Rail Privatisation

HC Deb 15 November 1996 vol 285 cc598-668

Motion made, and Question proposed, That this House do now adjourn.—[Mr. McLoughlin.]

9.35 am

The Minister for Railways and Roads (Mr. John Watts)

It is many months since our last debate on railways. Curiously, the Opposition's interest in rail debates has waned over the past seven months, perhaps because in that time a great deal of progress has been made with privatisation: we have franchised a further seven passenger lines, and all passenger services are now well on the way into the private sector. In the industry as a whole, we have privatised about 70 per cent. of the old British Rail.

Hon. Members will not be surprised that the Opposition have been unusually quiet on the subject of railways since the spring; it is obvious that they have given up the unequal struggle to pretend that their policy of renationalisation is anything other than dangerous and costly.

The Labour party is not even clear about whether that policy still holds: I note that in Wednesday's The Daily Telegraph the hon. Member for Hampstead and Highgate (Ms Jackson) is reported as having stressed that while not seeking to renationalise the railways, Labour would want to extend central regulation. She went on to outline her plan for revitalising the railways: it is to put Jimmy Knapp on the board. The man who has been dedicated to stopping the railways operating is to be put in charge of running them; that brought to my mind the phrase about putting the wrong people in charge of the asylum.

Until this year, the Labour party appeared not to have a policy at all; it merely parroted its unthinking opposition to the privatisation programme. As we know from all other privatisations, once we have proved them to be a success for the customers, the Opposition have had to accept the wisdom of our policy.

Mr. Nick Hawkins (Blackpool, South)

My hon. Friend mentioned the suggestion that Mr. Jimmy Knapp might be put in charge of the railways. Does he think that that could have anything to do with the trade union sponsorship of some of the Opposition transport spokesmen?

Mr. Watts

I am well aware of the close relationship between the transport unions and many Opposition Members, but I leave my hon. Friend to draw his own conclusions.

Ms Glenda Jackson (Hampstead and Highgate)

I am somewhat bemused by the fact that the Minister and his hon. Friends are not aware that the system whereby individual members of the Labour party were sponsored by individual trade unions is no longer in operation.

Mr. Watts

I am well aware that some fuzziness now surrounds the relationship between Labour Members and trade unions, but that is clearly a matter of form over substance; the substance of the relationship, with the trade unions as the paymasters of their mouthpieces, remains unchanged.

Dr. John Marek (Wrexham)

On a point of order, Madam Deputy Speaker. It is unworthy of the Minister to suggest that any hon. Member is a paid mouthpiece of any organisation. I hope that you will ask the Minister to think carefully about what he said and that on reflection he will withdraw it.

Mr. Watts

I hope that the principles that the hon. Gentleman wishes to apply to his right hon. and hon Friends will be applied to the way in which Opposition Members regard Conservative Members. Opposition Members are never slow to allege sleaze. If some of the relationships between the business community and hon. Members are considered to be sleazy—

Mr. Keith Bradley (Manchester, Withington)

Get on with the speech.

Mr. Watts

The hon. Gentleman urges me to get on with my speech, but I am replying to the hon. Member for Wrexham (Dr. Marek). The relationship between the trade unions, as the paymasters, and the Labour party, must at least come under the same scrutiny as any relationship between industry and my party.

Mr. Alan Duncan (Rutland and Melton)

On dubious relations between political parties and business men, will my hon. Friend dissociate himself and his Department from anything that might have happened in respect of the cash for contracts scandal that has engulfed the Liberal Democrats this morning? They invited business men to lunch with council leaders, to try to give them preferential treatment for the award of contracts.

Madam Deputy Speaker (Dame Janet Fookes)

Order. I do not see that that has anything to do with the debate in hand. The hon. Gentleman has made his point and he must now sit down.

Mr. Watts

I am happy to confirm that I have no connection with or interest in the Liberal Democrat party.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich)

As the Minister has been kind enough to make that definite point, may I have an assurance that at the next general election he will publish a detailed list of all the moneys accruing to the Conservative party from industrial sources, irrespective of nationality or country of origin?

Mr. Watts

That is not a matter for me. As the hon. Lady knows, British registered companies that make political or charitable donations are required to disclose them in their annual report and accounts. I will return to the theme of my speech, as the hon. Member for Manchester, Withington (Mr. Bradley) invited me to.

I welcome the hon. Member for Withington to his first rail debate. I hope that we shall have many more, including some in Opposition time. Perhaps he will be able to explain how renationalisation would be paid for, if that is still Labour's policy; there is confusion between him and his colleagues, which he will no doubt clarify.

As Labour's ludicrous plans depend on diverting subsidy from train operators to Railtrack, how would socially necessary but commercially unviable services be maintained? Where would the money come from to invest in infrastructure improvements: higher fares, higher taxes or higher borrowing? I await with bated breath the hon. Gentleman's answers. Or is he is going to pretend that he learned all that he knows about business from his mother as well?

As the Opposition are living in a fantasy land of their own make-believe, let me take the House through the facts of rail privatisation. I say "facts" because we have been bombarded with every sort of scare story by the Opposition and their friends, none of which has any basis in truth.

Mr. Bernard Jenkin (Colchester, North)

Before my hon. Friend moves on from the supposed policies of the new Labour party, has he noted how enthusiastically Back-Bench Labour Members have turned up this morning to support their Front-Bench colleagues? Does not that testify to the fact that there is no Labour policy? Does not the fact that there is only one genuine Labour Back Bencher—the other Labour Member sitting on the Back Benches is a Whip—say much about how seriously the Labour party takes the subject?

Mrs. Dunwoody

On a point of order, Madam Deputy Speaker. I do not know what the difference is between genuine and bogus Back Benchers. Perhaps there are more of the latter to be found on the Conservative Benches than elsewhere. I can see several genuine Labour Back Benchers, all of whom are of 18-carat gold quality. It is a pity that the same quality is not to be found elsewhere in the House.

Mr. Watts

With the honourable exceptions who are here, I suspect that the dearth of Labour Back Benchers arises because they do not want to listen to the good news. Perhaps they will come later to bolster the failing arguments of their Front-Bench colleagues.

Scare story No. 1 was that Labour Members said that they would stop privatisation. They clearly got that wrong, and the hon. Members for Oldham, West (Mr. Meacher) and for Birmingham, Ladywood (Ms Short) have paid the price. We have already sold 70 per cent. of British Rail, bringing in proceeds to the public purse to the tune of £4.5 billion. We have given opportunities to companies to compete and to win new business, revolutionising our railways by bringing in private sector management and enterprise.

We successfully floated Railtrack on the stock exchange on 20 May, generating more than £1.9 billion for the taxpayer. There are now more than 650,000 private investors and 90 per cent. of staff are shareholders. That is a vote of confidence from those who work in the railway industry. We have sold the rolling stock leasing companies. The first 13 franchises are operating successfully in the private sector, and early this week, the Office of Passenger Rail Franchising selected Virgin as the preferred bidder for Cross Country; the franchise is expected to be awarded shortly. The remaining 11 franchises are on course to be awarded this financial year.

We have sold 90 per cent. of the domestic freight and parcels businesses: Red Star, Rail Express Systems Ltd., and the three Trainload Freight companies. The channel tunnel freight service is on course to be privatised around the end of the year. All seven design offices and infrastructure services and track renewal companies have been sold, together with a myriad of support businesses, such as heavy maintenance, telecommunications, central services and, in On Board Services, even the British Rail sandwich.

Labour said that Railtrack flotation would flop because of fears of a Labour Government. It did not and there will not be one. Indeed, the shares have been rising as we get closer to the election, and they leapt when the hon. Member for Ladywood was sacked. The hon. Member for Oxford, East (Mr. Smith) has been promoted to the political graveyard of the Labour Front Bench.

Scare story No. 2 was summed up in the claim of the hon. Member for Ladywood that a privatised service costs taxpayers more for less. So far, we have franchised 13 lines. Under BR, the grant for those lines was £669 million; next year, private operators will get £76 million less. In seven years' time, the subsidy will be under £200 million—£450 million less. As the retiring franchising director explained to the press recently, contracts for franchising the 13 passenger services let so far will save taxpayers £2 billion over seven years. Not only that, but the greatly reduced public subsidy has bought better services.

Mr. David Chidgey (Eastleigh)

On the industry's overall costs to the country, will the Minister clarify that in overall Government funding for the railway industry, the £2.4 billion from the national loan fund that was loaned to British Rail is mostly to be attributed to the cost of channel tunnel rail services rather than domestic services?

Mr. Watts

Not to the extent of £2.4 billion, but I am sure that the hon. Gentleman would not like to fall into the trap of defining worthwhile investment as only that which goes into the historic network and not into developing a railway for the 21st century.

Dr. Marek

On a point of order, Madam Deputy Speaker. Is it in order for Back-Bench Conservative Members to talk to the scribblers in the Box behind you on your right?

Madam Deputy Speaker

In general, it is not in order for a Member of Parliament to do so. It is understood practice that parliamentary private secretaries may pass information to a Minister. I cannot at the moment see what is happening behind me.

Dr. Marek

Further to that point of order, Madam Deputy Speaker. With respect, would you please keep an eye to your right? This is not the first but the second time that a Back Bencher has gone to talk to the civil servants in the Box.

Mr. Toby Jessel (Twickenham)

On a point of order, Madam Deputy Speaker.

Mr. Andrew Robathan (Blaby)

On a point of order, Madam Deputy Speaker.

Madam Deputy Speaker

Order. I have given my ruling, and I do not expect to have to look behind me to see that it is obeyed.

Mr. Jessel

On a point of order, Madam :Deputy Speaker. Is it in order for an hon. Member to refer to civil servants—who serve the whole of the country and are impartial in their politics—as "scribblers"? That is a most derogatory word aimed at people who cannot answer back, and it was an unworthy utterance by the hon. Member for Wrexham (Dr. Marek).

Madam Deputy Speaker

I doubt whether the word is precisely unparliamentary, but it falls below the standards that I would expect. I have noted a sense of ill humour in the House this morning that does nothing for the quality of debate, and I therefore invite the House to aspire to the higher standards, and not the lower ones.

Mr. Watts

They scribble extremely well, Madam Deputy Speaker.

The reduced public subsidy has bought better services. Scare story No. 3 was that services would be cut, but Thames Trains will provide a 30-minute service from London to Oxford—the very line used by the hon. Member for Oxford, East, which he has refused to welcome for his constituents—instead of a one-hour service. There are five more trains a day and faster journeys on Great Western, and the franchise for the west coast main line offers the prospect of journey times of two hours from London to Manchester. Midland MainLine plans to introduce dramatic increases in service levels—10 more services each weekday to and from Derby, 10 to Nottingham and 22 for Leicester.

Dr. Marek

Will the Minister give way?

Mr. Watts

I shall, but it must be for the last time.

Dr. Marek

I am grateful to the Minister—we have plenty of time. [HON. MEMBERS: "You might have plenty of time."] Well, I might not have plenty of time—there might be no trains in operation. Why does the minimum passenger requirement stipulate two trains instead of three on the route between Euston and Holyhead? Four years ago, we had six trains.

Mr. Watts

The hon. Gentleman will know from the pattern of the franchises let so far that the core services provided are guaranteed in the passenger requirement. Let me remind him that the only absolute guarantee for a particular service under British Rail is one train a year. He will know that, in every case, the operators have continued to provide at least the level of service that they inherited and, in virtually every other case, they have put on additional services, or plan to do so.

Apart from improving the service to Oxford, Thames Trains, for example, will provide additional trains to Thatcham, Theale and Newbury and extra off-peak fast services from Paddington to Maidenhead in 1999. Better services will be provided between Reading and Gatwick, and journey times between Reading and Paddington will be improved. I could go through line after line and give examples of the way in which services are being improved, but pressure of time prevents me from doing so.

Scare story No. 4 came when the hon. Member for Hampstead and Highgate predicted that privatisation will lead to an investment drought in the rail industry". So how does she explain the new trains that will be provided by London, Tilbury and Southend?

Ms Glenda Jackson

When shall we see them?

Mr. Watts

Within three years, with the first cascade starting within nine months. Some £400 million of replacement rolling stock will be provided on South Eastern, new trains will be provided on the Gatwick Express, additional new trains will be provided by Midland MainLine and Chiltern, and refurbished high-speed trains will be provided by Midland MainLine and Great Western. In the case of Great Western, the first of those trains rolled out within six months of the franchise being let.

Railtrack is committed to spending £8 billion in the next five years—another £8 billion that we do not have to fight the Treasury for, and which will not come from the taxpayer's pocket. That drives another nail into the coffin of Labour's fantasy railway.

Mr. Bernard Jenkin

Does my hon. Friend agree that we can expect further investment to add to the figures that he has announced because, as privatisation continues, the process of developing the business will be dynamised? Is he aware that, following privatisation, the car industry is receiving such investment? Today, BMW has announced a £400 million investment in a new engine plant in the midlands. Is not that the sort of investment that we can expect in the railways in future?

Mr. Watts

My hon. Friend is completely right, and refers to the Hams Hall site in the west midlands, which has been developed as a rail freight and industrial site. I visited the site a few weeks ago, and saw that massive private investment is going there. It will generate more jobs when it is completed than were provided when it was a power station, and it is the most significant industrial development site in the west midlands. Rover BMW's announcement will be well received.

Great North Eastern plans to order two high-speed tilting trains to reduce journey times between Edinburgh and London from four and a half hours to three and a half hours, and it is refurbishing its existing high-speed trains. Railtrack's interim results, released today, show that it has increased its investment level by £100 million, or 25 per cent. In the first six months of this year, it has spent £0.5 billion, compared with £400 million last year, and it is therefore well in line with its guarantee to spend at least £1 billion a year on infrastructure.

Another of our opponents' tricks has been to tell people that fares would rocket under privatisation—that is scare story No. 5. I am pleased to say that the Government have ensured that key fares have been frozen to the retail prices index for three years from January this year, and will then fall below the RPI for the next four years. We can give guarantees to passengers on fares for the first time ever, and those guarantees will run into the 21st century. What have Labour and the Liberal Democrats said about fares? Have they said that they are too high? Have they said that they would lower them? What promises have they given to the passengers? Again, an incriminating silence has come from the Opposition. Thanks to our determination to introduce competition into the railways, passengers are now seeing rail companies vying with airlines to win their custom. That is why East Coast has a £29 return fare from Glasgow to London to compete with Easyjet.

Midland MainLine—stung by criticism that it was always cheaper for four people to travel by car than by rail—introduced "4Sight", a ticket allowing up to four people to travel anywhere on the network for £29. Connex South East and Connex South Central introduced a new discount during the school half-term, allowing unlimited travel on both networks for a five-day period for just £10 for an adult or £5 for a child.

Scare story No. 6 was that quality would suffer as a result of franchising. In the past few months, we have seen a range of commitments that franchisees are making to attract new customers to the railway. Franchisees have the incentives that they need to create a quality railway, and are improving passenger comfort in the drive to get people out of their cars and on to the trains.

Following the launch of its family coaches this summer, Great Western is introducing Business First, a ticket that covers car parking, tickets for the London underground and meal vouchers. Following the success of the "quiet zones" in standard-class coaches—where the use of mobile telephones and personal stereos is discouraged—the idea is being extended to first class. Gatwick Express plans to offer on-board check-in facilities for airline passengers in club class, and is to spend £100,000 per year on staff training with a view to creating a standard of service comparable with that of the airlines, with special attention being paid to the needs of overseas visitors.

Another great myth—scare story No. 7—was that passengers would lose their network benefits as a result of privatisation, and that rail would cease to co-ordinate its operations effectively with other modes. All the key network benefits have been protected as licence conditions, but the new private sector players are improving co-ordination between the railway and its counterparts in the bus and coach industry. Cardiff Railways, for example, is introducing an experimental bus link between Cardiff international airport and Cardiff central station. South West Trains has introduced its dedicated bus feeder services, plus through bus-rail ticketing for most destinations.

Mr. Jon Owen Jones (Cardiff, Central)

Will the Minister give way on Cardiff Railways?

Mr. Watts

I will.

Mr. Jones

The Minister will be interested to know that Cardiff Railways has just introduced a surcharge on travel during the Christmas period, to take maximum advantage of people travelling into Cardiff to shop. Will the Minister condemn such a blatant use of Cardiff Railways' monopoly position?

Mr. Watts

The privatised railway is pricing its products to increase the number of people travelling by rail. That generally means discounting fares off-peak. I have given many examples of that.

Mr. Robathan

Does my hon. Friend recall an incident last year in Devon, far from my constituency, when it was discovered that the route into Plymouth, which was still in the hands of British Rail, was being over-used by commuter traffic? British Rail decided to double the fare on that route. That soon sorted out the problem, because no one took the train.

Mr. Watts

I recall that incident clearly.

Great Western is developing comprehensive links with local bus operators, and Midland MainLine is providing a coach-bus link from Corby to Kettering to connect with all the trains that stop at Kettering. Thames Trains has appointed a director whose full-time job is to develop through bus-train ticketing arrangements and links with bus operators to every station on its line into Paddington.

Train operators are also dealing with security by installing closed circuit television in car parks and, as in the case of LTS, employing security guards to reduce crime and improve the safety of passengers and train crews.

Privatisation is bringing an enormous benefit to the travelling public. By putting companies into the private sector, we have reduced the ability of the unions to bring the entire network to a shuddering halt. Of course, the hon. Member for Hampstead and Highgate has plans to reverse that, by putting the same people in charge of running the railways. Regrettably, strikes were called earlier this year by the National Union of Rail, Maritime and Transport Workers and the Associated Society of Locomotive Engineers and Firemen, but those strikes were short-lived because the companies reached settlements quite quickly with their employees. It was often the case that only the national organisation of the RMT stood in the way of agreements that the RMT locally had made with local management.

Conservative Members have condemned such strikes, but from the Opposition we hear nothing but a deafening and sponsored silence. They cannot speak up for passengers; they are not the party of the consumer, just as they can never be the party of business. They are always the strikers' friend and the passengers' enemy.

So far, I have spoken about the passenger railway. Scare story No. 8 was that privatisation would mark the death knell of rail freight. The facts tell a different story. The House will know that in our transport Green Paper we stated that one of our key aims was to reduce the impact of road freight. Clearly, one way of doing that is to increase the amount of freight carried by rail. I can safely say that such a policy will command universal support in the House.

As hon. Members know, in September I announced important changes to the grant regime for rail freight. To give further impetus to our policy, we have increased the rate at which grants can be paid to companies that want to put freight on rail, but need some assistance. I have increased the motorway mileage rate fourfold, from 5p a mile to 20p a mile. As a practical example of the impact that that can have, our grant has taken 67,000 lorry journeys a year off the roads between Immingham docks and Sheffield.

Mr. Winston Churchill (Davyhulme)

Is my hon. Friend aware that from the Euro freight railhead at Trafford Park in my Manchester constituency, seven freight trains per night leave for Europe and come back from Europe? That relieves the motorway network of many hundreds of container lorries per night.

Mr. Watts

My hon. Friend is right. That is not just the experience of the terminal in his constituency. There is tremendous private sector investment in new terminals, such as the one at Daventry and Hams Hall, which was mentioned earlier.

There is no doubt that privatising the freight side of BR brings more companies a commercial opportunity to send their supplies and products by rail. English, Welsh and Scottish Railways is so convinced of the market potential that it has already ordered 250 new locomotives. It has recently won new business by being able to organise a freight service in three days, instead of the three weeks that that would have taken under the old arrangements.

Mrs. Dunwoody

Will the Minister give way?

Mr. Watts

Not again; I am sorry.

I am confident that with private sector enthusiasm and the significant opportunities offered by the channel tunnel, there will be a revival of rail freight.

EWS is investing in its wagon fleet—120 surplus wagons are being converted into box wagons for use in coal services, 22 flat wagons are being converted to carry steel coil and 50 redundant vans will be refurbished to become modern curtain-sided vehicles to promote new business. EWS has announced an expansion of its Enterprise—wagonload—service. New services will link the ports of Goole, Immingham and Avonmouth with the Enterprise network, starting in January.

EWS is moving pipes for the North sea gas and oil fields, between Hartlepool and Georgemas junction. Those trains are believed to be the largest ever to operate in the Scottish highlands. The company has brought back coal trains to Castle Cement's Padeswood works in north Wales, and hauled pipes from Stanton plc's Ilkeston works to Plymouth. Coal trains have gone back into Falmouth docks. There are many other examples of the way in which the business is expanding.

Freightliner has recorded a record number of container movements in Felixstowe and Manchester. It also has plans to refurbish its locomotive and wagon fleet.

Our policy is bearing fruit. Passengers are increasingly experiencing the benefits of that policy in better services, capped fares and new investment. Taxpayers are also being helped, with more than £2 billion-worth of savings of subsidy over the next seven years. Investment is increasing, not decreasing.

While our opponents look back to nationalisation—a state monolith belonging to the dark ages—we look forward to the next millennium, when our national network will be worthy of national pride.

The Government recognised long ago the case for privatising the commanding heights of the economy. We have had the vision, courage and strength of purpose to apply the tried and tested privatisation formula to the railways. Now, after four years of scare stories, the fightback is well and truly under way. The franchising programme is now churning out service improvements at such a speed and to such an extent that the media are finding it difficult to keep up. Rail user groups are increasingly coming to recognise the benefits that privatisation has brought. A shift in public attitudes is under way. The future of the railway in the UK is secure. The case for privatisation is so overwhelming that in 10 years the radicalism of today's policies will look like nothing more than common sense. By putting the railways into the private sector, we are powering them into the 21st century.

