for a thorough review?
Reading on, I find some of the aims in the motion wholly admirable. It aims to securehigher levels of rail investment, improved services
and finally, and quite importantly,the best possible return on taxpayers' money.
The problem for the Opposition is that our policy, not theirs, meets those objectives. Having struggled for so long to find a policy, why are they so shy of adopting their normal approach, which is simply to embrace ours? They have done so on many other matters of policy, so why do they not on rail privatisation?
As my hon. Friend the Member for Worcester (Mr. Luff) reminded the House, the shadow Cabinet, reliant as it is on the support and sponsorship of the trade union movement, is unable to adopt an honest policy because the union bosses will not allow it.
The hon. Member for Cunninghame, North mentioned the investment plans of Railtrack and quoted rightly the statement that Railtrack intends to spend more than £1 billion a year for the next 10 years. What he did not quote, although he could have found it in the pathfinder prospectus from which many hon. Members have quoted so readily throughout the debate, was that in the five years to 31 March 2001 Railtrack intends to spend approximately £8.125 billion. That appears to be higher than the £1.37 billion that the hon. Gentleman said was necessary to achieve steady state spending. 808 My hon. Friend the hon. Member for Dartford (Mr. Dunn) dealt with the only real news of the day when he welcomed the announcement that, in letting the franchise for South Eastern Trains, there would be a requirement for new rolling stock. Incredibly, I heard during the course of the day that the trade union front organisation, Save Our Railways, said that it was opposed to that idea. It cannot even accept one piece of good news.
The hon. Member for Cunninghame, North asked how a promise to be fulfilled in 1999 could be given any credence. The final bids, which are to be made on the basis of the replacement of the rolling stock, must be with the franchising director by mid-June. When the franchise is let, the new franchiser will be locked into a contractual commitment to meet all the terms of the franchise agreement, including that to replace rolling stock. My hon. Friends know that they now have a promise on which they can rely, which they have not received from the nationalised railway industry.
§ Sir Roger Moate
Did my hon. Friend note that the hon. Member for Cunninghame, North (Mr. Wilson) expressed real disappointment that the order had been announced—and he got that wrong, as he did almost everything else? The hon. Gentleman said that the rolling stock would not be ordered until 1999. He missed the point that the rolling stock that will be life-expired by then must be replaced by 1999.
§ Mr. Watts
My hon. Friend is exactly right. It is not just South Eastern that will have new rolling stock, because the contract for the 15-year franchise for the Gatwick Express requires a commitment to a completely new fleet of rolling stock. The first franchise for Great Western contains a commitment for the total refurbishment of all rolling stock in return for a 10-year franchise. A couple of weeks ago, Porterbrook Leasing announced a £40 million-plus deal with ABB for the refurbishment of other InterCity stock.
The hon. Member for Linlithgow (Mr. Dalyell) made important points about the Forth bridge. It is absolutely clear that responsibility for the safety and maintenance of the Forth railway bridge lies firmly and squarely with Railtrack. The bridge is part of Railtrack's existing infrastructure, which it has a commitment to maintain. Furthermore, the Health and Safety Executive has powers to ensure that Railtrack honours its obligations to maintain the bridge in a safe condition. The executive has said that it is minded to serve improvement notices on Railtrack. Whether that is necessary is a matter of judgment for the HSE, but I understand that Railtrack has fully accepted the recommendations made in the report. As for the hon. Gentleman's other important and more detailed points, perhaps he will allow me to give him full answers in writing.
§ Mr. Dalyell
Perhaps many millions of pounds are involved. Should not that obligation be made clear in the prospectus?
§ Mr. Watts
Although the hon. Gentleman may be well—[Laughter.] The hon. Gentleman is obviously well. He may well be right that the cost of the repairs may run into millions of pounds. I have been talking about investment and renewal obligations running into billions 809 of pounds. In any event, from today's debate the significance of the Forth bridge will be seized upon by people outside the House.
