Railways Bill

HC Deb 19 July 1999 vol 335 cc789-893

Order for Second Reading read.

Madam Speaker

I should inform the House that I have selected the amendment in the name of the Leader of the Opposition.

3.30 pm

The Secretary of State for the Environment, Transport and the Regions (Mr. John Prescott)

I beg to move, That the Bill be now read a Second time.

A year ago we published a new integrated policy. Ours is a transport policy, not just a policy for roads, which appears to be the policy of new Conservatism after the debate last week. Our aim is to improve choice. We want people to have greater choice, rather than a greater dependence on their cars. That means providing a better, more reliable public transport alternative.

The Bill is about providing a more punctual, reliable, accountable railway system as part of an integrated transport system. [Interruption.] The right hon. Member for Wokingham (Mr. Redwood) is still making silly remarks. I should have thought that he had had enough of that this weekend.

Madam Speaker

Order. If hon. Members wish to contribute to the debate, they should seek to catch my eye before doing so.

Mr. Prescott

The British Railways Board and the franchising director are already working closely together as the shadow Strategic Rail Authority. The Bill is about taking the "shadow" out of the title and putting in more powers to enhance the effort already being made on behalf of passengers in developing our national railways.

The Bill meets our manifesto commitment and the policies described in our transport White Paper. It is consistent with the excellent report and recommendations of the Select Committee on the Environment, Transport and Regional Affairs. The Committee's all-party report on the Strategic Rail Authority and regulation said: We support the Government's plan for a Strategic Rail Authority as a practical way of addressing the problems of the restructured railway. The Select Committee also said: The proposal for a strategic body was universally welcomed by our witnesses. Anyone reading that report will see that the proposal was universally welcomed by the range of people who will be affected by the authority's activities. Indeed, the other day, the right hon. Member for Wokingham was arguing on the "Today" programme with a representative of a rail users consultative committee, who was advocating the establishment of a Strategic Rail Authority.

Mr. Patrick McLoughlin (West Derbyshire)

The Secretary of State has just said that the Bill is in line with the recommendations of the Environment, Transport and Regional Affairs Committee. Why, then, is he using this procedure to send the Bill, which he says has been drawn up following the Select Committee's report, back to the Select Committee before it makes further progress?

Mr. Prescott

Those are the new procedures that the House has developed to provide an opportunity for Select Committees to examine Bills. As the Select Committee in this case has reported on the Bill in a most comprehensive manner, I should have thought that it would welcome the opportunity of this debate and of further examination of the Bill. The new procedure treats our Select Committees very seriously.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich)

May I point out that my Committee not only warmly welcomes the chance to examine the Bill but believes that, because it is founded on the work that we have done, in those very few areas where we shall want to raise the odd omission we can contribute something more to the discussion?

Mr. Prescott

I am grateful for that statement of support. If a Bill like this is presented to a Select Committee, it involves hon. Members in serious examination of legislation—sometimes much better than the examination carried out in Standing Committees. Although I may claim from the Dispatch Box that the Bill is consistent with the Select Committee's recommendations, it will be better to listen to what the Committee has to say once it has examined the Bill in detail. That is right and proper, but I believe that the Bill is broadly in line with the Select Committee's recommendations.

More recently, the support that I claim exists from the industry was confirmed by the Director General of the Railways Forum, David Morphet, who said: This Bill is good news for the railways and good news for the transport industry as a whole. As well as forming the basis for a genuine strategic partnership between the Government and rail companies, it ensures Britain's railways are at last at the top of the political agenda. I do not think that anyone could deny that.

Mr. David Heath (Somerton and Frome)

Will the authority's strategic role in promoting the railways explicitly extend to rural areas, not only preserving small stations but reopening some of the ones that we have lost in the past 20 or 30 years?

Mr. Prescott

Very much so. The authority is concerned about the network and can recommend enhancements of the railway system. It has certain funds available to do that. That is one of the reasons why we have given it a strategic role. That will be an important advance in the powers that are available to develop a far better railway system.

Mr. Michael Colvin (Romsey)

My question follows on from that of the hon. Member for Somerton and Frome (Mr. Heath). As the right hon. Gentleman knows, long-haul civil aviation works only where we have good feeder routes and a through-ticketing system. When it comes to renew the franchises for long-haul railway services, will the new Strategic Rail Authority take into account the extent to which those companies are able to provide the feeder services? At the moment, people in my constituency are fortunate in having a bus service from Romsey to Winchester, but that is the only one that they have. Otherwise, they have to resort to the car. Track has been laid. If we do not make full use of that existing track to provide feeder services for long-haul services, they will not work. That is why I wish such services to be a criterion when the authority comes to renew licences, which should be for longer than seven years.

Mr. Prescott

Enhancement of the system is very important, as is how the franchise negotiations take place. There will be some statements about that later, but we have to keep it very much in mind that we do not have to take the traditional patterns but should look at how we may enhance the railway system itself. That is one of the purposes of the Strategic Rail Authority—to take those points on board.

The Central Rail Users Consultative Committee said—

Mr. John Bercow (Buckingham)

Will the right hon. Gentleman give way?

Mr. Prescott

May I give the quote? Then I will give way.

I have said that the Select Committee has endorsed the Bill and will examine it further and that the industry has welcomed it overwhelmingly. The Central Rail Users Consultative Committee has said—I quote from the deputy chairman, Stewart Francis: At last passengers will see the benefit of strategic rail planning, leading to focused investment to enhance the network. We have long campaigned for effective performance and the incentives and penalties in the Bill should start to deal with these concerns". Therefore, the industry, the Select Committee and consumer representatives fully support the Bill.

Mr. Bercow

Will it be possible for passenger representatives to become members of the Strategic Rail Authority? It is not clear from clause 2 whether that is so. The right hon. Gentleman nods from a sedentary position; I take that as welcome evidence that they will be able to be so represented. Will it be possible, in the spirit of choice and of competition, for the rail authority itself to bid for franchises?

Mr. Prescott

On the first point, consultative bodies can be represented. I intend to have them on the board of the Strategic Rail Authority, but not the chairmen of consultative bodies. I wish to keep the independence of rail consultative bodies, but they will keep a watchful eye on the role of the Strategic Rail Authority and will have direct representation in it. That is a proper balance, keeping that independence and accountability.

With regard to whether the Strategic Rail Authority would have the power to bid for the franchises, it would not be involved in bidding for such franchises, but it has to reserve the power to do so. If there were a breakdown in negotiations, or a failure of a company, there would have to be an operator of last resort and that would be the authority. As anyone would know from examining the Bill and from debates in the House, that was the role that we gave the franchising director. As we are transferring the functions of the franchising director to the Strategic Rail Authority, the Bill does not change what was already in legislation.

Mr. Dale Campbell-Savours (Workington)

My right hon. Friend has spoken of the importance of enhancing the system. Does that include the infrastructure and, in particular, stations? Has my right hon. Friend seen the condition of some of the great railway stations of this country? They are dilapidated; they are falling down; rubble is strewn across areas surrounding tracks. They were never like that in the old days of public ownership. [Interruption.] No, they were not. There has been a marked deterioration in the standard of stations throughout the United Kingdom, which any traveller will notice on the north-west line. Has my right hon. Friend anything to say about that?

Mr. Prescott

The Bill is about raising standards. There has been a growing disparity between the state of our major stations, which have received massive investment and have improved considerably over the past few years, and that of stations that are used less often—and, indeed, some that are often used—and have been allowed to deteriorate. That disparity has prompted concern about investment. The Bill is about enhancement: it is about raising standards in the service, and seeing it as a national service rather than the fragmented privatised service that we inherited.

Mr. Jeremy Corbyn (Islington, North)

I welcome the broad thrust of the Bill, which deals with the planning of investment and with ensuring that the railways work effectively in an integrated transport network.

Under clause 10, the Strategic Rail Authority will, ultimately, be empowered to run services if no other contractor or train operating company wishes to do so. What concerns me is the relationship with Railtrack, which is seeking a large amount of public money for its network improvements: some £11 billion is included in its proposals. Does the Bill provide any opportunity for even a proportion of Railtrack to become publicly owned so that the company—which, potentially, is to receive such a vast amount of public investment—can be made accountable to the public for the money, rather than money being passed to the shareholders in the form of the considerable profits that Railtrack is currently receiving?

Mr. Prescott

The money given to the rail industry is given to the train operating companies, not to Railtrack. Railtrack raises its own resources and receives no public money except through access charges, which are subsidised. As the money does not go directly to Railtrack, the question of Railtrack's accountability for public money does not arise.

An entirely different question is whether Railtrack should be accountable for network services and for the promised development of the infrastructure. One of the first things that I did when I took office was talk to the regulator, who told me that he did not have sufficient powers to force Railtrack to deliver on the promises that it had made about network services. That is why there is a new regulator, and why there are new powers for enforcement. The Bill will strengthen those powers, to ensure that Railtrack is accountable to the public for what is basically a public facility run in a privatised way.

Sir Teddy Taylor (Rochford and Southend, East)

Will the Secretary of State say something positive about the railways, instead of all these negative things? It should be borne in mind that the number of passengers has increased dramatically over the past four years, that fares have been cut in real terms, and that subsidies have been cut. If the right hon. Gentleman is in any doubt about the massive change that has taken place, let him visit Southend. We used to have a terrible railway line there, which has now been improved dramatically.

Some very negative comments have been attributed to the right hon. Gentleman. Will he now give us some of the facts about the railways? They are much better and far less subsidised, and fares have been cut in real terms.

Mr. Prescott

The problem with allowing so many interventions at an early stage is that it leads to criticism of that kind. I intend, later in my speech, to give due credit for the fact that the increase in passengers did not begin on the day that the Labour Government came to office, but was under way two years before that. That is in my speech.

Ms Margaret Moran (Luton, South)

Will my right hon. Friend give way?

Mr. Prescott

I will give way one last time, and then get on with my speech.

Ms Moran

I thank my right hon. Friend.

My right hon. Friend has spoken of the accountability of Railtrack. Will he ensure in the Bill that Railtrack property development services are brought within the rules of accountability? Is he aware that the Luton railway interchange in my constituency—an excellent example of the linking of rail services and airports in an integrated way—is being held up because of protracted negotiations between Railtrack and its property development side? That is preventing a valuable part of the integrated transport system from opening, at the time when it is most needed.

Mr. Prescott

That is yet another example of Railtrack's failure to live up to its promises and to take account of our integrated investment priorities. That is why we believe that a Strategic Rail Authority and a powerful regulator could play an important part, not only in establishing network investment but in ensuring that it is carried out.

We often hear public statements by Railtrack about the many billions of pounds that it intends to invest. The previous regulator's complaint to me was that although those promises had been made, he could not ensure that they were kept. That was a weakness, and it is a reason why we have proposed a Strategic Rail Authority that will do much more to ensure that we have a network better than the one about which my hon. Friend is complaining.

When we took office we found a fragmented railway that was all too ready to pass the buck when things went wrong.

Mr. John Redwood (Wokingham)

Will the right hon. Gentleman give way?

Mr. Prescott

Very well, but this must be the last intervention because I want to get on with my speech.

Mr. Redwood

The Secretary of State is being generous in giving way. My point relates to the one that arose in the previous exchanges. Given his dislike of Railtrack's standards of service, will he now rule out giving Railtrack an inside track on one of the tube contracts? Will he now promise to open up that contract to proper competition? I read in a newspaper that Bechtel, rather than Railtrack, will be brought in on that contract. Is that correct?

Mr. Prescott

There is nothing new in that proposal. I made that proposal for the channel tunnel rail link. If the previous Government had done the same for the Jubilee line extension, I would not be facing an extra £1 billion cost on a lousy contract that was not implemented properly. I brought Bechtel in on that contract to improve and tighten up the Jubilee line facilities and production, which it has done. I invited Bechtel to become involved in the channel tunnel rail link operation and I asked it to restore that operation following the contractor's request for an extra £1 billion as a result of the lousy contract entered into by the previous Administration.

I learned from that experience to ensure that there is a good project organiser. That is why I have made it clear that I would not leave the tube contract solely in Railtrack's hands and that I expect a project management company to be involved. I have said that from the beginning; it is nothing new. The need for a good project organiser is the lesson that I learned from the inadequacies of the previous Administration's contract negotiations. They were part of the inheritance that I was faced with when I first began to renegotiate some of those contracts.

We found that after an initial improvement in services following privatisation, there was an unacceptable deterioration two years later, which caused great concern. We found that disgruntled passengers did not know who to turn to when their trains were late, cancelled, dirty or overcrowded. We found a rail freight industry that was eager to expand but held back by red tape and underfunding. We found a lack of investment throughout the network and historical underfunding, and parts of the industry felt no sense of urgency about making up lost ground.

In the first 12 months, the franchising director and the Rail Regulator told me that their sanctions were unwieldy and lacked teeth, so they could not enforce them and make the rail companies live up to their promises. Finally, we found that the passenger's voice was neglected.