10.7 am

Mr. Keith Bradley (Manchester, Withington)

The Minister has presented a glorious picture of the success of rail privatisation and has built on the claims of the Secretary of State at the Tory party conference, when he stated that privatisation had ensured that fares were under control, services were improved, there was more investment and lower subsidy, and the future of freight was bright. It is important to test the truth of those claims, and especially to assess whether rail privatisation has been good value for money for taxpayers or whether, instead, they have been almightily ripped off. I do not use the expression lightly.

Let us consider the cost of privatisation and the amount of public subsidy involved. More than £450 million was spent on consultants and other professional advice. I understand that lawyers involved in the process were hired at a staggering rate of £25,000 per day. The National Audit Office recently criticised Opraf for failing to set a budget for advisers' and consultants' fees on which it spent nearly £40 million in taxpayers' money between 1993 and 1996.

The amount of public subsidy has almost doubled since privatisation, from £1 billion the year before privatisation to nearly £2 billion the year after. Before Railtrack's privatisation, a staggering £1,229 million debt was written off. In addition, assets have been massively undervalued. The three train leasing companies were sold for £1.8 billion at the end of 1995, but Ministers have suggested that they are worth as much as £3 billion. A Department of Transport press release from July 1994 states that the ROSCOS have assets in the region of £l billion each. In August 1996, Stagecoach paid £825 million to take over Porterbrook train leasing company, yet eight months previously, the Government had sold Porterbrook for a mere £527 million.

Mr. Watts

The hon. Gentleman is quite correct, but he should complete the picture. Eight months earlier, Stagecoach bid for the rolling stock operating companies. It underbid because, like everyone else in the market, it did not realise what the companies would be worth once the privatisation programme had proved a great success.

Mr. Bradley

I am grateful for the Minister's intervention, as he confirms our claim that the assets were undervalued and that the taxpayer has lost out because of the sell-off. Despite the Minister's intervention, it is clear that the Government sold assets short to make some quick money. Is that good value for money for the taxpayer?

Mr. Bernard Jenkin

Would it not assist the privatisation of assets in this country if the leading Opposition party were to hype the value of those businesses instead of undermining them? The £55 billion that the British taxpayer has invested in British Rail hardly represents value for money. The money that is being spent to move those businesses into the private sector—where they can generate profits and people will realise their true value—might provide an opportunity for the Labour party to call for a windfall tax when they prove successful.

Mr. Bradley

The hon. Gentleman often attends debates on a Friday and he usually makes thoughtful and important contributions. Sadly, his offering today is utterly bogus and adds nothing to the debate.

One of the four directors walked off with £39 million in shares as a result of the Porterbrook deal. The chairman is reported to have received £4 million for shares that he bought for £25,000 only eight months before. In the interim, it is believed that he worked for Porterbrook for only eight days—that is an average of £500,000 each day. It is hard to believe that the directors' contributions had such a dramatic and rapid impact on the company's performance as to warrant those excessive profits. Is that good value for money for the British public?

The Tories claim—as they did today—that rail privatisation will save £2 billion in public subsidies. That estimate is based on the declining rate of public subsidy on the 13 franchises awarded to date and it does not take account of the efficiency savings that British Rail proved it was capable of making. There is much evidence to support that contention. The Government are clearly not comparing like with like.

Furthermore, the Tory claim does not take into account the Government's high liability offer to take back any franchise if a private operator runs into financial problems. A recent study reported in The Sunday Times of 27 October revealed that only five of the 13 franchises already in private hands were likely to make a profit by the end of the franchise period. That suggests a potentially high financial liability for the public purse.

Mr. Churchill

Is the hon. Gentleman seriously harking back to the bad old days when politicians and bureaucrats played trains and ran other commercial organisations? Does new Labour believe that the state can operate commercial organisations better than the entrepreneur?

Mr. Bradley

If the hon. Gentleman will allow me, I shall come to that point later in my speech. If he is not happy with my comments then, I shall gladly give way again.

The Secretary of State's second claim—the Minister reinforced it this morning—concerned more investment. Investment in rolling stock and infrastructure has continued to decline in real terms and in relation to our European and international competitors. There have been no new trains on the track since privatisation. Furthermore, Railtrack is under no legal obligation to invest in the network and the Rail Regulator is not obliged to force it to invest any proportion of the notoriously high track access charges in the network.

One of the worst travesties of privatisation is the lack of an enforceable obligation on Railtrack to invest any proportion of its proceeds from land and property disposals in infrastructure. Railtrack has an extensive portfolio, including 20,000 miles of line and 2,500 stations located on prime sites in towns and cities, yet it has no obligation to invest proceeds of sales in the privatised companies. As a result, the privatised Railtrack is simply a property speculator, selling its portfolio to boost dividends for shareholders rather than investing in the national rail network.

A press release issued this morning refers to Railtrack's obligations and its relationship with the regulator. It is interesting to note the comments of Robert Horton, the chairman of Railtrack, who states: We will continue to give a high priority to maintaining our close relationship with the Rail Regulator". Railtrack is under no obligation to comply with the Rail Regulator's rulings—it will merely try to continue a close relationship. That is not good enough.

Mr. Watts

Railtrack has no option but to have a close relationship with the regulator because the nature of his functions necessitates close contact. Presumably the hon. Gentleman is aware that the regulator has decided to impose a single-till approach to Railtrack's revenue, whereby any returns from the property side of the business are taken into account when setting the track access charges that the regulator permits Railtrack to levy on the train operating companies. If the regulator is not satisfied that Railtrack is fulfilling its investment obligations, he has the power to reduce the track access charges and remove that stream of revenue.

Mr. Bradley

But does that apply to 100 per cent. of the proceeds or just the 25 per cent. that flows through in that way?

Mr. Watts

The arrangements are fairly complicated. Above a certain level of gain on land transactions, there is also a clawback of the super-profits, but I will happily write to the hon. Gentleman and set out the full position.

Mr. Bradley

I am grateful that the Minister will write to me to clarify that, because it seems clear from his response this morning that it does not apply to all the proceeds, and it reinforces our point that the regulator should have control over 100 per cent. of the proceeds.

Mr. Bernard Jenkin

Will the hon. Gentleman give way?

Mrs. Dunwoody

Will my hon. Friend give way?

Mr. Bradley

I give way to my hon. Friend.

Mrs. Dunwoody

Under Railtrack, unlike under British Rail, responsibility for more than 1,000 bridges has been handed to local authorities, many of which will find it extremely difficult to carry out the necessary rebuilding work. The Government do not accept the burden that that places on local authorities.

Mr. Bradley

My hon. Friend makes a very important point about transferring liabilities from Railtrack to ensure that it boosts its profits, to the benefit of shareholders, rather than making essential investment.

Mr. Jenkin

Will the hon. Gentleman allow me?

Mr. Bradley

No, I must get on with my speech. I have given way to the hon. Gentleman once and he made a less than effective intervention. We should not waste the time of the House any more this morning.

I ask again whether all of this is good value for money for the British taxpayer. Railtrack's excessive charges have prevented some local authorities and major companies from opening new stations and funding new services. For example, in 1992 British Rail put in an estimate of £353,000 to open a new station at Ashchurch in Gloucestershire, yet in 1995 Railtrack wanted more than £1 million to do exactly the same job.

Mr. Robathan

Will the hon. Gentleman give way?

Mr. Bradley

I shall move—

Mr. Robathan

Oh, go on.

Mr. Bradley

I shall give way once more and then I must make progress.

Mr. Robathan

I am surprised that the hon. Gentleman should mention British Rail reopening stations, because he may recall that the history of British Rail is one of closure, particularly in the 1960s. I will, if I may, take him to his own patch of Manchester, which I do not know well but which he will know much better than me. Does he remember that, when we were young, it was possible to travel from Didsbury to Chorlton cum Hardy, which I think is in his constituency, and from Warrington to Stockport and Manchester, but British Rail—this marvellous paragon of virtue to which he harks back—closed those lines, so it is not possible to travel there any more? We now have to go on the M56 and through spaghetti junction to the south of his constituency.

Mr. Bradley

I am extremely pleased that the hon. Gentleman mentioned the Didsbury to Chorlton line, because there is a proposal for a light rapid transport link to it from the new Manchester Metrolink, which will be a much better use of that route. I hope that the hon. Gentleman will make representations to Ministers to fund that line, to the benefit of my constituents in Withington.

I shall move quickly to the next claim—

Mr. Robathan

I am not surprised.

Mr. Bradley

I shall move rather more quickly than the investment proposals for the Manchester Metrolink are moving as a result of the Government stalling on backing and underwriting them.

The Secretary of State's next claim was that the future of freight is bright. The Tory record on getting more freight on to rail is quite shameful. Rail accounts for only 6 per cent. of freight traffic in the United Kingdom—down from 11 per cent. in 1978. Railtrack levies notoriously high track access charges for freight, despite recent changes, which does nothing to encourage more freight on to rail. Railtrack charges 30 per cent. of English, Welsh and Scottish revenues in track access charges—twice as much as it costs in America. In some cases, track access charges are up to 60 per cent. of revenues. English, Welsh and Scottish pays Railtrack £120 million a year in track access charges. A National Audit Office report on the freight facilities grant shows that the Department of Transport had given only £32 million of the budgeted £70 million of grant between April 1985 and March 1996. Last year, freight operators were allotted only £4 million out of a total of £40 million budgeted for the grant.

Private freight operators have slammed Railtrack's excessive track access charges and the bureaucratic hurdles that stand in the way of getting more freight on to rail. We heard the Minister say this morning how confident English, Welsh and Scottish is, but its chairman, Ed Burkhardt, whose company accounts for 80 per cent. of UK freight, complained of delays and excessive pricing levels for allowing freight trains access to railway lines. He continued: We have lost customers since we bought the freight business here … The major thing that has stood in the way has been Railtrack being very slow to give a quote and then wanting to charge a new high.

Similarly, David Mann, property manager of PowerGen, tried to build a freight terminal, but was almost prevented from doing so by Railtrack's "intransigent" treatment, demanding large sums for a bridge to cross the line.

Mr. Mann was quoted in The Observer of 8 September 1996 as saying that such treatment from Railtrack would stop future rail terminals being constructed and make it "more and more difficult" for projects to get under way. People will revert to road, he warned.

At a time when the public are crying out for action to alleviate the dreadful congestion on our roads, does this example give any hope that the privatised rail network will help to solve the problem?

The fare structure and through-ticketing arrangements seem at best to be confusing. For example, a number of railcards and discount fares are not protected, so train operators can pull out of national fare schemes. Anglia has pulled out of the Network card and the Supersaver scheme. Other unprotected fares are free travel for under-fives, the forces railcard, cheap day return and Apex tickets for InterCity services. Only between 21 per cent. and 25 per cent. of fares are capped. Do the Government have any view on the way in which such fares are operating, or are they happy to let the confusion in the public's mind continue?

Similar comments can be made on passenger services. All passenger service requirements, which set minimum standards for service, are lower than when British Rail ran them. Again, there are clear examples. The draft west coast main line and north London railway PSR would allow a private operator to axe all inter-city services to Watford junction and Milton Keynes and cut weekday services to Watford on the Northampton line from five trains per hour to three.

I shall ask the Minister specific questions about the west coast main line proposals, because Railtrack's press release today—this must be a misprint, but in the current situation we could believe anything—states: In October 1996 Railtrack announced a £150 passenger upgrade investment". I hope that that is £150 million, or is £150 what Railtrack proposes to invest in the line? More important, will the Minister confirm that the total of £150 million plus the £157 million core investment will ensure that tilting trains can run to their maximum effect throughout the line from London to Scotland and that all necessary upgrades throughout the route will be made?

Will the Minister also confirm that that investment will enable the bridge and other infrastructure work to be undertaken so as to allow piggyback freight operations throughout the length of the line, and onward through to the tunnel? It is essential that the west coast main line, through the midlands to Manchester and onwards through other parts of the north-west to Scotland, is not only modernised but fully and comprehensively upgraded; otherwise, the introduction of tilting trains will not have the desired effect.

Will the proposals for the Birmingham-Northampton line to be linked to the west coast main line include similar enhancements? Unless there is consistency of upgrading of the trains that are to join the west coast main line, tilting trains will not be able to run to maximum effect.

Sally Keeble, the Labour candidate in Northampton, wrote to the Secretary of State regarding the consultation process on the Northampton line. It is clear that bids are being requested before completion of that process. They may be only indicative bids, but if the public are to be able to rely on and have confidence in the consultation process, it is essential that their voices about passenger service requirements on that line are heard.

The Government may claim that confusion about fares, through ticketing and services will be overcome by the introduction of the national train inquiry line. Again, it is difficult to argue that the public are getting value for money. There is mounting evidence of problems with the service. It is clear that the quality of information given at different train inquiry bureaux differs hugely. It is impossible to attribute blame to any location or individual when customers are misinformed.

I shall briefly cite one example of the problems that the public are experiencing. On Sunday 10 November 1996, Mr. and Mrs. Ward were booking to fly home from Stansted airport to Prestwick. They telephoned the national inquiry line for train times from north London to Stansted. At 9.30 am, Mr. Ward made an inquiry—which it is believed was answered in Newcastle—about train times after 12 o'clock from Tottenham Hale to Stansted airport. The answer given was: Trains to Stansted not running today due to Engineering works. Trains will start therefore at Seven Sisters, with bus connections from Liverpool Street and Tottenham Hale, and will run half hourly.

At 9.50 am, Mrs. Ward, unbeknown to Mr. Ward, made another inquiry—this time it was answered in London. She asked about train times after 12 o'clock from London Liverpool Street to Stansted airport. The answer given was: Trains to Stansted today subject to engineering works, will leave Liverpool Street 10 minutes earlier than usual at 20 and 50 minutes past the hour and will be subject to delay. At 10.30 am, Mr. Ward made another inquiry, believed to have been answered in Birmingham. He asked for train times from London Liverpool Street and Tottenham Hale to Stansted after 12 o'clock. The answer given was: Trains will leave London Liverpool Street on the hour and half hour to Stansted calling at Tottenham Hale at 10 and 40 minutes past the hour. Mr. Ward further asked what effect engineering work would have on services. The answer was: None. There are no engineering works on this line.

Mr. John Butterfill (Bournemouth, West)

rose—

Mr. Bradley

The confusion and farce continued. Following discussions, Mr. and Mrs. Ward decided to travel from Liverpool Street and to allow an extra two hours for possible problems. Tottenham Hale was considered risky, as there was no guarantee of a service. The outcome was that trains left Liverpool Street on time, and they arrived at Stansted with an extra two hours to spare. Afterwards, Mr. Ward telephoned the national inquiry line and was assured that there had been engineering works when he was travelling to Stansted on the Sunday, but because of the service he would not have noticed that. The service to the public is in absolute confusion. Is that the service that the Government support?

Mr. Butterfill

rose—

Mr. Bradley

I shall give way for the last time, because time is getting on.

Mr. Butterfill

I am grateful to the hon. Gentleman—he has not previously given way to me, and I have been listening to him intently.

The hon. Gentleman's anecdote was amusing, but is he really suggesting that such incidents never happened when the service was run by British Rail? Does he recollect trying to get through to British Rail inquiries, and how long he had to wait for the telephone to be answered? Is he aware that South West Trains is spending £200,000 this year on improving its answering service? We would have given our eye teeth for that when British Rail ran the service.

Mr. Bradley

The Government claim that the privatised industry provides a better service. I have given an example of the chaos and confusion that is reigning throughout the country in the different operating companies. There is no consistency of treatment from one train operator to another. That is the truth of the matter, and the hon. Member for Bournemouth, West (Mr. Butterfill) should ask his constituents what is happening in the real world.

The Government may claim that it is only the Labour party that is expressing such concerns—the hon. Member for Bournemouth, West seemed to imply that by what he said. Complaints received by the rail users consultative committee in the west country show that the evidence is stark. In that area, the number of complaints has increased by 40 per cent. to a record 2,371. When those figures are broken down, they show that complaints about train conditions have risen by 124 per cent., about fares and marketing by 92 per cent., overcrowding and bad information by 79 per cent. and punctuality by 66 per cent. Is that good value for money for taxpayers as a result of rail privatisation?

With barely five months to go before the general election, it is important that we look forward, not merely backward, and consider the future of our railways. It is our aim not to go back to the old structures, but to create a new system capable of mobilising high investment and achieving a more intensive use of rail. Our policy is to move by stages away from the fragmented industrial structure that the Government have created towards an integrated system for the benefit of passengers, with stronger protection for the public interest, to ensure the best value for money from public subsidies.

A systematic framework that encourages strategic decisions consistent with wider Government policy on transport must be instituted. To achieve that, we intend to reconstruct British Rail as a fully publicly owned and publicly accountable company holding the public interest in the rail network. That strategic planning body for the railways is essential, because the current fragmentation and multiplicity of players—the network has been split into more than 100 companies—make it difficult, if not impossible, to take a systematic view of future strategy.

Labour will return to the Secretary of State the power to direct the Rail Regulator to use the existing regulatory regime to secure higher investment and a more intensive use of the system. Under a new regulatory framework, the powers of the Rail Regulator over Railtrack will be used to the full to protect the interests of passengers and the taxpayer. For example, the regulator will be asked to ensure that land and property that are needed for the railways are not sold and that a proportion of the proceeds of any sales that do go ahead are invested in the railways.

Mr. Churchill

Is the hon. Gentleman seriously telling the House and the nation that if by mischance Labour was elected to govern, it would put the clock back to the state of affairs that prevailed before, when politicians were in the driving seat? It was absolutely disastrous for British Rail and all the other nationalised industries to be run politically and bureaucratically.

Mr. Bradley

I have made it quite clear that we shall not move back to the old structures. We shall set up a strategic body to deal with the fragmentation of the rail network to ensure that it works in the public interest, that subsidy is transparent and that the taxpayer gets value for money.

Labour's clear objectives are a modern, integrated rail network with easy access for all to effective ticketing and travel information. We shall facilitate rail interchanges for passengers and freight and between rail and other forms of transport. We shall direct more of Railtrack's proceeds to investment in the network; reform track access charges to encourage more passenger and freight traffic; mobilise more investment in the network; and look at completing regional high-speed links to the channel tunnel and beyond. Essentially, we shall ensure high standards of safety through an independent body. That is what the public want from our railways and they will support it. We shall give that and it will provide real value for money for our people.

10.41 am

Mr. Steve Norris (Epping Forest)

I shall start by recording my enormously happy experience over four and a half years as a Transport Minister. Specifically, I should like to put on record my enormous admiration for the three Secretaries of State for Transport with whom I had the pleasure of serving during that time. My right hon. Friend the Member for South Norfolk (Mr. MacGregor) was the architect of the Railways Act 1993 and he, with my right hon. Friend who is now the Chancellor of the Duchy of Lancaster and me, sat down with practically a blank sheet of paper. I recall the permanent secretary saying to us immediately after the 1992 general election, "I am afraid that we did not do a lot of work on this because quite honestly we did not think that you would win." My advice to my good friend Sir Patrick Brown is that perhaps this time it might be as well to keep all the files current.

I also pay a warm tribute to my right hon. Friend the Minister without Portfolio, who brought a tremendously incisive political mind to bear on the problems of transportation. He deserves great credit for initiating the debate on transport. It was long overdue and it has moved us on by a generation in terms of thinking about how to develop our transport infrastructure. I am sorry that my right hon. Friend the present Secretary of State for Transport cannot be with us as I should have liked him to hear my enormous admiration for his work.

Mr. Bradley

What a crawler.

Mr. Norris

Ex-Ministers have the great advantage of not needing to crawl. And when they intend to leave these hallowed portals when the Prime Minister calls the general election they have even less cause to make such remarks—unless they are sincerely meant, as I assure the House that they are. I have admired the present Secretary of State for Transport for many years, since his wonderful principled opposition to the ill-fated community charge. That opposition was conducted with great decorum and amazing effectiveness, and he is now doing sterling work in his present Department. The only issue on which my right hon. Friend and I ever disagreed was on the compulsory fitting of bicycle bells. I leave the House to determine which of us wanted them to be fitted compulsorily.

I welcome the hon. Member for Manchester, Withington (Mr. Bradley) to his new post. I have always thought of him as a rather decent chap and for the life of me I cannot think what he must have done to deserve to be given the ultimate Labour poisoned chalice—responsibility for a policy that is in tatters and is without a shred of intellectual or moral integrity. I can only suggest that it must be due to something in the Stalinist, Beria-like regime that floats around the Leader of the Opposition, the hon. Member for Hartlepool (Mr. Mandelson) and Mr. Alastair Campbell, so that in some secret way the hon. Gentleman and probably members of his family are destined for some distant gulag. I had thought that he deserved rather better.

We all know why the hon. Member for Hampstead and Highgate (Ms Jackson) is in the transport team. The problem with a double Oscar winner who sounds like Stalin's granny is what on earth to do with her. She speaks charmingly and is charming, but she is decades out in terms of new Labour and that must present the Leader of the Opposition with an enormous challenge. No doubt she will rise to it with her usual good grace and spirit. I look forward to the time after the next election when she becomes Opposition spokesman on national heritage or is given some other opportunity that will enable her to display her talents to the full.