My hon. Friend the Member for South-West Bedfordshire (Sir D. Madel) raised three matters, including the Dunstable bypass, which he introduced intriguingly by suggesting that savings made by the efficiencies of rail privatisation might be used to fund it. I will not make any commitments about sources of funding, but it is our intention to take forward the proposals for a planning conference and to examine the Dunstable bypass and associated transport issues in the area, including rail issues, as quickly as possible.
My hon. Friend the Member for South-West Bedfordshire expressed concerns about track-side safety. Under the new safety regime, which is much more rigorous than that which existed before restructuring, every business that undertakes work on the railway must prove its own safety case as a prerequisite of being permitted to undertake any work on the line. My hon. Friend the Member for South-West Bedfordshire mentioned the west coast main line. Railtrack has already let two contracts for the development of the new signalling and control system, and a third will be let shortly. Contracts for the main works will start to be let from June. The core project will be funded through existing, standard track access charges. Funding may be required for additional upgrades. Those matters will be considered when the cost and technical reviews of upgrade options are completed and discussions will take place between Railtrack, Opraf and the Department of Transport so that we can consider what funding may be necessary to enhance franchising of the route. The franchising director intends to bring forward the franchise for the west coast main line later this year.
My hon. Friend the Member for Keighley (Mr. Waller) said that the case for privatisation must be made on its merits and he went on to do so extremely well. He mentioned the benefits of fare regulation. Never before have passengers had the assurance that key fares will be pegged to the rate of inflation for three years and then to 1 per cent. below the rate of inflation for the four years thereafter. It is also clear that franchising is good news for passengers, who can see that, far from services being slashed, as our opponents have claimed falsely so many times, they are at least being maintained and in many instances being improved. Of course, franchising is also good news for taxpayers who can see that, for the first five franchises that have now been let, services that required a grant of £300 million to be operated by British Rail will be operated in the seventh year of the franchise for only £95 million. That is good news and it gives the lie to the claims that franchising is an expensive way to deliver rail services—quite the contrary.
My hon. Friend the Member for Keighley also mentioned rolling stock for the Airedale and Wharfedale lines. I hope that he will take comfort from the announcement today about south-eastern trains and the possibility of a franchise term long enough to justify new rolling stock. That shows that, far from privatisation and franchising being incompatible with the provision of new rolling stock, they will facilitate its delivery. I understand that the PTE is working on a replacement options report, which it hopes to have ready by the end of June or in early July. I have agreed to a meeting with the PTE, which 810 I hope my hon. Friend will lead, to discuss any ways in which the Department can help to ensure that the full benefits of the electrification of the line can be obtained.
The hon. Member for Hampstead and Highgate (Ms Jackson) entered the realms of fantasy when she claimed that privatisation would cost £2.6 billion. The reality is that the cost to the Government, from the start of the preparation to the end of the past financial year, is £145 million and the cost for British Rail and Railtrack is some £325 million. Against that, we have, so far, sale proceeds in excess of £2.3 billion. To put it another way, the total cost to date of £470 million is represented by only three years of savings on the average subsidy required for the first five franchises.
My hon. Friend the Member for Chorley (Mr. Dover) said that privatisation of Railtrack will deliver commercial investment funded by the private sector. The Labour alternative, of course, requires more funding through public sector borrowing, from higher fares or from higher taxation. We know that the hon. Member for Ladywood is prepared to pay more in taxes, because she has told us honestly that she is prepared to do that, but that does not run for other Opposition Members, so we must conclude that a Labour Government managing a nationalised railway would not find the funds that Labour Members say are needed to provide adequate investment.
My hon. Friend the Member for Chorley also mentioned access for disabled people. He will recognise that it is difficult to provide access at every station. Unfortunately, earlier generations did not build railway stations with disabled people in mind, but the Rail Regulator requires every train operating company to produce a disabled person's protection policy. The first step towards producing that is an inventory of the existing provision and facilities at stations, and that will be used as a benchmark against which further improvements will be measured.
