§ Ms Clare Short (Birmingham, Ladywood)
I beg to move,That this House notes with grave concern the very serious allegations of fraud against the management team which has been awarded the franchise to operate the London, Tilbury and Southend rail line; is concerned that this fraud was discovered by British Rail staff only days before the franchise was handed over and would not have been subject to British Rail audit thereafter; believes that this development reveals flaws in the franchising system and the effectiveness of the franchise director; calls on the Government to acknowledge that the process of rail privatisation is costing the taxpayer more for a lesser service, has led to a slump in investment, and is undermining through-ticketing and connections between services; and therefore calls on the Government to halt the process of rail privatisation which is driven by dogma rather than the transport needs of the nation.It is clear to anyone who has studied the detail of rail privatisation that it is a project driven by right-wing ideology and not by the transport needs of Britain. The Government are willing, at enormous cost to the public purse, to wreak great damage on our rail system and to sell it off for a tiny proportion of its value. The whole process is a madness, driven by dogma and ideological zeal.
Any serious person considering the future transport needs of Britain knows that the country cannot accommodate the projected increase in car use. We must therefore enhance public transport use, and that means that we must improve the quality and reliability of bus and rail. We must get more passengers and freight on to rail.
The nation's needs therefore dictate that we must preserve our national rail network, but achieve considerably higher levels of investment than we have had in the past. The privatisation of rail is producing the opposite. It has caused a slump in investment, and thus we have the disgraceful deterioration of the west coast main line, which is close to my heart because it takes me between London and Birmingham. That line serves a major corridor in the country and it is deteriorating greatly.
Investment in rolling stock has slumped, which means, tragically, that the Asea Brown Boveri carriage works in York will close. That will make hundreds of skilled workers redundant, and there will be further redundancies at ABB in Derby. Jobs will be lost and Britain's manufacturing capacity will be reduced. One hundred trains, worth nearly £500,000, which have already been purchased, are lying idle because the new bureaucracy set up by the Government has not cleared them for use. Of course we agree that proper health and safety standards must apply, but it is madness that new trains cannot be used and that older, less safe trains remain in use. That is another example of the madness of the structures established by the Government.
On top of those facts, Railtrack's published investment plans for the next 10 years promise less investment than British Rail's previous record, yet we all know that we 338 must achieve higher levels of investment. Despite the Government's rhetoric in defence of privatisation on the grounds that it will produce more investment, the reality is that the opposite is the truth.
§ Mr. Tracey
I am grateful to the hon. Lady, although I am afraid I do not intend to be helpful to her. She talks about dogma, but I suggest that what she has been saying about investment is socialist dogma which is not backed up by reason. In my constituency, Stagecoach has just taken over South West Trains. The company is promising considerable investment in services to help commuters and business travellers and to improve the facilities at stations. That follows the total failure of BR to provide any investment in the service these past many years.
§ Mr. D. N. Campbell-Savours (Workington)
Stagecoach's most recent foray into this area was, as my hon. Friends will recall, on the north-west coast line— from which the company subsequently withdrew when it could not make the line pay.
§ Ms Short
No, I will not give way to the hon. Gentleman, but I do intend to give way to the hon. Member for Southend, East (Sir T. Taylor) in a few moments.
It is clear that this privatisation has been designed by zealots. The privatised service is costing the taxpayer more for a lesser service: £1 billion of taxpayers' money is being spent on the one-off costs of preparing for the privatisation and, according to the Red Book, it is costing taxpayers £850 million a year more in public subsidies to run the same services under the privatised structure.
§ Ms Short
Certainly not. One would have thought, after yesterday, that the hon. Gentleman would not dare rise from his seat.
The system that the Government have designed breaks British Rail into 100 separate profit-seeking organisations. The taxpayer is being made to pour £2 billion into the top 339 of this system so that it can trickle through, giving a profit to all 100 companies on its way down—profit at the expense of the taxpayer.
The public have no control over the way their money is spent.
§ Ms Short
This is an outrage. I have made it clear, Madam Speaker, that I am not giving way to the hon. Gentleman. I would be grateful for your protection.
There are also many questions to be asked about the franchising system for the train operating companies. With the allegations of deliberately organised fraud on a major scale on the London, Tilbury and Southend line, we can see the consequences of scrapping a public service ethos and replacing it with a profit-maximising ethos.
§ Sir Teddy Taylor
The residents of Southend have suffered from a lack of investment and unreliable trains for all of the 15 years I have represented the constituency. I accept the hon. Lady's point that we must thoroughly root out dishonesty, but will she accept that it would be in the best interests of the people of Southend to sort out the matter and get privatisation going? The privatised company has signed a contract agreeing to bring in new trains in three years' time. That is more than just a pledge. We are going to have more services.
Instead of engaging in a political battle—understandably perhaps—should we ask ourselves what is best for the travelling public? The fact is that privatisation can provide the cash which British Rail, under Conservative and Labour Governments, has been unable to provide.
§ Ms Short
I agree with the hon. Gentleman that there is a need for better rolling stock and services on his line. I also agree absolutely that we do not need political arguments: we need a commitment to a better quality railway and to higher investment. We in the Labour party have for a long time advocated leasing rolling stock.
If the hon. Gentleman has visited rail manufacturing companies, he will know that they are interested in putting lots of private sector investment into our rail network to improve the quality of our rolling stock. That could be done under existing arrangements. Instead, because of dogma and the waste of time and money of this privatisation, all that new rolling stock has not come on stream—which is a tragedy for the hon. Gentleman's constituents and for people in other parts of the country.
I agree with the hon. Gentleman that the allegations of fraud must be dealt with thoroughly, and that his constituents deserve an end to doubt and an enhanced service; but I think that that would be better achieved in the public sector than in a profit-maximising ethos.
Inquiries into the allegations continue, and a number of questions will continue to be asked. I am told that there were plans to embark on a similar ticket-selling fraud at Barking. There is the serious question of when the fraud was planned. Did the management team allow for the proceeds of that fraud in presenting its bid for the franchise? All those questions will have to be answered.
The South West Trains bid was so low that those who work in the service expect staff terms and conditions to be decimated. We shall pay close attention to future 340 developments. The high-quality railways that Britain needs require good working conditions for staff so that they feel that they are stakeholders—if I may use that word—take pride in the service that they provide, and help to bring about high standards and productivity.
When the Secretary of State claimed that the new system would guarantee minimum service levels and control increases in ticket prices, he could have been said to be misleading the public. The contracts being let for franchises provide for the operator to negotiate lower conditions or higher subsidy than those laid down, and the minimum conditions laid down are in turn much lower than those relating to existing services. Moreover, only 50 per cent. of tickets are covered by promises not to allow large price increases. To suggest to the public that their services and tickets will be protected is to mislead them.
The Government's repeated claim that private operators will run services more cheaply than British Rail is also not completely true. The Secretary of State is comparing figures from bidders with inflated figures allowing for high access charges and a notional profit on top of British Rail's real operating costs. If franchising will result in such great savings, can the Secretary of State explain why taxpayers are putting an extra £850 million a year of subsidy into the system?
Why has British Rail not been allowed to bid for the franchises? The Bill that became the Railways Act 1993 was defeated in the other place—on that very point—and was then amended in the House of Commons to allow British Rail to bid; yet it has been excluded from all the bids that have been considered so far. Why? It could have provided a benchmark for decent public service standards. Any other bidder would at least have had to provide a better service than British Rail. Its exclusion breaches promises made to Parliament, and demonstrates again that the process is driven by dogma rather than by the search for a quality rail service.
The Government's proposed sale of Railtrack involves another major scandal. When their rail privatisation Bill went through the House of Commons, the Government repeatedly said that Railtrack would be a public sector company.
§ Mr. David Chidgey (Eastleigh)
I agree with much that the hon. Lady has said, but my party and, I think, the House would like to know the answer to a question. If she believes that Railtrack should be under public control and regulation, how is that to be achieved? It is important for us to know what will be in the prospectus for Railtrack in a few weeks' time. Will the Labour party be making a commitment to that effect?
§ Ms Short
I have answered the hon. Gentleman's question personally in the last couple of days, but I am coming to his point. I shall be deeply critical of his party's position, for reasons that I have already explained to him.
The proposed sale of Railtrack is another major scandal. During the passage of the Railways Bill, the Government promised the House over and over again that Railtrack would be a public sector company. Rail privatisation with Railtrack in the public sector and rail privatisation with Railtrack in the private sector are two utterly different propositions. The change of course means that the House passed legislation on one basis but is being given something entirely different. It is totally 341 dishonourable for the Government not to seek the permission of the House of Commons for such a major change in policy.
We know from the survey conducted by Save Our Railways that 20 per cent. of Tory Members of Parliament say in private, when asked, that they do not support rail privatisation. There must be a vote. In honour, it should be arranged by the Government. If they fail, it will be arranged by the Labour party. If Conservative Members vote for what they know is in the national interest, the sale of Railtrack will be stopped. We shall see what they are made of, or whether they say one thing to Save Our Railways, another to their constituents and another in the House of Commons.
§ Mr. Tim Devlin (Stockton, South)
Railtrack has said that in the first 10 years after privatisation, it intends to spend £1 billion a year on upgrading track, signalling and so on. If, after the general election, we had a Labour Government, would the hon. Lady be able to match that investment or would she leave Railtrack in the private sector?
§ Ms Short
Conservative Members seem to read handouts from central office rather than listen to the debate. I have already dealt with that point. [HON. MEMBERS: "Answer the question."] So few Conservative Members seem to listen. They are simply here to barrack, which the public do not like.
I have already dealt with the point that Railtrack's 10-year investment plan promises a lower level of investment than British Rail's record, and we all know that previous levels of investment were too low, so that is nothing for Conservative Members to boast about.
§ Ms Short
I have checked my facts, unlike many Conservative Members.
Railtrack has been valued at £6.5 billion in modern replacement value for the purposes of setting the costs of access to the track. City experts believe that it will sell for about £1.5 billion. This is a valuable public asset, but it is to be sold off cheaply—£5 billion of taxpayers' investment is to be thrown away.
The scandal goes on because £1.5 billion worth of debts are to be written off in order to help the sale—another £1.5 billion of taxpayers' money thrown away. Most recently, £80 million owed by Railtrack to the train operating company for its failure to meet its contracts is to be paid not by Railtrack but, to fatten it up for the sale, by the taxpayer—another £80 million of taxpayers' money thrown away on this dogma-driven scheme.
The net result is that City experts expect Railtrack to sell for about £1.5 billion and to continue to receive £2 billion each year from the taxpayer with no public accountability. That is an outrageous proposition.
§ Mr. Tony Banks (Newham, North-West)
What does my hon. Friend think would be the reaction if, for example, a Government decided to purchase assets worth £6.5 billion that were privately held for £1.5 billion? What 342 would the newspapers say about such a Government? Would not they say that that was theft, expropriation or robbery? Are not the Government proposing precisely the same thing now for publicly owned assets?
§ Madam Speaker
Order. The hon. Gentleman must not persist. The hon. Lady has made it clear that she is not giving way.
§ Ms Short
I shall press on, if I may.
There is, I am afraid, beyond the scandals that I have listed, a further scandal. It concerns the land and property owned by Railtrack. I can best summarise the situation by quoting from a couple of newspaper stories. On 14 January, in the business section of The Observer, Anthony Barnet wrote:Property companies are queuing up for a slice of the lucrative development pie expected when Railtrack is privatised in May … On Friday"—the Friday before Sunday 14 January—property consultants submitted tenders for the lucrative contracts to manage Railtrack's retail portfolio … One of the property consultants who bid, but refused to be named because of the sensitivity of the deal, said: 'In retailing terms, Railtrack is one of the biggest shopping centre owners in the country. But it has been wasting its potential. It has some plans which will be controversial, but could be immensely profitable'.And we thought that this was all about running our railways.
In The Independent on 20 January, after the regulator had decided that 25 per cent. of the proceeds of windfall profits from property would go to the train operating companies and 75 per cent. would go to Railtrack, Christian Wolmer said:The decision to allow the company to keep the lion's share of a property portfolio that some analysts estimate could be worth £2bn"—taxpayers' money—follows a fierce lobbying campaign by Bob Horton, Railtrack's chairman … Sir George Young, the transport secretary, also backed the idea of putting what Railtrack's advisers call a 'property kicker' 343 into the sale, so that the company can be marketed as a high-yielding utility with the added spice of potential property development profits.There we have it. That is how the Government view valuable land currently owned by the public in the centre of every town and city across the land—added spice to assist the privatisation process.
§ Ms Short
No, I must get on.
What is to be done about this terrible scandal? I say to people such as John Humphreys, Christian Wolmar, Keith Harper—journalists whom I like and respect, who think that Labour can wave a magic wand and stop all of this— that the problem is that, as yet, we are still in opposition and do not have the votes to prevent the privatisation unless, as I have made clear, some Tory Members of Parliament have the integrity to vote with us to prevent the sale of Railtrack.
Those journalists who constantly ask what Labour will do are letting the Government off the hook and asking a question that cannot be answered by a serious political party preparing for government. The Government have not yet said whether they will sell 51 per cent. or 100 per cent. of Railtrack. We do not know the timing of the sale or the price. No serious party can say precisely what it will do in conditions of such uncertainty.
What the leader of the Liberal Democrats and his spokesperson on transport claim is simply not true. If Labour said that it will buy all the shares in Railtrack, that would not halt the sale. On the contrary, it would mean that there would be no risk in buying Railtrack's shares. They could be sold cheaply, thus wasting taxpayers' money—again—and bought back expensively, wasting further taxpayers' money. Those who think that Labour can somehow stop this flotation by such an open-ended commitment are simply wrong. It is all right for the Liberals, who are not expecting to take power, to make such promises, but it is not all right for the Labour party, which is preparing for power.
How dare the Secretary of State and Tory Members ask what Labour will do after they have done their best to damage and break up our rail network and waste vast sums of public money? Perhaps the Government are so driven by zealotry that they cannot see the reality. Perhaps a simile might help them to understand what is proposed: the Government and Tory Members are behaving like a bunch of thugs who come marauding into a town and threaten to burn down all the civic buildings before an election and then ask someone such as me, who is standing for election in the town, what I would do, if I won, with all the burnt civic buildings. My answer is that I will do all in my power to stop them burning down the civic buildings now and that, if I fail, unlike the thugs, I will do in all my power to restore and protect the civic treasures. Perhaps Tory Members will now understand what their proposals for our rail network really are.
Labour's view is that a crucial public service that receives a large annual injection of public money—that fact makes this unlike any previous privatisation—should be publicly owned and publicly accountable. That is why we vehemently oppose privatisation. We believe that we need higher, not lower, levels of rail investment. That is 344 why we have for a long time supported the leasing of rolling stock and public-private partnerships to mobilise higher investment levels from the private sector.
It is because we know that it is morally wrong and deeply destructive that we will try to halt the sale of Railtrack. We ask the public to help us by putting pressure on Tory Members to vote to halt the sale. If that fails, we will make our position clear before the sale so that anyone who contemplates buying shares knows Labour's view. We will set out our view when the time is right but, meanwhile, for the benefit of anyone contemplating buying Railtrack, I will list our concerns.
First, there must be public accountability and a return to the public in relation to an annual subsidy of £2 billion to a company that may sell for as little as £1.5 billion. Secondly, 100 per cent. of the proceeds from property development should go into rail investment. Thirdly, health and safety cannot be left in the hands of a company driven by commercial considerations.
Fourthly, we are concerned that track access charges are so high that they make the marginal cost of enhancing rail use prohibitive. We are attracted by the Dutch and Swedish models that direct subsidy into the infrastructure, thus creating profitable train operating companies and allowing rail to compete on an equal basis with roads. Fifthly, we are concerned that the separation of the signalling operation from train operators is inefficient and dangerous and must be reviewed. Sixthly, we are aware that a high-quality rail service requires decent employment conditions for staff. We will oppose savings driven by cuts in pay and conditions.
Labour will use its powers to legislate and to regulate, and the power of the subsidy to create a nationally integrated, high-investment, high-quality rail network that is better used by passengers and freight than the existing system. No one should doubt our seriousness, but, unlike the Government, we will not spend public money irresponsibly on dogma-driven schemes. So much needs doing in this poor old country of ours and so much spending is needed on reducing unemployment and improving the health and education services, housing and much else, that every penny must be spent wisely.
I advise anyone who is thinking of investing in Railtrack not to do so because the structures being created by the Government cannot be left in place. With the help of the electorate, Labour will form a better Government and create a better rail system. That is our promise.
§ 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, particularly with the start of private passenger services on the South West and Great Western lines, offering the prospects of better services and higher investment at less cost to the taxpayer; 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 an opportunity for the railways to access private finance for investment.".I welcome this opportunity to set out our plans for a better railway, to report on the progress that we have made towards achieving that and to contrast it with the policy vacuum offered by the hon. Member for Birmingham, Ladywood (Ms Short). Anyone listening to 345 her speech and hoping for some glimmer of intelligence on how the Labour party conference resolution on a publicly owned railway would be achieved would have been disappointed. It was an excuse of a speech, offering no clarity from a party that hopes to be elected. It is, I think, the first time in my life that I have been called a right-wing ideologue, a zealot and a thug. I hardly recognise her description.
