Railtrack Sale (Hansard, 10 June 1996)

§ 6. Mr. Bayley
To ask the Secretary of State for Transport if he will make a statement on the sale of Railtrack. [30606]

§ Sir George Young
The Government's offers of Railtrack shares were successfully completed on 20 May, when dealings started on the London stock exchange. The share offer was highly successful and secured gross proceeds of some £1.93 billion.

§ Mr. Bayley
Does the Secretary of State recall the Government's pledge to the House that rail privatisation would improve the quality and frequency of services? Has he seen the franchising director's draft passenger service requirement for InterCity cross-country trains, which would allow a private operator to cut the number of trains from York to the south-west from 11 a day to three a day? Unlike the east coast services, those trains are highly subsidised and, without a requirement, they are likely to be axed. As 700,000 tourists a year arrive in York by train, will he guarantee that services to York from the south-west will be protected if privatisation proceeds?

§ Sir George Young
In view of the hon. Gentleman' s knowledge of the industry, I am surprised that he makes the elementary mistake of confusing passenger service requirements with the services ultimately provided by those who win the bids. I invite him to look at the successful franchise for the midland main line, under which 22 extra services per day, over and above those now provided, will be offered from St. Pancras to Leicester. That offers the assurance that the hon. Gentleman wants.

§ Mr. Mans
Does my right hon. Friend agree that the privatisation of Railtrack has offered us the best possible chance to have the west coast main line upgraded? Does he further agree that any restrictions imposed upon Railtrack, as suggested by the Labour party, would delay or even stop that much-needed improvement to infrastructure in the north-west?

§ Sir George Young
My hon. Friend will know that about £1 billion will be invested by Railtrack in the modernisation of the west coast main line. I regard that as one of the most important current projects for Railtrack. My hon. Friend will also know that two initial signalling contracts have been awarded. Further contracts will follow this year, with work on the substantial contract beginning in 1997.

§ Mrs. Dunwoody
Has the Secretary of State noted that Railtrack, which will take more than a year to put in place safety requirements at Euston station which are essential to the running of the west coast main line, has nevertheless immediately managed to put on the market the air above Victoria station to any property developer who wants to buy it? It has done so because its priorities always have been, will be and are absolutely plain—to put property first and safety second?

§ Sir George Young
Railtrack has been allowed a year by the Health and Safety Executive to do the work at Euston station, and I hope that it will be completed before 10 that year is up. As to the hon. Lady's second point, I thought that it was agreed by those on both sides of the House that it makes sense to focus new office developments at major transport interchanges so as to minimise the use of cars and maximise the use of rail and buses. I am amazed at the outburst that we have just heard from the hon. Lady.

§ Ms Short
Does the Secretary of State agree that to meet the future transport needs of Britain we must have more investment in rail so as to increase the number of passengers on it and the amount of freight that is moved by it? Now that the flotation has happened, may I ask the Secretary of State to be honest about the likely consequences of privatisation? Is it not true that the £10 billion to be invested over 10 years is no greater than the level of investment that we had historically under British Rail and that that investment is inadequate to achieve the rail network that we need? Will he also admit to the House that the prospectus says—so it must be true because it is legally binding—that there is no expectation of any significant growth in passenger or freight use of rail under the privatisation arrangements? They are therefore deeply damaging to the national interest.

§ Sir George Young
On the hon. Lady's first point, the investment figures are £8 billion over five years, which in my view is a higher level of investment than would have been afforded had the railways remained in the public sector. The hon. Lady needs to explain how she would find £8 billion if we pursued her policies to put Railtrack back in the public sector. Would she put up the fares? Would she put up taxes? Would she cut services? Would she take money out of the health service to find that money?
As for growth in passenger or freight traffic, when I went to the handing over of Freightliner I was encouraged to hear from the management buy-out team that it hoped to increase its traffic by 50 per cent. in the next few years. That is a measure of confidence. Wisconsin plans to buy 250 more locomotives. That sounds to me as though it has some confidence in traffic growth in the private sector.