The position is much brighter when it comes to access to rolling stock. Anglia Trains, Chiltern Railway, CrossCountry, Gatwick, Great Western, InterCity East Coast, InterCity West Coast, Island line, Mersey Rail Electrics and Midland Mainline, for example, are all operating fleets that are entirely accessible to people in wheelchairs. Other operators have mainly wheelchair-accessible rolling stock, even now.
The hon. Member for Burnley (Mr. Pike) reminded me of the Government's responsibility, our having been in office for 17 years, to ensure that railways are in a position to operate efficiently and effectively. We accept that responsibility, and we are taking action in the form of the privatisation programme to bring about precisely the improvements in services that everybody recognises should be made.
The hon. Gentleman used the odd term "fragmentation". The network is not fragmented. It was a policy decision that the entire rail network should be owned and managed by Railtrack as an integrated network. Network benefits, such as through ticketing, are all guaranteed by arrangements made by the franchising director and the regulator.
§ Mr. Watts
No. I do not have time to give way to the hon. Gentleman. The hon. Member for Cunninghame, North, who responded to the debate for the Opposition, overran his time and I must make the best use of mine. 811 The hon. Member for Burnley talked about Railtrack asset values. Track access charges are based on replacement values because the purpose of the charges is to ensure that assets can be replaced with their modern equivalents. Fixed assets in the most recent accounts were valued at £4.3 billion. Account must be taken, however, of the company's liabilities. The net assets of Railtrack—assets less liabilities—are only £2.4 billion, not the exaggerated figure of £6.5 billion that Opposition Members are so keen to quote.
My hon. Friend the Member for Cheadle (Mr. Day) made some thoughtful observations on railway safety. It is still part of the culture to share experience on safety matters. Some of the so-called leaks on safety that make the Opposition so excited arise only because it is part of the system widely to disseminate information on safety matters within the industry. I particularly welcome my hon. Friend's support for the Government in defeating the Opposition's motion. Like many of my other hon. Friends, and hon. Members representing parties other than the Opposition, my hon. Friend is much too wily to be caught out by squalid little tricks from the Labour party.
§ Mr. Watts
No. There is no peroration. I am trying to respond to the many points that have been made in a long debate.
The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) accused the Government of bad faith over the privatisation and flotation of Railtrack, as did other hon. Members. I shall set the record straight. My right hon. Friend the Member for Kettering (Mr. Freeman), the then Minister for Public Transport, said on 23 February 1993:Railtrack will be in the public sector for the foreseeable future".—[Official Report, Standing Committee B, 23 February 1993; c.400.]It is also true that my right hon. Friend said on Lords amendments on 1 November 1993:Ultimately we wish to see Railtrack move into the private sector, although we cannot forecast when that will happen."—[Official Report, 1 November 1993; Vol. 231, c. 43.]Lord Caithness, the then Minister of State, Department of Transport, said in July 1993 that the Government had made it clear thatRailtrack's existence as a government-owned company will last only until it is feasible to transfer it to the private sector." —[Official Report, House of Lords, 15 July 1993; Vol. 548, c. 354.]Any accusation of bad faith is totally without foundation.
I call on my right hon. and hon. Friends to defeat the Labour motion for the nonsense that it is and to support the amendment in the name of my right hon. Friend the Prime Minister.