§ Sir George Young
No. I should like to exit the terminus and gather up a bit of speed before the first signal turns red.
Our White Paper, published in July 1992, set out a clear coherent programme for revitalising the railways by transferring them to the private sector. The policy has been pursued steadily over the past few years and is now coming to fruition, much to the frustration of the Labour party, which has been running to catch up. The speech by the hon. Member for Ladywood was evidence that Labour has now run out of steam.
I shall set out the progress that we have made towards achieving that better railway, but first let me deal with what the hon. Lady said about the LTS franchise, comment about which forms the main component of the motion before the House.
I reported to the House on Monday that, pending investigation of ticket irregularities, the franchising director had decided not to proceed with the transfer of the LTS franchise to Enterprise Rail. Since then, British Rail has sent audit teams to all the stations where the allocation of revenue between London Underground Ltd. and the train operating company could be manipulated to the advantage of the train operating company.
The checks picked up only one irregularity, involving about 30 tickets and a sum of £250, at Walthamstow Central, where the chief clerk has been suspended from duty. Checks of the newly franchised companies have revealed no irregularities at their stations.
The House should be in no doubt that we take the allegations seriously. As I said on Monday, financial irregularities, in the public or the private sector, have no place in a modern railway. The incidents are being fully investigated by British Rail and the Rail Regulator, and the franchising director has assured me that until he, the Rail Regulator and British Rail are completely satisfied that the allegations have been fully investigated, there can be no question of the transfer of the LTS franchise going ahead. The franchising director will not take any decision about the future of that franchise until he has had the chance to consider the outcome of the investigations.
The hon. Member for Ladywood alleged—
§ Sir George Young
I shall finish the next paragraph in my speech and then give way.
The hon. Member for Ladywood alleged that the irregularities would not have been uncovered had the LTS franchise already been transferred to the private sector. 346 There is no basis for that assertion. The irregularities were picked up as a result of new audit arrangements put in place for privatisation through the Association of Train Operating Companies.
After privatisation, ATOC will continue to carry out regular audits of ticketing transactions involving British Rail and the franchise operators. The audit arrangements have worked well and quickly; the irregularities were picked up within weeks. Nevertheless, the Rail Regulator will examine the robustness of the audit and check systems to find out whether any changes are required to improve the detection of fraud and other irregularities.
§ Ms Jackson
I am grateful to the Secretary of State—[Interruption.]—and to quell any anxiety on the Conservative Benches, I of course declare an interest, as I am sponsored by the train drivers' union, ASLEF. It is my understanding that the franchise for LTS was awarded on 19 and 20 December. How could that happen if the franchising director had gone through the five stages necessary before a franchise is offered? Had he made the relevant inquiries into the managerial and economic competence of the franchisee, and had he really exercised his powers of diligent examination of the background of the would-be franchisees?
§ Sir George Young
Yes, clearly he had, because the franchise was awarded to LTS. The crucial factor is that the audit picked up the irregularities almost at once. I hope that the hon. Lady will await the outcome of the investigations undertaken by ATOC, the Rail Regulator and the Office of Passenger Rail Franchising before coming to any premature conclusions.
§ Mr. Wilson
For the benefit of the House and of potential investors in any of the companies, will the right hon. Gentleman confirm that if the incident had occurred after privatisation, it would have been exactly the kind of offence and breach of contractual conditions that would have justified the removal of the franchise there and then?
§ Sir George Young
It is, indeed, true that the regulator and OPRAF have a wide range of powers at their disposal, including, in the case of the former, the power to revoke the licence. The point that I want to make at this stage, however, is that the prompt response to the incident by ATOC, British Rail and the Rail Regulator sound a clear warning to everyone in the industry that sharp practices will not be tolerated, but will be uncovered and dealt with.
I hope that the House will join me in expressing the hope that other public bodies, especially local authorities confronted by worse problems than those that I have mentioned, would respond as promptly.
§ Mr. Peter Luff (Worcester)
Does my right hon. Friend agree that what he has just said shows which party is tough on fraud and tough on the causes of fraud?
§ Sir George Young
I am grateful to my hon. Friend. Indeed, earlier today I read the Appleby report into Lambeth council, which said:In 1993, it seemed there could have been as many as 400 to 500 council officers receiving fraudulent benefits. I could see no justification for Lambeth's failure to take strong action in this matter.
§ Dr. Spink
Does my right hon. Friend agree that it ill behoves the House to prejudice and prejudge matters that 347 are under investigation and that we should not address the detail of matters until inquiries have been completed and we have the facts before us? Is he aware that column 20 of Hansard of 5 February 1996 shows most clearly that the hon. Member for Birmingham, Ladywood (Ms Short) said that the management team was "corrupt" and added the qualification "if only after I had shouted "Withdraw"?
§ Ms Short
On a point of order, Mr. Deputy Speaker. The hon. Member for Castle Point (Dr. Spink) raised that matter on a point of order yesterday, and it was dealt with fully by Madam Speaker. The hon. Member for Gravesham (Mr. Arnold) misquoted Hansard. It is out of order to raise the point again in such a misleading way. [Interruption.]
Mr.Deputy Speaker (Sir Geoffrey Lofthouse)
Order. Hon. Members must settle down and get on with the debate.
§ Sir George Young
I will give way in a moment after I have got slightly further down the track.
Of course I regret that, as a result of what I have just referred to, users of the London-Tilbury-Southend line, including the constituents of my hon. Friend the Member for Southend, East (Sir T. Taylor), will have to wait a little longer before enjoying the benefits of privatisation, which are already starting to emerge for passengers on the Great Western and South West Trains' lines, as my hon. Friend the Member for Surbiton (Mr. Tracey) mentioned a moment ago.
We have combined robust safeguards to protect the benefits that passengers want from the railway with opportunities for franchisees to introduce better services and deals for their passengers. It has always been my view—I suspect that it has been shared by most hon. Members—that people will judge policies not on rhetoric but on performance: on what happens on the railways under the new regime.
I should like to outline some of the safeguards. For the first time, key fares are to be pegged to inflation for three years and at 1 per cent. below inflation for four years thereafter. In simple terms, I can guarantee that for every journey to every station in the country, there will be at least one regulated fare—a safeguard that passengers have never had before, laying the foundation for a revival in rail travel. Secondly, for the first time, service levels are guaranteed by contractually binding passenger service requirements—a guarantee not provided by British Rail. National through-ticketing schemes and discounts for disabled, elderly and young people are all protected.
In addition, franchisees are offering additional services above the PSRs, such as improved passenger charters— South West Trains is setting punctuality and reliability targets 2 per cent. higher than at present—improved information for passengers and bus feeder services for local stations. South West Trains introduced such services to Winchester and Liphook the day after it took over the franchise.
348 Moreover, the franchisees are demonstrating their enthusiasm for marketing their services through plans for improved facilities for business travellers, special offers for SWT's frequent travellers and £1 travel days for senior citizens.
§ Sir George Young
Five or six European countries have done the same as us and have separated the provision of infrastructure from the provision of services—a policy recommended in one of the European Commission's directives.
§ Sir George Young
It is important to separate the provision of infrastructure from the provision of services.
§ Mr. Deputy Speaker
Order. There is no point in asking the Minister a question if he is not allowed to answer it.
§ Sir George Young
I am grateful for your protection from one of the more boisterous Chelsea fans, Mr. Deputy Speaker.
§ Sir Teddy Taylor
I am grateful for the strong and determined action that the Secretary of State has taken on LTS. He knows that the long-suffering passengers of Southend have had many problems for many years. Will the matter be resolved soon? Will it be a matter of days, weeks or months?
§ Sir George Young
I said on Monday that the inquiry will not be rushed, as it is important that it is full and complete. We must, however, complete it as soon as is reasonably practicable, and I will ensure that my hon. Friend is kept in the picture.
I say to my hon. Friends whose constituency lines have not yet been franchised and who, no doubt, want to get the benefits that are emerging that the Government want to see those benefits extended promptly to other parts of the country.
The hon. Member for Ladywood referred to investment. I have been particularly impressed by the willingness of the franchisees to invest in the future of the railways. Great Western Trains plans to refurbish and modernise its rolling stock ahead of current plans to enable it to provide additional and flexible services, while South West Trains is embarking on a £3 million programme of improvements to stations and passenger facilities such as security, lighting, waiting rooms and information services. That is 349 clear evidence of a long-term commitment to the railway by those who won the franchises, and that sense of commitment will drive forward the improvements in the railway that all hon. Members want to see.
A few months ago, the hon. Lady was trying to pretend that privatisation would not happen. Her plan was to stop privatisation, but it has failed. The first franchisees are operating, and nine franchises have either been awarded or are on the market. These alone comprise more than 50 per cent. of the existing railway by revenue.
§ Sir George Young
I shall make some progress, if the hon. Lady will allow me.
Pre-qualification has started for a further two franchises—South West and Wales, and the Cardiff Railway. The franchising director is making excellent progress. There is great market interest and serious bidders are coming forward with serious bids. Rolling stock companies, heavy maintenance depots, seven design offices, British Rail Telecommunications, on-board catering and a range of smaller businesses have all passed into the private sector. We have invited bids for 13 British Rail infrastructure support businesses, and I look forward to announcing the first sales very soon.
In all, more than 30 businesses have been sold or franchised, bringing proceeds of more than £2 billion. More than half the former British Rail by turnover has either been sold or is on the market. I am pleased that there is no evidence that bidders have been deterred by the attitude and the empty threats of the Labour party.
§ Mrs. Mahon
Will the Minister confirm that in 1993 the House was promised that British Rail would be allowed to bid for franchises? Why has British Rail been excluded? Is it not an example of the Government saying one thing and doing another?
§ Sir George Young
That is not the position. The matter is clearly set out in the legislation. The duties of the franchising director, Roger Salmon, are clearly set out, and there are certain conditions under which he can allow British Rail to bid. Those conditions have not so far been met. As the franchising director has been satisfied by the level of interest shown by the market as a whole, it has not been necessary to allow British Rail to bid. He is keeping the position under review.
§ Mr. Dalyell
On infrastructure—this is not a frivolous question—it may be within the recollection of those at the Department that, because of bad fencing, some cattle strayed on to the Edinburgh to Glasgow line near Polmont, causing a very bad accident in which fatalities occurred. One gathers that the responsibility for fencing and protection against cattle and other animals straying on 350 to the line is far from clear. Before the Secretary of State leaves the subject of infrastructure—I do not expect an answer from off the top of his head—will he undertake that the Department will at least look at the matter because, as far as the Edinburgh to Glasgow line is concerned, it is serious?
§ Sir George Young
Of course no one wants cattle on the Edinburgh to Glasgow line. Normally, it would be Railtrack's responsibility permanently to safeguard the infrastructure. I will make some inquiries and write to the hon. Gentleman.
We have announced that Railtrack will be floated on the stock exchange in May. I firmly believe that its privatisation offers the best future for Railtrack, for passengers and for freight.
§ Sir George Young
No. I want to make some progress.
Privatisation will allow greater use of private sector skills in managing the network and will provide greater scope for private capital to be invested in improving the network. Railtrack recently published the first long-term plan for managing the rail network, detailing its intention to spend more than £1 billion a year over the next decade. That is a substantial sum and good news for all rail users.
§ Sir George Young
No. I want to make some progress and deal with the hon. Member for Lady wood's argument that we have no mandate for the sale of Railtrack.
On the contrary, the sale of Railtrack was clearly foreseen when the White Paper was published three and a half years ago. We said then:In the longer term the Government would like to see the private sector owning as much as possible of the railway. Powers will therefore be taken to allow the future privatisation of all BR track and operations.All the necessary powers were taken in the Railways Act 1993 and the Government made it clear at the time that the powers would be used in due course to privatise Railtrack. For example, my right hon. Friend the Member for Kettering (Mr. Freeman) said:ultimately we wish to see Railtrack move into the private sector".— [Official Report, 1 November 1993; Vol. 231, c. 43.]My noble Friend the Earl of Caithness said:Railtrack'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.]
§ Ms Short
I have here sheaves of quotations in which Ministers say the opposite. In Committee, the junior Minister, in exasperation, said:We have been round the issue several times. Railtrack will be in the public sector for the foreseeable future".—[Official Report, Standing Committee B, 23 February 1993; c. 400.]
§ Sir George Young
I have made it clear that the Government also explained that Railtrack would move 351 into the private sector. I have given three quotations in which it was made clear that that was our ambition. That is the goal that we want to secure.
The hon. Member for Ladywood claimed that privatisation was a bad deal for the taxpayer. The early signs are that privatisation will be better value for money. Let me quote the figures. British Rail was budgeted to receive £83.4 million in 1995–96 to operate South West Trains' services. Stagecoach will receive, on average over the seven years of the franchise, £49 million per annum— an average saving of £34.4 million per annum. British Rail was budgeted to receive £61.7 million in 1995–96 for running Great Western Trains' services. Great Western Holdings will receive an average of £44.8 million—an average saving of £17 million per annum. Those are substantial figures on two franchises which, if replicated across the network, will significantly reduce the grant required by the railway. On top of those savings come the proceeds from the sales of other BR businesses, which already amount to more than £2 billion before Railtrack is sold.
The picture that I have painted of our policies and plans for the railway represents a promising vision for the future.
§ Sir George Young
I want to make some progress. It is a short debate and it is clear that many other hon. Members want to speak.
Our vision is increasingly being shared by others—by bidders for franchises and for other parts of the railway, by commentators and, I hope, by passengers, especially those whose services are now being provided by private operators.
What about the Labour party? It has said that it will not buy back the rolling stock that we sold before Christmas. It has said that it will not break the franchise contracts, which run from seven to 10 years. As we have just heard, there is no commitment to buy back Railtrack. When the hon. Member for Ladywood and I first debated the railways together in October she asked whether someone as intelligent as me could possibly support the Government's policy. It now looks as though someone as intelligent as herself is doing exactly that. We are left with the conclusion that Labour is in favour of privatisation, but it cannot say so for fear of its trade union paymasters.
§ Sir George Young
No. The end of the track is in sight.
As the flotation of Railtrack is drawing ever closer, the Labour party is sitting on its hands, refusing to say whether it is sticking to its commitment to buy back the railways. However, the hon. Lady made her views on buying shares in Railtrack very clear on Sunday. Speaking without restraint, she said that it would be immoral for people to buy shares in Railtrack. What does her comment about immorality mean for the millions of people who are shareholders in other companies that used to be nationalised industries—for the stakeholders in British Telecom, British Airways or the BAA? Is she accusing them of immorality for buying a stake in a former nationalised industry?
352 What do her remarks tell us about the RMT, which has a large shareholding in Thames Water? What about the Labour Members who are sponsored by RMT and other unions, such as the GMB, which have shares in privatised companies? Is she claiming that they are all living off immoral earnings?
§ Sir George Young
There are many questions to be asked of the Opposition. I will ask just a few. Given their commitments to public ownership, how would they pay to buy back the railways? Would it be through higher fares, higher taxes or higher borrowing? Can they match our guarantee on fares? If they cannot, passengers will know that their fares will not be safe under Labour. Could they match our guarantees on services? Can they give a commitment, as we have done, that the Rail Regulator will continue to reduce access charges by 2 per cent. per annum in real terms?
At 7 o'clock, the House must decide which strategy for the railways is the right one: Labour's muddled policy, which is uncosted and unconvincing; or our strategy, which is clear, confident, forward-looking and determined to roll back decades of decline under the dead hand of state ownership and usher in a new era for the railways. I have no doubt how the House will decide.
§ Ms Glenda Jackson (Hampstead and Highgate)
In the vote at 7 o'clock, the House should consider carefully the national opinion poll that was conducted on this single issue last year which showed that 69 per cent. of people are totally opposed to rail privatisation. An even more interesting statistic is that one in five Conservative voters—of those who were open and honest about the fact that that is how they voted in the general election in 1992—will reconsider casting their votes for the Conservative party on that issue alone. Conservative Members with comparatively small majorities should consider seriously the deep opposition, which has always existed and continues, to this benighted policy.
The late, much lamented Robert Adley called the Government's proposals the poll tax on wheels. We can compare the cost to the taxpayer of this privatisation with the cost of that other benighted legislation. It has been estimated that the poll tax cost taxpayers more than £4 billion. My hon. Friend the Member for Birmingham, Ladywood (Ms Short) succinctly described the costs to the British taxpayer of the Government's policy, which attempts not to give the travelling public a better service but to destroy an integrated rail network system. Of the £1 billion that has been already spent, not one penny piece has gone into improving the track, buying new rolling stock, manning stations or improving signalling equipment.
After the first full year of franchising, the taxpayer will have had to fork out an additional £1.8 billion, the equivalent of lp off the basic rate of tax. If we divide that by the number of taxpayers, that is an additional £72 per taxpayer. Regionally—I must admit a preferential interest as I represent a seat in the south-east of England—every taxpayer in the south-east will have to pay an additional £93.