We took stock of that inheritance. We assessed the problems and the different solutions and then took decisive action. We set the franchising director new objectives, instructions and guidance to ensure high standards of punctuality, reliability and the protection of the passenger's rights. I made it clear that I expected a passenger dividend from franchise changes such as a change of control of a franchise company.

With my encouragement, the Rail Regulator negotiated a voluntary change, called condition 7, to Railtrack's licence to ensure that Railtrack meets the reasonable demands of train operators and funders such as the Office of Passenger Rail Franchising and passenger transport executives.

The new franchising director and Rail Regulator are working closely together, but I would prefer them to do so in the new, powerful framework that the Bill will provide. Last November, I made it clear to the rail industry that performance was unacceptable and that I would call its representatives to a summit the following spring to report on the commitments that they made.

The rail summit in February was a turning point. The Prime Minister and I made it clear to the industry that things had to change. To its credit, the industry has started to respond. At the summit, it committed itself to year-on-year improvements in quality, particularly punctuality, which is what passengers value most. The industry committed itself to renewing half the entire rolling stock fleet by the end of 2002, and it is recruiting 800 new drivers. Having got rid of thousands of drivers, the industry found itself to be desperately short, which caused great delays. It has now started a recruitment programme. It has also set up a hit squad to tackle the 50 worst black spots in the railway system.

The shadow Strategic Rail Authority started on 1 April, in the form of the franchising director and the British Railways Board working together under new leadership to get a grip not just on short-term performance, but on long-term planning.

The Office of Passenger Rail Franchising will, from tomorrow, operate under the title of shadow Strategic Rail Authority. The franchising director and the British Railways Board will, of course, continue to exist as separate statutory entities with their own functions and responsibilities.

The shadow Strategic Rail Authority is monitoring delivery of the summit commitments. It has also started the process of franchise renegotiation to put in place the high standards that the last Government sacrificed in their dash for cash and privatisation. The shadow Strategic Rail Authority is also developing a proper strategic plan for the railways, planning for the growth of freight as well as passenger traffic. We have revitalised the freight grants scheme, with awards totalling £60 million over the past two years—double the amount given by the previous Administration.

The new Rail Regulator has already started asking some very searching questions of Railtrack: about the robustness of the statements in the network management statement about freight; about the absence of costed options for the freight routeing strategy; and about the robustness of proposals for gauge enhancement. He has asked for answers by 13 August. Railtrack will have to demonstrate that its investment plans are up to the task of creating an expanding railway.

We have achieved a great deal within the constraints of the framework that we inherited. However, only primary legislation can remedy the fundamental flaws that I described earlier.

I turn now to the Bill's main provisions. Part I of the Bill makes provision for the Strategic Rail Authority, and clauses 1 to 4 provide for its establishment. Clause 5 sets out the primary purposes of the Strategic Rail Authority: to promote the use of the railway network for the carriage of passengers and goods; to secure the development of the railway network; and to contribute to the development of an integrated system of transport of passengers and goods.

Clauses 5, 6 and 7 impose a new duty on the Strategic Rail Authority to develop a strategy for implementing these objectives in consultation with the regulator.

Clauses 8 to 17 confer on the Strategic Rail Authority the various powers, in the form of functions, which it can use to work towards its purposes and to achieve its strategies. It must use these powers in the manner best calculated to balance various considerations as listed in clause 7, subject to directions and guidance from the Secretary of State, and any payments which it makes must achieve value for money.

Mr. Colvin

When will we see the new guidelines to the authority for the issuing of new franchises? Will any provision be made for the ending of existing franchises in the near future, or for renewed, extended franchises—perhaps for a 10-year period—to encourage the operating companies to invest in the new rolling stock required? I gather that some 7,000 wagons are possibly on order, but my constituents—like many others—are fed up with being treated like cattle and want to see the new rolling stock. The investment in rolling stock ought to be a criterion in granting the new licences.

Mr. Prescott

The criteria to be considered in the renegotiating of franchises have been spelt out, and it is a pity that those criteria were not put in the earlier franchise agreements—the hon. Gentleman would not then be complaining to the House. My complaint is that promises were made but were not written into contracts. One of the advantages of having a contract is that those concerned can be held to it. If the contract makes no requirement for new investment, there is a difficulty.

One of our major changes will be to consider the extension of franchises, although that does not necessarily mean that they will be in exactly the same form. However, the commitment to investment, quality and value for money for the taxpayer will be put in guidance to the Strategic Rail Authority for the negotiations, which are in their final stages. When these are completed, I will let the House know. As we said at the summit, that would be our broad approach to the renegotiation of franchises.

Many of the franchises are set at seven years and they will all be up for renewal in one rush, a few years into the new millennium. I want the franchises to be spread out, so we can negotiate them individually to secure not only what is best for the passengers and for investment in the railway system but best value for the taxpayer, who is constantly involved in one way or another.

If the hon. Gentleman waits for the guidance, he will see that it is very much in line with what he wants. It is a pity that such guidance was not issued in the first place, but the franchises were rushed through without any such requirement, and he voted for that. I am happy to say that we will do what we think is necessary to produce a good-quality railway system. That is what the Bill and the powers are about.

I assume that the Opposition will support the Bill, although I cannot be sure what line new Conservatism will take. I know what old Conservatism did. I do not know whether the hon. Member for Croydon, South (Mr. Ottaway) is new or old Conservative, but he said: Such a complex privatisation needs constant fine tuning. That is certainly true. He continued: The previous Government would have concluded that a strategic rail authority was necessary during this Parliament."—[Official Report, 25 March 1998; Vol. 309, c. 452.] That was old Tory; I await with interest to see whether new Conservatism is the same.

Clause 8 gives the authority the power to give grants, loans and guarantees and to enter into agreements with third parties to secure railway investment. The guarantees can be backed by the Government, and the authority may borrow within prescribed limits. The borrowing limit is £3 billion, which is the limit inherited from the British Railways Board. Before anyone rushes in to ask whether that amount is available, it should be realised that almost £1 billion of British Rail debt is to be transferred to the authority.

I shall want to consider precisely how the debt is to be managed. The previous Administration set up the changeover, and the debts and liabilities of the British Railways Board will be transferred accordingly.

Mr. Eric Pickles (Brentwood and Ongar)

I understand that the budget for the Strategic Rail Authority has not yet been determined. We will not hold the Secretary of State to the odd £10 million, but could he give us a rough idea of the figure?

Mr. Prescott

The current Opraf expenditure will remain, as the body is transferring to the Strategic Rail Authority. We estimate that the extra cost for the authority will be about £5 million a year. That is why the House is to consider a money resolution.

Clause 9 gives the authority the basic power to secure or provide railway services. That preserves the capacity to run services in the public sector in the last resort, as identified in our integrated transport White Paper. Clause 10 makes it clear that if there are no bids for franchises, or if the bids received are unacceptable, or in the event of a failure, the authority will become the operator of last resort.

Many of the authority's powers, of course, will be inherited from the franchising director, the British Railways Board, the regulator and the Secretary of State. All the franchising director's functions and all the British Railways Board's property and liabilities will transfer. Transfers from the British Railways Board will include responsibility for the British Transport police.

The shadow authority has considerable powers to do much of what is being done in the Bill, although perhaps in a different way. We do not have to wait for the Bill to be enacted to get on with modernising the railways.

Mr. Bill O'Brien (Normanton)

Will my right hon. Friend give way?

Mr. Prescott

Yes, but can I make this the last time?

Madam Speaker

The right hon. Gentleman has been very generous. He has taken about 10 interventions in 15 minutes. I have them written down here.

Mr. O'Brien

I appreciate the co-operation that my right hon. Friend has shown to Back Benchers.

I am concerned about land in the ownership of the British Railways Board and the fact that, under the previous Administration, instructions were given to sell that land as quickly as possible. It is important to retain the land because we may need to open lines, especially in the north where we often travel east-west rather than north-south. I hope that my right hon. Friend will seriously consider requiring the Strategic Rail Authority to retain the land in case further development is required.

Mr. Prescott

It will indeed, and I have given instructions to that effect. Some land contracts have already been let, but I have made it clear that land that could be used for expansion of the rail system should be retained.

The powers that the authority will inherit include those of the franchising director and the British Railways Board, and they will be sufficient for it to begin work. The authority will also acquire responsibilities for consumer protection from the regulator, and for administering freight grants. The office of the franchising director, and the British Railways Board, will be abolished.

All staff who transfer to the SRA will do so with their existing conditions of service preserved. Staff transferring are also assured that there will be full protection of pensions. Nothing in the Bill will override the statutory protection for pensioners in the Railways Act 1993, for which we fought so hard in opposition. The SRA will also assume responsibility for the continuity of the rail industry staff concessionary travel schemes.

Part II of the Bill amends the regulatory regime set up under the Railways Act 1993. Clause 17 allows the SRA to ask the Rail Regulator to direct facility owners to provide enhancements to existing station and rail facilities—a point raised by my hon. Friend the Member for Normanton (Mr. O'Brien). That power could be used to achieve greater rail capacity in the network or even to secure new network.

The 1993 Act has left the regulator acting in isolation, because the Secretary of State's power to give guidance expired in December 1996. I am pleased that the new regulator and the shadow SRA have already begun to work more closely together, and the Bill will confirm that. I have said already that the authority will need to consult the regulator on its strategies, and clause 18 provides for the regulator to facilitate the SRA's strategy. As Secretary of State, I will also have the power to give general guidance to the regulator. The measures will ensure that a coherent railway policy can be decided and then carried out consistently by the SRA and the Rail Regulator.

Mr. Redwood

I am grateful to the Secretary of State for giving way, but I think that my question will help our deliberations. If the plans go ahead as described, will he say how much of the borrowing limit of £3 billion will be available in the first full year?

Mr. Prescott

I have already made it clear that debts of about £1 billion will remain after the transfer. However, the right hon. Gentleman has asked a proper question, and I intend to make a statement shortly about how the debt will be managed and about the borrowing powers available to the Strategic Rail Authority.

Clause 18 also provides that the duty on the Rail Regulator to promote competition will now be balanced by a requirement that competition must be for the specific benefit of railway users. The Rail Regulator needs to balance competition against the public interest of network provision. We are not concerned solely with the promotion of competition.

The previous franchising director and Rail Regulator complained about the weakness of their powers to enforce the promises of train companies and Railtrack. The enforcement regime is tightened by the Bill. Monetary penalties, which must be of a reasonable amount, will be payable for all contraventions of licence conditions, franchise requirements and contraventions of orders made to secure compliance with a licence or franchise agreement.

The Government have agreed in principle that the Strategic Rail Authority will be able to retain income from penalties and to reinvest it in the railways. I hope that the industry and the House will welcome the fact that that income will not be returned to the Treasury. That innovative approach is a one-off exception to the normal rules for such income. We are currently developing the details of the arrangement.

It will be of interest to the House that clauses 21 and 22 amend the closure provisions, including some dealing with major closures. The Rail Regulator's functions are to be transferred to me, as Secretary of State. I, or any future Secretary of State, will be responsible for determining major closures, so I will be accountable to the House. I am sure that the House will welcome that approach.

The definition of minor closures is extended to include the track involved in a minor closure. Under clause 23, the remit of the rail users consultative committees, whose sponsorship will pass to the SRA, is widened to cover all passenger services. The committees' independence will be maintained, and I referred earlier to the welcome that the independent central users committee has given to the Bill.

Part III makes provision for the devolution of some functions to the Welsh Assembly and to the relevant Scottish Ministers. That provision delivers parts of the agreed settlement for devolution. Other elements have been handled by orders under the Scotland Act 1998. Part III also makes provision for the consequential amendment and repeal of other Acts. We will need to add to those provisions in due course.

In conclusion—

Mr. Geoffrey Clifton-Brown (Cotswold)

Will the Secretary of State give way?

Mr. Prescott

No, I am in my final stages.

The way in which British Rail was privatised was a national disgrace. Our Bill brings public accountability back to the railway industry; it will allow the new SRA to plan for an expanding network; it will require those who own the network to meet their obligations; and it will require train operators to fulfil their franchise agreements.

The railway industry has had plenty of well-deserved criticism but there are now positive signs of a revival of Britain's railways. Passenger traffic is rising. Over the past five years, passenger kilometres have increased by approximately 20 per cent., and roughly 14 per cent. of that growth has occurred in the past two years. Around 1,000 extra services are being run each day to help meet that growth.

Rail freight is also increasing, and is up by roughly 20 per cent. in the past two years. The industry has promised that by the end of 2002 half the passenger fleet will have been renewed. Some 433 station car parks will soon have video camera surveillance. Twelve stations have been opened since May 1997, and four more are due to open this year. All that is part of the agreement that the previous Government failed to achieve with the industry. There is a new spirit of co-operation and responsibility in the industry, and a new attitude that we need to restore a national railway in the public interest.