§ Question put, That the original words stand part of the Question:
§ The House divided: Ayes 287, Noes 306816
|Division No. 99]||[10.00 pm|
|Abbott, Ms Diane||Dewar, Donald|
|Adams, Mrs Irene||Dixon, Don|
|Ainger, Nick||Dobson, Frank|
|Ainsworth, Robert (Cov'try NE)||Donohoe, Brian H|
|Allen, Graham||Dowd, Jim|
|Alton, David||Dunwoody, Mrs Gwyneth|
|Anderson, Ms Janet (Ros'dale)||Eagle, Ms Angela|
|Armstrong, Hilary||Eastham, Ken|
|Ashdown, Rt Hon Paddy||Etherington, Bill|
|Ashton, Joe||Evans, John (St Helens N)|
|Austin-Walker, John||Ewing, Mrs Margaret|
|Banks, Tony (Newham NW)||Fatchett, Derek|
|Barnes, Harry||Faulds, Andrew|
|Barron, Kevin||Field, Frank (Birkenhead)|
|Battle, John||Fisher, Mark|
|Bayley, Hugh||Flynn, Paul|
|Beckett, Rt Hon Margaret||Foster, Rt Hon Derek|
|Beith, Rt Hon A J||Foster, Don (Bath)|
|Bell, Stuart||Foulkes, George|
|Benn, Rt Hon Tony||Fraser, John|
|Benton, Joe||Fyfe, Maria|
|Bermingham, Gerald||Galbraith, Sam|
|Berry, Roger||Galloway, George|
|Betts, Clive||Gapes, Mike|
|Blair, Rt Hon Tony||Godman, Dr Norman A|
|Blunkett, David||Godsiff, Roger|
|Boateng, Paul||Golding, Mrs Llin|
|Bradley, Keith||Graham, Thomas|
|Bray, Dr Jeremy||Grant, Bernie (Tottenham)|
|Brown, Gordon (Dunfermline E)||Griffiths, Nigel (Edinburgh S)|
|Brown, N (N'c'tle upon Tyne E)||Griffiths, Win (Bridgend)|
|Bruce, Malcolm (Gordon)||Grocott, Bruce|
|Burden, Richard||Gunnell, John|
|Byers, Stephen||Hain, Peter|
|Caborn, Richard||Hall, Mike|
|Callaghan, Jim||Hanson, David|
|Campbell, Mrs Anne (C'bridge)||Hardy, Peter|
|Campbell, Ronnie (Blyth V)||Harman, Ms Harriet|
|Campbell-Savours, D N||Harvey, Nick|
|Canavan, Dennis||Hattersley, Rt Hon Roy|
|Cann, Jamie||Henderson, Doug|
|Carlile, Alexander (Montgomery)||Henderson, Dr Joe|
|Chidgey, David||Heppell, John|
|Chisholm, Malcolm||Hill, Keith (Streatham)|
|Church, Judith||Hinchliffe, David|
|Clapham, Michael||Hodge, Margaret|
|Clark, Dr David (South Shields)||Hoey, Kate|
|Clarke, Tom (Monklands W)||Hogg, Norman (Cumbernauld)|
|Clelland, David||Home Robertson, John|
|Clwyd, Mrs Ann||Hood, Jimmy|
|Coffey, Ann||Hoon, Geoffrey|
|Cohen, Harry||Howarth, Alan (Strat'rd-on-A)|
|Connarty, Michael||Howarth, George (Knowsley North)|
|Cook, Robin (Livingston)||Howells, Dr Kim (Pontypridd)|
|Corbyn, Jeremy||Hoyle, Doug|
|Corston, Jean||Hughes, Kevin (Doncaster N)|
|Cousins, Jim||Hughes, Robert (Aberdeen N)|
|Cox, Tom||Hughes, Roy (Newport E)|
|Cummings, John||Hughes, Simon (Southwark)|
|Cunningham, Jim (Covy SE)||Hutton, John|
|Cunningham, Rt Hon Dr John||Illsley, Eric|
|Cunningham, Roseanna||Ingram, Adam|
|Dafis, Cynog||Jackson, Glenda (H'stead)|
|Dalyell, Tam||Jamieson, David|
|Darling, Alistair||Janner, Greville|
|Davidson, Ian||Johnston, Sir Russell|