353 My hon. Friend the Member for Ladywood spoke of the amount that Railtrack would be worth if we had to replace it today, which is £6.5 billion. The Government have said that they will sell it for £1.5 billion. That is another £5 billion; we are now up to £7.8 billion.
§ Ms Jackson
If I may first finish my mathematics. That means that rail privatisation has already exceeded the cost to the taxpayer of the poll tax.
§ Sir George Young
The hon. Lady has stated a figure of £1.5 billion and said that the Government had volunteered that figure. What is her reference?
§ Sir George Young
The hon. Lady attributed a figure in relation to proceeds from the privatisation of Railtrack to Ministers. I should be interested to know the reference.
§ Ms Jackson
I apologise to the Secretary of State; it was a slip of the tongue. The figure came from City experts. However, as we know, City experts and Ministers work so closely together on so many occasions that it is sometimes difficult to separate them and decide who has made a decision.
§ Ms Jackson
Let me finish my point.
If one examines how much we, as taxpayers, have paid to the City experts whom the Department of Transport has employed over the years to help it bring about privatisation—which, as Labour Members know, means the destruction of our railway system—it is, according to the Government's figures, more than £12 million. I think therefore that I could be allowed a little leeway in sometimes confusing the grey suits.
§ Dr. Spink
I have been listening carefully to the hon. Lady. She seemed to say that my constituents are against privatisation. Is she aware that my constituents are served by the LTS line, which, along with British Rail, has failed my constituents during the past 15 years, as we heard from my hon. Friend the Member for Southend, East (Sir T. Taylor) earlier? Does she accept that my constituents wanted some change to take place, and that doing nothing was simply not an answer for them? Will she tell me what she suggests should be done instead of privatisation? Where would she find the investment to pay for the necessary changes?
§ Mr. Deputy Speaker
Order. My comment does not relate directly only to the hon. Gentleman, but long interventions do not help in short debates.
§ Ms Jackson
I have every sympathy for the constituents of the hon. Member for Castle Point 354 (Dr. Spink)—I know that they have been forced to travel on the "misery" line. However, I should point out to him that it is his party and his Government who have failed, during the past 16 years, to find the necessary investment to improve that line. Far from doing nothing— [Interruption.] Allow me to answer the hon. Gentleman's intervention.
Far from doing nothing, the hon. Gentleman's Government have wilfully wasted his constituents' taxes, not only by not investing in the line, not finding new rolling stock and not improving signalling, but by attempting to destroy the line. If the hon. Gentleman had listened to what my hon. Friend the Member for Ladywood had said, he would know what we would do to provide a railway system for this country that is fit not only for the people who travel on it now but for the 21st century.
The Secretary of State referred to Great Western Trains, which was one of the first two franchises, and spoke of the improved rolling stock that it is committed to introducing on its line. The two franchises that have managed to deliver a service have received quite a lot of coverage, and it seemed that one of the ways in which Great Western improved its rolling stock was to paint a new colour down the side of a comparatively old train. As we know, the first services that South West Trains and Great Western Trains provided were not by trains but buses.
I draw the Secretary of State's attention to a written answer from his Department which states that, out of the franchised companies, Great Western Trains has the most speed restrictions imposed on it because of a failure to invest in maintaining the track on which it is attempting to run its services. Sixteen speed restrictions are being imposed on lengths of track that vary from 200 yd to two to three miles. The Secretary of State may speak about the franchise operators' additional investment and improvement of services to the travelling public. If that investment is a pot of paint—as opposed to the necessary millions of pounds to maintain track so that trains may run at speed and passengers arrive at their destination at times that they find acceptable—the right hon. Gentleman is being extremely ingenuous.
I find it very surprising that the Government are holding the commitments made in the contracts between the franchising director and the franchisees so close to their chest, but I understand that, as no additional money has been put into our railway system by the franchise operators, it would be possible for a franchisee to meet the franchising director at the end of the first year of attempting to run services and say, "I am sorry, but I cannot run services for the amount of subsidy that you give me. Would it be possible for me to examine fare structures not once a year, as is the case at the moment, but three times a year?"
That shows that when the Government claim, as they have done, that they have given guarantees to the travelling public about services and about the freezing of fares, they say one thing and do unto others something quite other.
The Government's protestations that fares would be frozen gave the travelling public and all the people of the country to believe that that meant that all fares would be frozen. Closer examination shows that fewer than half of fares—47 per cent.—will be frozen, and I understand that, 355 on InterCity, only 21 per cent will be. We were also told that fares would not increase by more than the rate of inflation. The Government did not choose to freeze fares at the inflation rate of January 1996—the month when fares always increase—but of June 1995, when inflation was infinitely greater than it was in January. There, yet again, the travelling public and the people of the country have been deceived about what the Government intend when they speak about presenting progressively wider and better services for the people of Britain.
§ The Minister for Railways and Roads (Mr. John Watts)
Does her brief from ASLEF tell the hon. Lady how long it takes for all the fare manuals to be revised? Will she suggest how fast they might have been revised, and consequently her opinion on the latest month for which an automatic retail prices index figure could be used to base the fares limitation from January?
§ Ms Jackson
Regrettably, I am not briefed by ASLEF so I cannot answer the Minister's question, but I can tell him that the fares that I mentioned in the main came from his Department. If he wishes me to obtain a brief for him from ASLEF, I will be happy to advise because, if we need expertise in running railways, I have a strong suspicion that there is greater work experience among the members of ASLEF than there is among the Ministers facing me.
I realise that many hon. Members wish to speak and I notice that I have spoken for a comparatively long time. I end where I began, by urging Conservative Members to take the opportunity—positively rare in their parliamentary lives—to place the interests of their constituents first. The Government's plans for privatisations will lead only to progressively greater hardship for the people of the country, who desperately wish to use their trains for environmental reasons alone. People are desperate to be able to get out of private transport because of the damage that they know that it does to themselves, their children and their communities. They would dearly love to be able to make additional journeys on a properly integrated public transport system.
I urge Conservative Members to acknowledge that a properly integrated public transport system can never be visited on the country while a Conservative Government are in office, and that the present Government's plans to privatise the railways are a disaster. They should exercise their responsibilities to their constituents and vote with Labour Members in the Lobby tonight.
§ Mr. Bob Dunn (Dartford)
I am grateful for the opportunity to follow the hon. Member for Hampstead and Highgate (Ms Jackson). When she speaks on transport matters, she is always careful to acknowledge that she is sponsored by ASLEF, and she did so earlier. It might be to the benefit of the House if I read out from the entry in the Register of Members' Interests the extent of that sponsorship. On page 72 of the current Register, the hon. Member for Hampstead and Highgate says that she isSponsored as a parliamentary candidate by ASLEF, who pay 80 per cent. of general election expenses and in the year 1994–95 gave £5,500 to Hampstead and Highgate Labour Party for its constituency work.It is obvious from the speeches by Labour Members that there is two-tier opposition. I challenge the hon. Lady to consider the following: is she speaking in the debate 356 today for the people whom she represents, or is she taking one step to the left and speaking for the union that sponsors her? In order to make the position absolutely clear, I challenge her to resign her sponsorship from ASLEF so that when she speaks in the House and in the community she can say—without fear of contradiction from someone such as me—that she speaks out of philosophical conviction, not because she is sponsored by a trade union.
§ Ms Jackson
I point out to the House and to the nation at large that the hon. Gentleman has never been part of my past experiences, and he certainly will not be part of my future experiences. My constituents have a particular interest in the future of our railways. Three of the main railway termini—King's Cross, Euston and St. Pancras— are situated just to the south of my constituency and the lines that those termini serve run at the bottom of my constituents' gardens. Therefore, the future of the railways is of particular interest to them.
§ Ms Jackson
If the hon. Gentleman was very young, he would not have seen any of my films because they were not allowed to be shown to people under the age of 16.
§ Mr. Deputy Speaker
Order. That is very interesting, but we should get down to a serious debate on the motion before the House.
§ Mr. Dunn
It is not true that the first films that I saw were silent. More than 200 Labour Members of Parliament are sponsored by trade unions. That is the way in which the Labour party has evolved and I have no quarrel with that. However, when I speak on behalf of my constituents, I speak for them—I am not sponsored, controlled or got at, and unions are not represented on my association executive council as is the case with Labour Members.
§ Mr. Dunn
No, I will not give way again; I resent being interrupted when I make a point that Labour Members do not like. Two hundred Labour Members of Parliament are sponsored by trade unions, and we know the result of that. The hon. Lady did not answer my 357 question as to whether she will resign her sponsorship. I dare say that she will write to me with an answer when she has one.
We listened with great interest to the speech by the hon. Member for Birmingham, Ladywood (Ms Short). I am not certain—and my constituents need to know—whether a Labour Government would renationalise the railway system. If the Labour party were to renationalise the railway system, what levels of compensation would be paid to shareholders of Railtrack? How would passenger services be brought back under state control, bearing in mind the legal obligations that have been entered into recently and those that will be entered into in the future?
How would the Labour party fulfil its commitment to encourage more passengers and freight on to the railways? Finally, would the hon. Member for Ladywood—who is not in the Chamber—commit her party to greater investment in the railways? If so, to what extent?
It is quite clear that the Government have a good record of support for our national rail system. Since nationalisation, £54 billion has been invested in the railways. Every Conservative Government since the war have increased investment in the railways. Since 1979, this Conservative Government have demonstrated their overwhelming commitment to the railways by investing more than £15 billion in British Rail, including £6.5 billion in the past five years.
Since 1979, £4 billion has been invested in new rolling stock. There has been massive investment in the Dartford loop line in recent years, leading to modern new rolling stock for the people of Dartford. The number of complaints that I receive about the quality of service on the Dartford loop line has fallen to almost none.
I expected to hear something about where Labour stands on rail privatisation. The truth is that Labour opposes rail privatisation, just as it opposed that of British Telecom; the water, gas and electricity boards; British Airways and so on. Nationalisation has been a disaster since it first came into being in the late 1940s under the Attlee Government. What is Labour's policy now? I hope that the hon. Member for Cunninghame, North (Mr. Wilson) will make it clear—in the way that the hon. Member for Ladywood did not—that Labour will renationalise the rail system. He owes that declaration to the intellectual honesty that I have always associated with the Labour party in the past.
§ Mr. Dunn
There is no intellectual honesty to be found in the Labour party, according to the hon. Member for Newham, North-West (Mr. Banks)—the former chairman of the Greater London council. We know where that hon. Gentleman is coming from. What is more, we know where he is going—back to that side of the House.
Labour must decide for the sake of its own soul whether it speaks for the people or for the trade unions that sponsor Labour and control its local parties. I know the answer, and so do my right hon. and hon. Friends. I look forward to rail privatisation. It will mean accountability, efficiency, investment and a far better service. Then we might see an improvement in the number of rail passengers. I have no doubt how I will vote tonight. I shall vote in the Lobby with the Government.
§ 5.2 pm
§ Mr. David Chidgey (Eastleigh)
I probably have full agreement that the motion and the debate so far emphasise how far removed the rail privatisation process has become from serving the national and public interest—hon. Members have no doubt enjoyed themselves immensely over the past hour or so. I will make a few points briefly, because I know that other hon. Members wish to contribute.
I remind the House of the recent scandal of the misuse of ticket revenue on the LTS line, the disposal of rail assets at a fraction of their value, creating large profits for the purchasers at the taxpayer's expense, and the lack of regulation to ensure investment to modernise our rail system and achieve growth in passenger and freight loadings, which should be the key objectives of the rail system. The argument surrounding the fraudulent misuse of LTS ticket income is another illustration of the flaws in the privatisation process.
An integrated public transport system has been a vital component in the success of our capital city in every respect—commerce, tourism and culture. The interchangeability of public transport was a key factor in that success, made possible by the successful travelcard scheme. Under the umbrella of public ownership, there was no problem or concern about operators diverting income to maximise their profits. The formula for distributing travelcard income was based on passenger surveys. It was a tried and trusted system. The events of recent weeks on the LTS line have destroyed the trust of operators in what until now has been a well-proven system. Rail, underground and bus operators have been unnerved by those events. Without an effective ticket interchangeability system, there could be chaos at ticket offices at all purchase points. There could be bitter in-fighting between operators to attract passengers. London's integrated public transport system, in which we should be able to continue to take great pride, is threatened with collapse.
I was saddened to hear in the House today arguments about whether the LTS irregularities were discovered by auditors at some stage. The key issue is that trust in a system that has been working extremely well has been undermined.
§ Sir Donald Thompson (Calderdale)
The hon. Gentleman must have travelled by air from airports such as Heathrow, and swapped tickets and destinations between British Midland, British Airways, Air France and other airlines with no trouble. That is private enterprise at its best. The same facilities will continue on the railways, and must continue.
§ Mr. Chidgey
I am a veteran air traveller, but the hon. Gentleman should remember that the frequency of air travel is nothing compared with that of public transport in a city such as London. If one were to introduce the same systems in the capital, there would be chaos.
§ Mr. Wilson
I am sorry to interrupt the hon. Gentleman, but the hon. Member for Calderdale (Sir D. Thompson) scored such a good own goal that I cannot miss the opportunity to point out that different airlines might be involved in a multi-part journey, each part of which is separately priced at the full rate. One can get discounted through air tickets, which one certainly cannot get on the railways now.
§ Mr. Chidgey
That is a good example of why we should call into question the Government's obsessive criticism of the so-called inefficiency and non-competitiveness of the public sector—which, from what we heard today, has a hollow ring.
§ Mr. Tony Banks
The hon. Member for Eastleigh (Mr. Chidgey) said that he regularly travels by air. Has he ever been on a flight that departed or arrived at its destination at the scheduled time? If British Rail or any rail service was so inefficient in its punctuality, there would be riots. Hon. Members know that that is true.
§ Mr. Chidgey
My experience of air travel is wide and varied. In some cases, it has been more a question of which day the aircraft would arrive. I hope that we never find ourselves in that situation with rail.
We should be striving for an effectively regulated, well-funded and well-managed public and private partnership, capable of delivering an efficient and responsive rail service. A case in point is the rail company that reported itsbest-ever overall performance levels and ended the year with not a single route triggering season ticket discounts … The 92 per cent. target set by the government for punctuality of services overall was met … These improvements in operations were matched by a continuing rise in customer satisfaction, measured by independent research.The rail company's overall service levels were raised by the introduction of new trains, whichwere ordered following a successful bid for £150 million leasing finance".Another £84 million was invested in resignalling and overall efficiency gains exceeded 10 per cent. The companyincreased its operating profit … from £5 million to £71 millionin one year.
§ Mr. Chidgey
Indeed, where is it? That company's operating profit reached £71 million and it received no grant, and it reinvested £432 million. That company was not an Asian tiger but British Rail's Network SouthEast in 1993–94—its last year of operation. That report shows the benefits that can be achieved by managers given the freedom to use their talents, as they did under the organising-for-quality system. I hope that the Minister, in his response tonight, will give us some comfort.
§ Mr. Chidgey
I am sorry, but I must make progress.
I hope that the Minister will allow British Rail managers the opportunity to bid for some of those franchises. The managers have shown what they can do and they should have that opportunity.
I now come to the subject of the privatisation of Railtrack. We must have a nationally planned, nationally controlled, integrated rail network. That is essential to the community and to our economy. The Government, as we have heard today, now plan to sell off assets worth at least £6 billion, with an 8 per cent. rate of return, for a fraction 360 of their value. To make the deal even more juicy, the Government are currently allowing Railtrack to accumulate the revenue from track access charges.
What is happening to the money collected from track access charges? At present, I understand that the money is being held under the heading "Asset Maintenance Plan". In the six months to March 1995, the total amassed in track access charges was some £483 million, and £253 million in the six months to September 1995. That revenue was retained on the balance sheet. It gives the appearance of very healthy revenue, but it also disguises the impoverished state of Railtrack's assets. Why is Railtrack refusing to spend that money, when the organisation knows that it needs to be spent urgently on the maintenance and renewal of the rail network? Why are the Government allowing Railtrack to charge for track access when it continues to allow the rail network to fall into disrepair? Is that yet another example of creative accounting on the real costs of privatisation to the taxpayer?
Last year, we saw the Government's willingness to sell off the rolling stock companies for a minimum return. It is astounding that such an important component of the rail service could be sold for such a knock-down price. Rolling stock valued at some £3 billion was sold for about £1.8 billion. It is scandalous that the new companies are under no obligation to purchase new rolling stock. They have merely to maintain existing stock, while they are guaranteed an annual rate of return of approximately £700 million a year. That is not bad on a £1.8 billion investment. Predatory companies have been given an opportunity to run down the rolling stock, maximise their profits and, at the end of the contracts, hand back a derelict railway.
Government subsidies are clearly being used to induce private sector companies to take the opportunity to operate rail companies under franchise. Stagecoach, as we have heard, will receive a subsidy of some £53 million a year to operate South West Trains. I have been told that when British Rail last ran that sector of the rail network, it made a profit of £15 million and required no passenger service obligation subsidy. Why does Stagecoach need a subsidy? Because it must pay the hugely inflated rail access charges.
§ Mr. Chidgey
I am referring to the time before the South West Trains region was set up. In any case, the subsidy was being paid so that British Rail could pay the track access charges.