Ms Glenda Jackson

I am surprised to discover that the hon. Gentleman is old enough to have heard any of the utterances of Stalin's granny, and even more surprised to discover that he is so fluent in Russian that he understood what she said.

Mr. Norris

I am grateful to the hon. Lady for pointing out that I am not old enough to have heard Stalin's granny verbatim. However, I have a vivid picture of what her morning breakfast lectures must have been like and I suspect that the hon. Lady must have taken them in as mother's milk. However, it is ungentlemanly to refer to an hon. Lady's age and I shall not do so.

Mrs. Dunwoody

Get on with it.

Mr. Norris

The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) has taken her accustomed ill-humoured corner in which to spread herself over a number of seats. One of the characteristics of the debate so far has been the extent to which body language is so obviously different. Opposition Members show that rictus of mild terror which suffuses any party which knows that it is about to lose the argument. There is also ill humour, as demonstrated by the hon. Member for Wrexham (Dr. Marek): I used to think that he chose to sit on his own, but I now know that Opposition Members, recognising the trait of the ancient mariner, have taken their own decisions. Perhaps that also accounts for the splendid isolation of the hon. Member for Crewe and Nantwich.

The hon. Member for Withington started well enough with a paeon of praise for the Government's policy. Sadly, his speech degenerated into an utterly laughable anecdote about unfortunate people who were badly served by British Rail's information system. Let us not pretend for a moment that that is either funny or acceptable, because it is not. However, my hon. Friend the Member for Bournemouth, West (Mr. Butterfill) was absolutely right to say that that kind of nonsense occurred every year when the railways were nationalised. It happens now, albeit rather less, and the train operating companies are making a genuine effort to try to improve the service. I fear that if we were to have a similar debate in 10 years' time we would probably be able to surf the Internet to find an example of a customer who had been badly served and given contradictory information. In a system as complex as the rail system by its nature must be, we should accept that such incidents occur—although we should never be complacent.

It is not good enough to rest opposition to the changes that the Government have made on an isolated anecdote. Nor is it acceptable—to my mind, this point is much more serious—to treat the privatisation of railways with the same mixture of ignorance and the politics of envy which constituted much of the speech by the hon. Member for Withington. He said a lot about the profits of Porterbrook's original directors. No doubt those profits are spectacular, and I wish the directors well. As I believe that my hon. Friend the Minister for Railways and Roads said in an intervention, however, those profits were made largely because most people in the marketplace listened to Labour and its constant attempts to denigrate the privatisation of the industry. Those who had chosen to invest against Labour's advice were thus able to profit from the reward.

Mr. Butterfill

Might the profits also be due to the fact that at the time of privatisation the Labour party was committed to renationalisation of all those assets?

Mr. Norris

I will come to that point because the central point of our debate today is whether privatisation has worked and will work, or whether it has been the disastrous failure that the Opposition allege. It is important to note that the Opposition's Front-Bench spokesman devoted so much of his speech to the fact that one or two people in the railway industry have already done rather well. It is that politics of envy which runs through the whole of Labour policy and means that the Opposition are never even willing to look at the underlying structural improvements that the industry has undergone. For my part, I am not concerned whether the directors of Porterbrook or any of other leasing or train operating company do well or badly: I am concerned about how well the passengers who want to use the rail services are treated. It is patently obvious, as I shall go on to demonstrate in a moment, that the passengers are now infinitely better treated and have better prospects of improved services than was ever the case with the nationalised railway.

Dr. Marek

Will the hon. Gentleman give way?

Mr. Norris

For auld lang syne, I will give way.

Dr. Marek

The point surely is that the £300 million profits went to the private sector because the public sector—the Government—did not realise or did not choose to realise the true value of the assets that were sold under the bidding contract. We feel not envy but disappointment that £300 million of public money was forgone through the Government's ineptitude in not realising or in choosing not to realise the true value of the assets. The issue is not the money, but the fact that it should have been in public coffers and it is now in private coffers.

Mr. Norris

The invariable response of the Labour party, when a privatisation proves to be not only successful but rewarding, is to complain that any of the reward that is gained once the industry has been privatised is somehow an amount due to the public purse. What it overlooks, of course, is that one of the beneficial consequences of privatisation has been the receipt of £4.4 billion of capital value, which the taxpayer has now had back from an industry that in nationalised hands—the hands of the state—offered no prospect whatever of any return to the taxpayer at any point in the future. I am disappointed in the hon. Member for Wrexham, because the last position that any credible interlocutor should adopt in this debate is to complain that the second-generation profits in previously nationalised industries are somehow a loss to the taxpayer. It is clear that the taxpayer has benefited hugely from privatisation.

The important point is how, in the past two or three years, the whole debate on railways has swung around by 180 degrees. I remember sitting where my hon. Friend the Minister for Transport in London is sitting now and listening to the three stages of the Labour debate. First, Labour said privatisation could not happen. It said that the railways were the one area of privatisation that even Lady Thatcher dared not attempt. It was too complex—

Mr. Bernard Jenkin

Unsaleable.

Mr. Norris

As my hon. Friend observes, the railways were alleged to be unsaleable. Some asked how we could possibly have one operator operating an inter-city train, another running a regional railway train, a third running a freight train and a fourth in charge of the signalling. They asked how we could possibly make that work in the private sector, and they were perhaps rather alarmed to discover that that was precisely how the railways had operated for the previous 20 years. First, Labour said that privatisation could not happen. Then we went through an extraordinary stage when Labour said that it would not happen. A party that purported to be a serious party of government—

Mr. Jenkin

New Labour.

Mr. Norris

As my hon. Friend says, it is now new Labour and we all know the jokes, which are now so old and tired that they are hardly worth repeating. [HON. MEMBERS: "Go on."] No, I have no wish to intrude on private grief and the House does not have the time to listen to my rantings on that subject. I shall just make one point crystal clear: until the successful privatisation of Railtrack and the enormous interest in the train operating companies proved the point beyond all doubt, the right hon. Member for Kingston upon Hull, East (Mr. Prescott)—the unlikely, dare I say it, deputy leader of the new Labour part—asserted that the Labour party did not need to have a policy on the renationalisation of the railways, because privatisation would not happen.

The poisoned chalice was then handed to the poor, ill-fated hon. Member for Birmingham, Ladywood (Ms Short), who labours under the appalling burden of honesty that so afflicts Opposition Members—

Mr. Bradley

It does not seem to bother your lot.

Mr. Norris

It is an extraordinary burden that we all bear with fortitude, but some of us have learnt over the years to wear a cynical veneer that protects us from its worst excesses. Sadly, the hon. Member for Ladywood has yet to learn that lesson. She indulged in a critique of rail privatisation which implied that every private sector involvement in the railway was just an opportunity for a private sector company to rip off profits from passengers. She had not the slightest regard for the reality of the enormous improvement in passenger service that the new railway envisages.

If the first stage of Labour's argument was that privatisation could not happen and the second that it would not happen, the third stage was that it should not happen. The argument is that privatisation has simply resulted in profits for leasing companies and that the issue is about the private sector, as ever, filling its coffers at the expense of the hard-pressed taxpayer. The reality is, of course, that transport is—perhaps above all—the field of enterprise which proves beyond doubt that privatisation works. One has only to look at the record of British Airways, which is still the only major flag airline of any European state to have been privatised. Other states said that it could not be done, but we did it so long ago that the results are beyond argument. International airlines operate not within the cosy confines of one nation's boundaries, but in the toughest market of the lot—the world market. What has happened to British Airways? Has it collapsed, as the Labour party, including the Labour Chief Whip, asserted that it would? No. It has gone from strength to strength and is now arguably the most powerful airline in the world.

The British Airports Authority has converted London's and other airports from prisoner of war sheds to some of the most attractive airport facilities in the world. After privatisation of the bus industry, investment is at record levels, with some of the major companies ordering literally thousands of new buses and reducing the age of the national fleet considerably. For many years freight, too—or a substantial portion of it—was in nationalised hands. It was the Conservative Government who liberated freight from the dead hand of the state.

In all those sectors, privatisation has been an enormous success, essentially because it delivers three great benefits. The first—often referred to as the only benefit by the Labour party, which grudgingly admits this—is the least important: the capital receipt to the taxpayer. It has never been the essential advantage of privatisation simply to sell off the family silver, as the late great Earl of Stockton once asserted. That was never the purpose of privatisation. It is, however, an enormously useful incidental benefit that when we do sell off businesses which have been not just family silver sitting in the sideboard, unused month after month, but a burden and drain on the taxpayer, we receive a considerable capital receipt and we improve the public coffers in two ways. The capital receipt allows the Chancellor of the Exchequer not to burden the taxpayer for that amount and the industries go on to contribute corporation tax rather than consume national resources.

On one occasion, I read an analysis showing that in the seven years up to, I believe, 1990 the former nationalised industries, which in the previous seven years had consumed £2.5 billion of subsidy, produced more than £2 billion-worth of corporation tax receipts to the Treasury—from a net outflow to almost the same net inflow. That is a pure, simple financial picture and an attractive one, but it is not, as I have said, the essence of the argument, which has always lain in the two other principal benefits of privatisation.

The second great benefit is the liberation of an industry from the constraints of the Treasury. Incidentally, that does not instantly make the people who work in the private sector more superhuman or better managers than those in the public sector. That would be insulting to the many good people who work well in the public sector, but they work within an extraordinarily artificial constraint. When over many years British Rail went to the Secretary of State for Transport and said, "Here is a case beyond argument for investment"—investment which in some cases could have been returned in full within two years—Labour and Conservative Chancellors were obliged to say, "Sorry, but there are simply too many other demands on the public purse to allow you that investment. The demands of hospitals, schools, social security, defence, local authority expenditure, whatever they may be, are all politically more demanding than investment in the nationalised industries."

Rail, therefore—as much as any of the other nationalised industries—suffered from the one classic mistake that the people who nationalised those industries in the 1940s innocently made. I make this point not in a simple, party political sense, but in all seriousness. Those who nationalised the industries in the late 1940s believed conscientiously that, when the industries were under the state's control, they would always have the investment that they needed because the state, a generous benefactor, would provide. Tragically, precisely the reverse happened. Those were the very industries that were starved of investment because successive Chancellors of all parties found themselves unable to satisfy the investment demand, consistent with the pressure on the public sector borrowing requirement.

The second greatest liberation to British Rail, therefore, is that independent private sector businesses, whether train operating companies, Railtrack or the leasing companies, can make an investment case, take it to the City or the banks—these days, the banks are worldwide—and say, "Here is an investment plan which justifies your giving us the resources to put in the investment and upgrade the service." With that investment comes operating efficiency, reduced cost, the ability to rationalise manpower and the ability, above all, to deliver a better service to passengers.

It is perhaps a sad indictment of the way in which Britain organises its national resource allocation—the process of Treasury control of expenditure—that it is unable to duplicate that regime in the public sector, but the system has failed Chancellors on both sides of the House, in every Government, since the war and there is no prospect of that regime changing either. It will be in the private sector that industries can invest, according to the sort of projects that they are able to bring to their investment bankers.

The third great improvement will deliver most benefit most immediately to the railway. Through privatisation, management is given a genuine incentive to manage a business and to develop a focus which, for generations, has been consistently absent from the railways, as even the anecdote of the hon. Member for Withington illustrated. It was often said that British Rail's motto was, "This would be a terrific business if it were not for the passengers." That illustrates the extraordinary sense of the railways having been, over the generations, just a system that was there, a marvellous job protection scheme, a business that we did in that way because we had always done it in that way. If passengers did not understand the complexity of the rail system, that was simply because they were ignorant and should have learnt.

Such inwardness is not unusual in a nationalised industry, whether in Britain or elsewhere, but it is enormously damaging to a business which should be trying to deliver what the customer wants. That is what the private sector lives or dies by. Either it delivers what its customers want or it does not survive. No business survives by telling the customers what they will want and trying to force that product on them.

How has the improvement occurred already in the privatised railway? I will give one example—the most telling that I can currently identify, bearing in mind my experience over several years, particularly in London. Before rail privatisation, many people said to me, "We are worried that the consequence of rail privatisation will be that new private operators will denude the railway of staff." It was apparently assumed that all private sector operators would automatically reduce staff for the sake of it as though it were some sort of extraordinary religious nostrum. Those people also said, "The one thing that worries us about travelling on the railway, particularly in the evening, is the absence of staff." Here they were entirely right. That absence gives unmanned stations an extraordinary feeling of anarchy, an impression of no one caring and no one being concerned, an atmosphere of unease for the unwary passenger and of concern about any other passenger who might just arrive on the platform.

I said to those who expressed concern, "You will find that the train operating companies in the private sector will have to worry about getting more people on to the railway. They are likely to identify precisely this area of concern as one in which they will have to effect change. They will see the need to do so. I can assure you that the operating companies will respond in that way." Whatever my persuasive skills, I do not believe that people were necessarily convinced before the event. I am sure that when they left me they were thinking, "That sounded like yet another politician talking—the reality is that operators will remove staff for the sake of it."

Prism, the operator on the London-Tilbury-Southend line, recognised immediately that security was uppermost in the minds of passengers. What did it do? It embarked immediately on a £14 million programme—it is now known as "Operation Safeguard"—which put new security staff on trains and platforms. The effect of that has been to reduce what the company describes as "disturbance-related incidents". I am sure that we can all imagine what that means. Such incidents on the LTS line have already been reduced by 70 per cent. and I understand that Prism is now considering putting more staff back on stations and trains.

There are three female Labour Members in the Chamber, and they will perhaps accept that for women generally the issue of security is vital. Women were failed by British Rail. Within British Rail's accounting system, one group focused on revenue generation while another group concentrated on costs. The two groups never spoke. When considering cost reduction, it was said that the only approach was to take staff out of the system. That happened year after year. I do not believe that I am making any error when I say that British Rail even failed to live up to its own code of guidance on station staffing. Instead, it removed staff. Privatisation has ensured that staff have returned to where they belong—on stations and trains—has made the environment safer for those who travel and has led to new passengers using the railway.

Privatisation has led to a second advantage. During my four and a half years at the Department of Transport, I was keen to promote cycling. It is something that we do not do enough of in Britain. It is something that we have institutionally neglected. Governments of all persuasions have treated cycling almost with derision. Until recently cycling has not been accepted seriously as a part of the transport environment, which it so desperately needs to be.

The House knows that the history of British Rail in dealing with cycles is rather unattractive. British Rail has regarded the bicycle and the cyclist as irritants and has been extraordinarily unwilling to contemplate accommodating cyclists in all but those circumstances in which it was driven, either by embarrassment or by statute, to do so.

What has happened in the privatised railway system? Within weeks of taking on the franchise, Great Western Holdings has announced that it intends to make specific additional provision for cyclists. I will leave it to my hon. Friend the Member for Blaby (Mr. Robathan), the chairman of the all-party cycling group, to elaborate on that if he is lucky enough to be called. I think that he will agree with me that those of us who believe that we should be promoting cycling are enormously gratified that one of the immediate responses of a new train operating company is to do something that has been overdue for decades.

Commercial opportunities are offered on the London to Gatwick British Rail services. There are three ways of getting from London to Gatwick by rail—the Gatwick Express, the Thameslink service and the old Network SouthEast and SouthCentral services. Since the Gatwick Express was used as the first pilot in the privatisation process-a great deal of attention was devoted to it-the service has attracted a considerable number of extra passengers. Some might say, "That is not surprising." It is perhaps less well known that it has also put additional passengers on both the other routes. The positive process of marketing rail as the way to travel to Gatwick airport—London's second largest airport and in many ways one of the most important tourism and holiday airports in the world—is succeeding, and everyone is benefiting.

The operators of the Gatwick Express are offering on-board check-in services to airport customers while they are on the train. That is exactly what those passengers want. They want a seamless and easy journey. The opportunity has been available for as long as the Gatwick Express has been running. Was it taken under the old regime? No, we could not do something like that: "That's airport stuff. It's not our territory. We run a railway, not a transport service." We now have a transport service.

The examples are legion. They are not confined to security, cycling or better ticketing. Freight is a good example. I remember talking to representatives of one of the companies now involved in the private freight industry on rail. They spoke to me and to my right hon. and hon. Friends about the freight industry. They said, "So long as you have a rail freight industry which says to customers, `So long as you bring your goods to us in a 44-tonne container on Wednesdays before 3 o'clock and you don't mind too much whether they are delivered tomorrow, next week or the week after, we shall be happy to take your business,' you may not be entirely surprised when we say that that is not an attractive transport environment for most modern companies."

The companies' representatives then said, "What you have to do, if you want to make rail freight work, is to ask the market, as a rail freight operator, what it wants. There are acres of railway sidings that are now derelict. They are useless. They are not being used for anything. You can build all the railhead facilities that you want in those areas, including all the distribution depots and the general infrastructure. The logistics are there and you can offer what modern transport companies have to offer, which is a service from the production line to the customer's shop. You have to offer an integrated service." We know that rail can be part of an integrated service, as it is in other parts of the world, especially in the United States. It is in the area of rail freight, even more than that of passenger services, where we shall see spectacular improvements in the volume of freight carried by rail. That is entirely consistent with the all-party conclusion that we definitely need to see a shift from road to rail and to public transport generally, whether we are talking about passengers or about freight.

In this debate the Government can claim beyond peradventure, as on so many other major issues that have faced us in the past 17 years, that we as Conservatives are right. We have been attacked ferociously, if somewhat inexpertly, by the Opposition, but we have been proved right. We have been proved right on rail, and we shall be proved right on so many other issues when we win the next general election.

11.18 am

Mrs. Gwyneth Dunwoody (Crewe and Nantwich)

It is always interesting when Members who have been Ministers for some years choose almost immediately to address the House on their own subject. It is unusual to do so, but having heard the saloon-bar stories of the hon. Member for Epping Forest (Mr. Norris), it seems that he is not serious. It is rather sad that in this debate he should work so energetically to suggest that others should give him a job after the general election. I am sure, however, that he will be very successful.

The privatisation of British Rail should concern the taxpayer at every level. I shall begin by talking about Opraf, and especially the franchising director, who is leaving his post. The Government decided that they were going to go ahead with the privatisation of British Rail, almost irrespective of the cost to the taxpayer and the possible benefits. Not only did they give instructions to the franchising director that he should push at even greater speed than had originally been intended, but they twice quietly altered his terms by sending letters to him—which were placed in the Library, on one occasion after the House had risen for the summer recess—that had a direct effect on the way in which he was able to do his job.

I raised that issue with the Department, because I felt that it was totally unacceptable that a man whose duties had been set out and whose responsibilities had been debated by the House in considerable detail, and who was answerable to the House, should suddenly be given a letter that effectively said: "You may now do virtually what you like. You must take account of the general terms that we set out, as Secretaries of State, irrespective of the conditions that were applied to your original duties by the House of Commons." That is totally unacceptable. The Government got away with it because absolutely no attention was drawn to it.

Moreover, it is useful to study the evidence that has been given by the franchising director himself to the Public Accounts Committee, which will undoubtedly be the subject of considerable debate. It is sufficient to say that one of the items that became very clear was that the man, who was a banker—not, as one would think, one of those lower-middle-class workers one finds on the Opposition Benches—had often allowed the so-called "consultants" who were brought in to privatise British Rail to operate without any type of budget. In one case, he allowed them to receive payments of £2.24 million of taxpayers' money as "success" payments, on top of the consultancy fee that they were already receiving, which had not been specified before they entered into the job.

When the franchising director was asked by hon. Members to define exactly a "success payment", how it could be earned and why two firms received those enormous sums, he found the questions exceedingly difficult to answer. In debates such as this, it is vital that we point out to the taxpayer what is happening to his assets. As one listens to Conservative Members making extremely unimaginative speeches—which they imagine will do them some good in a general election—about a subject as basic as transport, one is struck by the fact that they never manage to mention the cost to the taxpayer. When the franchising director hands over millions of pounds to consultants in the City—not to improve the track, to buy new rolling stock or to put security people into stations to defend the noble womanhood of the United Kingdom, but merely to pay for consultants to hand over assets to the private sector—that is not spelt out in the detail given to taxpayers, and they really should be interested in that.

Mr. Norris

Is the hon. Lady somehow suggesting that the amount of subsidy required by the new privatised train operating companies is greater than the amount required by the old British Rail? Do not we already know that the train operating companies in the private sector are taking £2 billion less than the amount that was previously demanded by her great nationalised British Rail?

Mrs. Dunwoody

I am delighted that the hon. Gentleman has chosen to raise that issue. He and I know that, from the beginning of the privatisation, it was very clear that the subsidy from the taxpayer at the end of the franchise period would not be less than it had been under previous arrangements, but that it would be more. He knows that. He gave evidence to the Transport Select Committee that spelt out the figures and set down the timetable by which it would happen. He himself—no one else—knows that that is the reality. He knows that, in the initial few years, the taxpayers, having handed over enormous assets, may not have to pay up the same amount each year, but that, eventually, the taxpayers will pay not only as much as they paid for British Rail but consistently more.

We hear talk about how the new companies will import new rolling stock, provide new engines and make everything wonderful for passengers. Does it not also behove us to point out that those engines will not be made in the United Kingdom? One of the freight companies has made it very clear that it is interested only in importing American engines. So a nation that started railway engine design will be incapable of supplying any of the new firms.

Mr. Butterfill

Is the hon. Lady implying that, under the regime that may be heralded in by the unlikely event of a new Labour Government, companies in this country will be directed to buy their investment products from United Kingdom companies only?