The Bill will reinforce those trends. It will create a new guardian of the public interest—the Strategic Rail Authority. It will plug the loopholes in the last Government's rail legislation, to provide tougher enforcement and to protect the passenger.

I commend the Bill to the House.

4.6 pm

Mr. John Redwood (Wokingham)

I beg to move, To leave out from "That" to the end of the Question, and to add instead thereof: this House declines to give a Second Reading to the Railways Bill because the introduction of this Bill now, when it will inevitably fall due to lack of legislative time and will have to be reintroduced in the next Session, is not the best use of the time of this House and represents a new definition of pre-legislative scrutiny which the Government is using as a way of side-stepping its own decision-making responsibilities and covering its doubts and internal divisions about the wisdom of the measures which the Bill contains. I am grateful to the Secretary of State for making some of my speech for me. He concluded with sterling words about the successes of the privatised railway industry. I agree that there has been welcome progress over the past five years, and it was good of him to state that we had enjoyed the advantages of the privatised industry over that period, which takes us back to before the change of Government.

Over the past four years, the number of passenger trains has increased by 14 per cent.—one extra train for every seven previously running. Passenger miles have increased by a quarter. We all want freight to transfer from road to rail wherever possible, and freight tonne miles have risen even more impressively—by 35 per cent. during the past three years. Those are impressive figures, but we are not yet satisfied. Privatisation has many more achievements to come, provided that the Government work with the industry rather than get in its way or mess it up.

My worry is that the Bill has been drawn up by Ministers who do not like the privatised industry and who are secretly trying to find ways back to nationalisation. They do not seem to understand that the beginning of a transformation in our railway industry has occurred under Governments of both parties and as a result of privatisation. The industry never worked when it was nationalised, whether under Labour and Labour-Liberal Governments in the 1970s or under Conservative Governments in the 1980s. During the 1990s, it is beginning to work, and the Labour Government must not impede the progress of a very good Conservative policy.

Mr. Corbyn

Before the right hon. Gentleman finishes his eulogy of the privatisation of the railway network, will he comment on the increase in the number of complaints against individual train operating companies, and on their inefficiency since privatisation began?

Mr. Redwood

People think it more worth while to complain now than they did under nationalisation because there is a proper complaints system and it is more likely that something will happen. As a train user myself, I know that services in my area have improved, but also that they are not yet good enough. I want further progress to be made as a result of more investment and more enlightened attitudes. Services are a great deal better than they were 10 years ago, although considerable room remains for improvement. As the Secretary of State has often pointed out, performance around the country is patchy. We would welcome anything that could sensibly be done to raise the performance of many operators to the performance of the best.

Mr. Matthew Taylor (Truro and St. Austell)

The right hon. Gentleman should be wary of saying that services are a great deal better than they were 10 years ago. The passenger figures to which he referred followed a dramatic drop during the recession engineered by the previous Conservative Government. The numbers have risen merely back to where they were before that recession.

Mr. Redwood

My point was well made from my own observation of standards of service in my local area. It can be borne out by many of my constituents, who recognise that there have been improvements in punctuality and reliability, but that there could be even more.

Mr. Geraint Davies (Croydon, Central)

Does the right hon. Gentleman accept that the sale of Railtrack for £1.9 billion—it is currently valued at more than £8 billion—is a clear example of how the British taxpayer was ripped off by privatisation? Does he further accept that giving away Railfreight for £240 million of taxpayers' money, just so that people would take it off our hands, is a complete disgrace? Any idiot could have predicted the increase in freight transportation under Governments of either political persuasion. This Government have advocated constraining the growth of road traffic, and everyone wants to see more rail freight and greater profitability in that industry.

Mr. Redwood

I remember how the then Labour Opposition succeeded in doing everything that they could to undermine the rail privatisation and sale. Labour did everything it could to damage the sale price and to lower the proceeds. We warned at the time that Labour was doing damage, and that is what occurred. The shareholders of that company are now benefiting from its success. It has picked itself up after that unwarranted criticism—and in the face of unwarranted criticism from the Secretary of State on bad Tuesdays—and has developed a much better business.

Mr. McLoughlin

Will my right hon. Friend assure the House that, if the Government produce privatisation plans—they tell us occasionally that they will do so, as is the case with air traffic control—he will not call from the Opposition Front Bench for renationalisation? Will my right hon. Friend enable the Government to secure the true market value of the industry concerned—unlike Labour did to us?

Mr. Redwood

My hon. Friend can rest assured that I am unlikely to call from this Bench for renationalisation. He will also be well aware that I am always in favour of taxpayers getting a good deal. Conservative Members will do everything in their power to encourage a fair—even a good—valuation of any assets that the Government wish to sell.

Mr. Prescott

I recall that a previous Administration nationalised Rolls-Royce—but I shall leave that aside. Does the right hon. Gentleman remember that when the then Opposition attacked the then Government's privatisation programme for British Telecom—there was concern about the share price—the Government did what we advocated with regard to Railtrack: they waited until after the general election and then brought forward the proposal so that the taxpayer did not lose out in terms of the share price? The previous Government could have done that with Railtrack, but refused—presumably because they thought that they would lose the election.

Mr. Redwood

We thought that we needed to get on with it because the railway industry deserved privatisation. We have seen that the results of the privatised industry are much better than those achieved under the nationalised regime.

Mr. Bercow

Does my right hon. Friend agree that the hon. Member for Croydon, Central (Mr. Davies) has a brass neck to level the charge that he has just made? The twenty-fourth report of the Public Accounts Committee on the flotation of Railtrack, which was published on 13 July 1999, underlines precisely the point that my right hon. Friend has made—namely, that political opposition to the flotation undermined investor confidence and the share price. Does my right hon. Friend think that the hon. Gentleman should do his homework before contributing to the Second Reading debate?

Mr. Redwood

My hon. Friend is right, but I must now make some progress.

The Secretary of State began by saying that "A Fair Deal for Motorists"—a popular policy that we launched last week—represents the sum total of our policies in this area. He should know from our debate last week that our fair deal is popular, but it is only part of our transport policy. We also have exciting policies to promote more rail, tube and bus travel to ensure that people get out of their cars and on to the buses and trains. The Government still do not seem to understand that most people do not live by a bus stop or a train station. We need to make it easier for motorists to get to the bus stop or the train station and be able to park when they get there. That is a truly integrated transport policy—rather than the disintegrating policy over which the Secretary of State is presiding.

Mr. Clifton-Brown

Is my right hon. Friend aware that the Public Accounts Committee report, to which my hon. Friend the Member for Buckingham (Mr. Bercow) referred, revealed that an unprecedented four pages of Labour's policy document spelling out what it would do with the railways should it be elected depressed the price of the sale by well over £100 million? Therefore, the Secretary of State cost the flotation of Railtrack more than £100 million.

Mr. Redwood

My hon. Friend has admirably strengthened my point.

Dr. Alan Whitehead (Southampton, Test)

Is the right hon. Gentleman aware of one of the key findings of the PAC report? It states that: The timing of the sale was a factor in the poor value achieved, and the Department themselves acknowledge that the large increase in Railtrack's share price since flotation was because it had been undervalued and sold in haste Does that not completely undermine the case that the right hon. Gentleman is making?

Mr. Redwood

It reinforces my case. The main reason for any undermining was because Labour made matters as difficult as possible by putting the accent on all the negatives and on none of the positives—as they were so good at doing in respect of privatisation policies and much else.

The Secretary of State said that the other day I was on the radio arguing with a train operating company representative over railway policy. He clearly did not listen to the broadcast. As I made clear on that programme, my argument is with the Secretary of State himself: it is his policy that has miscarried; it is his inability to persuade the Treasury to give him the money that he needs in order to do up public transport facilities; it is his transport policy that is falling to bits—clobbering the motorist but not providing a better alternative. I hope that the right hon. Gentleman will listen a little more carefully the next time that I am on the radio.

Mr. Prescott

I am grateful to the right hon. Gentleman for giving way. As John Humphrys pointed out, we were talking about the Strategic Rail Authority—we can listen to the tape if the right hon. Gentleman cares to do so. The train operating company's representative made it clear that the operating companies fully supported the authority. That was his point. It was also John Humphrys' point—even though the right hon. Member for Wokingham wanted to talk about anything but the SRA.

Mr. Redwood

My worry about the way in which the Government have presented the Bill to the public and to the House is that, until today, they have concentrated on only two clauses—those that relate to the power to fine companies that do not perform—and have ignored the wide-ranging powers contained in the other 32 clauses. Those powers will greatly strengthen the hand both of the Secretary of State and of his creature, the new quango. I have repeatedly made the point that that is a dishonest spin on a massive piece of legislation; it is a backdoor nationalisation measure, which would give the Secretary of State extremely wide-ranging powers to play at trains exactly as he sees fit.

Today, the Secretary of State comes to the House unable to answer the most fundamental and obvious question: how much of the £3 billion in the borrowing limits outlined in the measure will be available as new money to spend on buying shares, making investments in railways, running train services and setting up new tramways? The Bill will give massive powers to a new quango and to the Secretary of State so that they can play at trains and tramways and provide all kinds of public transport facilities, but we do not know to within £1 billion or £100 million how much money the right hon. Gentleman will have to play with. How on earth can we treat the matter seriously?

Mr. Prescott

The previous Administration gave exactly the same powers and resources to the British Railways Board—they already exist, and will be transferred to the Strategic Rail Authority. In respect of financing facilities, we have made it clear that it is not our intention to renationalise the railways. We made that judgment before we came into office. We want to make the system work. It is not necessary to have the borrowing powers to which the right hon. Gentleman refers. I said that I would report back on reconstruction because, as we know from the experience of the British Railways Board, whenever the debts were reconstructed, there had to be a report to Parliament.

Mr. Redwood

I take that to be some kind of reassurance that the provisions will be used only for existing debts and not for new debts. However, that is not how the Bill reads. The Bill gives extremely wide-ranging and open powers; it leaves open the large amount of money—well in excess of what is needed—to handle the existing debts. The Secretary of State himself told us that about £1 billion of inherited debt had to be dealt with under the measure. We are entitled to ask why he needs a £3 billion borrowing limit for the body, when he thinks that the problem is about only one third of that amount. That is most suspicious.

Mr. James Gray (North Wiltshire)

Is my right hon. Friend aware of paragraph 73 of the Government's response to the PAC report? On the question of whether they would be interested in renationalisation, it states we have made clear that renationalisation would be … expensive, and cannot be a priority. Am I right in presuming that, if it is not a priority, it may be somewhere further down their agenda?

Mr. Redwood

My hon. Friend has drawn out an interesting point—it is an interesting exchange. If the Bill is passed unamended, it will give the Secretary of State all or most of the powers that he would need to renationalise portions of the railway, and to set up a new nationalised railway or tramway system—or both—in parallel with the existing privatised industry. The measure offers no guarantees as to fare competition. There is nothing about fare levels and the rate of return that would have to be earned in order to secure fair competition. Some people in the industry are extremely worried by these wide-ranging powers. This whole piece of legislation has been dogged by controversy and trouble.

Mr. Andrew F. Bennett (Denton and Reddish)

Is not the right hon. Gentleman's argument that the Bill needs careful scrutiny rather odd given the reasoned amendment, which complains about the scrutiny process?

Mr. Redwood

I was just coming to our reasoned amendment. We believe that today's debate shows that the Secretary of State has failed to carry his colleagues. The Bill was cancelled last year and delayed this year and it might—if the right hon. Gentleman is lucky and we are unlucky—arrive late in the next parliamentary year. Today's debate is therefore a misuse of the House's time. We would be happy to have Second Reading and go straight into a Standing Committee in which the Bill could be given the detailed scrutiny it needs. If the Secretary of State is willing to proceed in that way, my right hon. and hon. Friends and I are more than willing to sit on such a Committee, starting as soon as possible, to give the Bill the necessary scrutiny. However, the right hon. Gentleman is no position to deliver. He has obviously been vetoed by the Prime Minister and other members of the Government, so the Bill has been shunted off into a siding and cannot make proper progress.

Mrs. Dunwoody

As the Chairman of that particular siding, may I ask the right hon. Gentleman one simple question? Are we to take it that he does not approve of Select Committees performing a pre-legislative function, or is it simply that he objects to my Committee performing that function?

Mr. Redwood

I have no objection to the Committee considering the Bill, and may it take a good long time: there is much in the Bill that is disturbing, and I am not the one trying to rush through those provisions. However, let us look at matters from the perspective of the Secretary of State, who tells us that the Bill is crucial to his strategy and that he cannot have an integrated transport policy without it. If that is so, why are we having a Second Reading debate now, but no Standing Committee to follow? Why cannot the right hon. Gentleman get the Bill through more quickly?