In spite of improvements and investment by British Rail, South West Trains has done nothing to improve the railway. Too many elderly coaches trundle up and down the region. They are fitted with the notorious slam doors, which have an appalling passenger safety record. That point strikes home for me because, for several years, a door-lock system has been available which was developed in the railway works in my constituency. The system has been tested and found to work, but South West Trains has placed no orders and Stagecoach has given no commitment to make those trains safer.
If the confusion and disarray that have been caused to rail operations was not enough, the chaos that has been caused by through ticketing is inexcusable. Hon. Members 361 will be aware of the report by the Consumers Association that discovered that 90 per cent. of ticket inquiries resulted in incorrect information about the cheapest tickets available, despite the regulator's insistence that information on the cheapest fares for a journey should be available from all ticket offices. The train operating companies, on average, over-priced tickets by £24, which is scandalous. In many cases, the charges quoted were double the cheapest fare.
We have heard today some glowing accounts of the first week of operation of the new franchises for Great Western Trains and South West Trains. Let us return to reality. Passengers who used to travel into London on one line and wished to travel home on another could do so on one return ticket. Now, if the lines are run by separate companies, passengers can travel to Paddington on one line, but they cannot use a return ticket to travel out of Waterloo later on the same day. They have to buy separate tickets. That is not only ridiculous, but bizarre.
I had a call to my office late yesterday afternoon from a young lady called Sally Lloyd-Jacob, who has allowed me to use her name today. She travels every day from Sutton to Horsham on a line now run by South Central Trains. She catches the 8.25 from Sutton, which arrives in Horsham at 9.10. That is a 45-minute journey, but yesterday it took five hours. Why? The brakes had caught fire. That tells us much about the level of maintenance we may now expect. However, the five-hour delay was not due to lack of repairs or maintenance. There was another train immediately behind to which the passengers could easily have transferred. However, the train behind was not owned by South Central Trains; it was owned by South West Trains. The five-hour delay was caused while the two companies haggled over the price that would be paid for the transfer of passengers from one train to the other. Passengers, possibly including the elderly and children, were left freezing while rival companies argued over profit. That is a measure of the new train service that the Government have given us.
We need a commitment to return to the sensible operation and development of our railways in the national interest. The Liberal Democrats are pledged to reacquire a controlling interest in Railtrack, to create a national rail system that is responsive to national, integrated transport planning, with a private and public partnership. I must tell Opposition Members, who often sing from the same song sheet as I do, that it is not acceptable to hide behind the internal rules of share transfer in the stock exchange. Those rules apply to companies trading with each other, not to Governments. There should be a commitment in the Railtrack prospectus to exchange 51 per cent. of Railtrack shares for Government bonds, at the issue or market price—whichever is the lower—using primary legislation if necessary. Labour's position is untenable. Leading City analysts claim that the Railtrack sell-off would collapse tomorrow if Labour made a commitment to reacquire 51 per cent.
The Liberal Democrats have pledged to establish a national rail authority to regulate properly, with a partnership between the public and private sectors. We would renegotiate the franchises to recognise the long-term investment needs of railways, and the operators of the new companies would welcome that. They know how ridiculous the franchises are. We would set targets 362 for increased passenger and freight loadings, instead of maximising profits at the taxpayer's expense, which is what the Government have done. We shall vote in favour of the motion tonight, because we believe that the Government's wholesale destruction of our integrated national rail system must be opposed and must be reversed.
The Labour party has been found wanting. It must now show some resolve, commitment and leadership, if it is to be taken seriously on rail privatisation in the House and in the country.
§ Mr. Graham Riddick (Colne Valley)
I congratulate the hon. Member for Newham, North-West (Mr. Banks) on his apparent promotion to the Front Bench. That has happened so often before and he has returned to the Back Benches. Let us hope that this time his promotion is permanent, but only to the Opposition Front Bench.
I am sorry that the hon. Member for Eastleigh (Mr. Chidgey) did not welcome rail privatisation. I must congratulate the councillors on Liberal Democrat-controlled Isle of Wight council. They have welcomed the fact that their rail service is to be one of the first put out to franchise—but as we know, Liberal Democrats say different things to different audiences.
§ Mr. Chidgey
I hope that I have made it clear—I may have been speaking rather fast to save time—that we are not against privatisation: we are against the way in which it is being handled by the Government, which is appalling. We want a partnership between the private and public sectors to run the railways of this country.
§ Mr. Riddick
This has been an extremely useful exchange. The Liberal Democrats have now said on the record that they are in favour of privatisation. That is to be welcomed. I am not quite sure, however, how Liberal Democrat researchers will be able to respond to the apparently contradictory approaches to privatisation in their party.
§ Mr. Peter Ainsworth (East Surrey)
I rather doubt whether my hon. Friend will be able to shed any light on this—I am certainly confused. A few moments ago the hon. Member for Eastleigh (Mr. Chidgey) seemed to be urging the hon. Member for Newham, North-West (Mr. Banks), who is temporarily occupying the Labour Front Bench, to renationalise Railtrack. There seems to be total confusion; there has certainly been a volte-face in the space of three minutes.
§ Mr. Riddick
My hon. Friend makes a telling point. I do not know whether the hon. Member for Eastleigh would like to reply to it—
§ Mr. Chidgey
I am delighted to do so. I do not want to turn this debate into a seminar on our policies, but I should be delighted to send hon. Members copies of our transport policy, in which all will be revealed. We have made it clear that Railtrack should stay in public control, through a 51 per cent. shareholding. We have also made it perfectly clear that we encourage the acquisition of 363 private finance in the running of our railways. We simply want it done more effectively than the Government have managed.
§ Mr. Riddick
I thank the hon. Gentleman very much for his contributions; they will be most helpful to both main parties.
I want to talk first about the general principle of privatising the railways, and secondly about one narrow aspect of the railways—that is, charter train operation.
At this stage of a privatisation it is always more difficult to set out the benefits that will accrue, because those benefits have not yet become apparent—there has not been enough time for them to show up. It is easy for the Opposition to criticise and to forecast the demise of the industry, just as they have done with every other privatisation. They have said that prices will rise and services will decline. It was outrageous of the hon. Member for Birmingham, Ladywood (Ms Short) to say that a private company cannot be trusted to ensure high safety standards.
§ Mr. Riddick
That indeed is the obvious riposte. Many of the world's major airlines are privately owned companies with excellent safety records. It is a disgrace that the hon. Member for Ladywood should be putting around those scare stories when they are clearly not accurate.
We need only look at other privatisations to find out what really happens. The Labour party is increasingly desperate and occasionally disingenuous when it makes its attacks on privatisation. There was a classic example of that over the new year. During the cold spell, hundreds of water mains cracked in various parts of the country. Up in the north-east, about 150,000 homes were cut off for a short time as a result of those problems. A local Labour Member of Parliament, I think the hon. Member for Sunderland, South (Mr. Mullin), went on television to say that it was all the fault of privatisation. Yet at the same time 100,000 homes in Northern Ireland were cut off for the same reason, and as far as I know the water industry there is not privatised.
Up in Strathclyde, where the water industry is still in public hands, 500,000 homes were cut off. That shows how Labour sometimes resorts to desperate claims.
§ Mr. Dalyell
Five hundred thousand homes cannot possibly have been cut off in Strathclyde—this is drivel.
§ Mr. Riddick
I got the figure from The Daily Telegraph, which is certainly more accurate than most in its reporting. I can show the hon. Gentleman the cutting if he wants to see it.
If the Labour party really believes that privatisation will be so disastrous, why do not Opposition Members commit themselves to renationalising Railtrack? Why not commit themselves to reversing the process? Of course, the reason is that they know that privatisation has transformed the economy for the better. Long-distance coaches, British Airways, the British Airports Authority, road haulage and British Gas—those have all been transformed; prices have come down and customer services have improved. 364 Commercial disciplines and incentives have forced the managements of those companies to provide customers with what they actually want.
When British Airways was being privatised back in 1979, the hon. Member for Glasgow, Garscadden (Mr. Dewar), leading for the Opposition, said that the company would become the "pantomime horse of capitalism". As we know, British Airways is now one of the most successful airlines in the world.
I believe that privatisation will have the same beneficial effect on the railways as it has had on many other industries. The new rail franchises will give new entrepreneurs and new companies the opportunity to come into the rail market. Besides bringing innovative ideas with them, those companies will want to introduce new and different services and to try new pricing arrangements that will benefit the travelling public. It is in their interests to attract more passengers to the railways—that is the point.
The purpose of privatisation, in short, is to halt and reverse the decline in railway use. Since 1948, £54 billion of taxpayers' money has been invested in the railways, but the railways' share of journeys has fallen from 17 per cent. in 1953 to just 5 per cent. now. It is time that we tried to reverse the process.
My local electricity company is an example of what can be achieved under privatisation. Prices have fallen by 19 per cent. since the company was privatised. They were reduced by 3.5 per cent. last April and will be reduced again by a similar amount this coming April. The customers of Yorkshire Electricity have also benefited from a £50 bonus resulting from the flotation of the National Grid. That, too, benefited customers.
British Telecom is another example of privatisation benefiting customers. Inland call charges have been cut by 21.4 per cent. since 1984—a 53 per cent. reduction in real terms in telephone call prices since the company was privatised. That is of major benefit to everyone. There has been an explosion in the number of public pay phones. At the time of privatisation there were 77,000; there are now 130,000. When British Telecom was privatised, 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.]
§ Mr. Deputy Speaker
Order. It would be helpful if the hon. Gentleman now returned to the subject of the privatisation of the railways.
§ Mr. Riddick
I contend, Mr. Deputy Speaker, that it is—but I entirely accept your ruling. I believe that the benefits of privatisation will feed through to rail customers, as they have fed through to electricity and gas consumers.
Exactly a year ago, I made a speech on a similar motion. I congratulate the Labour party on its precision— although I do not suppose that it was deliberate— in choosing to debate this subject on the anniversary of the debate on rail privatisation that took place on 365 7 February last year. At that time, I explained that a company called Days Out Ltd. had been formed and was planning to run 60 steam excursions during the year, some of them on completely new lines. I regarded that as a plus for the new railways.
Railtrack has been very co-operative with charter operators, trying to encourage as many of them as possible to use the tracks. Unfortunately, a number of excursions were cancelled last year as a result of the hot, dry summer: it was feared that fires would break out beside the lines because the ground was so dry. The main problem for charter companies, however, has been the behaviour of Rail Express Systems, which until recently was a wholly owned subsidiary of the old British Rail. It is a great shame that that company has abused its monopoly to make life difficult for charter operators.
RES was recently sold to Wisconsin Railways, but before that it was obstructing charter operators, overcharging and then refusing to provide the details of its invoices. The Huddersfield Green party, which has run a number of charter trains over the years, experienced problems last year because of mismanagement of the trains by RES. I believe that those abuses have taken place as a result of the company's monopoly on licensed steam excursions.
Wisconsin Railways has reacted quite favourably to charter operators. It has been in charge only since December, but I understand that it is negotiating with the charter operators and trying to repair the damage done by RES. There is more to be done, however, and I believe that the Rail Regulator will have a role to play. I have tabled an early-day motion on the subject. Most important of all, we need to ensure that there is more competition in the organisation of charter trains. Perhaps my hon. Friend the Minister will consider that.
I shall be delighted to support the Government in the Lobby. I believe that rail privatisation will bring benefits to passengers. Our only reason for introducing it is our wish to see lower fares and better services. We want rail passengers to gain, and I believe that they will.
§ Dr. John Marek (Wrexham)
The speech of the hon. Member for Colne Valley (Mr. Riddick) consisted of two parts: an apology for privatisation, and special pleading for charter trains. His discourse on privatisation was composed of some pretty selective statements. For example, he said that the price of electricity had fallen by 19 per cent. since privatisation—in real terms, presumably; but it probably rose by the same amount just before privatisation. He forgot to mention that British Airways' debts were written off. He also tried to make us believe that the privatisation of British Gas had been a success, notwithstanding all the fuss about Mr. Cedric Brown.
Opposition Members are not convinced that the hon. Gentleman is right. I admit that British Telecom has done well, but that might also have something to do with technology. The hon. Gentleman did not mention that. We would have listened to him more attentively if he had tried to be a little more serious, rather than peddle the usual political points. People are not stupid; they realise that there is more to success, or the lack of it, than privatisation.
366 British Rail is in an entirely different position from other privatised companies, because it does not have a monopoly. There are other means of travel, such as cars, aeroplanes and coaches. More important, it has no obvious means of making a profit. In this country and elsewhere in Europe, because of the way in which cars and petrol are taxed, subsidies must generally be paid for the running of a public transport system. That, too, places British Rail in a completely new category. I do not accept the argument that, because previous privatisations have succeeded—some have; others have not—this privatisation will succeed as well.
The motion mentions the allegation that tickets were taken from a machine at Fenchurch Street station and sold at Upminster, and the Secretary of State referred to another ticket fraud at Walthamstow. I do not believe that such fraud would take place if we had an integrated railways network. It is true that London Underground is run slightly differently from British Rail, but if there were a single system there would be no reason for one part of it to try to cheat the other.
Much more will now have to be spent on auditing. It is not just a question of catching a clerk who has succumbed to temptation. That is bound to happen sometimes—none of us is perfect, and an audit system is always necessary— but audit provision will now have to be increased simply because, owing to commercial considerations, one half of the organisation will be encouraged to engage in sharp practice at the expense of the other half. On occasion, commercial enterprise will become corruption and fraud.
If it is proved that tickets were purchased at Fenchurch Street and sold at Upminster, that will be fraud in anyone's book. I shall not prejudge the issue or blame anyone at this stage, but it is clear that something underhand has gone on. I shall await the findings of the inquiry. I noted on Monday, when the Secretary of State replied to a private notice question, that he is to return to the House to explain the reasons for what happened and to tell us what he proposes to do.
The speech of the hon. Member for Colne Valley revealed that privatisation has much to do with dogma and ideology. My hon. Friend the Member for Birmingham, Ladywood (Ms Short) used almost the same words, and I am happy to echo them. No real concern is felt for the industry, the travelling public or the country; the Tory party simply wants to divest government of as many functions as possible. That is the real motive for inflicting rail privatisation on the public.
§ Mr. Devlin
I beg to disagree. Will the hon. Gentleman consider this point—not a dogmatic point, but a practical point relating to the way in which our public services are funded?
At the end of her speech, the hon. Member for Birmingham, Ladywood (Ms Short) described all the great things that a future Labour Government would do to improve health, social services, hospitals and a variety of other things. The hon. Gentleman must accept that—in the words of the hon. Member for Ladywood—that will necessitate a good many hard decisions. There is no doubt that the railways will be at the back of the queue, because they are not as politically emotive as hospitals. Consequently, when the public pie has to be divided, the railways will get the scraps. The benefit of privatisation is not that it is a dogma, but that it enables the infrastructure to receive resources from elsewhere—
§ Mr. Deputy Speaker
Order. I did not call the hon. Gentleman to make a speech. Many hon. Members still wish to speak in this short debate and long interventions do not help.
§ Dr. Marek
I appreciate the point made by the hon. Member for Stockton, South (Mr. Devlin), but privatisation will increase, not decrease, the subsidy. The additional net subsidy has been calculated to be £850 million a year. There has been some argument about the subsidy for South West Trains. The franchisees will be able to cut the subsidy if they succeed in getting more people to travel and in getting extra revenue, but they can also do it by cutting staffing.
Many stations in the United Kingdom could have no staff at night. That is important, because many women simply will not go on to a station at night which may be all but deserted if it is not staffed and there is no security. The private franchise operators may employ staff if they can obtain extra revenue, but I suspect that the number of staff employed late at night, when few people travel, will be cut and that there will be fewer, not more, services as a result of privatisation.
§ Mr. Donald Anderson (Swansea, East)
Is not another reason why the franchise process is bad for the public that the current timetable is politically rather than economically driven, with the result that the sums that are likely to be obtained will be reduced accordingly because the potential purchasers know that the Government are desperately trying to get this operation finished by the next election?
§ Dr. Marek
My hon. Friend is right. Railtrack was initially valued at about £6.5 billion, but now the Government are talking of getting about £1.5 billion or £2 billion for the sale of that massive estate that is owned by the public. The hon. Member for Colne Valley talked about the £50 reduction in people's electricity bills. We all got £50 off, but we sold the grid, and for ever more, succeeding generations will pay shareholders' profits for that once and for all cut.
§ Dr. Marek
My hon. Friend is right.
Conservative Members are fond of asking whether the next Labour Government will be able to provide the investment that has hitherto taken place in British Rail. I think that we will. Investment between 1974 and 1979 under the previous Labour Government at constant 1995 prices was just under £1 billion. It was less under the right hon. Member for Old Bexley and Sidcup (Sir E. Heath), when it was perhaps £700 million. Unfortunately, between 1980 and 1984, investment went down, and reached the £600 million mark one year. It is true that, between 1989 and 1993, the figure has been more than £1 billion, but in 1993–94 it went down to £663 million—a catastrophic decline for which the Conservative party is entirely responsible.