Mrs. Dunwoody

I am telling Conservative Members something that anyone other than the hon. Gentleman would know. There were companies under British Rail Engineering Ltd. capable of producing very high-quality rolling stock, which had full order books for engines and no difficulty in providing what was needed by United Kingdom rail companies. In the future, however, because of the deliberate rundown and sale of those assets, it will be extremely difficult to find sufficient British workmen to fulfil any order, from wherever it comes. If he does not know that, I will introduce him to the thousands of British Rail engineering workmen and women who have lost their jobs because of the specific political—there was no other reason—decisions taken by the Government.

Assurances were given at the Conservative party conference that tilting trains on the west coast main line would be one of the new results of privatisation. That is total fantasy. In answering a parliamentary question from me, the Minister confirmed that passenger service requirements for the InterCity west coast main line do not include requirements for trains to call at places such as Watford or Milton Keynes. The franchising director recently said that if the new high-speed trains run on the west coast main line, they will run straight through those stations, or perhaps make only one stop. When he was asked by a Conservative Member specifically what would happen to Crewe, he replied that Crewe would then be a parkway. That was his way of interpreting the fact that passenger service requirements would not be capable of producing current standards. It is very clear that if the privatisation goes ahead, Watford and Milton Keynes, for example, will lose their services to anywhere north of Birmingham.

In answer to a parliamentary question from me on the passenger service requirement, the Minister for Railways and Roads said that, when drawing up passenger service requirements, the franchising director is required, by his instructions and guidance from the Secretary of State, to consider each service individually and not services for the franchise as a whole. So to maximise carriage on the profitable parts of any system and to increase its attractiveness to any private buyer, the conditions laid down will not insist on the same level of care that we have had before or the same level of cover, but simply be a question of writing the terms in a manner that allows them to be exploited in any way by the potential buyers.

That leads me to a fundamental issue. I was delighted to hear my hon. Friend the Member for Manchester, Withington (Mr. Bradley) talk about safety. It is clear that there will be a conflict of interests on safety in the privatised railway system. That is a real difficulty. Railtrack has some high-powered, well-trained and highly responsible railwaymen who have been involved in the real commitment of rail services to safety for many years. When they retire or move on, there will clearly be a different ethos in the railway system. It behoves the House to insist that responsibility for safety standards should be moved away from Railtrack. There should be a free-standing unit outside any existing Railtrack structures.

There are several reasons why that should be done. It is clear that the instinctive response of Railtrack to an accident is totally different from the response that came from the old British Rail. British Rail would accept responsibility for an accident from day one. It would say that there would have to be a proper investigation, but it took responsibility. The immediate response of Railtrack to any kind of problem—this has been evident in press notices on two separate occasions—is to say, "That is not Railtrack's responsibility," before it knows anything about the accident or the conditions.

The reason for that is clear: Railtrack is terrified that—

Dr. Marek

On a point of order, Madam Deputy Speaker. The banter between the civil service Box and Back Benchers is still going on. It surely cannot be right. Is it not against the rules of the House?

Madam Deputy Speaker

I have already ruled that the only person who may speak to the civil servants in the Box is the parliamentary private secretary—or someone acting as the parliamentary private secretary—giving information directly to a Minister. Can the Minister confirm that that is what has happened?

The Minister for Transport in London (Mr. John Bowis)

I have just been passed some notes exactly according to your ruling, Madam Deputy Speaker.

Mrs. Dunwoody

I hate to break into this erudite and important point. I thought that we were having a serious debate about railways. I hope that the to-ing and fro-ing of half a dozen Conservative members of what might be called the Friday gang, who are here simply to get their names into Hansard, irrespective of the subject matter, will mean that we shall hear less from them for the rest of the debate.

To put it simply, Railtrack is behaving totally differently on safety from how British Rail behaved. If there is an accident, Railtrack immediately says, "This has nothing to do with us," as it has done on two occasions. The reason is simple: it cannot afford to have its shares questioned on the stock exchange. It would regard with horror any suggestion that there might be a problem with an accident, particularly a major accident.

A detailed accident report was, in my view, deliberately leaked recently in an attempt to put the blame on a particular driver before the matter could be fully debated and before it had been reported to those with responsibility. That is disgraceful and unacceptable. Everybody in the railway system should be concerned about safety.

Mr. Hawkins

Will the hon. Lady give way?

Mrs. Dunwoody

In cases such as the accident at Stafford, for which no one will take responsibility until there have been months and months of argument between the fragmented parts of the railway system, those who suffer most are those who are in no way responsible.

Mr. Hawkins

Will the hon. Lady give way?

Mrs. Dunwoody

Some of the people who were moved out of their homes because of damage caused during the Stafford accident are still living in bed-and-breakfast accommodation. No attempt has been made by Railtrack or any of the other relevant companies to sort out the situation.

Mr. Hawkins

Will the hon. Lady give way on the issue of safety?

Mrs. Dunwoody

Everyone who inquires about the effects of the non-payment of insurance or about any kind of assistance to the people most affected has been consistently referred to a firm that I cannot find in the telephone book. As far as I am concerned, that firm has some mysterious headquarters that cannot be located. British Rail would have taken responsibility immediately. Not only does Railtrack not accept responsibility, it refers everybody to a third party. That is unacceptable, leaving those concerned with real problems.

Those who live near the site of the Stafford crash have not yet received compensation. Railway Claims Ltd. does not insist that privately owned freight wagons are part of the insurance schemes. Anyone living alongside a railway ought to know that, in the event of a major accident involving privately owned freight wagons, they are extremely unlikely to receive compensation for many years after the issue has been debated in the courts of law. That is a retrograde step that should be deeply regretted by the House.

Other aspects of safety culture should also be debated. Who will undertake detailed research on safety in future? There will be continuing debate on whether it is the responsibility of one private company or another. To give a simple example, a great deal of work needs to be done on driver fatigue. That work was originally undertaken by British Rail, but the new incoming companies will clearly not be prepared to fund any such research.

British Rail estimated that a 20-year, network-wide automatic train protection system assessment would cost £759 million. Individual train operating companies will not be prepared to continue work on that system, although even the Government accepted that there could be a higher level of safety.

There is no suggestion that the old mark I rolling stock, which is widely used in the south-east, will be replaced at anything like the rate contemplated by British Rail. Many passengers will be not at all happy to discover that, in a serious accident, mark I rolling stock is likely to contribute to more injuries and provides fewer ways to solve the immediate problems of the passengers. It is clear that fragmentation has led to dangerous developments that the Government have not addressed.

Some aspects of safety are even stranger. Several train sets are waiting for safety case clearance by Railtrack. We have heard this morning about how much Railtrack and the operating companies are doing to improve the lot of the passengers. The reality is rather different. It was clear to the Health and Safety Executive that a lot of work needed to be done at Euston. It had to insist on a time scale for Railtrack to do it. In some instances, the time scale included finishing work on the tracks by Christmas this year. The result for passengers is plain—I recently arrived at Euston station at 7 am to find not just one, but two trains cancelled, with no prior warning to passengers and no concern for the inconvenience created for those wanting to use the west coast main line. That will get worse and worse because Railtrack has not invested the same amount in safety and is prepared to follow those dictates only where it is given strict instructions.

The privatisation of British Rail has led to some extraordinary incidents. I wonder how many members of the public know that the Ministry of Defence is hiding train sets for private owners. Because they do not have clearance, many privately owned train sets must be parked somewhere. Quite a few have been parked around Crewe station for some time, but many have been put on Ministry of Defence property and, in case that should be an embarrassment, they have been camouflaged.

If hon. Members think that I am exaggerating, they might like to know that when I asked the Ministry of Defence in whose interest those trains were being hidden, what was the cost and what was the taxpayer getting for that nice little camouflaged group, I received a marvellous letter from the Minister in the other place. He is, inevitably, an earl; I find that we never deal with less than a viscount in the present Government. Earl Howe wrote to me on 21 September and said: Thank you for your letter … regarding railway rolling stock stored at MOD sites. Army depots of the Army Base Storage and Distribution Agency at Bicester, Kineton, Longtown and Ludgershall, together with HQ Engineering Resources at Long Marston are storing railway rolling stock belonging to various Railway/Transport Companies. The MOD has been storing rolling stock for a number of years; the amount of rolling stock varies depending on the demand of the companies concerned. We are able to offer these companies the opportunity to use secure storage, free from vandalism whilst utilising our spare capacity to obtain good value for the Department and hence the taxpayer. ABSDA is not aware of the rationale for storing particular rolling stock, (this is subject to the commercial decisions of the companies involved)". How absurd. I wonder whether the Ministry of Defence is using that opportunity to improve on camouflage techniques. If the Government hide enough rolling stock, people will not know that the system is not working. They will not know that Railtrack is not clearing the safety case because it has no safety case people of its own and must employ consultants and, with any luck, the taxpayer will not know what is happening in the name of privatisation.

The £400 million that has already been spent on consultants, which could have provided us with an enormously efficient west coast main line with new rolling stock built in this country and supplied by British companies, will not be made available. If anyone doubts that the Government have undervalued the assets, they have only to look at Railtrack's returns. In fewer than eight months, it has managed to make an enormous profit while doing astonishingly little to make the railways more efficient. In addition, the Government have handed out bags of gold to City companies of accountants or bankers who know nothing about railways and have no interest in individual passengers but are concerned only with how to make money out of state assets. Those who work in City firms, particularly firms of accountants, have good reason to support privatisation: it has provided a large amount of their income for the past four or five years. Passengers standing around waiting for a safe, clean, efficient train, however, may not think it such a good idea.

This has not been a serious debate and I am saddened that Tory Members chose to make a knockabout of what they consider a suitable political vehicle in the run-up to a general election. Our transport system deserves better and passengers deserve a great deal better. The sooner we get rid of this extraordinary lot and get back to operating a responsible railway system, the better.

11.45 am

Mr. Nick Hawkins (Blackpool, South)

It is always interesting to follow the hon. Member for Crewe and Nantwich (Mrs. Dunwoody). I was fascinated that she did not have the courtesy to accept interventions. That is entirely a matter for her, but I was reflecting on the appropriateness of the fact that we read today that someone who is quoted as being a senior Labour Member writing under the pseudonym of Cassandra says that the mutual loathing between Tony Blair, John Prescott, Gordon Brown, Robin Cook and Margaret Beckett is so blatant it has become public knowledge. I wonder whether that is why the hon. Lady did not take interventions—could Cassandra be her?

When I think of the politics of envy, I think first of the hon. Member for Crewe and Nantwich. We have just heard a classic example of the genre, running down everything that is happening in the transport system, especially the great progress made on the railways in recent years. The hon. Lady may represent one of those few dinosaurs of the left who, having become a junior Minister in the days of the first Wilson Government, has seen her entire political career, which she thought so promising, waste away in 17 years of opposition. She was once a promising rising star; she is now a dinosaur condemned for ever to oblivion.

The hon. Lady made some interesting observations about safety. She suggested that there was something wrong with the public finding out that a driver involved in a recent tragic accident had an appalling record and had had several warnings about going through red lights, which he clearly did in that accident. If the hon. Lady seriously wants better service for the public and safety on the railways, it cannot be wrong for the public to be aware that a driver had a series of warnings for precisely the same kind of problem that led to that accident. I doubt whether British Rail passengers would agree with her suggestion that it is wrong for that to be in the public domain. That disposes of much of her nonsense about safety.

We heard weasel words from the shadow Transport Minister, the hon. Member for Manchester, Withington (Mr. Bradley), who opened the debate. His words about Labour policy sounded fine—words such as "strategic" and "integrated"—full of sound and fury, but signifying precisely nothing.

Mr. Jessel

Has not my hon. Friend left out the word "comprehensive"?

Mr. Hawkins

Indeed. It is a word beloved of so many Labour politicians, and it has always spelt disaster in education, as it would in rail if the Labour party ever had control over that area.

The crucial point about the anecdote that the shadow Transport Minister told in his opening speech was that, despite confusion over the telephone, the people concerned reached their destination on time. Moreover, they had two hours extra at Stansted airport. If the best that Opposition Front Benchers can do is tell a story of people who get to their destination on time and have two hours extra to enjoy the excellent facilities that the private sector has provided at Stansted airport, it shows the bankruptcy of their arguments.

I return to the crucial issue of the benefits that rail privatisation has produced. For many years before I came to the House, I campaigned for improvements to passenger services on the railways and worked with passenger consultative committees, transport users consultative committees and other campaigning groups. Thus I have been delighted in my first Parliament to see the Government delivering, with the great support of hon. Members such as my hon. Friend the Member for Epping Forest (Mr. Norris), the benefits to passengers that we all knew would flow from involving the proper use of commercial entrepreneurship on the railways. I pay tribute to my hon. Friend; one of the few difficulties about speaking in a debate in which he has spoken earlier is that all the best arguments have been used and have been put far better than I could put them.

I want to mention some of the specific benefits that the taxpayer would never have had if the railways had remained under state control. Opposition Members do not understand how railways can be run commercially for the benefit of passengers, because so few of them have had any direct business experience; they all still believe that state control, which has failed throughout the world and has led to the death of socialism in eastern Europe and many other places, is in some way a redeeming feature of their policy, and that profit is a dirty word.

Opposition Members do not understand that, to provide benefits for consumers in a capitalist system, there have to be people who are prepared to take the commercial risk and one has to ensure that benefits and improvements to services can be funded by investment. That is what profit is all about; it produces risk takers who will provide the risk capital to produce benefits for passengers. That is what the new privatised system is all about.

Railtrack is going ahead with core modernisation programmes on the west coast main line, amounting to £1.3 billion. If Opposition Members seriously think that they could have got that kind of money from a Labour Chancellor, if we were ever unfortunate enough to have one, they can dream on: it would never have happened, because only the private sector can produce £1.3 billion of badly needed investment.

Railtrack has already awarded two parallel contracts for the signalling and control system to Transig, a consortium of ABB Transportation and Westinghouse Signals, and to a consortium of GEC Alsthom and Siemens. The main contract letting will begin late this year or early next year, and the work will start next year. There is no way that any Labour Chancellor could have promised that under a nationalised system; it would never have happened.

The infrastructure investment agreement between the franchising director and Railtrack for the upgrading of passenger facilities on the west coast main line, with tilting trains and dramatically reduced journey times, was signed on 7 October. Opraf is aiming to award the 15-year franchise for InterCity West Coast in March next year, and the benefits of the upgrade will flow to passengers over the next few years. Railtrack is discussing options for the freight usage of the west coast main line with the Department of Transport, and work on the freight upgrade plan is expected to be continued shortly.

It is essential, as those of us know who sometimes use the west coast main line and sometimes use the roads, to get more heavy freight off the M6 and on to the railways. That is already starting to happen from the Trafford Park terminal, as my hon. Friend the Member for Davyhulme (Mr. Churchill) pointed out, and it will increase as the infrastructure improvements come through. That will be of great benefit to those involved in long-haul freight, maximising the usefulness of the channel tunnel, and to all rail users in the midlands. I have seen for myself how much benefit there would be in terms of improved journey times on the roads if the heavy lorries for long-haul freight were taken off the M6 as much as possible.

There will be great benefits for British industry, especially in parts of the north-west, from using the channel tunnel. Long-haul freight going, for example, from Italy to the north-west and vice versa, can be made much more economic. It was always inevitable once the channel tunnel opened that economies of scale for long-haul rail freight would be improved dramatically, and much more heavy freight is now going by rail.

The channel tunnel is yet another example of a project that could never have existed except under a Conservative Government and with the help of the private sector. Opposition parties would never have got it built; the risk capital would never have been raised. The solution for rail freight in this country is the existence of the channel tunnel, and the upgrade that the private sector is producing for major trunk routes that run to the tunnel, such as the west coast main line, is vital.

The rail freight business is nearly completely privatised. Rail Express, Freightliner and Trainload Freight have all been sold and British Rail intends to sell Railfreight Distribution around the turn of the year. There is no doubt that Freightliner and the other companies have recorded notable successes in attracting new freight to the railways. Both Freightliner and EWS have plans for new investment that demonstrate their belief in rail's future.

My hon. Friend the Member for Epping Forest drew attention in his splendid speech to the problems that many companies had in trying to place freight contracts with British Rail. As he rightly said, freight could be delivered by British Rail only if the customer agreed to a specific day and a specific time when the train would turn up.

We had proof positive of that in evidence given a few years ago to the Select Committee on Transport by Castle Cement in Lancashire, which said that it did not want to have to despoil rural Lancashire with fleets of heavy lorries, but was forced to do so, because whenever it tried to use the railways, the driver would turn up at the wrong times and the business of delivering cement to the other end of the country for a construction site was time sensitive. The driver would turn up sometimes several hours late and would then say, "I'm sorry, I've now got to take the engine all the way back to the depot because it needs some more diesel fuel." That was the pattern of freight on the old nationalised railways; that customer had been forced for the survival of its own business and the delivery of its services to invest in heavy lorries in which it did not want to invest.

The privatised freight business can be sensitive to customers' needs; they need not be dependent on when the driver turns up and there is a guarantee that the service level that they want will be provided. The scale of Railfreight's acute losses made the write-off of tunnel freight investment inevitable; it would have happened under any Government, regardless of our proceeding with privatisation.

Railtrack expects to spend no less than £8 billion over the next five years to maintain and improve the network. Even that huge sum does not include enhancement projects such as Thameslink 2000. Privatised Railtrack receives income from the franchised train operating companies through access charges and has access to wider sources of private finance to fund infrastructure schemes. It is essential that we continue with that process of investment.

Railtrack's current commitment to a safe and efficient railway will be continued because it can raise money on the private sector capital market. The key aim of privatisation is to improve the quality of service on the railways. As my hon. Friend the Member for Epping Forest rightly said, it is customers who matter, not a rail system that appeared for so many years, until privatisation, to be run for the convenience of the employees rather than passengers.

Before I came to the House, I worked for many years with many dedicated rail employees who cared about customers, but the biggest concern expressed to transport users consultative committees year after year was about the poor quality of front-end contact with passengers, the lack of information, and the fact that people on the station platforms did not seem to care. When people travel on privatised services such as Gatwick Express, Great Western or Midland MainLine, which I discussed with my hon. Friend the Member for Blaby (Mr. Robathan) only the other day, they notice how vastly improved the services are. My home town is on the latter line. I know that the improved service is of dramatic benefit to the people who use it. It is not only quicker and more efficient; the attitude of customers to the provision of service to passengers is much improved.

On the Midland MainLine, there are plans to run 22 extra services each weekday between London and Leicester. That is only one example; similar examples are to be found all over the new privatised railway. Some, such as the London-Tilbury-Southend line, which as my hon. Friend the Member for Epping Forest said is now run by Prism Rail, have improved security at stations. I commuted on that line for a while. There were rarely station staff in the evening to protect passengers travelling late at night and there were several serious incidents. Each of those reduced the number of passengers. Now that we have the extra staff to ensure security, I am sure that passengers travelling on the line will feel much safer. It is an improved service and more people will be prepared to use it, especially, as my hon. Friend said, ladies who have to travel late at night from the City back to their homes in Essex.

Many companies are investing in improved rolling stock. National Express Group plans to introduce a new fleet of rolling stock for the Gatwick Express service by 1989. NEG is also refurbishing the existing high-speed fleet on the midland main line and will introduce additional rolling stock to provide the extra services that I mentioned. On south-eastern services, Connex will undertake rolling stock investment worth about £400 million to replace all the slam-door stock within the 15-year life of the franchise, starting with the oldest stock shortly.

There is a rolling programme of further investment and improvement that no Chancellor of the Exchequer would have been able to afford from taxpayers' funds. Only by raising private sector money in the capital markets can such investment be provided. On Network SouthCentral, new off-peak and Sunday services for south London by the London and South Coast railway are planned. There is support from the franchising director of £85 million in the first year of the franchise. There is an improved passengers charter, with high punctuality standards, and £10 million of investment in improvements, including the refurbishment of stations and car parks, for which customers are desperately keen. That includes enhanced security for passengers.

Safety on the railways is not only about preventing bad accidents when trains collide or are derailed, important though that is, but about safety for passengers who use trains, stations and car parks. Network SouthCentral will have a centrally co-ordinated passenger information system, with public address and display systems at stations.

On the south-eastern service, Connex is planning to invest a further £25 million in one section, with station improvements including enhancements to passenger security, ticketing systems and car parking. It will improve punctuality standards for the Kent link and services on the Kent coast.

I have used Thames Trains recently to travel to conferences. Victory Holdings plans to increase the frequency of the Oxford to Paddington service to make it half-hourly, and to introduce additional services between Thatcham, Theale, Newbury and Paddington from 1998. Services between Reading and Gatwick are being improved. There will be additional off-peak fast services to Maidenhead and improvements in Reading to London journey times.

Our new silicon Thames valley, one of the hearts of British investment, is one of the areas where people who travel to London want improved services. They are coming because the railways are in the private sector, where improvements can be provided for passengers. The grant of £33 million to Victory Holdings in the first year of operation will decline to zero by the end of the seven-and-a-half-year franchise term. That shows how much more efficiently the private sector can operate railways. In the old days, everything depended on the huge taxpayers' subsidy.

What of the Liberal Democrats? As always, they will tell potential voters one thing in one part of the country and another in another.