Why is the Bill being offered to the Select Committee? If the scrutiny that the Select Committee is to give it is truly pre-legislative, why have Second Reading? Why not have proper pre-legislative consideration in the Select Committee, whose members are wise and whose scrutiny would be useful? Then, the Government could amend the Bill and return to the House with a proper Bill that had been properly considered, on which we could then have a Second Reading debate. That would be far more welcome to us than the bodged approach that is being taken today.

Mr. McLoughlin

The Secretary of State never addressed one of the points raised in our reasoned amendment. Why is the Bill being treated differently from all the others, which have been referred to Select Committees before Second Reading? Is it not the case that the process being used is a panic measure, initiated by Downing street to cover up the botch job that the Secretary of State has made of transport policy?

Mr. Redwood

That is the only possible explanation. There has obviously been a compromise: the Secretary of State said that he must have his Bill, but the Prime Minister said that he could not have it, so they hit upon the ridiculous compromise—a camel instead of a horse, with everyone getting the hump—of the Bill being given Second Reading and then going off to the Select Committee, rather than through a proper Standing Committee.

Mr. Prescott

I have made it clear on several occasions that the real problem with the legislative timetable is what happens in the other place, not what happens here. The other place is starting its recess later and returning earlier than this House. We can argue about who is responsible, but the fact is that legislation has to pass through both Houses. Under the new procedures arising from the modernisation process, Bills have been sent to Select Committees and Special Standing Committees for different forms of examination. The process adopted for the Railways Bill is simply another new way of proceeding.

It will be useful to hon. Members and to people outside to know the House's opinion on the powers contained in the Bill. I hope that the House and the Select Committee will give the Bill an overwhelming endorsement. The right hon. Gentleman has not yet said whether or not he supports the Bill, and it would be useful to know that. If the House expresses its support in a vote today, it will be clear that the current actions of the shadow Strategic Rail Authority are consistent with the will of the House.

Mr. Redwood

In that spirit, I shall press on to address the Bill itself, even though my right hon. and hon. Friends and I still think that we are following an odd procedure—one that tells us more about the divisions in the Government than about the need for proper scrutiny—or the need for a Railways Bill, which the Secretary of State has urged on his colleagues for many months.

The Opposition are worried that the powers in the Bill are too wide ranging and lack specific drafting through which they can be controlled. I draw the House's attention to several of the important clauses. The purposes of the authority have already been read out to the House by the Secretary of State. They are extremely wide ranging and should be read in conjunction with the powers to borrow, direct, invest and spend money. The authority is allowed to promote the use of the railway network, to secure development of it and to contribute to the development of an integrated system of transport.

Mr. Tony McNulty (Harrow, East)

Will the right hon. Gentleman give way?

Mr. Redwood

I will not give way to someone who has not been present throughout the debate. The hon. Gentleman should listen a little more before intervening. I have given way to everyone else.

The wide-ranging purposes are backed up by the most enormous powers, which would leave the Secretary of State and his creature—the quango—free to run a railway within a railway and to buy up chunks of the existing network. Under clause 6(3), the Secretary of State is the person pulling the strings. The quango may be apparently independent, powerful, expensive and all such wonderful things—many millions of pounds will be spent on it—but the Secretary of State can be in charge if he so wishes. He can give the authority directions and guidance over all its strategies, stipulating what should be covered by them, the issues to be taken into account … the strategy to be adopted in relation to any matter", and how to update such strategies. That is extremely comprehensive. The Secretary of State wants to buy a train set to play with, and this Bill gives him the crucial powers.

Mr. Geraint Davies

May we have clarity? Does the right hon. Gentleman agree that there should be a Strategic Rail Authority—yes or no—particularly given the words of the hon. Member for Croydon, South (Mr. Ottaway), who thought that there should be one? If there is a Strategic Rail Authority, should it have any budgetary powers? If so, which powers and how will it be accountable to Parliament? The right hon. Gentleman is very unclear.

Mr. Redwood

I shall be crystal clear, as I have been on the powers and the conduct of these proceedings. The Opposition believe that there is a role for sensible regulation of the railway and support good regulation of it for as long as there continues to be monopoly elements and the power to use fares as surrogate taxation. It is most important to have a regulatory power. We do not support the creation of this regulator with these massive powers because the Secretary of State is trying to create not just a regulator but an actor, an investor and a business as well. In my experience, when the role of a regulator is muddled with that of someone providing services or interfering with service provision, one gets into difficulties, which can damage the taxpayer and the passenger or customer.

Mr. Graham Stringer (Manchester, Blackley)

Does the right hon. Gentleman accept that it was a great mistake not to regulate the rolling stock companies when the railways were privatised? One witness told the Select Committee that ROSCOs were receiving a guaranteed income stream and profit under contracts that did not require them to invest, which led to their sale at double the price that the public got for them and their making a third of their capital value in profit? Does he accept that that was a huge mistake of the Conservatives' privatisation?

Mr. Redwood

I am not sure how that problem is covered by the Bill. Perhaps the Committee disagrees with the Government in that area. We have already discussed at some length the history of privatisation, to which the Labour party, with its clumsy intervention, did much damage.

Clause 8 sets out the functions. It states that the authority may make grants, make loans, or give guarantees, for any purpose relating to any railway or railway services. "Railways" for these purposes include tramways, and in certain conditions, bus and taxi services too. So this body will be enormously powerful and wide ranging. The grant, loan or guarantee may be subject to any conditions as the authority considers appropriate: The Authority may enter into agreements for the purpose of securing the provision, improvement or development of any railway services or railway assets. The powers are even stronger in clause 9, which states that the authority may provide services for the carriage by railway of passengers and goods as the Authority considers desirable. In other words, the Bill creates not just a regulator but a body that can take public money, with the Secretary of State's consent, and run passenger and goods railway services. Clause 9 states that the authority may include in that the provision and operation of network services, station services and light maintenance services, entering into agreements … for … carriage … acquiring the whole or any part of an undertaking, and storing goods and consigning them from any place to which they have been carried by rail. That is the kernel of our case—the power is a very wide-ranging one, allowing the backdoor—or frontdoor—renationalisation of the railways, should the Secretary of State be so inclined, and should he be able to persuade the Prime Minister and the Treasury of the need to do so.

Mr. Pickles

On the combined provisions of clauses 8 and 9, but especially the provisions of clause 8, surely the Strategic Rail Authority will not really have the expertise to second-guess the investment decisions of both Railtrack and the train operators. Essentially, the consequence of the provisions would be that those who make the investment decisions will not be able to raise necessary capital, as there would be no certainty that the Strategic Rail Authority will not change all the terms.

Mr. Redwood

I certainly agree with that statement in the light of the fact that the Secretary of State would be pulling the strings and providing the advice.

Mr. Prescott

No.

Mr. Redwood

Perhaps the right hon. Gentleman would like to explain.

Mr. Prescott

We propose transferring already existing powers. The regulator is already able to require Railtrack to invest in the public interest, as that was a condition of the licence. If the regulator is not satisfied that Railtrack is meeting its requirements, he is able to enforce those requirements. Therefore, under powers created by the previous Administration, the regulator is able to act by asking for further investment. The powers are already there.

The right hon. Gentleman should say what new extra enforcement powers he thinks could be created for the regulator. The complaint about both the previous and the current regulator is that, although powers were available to them, they did not use them. However, this one intends to use them.

Mr. Redwood

The proposed power is a very new one, and it is much wider and stronger. It is one thing to say that a regulator is able to instruct a private sector company to make a bigger investment because it is in the regulated sector, but it is quite another to give a power to an authority to do anything that it considers desirable for the purposes of the provision of railway services. The proposed power is extremely wide ranging—

Mr. Prescott

No.

Mr. Redwood

I hope that the Secretary of State will look again at the drafting, because that is not how it reads in the Bill. He may now be claiming that his intentions are rather more modest than they seem to be in the Bill. I therefore hope that he will re-examine that point.

In Committee, the burden of the Opposition's argument will be that we wish to narrow the regulator's powers to that range of limited powers that the Secretary of State says that he wants and are necessary, so that the regulator—the authority—falls short of playing trains on a huge scale—which I still believe it would be entitled to do under the provisions of this very wide-ranging legislation.

If the Secretary of State would like to look at clause 16, he would see how the powers are emphasised and underlined still further. The clause states that The Authority may do anything which it considers— (a) is necessary or appropriate for or for facilitating … its functions. In particular, the Authority may

1. (a) enter into agreements,
2. (b) acquire or dispose of property,
3. (c) invest money,
4. (d) form bodies corporate or acquire or dispose of interests in bodies corporate, and
5. (e) promote or assist in the promotion of publicity."

That gives the authority the power to run railways, to buy assets, to build stations, to own track, to own rolling stock and to run services. I do not see how the Secretary of State can deny that.

Most sinister of all—but then it is the little bit of new Labour creeping in—is the power to spend public money, collected by the authority and borrowed by the Government, on spinning at the taxpayer's expense.

Mr. Prescott

I am grateful to the right hon. Gentleman for giving way; he is generous with his time. However, is he really arguing that, if a private company were not prepared to continue the franchise or were offering a very bad deal, that the public sector should not, in the taxpayer's interest, have the right to maintain and run that service? The previous Administration accepted that argument. In their legislation, they gave the British Railways Board the right—which the Bill will be transferring—to intervene to secure such services. Such an intervention would be made by the public sector when the private sector failed to produce promised services.

Mr. Redwood

We have now, at last, teased out of the Secretary of State the power's importance. In Committee—if the Bill reaches that stage—we shall be pressing hard to try to limit the power rather more than he has done.

Currently, the power is far too wide ranging, and the Bill does not make it clear that it will be used only in extremis, after something has gone horribly wrong—something far worse than has yet happened in the privatised industry. I think that it is very unlikely that something will go wrong on that scale. if the Secretary of State saw fit, the power could be used in totally different conditions—and it is to that that I and my right hon. and hon. Friends shall be objecting. I hope that the Secretary of State now has a clear understanding of the Opposition's view of the Bill. We believe that it needs a fundamental rewrite. We are all in favour of sensible regulation, but we think that the Bill goes far too wide.

Mr. Matthew Taylor

I am still not absolutely clear about the official Opposition's position. Do they wish to keep the present regulatory structure as set up at the time of privatisation, or do they accept that that has proved inadequate and that there needs to be a strengthened regulatory structure, albeit not the one presented today?

Mr. Redwood

We would be happy to examine a sensible revision of the structure. It is always possible to improve things in the light of experience. However, I do not think that the Bill presents the right approach. It is clear that it goes considerably further than the Railways Act 1993, for example. The powers of that Act are expressly amended by provisions set out in the Bill. It is proposed to make things tougher and to give the regulator more wide-ranging powers to intervene and to interfere in the running of the railways.

We are suspicious of the costing of £5 million per annum for the authority. That may prove to be an underestimate given the enormous range of strategies and functions that the authority will have foisted upon it. We wish to return to the question of £3 billion. It is most important to know how much of that money will be available to do the sometimes worthy things that are demarked in the Bill.

We are worried about the length of franchises and we believe that decisions are pending. These decisions have been delayed for many months and this is becoming an impediment to proper investment and success in the railway industry. I have heard complaints from those in the industry that decisions have been sitting in the Secretary of State's "in" tray for many months. That is a great pity. I thought that there was cross-party support for the idea that the privatised industry should be given its head to make the necessary investments. We are all impatient to see new rolling stock and better services.

The Opposition urge the House to adopt our reasoned amendment to the procedure for the handling of the Bill. An enormous mess and muddle has been revealed at the top of Government, a huge row between the Prime Minister and his deputy and obvious second thoughts around the ministerial table about the wide-ranging powers that are being offered through the Bill to the Secretary of State and to the quango creature that is being established beneath him. If this were the world of "Thomas the Tank Engine", this would be the Bill to make the Fat Controller wax lyrical at night at the great strengthening of his powers.

We shall be offering strong scrutiny of the Bill. It is not the right Bill at the right time. The Secretary of State should concentrate on better tube investment, better car parks at stations and easing the flow of cars to stations. We could then have an integrated transport policy. We see chaos and disintegration surrounding the Secretary of State. There is a lack of ability to win the investment that he needs for public enterprises from the Treasury and a willingness to get in the way of sensible investment by the private sector. The Bill will not help and that is why we are opposing it tonight.

4.38 pm

Mrs. Gwyneth Dunwoody (Crewe and Nantwich)

The Strategic Rail Authority is the first intelligent attempt to bring together a proper planning system for the future of a new and modern railway system, and is a long overdue recognition of the fact that the privatisation and fragmentation of the railway system unfortunately resulted in the passenger receiving a far from acceptable level of service.

In its report on the Strategic Rail Authority, the Transport Sub-Committee made it clear that there were considerable problems if a modern railway was to be worked in the disorganised and disorientated manner that had ensued with privatisation. It made it clear also that we would not be able to remedy the situation without some reintegration of the various companies and an acceptance of the fact that some of the powers handed to both the franchising director and the Rail Regulator were not sufficient to cope with the lacunae that had appeared in both the administration and operation of the railways.

