Freight (Hansard, 22 April 1996)

§ 7. Mr. Hendry
To ask the Secretary of State for Transport what assistance his Department has given to encourage freight off the roads and on to the railways. [24722]

§ Sir Geroge Young
By giving rail freight operators the commercial freedom and incentive to win traffic from road, we are ensuring a bright future for that important industry. We have made good progress with the sale of British Rail's freight businesses. We continue to provide targeted support for the industry through track access grants and freight facilities grant.

§ Mr. Hendry
I am grateful to my right hon. Friend for that reply. Does he recall his recent visit to my constituency, when he opened the new Government-funded railhead at Buxton Lime Industries, which is the largest quarry in Europe? Does he agree that such a combination of privatisation with Government grants and incentives will make it possible for freight to be transferred off the roads and on to railways? Will he assure my constituents that, wherever possible, it will be 9 the Government's objective to achieve precisely that, and to stop huge lorries rumbling through small villages that were never intended for such traffic?

§ Sir George Young
I recall with affection my recent visit to my hon. Friend's constituency. He was good enough to arrange for me to be transported by a steam train and to be greeted by a brass band on my descent. I must say that that is not a reception that I receive in every constituency that I visit. The grant to which my hon. Friend referred is one of the largest ever awarded to a company. It ensures that the town of Buxton is spared 125 lorry movements a day for at least 10 years. Yes, it is indeed the Government's policy to continue to make grants available in suitable circumstances to win traffic off the road and to put it back on the railways.

§ Mrs. Dunwoody
The Secretary of State would like to come to Crewe and Nantwich, I could arrange for at least two brass bands to give him a very suitable fanfare, making the right kind of noises. Perhaps he could then explain to my constituents why the Conservative party chairman, having told us all at great length how it was necessary to split the freight system to get competition into the rail system, apparently went to America and handed over vast numbers of assets to a particular American firm, which has insisted that it should have total control? Is that correct, and is it why the Secretary of State received a fanfare when he went to the constituency of the hon. Member for High Peak (Mr. Hendry)?

§ Sir George Young
I am interested in the auction that is developing to see who can provide the most brass bands with which to greet the Transport Secretary. On the suggestion concerning my right hon. Friend the Member for Peterborough (Dr. Mawhinney), the competition was open, it was comprehensive and I have absolute confidence in its propriety. On the gist of the hon. Lady's comments, Trainload Freight was indeed split into three. We then gave the market an opportunity to decide whether it wanted to bid for it in three parts or in its entirety. It was clear from that competition that the market would prefer to buy it in one go. If one takes the view that real competition comes from road rather than rail, there is much to be said for having one well-resourced, effective provider in the rail industry in order to compete effectively with the road industry.

§ Mr. Congdon
Although new investment in the railways is desirable to build additional freight lines, especially as that removes freight from the road on to the railway, does my right hon. Friend agree that it is important that any proposals do not do so at the expense of the destruction or blight of many houses, as is likely under the proposal by Central Railways?

§ Sir George Young
I know how strongly my hon. Friend and other hon. Members feel about the potential impact of the Central Railways Group proposals. He will have seen that I recently refused the application for waivers that was lodged with my Department. The ball is now in the court of the Central Railways Group, which will have to decide whether it will proceed with that proposal.

§ Ms Short
Does the Secretary of State agree that, given the projections of congestion, we must get more freight 10 on to rail? We are down to just 6 per cent. now. Does he agree that the opening of the channel tunnel gives us a real opportunity to get more freight on to rail because it can travel much greater distances? Is it not, therefore, a tragedy that track access charges have been set so high, to give a high income stream to Railtrack, that we shall not get that expansion? Will the Secretary of State admit that the pathfinder prospectus makes it clear that the opportunities for an increase in freight on rail are limited and, therefore, that the Government have no expectations that we shall get the expansion that we need?

§ Sir George Young
I do not think that the hon. Lady does justice to the Government's progress in this matter. We have liberated access to the railways and as a result, two companies, National Power and Direct Rail Services, are now running their own rail freight services under the open access powers in the Railways Act 1993. Since 1979, we have awarded 146 grants with a total value of £100 million at today's prices, securing traffic to rail equivalent to more than 2.5 million lorry journeys per year. I am convinced that, with Wisconsin—an experienced operator, which will bring new ideas, new practices and new successes to rail freight—we shall make further progress in winning traffic back on to the railways and away from the roads.

§ Mr. John Marshall
Does my right hon. Friend agree that the fact that only 6 per cent. of freight goes by rail is a crushing indictment of British Rail? Does that not underline the case for privatisation rather than the status quo?

§ Sir George Young
My hon. Friend is absolutely right. Under the regime that we are introducing, there is, for the first time, a commercial incentive to win traffic back on to the railways. Wisconsin has that incentive, but that incentive did not, and could never, exist within the nationalised industry. That is why I am confident that the new regime will lead to a reversal of the decline to which my hon. Friend has drawn attention.