Average investment has been about £1 billion. That £1 billion should not all come from the public sector. I agree with the hon. Member for Eastleigh (Mr. Chidgey) that there must be a partnership between the private and 368 public sectors. Preferably, the public sector borrowing requirement rules should be redrawn, especially where there is a clear case of a resulting return on capital investment. If such a return was reasonably certain, whether it was public or private would not matter. I am keen that that should happen.
Like my hon. Friend the Member for Hampstead and Highgate (Ms Jackson) I have an interest to declare. I am not sponsored by ASLEF, but I am sponsored by the National Union of Rail, Maritime and Transport Workers—roughly, according to what the hon. Member for Dartford (Mr. Dunn) said, under the same conditions. I certainly speak for the union members because they want a decent railway system, high motivation and to serve the public. I also speak for my constituency, for my constituents in Wrexham and, in this case, for nearly everyone in the United Kingdom.
§ Dr. Marek
I would not use the word asinine, but I hope that the hon. Gentleman will think about what he has said a little more carefully. One can borrow for items on which there is no return and no hope of any return, and for others on which there is a good return—almost a guaranteed return—over the life of the investment, which may be anything from 20 to 40 years. We must be a little more intelligent about this and stop only those investments for which there is no guaranteed return.
I do not believe that, under privatisation, there is any real prospect of a lot of rolling stock. There is certainly no prospect of an early upgrade of the west coast main line. I do not think that trains will run from Euston to Manchester in less than two hours. The regulator will not help. He is not there just for the travelling public; he is also there to enable the franchisees to make profits. Nor will there be cuts in subsidies.
What can be done? The only answer is that Railtrack must be in public ownership. The system can be regulated more toughly, but it cannot be integrated without a publicly owned Railtrack in the major part of the network. That is the crucial part. We can do what we like by way of regulation, but franchisees will still compete against each other and revenue will have to be raised by obtaining more passengers or by being commercially enterprising.
I agree with my hon. Friend the Member for Ladywood that it is premature to say exactly what we will do. We should wait for the prospectus to be issued for the flotation of Railtrack. I agree with what is probably most City opinion, and certainly that of the hon. Member for Eastleigh. I am sure that the Labour party will say that it will take Railtrack back into public ownership, whether by taking the voting shares from the company, by demanding equity for subsidy, or simply by taking back the shares— the Government cannot spend the money that quickly if Railtrack is sold in the autumn—but without paying for any of the dealing costs or other associated expenses associated with the share distribution.
If we do that, I am confident that we shall ensure that Railtrack is not sold and that the flotation will not take place. That is a prerequisite. After that, Britain must 369 demand a proper, integrated, functioning railway. The debate about the car is now taking place and changes are being made. The Government realise that we cannot build more and more roads because they simply suck in more and more traffic. We need a debate about how we transport our people and goods up and down the land. An integrated publicly owned and publicly accountable railway will be part of the future and part of that debate.
§ Mr. Peter Ainsworth (East Surrey)
I am grateful for the opportunity to make a few comments in this interesting debate. I welcome the privatisation of rail services for the reasons on which my hon. Friend the Member for Colne Valley (Mr. Riddick) touched. Like all other privatisations, rail privatisation will improve the service that the public receive, improve the management of the business, lower the cost to the public of using the service and enhance investment in it.
The Opposition say that the Conservative party is driven by dogma in wishing to privatise and franchise rail services, but that is far from the truth. We are driven by a desire for rising investment, better services and more use of the railways. I represent a constituency that is riven by two motorways. I know as well as anyone the damage that cars do to the environment and the pollution that they cause, so the matter is of great concern to my constituents. I deplore the fact that, under nationalisation—despite the £54 billion that has been poured into the industry since 1948—there has been such a dramatic decline in rail use by passengers and for freight.
Nationalisation of the railways has not worked; it has been an unmitigated disaster. It is not dogma that drives Conservatives to want to see the liberalising effects of privatisation, but an urgent desire to see an improvement in the service. If we are looking for dogma, we should look to the Labour party, as its only solution to the problems of the rail network is to renationalise it.
It is one thing to have principles and to believe in state control—I understand that some Labour Members are still prepared openly to admit to that—but it is quite another to offer as the only response to the declining use of rail the very formula that has proved such a disastrous failure in the past.
My constituents want investment. They want the investment that privatisation can harness. They want the £1 billion a year that Railtrack has said that it will invest in renewal and maintenance work in the 10 years following privatisation. Instead of endlessly escalating prices, they want fares pegged to the rate of inflation for the next three years, and to below inflation for the four years after that. They want independent regulation of service standards. They want the statutory protection that privatisation will introduce for the very first time.
The fact that British Rail was accountable to nobody for the service that it provided probably accounts for the fact that, in many cases, that service was famously deplorable. Under nationalisation, British Rail became a national joke, an emblem of British decline—the British disease. People were fed up with being left standing on cold, dark platforms with no information, not knowing when the next train was coming, and not knowing when they would get home or get to work. It was a peculiar hell 370 invented by British Rail. It even reached the stage where Saatchi and Saatchi, I think, launched a campaign, for which the slogan was, "Sorry seems to be the hardest word". It certainly was for British Rail because, instead of sorry, all too often we got a shrug as the member of staff shuffled off to get another cup of tea.
My constituents want an end to the restrictive practices that have flourished under the vast, monolithic structure that was BR. As with so many other nationalised industries, the overriding feeling of the people who used the service was that it was run for the benefit of the employees, not the users. Under privatisation, all that will change. To be successful, the new franchisees will have to make themselves attractive. That means investing more in equipment and people. In the private sector, the old BR shrug simply will not do.
It is extremely sad that, whereas in 1953 24 per cent. of all goods were carried by rail, only 5 per cent. are today. We all want more goods to be carried by rail. The Railways Act 1993 will help substantially and the greater flexibility that is being introduced should encourage more freight on to rail. In that context, I commend the work of the piggyback consortium—
§ Mr. Wilson
On a point of order, Mr. Deputy Speaker. I have noticed in the Register of Members' Interests that the hon. Member for East Surrey (Mr. Ainsworth) is a consultant to S. G. Warburg Group plc, which is advising Railtrack on the flotation. Do you think that the hon. Gentleman should have declared an interest?
§ Mr. Deputy Speaker
That is purely and simply a matter for the hon. Gentleman concerned. Hon. Members know the rules of the House, including the new rules.
§ Mr. Ainsworth
I have had no discussions of any kind with S. G. Warburg on the subject of Railtrack. Had I done so, I would of course had made that clear earlier in my remarks.
I return to the subject of the piggyback consortium, which includes 40 freight operators, port and terminal operators and local authorities, who have got together to develop a scheme that will increase dramatically the capacity of the rail network to carry fright at relatively little extra cost. I commend the work that it is doing and I wish it well.
That is more than I can say for the proposal by Central Railways, which involves the construction of 180 miles of new railway between Leicestershire and Calais. There is growing evidence to show that that proposal is technically flawed and economically dubious. In the meantime, it is causing severe blight to my constituents and those of other hon. Members the length of the line. The best thing that I can say about it is that I hope that it reaches an early resolution. I hope that my hon. Friend the Minister is listening carefully to these remarks.
In the meantime, I support the Government's proposals. I shall vote with them tonight. I sincerely hope that privatisation of the railways will lead to improved services—I believe that it will—better standards and a better rail system for Britain.
§ Mr. Tony Banks (Newham, North-West)
The hon. Member for East Surrey (Mr. Ainsworth) should have declared the fact that he was a parliamentary affairs 371 consultant to S. G. Warburg, which was employed to give advice on merchant banking; we would have been interested to know about that. A range of hon. Members are listed as working as parliamentary consultants to the merchant bank advisers to the privatisation proposals. It is no wonder that they are so in favour of privatisation—they have done very well out of it already. The hon. Gentleman gave a grotesque view of British Rail's past, showing that he knows little of its history. I do not know what the quality of his advice to Warburg was, but I certainly would not want to pay for it in used railway tickets.
I do not want to be controversial, but rail privatisation is total lunacy. It makes no sense whatever, however it is examined. It is not based on any rational transport or economic arguments, and none of the arguments for it has persuaded the public that it makes any sense. If there is any sanity left on the Conservative Benches, the Government would abandon this proposal, because clearly it is not doing them any electoral favours. No other country in Europe—despite the Secretary of State's comments on the split between the railways and the operators in other countries—is splitting its railway system into all these organisations. No one would follow that crazy example. If any countries were so doing, the Minister would have been able to answer my question.
The procedure is pretty straightforward. The Government scrap British Rail's debt—a debt that is owed to the people of this country because the money was borrowed. We deserve to see it coming back to us, as we would expect if we had lent money to any other concern. Having scrapped the debt, they sell the assets at knock-down prices. Even the lunatics on the Conservative Benches could sell the assets, because they have discounted them heavily. We know that Railtrack was originally valued at about £6.5 billion. The Government are prepared to accept about £1.5 billion. I would like to know what the real figure is. Perhaps the Minister will tell us how much they are prepared to accept for Railtrack. It will not be anything like the £6.5 billion valuation.
Private operators receive subsidy to the tune of an extra £700 million—from taxpayers again. What sort of privatisation is it when the Government sell off an industry cheap and still expect those who have had their assets taken away to continue to subsidise the private operator?
§ Mr. Nigel Evans (Ribble Valley)
Would the hon. Gentleman care to remind the House which union he is sponsored by, and does it invest any of its pension fund money in privatised companies?
§ Mr. Banks
I am sponsored by the Transport and General Workers Union and I have not faintest idea where it puts its income. If the hon. Gentleman wants to find out, he can read its annual report in the Library. Will he then tell me how we can ever find out who puts money into the Tory party, which will not publish its accounts and show which crooks and fascists from abroad invest in it? The hon. Gentleman should not lecture us about honesty and openness in accountancy, either in the unions or the political party. Thank you, Mr. Deputy Speaker; I feel much better for that.
This is a lunatic proposal. The Government propose to split a unified railway system into dozens of competing units. As I said, no other European country is doing so. 372 I challenge the Minister to tell us which other European country is doing that—I want him to name them specifically.
§ Mr. Watts
I am happy to do so: Sweden, Germany and Holland, to name but three, are splitting their infrastructure from the operation of services. They have divided services between inter-city, freight and regional railways and they intend to privatise them. No doubt, as they develop the details of their policy, they will want to follow the successful model that we are implementing in this country.
§ Ms Short
It is misleading for the Minister to quote Sweden and Holland in particular, which we have examined as attractive models that seek to reduce track access costs so that road and rail can compete equally and which have two public sector companies. To suggest that that is anything like the Government's proposals is an outrage.
§ Mr. Banks
My hon. Friend again makes the point that the Government have been revealed as being prepared to deceive themselves and the country about this privatisation. The railway system will be disorganised and unco-ordinated if it is ever split up.
I get angry when I hear the argument about the lack of investment in British Rail. Yes, there has been a lack of investment. The hon. Member for Southend, East (Sir T. Taylor) complained about the line in his constituency and the lack of investment in the past 15 years. Has it ever occurred to him that, in that time, his party has been in government? Why does he not blame his party for failing to invest in his British Rail line, as he has a right to do?
The Government say that the private sector will invest resources. Where is the logic in that? If private investors can profitably invest in the railways, why cannot the state equally do so? The only reason why it has not done so is that the Government would not permit it. The Government deprive undertakings and nationalised industries of investment possibilities, services become less efficient and the Government then say, "Oh, we must privatise industries because they are inefficient and they have failed to invest properly." The Government are responsible, however, for the failure to invest in British Rail and in all the other sectors that we have discussed. We know that the Government can always borrow money far more cheaply than any private company car. If they had had the will to invest, investment could have been made.
The Government have failed to invest in the railways and public transport generally. I could go on for a long time, but I will not—my few minutes are almost up. I should like to take Ministers around London, not in the armour-plated, plush limousines in which they get chauffeured around London but on the underground, on British Rail—what is left of it—in the south-east or on the clapped-out buses that belch out fumes and poison Londoners 24 hours a day. They might then not be so complacent about travel, railways or privatisation.
373 I am not a Front Bencher. I had a moment of glory a few minutes ago when I was left in charge at the Dispatch Box, when I thought that I discharged my duties very responsibly, but I do not have to be cautious and responsible in what I say. I say to my hon. Friends that, if I were in charge of my party, I would tell potential asset strippers of the railways that the buyer should beware and that legalised robbery by the Government of taxpayers' assets would be countered by a Labour Government taking back into public ownership all the assets at a discounted purchase price—assets that have been stripped out of industries that the Government gave to companies at a knockdown price. I would do so—this is a Liberal party suggestion as well, although my proposal is more radical—through interest-bearing bonds that would be redeemed in the future.
Who would be upset by the policy? It would not be the people whom I represent in the east end or, I suspect, the majority of people in this country. It would, however, certainly put off the asset strippers, the fat cats and the City slickers who just stand around waiting to cream off industries at the public's expense.
This is a lunatic set of proposals coming from a Government who have clearly lost all control of time, opportunity, policy and their senses.
§ 6.5 pm
§ Mr. Peter Luff (Worcester)
I do not know about you, Mr. Deputy Speaker, but for me this debate has a strange sense of déjà vu, both in terms of the Opposition's arguments and of the debate on classification between my hon. Friend the Member for Dartford (Mr. Dunn) and the hon. Member for Hampstead and Highgate (Ms Jackson). There may be a case for another ten-minute Bill to classify the Opposition horror stories that we have been hearing, especially from the hon. Member for Newham, North-West (Mr. Banks). They would be classified as fiction by any librarian, that is for sure.
Nostalgia, we often hear, ain't what it used to be, but we will be able to look back on today with great nostalgia. This is the last opportunity for Labour to peddle its horror stories with even a semblance of credibility outside this place, because when we next return to the subject the franchise operators will be providing services. Two are already up and running and we do not know what they will do yet, but we will have evidence gained over a sustained period of the improved service quality that they will deliver.
§ Mr. Wilson
On a point of order, Mr. Deputy Speaker. This relates to my previous point of order. Would it be in order for the hon. Gentleman to declare the rail privatisation interest of Lowe Bell Communications?
§ Mr. Deputy Speaker
Again, hon. Members know full well the rules of the House. It is matter for them what they declare, or otherwise.
§ Mr. Luff
I am not even aware of the rail privatisation interest to which the hon. Gentleman refers. I advise the Chamber of Shipping through Lowe Bell Communications and no one else.
The current edition of The Economist states: 374privatisation … is more likely to be a consumer's dream— the start of a new era which will revolutionise Britain's under-invested railway network. Those who jeered that rail privatisation would never get rolling have already had to eat their words.Even discounting the better management that privatisation should bring, assured levels of subsidy and a stable fare-structure can hardly fail to deliver improved performance.I say, "Amen to that."
I am already beginning to receive evidence in my constituency of improved service by Great Western Trains. I was delighted to receive a letter on 3 January from its managing director, Brian Scott, who said:I am confident you will see a nice balance between continuity and innovation.That is precisely the point of privatisation. He goes on:As far as the Worcester area is concerned we aim to heighten our profile, including the use of local advertising. In order to spearhead this, I am appointing a Cotswolds Business Manager with special responsibility for Worcester, Hereford and the Cotswold Lines."—[Interruption.]Is that not interesting? Labour Front Benchers laugh at attempts to increase rail travel. I thought that that was what they wanted. It is certainly what I want. Their laughter speaks volumes for what they are really up to in this debate.
This morning I received another fax from Mr. Scott. I had asked him about the early experience of rail privatisation. [Interruption.] Labour Members can barrack all they want. They do not like the truth—I know that it hurts them. The truth is that privatisation is already bringing benefits. Mr. Scott says of Great Western Trains:It… faced severe weather problems on its second full weekday of operation. With large sections of motorway and airports in the region closed, Great Western Trains was able to run 99 per cent. of its trains (one Hereford to Paddington cancellation only). Only 5 out of the 133 trains run were over half an hour late despite horrendous weather conditions.There was excellent co-operation between Railtrack and Great Western Trains who were also able to assist other (BR owned) Train Operating Companies in difficulties by making four additional station calls.That demolishes the myth that there would be a lack of co-operation between railway companies. We saw co-operation in action yesterday, and it delivered people to their destinations, against the odds.
That myth is but one of a number that I want to demolish. The second myth is the idea of massive fraud. Of course, no part of any nationalised industry has ever suffered any fraud or inefficiency whatever; no constituency Labour party has ever been implicated in any fraud whatever—for the benefit of readers of Hansard, I am saying that ironically. In fact, taxpayers have been ripped off by nationalisation.
The third myth is that privatisation will mean a worse service. I heard your ruling earlier, Mr. Deputy Speaker, about not being able to draw too many parallels with other privatisations, but I had personal experience of British Telecom this weekend when my telephone went wrong, and there has been a revolution in the service quality that it delivers. That will happen on the railways, too.
In my constituency even the preparation for privatisation has led to timetables that, for the first time in living memory, give bus connections, to improved timetable displays at stations, to better on-board services on trains and—I say this with no sense of apology— 375 to guaranteed services between Worcester and London, for the first time ever. The passenger service requirements, much derided by Opposition spokesmen, provide my constituents with a guarantee of express trains to London. Privatisation means better services, not worse.