Mr. Robathan

As we are discussing transport, does my hon. Friend think that that applies in Newbury, where the Liberal Democrats seem to support the Newbury bypass? Many people, especially around Newbury. are concerned about that. I thought that the Liberal Democrats wanted to get people on to trains and off the roads, and did not want to build new roads.

Mr. Hawkins

My hon. Friend makes a good point. I mentioned the improved services between Newbury and Paddington. I wonder whether the hon. Member for Newbury (Mr. Rendel) will welcome that benefit of privatisation. The important point about the double standards of the Liberal Democrats is that the right hon. Member for Yeovil (Mr. Ashdown) said: Liberal Democrats will buy back 51 per cent. of the shares in Railtrack"— and this is rather puzzling— at the issue price or the market price, whichever is less. That is an odd understanding of the way in which the market works, and I wonder whether it is not a case of Ashdown but mark down. Despite the Liberal Democrats' promise to renationalise the railways, the Liberal Democrat-controlled council on the Isle of Wight has suddenly welcomed the fact that its rail service was among the first to benefit from franchising. How is that for the kind of Liberal Democrat hypocrisy that we are so used to seeing in the House and across the country?

As my hon. Friend the Member for Epping Forest rightly said, so many people said at first that rail privatisation could not work, and then that it should not work. Customers are now saying that it is working, and it is a great and signal success.

12.4 pm

Mr. David Chidgey (Eastleigh)

I am pleased to have the opportunity to follow the hon. Member for Blackpool, South (Mr. Hawkins) as it enables me to deal with some of the nonsense with which he rather spoiled the closing moments of his speech.

We have made it clear as a party that we can see potential advantages in a public-private sector partnership investing in and running the railways, particularly as far as the train operating companies are concerned. That has been our position for some years. We have made it equally clear that we do not believe that the freehold for the rail infrastructure should be entirely in private hands. We believe that major investment decisions on our strategic transport corridors—be they road or rail—should not be in the hands of a private owner, whose prime objective must be to maximise profit to shareholders rather than to serve the transport interests of this country. I hope that that is clear to the hon. Member for Blackpool, South and that he is now satisfied.

Mr. Norris

rose—

Mr. Chidgey

I shall give way to the recently retired Minister, who may now have been promoted to parliamentary private secretary.

Mr. Norris

I thank the hon. Gentleman, who shows his customary courtesy, but I ask him to reflect on the point that he has just made. If the freeholds had been transferred to Railtrack in a way that allowed it to dispose of them without the slightest consideration of the needs of the railway, that would indeed have been—to say the least—irresponsible and, others might say, downright dangerous, but under the statutory regime the regulator ensures that Railtrack cannot dispose of freehold property, or any other property, in a way that would adversely impact on the railways. Surely that is quite different.

Mr. Chidgey

The hon. Gentleman made two points, which I shall try to answer. First, he referred to regulation of Railtrack's property assets. I am concerned about the amount of profit from property development that can be passed to shareholders. I would welcome Railtrack developing its excess property, but I am concerned that the regulations are insufficient to ensure that much of the profit is redirected into rail investment. Under the present regulations, I doubt that that will be possible, but it must be addressed.

I can answer the hon. Gentleman's second point directly by saying that great concern has been expressed about the way in which Railtrack is dealing with the interests of major freight hauliers and access to the rail network. It is clear that Railtrack is not motivated to encourage extra freight on the railways, where it foresees better profits from passenger services. It is not in the interests of the nation's transport system that those decisions be made on the basis of immediate profit, and that is why we are adamant that there must be some public control over the development of the rail network.

There is no dispute among hon. Members that an efficient, attractive and expanding railway is essential to sustainable passenger transport. It is agreed that the Government's programme of rail privatisation is a key factor in determining whether we rise to the challenges of initiating fundamental change in travel patterns, maximising rail travel and reducing congestion and pollution on the roads.

That is the issue. Let me set the scene by recalling the main objectives that the Government set the franchising director when the Railways Act 1993 was passed: to secure an overall improvement in the quality of rail passenger and station services, encourage efficiency and economy in the provision of railway services and promote the use and cost-effective development of the railway network. Most important, the 1993 Act placed a duty on the franchising director to secure value for money in achieving those objectives.

Have the objectives been achieved? Has there been an overall improvement in quality, the development of the network and the level of service? Has Opraf secured value for money in the award of franchises and has it controlled the cost of advisers?

According to the central rail users consultative committee, punctuality deteriorated last year on 33 routes out of 59. On the InterCity west coast main line, one in five trains was late by 10 minutes or more.

When Parliament considered the Railways Bill, the Government promised that existing services would be protected. On 11 February 1993, the then Minister for Public Transport, the right hon. Member for Kettering (Mr. Freeman), said that the franchises would be based on the 1994 timetable, that the franchising director would not be given discretion to pick and choose and that he would have to start with the existing timetable.

When the passenger service requirements were published, however, it was found that they gave massive scope for cuts in service. That was successfully challenged by some groups in the courts, but rather than accepting that they may have been wrong the Government responded by quickly changing the instructions to Opraf—in effect, moving the goalposts.

Across the country, the PSRs now allow operators to make significant cuts, should they choose to do so. For example, under the cross-country passenger service requirement, they are entitled to scrap services to Didcot, Kensington, Manchester airport, Poole, Weymouth and Blackpool. On the west coast main line they can axe InterCity services to Watford and Milton Keynes. We are not convinced that the objectives on the quality of service are being achieved.

The much-vaunted fare cap fails to protect a wide range of railcards and discount fares. Only one quarter of InterCity tickets, one quarter of Great Western tickets and less than half of South West Trains tickets are protected by a fares cap. More and more passengers are suffering from the fragmentation of the network.

Mr. Norris

I very much appreciate the hon. Gentleman's contribution; it is always considered and worth listening to. With reference to the so-called protection of discount fares, is it the case that the only one of the discount fare offers that was a net cost to British Rail was the disabled persons railcard? It cost British Rail about £3.6 million a year. A private operator might not take on an obligation that was just a cost, so that was specifically protected in the 1993 Act. An operator must provide that discount. All the other discount offer cards—the Supersavers, the pensioners' offers, the student offers—were profitable marketing enterprises. There was no need to protect a normal marketing enterprise that was making money for the railways. That is precisely what we should let the private sector get on with.

Mr. Chidgey

I followed the Minister's—I am sorry, the habit dies hard; I should say the hon. Gentleman's—intervention carefully, but it is difficult to follow his argument. The discount fares offered on the British Rail network were intended to fill available capacity throughout the working day or evening. We are concerned that the availability of rail services will be undermined by a failure to protect discount facilities. I am not aware of any evidence showing that all the discount fares offered previously under the British Rail regime and by regional companies were profitable—although that may be so.

More and more passengers are suffering as a result of fragmentation of the rail network. It is estimated that a third of all inter-city journeys involve a change of train—that is a sad reflection on what we hoped to achieve. A Railtrack South West employee, writing to a customer regarding inter-city train journeys and changes of train, said: Different train companies do not generally operate a connections policy for passengers using other companies' trains". It is hardly surprising that passenger complaints increased by 14.5 per cent. last year to their highest level ever.

Let us consider some track maintenance and safety issues. The Rail Regulator gave evidence before a recent meeting of the Transport Select Committee and reported that expenditure in 1994–95 on the renewal of assets covered by Railtrack's asset maintenance plan—that point was mentioned earlier—was £150 million below the level required in the medium term to maintain the performance of the network. The regulator said that he had made it clear to Railtrack that he would want to be satisfied that the company had plans in place to achieve the increase in expenditure needed to maintain current performance, yet Railtrack underspent again in the following year by £127 million, making a total underspend of £277 million—more than 25 per cent. of the asset maintenance plan's budget.

That can only compromise safety and maintenance standards. I am concerned about a recent report issued by Railtrack senior engineering and operating managers. They kept a dossier of potentially dangerous incidents of which they became aware during the current year—such was their concern about the way in which maintenance standards were slipping. They revealed that, in the first seven months of the year 90 potentially dangerous incidents … could have resulted in catastrophic accidents across the network of Britain's railways. Those senior engineering managers have no axe to grind: they are simply concerned about ensuring an efficient, modern and safe rail network. They believe that those incidents are only the tip of the iceberg".

In his evidence to the Transport Select Committee, the Rail Regulator said that, two years on from the Railways Act 1993, he believed that there were no excuses. There are no excuses for falling standards of maintenance and safety on our railways.

Conservative Members have made great play this morning of what has been achieved by introducing private sector investment into our rail operations and services. As I have said before, I welcome such private and public sector involvement, which has many potential benefits, but the picture is not as rosy as Conservative Members claim.

We must remember that the ROSCOs were sold for £1.8 billion, with a guaranteed yearly return of £800 million for seven years—that is a pretty good deal by anyone's standards. I am concerned that no obligation was placed on those companies to do any more than maintain the stock that they had bought in its present condition. They are under no obligation to invest in new stock. The sale of the Porterbrook ROSCO to Stagecoach is a case in point. I resent Conservative Members assuming that no Opposition Member has run a business or hired staff. They should know better—perhaps they could pass an eye over "Dod's Parliamentary Companion" occasionally. I do not mind if somebody makes a profit out of a good operation that provides a reasonable service, is cost-effective and gives good value to the customer, but I object when the people who are supposed to be the guardians of our national resources show incompetence and allow our assets to be flogged off at knockdown prices, and other people come along and make a huge killing within months of the sale. That is incompetence and no business would employ any person who made such mistakes, so let us get that into perspective before we go any further.

Mr. Butterfill

Can the hon. Gentleman suggest a mechanism, short of inviting the highest bids, whereby we could obtain higher bids for the assets than anybody in the market was prepared to pay?

Mr. Chidgey

The hon. Gentleman makes a nice point. Let us be absolutely direct about this—[HON. MEMBERS: "Answer him."] If Conservative Members will allow me to do so, I will certainly attempt to answer the hon. Gentleman's question.

When an asset is sold for some £500 million and a few months later suddenly acquires a 60 per cent. increase in value, surely we can accept that the advisers got it wrong. The advisers, who were paid from an open-ended budget, were still paid, despite the fact that their advice was massively wrong. That is another key issue on which hon. Members might like to reflect.

Under its franchise, South West Trains, which provides rail services in my region, was obliged to replace only some 5 per cent. of its rolling stock. That is hardly surprising, because its franchise is limited to seven years. It is recognised in the industry that rolling stock generally has a life of about 40 years. It is hardly reasonable to expect a company to make a major investment in rolling stock with a working life of 40 years when it is faced with the prospect of its contract being terminated in seven.

I do not know who decided to limit most of the franchises to seven years, but I suspect that the dead hand of the Treasury was involved. It is a pity that we could not have had a more sensible approach to getting more investment in our railways. South West Trains has to cope with a fleet of rolling stock predominantly of mark I coaches—the old slam-door coaches, which were condemned after the Clapham rail crash. It was made clear that any crash involving mark I slam-door coaches is likely to increase the number of injuries and deaths among the passengers unfortunate enough to be travelling at the time. In the Clapham accident report, inspectors made it quite clear that they wished all mark I coaches to be withdrawn from the network by 1997, yet in November 1996 at least 2,500 mark I coaches are still trundling around the network. Why did not the franchising director consult the Health and Safety Executive before drawing up South West Trains' franchise? Why was not the opportunity taken to bring in private investment to rid the railways of those death traps?

I now deal with the steps that are being taken to promote the use of railways. The hon. Member for Blaby (Mr. Robathan)—our bicycling friend on the Conservative Benches—made a point about the closure of stations under British Rail. He went back to the 1960s, but I did not think he was around in those days. Nevertheless, let us get the record straight. Between 1970 and 1994, British Rail reopened more than 250 railway stations. Recent surveys have estimated a need for a further 650. If the trend established by British Rail had continued, over the life of the current franchises we could have expected at least another 30 stations to have opened, but for the first six franchises that have been let only two new stations are promised over the next seven years.

Mr. Robathan

The hon. Gentleman gives way with his usual courtesy. I exempt him from the accusation of having anything to do with the £198 a ticket lunch at his party's conference. I am sure that he is far too decent for that.

The hon. Gentleman harked back to British Rail. I am delighted to say that it has reopened some stations. Indeed, one of the 15 stations in my constituency that closed in the 1960s and early 1970s has been reopened. I now have one where I used to have 15. The hon. Gentleman is a civil engineer and he has an historic interest in civil engineering. In his constituency, I suspect that he could walk along the old track from Botley to Bishop's Waltham, but when we were born we could have taken a train. Indeed, he could have taken a train from Eastleigh via Romsey to Andover, and via Winchester to New Alresford. We can no longer do that, because those lines were shut by that marvellous old institution, British Rail, to which he harks back with such fondness.

Mr. Deputy Speaker (Sir Geoffrey Lofthouse)

Order. I thought that the hon. Member's intervention was leading to a point, but it is a mini-speech.

Mr. Chidgey

The hon. Member for Blaby made a delightful intervention, apart from his unfortunate comment about some lunch or other. I have never been to a Tory party conference—I do not wish to go to one—but I imagine that people rent space to lay out their wares in the hope of catching the eye of the odd Tory party member. Some people may even pay 10,000 quid for lunch with the Prime Minister, but that is up to them.

The substance of the hon. Gentleman's intervention was the closure of railway lines. When we consider the reorganisation of our rail network, we should go as far back as the changes made by Dr. Beeching, which related to the change in our social and working patterns. I do not want the hon. Gentleman to get the impression that I am a great believer in traditional British Rail: I am not. I welcomed the restructuring of British Rail and the introduction of the regional companies, which were doing so well with the degree of independence that they were given.

I am glad that the hon. Gentleman mentioned my patch. Hampshire county council has, for many years, supported a strategy to reopen stations. It had great plans before the privatisation process began. In Eastleigh, strenuous efforts were made to reopen the Chandler's Ford station, which may have been on the list to which the hon. Gentleman referred. We wanted to run services from Romsey over the existing freight line to connect with the London main line to Eastleigh station. The privatised company, South West Trains, is now in charge. It provides a bus service to Winchester as an alternative. It is owned by a bus company, after all, but what a shame that we lost the opportunity to invest in a new station in an area of my constituency that has grown tremendously in the past 10 years.

The underlying restriction on the development and improvement of services by opening new stations has been Railtrack's profit-hungry policy. In 1994, the typical cost of a new, two-platform station was about £280,000. In two years it jumped to an average price of £500,000. That is a 77 per cent. increase in the cost of a simple station in under two years, which does not provide value for money. It is hardly an example of promoting the use and cost-effective development of the rail network.

The major issue is whether Opraf has secured value for money in the award of franchises. To what extent has rail privatisation secured value for money? We must first fix the criteria on which we measure that. It is generally accepted that it is necessary to measure the cost to the nation of the privatised railway services this year and in future years, and then to compare that with the cost that used to be incurred by British Rail. It is a relatively simple, benchmarking exercise, which compares changed circumstances with a base line. However, the National Audit Office failed to do that.

The Select Committee on Transport accepted the report and accounts of British Rail for 1993–94—the year before privatisation—as the relevant benchmark for judging the financial success of rail privatisation. That was not a good year for the railways, as the country was still locked in a deep recession, but it was the year in which Railtrack was separated. In that year, the cost to the public purse of running our railways, including the money paid via the passenger transport executives in England and Scotland, amounted to £1,057 million.

During that year, British Rail borrowed about £600 million. The Minister confirmed that most of that money was to pay for services connected with the channel tunnel, and was nothing to do with the domestic rail service operation.

In its recent report, the National Audit Office failed to bring out that fact. It included the borrowings as if they were part of the costs of providing domestic rail services. That is a serious flaw. It seems that the National Audit Office, which should know better, has been taken in by the Government's hype.

Since 1993–94 the accounting process has changed. Charges for the use of the track and for leasing the rolling stock now provide for a form of current cost accounting—the modern equivalent of asset valuation. That provides sufficient money to maintain and renew the assets. British Rail never enjoyed such a privileged position, nor do any of the local authorities that are responsible for road maintenance.

The new, somewhat creative accountancy arrangements mean that the cost of providing railway services increased substantially. In 1994–95, these costs, including those incurred by the passenger transport executives, rose to £2,055 million, and in 1995–96 the figure was £1,973 million. Those costs included the nominal profits which, until BR was broken up and sold off, had been returned to the Treasury.

The changes in accounting practice, the separation of the international operations of the European passenger services and Union Rail, the huge write-off of debts, sale proceeds, the enormous and unlimited payments to lawyers, consultants and advisers and the payment of profits to the Government before subsidiaries were sold make it very difficult to be clear about the continuing cost of providing domestic railway services in future years. However, to establish whether the taxpayer is getting value for money we have to strip away all the one-off financial transactions and look to the years ahead when the franchising director and the PTEs are buying railway services. To set a value-for-money benchmark, a judgment must be made about the level of efficiency improvement that BR could reasonably have achieved if railways had remained in the public sector.

In his evidence to the Public Accounts Committee the franchising director, Mr. Roger Salmon, suggested that an efficiency gain of 3 per cent. per annum would be an appropriate assumption. It is a much more modest achievement than that made by BR as an integrated concern in 1992–94, when it achieved 9 per cent. If we accept Mr. Salmon's figures and project them forward, it gives us a benchmark against which we can compare the financial performance of the new franchised railway.

In terms of borrowing to finance domestic rail services, BR was repaying its loans for domestic rail services on time and was expected to be able to continue to do so. Therefore, we can establish a benchmark that is based on BR's 1993 performance and use it to measure the financial success of franchising. BR, with its improved efficiency of 3 per cent., would have reduced its costs from £1,067 million to just over £800 million per annum and could have continued to provide services.

The payments from public funds to franchises have two sources. A vote goes directly to the franchising director and money passes through the passenger transport executives. The latter sum is £281 million for 1996–97 and was not included in the National Audit Office figures, which is misleading. Recent answers to my parliamentary questions have shown that the cost to the taxpayer of the first 13 franchises will be £203 million in the year 2003–4. That includes the best performing franchises and we can expect the remaining 12 franchises to cost considerably more, taking into account payments from the franchising director and the PTEs and assuming that the franchises deliver the service that they are supposed to deliver.

It is clear from the figures that the franchising director's claim to the Public Accounts Committee to have saved £1.7 billion of taxpayers' money is unfounded. To save such an amount, it would be necessary over the next seven years for the franchised service to be delivered at an average cost of £250 million a year less than it would have cost if BR had continued to operate the system. In 1997–98, the first 13 franchises will cost the franchising director £505 million yet, under British Rail, we could have expected the whole system to have cost only £945 million. Are we to believe that the rest of the franchises will cost only the difference of £440 million and that over the first seven years savings of some £1.7 billion will be made? That is plainly fantasy and a smokescreen that the Public Accounts Committee has failed to penetrate.

Parliament and the taxpayer must be fully aware that railway privatisation is not the bargain that the Government would have us believe, working as they do on the premise that few people understand what is being done with public money. A simple projection of the full cost to the taxpayer of the franchised railway against the BR benchmark reveals that it could take several Parliaments before the true cost of the privatised service becomes less than that of BR, year on year. By that time, most Conservative Members will no longer sit in this place.

12.34 pm

Mr. Toby Jessel (Twickenham)

My constituents, like those of the hon. Member for Eastleigh (Mr. Chidgey), use South West Trains. What they want is trains that are safe, punctual and pleasant, and they do not want their trains to be a financial burden on themselves and everyone else as taxpayers.

On punctuality, South West Trains, run by Stagecoach, are now more on time. The proportion arriving at Waterloo within five minutes of when they are due has gone up from 89 per cent. a year ago to 93 per cent. now. The frequency, by and large, with some exceptions, has not diminished. For example, at St. Margaret's, the frequency is still every half hour throughout the evening. That is just one of the eight stations in my constituency on the Waterloo line—the others being Fulwell, Hampton, Hampton Wick, Strawberry Hill, Teddington, Twickenham and Whitton.

I am worried about one thing and I should be grateful if my hon. Friend the Minister for Transport in London would give his attention to this point. Under nationalisation, every time there was a freezing winter, the points seized up with ice, and the trains were delayed and were sometimes taken off altogether. It was as though the British were taken by surprise by the arrival of winter—in contrast with the Canadians, for example, who seem to expect cold weather and are able to cope with it each year. I should like to ask the Minister if he is willing to undertake to approach the privatised train companies and ask them what preparations they have made for a cold winter so that if that takes place—and winter is coming—the public, who need their trains to be more reliable in inclement weather, can be protected from the poor performance of the nationalised trains in the past in dealing with cold weather. I would hope that privatisation would be more efficient.

I went on the first privatised train of South West Trains. My right hon. Friend the Secretary of State for Transport came to Twickenham one Sunday morning in February at about 5 o'clock in the morning and got on the first train from Twickenham to Waterloo. I may have been mad to get up and join that train at 4 or 5 o'clock on a Sunday morning, but that is what I did. I have kept the ticket. The train has run rather well ever since. Before privatisation, of course, there were scares galore, as my hon. Friend the Minister of State mentioned. Everyone was forecasting doom and gloom, irregular and infrequent services running late and often taken off, dirty carriages and no attention to the needs and wishes of customers; but every time there has been a privatisation, the Jeremiahs have been confounded, and they were on this occasion. That was so, too, for privatisation of British Airways, as has been mentioned, the airports, electricity, telephones, gas or any other industry: there have been ghastly forecasts of doom and gloom beforehand, with Opposition Members fomenting and stirring up people's fears and anxieties that the service might deteriorate, but it has hardly ever happened—indeed, I do not believe that it has happened at all. The privatisations have all been successful and are now broadly accepted. The same is true of the rail privatisation. We all had alarming letters six, nine and 12 months ago, but the complaints have all disappeared and there are hardly any at all now.