Today's debate is not only extremely welcome, but long overdue. My Committee warmly welcomes the opportunity to examine the Bill in considerable detail. We believe that it contains many aspects of policy that we have already examined in such detail, but inevitably there will be areas where the Committee will want not only to make suggestions but to consider the wording.

Given the way in which, in recent years, some legislation that has been put before the House has not been in its final form, it is tremendously important to use such a Committee to consider the detail, as a pre-legislative Committee can do. Far from the Select Committee delaying the passage of this legislation, it can, if need be, produce a polished Bill and perhaps even a better formulation—if my right hon. Friend the Secretary of State will forgive me for saying so.

Mr. Gray

Am I right in thinking that the hon. Lady's Select Committee, on which I serve, reserves the right to make possibly trenchant and fundamental changes in the Bill, or will it merely be a rubber-stamping operation?

Mrs. Dunwoody

I do not know to which Select Committee the hon. Gentleman is referring. If he seriously thinks that any Committee that I chair would be known as a rubber-stamp Committee, I can only assume that his frequent absences from the Committee have been such that he has forgotten what goes on.

My right hon. Friend the Secretary of State will have noticed that the business motion on the Order Paper suggests a date by which the Select Committee's examination of the legislation will conclude. That is helpful. By next Session, the legislation will have been considered and extra evidence will have been taken. Points that need to be made by the operating companies or various other elements, including passengers, will be not only welcomed but registered in a way that ought to be constructive and useful.

The Bill contains tremendously important provisions. Railtrack will now have to comply with investment requirements not simply by producing a number of wish lists, but by demonstrating that it is serious about its investment programme. I do not want to digress by discussing some of the more interesting recent developments, but I would mention the network statement, for which Railtrack got the support of consultants who said that they had not checked any of Railtrack's figures but could nevertheless project them into the future to produce particular results. That is not the sort of expertise or, frankly, detailed work that my Committee finds acceptable.

Clearly, Railtrack must not merely talk about what it intends to do but demonstrate that it means to do it. It must produce concrete plans that are not just based on extra money from the taxpayer. If Railtrack is to fulfil its responsible role, it has to get on with a programme to deal with its very old infrastructure. Railtrack has known for a long time about the problems of pinch points, for example, and of some track that needs considerable maintenance and improvement. It knows of the need for reinvestment in lines such as the west coast main line. The sooner it makes those changes rather than talking about them, the better the passenger will be served.

Mr. Lawrie Quinn (Scarborough and Whitby)

I know my hon. Friend's constituency well. As she is aware, I spent some time as a railway engineer maintaining bridges in and around Crewe. Will she tell the House whether Railtrack has delivered on its promises and commitments on bridges in the relatively small area in and around her constituency; and will she tell us how detrimental its failure to produce has been to the immediate economy of her constituency?

Mrs. Dunwoody

I do not want to get diverted, but people who enter my constituency have to cross antique rail bridges; indeed, three of the main roads are on rail bridges. The previous time one of them was examined and modernised, it managed to sink 11 inches during one night, so I am somewhat sensitive to the difficulty arising from trying to rebuild an ancient system. Not only will working on bridges be an urgent part of Railtrack's work, but it will have to work closely with others to provide a properly programmed advance in the provision of proper infrastructure.

Mr. Bernard Jenkin (North Essex)

Will the hon. Lady at least admit that investment expenditure under Railtrack is more than double what it was under British Rail? If British Rail had not been privatised, where would her Government be getting that money from, given that public investment in transport, for which the Deputy Prime Minister is responsible, is being cut?

Mrs. Dunwoody

I am getting pretty bored with these absurd interventions from Conservative Members. The whole of the west coast main line would be modernised today and there would not be such poor standards if the money that was spent on privatisation—including that which was identified by the Public Accounts Committee as going directly to people whose only contribution was making the most absurd suggestions about how particular contracts should be framed—had gone into the railway system. Rail companies certainly would not be adding 10 to 15 minutes to every timetable in the pretence that services are getting somewhere near their original arrival times. I am bored with all that and the time for going over and over such absurd suggestions is gone.

The Strategic Rail Authority will be able to retain fines, rather than pass them back to the Treasury, and spend them on the infrastructure. That is not only a sensible development, but one that will soon be seen to be advantageous. I believe that the acceptance of a public sector benchmark, which will provide for the assessment of all franchise bids, is not only long overdue, but will mean that the passenger will be much better served in future. The Strategic Rail Authority will have responsibility for publicising rail services—not, if I may say so, for providing beautiful posters at conferences saying what a wonderful investment programme there will be in the next 30 years. It will tell rail travellers, "In future, you will be able to travel safely, cleanly and punctually." At present, all those "minor" points are not taken seriously by many of the companies.

I believe that open access and the changes proposed in the Bill will make a difference. Companies will not only have to face up to the real problems of competition, but seriously consider what to do in order to attract more passengers. Some aspects of the Bill, such as the permission to promote light rail, will transform a lot of other railway services. People want clean and comfortable access to various forms of rail transport and they believe that an integrated system means getting on a train at their chosen station, comfortably and safely, and getting off where they want to be—not a considerable distance from their ultimate destination.

Mr. Corbyn

When my hon. Friend's Committee examines the Bill and other developments in railways legislation, will she look enthusiastically at the possibility of reopening a large number of mothballed, underused or unused lines so that we can develop properly integrated local transport systems? We should bear it in mind that some lines would be loss makers initially, but over time integration would encourage people off the roads and on to the rail system, which they are not attracted to at present because they live too far from the main lines.

Mrs. Dunwoody

I hope that the Strategic Rail Authority's powers to borrow will enable it to look forward to means of developing the network; it should not simply rest on the present system. Although my hon. Friend specifically mentions services that may have been mothballed, there are all sorts of other developments. For example, many of us look forward to a real increase in freight once lines are available. If there were a new freight line through the centre of England, we would begin to see a serious movement of large amounts of freight off the roads and on to the railways, where it belongs. That would not only promote a better environmental response in many areas but would demonstrate efficiency and represent something that people genuinely want. Part of the SRA' s powers will be to consider such schemes and the occasions on which investment should be made in them, and to encourage others to take up new and more imaginative schemes.

Mr. Pickles

Will the hon. Lady give way?

Mrs. Dunwoody

Yes—for the hon. Gentleman, I shall of course give way.

Mr. Pickles

The hon. Lady is most gracious. If she is right in suggesting that investment will be considered for light railways and the reopening of disused lines, might not we have to consider a considerably higher budget than the £5 billion that the Deputy Prime Minister mentioned in answer to my earlier question? The central railway line alone would take £5 billion, plus some change.

Mrs. Dunwoody

As the hon. Gentleman knows, many people would be interested in such a development and might be prepared to talk seriously to the SRA about how it could be financed.

Mr. Geraint Davies

Will my hon. Friend give way?

Mrs. Dunwoody

I am trying to make a shortish speech, but I am getting so much help.

Mr. Davies

Is my hon. Friend aware that, in Croydon, the Tramlink project that is due to be completed at the end of this year involves both private money—to the tune of £75 million—and public money? Moreover, it uses a disused railway line to create a new commuter link, which is proving popular. We have the finance, and I hope that my hon. Friend will come to Croydon at the end of the year when we open the line.

Mrs. Dunwoody

My hon. Friend tempts me into all sorts of interesting debates about how passenger transport authorities' and local authorities' transport plans can be fed into the plans for a shiny new railway system. That is what I look forward to in the next millennium, but I do not wish to speak for too long today.

My right hon. Friend the Secretary of State would not expect me simply to tell him that the Bill is absolutely marvellous, because it has left out some of the bits that I think are important, and I shall want to ask him a number of questions in the future. I hope that the SRA will have the power to prevent another round of rural closures. Many of us who have lost railway stations know that that directly contributes to a drop in the number of passengers in some areas. Some of the stations that are now being warmly welcomed by the Opposition were paid for by local authorities, which got absolutely no credit and were then told by Railtrack that they would have to pay towards the maintenance.

Mr. Prescott

rose—

Mrs. Dunwoody

Oh—I am most honoured to give way to my right hon. Friend.

Mr. Prescott

Perhaps I can satisfy my hon. Friend by saying that, when the closure of a line is requested, the decision will no longer be dealt with by the regulator but will come directly to me as Secretary of State. It will be a decision for which I shall be answerable to this House.

Mrs. Dunwoody

I welcome that tremendously important development; passengers will want not only to see it carried through, but to have an input into any decisions that are taken.

I hope that the public borrowing figure for the SRA, which seems pretty generous to us, will be fairly secure and that the whole question of whether the SRA can borrow on the open market will be discussed. If the SRA is to create public sector comparators for franchise bids, that will be helpful, but if for any reason the franchises collapse—I am afraid that, if we are not careful, privatisation will create a two-tier railway system in which some companies can run well but others will come perilously close to being non-viable—the SRA may need to assess accurately exactly what should happen to their bids. It will therefore need a base so that it can consider whether it can run those services as the owner of last resort.

I take the point that my right hon. Friend made earlier in the debate about the absurdity of the Opposition objecting to the transfer of powers that were in the hands of the British Railways Board before the introduction of this Bill. One aspect, however, has not been transferred. I am a bit anxious about it. My Committee made it clear that it thought that BRB should not sell rail land before decisions that could have an impact on the railway system. The Secretary of State knows better than anyone that, in the previous century, railway companies were extravagant in their acquisition of land. It would be extraordinary if we were trying to plan for a new system but, because of a hangover from previous legislation, the BRB was selling sites. There will always be some bits of land that it is happy to let go, but it is important that strategic decisions be taken in relation to particular land before it is put on the open market.

I know that the Select Committee will want to examine the difference in the powers between Wales and Scotland. It will also want to examine the role of the London mayor and whether, in the Bill, the mayor's powers should appear transparent to the voters.

I was glad that the Secretary of State mentioned that he wanted passenger representatives to be on the Strategic Rail Authority. It is extraordinary that we all talk about the internal debates between the operating companies, Railtrack and Ministers, but that, even with the only slightly improved passenger rail authority set-up, we still do not hear the voice of the passenger as strongly or as usefully as we should. It is vital that passengers, freight users and railway employees should have a direct input, so that their views are heard. I am not suggesting that they should automatically be given precedence over other aspects of rail policy, but unless their voice is heard there will be a real worry. One hopes that the new consumer structures will be broader than existing ones.

I hope that, somewhere in the legislation, we can look at the whole question of rail safety. Despite its age, the railway system is very safe. People are carried safely, but there are still problems about some of the slam-door stock and the speed at which it is being replaced. There are worries, too, about the signalling system and about its age.

Without being unkind about it, if Railtrack feels that it is necessary to issue a notice to its contractors saying, "Please do not touch the signalling because the wiring is so old it may automatically go wrong," we have to worry about some aspects of the working of the system. We need to look at them closely.

Will the Strategic Rail Authority have the right to say to companies, "We do not want you to carry on with some of the rolling stock—certainly, mark one rolling stock—and we want it to be replaced as quickly as possible"? The Government so far do not seem to have told us exactly how many train operating companies they believe should be in existence. It is possible that, at the end of the franchise renegotiation, there will be no need for quite so many companies. It would be helpful to know exactly what my right hon. Friend has in mind for the future.

I am concerned about the tension between competition policy and the integration of a railway system. We know that, once there is privatisation, there is a need for regulation. Those two things are likely to grate against one another. The arguments advanced by individual operators are the sort of arguments that have been used by some Conservative Members today: when it comes to the crunch, the shareholder and profit-maker must take precedence over the passenger and the need to run the system. That is not in anyone's interests. I hope that it will not be the case when the time comes for a renegotiation.

Mr. Gerald Howarth (Aldershot)

Will the hon. Lady give way?

Mrs. Dunwoody

No. I am coming to the end of my speech and many hon. Members are waiting to speak.

I welcome the opportunity that the Secretary of State has given my Committee to look closely at the Bill. It is long overdue. It has tremendous opportunities for every one of us. It is the first time for many years that any senior Minister has come to the House with a plan for the future that is optimistic. My right hon. Friend's plans relate to the future, not the past—whatever that murky and unhappy place may be. I assure my right hon. Friend that we shall play our part in the passing of the legislation, and the securing of the examination, on time. I trust, however, that he will not expect us to work at quite the same pace for the rest of the current Parliament; if he does, we may have the odd thing to say.

5 pm

Mr. Matthew Taylor (Truro and St. Austell)

I am glad that at long last—more than two years after the general election—some transport legislation is before the House. I have repeatedly offered the Secretary of State our support for the passage of the Bill at the earliest possible opportunity, and I am disappointed that it will clearly not be enacted until some way into the next Session. The travelling public will be disappointed as well: they have not seen the improvements that they may have expected following the change of Government. Those improvements are vital, and we will do what we can to ensure that the Bill is passed sooner rather than later. The Secretary of State's role has, I think, been to do all that he can internally, within the Government, to speed up the process.