The fourth myth is rather an odd one. It is that trade unions do not like privatisation. On the contrary, it seems that they do. We have heard a lot of evidence about their investments in privatised utilities, and the investors include even the National Union of Rail, Maritime and Transport Workers. Will the unions extend that love of the privatised utilities and buy shares in Railtrack? I hope that they will. Then we shall safely be able to say that it will be a case of "do as we do", as well as "do as we say".
The fifth myth, and probably the one that it is most important to demolish, is the Opposition's fanciful claim that nationalised industries are more responsive than the private sector. Of course they are not. I looked back at a debate that took place in the House on 15 December 1952. The Committee stage of the Transport Bill was being taken on the Floor of the House when the then Member for Wolverhampton, South-West, Mr. J. Enoch Powell, quoted from a Fabian Society pamphlet about the railways published two years earlier, in 1950. It said:The paramount fact of centralisationof the railwaysis the remoteness of those responsible for taking important decisions from those whom they affect … The term 'management' indicates, not an organisation of human beings, but an amorphous mass of anonymous individuals with 'no soul to save and no backside to kick'.Later Mr. Powell said:British Railways at present are an organisation employing over 600,000 men and the responsibility for decisions in the whole of the system is substantially centralised. No commercial undertaking of so embracing a character as British Railways would endeavour to conduct that undertaking in the top-heavy fashion of British Railways as organised at present".That top-heavy organisation endured for 40 years, and only now are we beginning to see the end of that ridiculous situation.
Perhaps most tellingly of all, Mr. Powell quoted a letter from an engine driver living in Wolverhampton, which still rings true 44 years later:Railway employees prior to 1948"—[Interruption.] The hon. Member for Cunninghame, North (Mr. Wilson) would do well to listen to this, because it might remove the smile from his face, for once. The letter said:Railway employees prior to 1948 were, unfortunately, for the most part adamantly Socialistic. They have now received an effective dose of Socialism in practice, and verily, it has proved a penetrating lesson. They see with scorn an ever-growing superfluity of officials and inspectors, a daily deterioration in efficiency and a relentless intensification of muddle.That is exactly what nationalisation led to—not to responsiveness but to a lack of responsiveness, and to remoteness.
According to Mr. Powell, the Fabian Society pamphlet concluded thatsome form of de-centralisation of management into smaller regions, each under a manager having overall responsibility for all departments, is preferable to the present centralised administration."—[Official Report, 15 December 1952; Vol. 509, c. 1071–76.]376 The Fabian Society got it nearly right 40 years ago: Opposition Front Benchers would do well to listen.
The official history of the Great Western Railway makes exactly the same point when it says:For the railwaymen at large on the Western, nationalisation meant a remote British Transport Commission, headed by people of whom they had never heard, a Railway Executive manned by people only one of whom they knew, and a Western management who obviously would go on playing the traditional tunes.There was no increased responsiveness there.
The sixth and final myth is the argument that investment will be jeopardised by privatisation, but is guaranteed by nationalisation. The history of the railways shows that one of the real problems with nationalisation was that it destroyed investment. After nationalisation, southern region could not pursue its electrification programme, as it should have been allowed to do.
The official business history of British Railways, written by Dr. T. R. Gourvish with the sanction of the British Railways Board, said the following about the first 25 years of nationalisation:The early years of nationalisation were a bleak period in terms of investment, and many writers have traced some of the railways' enduring problems to this situation.It then mentions one or two academic experts, one of whom,Ken Gwilliam, also a transport economist, emphasised the difficulties caused by the accumulated disinvestment of the war and early post-war years, the result, he thought, of both the inadequacy of the war-time financial arrangements and the attitude of the post-war Labour Government. 'Facing inflationary pressure … [the government had] deemed that investment in railways was an expendable item in the short run.'That is the dilemma that will always face Governments of any political colour, who must choose between hospitals, schools and railways. It is one of the principal reasons for putting the railways into the private sector. In terms of investment Labour failed the railways in the early crucial days of the nationalised industry. Nationalisation failed the railways.
Labour asks us to believe that everything is different now, and that now it would do as it says, not as it did then. That is not a very plausible argument. I have one simple question to ask the hon. Member for Birmingham, Ladywood (Ms Short). Would Labour invest more in the railways? Yes or no.
§ Mr. Luff
We hear no more about the amount. Perhaps to expect more would be asking too much—but I am grateful to the hon. Lady for what she did say.
377 One very distinguished figure connected with the railways is the Rev. W. Awdry, whose works are well known to the children of this country. He once observed:There are two ways of running a railway; the Great Western way and the wrong way".I am glad that the Great Western now has the chance to do it the right way again.
§ Mr. Andrew Mackinlay (Thurrock)
I shall not take any interventions. I am not sponsored by a railway union, but in the abortive legal action that I tried to undertake before Christmas in an attempt to halt the franchising of the London-Tilbury-Southend line the rail unions gave me some assistance with legal expenses.
I am implacably opposed in principle to privatisation of the railways, but, putting that aside, many people who welcome the concept of privatisation still consider the Government's method barmy and foolhardy in the extreme—and that includes some Conservative Members of Parliament. The Conservative-dominated Transport Select Committee has often cautioned the Government about the prudence of the course on which they were embarked, citing especially the problems of inter-ticketing and the transfer of revenues between rail operators.
I am a member of the Transport Select Committee. During hearings, I asked the then Secretary of State for Transport—the right hon. Member for South Norfolk (Mr. MacGregor)—and the chairman of the British Railways Board how there could be transparency and probity when management teams were preparing and marshalling bids at the same time as they were running the railways. That problem is emerging in relation to the LTS line.
The Secretary of State has not given adequate information, to which we are entitled, on when the alleged scam was discovered, by whom, when it began and how widespread it is. It is not sufficient to say that auditors have been called in. He should be able to give us much more information and reassure us that similar problems do not arise—
§ Mr. Luff
On a point of order, Mr. Deputy Speaker. The hon. Member for Thurrock (Mr. Mackinlay) said that he was not sponsored. Although I accept that an entry in the Register of Members' Interests may change, the register shows clearly that at least a year ago he was sponsored by the Transport and General Workers Union.
§ Mr. Deputy Speaker
I think that this is the fourth time that a similar point of order has been raised. I have ruled on each occasion. Hon. Members know full well that it is their responsibility to declare interests—indeed, it is a rule of the House that they should do so.
§ Mr. Mackinlay
The hon. Member for Worcester (Mr. Luff) will notice in Hansard tomorrow that I said with great precision that I was not sponsored by any rail unions. I went on to declare the absolute extent of my involvement with them, which was an attempt to frustrate the decision to franchise LTS in the High Court. The hon. Member really should know the difference. He is a silly Member and I regret that he felt it necessary to interrupt in such a way.
378 I regret that there have been diversions into people's film careers and into other privatisations and that hon. Members have not addressed the central problems, which is what I will do and why I shall not give way. What reassurance do we have that other similar alleged scams or problems will not arise in interfaces with rail operators such as Thameslink, Network SouthCentral and even down as far as Exeter station? The problems with ticketing and fares could arise again and we want assurances that they will not.
How sure is the Secretary of State that what is clearly an irregularity has not interfered with the tendering process? Can he assure us that it has not given some advantage to Enterprise Rail? If he does not know, he should say so. If he can say that there was no problem, he should do so from the Dispatch Box.
Some Enterprise Rail staff have left the company or been suspended. We are told that Mr. Colin Andrews, the commercial director, has departed. On what terms did he leave? If he resigned, terms must have been established. Has he offered a reason for his resignation? Above all, I want an assurance that no money has been advanced as a sweetener, either for his silence or his swift departure. Mr. Andrews' deputy, the commercial manager, has been suspended. Two area managers, better known as station masters—one at Fenchurch Street and one at Upminster— have also been suspended, as well as two others in the commercial department.
In my experience as a trade union official before I entered the House, it was common place for people to be suspended for two reasons: first, so that they would not be able to influence an inquiry and, secondly, in their own interests to be able to demonstrate that they would not be able to influence an inquiry. Therefore, why has not the managing director, Mr. Kinchin-Smith, been suspended? I do not rush to judge him; I know him. It would be in the interests of everybody, however, including him, if he were not at his desk. Clearly, it is inappropriate for him to stay. Will the Secretary of State tell us why Mr. Kinchin-Smith is still at work?
Mr. Kinchin-Smith was also the architect of the penalty fares scheme. When he was running the LTS line, I told him that many of my constituents considered the scheme foolhardy in the extreme. Legitimate, fare-paying passengers who had wanted to purchase tickets but were unable to do so because ticket machines, even those issuing permits to travel, were not working were embarrassed by the scheme. The scheme was a charter for people who did not wish to pay but who were prepared occasionally without any embarrassment to fork out £10.
It has been discovered that the scheme that Mr. Kinchin-Smith introduced and which he described as the greatest thing since sliced bread has been arbitrarily abandoned. I want to know why. Was London Underground receiving its just receipts? Was it consulted about the abandonment? Were there irregularities in the handling and ending of the penalty fares scheme and, if so, are they the subject of further investigation?
Reference has been made to the franchising director. The Secretary of State has said that he wants the investigation to be conducted thoroughly, and I expect no less of him. When I was spying on the franchising director at Waterloo station on Monday morning, however, he made it abundantly clear to every journalist who was listening that he saw the LTS scandal as a hiccup and 379 that he hoped—indeed, he was determined—that the LTS franchise would be transferred in three to four weeks' time.
That does not make me confident that the franchising director is not pre-judging the inquiry. Indeed, I regard him as a puppet of the political machine. He is prepared to play the Government's tune, keep his head down and remain determined that the franchise will go through, regardless of what may be discovered. He should resign or be sacked because there is little or no confidence in his stewardship of the LTS franchise and there is little or no confidence in any of the other franchises that have been let.
Unhappily, the South West Trains franchise was wrongly allowed to go ahead on Sunday. The management team, under Mr. Peter Field, marshalled a bid, but it was inconceivable that the Government and the franchising director would let two management bids go ahead. Clearly, room in the garden was guaranteed for Stagecoach and other operators. I am deeply concerned about the way in which the management team at South West Trains was overlooked. It had all the hallmarks of the franchising arrangements for independent television, which resulted in Thames Television's quality bid suffering.
I also noticed on Monday, amid all the trumpeting about two franchises being let, that a Stagecoach bus was parked close to platform 13.1 thought that that was a sign of things to come. Inevitably, over time, Stagecoach will reduce its rail services and introduce coaches if it is allowed to get away with it.
For a number of years I had to spend a great deal of time at Surbiton station. I remember it well. The announcement used to go something like this: "The train arriving on platform 3 will call at Esher, Hersham, Walton, Weybridge, West Weybridge, West Byfleet and Woking. Join the front four cars for Brookwood, Ash Vale, Aldershot, Farnham, Bentley and Alton. The other part of the train is for Worplesdon, Guildford, Farncombe, Godalming, Milford, Witley, Haslemere, Liphook, Liss, Petersfield, Rowlands Castle, Havant, Bedhampton, Fratton and Portsmouth and trains to the Isle of Wight."
Trains would also go to Hinchley Wood, Claygate, Oxshott, Cobham, Effingham Junction, Horsley, Clandon, London Road and Guildford, and going the other way they would stop at Berrylands, New Maiden, Raynes Park, Wimbledon, Earlsfield, Clapham Junction, Vauxhall and Waterloo.
I cite that list because the areas from which many of those great stations take their names are represented by Conservatives Members of Parliament. It needs to be borne in mind that many of those stations will disappear if the franchises are allowed to endure. Where are the right hon. and hon. Members who represent such constituencies as South-West Surrey, Epsom and Ewell, Kingston upon Thames, Richmond and Barnes, Twickenham, Mole Valley and North-West Surrey to speak up for the maintenance of services that will disappear when South West Trains, under Stagecoach, has been operating for a few months and decides that it is necessary to close intermediate stations and end off-peak services? That is what is threatened—if not promised— by the insistence on Stagecoach being awarded the franchise for South West Trains.
When, in a few years' time, people complain that their services have gone, I will point an accusing finger at Conservative Members who acquiesced and voted for the 380 surrender of our rail services to Stagecoach, a bus company. Tory Members have either boasted about it here today or denied their constituents an opportunity to have their views articulated in the House, because they were not here.
§ Mr. Brian Wilson (Cunninghame, North)
I congratulate my hon. Friend the Member for Thurrock (Mr. Mackinlay) on that virtuoso performance. During his routine involving the lists of stations, I was afraid that he was going to burst into song. If I remember, the next two lines went:Never paid my fare, man had no worries nor cares, man".Fortunately, I am sure that that was not the case with my hon. Friend.
My hon. Friend's speech was in marked contrast to that of the hon. Member for Worcester (Mr. Luff), whose speech gave us a fair indication of why the Tories are in such a disastrous position. Frankly, if he had made that arrogant and complacent speech in defence of rail privatisation at virtually any public gathering in the country, he would have been laughed at in derision. Only here could he be heard, in at least half the premises, with relative respect.
Listening to all the Tory Members with vested interests, I thought that it might not be a bad idea if we adopted some football terminology. In the same way as there is the Beazer Homes League, we had visits earlier from the Hill Samuel right hon. Member for Norfolk, South (Mr. MacGregor), the S. G. Warburg hon. Member for East Surrey (Mr. Atkinson) and, of course, the Lowe Bell hon. Member for Worcester. The idea that vested interests in the House lie among Members on this side of the Chamber, rather than the Tory side—[Interruption.] Of course there are Opposition Members with interests, but I can tell Members where the money is in terms of interests—it is on the Tory side of the Chamber. The Tories are up to their eyes in vested interests in the privatisation of the railways. Perhaps that is why there is such enthusiasm for privatisation among the tiny number of Conservative Members assembled here tonight.
When the Railways Bill was in Committee, I invented a hypothetical private railway company called Spivrail. Tory Members who had sat mute throughout the Committee's proceedings were moved at that point to voluble protest. "What an insult to the ranks of private enterprise," they cried. But in fact, that is exactly what has been put in place—a railway for spivs handed over to them by the Government of sleaze. One more fraud investigation and we may even rename it Sleazerail.
In reality, life has improved upon art. Not even I had anticipated such a series of humiliating fiascos for Ministers in the earliest days of rail privatisation. Let us look at the first three franchises offered. The preferred bidders for Great Western—Resurgence Railways—had to be dropped after we exposed the fact that the managing director had just run a double glazing firm into liquidation, leaving a trail of debt behind it.
The franchising director, who was very accurately portrayed by my hon. Friend the Member for Thurrock, employs hundreds of lawyers at £250 an hour and more to drive the measure through. Why did none of them uncover that minor difficulty in the background of 381 Resurgence Railways? Personally, I thought it a reasonable idea to check with Companies House, and there was the information available for anyone who wanted to find it. But the Tories, of course, did not want to find it.
At that point, the South West franchise had to be juggled. Otherwise, Ministers would have ended up with three management buy-outs, which would not have said a lot about the level of private sector interest. So Stagecoach suddenly became the preferred bidder—the company with the worst record of anti-competitive practices in the United Kingdom. I can tell the House that the people of the south and south-west ain't seen nothing yet. In Southampton, for instance, Stagecoach is remembered as the company to which the Tories sold the bus company for less than the value of the local bus station, which the entrepreneurial Stagecoach promptly sold off for development. The result is that, to this day, Southampton does not have a bus station. Let us hope that there is some safeguard in the franchise agreement preventing Stagecoach from selling the railway station.
Then we move on to fiasco No. 3—the London-Tilbury-Southend line—and what a cracker that is. Spivrail does indeed live. I love the names that the companies come up with—Resurgence Rail, Enterprise Rail, Victory Rail, Thatcher Rail. How many more of these names will we have? It really is a case of the louder they talk of their honour, the faster we should count the trains as they disappear.
Let us be clear about what has happened with Spivrail—or rather, the London-Tilbury-Southend line, or Enterprise Rail. There has been an absolutely predictable development following the tearing apart of our national rail network into dozens of fragments, each of which owes loyalty only to itself and its prospective shareholders.
§ Madam Speaker
Order. I have heard nothing that was out of order. I often say in this House that Members are responsible for their own comments.
§ Mr. Wilson
It was nice to hear from the prisoner's friend.
In the case of the LTS line, the alleged victim was London Underground, but when the Consumers Association recently checked up on the fares being offered where more than one operator was involved, it was clear that the victims were undoubtedly—there are no allegations here—the passengers. A fragmented railway is a bad deal for the taxpayer and for the passenger, and every day that passes confirms the basic lesson that we were preaching when the Railways Bill was introduced.
I wish to make a small inquiry about the LTS scandal. Will the Minister confirm that when the consultants who check travel patterns went to Upminster in December to carry out a routine check, they found that the relevant records had been removed to Southend? The consultants, 382 by whose assessments the fare revenue is divided up between the operators, were then dependent on information provided by LTS management, rather than randomly selected information. Does that not suggest a degree of premeditation? Why was no action taken on that by the franchising director?