I happen to have been brought up in a nationalised industry, the Royal Navy, and I am perhaps less fanatical about privatisation than some of my colleagues. I have some reservations about it, but I think that I have been proved wrong as it has gone extremely well. I rather like having royal trains and the Royal Mail going by train, and making sure that the Queen's face is kept on our stamps and, even more importantly, on our bank notes. I regard myself as a subject and not as a citizen. I do not much care for the word "citizen", which reminds me of the French revolution—one of the worst things that ever happened in the history of the world.

There was great romance attached to railways. People loved the trains, the old Great Western Railway trains and Brunel's bridges and viaducts. Some of that romance seems to have gone as people now seem to see trains merely as a service, as though one were buying something in a shop; yet it is important, when buying a service, to get the results delivered, and that seems to be happening.

I wish to take up a few local matters and to ask my hon. Friend the Minister to raise these with Stagecoach and with South West Trains. First, I am very pleased about the coming renovation of Hampton Wick station. At Twickenham station, however, although I acknowledge some improvements, a waiting room has been turned into a buffet. This means that the waiting room facility is being curtailed and that after 9 pm on weekdays, 4 pm on Saturdays and all day on Sundays there will be no waiting room facility. That would be regrettable in such a large, important and well-used station. I hope that the company can be persuaded to take another look at that. Next, at Waterloo station, the cab rank is not efficient. This is because it is so extensively used. There is such a large number of passengers queuing for the taxis, and such a large number of taxis queuing for the passengers, that they are not married together nearly quickly enough. Typically, a person in the taxi queue has to wait five to eight minutes. It would increase the attraction of using trains rather than travelling by road if the cab rank could be duplicated—if there could be two lanes of it—or if at least the passengers queuing for the taxis and the taxis queuing for the passengers were not in contraflow so that, timidly, they marry up only one at a time, which results in very slow progress. I think that it is quite important that people who arrive by train and want to get a cab should be able to get one quickly. That is the whole point of getting a cab.

With that, Mr. Deputy Speaker, as several of my colleagues are waiting to speak, I thank you and the House for hearing me and resume my seat.

12.43 pm

Mrs. Jane Kennedy (Liverpool, Broadgreen)

It is always a genuine pleasure to be called immediately after the hon. Member for Twickenham (Mr. Jessel). He is a unique Member of this place and I regard him as a rare and real treasure. I wanted to compliment two other speeches, but neither of the two Members who made them is in the Chamber. One was that of my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody). I always learn a great deal whenever she contributes to a debate of this nature. The other was that of the hon. Member for Epping Forest (Mr. Norris), whom I especially wanted to congratulate. Had he spoken for one third of the time that he occupied, more of his hon. Friends would have had a hope of being called. Sadly, they are unlikely to have the opportunity to contribute to the debate, given the time that is available to us.

My hon. Friend the Member for Manchester, Withington (Mr. Bradley), who spoke from the Opposition Front Bench, made an excellent contribution. I understand that it is his first outing as a shadow spokesman on transport. I look forward to hearing the full wit that my hon. Friend the Member for Hampstead and Highgate (Ms Jackson) will bring to the debate when she replies on behalf of the Opposition. She is also someone whom I like to hear.

The hon. Member for Colchester, North (Mr. Jenkin), in the opening banter that warmed up the House earlier, referred to the fact that I was in my place—I assume that he was referring to me. I am in the Chamber to raise a serious matter about which I have already written to the Secretary of State. I accept, of course, that safety has already been mentioned by other hon. Members. Sadly, there have been some happenings in my constituency and on Merseyside generally that I believe have been affected by the change in ownership and administration of the railways, and I want to bring them to the attention of the House. I believe that there are things that the companies can do to deal with safety problems that they are not doing now.

Over the past 18 months, 17 children have been killed on the railway on Merseyside. Two others have been seriously injured. In three weeks this autumn there were four serious accidents in which three children were killed, the youngest being five years of age. Peter Mee, aged 16, and his 13-year-old friend climbed down from a railway bridge into coal trucks at Edge Hill in my constituency. Both boys were electrocuted by the overhead cables, and Peter was killed. His friend received 20 per cent. burns. Eight-year-old Anthony Gill was involved in an accident at Maghull when he and his friends were playing on the railway line. Anthony accidentally touched the third rail, the live rail, and was killed. Andrew Hall. aged only five, was killed in Birkenhead.

The three incidents to which I have referred happened within just a few days. They caused great shock to the community on Merseyside, including my constituents. In four weeks, four families were devastated. The impact on staff was also enormous. Five separate crews were sent home after the trauma that they experienced in trying to save Anthony's life after he had been electrocuted. Drivers are scarred for life after their trains have been responsible for the deaths of children or adults. I do not seek to suggest to the House that such incidents have never happened before, or that they are happening only because of privatisation, but we need to examine what has happened and see whether the companies set up to administer our railways have been helped to deal with safety issues.

Let us consider the response of the companies and take that in the context of the debate. One's immediate reaction—this would be true of anyone—is enormous sympathy for the parents and families involved. There is a real sense of shock that so many incidents could occur in such a short time. Questions follow on from that. How did the accidents happen? What investigations are taking place? Were the children aware of the dangers? How aware are people living near our railways of how increasingly dangerous they have become as speeds have increased and there has been an extended use of electricity to power our trains?

What can we do as a community to prevent more accidents happening? I appreciate that such incidents are becoming fewer over the years, but we must constantly review what is happening to ascertain whether we can do more.

Following the incident at Edge Hill, I met the regional director of Railtrack. I also met representatives of the local rail company, Merseyrail Electric, which operates the local services throughout Merseyside. I accept that there has been a thorough investigation on every occasion. I accept also that there is a genuine understanding of the problem on the part of those managing the services. They made no attempt to hide their shock and concern that young lives had been lost and families devastated. They have genuine concern also for their staff. They said that in some cases members of staff have been robbed of their health as a result of their experiences when an accident happens. They also expressed a real and genuine concern about the impact of the incidents on their passengers and on their ability to run the services. So there were commercial as well human reasons for them to deal with the problems and to ensure that their response to such incidents was as appropriate and thorough as possible. I invite the Minister to investigate the situation on Merseyside because of the frequency of the incidents.

The first matter that should be re-examined is the schools programme and the education programme with which British Rail has been involved for many years. Formerly, the drivers who took part were drawn from a range of services, because there was no effective demarcation between the different services. Now, however, Merseyrail Electric has contracted to provide the service across Merseyside, and drivers and staff involved in the longer-haul trains—which have overhead cables rather than the third rail—are not involved in the service. That tranche of experience is therefore not available to schools, which appreciate the service that they receive from the railway workers who educate children about the dangers of playing on railway lines. That loss of expertise should be re-examined.

Staff concerned about reductions in the education service have passed to me a set of minutes. The representatives I met from both companies stressed the fact that they were committed to the service. Shortly after 14-year-old Stephen Judge was killed at Edge Hill last year, however, two debates occurred between local representatives of staff and their managers in Liverpool. On the first occasion—Monday 22 May 1995—the management minute stated: Staff side were concerned that these visits to local schools by a regular Driver had recently been stopped at a time when there had been two serious incidents involving young people coming into contact with Overhead Wires in the area. Management Chairman stated that Railtrack … are now the custodian of these arrangements and that they therefore decide which schools will be visited and when. Staff side noted but expressed their strong feelings about the withdrawal of these visits and hoped that safety was not being sacrificed for the sake of costs.

In July 1995, the concern was revisited. The minute states: The Staff Representatives wished to reiterate their concern regarding the withdrawal of these visits so far as Lime Street is concerned—

the drivers who served my constituency and the Edge Hill area came from Lime Street— pointing out that Liverpool now have no Drivers carrying out these duties whereas Manchester has two, Chester one Driver still performing this important function.

I have talked to people at schools in my constituency, and they have stressed the value of the visits. There is a real need to review that service.

It is also worth noting the way in which one company would pass the buck of responsibility to another company. When I met managers, I did not detect a real attempt to duck responsibility, but in that type of routine meeting it becomes all too easy to say, "It is not our responsibility any more: we have noted what you said and you clearly have a legitimate concern, but it is the other company's responsibility now."

Local anxieties about the state of railway safety are such that the Liverpool Echo mounted a very successful campaign, the quality of which deserves congratulations. It produced posters with children to ensure that awareness is raised about the dangers of playing on railway lines. BBC Radio Merseyside should also be complimented for its work on the issue. The incidents have increased awareness in the area of the dangers, but the awareness may fade with time, as local media interest invariably moves on to more pressing issues. It is the responsibility of those administering the railways to ensure that on-going education is not reduced, but built on and increased.

It is worth considering the responses that the companies sent to Mr. Judge—the father of Stephen, who died last year. The British Railways Board and Railtrack responded to him in October last year, around the time of the inquest into Stephen's death. I refer particularly to Railtrack, which said that it was committed to stamping out injuries to young people. In this connection, a good deal of money has been spent on fencing the Edge Hill Depot and equipping it with electronic gates prior to this incident. Despite this, fences were deliberately damaged and vehicles positioned in the depot subjected to vandalism and fire. It is difficult to know what more we can do to deter young people intent on gaining access to railway property and causing damage. I got the same response when I met a Railtrack manager. He expressed genuine concern and anxiety and a wish that such things did not happen, but he did not know what could be done to stop determined young people getting on to the tracks. I genuinely feel that that attitude is not good enough. We have to check continually that we are doing enough.

On 14 December last year, Mr. Judge received another letter from the British Railways Board. It said: In addition to school liaison visits we have had poster and video campaigns.

Well done for that. We also work closely with both the British Transport and civil police forces in problem areas and have achieved some success in reducing trespass. But this sort of activity is"—

I am quoting directly— time consuming and diverts railway and police resources away from other duties. Dealing with vandalism and trespass is not a diversion from the work of the transport police: it is an important element of it.

The local railway managers could reduce the opportunity for such incidents by extending the closed circuit television network. That would necessarily have to be backed up by increased support from the transport police and the civil police. I have visited the local command and control centre of Merseyrail Electric and was genuinely impressed by the work that has gone on there and the amount of money that has been invested in the system. There are 100 CCTV cameras on Merseyside, most of which are located around the stations. However, a lot of the vandalism and access to the tracks takes place slightly beyond the stations. Kids do not get on to the tracks at the station, but further down the line where nobody is watching and where there is a whole playground available. I am not suggesting that the whole network should be covered by CCTV, but it would be worth making a proper study of the value of the system so that we could cost it properly. The companies, in partnership, could then put in a bid to the Home Office for an extension of CCTV. Will the Minister comment on whether he thinks that such a project would be worth while and would be considered by the Government?

An extended CCTV network is of benefit only if the train drivers can communicate with central control quickly and easily. That is the final area in which I should like some investigation. It was pointed out to me that every train now has an in-cab radio telephone, but that does not impress the drivers I have met. I have other worries about the response of the companies to complaints from their staff about issues such as trespass. I have a memo dated 9 May 1996—just a few months ago—describing the route between Broadgreen and Roby, which runs through the centre of my constituency. Under the heading, "Persons Affected", it says, "Train crew working route". The description of the incident is: No fencing, allowing access both sides of track by pedestrian walkway across under motorway (M6). Close on one dozen stone throwing incidents in last four months. No effective action has been taken by the companies to deal with that.

The same drivers who drew that problem to my attention also said that when they met with stone throwing and incidents of vandalism or saw youngsters on the track, their ability to relay the information to central control was limited by the poor quality of the in-cab communications that they were using. That must be looked at carefully because there are some black spots. Those of us who use mobile telephones—being new Labour, of course I have a mobile telephone—appreciate that we sometimes hit black spots in our attempt to communicate. But for train drivers it must be possible to devise a reliable system of communication with a central control base so that local police or transport police can be alerted when children are seen on the railway line.

The Government have a responsibility to look at how the railway companies are responding to the tragedies that have occurred on Merseyside. The three measures that I have mentioned could help to improve safety. As I said at the outset, I realise that deaths and injuries occurred when the railways were directly run by the Government, and it is likely that they will occur in the future. Improvements made in rail safety, however, have largely been the product of better technology and better policing of the railways. The break-up of the railways administration has not helped in dealing with those matters. I am concerned that the different companies involved in administration may get tangled up, as there is no clear guidance as to who is responsible for doing the work necessary to make our railways safer.

I am grateful to the House for the opportunity to raise these matters, given that my normal role is to sit in silence.

1 pm

Mr. Andrew Robathan (Blaby)

Further to the kind words of the hon. Member for Liverpool, Broadgreen (Mrs. Kennedy) about my hon. Friend the Member for Twickenham (Mr. Jessel), I should like to say that, should the good voters of Broadgreen determine that the hon. Lady remains, I am sure that, after 27 years of service in the House, he will also regard her as a treasure.

I shall not speak for long as I know that many other hon. Members wish to speak. First, I shall clarify a point for the hon. Member for Wrexham (Dr. Marek), who raised a point of order when I spoke to someone in the Box. I was just carrying out common courtesy: I saw a friend to whom I was saying good morning. I am sure that the hon. Gentleman would wish everyone in the House to be courteous, and I certainly intend to be so.

When I first came across the subject of rail privatisation, I heard warning voices wailing that it could not work and, like Labour Front-Bench Members, I wondered how it could work. However, I determined that the Government had a great deal of common sense and that many of those working for them had much more knowledge of the railway system than I do. I felt that British Rail had to improve. Since 1992–93, I have seen the service improve and I now speak with the zeal of a convert. I believe that the railway industry is now entering an exciting phase.

Let us look briefly at the history of British Rail. All hon. Members probably study Ordnance Survey maps from time to time and see disused railway lines covering the country. Most of them were closed in the 1960s and 1970s after the Beeching review. My constituency used to have 15 or 16 railway stations, all of which were closed, together with three whole lines: the central line and two others. Since then, only one station—Narborough—has been reopened. All the others remain closed, although there is a great deal of interest in reopening them. Leicestershire county council wishes to open the Ivanhoe line, which would run across to Derby, and I support the county council in that.

We must remember that British Rail's history is one of closure and decline. I pay tribute to the dedicated employees of British Rail, who worked to the best of their ability for a good railway system. Unfortunately, however, they failed to achieve that. My hon. Friend the Member for Blackpool, South (Mr. Hawkins) mentioned Railfreight and spoke of his experience with freight companies trying to get freight on to rail. Three years ago, I spoke to a man who told me that he wanted to get freight on to railways, but when he went to British Rail, the manager would come up with a figure on which he could not possibly make a loss, and then double it, to be absolutely sure that there was not the slightest chance of making a loss. Of course, the figure was in no way competitive, so the customer went away and bought lorries instead.

About 12 years ago at new year, I went to Scotland. Many people go to Scotland for hogmanay; it is not a one-off, but happens every year. When I wanted to come back by rail, there had been some snow and, of course, the railways were disrupted by it—one accepted that—but it was extraordinary that, far from there being more trains because many more people would be travelling, when we eventually arrived at Glasgow, we found that every train was standing room only. After all, it was new year and a bank holiday, and who on earth would want to travel by train on a bank holiday apart from all the people going up to Scotland? Most expatriate Scots seem to go there for new year.

That, to me, was the history of British Rail: old dog-eared sandwiches, leaves on the track, inefficiency, late trains and restrictive practices. The future is exciting. On Midland MainLine, which I use quite often, the staff are becoming noticeably more polite. They must have had some training, because instead of saying, "I dunno," they say, "Well, sir, I'm not quite sure, but I'll go and find out." That is surely better for passengers and customers.

Mr. Lawrence Cunliffe (Leigh)

New Labour.

Mr. Robathan

It is not new Labour at all; it is new railway lines.

My hon. Friend the Minister has already mentioned the "4Sight" fare. The biggest problem with the fare is that the public do not believe that it can be true. Midland MainLine will take a family of four from Sheffield to London and back for —29, and not on a train that runs at 2 o'clock in the morning and goes back at 3 o'clock in the morning, but on any train that can be booked. People do not take up the offer because they cannot believe it. One could not run a car on petrol from Sheffield to London for —29. At last, the railways are competing with the car on price, convenience and timings. That should be welcomed by everyone, and I pay tribute to Midland MainLine for it.

Midland MainLine also has a new, half-hourly weekday stopping service to Loughborough, and is upgrading security at car parks. Commuters who live three miles from a railway station and leave their car at a car park do not want to come back the next day and find that it has been broken into. At last, closed circuit television is being installed, because the company knows that if it can persuade people to take their car to the station, there will be more revenue from fares and the trains will not run half empty, as so many do at present.

The piggyback scheme on the west coast main line is extremely exciting; it will take lorries off the roads and put them on the trains. Mention has been made of Cross Country Trains and Virgin's possible involvement. We may think what we like of Richard Branson's style, but he is an exciting and entrepreneurial business man who has done incredibly well, and if he can see merit in taking up the Cross Country Trains franchise, that suggests that we could do a lot better with the railway lines than we did under the dead hand of state bureaucracy and nationalised industry. People want to invest in the railways, because they know that they are the future.

The railways used to be a bastion of restrictive practices. Dear old Jimmy Knapp, about whom we have heard already, took out newspaper advertisements in 1986 when there was a dispute about guards, asking people who thought that guards should be kept on trains to write to him. I wrote to him—perhaps I should mention that at the time I was not even a member of the Conservative party—because I, too, wanted security and guards on trains.

I had just been to Ashford in Kent, and I wanted to get a table for the rickety old carriage in which I was travelling, so I went to speak to the guard. When I found him, he had his feet up and was reading the Beano. He did not say, "Yes, sir, can I help you?"; he said, "Back carriage," and that was it. That was how useful having a guard was. Jimmy Knapp was wrong then, and he is wrong now. He has always been wrong; he is a trade union dinosaur. That he should oppose rail privatisation shows that we must be right.

I wish to raise a note of caution with my hon. Friend the Minister about the sale of railway assets. I understand from my hon. Friend the Member for Epping Forest (Mr. Norris) that we have safeguarded them, but I am worried that if the railways grow—as I believe that they will—and some assets and sidings are sold off prematurely, they will not have the opportunity to grow in the way that we would wish. I hope that my hon. Friend the Minister will pay attention to that.

I am chairman of the all-party cycling group. I am sure that Opposition Members are also cyclists. Not all cyclists are Conservatives, but they should be because of what privatisation is doing for cycling opportunities on the railways. It is not only Great Western but Anglia Railways that are examining changing their rolling stock so that cycles can once again be taken on trains. British Rail did away with all the useless old guards vans so that people could not take along their bicycles. Cyclists who want to travel to railway station A to get to B and then cycle to C have to take their bicycles. Now they will again be able to because the railways are considering the customer—the passenger—and how they can serve the customer-passenger to maximise efficiency and revenue.

The environmental benefits of rail travel are self-evident. I walked here today and I am sure that all Opposition Members used a bicycle or public transport or walked. More seriously, we must accept that the likelihood of major road building schemes is becoming increasingly slim because of the understandable resistance of our constituents, which I share. We do not have the space for new roads. All hon. Members must have motorways and dual carriageways that harm, and often ruin, the lives of their constituents.

If we are not to have new roads, we must consider how to get more people on to public transport. [HON. MEMBERS: "Hear, hear.") I am glad to hear that support from the Opposition. Rail privatisation gives us a chance to achieve that object. Last weekend, I was speaking to a banker who was working in New York. I am sure that he is a Conservative, although he did not say so. I was amazed when he said that he was looking forward to coming back to England and using the railways. He said that the roads were hopeless now. We all know that they are congested. I use the M1, which is always blocked on a Friday. I am going to Norfolk later today.

Mr. Churchill

What about the M6?

Mr. Robathan

It will be blocked as well. It is blocked because of prosperity. Under the Conservative Government, people have too many cars. We want people to get out of their cars and on to the railways. Schemes such as "4Sight" will do that.

My banker friend said that the future is railways. People will travel by rail. He works in America and can see that. People who cannot travel by car will use something that will get them there on time. That did not happen under British Rail. I firmly believe that it will under the privatised railways. I can say with the zeal of a convert that rail privatisation has brought a new era to the railways, which now have a future instead of the endless decline of the past 50 years.

1.12 pm

Dr. John Marek (Wrexham)

I accept the explanation offered by the hon. Member for Blaby (Mr. Robathan) for why he communicated with civil servants in the Box. If he was saying, "Good morning," I have no objection, but more than one Conservative Member was involved and there was quite a banter with the civil servants, who were perhaps being partial when cheering on the Minister when he replied to Opposition interventions. I thought that it was all slightly unseemly, but we have settled down after the first half hour and are having a reasonably instructive debate from which I hope both Government and Opposition can learn.

I must tell the hon. Member for Twickenham (Mr. Jessel) that I doubt whether the Minister will deal personally with changes to a waiting room in one of the stations in his constituency. The hon. Gentleman said that he did not want to be a citizen and would prefer to be a subject. If he had "subject" on his passport, he would be interrogated on arrival at terminal 2 or 3 and sent back as an illegal immigrant. The hon. Member for Twickenham also accused me of being unfair to the civil servants in the Box by calling them scribblers, but they were scribbling notes. It is a perfectly respectable term, and no disrespect was meant by the description. Such work continues to be done, and it is an important asset to Ministers who need advice and accurate information to help them reply to the points made by hon. Members.