|Davies, Bryan (Oldham C'tral)||Jones, Barry (Alyn and D'side)|
|Davies, Chris (L'Boro & S'worth)||Jones, Ieuan Wyn (Ynys Môn)|
|Davies, Rt Hon Denzil (Llanelli)||Jones, Jon Owen (Cardiff C)|
|Davies, Ron (Caerphilly)||Jones, Lynne (B'ham S O)|
|Davis, Terry (B'ham, H'dge H'l)||Jones, Martyn (Clwyd, SW)|
|Denham, John||Jones, Nigel (Cheltenham)|
|Jowell, Tessa||Powell, Ray (Ogmore)|
|Kaufman, Rt Hon Gerald||Prentice, Bridget (Lew'm E)|
|Keen, Alan||Prentice, Gordon (Pendle)|
|Kennedy, Charles (Ross, C&S)||Prescott, Rt Hon John|
|Kennedy, Jane (L'pool Br'dg'n)||Primarolo, Dawn|
|Khabra, Piara S||Purchase, Ken|
|Kilfoyle, Peter||Quin, Ms Joyce|
|Kirkwood, Archy||Radice, Giles|
|Lestor, Joan (Eccles)||Randall, Stuart|
|Lewis, Terry||Raynsford, Nick|
|Liddell, Mrs Helen||Reid, Dr John|
|Litherland, Robert||Rendel, David|
|Livingstone, Ken||Robertson, George (Hamilton)|
|Lloyd, Tony (Stretford)||Robinson, Geoffrey (Co'try NW)|
|Llwyd, Elfyn||Robinson, Peter (Belfast E)|
|Loyden, Eddie||Roche, Mrs Barbara|
|Lynne, Ms Liz||Rooker, Jeff|
|McAllion, John||Rooney, Terry|
|McAvoy, Thomas||Ross, Ernie (Dundee W)|
|McCartney, Ian||Rowlands, Ted|
|McCartney, Robert||Ruddock, Joan|
|Macdonald, Calum||Salmond, Alex|
|McFall, John||Sedgemore, Brian|
|McGrady, Eddie||Sheerman, Barry|
|McKelvey, William||Sheldon, Rt Hon Robert|
|Mackinlay, Andrew||Shore, Rt Hon Peter|
|McLeish, Henry||Short, Clare|
|Maclennan, Robert||Simpson, Alan|
|McMaster, Gordon||Skinner, Dennis|
|McNamara, Kevin||Smith, Andrew (Oxford E)|
|MacShane, Denis||Smith, Chris (Isl'ton S & F'sbury)|
|McWilliam, John||Smith, Llew (Blaenau Gwent)|
|Madden, Max||Snape, Peter|
|Maddock, Diana||Soley, Clive|
|Mahon, Alice||Spearing, Nigel|
|Mallon, Seamus||Spellar, John|
|Mandelson, Peter||Squire, Rachel (Dunfermline W)|
|Marek, Dr John||Steel, Rt Hon Sir David|
|Marshall, Jim (Leicester, S)||Steinberg, Gerry|
|Martin, Michael J (Springburn)||Stevenson, George|
|Martlew, Eric||Stott, Roger|
|Maxton, John||Strang, Dr. Gavin|
|Meacher, Michael||Straw, Jack|
|Meale, Alan||Sutcliffe, Gerry|
|Michael, Alun||Taylor, Mrs Ann (Dewsbury)|
|Michie, Bill (Sheffield Heeley)||Thompson, Jack (Wansbeck)|
|Michie, Mrs Ray (Argyll & Bute)||Timms, Stephen|
|Milburn, Alan||Tipping, Paddy|
|Miller, Andrew||Touhig, Don|
|Mitchell, Austin (Gt Grimsby)||Trickett, Jon|
|Moonie, Dr Lewis||Tyler, Paul|
|Morgan, Rhodri||Vaz, Keith|
|Morley, Elliot||Walker, Rt Hon Sir Harold|
|Morris, Estelle (B'ham Yardley)||Wallace, James|
|Morris, Rt Hon John (Aberavon)||Walley, Joan|
|Mowlam, Marjorie||Wardell, Gareth (Gower)|
|Mudie, George||Wareing, Robert N|
|Mullin, Chris||Watson, Mike|
|Murphy, Paul||Welsh, Andrew|
|Nicholson, Emma (Devon West)||Wicks, Malcolm|