Mr. Gray

How does the hon. Gentleman intend to give the Bill a fair wind, given that no member of his party serves on the Select Committee on the Environment, Transport and Regional Affairs which will consider it?

Mr. Taylor

We have negotiated to enable the sole Liberal Democrat member of that Committee to work on its Transport Sub-Committee in this instance, for the very reason that the hon. Gentleman has given. I personally feel that, if Select Committees are to be split into two sections—as not only this Committee but at least one other has been—they should have enough Liberal Democrat members for our party to be involved in both parts of their work.

Mrs. Dunwoody

As the hon. Gentleman will know, we have agreed to the provision of a place for his colleague for the purpose of consideration of the Bill. I am sure he will understand, however, that the Committee of Selection—on the basis of the rules of the House—decides how many Liberals should be on a particular Select Committee. If I may say so without being immodest, the Select Committee that I chair has done an enormous amount to try to ensure that there is a balance. I hope that the hon. Gentleman is not suggesting that the addition of another Liberal to the Committee would solve the problem; in fact, it would cause some difficulty.

Mr. Taylor

I do not think that you will allow me to proceed much further with that subject, Mr. Deputy Speaker. I must say, however, that, although the Committee of Selection is responsible for the numbers on Select Committees, it is not responsible for decisions made by those Committees about the division of their work. We should consider whether Select Committees should be all-party or not, and whether all-party reports should be published. I personally feel that they should be—although I am delighted to say that on this occasion the problem does not arise. That is the answer to the very reasonable question asked by the hon. Member for North Wiltshire (Mr. Gray), and, indeed, asked by me at an earlier stage.

Although the Bill is welcome, I do not think that we can pretend that it will solve all the industry's problems. Those problems can be traced back a long way: the railway industry has not had an easy time for most of this century. Opposition Front Benchers seem to forget that nationalisation was not carried out on an unwilling private industry, and that it was intended to rescue an industry that was rapidly going bankrupt.

The privatisation conducted by the Conservatives caused problems. We argued that it would, and so did the Government, when they were in opposition. I listened with interest to the Conservative Front-Bench spokesman, who skirted around the issue, as he and his colleagues do in their amendment. Do they believe that the system of regulation and the system for co-ordinating the development of the rail industry are inadequate, or do they believe that they got them right? They skirt around those questions in their amendment, which simply says that they are not in favour of the way in which the Bill is being introduced. They do not say that they do not like the proposal in its own right.

The right hon. Member for Wokingham (Mr. Redwood) argued that the Conservatives do not like this particular proposal but that they are not necessarily opposed to taking action. That is about as near as the House is likely to get to an admission from those on the Conservative Front Bench that something must be done. They were not prepared to state that, however, and they were certainly not prepared to apologise. Once again, the Conservative spokesman needs to listen to his leader, who said that Conservative Front-Bench spokesmen should be willing to apologise for the mistakes that they made in government. The right hon. Gentleman should not, therefore, feel embarrassed about doing so.

The right hon. Member for Wokingham admitted, however, that regulation of the industry needs to be more robust. It will be interesting to see whether the Conservatives can bring themselves to make any constructive proposals to achieve that. Privatisation has not been the success that they suggested it has been, and if they listened to passengers for one moment, they would understand that passengers do not believe that it has been a success.

As the economic cycle dipped, passenger numbers fell, and as it recovered, they increased. When I have met rail executives, they have said that they are pleased with what they have achieved, but they have admitted that the increases in passenger numbers are largely equivalent to a recovery to pre-recession levels and no more. They do not know, any more than the rest of us do, whether the same decline would occur if there were another recession, causing severe problems to the industry's investment plans.

The punctuality figures show no sign of improvement and those on reliability remain below the desired level. Complaints continue to soar. The Conservative party, therefore, has reason to acknowledge that there needs to be an improvement in the strategic co-ordination of the industry and the powers of regulation and enforcement. The regulators have asked for that improvement, and it is noticeable that the Association of Train Operating Companies, rail operators and Railtrack are not opposed to the principles behind the Bill.

Liberal Democrats should have preferred a more comprehensive Bill to implement the entire transport White Paper. I hope that before too long there may be legislation to tackle the wider issues raised in the White Paper. We should have preferred the Bill to set up an authority with a role similar to, but not as great as, the proposed Strategic Rail Authority to resolve problems in the bus industry. The current competition authorities in that industry are far too slow to tackle effectively many of the problems, including anti-competitive practices which are not in the interests of the consumer.

We want the proposed authority not only to co-ordinate rail, which is just one part of an integrated transport strategy, but to draw up plans for all public transport within that strategy. The Secretary of State could consider those plans and the House could debate them.

Will the House have a chance to debate the authority's annual reports? Will any strategic proposals that are made be reported to and debated by the House? There is a proper role in that process for the Secretary of State, but there is also a role for the House in a wider debate on transport.

Mr. Prescott

I believe that those matters should be debated in this House. I want a public debate about the strategic network, and the approach adopted by the Strategic Rail Authority should be debated by the House. I am sure that that will happen.

On the integration of bus services, the hon. Gentleman is right to criticise the competitive forces and the slowness in dealing with the deregulated bus industry—a major issue, requiring legislation. However, the integration can be achieved within the local transport plans that I have asked local authorities to produce and for which I have found £800 million to enable that work to start now. They are producing those plans; that does not require legislation.

Mr. Taylor

That is half the answer, but not the full one as it does not allow the regulator to tackle problems. Bus privatisation saw a massive decrease in the level of bus services, particularly in rural areas such as my own. In contrast, passenger use in London has increased—partly, at least, because there is an effective co-ordinated and regulated network. I am not arguing for the formal regulation of every single bus route, but we need a body with the ability to crack heads together, given some of the appalling anti-competitive and anti-passenger practices of some of the bus operators.

Mr. Gerald Howarth

The hon. Gentleman suggested earlier that the train operating companies are not opposed to the Bill, although they have expressed some comments. Perhaps one reason why they are not being too vigorous in their opposition is that whereas, previously, the renewal of their franchise would have been the responsibility of the franchising director, under the Bill it will be the responsibility of the Secretary of State. Therefore, the companies do not want to upset him.

Mr. Taylor

The hon. Gentleman may be right, but given the poor public service record of some of the companies, the public might rather welcome the idea that they will be cowed into submission.

With the train operating companies' subsidies set to fall over the coming years, real questions arise about how we get the investment that is needed in rail infrastructure so that the second if not third-class travel conditions that passengers have too often suffered are improved and match the first-class returns that shareholders have enjoyed. I hope that the Strategic Rail Authority will be able to address directly the high levels of profits, the high returns for shareholders and the high levels of pay for some of the bosses in the rail industry, as well as the low returns to the travelling public.

Mr. Tom Brake (Carshalton and Wallington)

Does my hon. Friend agree that however the Strategic Rail Authority is established, it should not impact upon existing projects such as the revamp of Sutton station—a joint venture by the British Railways Board, Connex and the local authority, which should proceed smoothly and quickly?

Mr. Taylor

I hope that that will be the case, although there will be a number of investment decisions that perhaps will be a little harder for the companies than that one.

At the moment, Connex is likely to be told to replace the slam-door trains—something that was not negotiated in the original contract, wrongly. The Government have also refused the franchise extension where that was offered—I think rightly, because I am not keen on franchise extensions that are not open to competition. It is difficult for the Government necessarily to get the best deal if they do not know the other available offers.

There may be other ways in which to allow companies to protect their capital investment when it comes to the handover of one franchise to another rather than simply extending the existing franchise. A new franchisee should be subject to the right contractual requirements to take on some of the obligations agreed with the Government, because that would be better than a simple franchise extension. Over the next few years, resolving some of those issues will be extremely difficult for the Government as they face pressure from some operating companies to exchange or extend franchises without proper competition and without seeing whether others can offer a better deal.

Mr. Jenkin

The hon. Gentleman betrays a lack of knowledge about the existing franchise system. The trains are owned by rolling stock companies—finance companies—precisely because the train leases are transferable, so if one franchisee loses a franchise, the rolling stock can be transferred to the new franchisee. It is erroneous to suggest that one needs to extend franchises in order to encourage investment, although if the company has its franchise extended it obviously has a bigger stake in the long-term performance. There is no financial or legal barrier to the transfer of the operation of the leases.

Mr. Taylor

The hon. Gentleman betrays more ignorance of what is happening in practice than I did of the legislation. The ROSCOs have not been making that investment unless companies have been prepared to underwrite it. The issue is precisely whether the operating company is prepared, either itself or through offering guarantees, to underwrite the investment, and companies do not want to do that when they do not know their franchise extension position and they have no protection.

I am suggesting a solution that would overcome the practical problem, and explaining why the people who originally bought the ROSCOs walked away with enormous profits at the taxpayer's expense. The Government of the day failed to regulate the ROSCOs effectively and prevent that from happening.

We have heard much from Conservative Front Benchers about the increase in the cost of motoring. Between 1974 and 1996 that cost fell in real terms, but over the same period the cost of rail travel went up by nearly 75 per cent. and bus fares rose by nearly 60 per cent. The people who have had a really bad deal are those travelling by train or bus in the past couple of decades.

Companies may well want to increase prices further to provide the enhanced services that are needed. I hope that both the Secretary of State and the regulatory authority will play a robust role in ensuring that that does not happen. The present planned decline in public investment in the railways may have to be reconsidered.

There is serious doubt whether the proposals for cuts in support negotiated by the Conservative Government will allow the less viable lines to keep going. There are ominous signs. In my area, Wales and West Passenger Trains has cut a substantial number of local train services on the branch lines because it is not under a specific obligation to run them.

That has happened in Cornwall and Devon, and similar cuts have happened elsewhere. The companies have not made the investment in increasing passenger numbers that we were originally told they would make; instead, they have simply cut services, decreasing the overall viability of rural lines and putting on pressure for their closure.

The most worrying sign from the Government came when the Under-Secretary, the hon. Member for Hampstead and Highgate (Ms Jackson), said that the Government do not rule out "bustitution"—the substitution of rail services with buses. That has been a disaster before and it would be a disaster again. It would be terribly short-sighted of the Government to allow the companies to go down that route.

We want clarification on many specific issues, including the relationship between the regulator and the authority; the need for direct accountability; and the ways in which Parliament will scrutinise the authority's workings. I am grateful for the Secretary of State's comments on that a moment ago. I hope that we will have the chance to debate both the annual report and the strategic proposals.

We want clarification on resource allocation and the authority's role in it, as distinct from direct support to the rail operators, which I notice is an issue about which Railtrack is concerned. We are concerned about the safety of users and how the Bill will improve rail services for women, disabled people and pensioners. What role will the authority play in considering the safety aspects of private operation, which the Labour party rightly raised in opposition? The unions have highlighted real concerns about cuts affecting safety. Another important question has to do with the way that the one-stop-shop public transport information system that the Government have promised will work in practice, and the role that the SRA will play in that.

We believe that the SRA should have responsibility for overseeing the co-ordination of the national timetable. Problems with the timetable mean that passengers are dropped at stations when no train is available for them to complete their journeys. That problem is especially acute when a train run by one operator is late and the operator that runs the connecting service chooses to let its train leave on time to avoid a fine.

Mr. Pickles

Will the hon. Gentleman give way?

Mr. Taylor

I cannot, as I have spoken for too long already.

The SRA should also be required to oversee improvements in the rail network. Although the Bill implies that responsibility, much detail is needed to explain how that will happen.

The SRA should play a key role in the renegotiation of minimum passenger service requirements. That may be one of the answers to the problem of maintaining rural lines, although the toughening-up process involved would be difficult.

We believe that the SRA should be empowered to ensure that Railtrack and train operators do not earn excessive profits, and to set targets for the growth in passenger numbers for each franchise. It should also be charged with improving access and safety for all passengers, and with conducting an immediate examination of existing freight-only lines to determine the potential for new passenger services. Also, the SRA should undertake an immediate re-examination of the potential for building new stations, for reopening lines and for developing new ones.

We need growth in the rail industry to avoid the road traffic congestion that would be the consequence of failure. It is vital to have an effective rail system, and the Bill is a first step in the right direction, albeit a limited one. I look forward to the introduction in the near future of a bigger Bill implementing the major proposals in the White Paper. That is what is needed to make this Bill the success that it should be.

5.21 pm

Mr. Clive Efford (Eltham)

I welcome the Bill, and the fact that it will be examined by the Environment, Transport and Regional Affairs Committee, which has a great deal of expertise in transport matters. Its deliberations and advice will help to improve the Bill considerably.

A strategic approach to all forms of transport, including the railways, is vital if we are to achieve an integrated transport system. Such a system seemed to be a mythical beast under the previous Administration, when investment in rail services was cut. An example of that process from my area is what happened with the channel tunnel rail link, when the previous Conservative Government tried to blight communities stretching from Kent to London.