Many Conservative Members have attacked British Rail today. They talked about Beeching, but none has said that a Conservative Government appointed Beeching and that Conservative Governments are to blame for the massive closures that took place in the early 1960s. I remember the Labour Government who took power in 1964. They appointed Lady Castle as Minister of Transport. She was unable to reverse many of the changes that had been made. I draw a parallel between 1964 and what is going on now. There is a rush to try to franchise and sell off the system, and it does not appear to matter what price the Government get. They want to sell as much as possible before the next Labour Government take office on 2 May.

Mr. Robathan

The hon. Gentleman is right in that Beeching brought out his report in 1962, under a Conservative Government, but it was generally thought that the motor car would take over—as it perhaps has done during the past few years. From October 1964 onwards—two years after the report was published—the Labour Government implemented the closures. He says that the Minister of Transport at the time was unable to stop the closures, but she could have if she had tried harder.

Dr. Marek

Nothing is ever totally black or white—although in this case it is mostly black as far as Conservative Members are concerned.

I wish to comment on the attack on Jimmy Knapp by the hon. Member for Blaby. Jimmy Knapp is an elected trade unionist who is representing his members and fighting, against all the odds, to ensure that his members continue to get a reasonable salary on which to live. Many Conservative Members—I am not accusing the hon. Gentleman of this—would be happy if rail workers continued to do the same job on half the salary. That must be stopped, and I am glad that the European Union has now made sure that public sector workers at least will benefit from the 48-hour directive.

The debate got off to a bad start when the Minister for Railways and Roads accused many Opposition Members of being paid mouthpieces of the rail workers or the unions. In the past, I was sponsored by the National Union of Rail, Maritime and Transport Workers. Conservative Members who look at the Register of Members' Interests will see that I have declared that 25 per cent. of my election expenses were paid for by the RMT. On the other hand, nobody from the RMT has paid me a penny—[Interruption. The Minister may look up at the ceiling, but I have not received a penny from the RMT to put in my pocket as salary, or as any expense or benefit—not one penny. It is Conservative Members who take —1,000 for asking parliamentary questions, not Labour Members.

It is a pity that the Minister for Railways and Roads is not here. Having made a bad start to the debate, he made his speech and hardly listened to the speech of my hon. Friend the Member for Manchester, Withington (Mr. Bradley). He then disappeared, and has not been seen since. However, I absolve his deputy, the Minister for Transport in London, who has been here throughout the debate, and whom I commend for listening to it all. That is not always the case; he has listened, and I am sure that we will get a good winding-up speech as a result.

I will refer to the problems of privatisation in a moment, but whether the system can be renationalised has been mentioned. I was pleased to hear my hon. Friend the Member for Manchester, Wythenshawe—

Mr. Bradley

Withington.

Dr. Marek

I am sorry. I live only 50 miles from Manchester, and I should know better. My hon. Friend the Member for Withington said that, under the next Labour Government. Railtrack would be publicly owned and publicly accountable. Those were excellent words. We need that for the establishment of an integrated system. I shall give examples in due course.

One way of doing that would be to insist that Railtrack lowers access charges to franchisees. In that case, Railtrack would need public subsidy. None of the Conservative Members who have spoken mentioned the fact that an enormous amount of public subsidy still goes into the railway system. If track access charges were reduced and Railtrack received public subsidy, equity could be taken in return. I imagine that Railtrack could be nationalised within a couple of years—with no trouble. If that public subsidy was not available, the entire system would stop—not tomorrow, but in 20 minutes. We must be clear that an important public interest is involved and that it must be maintained.

I do not argue that everything that Conservative Members have said is wrong. Of course there are advantages in allowing private individuals to exercise their entrepreneurship in operating services or parts of services. Some of that has been done reasonably well. By and large, though, it has been froth—some of it important froth—and the real problem facing the railway system now in its semi-privatised state is the lack of finance, investment, traction, rolling stock and proper facilities at stations.

Nothing will change that unless the method of financing is reassessed and the Government make a serious attempt to move passengers and freight on to the railways. I do not have the figures, but well over 90 per cent. of freight is carried by road—let us say 94 per cent. If the amount of freight carried on the railway was doubled, 88 per cent. would still be carried by road. The problem is huge. I am not confident that the next Labour Administration will be up to the task. It requires a Government with the will and the powers to tackle the whole unhappy situation.

I hope that, if the hon. Member for Blaby is going to Norfolk, he will go by train. It is Friday, so the roads will be blocked.

Mr. Robathan

I walked here.

Dr. Marek

I walked here as well. There is clearly much to be gained by Members of Parliament travelling from their constituencies by train or other forms of public transport—or, preferably, by foot, if that is possible. I have listened to the points made by other hon. Members. I welcome the fact that mobile telephones and walkmans have been banned from some railway carriages. Check-in facilities on the Gatwick Express will be helpful to the average passenger. I have no argument with such developments.

I regret, however, the loss of integration in services—for example, in pricing. It should be simple for a passenger arriving from my part of the world, north Wales, to turn up at Victoria and get the next train to Gatwick, whether it is the Gatwick Express, a stopping train that goes as far as Three Bridges or a Brighton express. We cannot do that now. By getting on the wrong train, people face penalty payments. Competition has led to differences in ticket prices. I do not oppose competition—it has some merit—but too much competition leads to a loss of integration and traveller convenience. Passengers who buy rail tickets should be able to travel from one part of the country to another with as few restrictions as possible.

Delays in the London area have increased. A friend who lives in Lee, south-east London, has used the line from Lee to Charing Cross for more than 30 years. I remember using the line from New Cross Gate to Charing Cross when I was a student 30 years ago and I do not recall many delays on the trains to London Bridge—although there were difficulties at Borough Market junction, which probably still occur. My friend told me only yesterday that trains are often delayed by five, 10 or 15 minutes before they reach London Bridge station. That is only anecdotal evidence but it is provided by someone who has used the service for 30 years and I think that we should take it seriously. It stands in stark contrast to the claims of many Conservative Members.

There are other problems. Some 20 or 30 years ago, trains on north Kent lines used to have four seats across—two on each side with a corridor down the middle. The much vaunted Networkers—which are still experiencing problems—have five seats across. I travelled on a Networker train some time ago and I could not sit in the seat because the pitch was too tight. There was a small well in the back of the seat in front of me and, if I was careful, I could slot my knees into it, but it was an uncomfortable journey.

I think that trains carrying passengers five abreast on the British gauge are not suitable for journeys of up to one hour and 40 minutes, for example, as from Victoria to Ramsgate. I do not doubt that rail passengers can stand for journeys of 20 minutes or sit in cattle-like conditions for 30 or 40 minutes, but why do we build down to a standard with every new generation of trains? That does not always happen, but it is what we have done with the South Eastern electrics. I do not applaud the new developments in trains. We must lift our horizons. It remains to be seen whether the investment in South. West Trains and elsewhere to which Conservative Members referred will provide better standard, more comfortable trains. I suspend judgment until I see what happens.

I apologise to hon. Members from other parts of the country, but I shall now restrict my remarks to the Wrexham area in my constituency and illustrate how privatisation has affected local services. First, I refer to the west coast and north Wales main lines. Until 1991, six trains travelled from Euston to Holyhead each day. Privatisation plans were being drawn up at that time and the Government were preparing for the 1992 election. They clearly asked civil servants to consider how to privatise the railways. As a consequence, there was a general change in British Rail's attitude to developing its services and passenger facilities.

The service in the Wrexham area began to go downhill after 1992, and there has been no improvement since privatisation and the introduction of franchising. The six InterCity trains that used to travel from Euston to Holyhead were powered electrically as far as Crewe, where there was an engine change, and then continued to Holyhead.

At that time, it was deemed that class 47s would be life expired after a certain time and that certain changes would have to be made. After much debate, it was decided to run diesel under the wires between Crewe and Euston and to have high-speed trains on the service. However, only three services in each direction were operated. It is getting worse. Last year, those three services came down to about two and a half, because the last train from Euston to Holyhead, at about 20.05 or 20.10, is no longer an HST. It is electrically hauled as far as Crewe, where the engine is changed and then some old engine—probably some class 37—is found and it is hauled by diesel from Crewe to Holyhead.

Why? Because under the old British Rail there was integration, and HSTs were maintained at Plymouth—there was a depot at Old Oak. Since the system was split up, the west coast main line has had three sets for use on the Holyhead service. Those sets cannot, however, be maintained in the integrated fashion that they once were, with the result that they have to go to Manchester for servicing, and it is simply not possible for the sets, in rotation, to be maintained in Manchester properly and efficiently, keeping the three services in each direction HST hauled all the way. That is an excellent example of where privatisation has worsened the service for the ordinary passenger. We now have a service that takes longer, that grumbles through the Welsh countryside after it reaches Wales from Chester to Holyhead, and there is a delay at Crewe. There has been a worsening of the conditions and the service.

Worse is to come. The franchising director's draft minimum passenger service requirement for the service stipulates not that three trains should be run each day in each direction, but only two. Why is the minimum PSR for north Wales going to be worse? I suspect that it is simply because there is no money in that service. There is money in services between London and Manchester, but I am not sure that there is in services between London and Liverpool. There is money on the east coast main line, but most of the rail network does not provide money, with the result that services will be provided at the lowest common denominator, with very little being added, because most of the franchise operators will depend on subsidy to be able to please their shareholders. If they are to depend on subsidy to please their shareholders, they will want to spend as little of their subsidy as possible and provide as few services as possible.

I suspect that the franchise operator, who I know has been told by the Government to speed everything up and flog it all off before the next general election, never mind how it is done, has no choice but to accept the dictates of the Government. I regularly notice on the north Wales main line that the maintenance of the HST sets is not as good as it was. They are in bad condition. Often, there are only seven carriages in a set, when there should be eight. The reason, of course, is that one of the carriages has had to be taken out because it has not been fit for use. The restaurant car on the last train from Euston has disappeared. It is not possible to get a meal or any refreshment on that train. That line is run down because there is no money in it for the private operator, and the present management—the line is not quite franchised, but they are there to try to get the contract—will go down to the lowest common denominator to provide the service.

It would be useful if the Minister could place in the Library a list of the times during the past six months when the Euston to Holyhead trains were held up or more than 10 minutes late arriving at Holyhead or Euston. The list would be long, and it would show that passengers and the public in north Wales are dissatisfied with the standard of passenger services on the west coast main line.

Wrexham had two-hourly services, which were increased to hourly services until 1991, following pressure from Members of Parliament and others. After that, they were reduced to two-hourly services, and the gap between trains from Wrexham to Chester is now sometimes more than two hours. Privatisation has been detrimental to my constituents. I shall be interested to know whether the Minister has a solution to the problem we face in Wrexham.

If people wish to travel from Wrexham to London, they have two ways of doing it. They can either take a Sprinter to Wolverhampton and Birmingham and take the InterCity service to Euston, or take a Sprinter 12 miles to Chester, where they can take the west coast main line InterCity service and travel in reasonable comfort to Euston—although it is a bone-shaking journey, and has got so bad that it is impossible to read, let alone write.

Mr. Jon Owen Jones

rose—

Dr. Marek

I shall not give way as I have an important matter to raise.

The journey via Birmingham takes roughly four hours. It can take as little as two hours 46 minutes via Chester—it was timetabled to take two hours 46 minutes in the summer of 1993. The Wrexham to Chester section is run by the regional railway company, Centro. It is not in its interest, as a sector operator, to provide good connections at Chester for passengers who are travelling only 12 miles from Wrexham to Chester and transferring their patronage to another company. Centro would far rather that passengers travel from Wrexham in a grotty Sprinter all the way to the midlands—so that the company can secure more revenue—and change to InterCity.

The only solution to that problem is for the franchising director to specify detailed conditions for connections at Chester. In the draft minimum passenger requirement, no such conditions were specified. The franchising director tells me that he will consider doing that, but I do not think that they will be sufficient. At present, when a passenger travels from Wrexham to London via Chester, the train from Wrexham to Chester arrives about 10 minutes before the train from Chester to Crewe and Euston. However, on the way back to Wrexham from London, the passenger arrives at Chester but the connecting train to Wrexham has left 10 minutes before, so he has to wait one hour 50 minutes.

Wrexham is quite a large place—it has a population of 120,000—but if one finds a connecting train there it is by sheer good fortune, not because of the system. My contention is that privatisation does not help integration or provide good passenger connections.

Railtrack, a privatised company, is supposedly dedicated to the provision of good transport facilities and good passenger connections. It proposes to close Wrexham Central station because it wants to develop the site and make a killing with a grotty development company called Trinity Investments Ltd. It wants to put up some retail sheds and flog them under a commercial lease, make a killing and then disappear.

My respect for Railtrack has been lowered because it has been taken in by this development scheme. There is a proposal before the rail users consultative committee that the station should be closed, that 350 yd of track should be taken up and that a new station should be built about 350 yd further away from the town centre. That means that my constituents will have to walk 700 yd each time they want to commute to the town centre or go shopping there.

The Labour council is supporting the scheme. It is beyond belief that such a council should support the first instance under the privatised regime of Railtrack trying to close railways to make a development killing to benefit its shareholders. The old council granted planning permission, and I suppose that it had an excuse in that it acted in a quasi-judicial capacity. I hope that the new council will object to the scheme, which would rip off the taxpayer and considerably inconvenience my constituents.

Railtrack representatives were in evidence at last year's Labour party conference. It did not have the franchise at that time, and I had a conversation with the chief executive, who said that he would not pursue any specific line or make any irrevocable decisions without letting me know. No knowledge of what he was about to do has been provided. It is regrettable that Railtrack representatives were not at this year's party conference in Blackpool. There was no reason for them to be there but, of course, they now hold a franchise and Members of Parliament can go to hell—it does not matter if passengers are inconvenienced or have arthritis or are disabled; under British company law, the only people who count are the shareholders. There is no advantage in privatisation.

The closure of Wrexham Central station is a major matter and will be the first closure of its kind. Would my hon. Friend the Member for Withington and the Minister care to visit Wrexham and be my guest for an hour so that I may show them the exact situation? I should be grateful if they could accept my invitation. Unless we get it right and insist on Railtrack promoting first the interests of the passenger and not those of the shareholder, whatever the changes—I think that they are wrong—the net result will be that the public will have an even worse railway system than they have at present.

I hope that these matters are taken seriously. I look forward to the general election because I am confident that the Conservatives will be out of office and that we shall have a better Government who have the real interests of the travelling public at heart.

1.43 pm

Mr. Winston Churchill (Davyhulme)

It is a matter of great regret that the hon. Member for Wrexham (Dr. Marek) has such a love affair with the sound of his own voice that he rabbited on for some 32 minutes and crowded out two of my hon. Friends.

In opening the debate, the hon. Member for Manchester, Withington (Mr. Bradley) told us that it is not the intention of new Labour to renationalise the rail industry. Why on earth not? Has it no longer the courage of its convictions? Or has it belatedly come to the realisation that state control is a disaster? If the latter, why is the Labour party committing itself to taking back political control of the rail industry, into the hands of the Secretary of State? I for one have no hesitation in saying that whatever the state can do, private enterprise can do better, cheaper and more efficiently. I have never accepted the socialist view, so brazenly articulated by the late Douglas Jay, that the man in Whitehall knows best". Although many Opposition Members still cling to that nostrum, it is patently bunk to imagine that politicians and bureaucrats in Whitehall have any concept of how to run a railway, let alone any other nationalised industry.

The state ownership of the railways has been a disaster. For the most part, the trains were old, dirty, overcrowded and unpunctual. The service provided to the travelling public was a scandal and much of the investment was misplaced. In the case of the east coat main line, £515 million was sunk into electrification and the re-equipment of the line. Do electric trains run faster than the diesel HS125s? No, the answer is that they do not, because the overhead power lines will not deliver enough steady power to allow higher speeds, and the signalling system is inadequate. Are electric trains any cheaper to run? Again, the answer is no. Electricity and maintenance of the overhead cables cost more than the diesel fuel, and the electric locomotives are less reliable than the diesel ones. It is the electric locomotives that do not work when the wrong kind of snow is falling. The electrification of the east coast main line was a purely political decision and the resources would have been far better spent on new rolling stock and signalling equipment.

The only worry that I have about rail privatisation is why it has taken a Tory Government 17 years, and —16 billion in the process, to privatise that disaster area of the nationalised industries. The total absence of any financial imperative under the nationalised regime led to an appalling state of affairs on the railways. What but a nationalised undertaking would do all its maintenance between 9 am and 5 pm, the very time when the maximum number of train sets were needed to carry passengers, and for the all too simple reason that that was a more convenient time for its staff?

Time and again, the staff came before the interests of the travelling public. When managers of the east coast main line were asked why the trains were so dirty and whether they did not have a train-washing machine, they replied that they had one such machine, but that it did not work very well in the winter months. The managers were asked why they did not employ gangs overnight to clean the trains when they were in the terminals. They replied that they had thought of that, but they could not do that because of the power in the overhead cables. Nobody had the wit to pick up a telephone to ask the person who controlled the electricity to switch it off for two or three hours while people were cleaning the trains at the main terminals.

A major scandal is that the greater part of British Rail's state-of-the-art signalling system makes no provision for efficient, direct voice contact between the signal box and the driver's cab. We are back to the days of Thomas the tank engine. If the driver wishes to speak to the fat controller—and the amiable figure of the right hon. Member for Kingston upon Hull, East (Mr. Prescott) comes to mind—he has to stop the train at a signal, dismount and go to a box on the signal tower to use the telephone.

At many major terminals such as King's Cross, Railtrack refuses to limit access to the station at night because the Post Office would complain". As a result, passengers must run the gauntlet of muggers, tramps sleeping rough, drug dealers and even physical attack. That is outrageous and I trust that the Minister will take it up with Railtrack and require it to take prompt action.

Another scandal for too long has been the treatment of disabled passengers in wheelchairs, who, under nationalised railways, except on InterCity trains, were consigned to the guards van, which was unheated and had no facilities. The right hon. Member for Kingston upon Hull, East has said that the only benefit from rail privatisation would be a new livery. That is already being disproved. The travelling public already enjoy cleaner trains, faster journey times and greater reliability of service.

The industry is being transformed, but it is important, if it is to realise its full potential, that the obstacles to large-scale investment be removed. The principal obstacle remains the Treasury. It is important that my right hon. Friend the Secretary of State for Transport and my right hon. and learned Friend the Chancellor of the Exchequer deal with that problem.

My hon. Friend the Member for Epping Forest (Mr. Norris) identified the dead hand of the Treasury as being the principal brake on rail investment in the past. Tragically, it remains so. The privatised rail network is having its investment constrained by the Treasury—not directly of course, but indirectly—by a refusal to grant franchises beyond seven to 15 years. Indeed, in most cases, the period is restricted to seven years. Within that brief time span, it is impossible to amortise new buildings and rolling stock. That acts as a supreme disincentive to the large-scale investment that would otherwise be made.

Either the franchises must be extended to 35 years or arrangements must be made to give the operator a guarantee that he will be able to sell to a successor the unamortised portion of his investment, if the operator's franchise is not renewed. I trust that my hon. Friend the Minister with deal urgently with the matter. It is the one remaining obstacle to making an enormous success of the railways, and it is urgent that it be removed.

It is evident that the Labour Opposition have still not been able to turn their back finally on the idea that commercial entities such as the railways would be better run if they were brought back within political control. If they are pledged to do that with the railways, why not with buses, airlines and all other previously nationalised industries? New Labour is a party that is suffering from acute schizophrenia, putting itself through all sorts of uncomfortable contortions to make itself electable. It is not comfortable in its new non-socialist clothes and, in consequence, its policies are a shambles, nowhere more so than in its attitude to a privatised rail network. It is clear that it needs to lose a few more elections before it is fit to govern Britain.

1.53 pm

Ms Glenda Jackson (Hampstead and Highgate)

It is surely a shame that the hon. Member for Davyhulme (Mr. Churchill), who bears a name that reverberates in a parliamentary sense in this place and throughout the world, chose to open his remarks with an insulting definition of the contribution made by my hon. Friend the Member for Wrexham (Dr. Marek), who could speak well for 32 hours, and who has no small experience and intelligence. My hon. Friend spoke specifically and concisely about his constituents' interests and how those interests have been damaged by the Government's rail privatisation policy.

My hon. Friend also spoke of the bad humour with which the debate began. Indeed, Madam Deputy Speaker referred to that ill humour. It began with the Minister of State berating the Labour party for failing to call a debate on rail privatisation since the spring, ignoring the fact that this is the first time for three years that the Government have chosen to call a debate on rail privatisation.

The Minister of State then went on, as regrettably did other Conservative Members, to be somewhat abusive about trade unions, and especially those in the railway industry. He clearly was unaware of the advertisement that had been published by the Conservative and Unionist party in The Guardian on Friday 27 September 1996, headed: If Labour don't want you, we do.

The advertisement says: We will not claim to put your interests above all others. But we pledge not to put any interests above yours. The Conservative Party is for all. We will not abandon you. Clearly, the Conservative and Unionist party is interested in the votes and membership fees of trade union members, but if the idea that a member of a trade union should be part of a board, where he can bring to bear his commitment to the rail industry and many years of experience, is presented to the Government, they find that quite different.