|Oakes, Rt Hon Gordon||Wigley, Dafydd|
|O'Brien, Mike (N W'kshire)||Williams, Alan W (Carmarthen)|
|O'Brien, William (Normanton)||Wilson, Brian|
|O'Hara, Edward||Winnick, David|
|O'Neill, Martin||Wise, Audrey|
|Orme, Rt Hon Stanley||Worthington, Tony|
|Paisley, The Reverend Ian||Wray, Jimmy|
|Parry, Robert||Wright, Dr Tony|
|Pearson, Ian||Young, David (Bolton SE)|
|Pickthall, Colin||Tellers for the Ayes:|
|Pike, Peter L||Mr. Eric Clarke and|
|Pope, Greg||Mr. Dennis Turner.|
|Ainsworth, Peter (East Surrey)||Douglas-Hamilton, Lord James|
|Aitken, Rt Hon Jonathan||Dover, Den|
|Alexander, Richard||Duncan, Alan|
|Alison, Rt Hon Michael (Selby)||Duncan Smith, Iain|
|Allason, Rupert (Torbay)||Dunn, Bob|
|Amess, David||Durant, Sir Anthony|
|Ancram, Rt Hon Michael||Eggar, Rt Hon Tim|
|Arbuthnot, James||Evans, David (Welwyn Hatfield)|
|Arnold, Jacques (Gravesham)||Evans, Jonathan (Brecon)|
|Arnold, Sir Thomas (Hazel Grv)||Evans, Nigel (Ribble Valley)|
|Ashby, David||Evans, Roger (Monmouth)|
|Aspinwall, Jack||Evennett, David|
|Atkins, Rt Hon Robert||Faber, David|
|Atkinson, David (Bour'mouth E)||Fabricant, Michael|
|Atkinson, Peter (Hexham)||Fenner, Dame Peggy|
|Baker, Rt Hon Kenneth (Mole V)||Field, Barry (Isle of Wight)|
|Baker, Nicholas (North Dorset)||Fishburn, Dudley|
|Baldry, Tony||Forman, Nigel|
|Banks, Matthew (Southport)||Forsythe, Clifford (S Antrim)|
|Banks, Robert (Harrogate)||Forth, Eric|
|Bates, Michael||Fowler, Rt Hon Sir Norman|
|Batiste, Spencer||Fox, Rt Hon Sir Marcus (Shipley)|
|Beggs, Roy||Freeman, Rt Hon Roger|
|Bellingham, Henry||French, Douglas|
|Bendall, Vivian||Fry, Sir Peter|
|Beresford, Sir Paul||Gale, Roger|
|Body, Sir Richard||Gallie, Phil|
|Bonsor, Sir Nicholas||Gardiner, Sir George|
|Booth, Hartley||Garnier, Edward|
|Boswell, Tim||Gill, Christopher|
|Bottomley, Peter (Eltham)||Gillan, Cheryl|
|Bottomley, Rt Hon Virginia||Goodlad, Rt Hon Alastair|
|Bowden, Sir Andrew||Goodson-Wickes, Dr Charles|
|Bowis, John||Gorman, Mrs Teresa|
|Boyson, Rt Hon Sir Rhodes||Gorst, Sir John|
|Brandreth, Gyles||Grant, Sir A (SW Cambs)|
|Brazier, Julian||Greeenway, Harry (Ealing N)|
|Bright, Sir Graham||Greenway, John (Ryedale)|
|Brooke, Rt Hon Peter||Griffiths, Peter (Portsmouth, N)|
|Brown, M (Brigg & Cl'thorpes)||Grylls, Sir Michael|
|Browning, Mrs Angela||Gummer, Rt Hon John Selwyn|
|Bruce, Ian (South Dorset)||Hague, Rt Hon William|
|Budgen, Nicholas||Hamilton, Rt Hon Sir Archibald|
|Burt, Alistair||Hamliton, Neil (Tatton)|
|Butcher, John||Hampson, Dr Keith|
|Butler, Peter||Hanley, Rt Hon Jeremy|
|Butterfill, John||Hannam, Sir John|
|Carlisle, John (Luton North)||Hargreaves, Andrew|
|Carlisle, Sir Kenneth (Lincoln)||Harris, David|
|Carrington, Matthew||Haselhurst, Sir Alan|