The reduction in the value of the housing stock meant that the cost of introducing the link was lower. However, even in Kent's leafy suburbs—the strongholds of many Conservative Members—people banded together to oppose the Conservative Government's outrageous approach to providing an essential transport link between one of the Europe's major capitals and the continent. It was left to this Government to pick up the pieces of that failed strategy and to press ahead a project whose benefits we should have enjoyed for years already.

Sir Teddy Taylor

I was in the House when the Channel Tunnel Act 1987 was passed. At the time, the House was assured that the channel tunnel would be such a wonderful financial success that there would be no need for Government funding for rail links. I disagreed and was one of the minority who voted against that legislation. Does the hon. Gentleman accept that the channel tunnel rail link has not in any sense been a huge financial success, and that all the assurances given at the time have been broken?

Mr. Prescott

rose—

Mr. Prescott

May I say that the contract between France and Britain was a problem that Labour inherited? I opposed the contract when the House dealt with it, so I understand the concerns expressed by the hon. Member for Rochford and Southend, East (Sir T. Taylor). However, we have changed the contract, and all the signs are that the venture is likely to be successful.

Mr. Efford

I am grateful to my right hon. Friend. I should take this chance to point out the approach taken by the French Government towards compensation for people who had to relocate so that the rapid transport link could be built between Paris and the channel tunnel.

Mr. Nick St. Aubyn (Guildford)

Would the hon. Gentleman aid our debate by telling us when, during 40 or more years of nationalised railways, a rail project was delivered by the Government of the day on time and within budget?

Mr. Efford

We are talking about the provision of public transport, not about whether the channel tunnel rail link should be a public or private service. The Conservative party has promoted privatisation as a panacea for rail problems, but it has proved to be the opposite, as thousands of commuters who travel to and from London every day—often through my constituency—would vouch.

The Conservatives published a new plan for transport last week. The Strategic Rail Authority and—via the rail regulator—the rail companies, Railtrack and the rolling stock companies must achieve a more co-ordinated approach to public transport and the growing problem of traffic congestion. We must provide a strategic approach that gives people choice. We are not anti-car, nor do we want to tax people off the roads.

Mr. Jenkin

Do not do it then.

Mr. Efford

Your own transport policy was predicated on introducing road—

Mr. Deputy Speaker (Sir Alan Haselhurst)

Order. Let me remind the hon. Gentleman to address other hon. Members in the third person.

Mr. Efford

The hon. Member for North Essex (Mr. Jenkin) forgets that his Government's public transport policy included the possible introduction of road and congestion charging, and that a great deal of money was spent on investigating the possibility of introducing such charges. We need take few lectures from the Conservatives on that subject.

In fact, the Conservative policy on the future of road transport is about as anti-car as it is possible to be. It offers a free-for-all on road transport, suggesting little more than car parks near stations—something we would all support. It does little to promote public transport, and nothing to increase capacity on public transport or provide more integrated transport to address traffic growth.

In a parliamentary answer, the Department of the Environment, Transport and the Regions told me that it expects a 50 per cent. increase in traffic over the next 30 years. The speed with which traffic can move is expected to reduce by 10 per cent., and by 14 per cent. in the area around London. The previous Government significantly reduced their own road building programme because they realised that it was not possible to build our way out of the problem as new roads generate traffic.

Mr. Gray

What has all this to do with the Railways Bill?

Mr. Efford

The hon. Gentleman's sedentary question shows why the Conservatives came up with their policy. Rail transport is essential if we are to address road traffic congestion. Ask any commuter to London—whether he or she drives a car or is squashed in as a pixie, a passenger in excess of capacity, on a train—whether trains have anything to do with the issue of road transport and reducing traffic congestion.

We need a strategic approach to providing transport—whether it is trains, buses, light rail, guided buses or taxis—in order to make public transport attractive to people. People must consider whether it is in their best interests to use their cars. That is not an anti-car policy; that is a sensible policy for the environment and for the convenience of the travelling public.

Mr. Quinn

I know of my hon. Friend's great personal experience as a driver in and around the London area. Would he care to share with the House his experience of the excessive freight transport that moves around the London area? What role does my hon. Friend think that the Strategic Rail Authority should play in easing the problems caused by excessive freight movements on the capital's roads and in our inner cities?

Mr. Efford

I am grateful to my hon. Friend for giving me the opportunity to consider that matter. The increase in axle weight introduced by the previous Administration has had a dramatic effect on my constituency. It is situated at the junction of the A20 and the A2 which leads from the channel ports, and there has been a massive increase in the number of heavy goods vehicles polluting and congesting local roads. It is clear that we must adopt a strategic approach and shift that freight from our roads and onto the rail network.

Mr. Pickles

Given the hon. Gentleman's expertise in this matter, will he give the House an estimate of what percentage of freight should be carried by rail within the next 10 years?

Mr. Efford

The hon. Gentleman tempts me to hazard a guess when I do not have the statistics that enable me to do so, but let me give him an example to illustrate the problem.

It is projected that the completion of the expanded development at Ebbsfleet is likely to put about 23,000 extra heavy goods vehicles on the south-east road network. We should make immediate plans to address that enormous injection of road traffic in that area. The Strategic Rail Authority and an integrated approach to dealing with transport issues would address such matters. I point out to the hon. Gentleman that the previous Administration had 18 years in which to deal with the problem but all we got was jam on our roads and jam for the privatised rail industry.

The travelling public—and certainly the commuters who travel through my constituency—want the Strategic Rail Authority to deliver a more effective way of imposing sanctions on the transport operating companies that fall foul of their contractual obligations. Only last week, Connex, which serves my area, suffered severe delays on three consecutive days. On Monday, there was a broken-down train at Kidbrooke. On Tuesday, a broken-down train at Welling delayed my journey from Eltham to Charing Cross, which took an hour and a half—a journey that should take 25 minutes at the most. On Wednesday, there were significant delays to trains travelling to Victoria—at least, the train on which I was travelling was delayed.

The travelling public in south-east London are suffering enormously. As I have said before, people from south-east London, north Kent and East Sussex rely heavily on the commuter train network to travel to and from London because we have no other forms of public transport. We do not benefit from the London underground in south-east London. The bus is not yet seen as a reliable alternative to the train, mainly because the roads are so heavily congested. Improvement in rail services from the south-east to central London is essential; the working day is disrupted for thousands of people because of delays on those services. That is not acceptable and we must ensure that the SRA brings about an improvement.

Mr. Gray

Will the hon. Gentleman tell us which clauses will put right those problems?

Mr. Efford

The Strategic Rail Authority will be given powers to require—through the regulator—investment that would bring improvements to public transport services. I think that clause 18 introduces that power.

Mr. Jenkin

Clause 17.

Mr. Efford

I accept that correction from a sedentary position.

It causes me some concern that the regulator must be satisfied that any such investment would bring about a return for the train operating company. The explanatory notes point out that we are shifting the emphasis from the need for the train operating companies to show a return for their investment to the need to provide improved services to the passenger. That element of the Bill should be strengthened. There is a lack of investment—for example, in improving the door-locking mechanisms on the networker trains, which cause enormous delays every day. Railtrack has also failed to invest, and it has become more of a property-owning company than a rail-operating one. The company needs to invest more in signalling systems in order to improve efficiency and the frequency of trains; an investment in new technology for such systems is long overdue. There is certainly the potential to increase capacity on the south-east network, but improvements are blocked because of the signalling system.

Mr. Jenkin

Will the hon. Gentleman clarify how the insertion, under clause 17, of 16A after section 16 of the Railways Act 1993 will work? He rightly says that the regulator can be directed by the authority to require new investment, provided that the investing company will make a return. If a company can invest for a return, why would it not be investing anyway? The great increase in investment in the railway that has already taken place came about precisely because companies can invest for a return. The problem arises when the Government, and other people, require investment where there ain't no return. How does the clause deal with that problem?

Mr. Efford

Two points arise from the hon. Gentleman's question. The first is that sometimes investment in public transport is designed to provide a service from which sometimes there may be no return. However, the second point is that there are times when the train operating companies invest in their existing services rather than considering long-term planning and the strategic role of the transport system. They do not plan or invest for the longer term. That disease of short-termism was encouraged under the previous Administration. It related to the provision of all kinds of public service and investment. If we are to deliver a strategic transport policy, at times it may be necessary for the train operating companies, the ROSCOs and Railtrack to be eased along the path to integrated transport.

A strategic approach to our rail network is long overdue and we need greater accountability among our train operating companies. Two years ago we inherited a lack of investment, no co-ordination and above-inflation fare increases for rail travellers. Over the past two years, those problems have been overcome and a significant increase in the number of people using public transport has been recorded. However, today's reality is that, under the current system, without the Strategic Rail Authority, passengers will continue to suffer every time the profits of the privatised rail operators are threatened. Since the powers of the Secretary of State to control the companies were removed, the situation facing many of those who rely on rail services has worsened, so a return to the Secretary of State being able to provide guidance to the companies is welcome. I believe that the Strategic Rail Authority will bring about a better integrated transport system, which is long overdue.

5.41 pm

Sir Teddy Taylor (Rochford and Southend, East)

I have been in a minority in the House on many occasions and I am afraid I am again today, because I am one of the few who are not looking forward to the Strategic Rail Authority and who believe that, because of its excessive powers, it will undermine the good performance achieved by the railways since privatisation.

The hon. Member for Eltham (Mr. Efford) offered several generalities, but we should try to work out the truth. He said that privatisation had resulted in increased fares, but the information I have received from what I regard as a reliable source is that, although fares consistently went up under nationalisation, there has been a reduction of 1 per cent. in real terms since privatisation. That is either true, or it is not.

Mr. Efford

indicated dissent.

Sir Teddy Taylor

The hon. Gentleman might disagree, but he should go along to the Library of the House of Commons, get some impartial information and see for himself.

Mr. Efford

I seek clarification: in respect of fare increases, is the hon. Gentleman talking about fares as they stood in May 1997, or as they stand today?

Sir Teddy Taylor

I am talking about what has happened since privatisation, which is a fair way to look at the question.

Mr. Efford

Would it not be fairer to talk about what has happened since the election of the Labour Government, who have required a better public transport service? Would not that provide a more accurate interpretation?

Sir Teddy Taylor

Not at all. We have to look at the facts, not try to make points about what has happened since election day.

Mr. Pickles

My hon. Friend is quite right. It is wrong of the hon. Member for Eltham (Mr. Efford) to try to claim credit for the fact that privatisation set up the mechanism whereby fare increases were restricted to 1 per cent. below inflation. That has nothing to do with the Labour Government or with changes made since the general election. It is about time that Labour Members understood that life did not begin in May 1997.

Sir Teddy Taylor

My hon. Friend is absolutely right. He is, as usual, spot on—his observations are the most accurate in the House of Commons. However, I am not trying to make a political point, but merely trying to get across some of the facts.

I travel a great deal by train. Because I have unusual views, I get invited to speak in unusual places all over the country, to which I travel by train. There is no doubt that, however one looks at it, there has been a substantial improvement in rail transport. Let us take the subject of investment. We all knew that investment was deplorable when British Rail ran the network. That was not its managers' fault—they were nice people—but trains were getting old and signalling systems wildly out of date, so the service was becoming infinitely worse. Since Railtrack was established, investment has increased by 85 per cent.—not because its managers are nice people but because of the change in the system, Some might say that Railtrack talks too much about what it wants to do or what it might do, but the fact is that that increase has occurred.

A further point that my colleagues often forget is that there has been a substantial reduction in the public subsidy. There has been a massive cut. Since privatisation, the subsidy has fallen from £2 billion to £1.3 billion. It would probably have gone up a great deal if privatisation had not gone ahead. The subsidy per passenger mile has decreased by 41 per cent. We know that the number of passengers has increased substantially, that the number of freight miles has increased dramatically, that the subsidy has fallen, that investment has risen and that services have been bettered.

Mr. Brake

Is the hon. Gentleman aware that about £600 million worth of investment is outstanding on slam-door mark 1 rolling stock, which is one third more dangerous than the modern equivalent?

Sir Teddy Taylor

I can talk only about my line, the Southend line. As he represents the Liberal Democrats, the hon. Gentleman will know that although there are no Liberal Democrats in my constituency, there are many in the next one, who I am sure have used the line. The line to Southend was the most dreadful line. I travelled on it and it was appalling; it was known as the misery line.

Mr. John Cryer (Hornchurch)

Notwithstanding the point that the hon. Gentleman is making, does he agree that there is still a predominance of slam-door mark 1 trains on the London-Tilbury-Southend line, four years after privatisation and about a year after we were promised that there would be new trains?

Sir Teddy Taylor

I had a meeting with LTS just this week about that. There was a press conference in Room W3 to which about 14 hon. Members were invited, although I was the only one who turned up—[Interruption. I am the only one, apart from my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles), who always turns up for meetings to do with Essex and whose commitment is an example to us all. He will confirm the full story that the new rolling stock is to arrive from September.