There is a massive vested interest and conflict of interest involved for management teams in the proposed buy-outs. They have all the time and incentive in the world to put schemes in place for the post-privatisation period at the same time as they are supposedly running a public sector railway. That is the problem with management buy-out teams.
I have two proposals to make today. First, in light of what we have learned over the past few days, the embarrassment that the Government have suffered and the clear evidence that this is not restricted to just one franchising operation or prospective operation, the franchising operation should be suspended in its entirety until the investigations are complete. I do not expect the Tories to yield to that, as they are into the scorched earth phase and are trying to push the measure through.
Secondly, as soon as a management buy-out team has notified its interest as a prospective bidder, it should cease to be the management team for that railway until the franchise has been awarded. If that is not done, conflicts of interest will continue to arise.
I have worked with people from all parties in the past three years who have a common concern for our railways. One of those was the late Robert Adley. Two nights before he died, I met Robert Adley in the Member's Lobby. He patted his inside pocket with immense satisfaction and said, "I have got them here—the amendments signed by six Tory Members." Using a code that most of us here will understand, I asked him, "Including the right to bid?" "Of course," he said, "That is the one that matters—that will kill the whole thing."
Two days later, Robert Adley was dead, and the tragedy of historic proportions was that there was no Tory Member to take his place. If there had been, the subsequent course of events would have been very different. The right of British Rail to bid for franchises was, as Robert Adley rightly identified, crucial. If it had had that right, it would have won the franchises—it is as simple as that. That was also recognised by Lords Peyton and Clinton-Davis, and others from all parties who pursued that amendment in the House of Lords.
Eventually, in what seemed at the time to be a success, the Government were forced to concede the principle— although, as always, the precise wording of the amendment was crucial. In the absence of an Adley to hold out for more, the amendment was written to the advantage of those whose aim was still to destroy British Rail and the national rail network. Nine franchises have now been offered, and in each and every case British Rail has been denied the right to bid. In other words, the will of Parliament was cynically and systematically negated to satisfy the obsession with privatisation at all costs.
I hoped that one or two Tory Members might be loyal to the memory of Robert Adley and might do something about it now that the scale of the affront is apparent. Judging from what we have heard today, however, I probably hoped in vain. The refusal to allow British Rail to bid is an affront to Parliament. Parliament would not 383 have given the Government their legislation without that apparent concession. The Government should never forget that.
Privatisation is a rotten deal for the taxpayer, who has been forced to pay private operators more than British Rail would have required for the same level of service in order to satisfy Ministers' ideological spite. It is also a tragedy for the people who work for the railways, thousands of whom will pay for the franchising process with their jobs. [Interruption.] The Secretary of State mutters from a sedentary position. He complained earlier about being called a right-wing ideologue. Give me a real right-wing ideologue any day rather than a bogus liberal without any principles who plays the role of a right-wing ideologue because that is the prevailing mood of the moment.
If the Secretary of State wants to regain his credentials as the bicycling baronet rather than the right-wing ideologue, there is a simple test for him. He should reopen the LTS franchising procedure and give British Rail the right to bid. Does he have the guts to do that? I doubt it very much—but that is how he will be judged, not on his own self-image.
I am grateful to a financial journalist named Michael Walters of the Daily Mail for what is undoubtedly the best definition of Railtrack privatisation that I have yet seen. He wrote with disarming honesty.Beneath the financial filigree, Railtrack is a conduit for distributing State moneys to private investors. All being well, the train operating companies collect subsidies and pass them to Railtrack to pay as dividends to shareholders.There you have it. I particularly like the phrase "all being well".
For anyone deluded enough to believe that rail privatisation has anything to do with quality of service, Mr. Walters was again very helpful in clarifying the position. He wrote:Forget the frustrations which can actually attend travelling by train. The service itself scarcely counts in the flotation of Railtrack. What matters most is the quality of the financial engineering. The bankers understand that the less popular Railtrack appears, the more of a bargain they will have to make it.On that point at least, the Tories have triumphed. They are the ultimate financial engineers. Through four Secretaries of State, their success in discrediting rail privatisation could scarcely have been improved upon. In those terms, it has worked.
As my hon. Friend the Member for Birmingham, Ladywood (Ms Short) pointed out, for the purpose of setting access charges the assets of Railtrack were found to be worth £6.5 billion. On that foundation, the whole lunatic system of access charges was based. Now the talk is of selling it off for perhaps a quarter of that. That is financial engineering of the highest quality. It is also part of the reason why Labour cannot and will not acquiesce in the sale of Railtrack.
Let us look at just one example in the most recent piece of financial engineering. The Minister may wish to explain the thinking behind it. Understandably, Railtrack does not want to be liable for compensation to train operators. So, incredibly, the Treasury is to give more money to the train operators so that they can pay it to Railtrack in supplementary access charges, so that Railtrack can pay it back to the train operators as compensation. The net cost to the taxpayer of that one 384 device will be £84 million in the first year and some £250 million over five years. Let the House be absolutely sure of the bottom line: the Government may be privatising, but in the case of the railways it is the taxpayer who is footing the bill. That is the factor which distinguishes rail privatisation from all previous privatisations and it is crucial in relation to Labour's intentions.
Why should the taxpayer fund the profits of a privately owned Railtrack rather than see every penny of his or her contribution to the railways go into the creation of better, more modern services? What conceivable case is there for the proceeds from the property assets of Railtrack to be converted in future into shareholders' dividends and boardroom salaries rather than ploughed back 100 per cent. into railway investment? Let any potential investor note those words: 100 per cent. There is no such justification, moral, financial or political.
§ Mr. Riddick
The Leader of the Opposition has talked about his desire to create a stakeholder economy under a Labour Government. Can the hon. Gentleman tell me what he envisages stakeholding would represent in the railways if there were a Labour Government?
§ Mr. Wilson
There are many ways of stakeholding. At the moment, we are all stakeholders in the railways. We all share a stake in the railways and we shall always do so because as taxpayers we shall all subsidise them, no matter who owns and operates them. Another way of being a stakeholder in the railways is to work for the railways. If the hon. Gentleman's idea of stakeholding is for Stagecoach to come in and make 1,000 people redundant or for Wisconsin Railways to come in and make 4,000 people redundant, that is not my idea of stakeholding.
The kind of stakeholders whom I respect are not just those who own and profit, but those who work and those who travel. That is my idea of stakeholding. That is the kind of railway that we shall have—an expanding railway. People will be able to look across to the continent and say, "Yes, let us have some of that." No Government of any country in the world would be prepared to sacrifice their railway network on the altar of lunatic, bigoted, dogmatic privatisation. The British people do not want it either.
I make Conservative Members one final promise. Let them go ahead with this if they wish. Let them do the vandalism. Let them carry out the scorched earth policy. But let none of them be unaware that they will pay a high electoral and historic price as the party which, in the face of all rational advice, set out to destroy our national rail network.
§ The Minister for Railways and Roads (Mr. John Watts)
The House always enjoys the wild man of the north act from the hon. Member for Cunninghame, North (Mr. Wilson), but much less impressive is his failure to explain clearly his party's position. The hon. Member for Birmingham, Ladywood (Ms Short), had a chance to do so when she opened the debate and the hon. Gentleman has had a chance to do so in replying to the debate, but he has failed. Perhaps nothing different should be expected of a party which in all things says one thing and does another.
385 I will give the hon. Gentleman an eleventh hour opportunity to answer three key questions. If so-called new Labour ever forms a Government at some time in the future, will Railtrack be renationalised and, if so, how? The hon. Gentleman's leader, the right hon. Member for Sedgefield (Mr. Blair), said at the 1995 Labour party conference that there would be a publicly owned and publicly accountable railway system under a Labour Government. The hon. Member for Wrexham (Dr. Marek), with the honesty that comes from the Back Benches, said that Railtrack must be in public ownership. The hon. Member for Newham, North-West (Mr. Banks) also made his position crystal clear.
On 8 January the hon. Member for Ladywood said:It is for this reason that we are committed to a publicly owned railway. There is no other way to protect the national interest. We will announce our plans for Railtrack if and when the prospectus is issued".Perhaps she will humour us on this side of the House and accept that the prospectus will be issued.
§ Mr. Watts
I did not, and I have made copious notes as I have listened to the debate.
Would new Labour breach new contracts with private franchise operators? Opposition Members seem to despise such operators. Will the contracts entered into with the first two franchise companies and those that will be entered into with the next four and in subsequent tranches be honoured or not? If investment of more than £1 billion a year by Railtrack plus investment by rolling stock companies and train operating companies is inadequate, how much should be invested and who will pay?
§ Mr. Watts
The hon. Lady said that I should have listened to her speech. She should have listened with greater care to what I said. I asked the hon. Member for Cunninghame, North three questions—one, two, three— about what would happen if so-called new Labour were ever to form a Government. I note that we have still not had any answers to those questions.
§ Mr. Wilson
As my hon. Friend the Member for Ladywood said, it is pathetic for the Minister to be asking questions instead of spelling out a policy for the railways. [HON. MEMBERS: "Answer, answer."] If Conservative Members say it three times, I will answer three questions.
First, on Railtrack, we will spell out our precise position on the flotation, which we must. Secondly, on the franchises, we have made our position absolutely clear and specifically answered the question that the Minister asked. Thirdly, on rolling stock it is interesting to note that if the Government had accepted our proposals on leasing railway rolling stock years ago, we would not have lost 8,000 manufacturing jobs in the railway industries, the York carriage works would not be closed and we would have new rolling stock on the London-Tilbury-Southend line. We do not have to take lessons on that because we suggested it to the Government.
§ Mr. Watts
I noted one answer out of three to the questions that I posed. I am glad to hear from the hon. Gentleman that the contracts with franchise operators will be honoured. It is important to hear that from his mouth, as well as from that of the hon. Member for Ladywood, because sometimes it is not clear who is the principal transport spokesman for the Labour party.
My hon. Friend the Member for Dartford (Mr. Dunn) asked whether Labour spoke for the people or for the trade unions. His question shows why we cannot get a clear answer to my other two queries. It is the fear of its trade union masters that prevents the Labour party from spelling out its policy on the renationalisation of Railtrack and its attitude to investment.
We have often heard allegations that the flexibility allowed in passenger service requirements for a commercial franchise would lead to dramatic cuts in services. It is worth spending a couple of minutes examining how, in practice, the first two private operators have planned their services. Great Western, far from slashing services as was predicted time and time again by the Opposition, is committed to continuing to run at least the current number of services and to reducing journey times. That includes services to Fishguard, which I recall were a central feature of one of our earlier debates. There is a commitment to refurbish rolling stock. The hon. Member for Cunninghame, North, said earlier from a sedentary position, "Ah, a coat of paint." He could not be more wrong. I was talking to Brian Scott, the managing director of Great Western Holdings, on Monday evening at Paddington station.
§ Mr. Watts
It is Great Western—Brian Scott. My facts are correct.
I asked Brian Scott when he was going to introduce new livery on the trains. He said that he was in no hurry to do that because he wanted his customers to have refurbished interiors and more comfort inside the trains before turning his attention to cosmetic treatment of the exteriors of the trains. I take great comfort from that.
387 In the case of South West Trains and Stagecoach, the hon. Member for Cunninghame, North will know that Stagecoach is planning to maintain the current levels of service and make significant improvements in the reliability and the punctuality of the services that it runs.
I say to the hon. Member for Eastleigh (Mr. Chidgey) that Stagecoach has owned South West Trains, by my calculation, for a little under 65 hours. He should be a little more patient and wait to hear details of its investment plans for improving stations and further plans that it may announce in respect of rolling stock. I am sure that the company will be pleased to share its plans in detail with him and with other hon. Members and their constituents whom it serves as customers.
The hon. Member for Thurrock (Mr. Mackinlay), who clearly wants a job as a station announcer—I am sure that he would do it extremely well—asked what assurance there was that there are not other routes where revenue is shared between British Rail subsidiaries and London Underground and where similar irregularities may be taking place. He will have heard my right hon. Friend the Secretary of State explain that in the past few days British Rail has sent its audit teams to all stations where the allocation of revenue between London Underground and British Rail subsidiaries is significant. The result of the checks on those stations revealed one irregularity— at Walthamstow central, involving 30 tickets worth about £250.
The hon. Member for Thurrock also asked me to speculate about the reasons why other employees of LTS Rail have been suspended. It would be unreasonable for me or for anyone else to speculate on reasons for those suspensions until the investigations have been completed and the facts are known. It is unreasonable for those individuals to be placed under suspicion in that way until their role, if any, in those events has been established and we know the full facts.
§ Mr. Watts
No, I am trying to answer the hon. Gentleman and other hon. Members and I have only five minutes left.
The hon. Member for Thurrock also asked about prejudging the decision on the subsequent award of the franchise for that service. He will have heard my right hon. Friend the Secretary of State say that the franchising director has assured my right hon. Friend that until he, the rail regulator and British Rail are satisfied that the allegations have been investigated fully there can be no question of a transfer of the franchise and that no decisions will be taken until the outcome of the investigations is known.
My hon. Friend the Member for Colne Valley (Mr. Riddick) elicited an interesting view from the hon. Member for Eastleigh, who declared himself within a few breaths both as being in favour of privatisation and as wanting Railtrack to remain nationalised. That is typical of the Liberal party—a policy which allows it to face in both directions at the same time.
My hon. Friend the Member for Colne Valley also mentioned charter services and praised the co-operation between Railtrack and charter operators. He also referred to the difficulties that some operators have had with Rail Express Systems. I share his confidence that now that that 388 company is in private ownership it will look on charter services as an important market for it to service and an area for growing its businesses.
My hon. Friend the Member for East Surrey (Mr. Ainsworth) reminded the House that nationalisation of British Rail has not worked and said that his support for privatisation was based not on dogma but on a desire for better services for his constituents. He said that they wanted investment, which privatisation will bring, and fares to be controlled in the passenger's interest. He can assure his constituents that they will get it from privatisation.
My hon. Friend the Member for Colne Valley also referred to advertising slogans. I recall that one used by British Rail was "We're getting there". After nearly 50 years of nationalisation, the best that could be claimed for the nationalised rail system was that it was getting there. The train had still not reached the terminus. My hon. Friend also referred to freight. I am confident that privatisation of British Rail's freight businesses will arrest the decline in the amount of freight carried by rail. Like my hon. Friend, I am enthusiastic about the Piggyback proposals which are being examined as part of the project to upgrade the west coast main line.
The hon. Member for Eastleigh, in common with a host of Opposition Members, confused cost and value, as they so often do. It is true that the replacement cost of Railtrack assets has been estimated at £6.5 billion, but that does not mean that that is what they are worth. The flows of funds through Railtrack from track access charges that will be employed in maintaining and upgrading the system will be what adds value to those assets.
Similarly, in relation to ROSCOs, the hon. Member for Eastleigh said that the price paid was a giveaway—he described it as a knock-down price—at £1.8 billion. It is perhaps coincidental that that is the same amount as the written-down value of the physical assets that were acquired. I should like him to explain sometime how it could be in that company's interest to run down its business.
We have heard no answers, except one, to the key questions that the Labour party must answer. For the fifth time since January last year, the Labour party has taken up the House's time to debate privatisation; yet it is unwilling to spell out its plans. I have no hesitation in expressing my confidence that my right hon. and hon. Friends will defeat the Labour motion and support the amendment in the name of my right hon. Friends.