|Cash, William||Hawkins, Nick|
|Channon, Rt Hon Paul||Hawksley, Warren|
|Chapman, Sir Sydney||Hayes, Jerry|
|Clappison, James||Heald, Oliver|
|Clark, Dr Michael (Rochford)||Heath, Rt Hon Sir Edward|
|Clarke, Rt Hon Kenneth (Ru'clif)||Heathcoat-Amory, Rt Hon David|
|Coe, Sebastian||Hendry, Charles|
|Colvin, Michael||Heseltine, Rt Hon Michael|
|Congdon, David||Hicks, Robert|
|Conway, Derek||Hill, James (Southampton Test)|
|Coombs, Anthony (Wyre For'st)||Hogg, Rt Hon Douglas (G'tham)|
|Coombs, Simon (Swindon)||Horam, John|
|Cope, Rt Hon Sir John||Hordern, Rt Hon Sir Peter|
|Cormack, Sir Patrick||Howard, Rt Hon Michael|
|Couchman, James||Howell, Rt Hon David (G'dford)|
|Cran, James||Howell, Sir Ralph (N Norfolk)|
|Currie, Mrs Edwina (S D'by'ire)||Hughes, Robert G (Harrow W)|
|Curry, David (Skipton & Ripon)||Hunt, Rt Hon David (Wirral W)|
|Davies, Quentin (Stamford)||Hunt, Sir John (Ravensbourne)|
|Davis, David (Boothferry)||Hunter, Andrew|
|Day, Stephen||Hurd, Rt Hon Douglas|
|Deva, Nirj Joseph||Jack, Michael|
|Devlin, Tim||Jackson, Robert (Wantage)|
|Dicks, Terry||Jenkin, Bernard|
|Dorrell, Rt Hon Stephen||Jessel, Toby|
|Johnson Smith, Sir Geoffrey||Paice, James|
|Jones, Gwilym (Cardiff N)||Patten, Rt Hon John|
|Jones, Robert B (W Hertfdshr)||Pattie, Rt Hon Sir Geoffrey|
|Jopling, Rt Hon Michael||Pawsey, James|
|Key, Robert||Peacock, Mrs Elizabeth|
|King, Rt Hon Tom||Pickles, Eric|
|Kirkhope, Timothy||Porter, Barry (Wirral S)|
|Knapman, Roger||Porter, David (Waveney)|
|Knight, Mrs Angela (Erewash)||Portillo, Rt Hon Michael|
|Knight, Rt Hon Greg (Derby N)||Powell, William (Corby)|
|Knox, Sir David||Rathbone, Tim|
|Lait, Mrs Jacqui||Redwood, Rt Hon John|
|Lamont Rt Hon Norman||Renton, Rt Hon Tim|
|Lang, Rt Hon Ian||Richards, Rod|
|Lawrence, Sir Ivan||Riddick, Graham|
|Legg, Barry||Rifkind, Rt Hon Malcolm|
|Leigh, Edward||Robathan, Andrew|
|Lennox-Boyd, Sir Mark||Roberts, Rt Hon Sir Wyn|
|Lester, Sir James (Broxtowe)||Robertson, Raymond (Ab'd'n S)|
|Lidington, David||Roe, Mrs Marion (Broxbourne)|
|Lilley, Rt Hon Peter||Rowe, Andrew (Mid Kent)|
|Lord, Michael||Rumbold, Rt Hon Dame Angela|
|Luff, Peter||Ryder, Rt Hon Richard|
|Lyell, Rt Hon Sir Nicholas||Sackville, Tom|
|MacGregor, Rt Hon John||Sainsbury, Rt Hon Sir Timothy|
|MacKay, Andrew||Scott, Rt Hon Sir Nicholas|
|Maclean, Rt Hon David||Shaw, David (Dover)|
|McLoughlin, Patrick||Shaw, Sir Giles (Pudsey)|
|McNair-Wilson, Sir Patrick||Shephard, Rt Hon Gillian|
|Madel, Sir David||Shepherd, Sir Colin (Hereford)|
|Maginnis, Ken||Shepherd, Richard (Aldridge)|
|Maitland, Lady Olga||Shersby, Sir Michael|
|Malone, Gerald||Sims, Roger|
|Mans, Keith||Skeet, Sir Trevor|
|Marland, Paul||Smith, Sir Dudley (Warwick)|