The Minister raised again the tired old hare of Labour Members speaking only as mouthpieces for trade unions. I explained the position, and my hon. Friend the Member for Wrexham went into some detail, defining for Conservative Members the situation between trade unionists and the Labour party. Regrettably, the Minister did not inform the House of his interest, which is in the Register of Members' Interests, as the parliamentary adviser to British Bus plc. As we know, there are many rail franchise operators who also operate buses. To add insult to injury, the Minister is no longer in his place. I trust that his colleagues will ensure that he reads my remarks in the official record.

Mr. Jon Owen Jones

Does my hon. Friend recall that the Minister referred to the number of Tory Members in the Chamber compared to Opposition Members? Has my hon. Friend noticed that there are more than twice the number of Opposition Members in their places than Conservative Members, thereby showing where the true long-term interests of the railway lie within the House?

Ms Jackson

I thank my hon. Friend for his intervention. Even more importantly, the British people know where the real, true interest and commitment to a properly integrated railway system is, and that is certainly not to be found among those on the Conservative Benches.

Mr. Bowis

Will the hon. Lady confirm that the hon. Member for Manchester, Withington (Mr. Bradley) was passed a note by my hon. Friend the Minister of State, explaining that he had to leave the House to speak at a conference and offering his apologies to those who sit on the Opposition Front Bench? Will she also confirm that there is no reference to a paid consultancy in respect of my hon. Friend the Minister of State in the Register of Members' Interests? Indeed, to have such a consultancy would be entirely in breach of the rules for Ministers. Will she please withdraw that allegation?

Ms Jackson

I am prepared to acknowledge both of the Minister's remarks, but that in no wise removes my initial statement that the Minister began the debate with no small ill humour. Possibly that could be because he had come to realise that he is a Minister in a Government who have fewer than six months before a general election and are facing the imminent prospect of becoming a minority Administration. He realised that a morning spent in the House attempting to defend rail privatisation would not necessarily be the wisest use of his time. That was obviously clear to the Secretary of State for Transport, who has not attended the debate—clearly, he is a man who knows a vulnerable parliamentary majority and a deeply unpopular policy when he sees them. In the best tradition of the officer classes, he allowed his men to storm over the top alone.

I pay tribute to Conservative Members who attempted to defend the shambles that is privatisation. First, there was the issue of services or, as Conservative Members claim, improved services, post-privatisation.

The hon. Member for Blackpool, South (Mr. Hawkins) mentioned the midland main line and the west coast main line, and painted a picture of a glowing future for the latter under privatisation. That confidence is undermined, however, by the fact that he has leapt on to the chicken run and moved himself away from the north-west. He also mentioned the contribution made by National Express—the same National Express that, in June, received a warning from the Secretary of State for Trade and Industry that it would be referred to the Monopolies and Mergers Commission unless it removed point-to-point coach services from London to Derby, Chesterfield, Leicester, Sheffield and Nottingham. It is also the same National Express that recently placed a series of advertisements urging passengers to take coaches rather than the train to the Phoenix and Reading rock festivals.

I should say, to be fair to him, that the hon. Member for Blaby (Mr. Robathan) was generous in his acknowledgement of the commitment made by many railway employees. He also—although he was not alone—described BR as incompetent, from beginning to end, in its stewardship of our railways. However, services offered by BR, such as InterCity, have been copied around the world. BR took InterCity into profit in 1988, and, between 1975 and 1995, it opened or reopened 242 stations and 25 lines for passenger services.

BR had an established international standing. It was generally acknowledged to be one of the most efficient railways in Europe, and it was the least subsidised. Support from public funds, as a proportion of gross domestic product, was 0.18 per cent. in Britain, compared with an average of 0.59 per cent. for other European railways.

The hon. Member for Blaby also referred to improvements on our railways for cyclists—a move that everyone will welcome. Bicycles were also mentioned by the hon. Member for Epping Forest (Mr. Norris), but in relation to Great Western. What he failed to mention was that the Government's preferred bidder for the GWR franchise was not the management buy-out team, which consisted entirely of former BR employees, but a company called Resurgent Railways, which was run by a failed double-glazing salesman and a vice-chairman of the Huntingdon Conservative association. The only reason why Resurgent Railways is not running the service is that my hon. Friend the Member for Cunninghame, North (Mr. Wilson) walked round to Companies House and exposed its record.

Conservative Members also mentioned South East Trains, which, as has been well publicised, is a subsidiary of Compagnie Générale des Eaux, the French multinational. CGE is the organisation that recently saw its president charged with corruption and 20 executives of one of its main subsidiaries arrested on bribery charges. It was also described by a French judge as one of the two most corrupt companies in France. That prompted my hon. Friend the Member for Cunninghame, North to suggest that the Government were probably desperately trying to track down the second most corrupt company. The fact that the Government regard fraud and bribery as indicative of managerial competence and suitability says almost as much about the Government as it does about the entire, shabby privatisation process.

Hon. Members from both sides of the House could sit here all day and swap anecdotes about services that have improved or services that have declined. Many of us have direct personal experience of the latter. Surely, however, the real test of the changes that privatisation is making to our network is how they are perceived and received by the passengers who are using them. In his excellent speech, my hon. Friend the Member for Manchester, Withington (Mr. Bradley) mentioned the Central Rail Users Consultative Committee's annual report. The committee is a statutory body, established by the Government, with the responsibility of representing the views of rail users. Its annual report refers to the rise and rise in complaints—complaints about punctuality; complaints about overcrowding; complaints about the on-train environment and facilities.

Mr. Robathan

It has been brought to my attention that some opponents of privatisation—including the Labour party, it has been suggested—have encouraged people to write complaining about the railways just so that they can point to a growth in the number of complaints. Will the hon. Lady deny that the Labour party has encouraged anybody to complain about the new railway system?

Ms Jackson

In denying what the hon. Member for Blaby has said, I have to ask whether there are any depths to which the Conservatives are not prepared to run in their contempt for the British electorate. Does he seriously expect hon. Members to believe that the British people, who already work far longer hours than others—those who are fortunate enough to have a job under this Government—would spend valuable spare time writing with complaints about events that they had not directly experienced? That is bizarre. It is little wonder that the country is crying out for a change of Government. That was the passengers' verdict on rail privatisation—a 14 per cent. jump in complaints in just 12 months. The figures are hardly a ringing endorsement of rail privatisation. They are, however, evidence of the failure of the Government's policies.

We have heard from the Minister of the service improvements promised under privatisation. I should be interested to know the Minister's response to Mr. Eric Midwinter, chairman of the London regional passenger committee, who said of his committee's investigations: In only one case … has it been able to identify a real service improvement in any of the public service requirements it has considered, and then only in respect of one train. I am sure that the users of that service welcome any improvements, but the destruction of the entire national rail network purely to guarantee the provision of one rail service seems over-dramatic and drastic even by the Government's standards.

Mr. Bowis

Will the hon. Lady give way?

Ms Jackson

This must be the last time.

Mr. Bowis

It will be. Mr. Midwinter has not been the chairman of that committee for some time. Can the hon. Lady tell the House how many months privatisation had been running when that former chairman may have made that remark?

Ms Jackson

It would seem that all the Government's promises are dependent on an ever-lengthening time scale. That is not what we were told when they introduced rail privatisation. We were told that there would be an immediate, recognisable, provable improvement in services throughout the network.

Anyone wanting a true flavour of what privatisation holds in store for the quality of rail services should read the comments of Mr. John Seymour, published in The Independent on 5 February 1996. Mr. Seymour had the historic distinction of being the first passenger to be carried by a private rail service in this country. He was on the 1.50 am Fishguard to Paddington service. It was a bus and it was late. Said Mr. Seymour: We weren't given any information at the station at all. Nobody seemed to know why there was no train. Everything from privatisation, work on the line and an accident were put forward as excuses. Next time I come I'm going to fly.

That is the Government's definition of success: soaring complaints from disgruntled passengers who justifiably regard privatisation as a failure. They know that it is a [Ms Jackson] failure not just because they are paying the price in poorer service quality. Ministers have referred to the magical fare cap, which, they have boasted in the past, will keep fares pegged to inflation. I remind them of the comments of the right hon. Member for Peterborough (Dr. Mawhinney), who boldly stated last May: Under nationalisation, passengers have regularly had to pay fare increases above the rate of inflation. This is to change … Now passengers can enjoy a period of stability and then a real fall in many rail fares. In November, the Minister for Railways and Roads, who should be present but who, I gather, has a previous engagement, admitted to me in a parliamentary answer that as few as 47 per cent. of commuter rail fares and 21 per cent. of inter-city fares would be capped. In January, fares rose by as much as 8 per cent.—more than double the current inflation rate.

It was a particularly embarrassing incident for Ministers when they had to explain to one of their senior colleagues, the Secretary of State for Social Security, why travellers from his St. Albans constituency, having been pledged a cut in fares, turned up at the station to find that the somewhat ironically titled "cheap day return" had risen by double the rate of inflation. It was even more embarrassing for them when they had to explain to the Secretary of State for Transport why fares from his Ealing constituency had risen by a similar amount. It must have been positively nightmarish for the hon. Member for Slough (Mr. Watts) when he had to explain to himself why he had pledged to peg fares and had then raised fares in his constituency by more than 30 per cent. above inflation.

In all seriousness, is it any wonder that the public are so disenchanted with the Government and this privatisation when a pledge made in May is so comprehensively broken fewer than six months later? We know that privatisation was supposed to improve services, and that has failed. We know that it was supposed to hold down fares; it has failed there also.

A third great pledge—that privatisation would secure massive amounts of private investment—was alluded to by the Minister. Let us take that supposed new investment piece by piece. First, we are experiencing the longest drought in new rolling stock manufacture since British Rail was nationalised in 1948. The historic railway manufacturing works at York have closed for good, with the loss of hundreds of jobs also at Derby. Thousands of commuters continue to travel on rolling stock that is up to 30 years old, crowded and uncomfortable. As the report into the recent Watford rail crash will prove—if Railtrack has the courage to publish it rather than see it distributed through a series of selective leaks—the rolling stock is also dangerous in the event of collision.

My hon. Friends the Members for Crewe and Nantwich (Mrs. Dunwoody) and for Liverpool, Broadgreen (Mrs. Kennedy) and the hon. Member for Eastleigh (Mr. Chidgey) spoke about the possible deterioration of safety in what used to be an integrated network. Those are extremely serious concerns, yet there would seem to be nothing that the Government either wish to do or can do about it. Indeed, so bad has the drought in rolling stock become that in March, a regional railway, South Wales and West, approached the Steam Town train museum in north Lancashire to ask if it could hire some of its 40-year-old exhibits because, said a spokesman for the company, we needed extra coaches and these carriages offer better value.

I trust that the Minister for Transport in London, who is no doubt preparing to regale us with tales of franchise contracts and commitments to new train orders, will answer some simple questions. First, in the past year, before it handed over ownership of rolling stock to the three ROSCOs, British Rail had more than 1,600 locomotives and 10,000 coaches. How many new units are currently on the ROSCOs' order books—not planned or proposed as part of a franchise agreement, but currently on the order books? Secondly, the Minister talked of extended franchises, with rolling stock clauses contained in franchise agreements. My understanding, however, is that in most, if not all, of those cases, franchises are of the conventional length of approximately seven years with an option for franchisees to extend the franchise once new rolling stock is ordered.

If a franchisee comes to the Minister after two or three years and says that it cannot afford the new rolling stock after all, what sanctions will be available? Will the franchise be revoked? Will the franchisee be prevented from bidding for an extension of the franchise once it has expired? Will there be any financial penalties? If not, that will underline how privatisation is failing to deliver any new investment in rolling stock and is delivering merely paper pledges that will be ripped up the second that the army of accountants now running our rail network casts a negative eye over the balance sheets.

It is the same story with the Minister's grandiose statements about investment in infrastructure. Railtrack's network management statement announces investment of —10 billion over the next 10 years, amounting to an annual investment programme of —1 billion. The Prime Minister leapt on that statement in the House, claiming that such a high level of investment would not occur in the public sector. Unfortunately, he had not bothered to check his figures or facts; if he had, he would have known that in 1992–93, the last year before the Government embarked on their great privatisation experiment, British Rail invested —1.35 billion on infrastructure alone—£35 million more than we have been promised by Mr. Horton and his colleagues.

Since 1948, total average investment by the publicly owned British Rail has exceeded £1.2 billion a year—more than the investment pledged by the private infrastructure and rolling stock companies combined. Moreover, in evidence to the Transport Select Committee, Railtrack stated: annual steady state maintenance should be £800 million which does not provide for any catching up of outstanding work … Renewals are given as £570 million … so steady state spending on the rail infrastructure should not be less than £1370m. That is the reality of infrastructure investment under privatisation: investment will fall not only below the levels achieved while BR was in the public sector, but below what Railtrack itself says is necessary to maintain the network.

For those in any doubt about the impact of the declining investment programme, I offer the example of an incident that took place near my constituency on the very day that Railtrack was floated. The incident began when more than 100 bottles of South African and Australian wine were found mysteriously rolling around the railway track near Primrose hill. After intensive investigation, the bottles were traced to some ransacked wagons operated by Freightliner that had been forced to remain in vulnerable sidings because Railtrack had failed to complete the promised maintenance work that would have allowed them to proceed to their destination.

So frequent were the delays in the area that a Freightliner official was quoted as saying: The thieves struck lucky. Normally, the containers would have been carrying boring stuff. It says much about the state of our railway network that modern-day highwaymen are considered lucky not because they find a vulnerable train but because it contains rick pickings.

Mr. Jessel

On a point of order, Mr. Deputy Speaker. Is it in order for the hon. Member for Hampstead and Highgate (Ms Jackson), who has been on her feet since—

Mr. Deputy Speaker

Order. The hon. Gentleman knows full well that it is in order. The hon. Lady has the Floor.

Ms Jackson

Thank you, Mr. Deputy Speaker.

More than £2 billion of taxpayers' money has been thrown away on privatisation. That money could have been invested in the network or used to buy school books or hospital beds; it could have provided us with more police on the beat; it could even have been used to cut more than 1p from the basic rate of income tax; but it was squandered on nothing more substantial than dogma. Conservative Members should remember that fact when they are out on the doorsteps this May, fighting to protect their slender majorities. Come the next election, the price for the so-called success of rail privatisation will be paid not only by the British people but by Conservative Members, their party, and their disgraceful Government.

2.19 pm

The Minister for Transport in London (Mr. John Bowis)

The people who have paid the price of the discourtesy of the hon. Member for Hampstead and Highgate (Ms Jackson) are the hon. Members who would have liked me to reply to the debate in detail. Nothing that she said gave us any clue about what her party might do were it to have the good fortune to be in charge of our railway system. The shadow railway team is more a ghost train team, although it has hardly the ghost of a shadow of policy.

Labour said that railways must be run by the state and that it would not allow rail franchising to happen. It is the party that believes that the taxpayer should pay, pay and pay again to preserve the legacy of the unpunctual, uncleaned, unimaginative, strike-ridden service that it knew and loved when it was in power. It yearns for the good old days of Jimmy Knapp and its first pledge is to put him on the British Railways Board.

Labour is to give British Rail a new name. Tunnel Vision plc or Backtrack to the Future Ltd. come to mind as it seeks to make the Rail Regulator its creature by removing his independence and ability to act impartially in the interest of the travelling public and an efficient rail system. Impartiality out, union bosses in; in with state control, out with enterprise. That sums up Labour's policy.

The previous Labour spokesman, the hon. Member for Birmingham, Ladywood (Ms Short), confirmed that its policy was public ownership. Labour's leader confirmed that in March at the Scottish Labour conference when he said: New Britain … where our railways are … publicly owned". The hon. Member for Manchester, Withington (Mr. Bradley) said it again today, adding the word "full"—its policy is full public ownership.

The hon. Member for Ladywood said: I don't want to use the term renationalise because it implies a blank cheque". Too right it does. It is a cheque drawn on the account of every British taxpayer. Not using the term renationalise will not reduce the bill to every taxpayer for restoring state control. Opposition Members will not be able to fool the British people into thinking otherwise.

It is a matter not only of the cost of buying back the ownership of trains, track and freight companies but of forgoing the dramatic increase in investment in new and better services that privatisation has already achieved. Labour would either forgo the investment or make the taxpayer pay for it. Its policy is to renationalise, re-bill the taxpayer and return to the never-never land where better services were never this year or next year but some time or never. For the benefit of the hon. Member for Hampstead and Highgate, I might say that that is a policy scripted by Kafka, directed by Khrushchev, with a walk-on, walk-out part for Jimmy Knapp.

The debate has helped to confirm what many rail passengers already know: rail privatisation is delivering and will continue to deliver enormous benefits for the travelling public. That means new investment, extra services, better customer care, tougher passenger charters and a much better deal for the taxpayer than was possible under nationalised British Rail. A railway renaissance is going full steam ahead and it is time that our critics started to acknowledge that. That was even the theme of the opening paragraph of the speech of the hon. Member for Withington. It was certainly that of Conservative Members.

My hon. Friend the Member for Epping Forest (Mr. Norris) made what I hardly dare describe as his maiden speech since returning to the Back Benches. Christopher Isherwood's book, "Mr. Norris Changes Trains", comes to mind. My hon. Friend has done that in both senses. He has changed trains in the sense that he has changed his job, but he has also changed trains for the better as part of the Government's transport team. He referred to station safety, which I take seriously. I recently issued a challenge to the rail industry to join me in developing a national secure station scheme, to give public recognition to stations that work to create a safe and secure environment for their passengers and staff. Station safety is the way to encourage people to use stations, especially at night. We would do well to heed his points about visibility of security measures.

My hon. Friend the Member for Davyhulme (Mr. Churchill) referred in his forceful speech, as did the hon. Member for Eastleigh (Mr. Chidgey), to what I might describe as the seven-year itch in respect of the planning for franchising. I have some comfort for my hon. Friend, who referred to the fact that franchises of up to 15 years have been awarded. There are three 15-year franchises and several 10-year franchises, and they are geared to the investment programme, particularly for the rolling stock necessary to improve the service. We can be a little less ungenerous to the Treasury on that matter, but I have no doubt that the Treasury, as always at this time of year, is listening to what we are saying.

The hon. Member for Cardiff, Central (Mr. Jones) referred to Christmas fares, and I can assure him that there is no question of fares being increased on the Cardiff line. All that is happening is that one type of cheap day fare will be restricted for a limited period so as to limit overcrowding. Those fares, as well as others elsewhere, are regulated and capped at the RPI for the next two years, and at the RPI minus one for four years thereafter. That is a commitment that we shall keep.

The hon. Member for Crewe and Nantwich (Mrs. Dunwoody)—who, like my hon. Friend the Member for Epping Forest, gave me notice that she could not be here for the winding-up speech—referred to safety. I yield to no one in my determination to keep safety at the top of the agenda on our railways. We have a good rail safety record and we are determined to keep it. Some of the nonsense that is talked from time to time about there being no independent safety executive needs to be nailed. We have the Health and Safety Executive, which is independent of the railways and the Government, and which has the task of ensuring that safety measures are implemented and maintained.

We consulted the Health and Safety Executive in the run-up to privatisation, and all its requirements were accepted by the Government and the railways and have been put into place. The hon. Member for Crewe and Nantwich also referred to compensation, and she should know that, since 1994, we have had a single point of reference for people wishing to claim compensation. There is no question of people not knowing where to go. A clear undertaking has been signed up to by everyone concerned, and there is an arbitration system to allot the elements of blame, and hence compensation.

My hon. Friend the Member for Twickenham (Mr. Jessel) referred to cold winters in the future. I cannot predict the weather—even new Labour cannot claim to do that. But as a result of privatisation, there is a requirement on Railtrack, through financial incentives, to make sure that services continue to be provided. To that extent, we have a greater power to ensure that Railtrack takes the necessary steps. If not, it will lose financially. I shall draw those matters, as well as the points that my hon. Friend made about the taxi queue at Waterloo, to Railtrack's attention. He referred also to matters for which South West Trains is responsible.

The hon. Member for Liverpool, Broadgreen (Mrs. Kennedy) made some important points about safety on the railway lines, and particularly about the safety of children. I shall read her speech carefully to see what she said about education through schools and the need to be constantly vigilant. We know that we cannot protect every inch of track—any more than we can protect every inch of road—from a child running on it because he knows no better, or because he has something mischievous or malevolent in mind. But we shall go on trying to ensure that those matters are taken into account.

Rail privatisation has had its critics over the past four and a half years—every privatisation that preceded it has had its critics. Each privatisation has been dogged by scare stories about deteriorating services, higher prices and vanishing investment, and each one has been triumphantly vindicated. One has only to look at British Airways, British Telecom and others to see how effective privatisation has been. Misrepresentation leads to public concerns. My hon. Friend the Minister for Railways and Roads went through many of the allegations that were made at the time and nailed them one by one with the facts.

The public have begun to understand the enormous benefits that are coming as a result of the Government having had the courage of their convictions and introducing measures to privatise our railways and improve services. That is being reflected even in the press. Modern Railways said: Certainly there is a new spirit abroad which is really encouraging. The Financial Times stated: long awaited improvements have become possible because, behind the scenes, the privatised operators are implementing changes which BR found too difficult to handle". Transport 2000, not usually an ally of ours, published its comment entitled "Were we wrong?" and pointed out the good news stories that are emerging—new trains, extra staff, more bus-rail connections, planning even for space for bicycles on trains—

It being half-past Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.