§ Question put, That the original words stand part of the Question:—
§ The House divided: Ayes 262, Noes 298.392
|Division No. 45]||[6.59 pm|
|Adams, Mrs Irene||Bayley, Hugh|
|Ainger, Nick||Beckett, Rt Hon Margaret|
|Ainsworth, Robert (Cov'try NE)||Berth, Rt Hon A J|
|Allen, Graham||Bell, Stuart|
|Anderson, Donald (Swansea E)||Benn, Rt Hon Tony|
|Anderson, Ms Janet (Ros'dale)||Bennett, Andrew F|
|Armstrong, Hilary||Benton, Joe|
|Ashton, Joe||Bermingham, Gerald|
|Austin-Walker, John||Berry, Roger|
|Banks, Tony (Newham NW)||Blair, Rt Hon Tony|
|Barron, Kevin||Blunkett, David|
|Battle, John||Boateng, Paul|
|Bradley, Keith||Hanson, David|
|Bray, Dr Jeremy||Harvey, Nick|
|Brown, Gordon (Dunfermline E)||Hattersley, Rt Hon Roy|
|Brown, N (N'c'tle upon Tyne E)||Henderson, Doug|
|Bruce, Malcolm (Gordon)||Heppell, John|
|Burden, Richard||Hill, Keith (Streatham)|
|Byers, Stephen||Hinchliffe, David|
|Caborn, Richard||Hodge, Margaret|
|Callaghan, Jim||Hoey, Kate|
|Campbell, Mrs Anne (C'bridge)||Hogg, Norman (Cumbernauld)|
|Campbell, Menzies (Fife NE)||Home Robertson, John|
|Campbell, Ronnie (Blyth V)||Hoon, Geoffrey|
|Campbell-Savours, D N||Howarth, Alan (Strat'rd-on-A)|
|Canavan, Dennis||Howarth, George (Knowsley North)|
|Chidgey, David||Howells, Dr. Kim (Pontypridd)|
|Chisholm, Malcolm||Hoyle, Doug|
|Church, Judith||Hughes, Robert (Aberdeen N)|
|Clapham, Michael||Hughes, Roy (Newport E)|
|Clark, Dr David (South Shields)||Hughes, Simon (Southwark)|
|Clarke, Eric (Midlothian)||Hutton, John|
|Clarke, Tom (Monklands W)||Illsley, Eric|
|Clelland, David||Ingram, Adam|
|Clwyd, Mrs Ann||Jackson, Glenda (H'stead)|
|Coffey, Ann||Jackson, Helen (Shef'ld, H)|
|Cohen, Harry||Jamieson, David|
|Connarty, Michael||Janner, Greville|
|Cook, Frank (Stockton N)||Jones, Barry (Alyn and D'side)|
|Cook, Robin (Livingston)||Jones, Ieuan Wyn (Ynys Môn)|
|Corbett, Robin||Jones, Jon Owen (Cardiff C)|
|Corbyn, Jeremy||Jones, Lynne (B'ham S O)|
|Corston, Jean||Jones, Martyn (Clwyd, SW)|
|Cousins, Jim||Jones, Nigel (Cheltenham)|
|Cunliffe, Lawrence||Jowell, Tessa|
|Cunningham, Jim (Covy SE)||Kaufman, Rt Hon Gerald|
|Dalyell, Tarn||Keen, Alan|
|Davidson, Ian||Kennedy, Jane (Lpool Brdgn)|
|Davies, Bryan (Oldham C'tral)||Khabra, Piara S|
|Davies, Chris (Littlebogh & Sdw)||Kilfoyle, Peter|
|Davies, Rt Hon Denzil (Llanelli)||Kirkwood, Archy|
|Davies, Ron (Caerphilly)||Lestor, Joan (Eccles)|
|Denham, John||Liddell, Mrs Helen|
|Dewar, Donald||Litherland, Robert|
|Dixon, Don||Livingstone, Ken|
|Dobson, Frank||Lloyd, Tony (Stretford)|
|Donohoe, Brian H||Llwyd, Elfyn|
|Dunwoody, Mrs Gwyneth||Loyden, Eddie|
|Eagle, Ms Angela||Lynne, Ms Liz|
|Eastham, Ken||McAllion, John|
|Etherington, Bill||McAvoy, Thomas|
|Evans, John (St Helens N)||McCartney, Ian|
|Ewing, Mrs Margaret||McCartney, Robert (North Down)|
|Fatchett, Derek||Macdonald, Calum|
|Faulds, Andrew||McFall, John|
|Field, Frank (Birkenhead)||McKelvey, William|
|Fisher, Mark||Mackinlay, Andrew|
|Flynn, Paul||McLeish, Henry|
|Foster, Rt Hon Derek||Maclennan, Robert|
|Foster, Don (Bath)||McMaster, Gordon|
|Foulkes, George||MacShane, Denis|
|Fyfe, Maria||McWilliam, John|
|Galbraith, Sam||Madden, Max|
|Galloway, George||Maddock, Diana|
|Gapes, Mike||Mahon, Alice|
|Garrett, John||Mandelson, Peter|
|George, Bruce||Marek, Dr John|
|Gerrard, Neil||Marshall, David (Shettleston)|
|Gilbert, Rt Hon Dr John||Martin, Michael J (Springburn)|
|Godman, Dr Norman A||Martlew, Eric|
|Godsiff, Roger||Maxton, John|
|Golding, Mrs Llin||Meacher, Michael|
|Gordon, Mildred||Meale, Alan|
|Griffiths, Nigel (Edinburgh S)||Michael, Alun|
|Griffiths, Win (Bridgend)||Michie, Bill (Sheffield Heeley)|
|Grocott, Bruce||Michie, Mrs Ray (Argyll & Bute)|
|Gunnell, John||Milburn, Alan|
|Hall, Mike||Miller, Andrew|
|Mitchell, Austin (Gt Grimsby)||Sheerman, Barry|
|Moonie, Dr Lewis||Sheldon, Rt Hon Robert|
|Morgan, Rhodri||Shore, Rt Hon Peter|
|Morley, Elliot||Short, Clare|
|Morris, Rt Hon Alfred (Wy'nshawe)||Simpson, Alan|
|Morris, Estelle (B'ham Yardley)||Skinner, Dennis|
|Morris, Rt Hon John (Aberavon)||Smith, Andrew (Oxford E)|
|Mowlam, Marjorie||Smith, Chris (Isl'ton S & F'sbury)|
|Mudie, George||Smith, Llew (Blaenau Gwent)|
|Mullin, Chris||Snape, Peter|
|Murphy, Paul||Soley, Clive|
|Nicholson, Emma (Devon West)||Spearing, Nigel|
|Oakes, Rt Hon Gordon||Spellar, John|
|O'Brien, Mike (N W'kshire)||Squire, Rachel (Dunfermline W)|
|O'Brien, William (Normanton)||Steinberg, Gerry|
|O'Hara, Edward||Stott, Roger|
|Olner, Bill||Strang, Dr. Gavin|
|O'Neill, Martin||Straw, Jack|
|Orme, Rt Hon Stanley||Sutcliffe, Gerry|
|Parry, Robert||Taylor, Mrs Ann (Dewsbury)|
|Pearson, Ian||Taylor, Matthew (Truro)|
|Pendry, Tom||Touhig, Don|
|Pickthall, Colin||Trickett, Jon|
|Pike, Peter L||Turner, Dennis|
|Prentice, Bridget (Lew'm E)||Tyler, Paul|
|Prentice, Gordon (Pendle)||Vaz, Keith|
|Primarolo, Dawn||Wallace, James|
|Purchase, Ken||Walley, Joan|
|Quin, Ms Joyce||Wardell, Gareth (Gower)|
|Radice, Giles||Wareing, Robert N|
|Randall, Stuart||Watson, Mike|
|Raynsford, Nick||Wicks, Malcolm|
|Reid, Dr John||Wigley, Dafydd|
|Rendel, David||Williams, Rt Hon Alan (SW'n W)|
|Robertson, George (Hamilton)||Williams, Alan W (Carmarthen)|
|Robinson, Geoffrey (Co'try NW)||Wilson, Brian|
|Robinson, Peter (Belfast E)||Winnick, David|
|Roche, Mrs Barbara||Wise, Audrey|
|Rooker, Jeff||Wray, Jimmy|
|Rooney, Terry||Wright, Dr Tony|
|Ross, Ernie (Dundee W)||Young, David (Bolton SE)|
|Ruddock, Joan||Tellers for the Ayes:|
|Salmond, Alex||Mr. John Cummings and Mr. Greg Pope.|
|Ainsworth, Peter (East Surrey)||Bowden, Sir Andrew|
|Aitken, Rt Hon Jonathan||Bowis, John|
|Alexander, Richard||Boyson, Rt Hon Sir Rhodes|
|Alison, Rt Hon Michael (Selby)||Brandreth, Gyles|
|Allason, Rupert (Torbay)||Brazier, Julian|
|Amess, David||Bright, Sir Graham|
|Arbuthnot, James||Brooke, Rt Hon Peter|
|Arnold, Jacques (Gravesham)||Brown, M (Brigg & Cl'thorpes)|
|Ashby, David||Browning, Mrs Angela|
|Atkins, Rt Hon Robert||Bruce, Ian (Dorset)|
|Atkinson, David (Bour'mouth E)||Bums, Simon|
|Atkinson, Peter (Hexham)||Burt, Alistair|
|Baker, Nicholas (North Dorset)||Butcher, John|
|Baldry, Tony||Butler, Peter|
|Banks, Matthew (Southport)||Butterfill, John|
|Banks, Robert (Harrogate)||Carlisle, John (Luton North)|
|Bates, Michael||Carlisle, Sir Kenneth (Lincoln)|
|Batiste, Spencer||Carrington, Matthew|
|Beggs, Roy||Carttiss, Michael|
|Bellingham, Henry||Cash, William|
|Bendall, Vivian||Channon, Rt Hon Paul|
|Beresford, Sir Paul||Chapman, Sir Sydney|
|Biffen, Rt Hon John||Churchill, Mr|
|Body, Sir Richard||Clappison, James|
|Bonsor, Sir Nicholas||Clark, Dr Michael (Rochford)|
|Booth, Hartley||Clarke, Rt Hon Kenneth (Ru'clif)|
|Boswell, Tim||Clifton-Brown, Geoffrey|
|Bottomley, Peter (Eltham)||Coe, Sebastian|
|Bottomley, Rt Hon Virginia||Colvin, Michael|
|Congdon, David||Heathcoat-Amory, David|
|Conway, Derek||Hendry, Charles|
|Coombs, Anthony (Wyre For'st)||Heseltine, Rt Hon Michael|
|Coombs, Simon (Swindon)||Higgins, Rt Hon Sir Terence|
|Cope, Rt Hon Sir John||Hill, James (Southampton Test)|
|Cormack, Sir Patrick||Hogg, Rt Hon Douglas (G'tham)|
|Couchman, James||Horam, John|
|Cran, James||Hordern, Rt Hon Sir Peter|
|Currie, Mrs Edwina (S D'by'ire)||Howard, Rt Hon Michael|
|Curry, David (Skipton & Ripon)||Howell, Rt Hon David (G'dford)|
|Davis, David (Boothfeny)||Howell, Sir Ralph (N Norfolk)|
|Day, Stephen||Hughes, Robert G (Harrow W)|
|Deva, Nirj Joseph||Hunt, Rt Hon David (Wirral W)|
|Devlin, Tim||Hunt, Sir John (Ravensbourne)|
|Dicks, Terry||Hunter, Andrew|
|Dorrell, Rt Hon Stephen||Hurd, Rt Hon Douglas|
|Douglas-Hamilton, Lord James||Jack, Michael|
|Dover, Den||Jenkin, Bernard|
|Duncan, Alan||Jessel, Toby|
|Duncan-Smith, lain||Johnson Smith, Sir Geoffrey|
|Dunn, Bob||Jones, Gwilym (Cardiff N)|
|Durant, Sir Anthony||Jones, Robert B (W Hertfdshr)|
|Eggar, Rt Hon Tim||Jopling, Rt Hon Michael|
|Elletson, Harold||Kellett-Bowman, Dame Elaine|
|Emery, Rt Hon Sir Peter||Key, Robert|
|Evans, David (Welwyn Hatfield)||King, Rt Hon Tom|
|Evans, Jonathan (Brecon)||Kirkhope, Timothy|
|Evans, Nigel (Ribble Valley)||Knapman, Roger|
|Evans, Roger (Monmouth)||Knight, Mrs Angela (Erewash)|
|Evennett, David||Knight, Rt Hon Greg (Derby N)|
|Faber, David||Knight, Dame Jill (Bir'm E'st'n)|
|Fabricant, Michael||Knox, Sir David|
|Fenner, Dame Peggy||Kynoch, George (Kincardine)|
|Field, Barry (Isle of Wight)||Lait, Mrs Jacqui|
|Fishburn, Dudley||Lamont, Rt Hon Norman|
|Forsyth, Rt Hon Michael (Stirling)||Lang, Rt Hon Ian|
|Forsythe, Clifford (S Antrim)||Lawrence, Sir Ivan|
|Forth, Eric||Leigh, Edward|
|Fowler, Rt Hon Sir Norman||Lennox-Boyd, Sir Mark|
|Fox, Dr Liam (Woodspring)||Lester, Sir James (Broxtowe)|
|Fox, Sir Marcus (Shipley)||LJdington, David|
|Freeman, Rt Hon Roger||Lilley, Rt Hon Peter|
|French, Douglas||Lloyd, Rt Hon Sir Peter (Fareham)|
|Fry, Sir Peter||Lord, Michael|
|Gale, Roger||Luff, Peter|
|Gallie, Phil||Lyell, Rt Hon Sir Nicholas|
|Gardiner, Sir George||MacGregor, Rt Hon John|
|Garnier, Edward||MacKay, Andrew|
|Gill, Christopher||Maclean, Rt Hon David|
|Gillan, Cheryl||McNair-Wilson, Sir Patrick|
|Goodlad, Rt Hon Alastair||Maitland, Lady Olga|
|Goodson-Wickes, Dr Charles||Major, Rt Hon John|
|Gorman, Mrs Teresa||Malone, Gerald|
|Gorst, Sir John||Mans, Keith|
|Grant, Sir A (SW Cambs)||Marland, Paul|
|Greenway, Harry (Ealing N)||Marshall, John (Hendon S)|
|Greenway, John (Ryedale)||Marshall, Sir Michael (Arundel)|
|Griffiths, Peter (Portsmouth, N)||Martin, David (Portsmouth S)|
|Gummer, Rt Hon John Selwyn||Mates, Michael|
|Hague, Rt Hon William||Mawhinney, Rt Hon Dr Brian|
|Hamilton, Rt Hon Sir Archibald||Mayhew, Rt Hon Sir Patrick|
|Hamilton, Neil (Tatton)||Mellor, Rt Hon David|
|Hampson, Dr Keith||Merchant, Piers|
|Hanley, Rt Hon Jeremy||Mills, lain|
|Hannam, Sir John||Mitchell, Andrew (Gedling)|
|Hargreaves, Andrew||Molyneaux, Rt Hon Sir James|
|Harris, David||Monro, Rt Hon Sir Hector|
|Hawksley, Warren||Montgomery, Sir Fergus|
|Hayes, Jerry||Neubert, Sir Michael|
|Heald, Oliver||Newton, Rt Hon Tony|
|Heath. Rt Hon Sir Edward||Nicholls, Patrick|
|Nicholson, David (Taunton)||Stern, Michael|
|Norris, Steve||Stewart, Allan|
|Onslow, Rt Hon Sir Cranley||Sumberg, David|
|Oppenheim, Phillip||Sweeney, Walter|
|Ottaway, Richard||Sykes, John|
|Paice, James||Tapsell, Sir Peter|
|Patnick, Sir Irvine||Taylor, Ian (Esher)|
|Patten, Rt Hon John||Taylor, Rt Hon John D (Strgfd)|
|Pattie, Rt Hon Sir Geoffrey||Taylor, Sir Teddy (Southend, E)|
|Pawsey, James||Temple-Morris, Peter|
|Peacock, Mrs Elizabeth||Thomason, Roy|
|Pickles, Eric||Thompson, Sir Donald (C'er V)|
|Porter, Barry (Wirral S)||Thompson, Patrick (Norwich N)|
|Porter, David (Waveney)||Thornton, Sir Malcolm|
|Portillo, Rt Hon Michael||Thurnham, Peter|
|Powell, William (Corby)|
|Rathbone, Tim||Townsend, Cynl D (Bexl'yn'tn)|
|Redwood, Rt Hon John||Tracey, Richard|
|Renton Rt Hon Tim||Tredinnick, David|
|Richards Rod||Trend, Michael|
|Riddick, Graham||Trimble, David|
|Rifkind, Rt Hon Malcolm||Trotter, Neville|
|Robathan, Andrew||Twinn, Dr Ian|
|Roberts, Rt Hon Sir Wyn||Vaughan, Sir Gerard|
|Robinson, Mark (Somerton)||Viggers, Peter|
|Roe, Mrs Marion (Broxboume)||Waldegrave, Rt Hon William|
|Rowe, Andrew (Mid Kent)||Walker, Bill (N Tayside)|
|Rurnbold, Rt Hon Dame Angela||Waller, Gary|
|Ryder, Rt Hon Richard||Ward, John|
|Sackville, Tom||Wardle, Charles (Bexhill)|
|Sainsbury, Rt Hon Sir Timothy||Waterson, Nigel|
|Scott, Rt Hon Sir Nicholas||Watts, John|
|Shaw, David (Dover)||Wells, Bowen|
|Shaw, Sir Giles (Pudsey)||Wheeler, Rt Hon Sir John|
|Shephard, Rt Hon Gillian||Whitney, Ray|
|Shepherd, Sir Colin (Hereford)||Whittingdale, John|
|Shepherd, Richard (Aldridge)||Widdecombe, Ann|
|Shersby, Sir Michael||Wiggin, Sir Jerry|
|Sims, Roger||Wilkinson, John|
|Skeet Sir Trevor|
|Smith, Tim (Beaconsfield)||Willetts, David|
|Smyth The Reverend Martin||Wilshire, David|
|Soames, Nicholas||Winterton, Mrs Ann (Congleton)|
|Spencer, Sir Derek||Winterton, Nicholas (Macc'f'ld)|
|Spicer, Sir James (W Dorset)||Wolfson, Mark|
|Spicer, Sir Michael (S Worcs)||Wood, Timothy|
|Spink, Dr Robert||Yeo, Tim|
|Spring, Richard||Young, Rt Hon Sir George|
|Squire, Robin (Hornchurch)||Tellers for the Noes:|
|Stanley, Rt Hon Sir John||Mr. Patrick McLoughlin and Mr. Gary Streeter.|
§ 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.
§ MADAM 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, particularly with the start of private passenger services on the South West and Great Western lines, offering the prospects of better services and higher investment at less cost to the taxpayer; 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 an opportunity for the railways to access private finance for investment.