|Marlow, Tony||Smith, Tim (Beaconsfield)|
|Marshall, John (Hendon S)||Smyth, The Reverend Martin|
|Marshall, Sir Michael (Arundel)||Soames, Nicholas|
|Martin, David (Portsmouth S)||Speed, Sir Keith|
|Mates, Michael||Spencer, Sir Derek|
|Mawhinney, Rt Hon Dr Brian||Spicer, Sir James (W Dorset)|
|Mayhew, Rt Hon Sir Patrick||Spicer, Sir Michael (S Worcs)|
|Mellor, Rt Hon David||Spink, Dr Robert|
|Merchant, Piers||Spring, Richard|
|Mills, Iain||Sproat, Iain|
|Mitchell, Andrew (Gedling)||Squire, Robin (Hornchurch)|
|Mitchell, Sir David (NW Hants)||Stanley, Rt Hon Sir John|
|Moate, Sir Roger||Steen, Anthony|
|Molyneaux, Rt Hon Sir James||Stem, Michael|
|Monro, Rt Hon Sir Hector||Stewart, Allan|
|Montgomery, Sir Fergus||Streeter, Gary|
|Moss, Malcolm||Sumberg, David|
|Needham, Rt Hon Richard||Sweeney, Walter|
|Nelson, Anthony||Sykes, John|
|Neubert, Sir Michael||Tapsell, Sir Peter|
|Newton, Rt Hon Tony||Taylor, Ian (Esher)|
|Nicholls, Patrick||Taylor, Rt Hon John D (Strgfd)|
|Nicholson, David (Taunton)||Taylor, John M (Solihull)|
|Norris, Steve||Taylor, Sir Teddy (Southend, E)|
|Onslow, Rt Hon Sir Cranley||Temple-Morris, Peter|
|Oppenheim, Phillip||Thompson, Sir Donald (C'er V)|
|Ottaway, Richard||Thompson, Patrick (Norwich N)|
|Page, Richard||Thornton, Sir Malcolm|
|Townend, John (Bridlington)||Whitney, Ray|
|Townsend, Cyril D (Bexl'yh'th)||Whittingdale, John|
|Tracey, Richard||Widdecombe, Ann|
|Tredinnick, David||Wiggin, Sir Jerry|
|Trend, Michael||Wilkinson, John|
|Trotter, Neville||Willetts, David|
|Twinn, Dr Ian||Wilshire, David|
|Vaughan, Sir Gerard||Winterton, Mrs Ann (Congleton)|
|Waldegrave, Rt Hon William||Winterton, Nicholas (Macc'fld)|
|Walker, Bill (N Tayside)||Wolfson, Mark|
|Waller, Gary||Wood, Timothy|
|Ward, John||Yeo, Tim|
|Wade, Charles (Bexhill)||Young, Rt Hon Sir George|
|Watts, John||Tellers for the Noes:|
|Wells, Bowen||Dr. Liam Fox and|
|Wheeler, Rt Hon Sir John||Mr. Simon Burns.|
§ 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.
§ MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.
That this House congratulates the Government on the progress that it is making with privatisation, with the franchising in the last three weeks alone of the InterCity East Coast, Gatwick Express and Network South Central lines, offering the prospects of better services and higher investment at less cost to tax-payers; recognises that this demonstrates that the Opposition's attempt to halt privatisation has failed; and looks forward to the flotation of Railtrack in May as a golden opportunity for the railways to gain access to the private finance necessary for investment, and for people to become real stakeholders in the railways, thanks to the Government's policy of wider share ownership.