As the hon. Member for Hornchurch (Mr. Cryer) is well aware, we were told that investment would not be forthcoming while the line was nationalised, and now it is forthcoming. That is not because people who run privatised companies are nice and those who run nationalised industries are nasty—far from it. It is merely that investment comes through the capitalist system; the Government save a great deal of money in subsidy and, by and large, services are improving.

There may be one or two terrible services. I am told that the Virgin line—wherever that goes—is deplorable, although I travelled on it once and it was fine. If the Government are trying to run an industry as complicated as the railways, which is a very difficult industry to run, why the blazes can they not just admit that there are some failures and some successes, and start naming the success stories? I am not in any sense pushing LTS, although it has been very successful. I am asking why, for the sake of the industry's morale, we cannot say that things are getting better instead of constantly bashing the rail network. The Government have a duty to try to help the image of the railways, especially when it comes to attracting people to the industry.

Some professions, such as teaching which is a perfect example, have a bad image. My third child is just finishing university and has no thought—nor have my other children or their friends—of going into teaching. It is unfortunate, but many say that teaching is not the way to make big money and get on. That is wrong. I am afraid that the same is true of the railways. Because they have a bad image, many people will not work for them. I happen to think that the railways are doing well and that we should encourage them.

Mr. Quinn

As someone who worked for the railway industry since 1979 until I entered this place, I am very pleased that the hon. Gentleman has commended all the many members of the railway community. For the assistance of the House, will he please explain the damage that his Government did over 18 years, which caused the loss of many thousands of jobs and a paucity of services? He said that excessive powers would be granted to the Strategic Rail Authority. While he is on his feet, will he please explain exactly what those excessive powers are and why they do not complement the development of our railway industry?

Sir Teddy Taylor

I shall certainly speak about those powers in detail, mention the relevant clauses and provide all the details for the hon. Gentleman. However, I hope that he will accept that it is simply not possible for the Government—whether Labour or Conservative—to find money for railway investment. As he will well know, when the Conservatives were in power, for a long time, money was demanded for many things, such as the health service, but the necessary finances were simply not available.

I felt sorry for British Rail, which was not receiving the investment that it required. The consequence of that lack of investment was that the industry became a shambles. Exactly the same has befallen London Underground. However, the problem with London Underground has not been its managers but the fact that the necessary investment was not forthcoming. Privatisation, which may be unacceptable to some, is a way of dealing with the investment problem. Although the Government are making arrangements with Railtrack that they hope will raise some extra money, we have to solve the problem of finding the necessary investment.

Mr. Quinn

I am sure that the hon. Gentleman will be well aware that a consequence of the fragmentation of our railway industry is that an organisation that formerly was a whole now has more than 100 parts. As for giving excessive powers to a Strategic Rail Authority, surely the creation of such an authority will provide a focus for developing our railways—essentially bringing Humpty-Dumpty back together again—and ensuring that we really are looking forward so that, for the first time in about six years, we and our railway industry might see some light at the end of the tunnel.

Sir Teddy Taylor

As I said, the subsidy has fallen whereas, this year, 2,000 new passenger vehicles are being delivered. In the old days, that simply did not happen. Privatisation—I am not talking about a group of nasties or of nice people—is producing facilities that simply did not exist before.

What about the new authority's powers? Although a crowd of new authorities is being established, the Financial Services Authority is the one that horrifies me most. It is the most appallingly powerful body, using its powers to treat cruelly and heartlessly those who run a business. Some of those businesses have been operated for years by very reputable people.

Clauses 8 to 17 deal with all the issues of the Strategic Rail Authority's powers of central direction. If those running the authority want to use those powers to the full, they will be able to rush around and direct those who, in a difficult situation, are trying to run the railway.

The Bill will also provide the authority with the power to impose massive fines. Clauses 19 and 20 will allow people at the authority to impose massive fines and to say, "We don't think that the railway is being run correctly. It's all wrong." Those idiots, who will probably be on very high salaries, with lovely big offices and enormously large staffs, will be able to tell railway companies, "We think you've made a muck of it. Here is a fine of half a million pounds."

To whom will the companies be able to appeal? To whom will they go? The answer is to no one. They will be allowed to appeal the merits of a fine, but not the size of a fine. Therefore, people who are running a railway company and think that they are, despite all the difficulties, doing the best job they can will have to face a massive new organisation, which will be run—according to rumour; the Minister may confirm it—by the person who told us how wonderful the channel tunnel rail link would be and how much money it would make.

Clause 17 will allow the authority to say to a company, "We want you to invest. We want you to spend all this money doing this." How does the new rail authority know whether that investment will be profitable? What special knowledge will the authority have? Will it employ consultants or bring in experts? I fear the consequences of the power provided in clause 17, especially when it is allied with the rather frightening power, to make grants, provided in clause 8.

Mr. Stringer

I have been following the hon. Gentleman's argument very carefully but am not quite sure whether he is against regulation completely. Is he in favour of a completely unregulated privatised system—which, effectively, would be a monopoly? Is he also making the case that when public subsidy is being provided to the railway—he has been generous enough to acknowledge that the subsidy is now twice what it was before privatisation—the public should not have a say in how it is used? He has acknowledged that the privatised system is not working perfectly, but is not the legislation intended to make it work better?

Sir Teddy Taylor

Subsidy has fallen—not increased—from £2 billion, to £1.3 billion this year. Although those reported figures may or may not be accurate, my advice is that subsidy has decreased and, eventually, will fade away.

Mr. Stringer

I was making the point that, on privatisation, subsidy doubled, and that—since then, not only in the past 12 months—it has been higher.

Sir Teddy Taylor

The hon. Gentleman should appreciate that we have no concept of what might have happened to the subsidy in the absence of privatisation. I have been an hon. Member for a long time. During that time subsidies have consistently been increased and, as the companies were getting into such a financial mess, hon. Members have consistently asked for more.

The plain fact is that, since 1996, subsidy per passenger mile has fallen by 41 per cent. Again, the percentage may or may not be accurate, but subsidy has decreased substantially.

I accept that we must have some type of public control in public services. However, we are building up a series of quangos with horrific power and run by those who think that they are terribly important.

I think that hon. Members who have worked in the industry will realise that it is not easy to run a railway which has, for example, to be run at unusual hours. Staff, who may have their own problems, are required to cover those services at unusual hours. Railways also have to deal with the public who, as we well know, are not perfect in how they deal with public property. If the proposed and rather grotesque organisation uses all its powers to the full—as it probably will, given the type of people who, we hear, are likely to run it—railways will be even more difficult to run.

Dr. Whitehead

Does the hon. Gentleman accept that he has perhaps not painted a full picture of the provisions of clause 17? The clause states that a facility may be provided, improved or developed if the regulator is satisfied that the person will be adequately rewarded for providing, improving or developing the facility". Does that not seem to deal with the points that the hon. Gentleman is making?

Sir Teddy Taylor

How will the regulator, who is not running a business, know whether a venture will be profitable? If I am running a railway company, shop or factory, and I put my own money in it, I shall have to make judgments on whether investments will be profitable. Now, this guy—who will be called a regulator and will probably be on a very high salary but not answerable to anyone—will be able to tell me, "I think that that will be profitable."

Mr. Quinn

I thank the hon. Gentleman for his great generosity in giving way. However, on expertise in running a railway, would he like to comment on the fact that the vast majority of those who are now running privatised railway companies had little or no prior experience in the railway industry? Would he also like to give the House his reaction—or perhaps that of his constituents—to the recent Public Accounts Committee report on the Railtrack valuation and sell-off, and on whether that sell-off ensured value for money for his constituents and the country?

Sir Teddy Taylor

Although I have already spoken for far too long, I shall deal with the specific points that the hon. Gentleman has made. He will know that political complications made it difficult to value and sell Railtrack. My impression of the sale is that the previous Government obtained the maximum possible market price. As it turns out, Railtrack was worth more than that, so the investment was very profitable for those who made one. However, that was not the previous Government's responsibility.

The fact is that Railtrack has been run very sensibly, so it has been able to obtain otherwise unobtainable resources. Does the hon. Gentleman think that, if he were a merchant banker, it would have been possible—this is the real test—to obtain a lot more for Railtrack? I believe that the answer to that question is no, and that the Railtrack privatisation has been a success story.

It is not the job of a regulator—or of someone who has run that ridiculous venture, the channel tunnel rail link, which was going to be so profitable—to say whether he or she thinks that an investment will be profitable. Surely such decisions must be made by those who are running the industry. If they think that something will be profitable, they should go ahead with it.

I accept that there must be some regulation to ensure that the public are protected. However, for goodness sake, let us not establish a series of crazy and expensive organisations that will cost a fortune, tell the rail companies exactly what they have to do, how they have to do it and for what they will be fined.

I say to the Government seriously that when we have a success story—there have been failures, but by and large the railways have been successes in that passenger numbers and freight mileage have increased, and they are operating well—we should single out the companies that have done well and encourage them to try to improve the image of the industry so as to attract others to it.

I think that the Bill goes too far. The Strategic Rail Authority will be far too powerful. It will become a horrendously expensive and powerful organisation that will make it more difficult for others to run a railway. Generally, I think that our railways are being well run at present.

6 pm

Mr. John Cryer (Hornchurch)

First, I should declare an interest. Although I have never gone a bundle on share owning, I own three shares in the Keighley and Worth Valley light railway. It is the railway on which my father drove steam engines for many years. I am probably the only Member of this place who has shovelled coal on the "Evening Star", which was the last steam engine built in this country before steam engines were finished.

Broadly, I welcome the Bill, like my hon. Friend the Member for Islington, North (Mr. Corbyn). We are both on-message this afternoon, which is unusual. I shall try not to spoil the situation, but I probably will because I usually do.

The key to transport policy and the running of a future transport system is the integration of transport and the moving of freight and people from roads on to railways and other forms of public transport. I can speak from bitter personal experience. Like the hon. Member for Rochford and Southend, East (Sir T. Taylor), I travel from the east London-Essex area into central London every day. I use the tube and the overground railway. I see overcrowding and trains in a bad state of repair. I see also the consequences of underinvestment, sometimes in the form of delays. This is on both the overground railway and the tube.

On the rare occasions when I drive into central London along the A13, the journey is not exactly a bundle of laughs. The A13 is frequently congested, often with heavy and lighter good vehicles. I occasionally drive a 1958 Armstrong Siddeley with, among other things, packed-up wipers along this route, and it is not a laugh a minute.

The key to getting people and freight off the roads and on to railways and other forms of public transport are public intervention and public investment. The Bill will take us some way in that direction and some way to solving the massive problems that we have had in the railway system.

History demonstrates that the railways work best as a publicly owned and controlled monopoly. That is why in 1924 the Baldwin Government, at a time when the free market was virtually an icon, forced the regrouping of the hundreds of railway companies that then existed. That Government realised that the railway system was crumbling and falling apart. There was underinvestment and rolling stock was in a chronic state in many instances. Regrouping took place and there were four large railway companies.

It became clear by 1948 that regrouping had not worked properly. There was still massive underinvestment in the railway system, and in many areas there was virtual anarchy in the way in which the system was run, especially in rural areas. Hence we had nationalisation in 1948. It was introduced to meet exactly the sort of problems that we face now, namely, massive underinvestment and a crumbling infrastructure.

I am not saying 120 per cent. that the private sector should have no involvement in public transport. For example, throughout the era of public ownership of London Buses there was always a contract between the public and private sectors to maintain and supply tyres. That contract came up for renewal every year, and I suppose Dunlop, Goodyear and other companies would submit a plan for the next year that set out how they would maintain the tyres of London Buses. That contract was continued within a specific and particular framework and was tightly controlled and administered. That is a far cry from the present position on the railways, where we have billions of pounds going into privately owned railways. At the same time, there is a still a threat to many rural railways as well as other lines.

Back in January 1996, one of the most revealing articles about rail privatisation appeared in the City pages of the Daily Mail, that great organ of the Tory party. Mr. Michael Walters wrote: Beneath the financial filigree, Railtrack is a conduit for distributing State monies to private investors. All being well, the train operating companies collect subsidies and pass them to Railtrack to pay as dividends to shareholders. That situation is very different from the one outlined by the hon. Member for Rochford and Southend, East. Michael Walters's comments spelt out the reality of Conservative plans for the rail system. The Conservatives saw their proposals as enabling the handing over of assets to the private sector, whether in the City or anywhere else. Of course, the private sector and the City financed Conservative party election campaigns, which was a convenient relationship. That was part of most of the privatisations of the 1980s and 1990s.

Even today, with all the billions of pounds ploughed into the private railway companies—far greater subsidies than we ever saw under public ownership—rural railways are still under threat. Privatised train operating companies are saying to the Government, "We might have to cut back on this railway or get rid of it completely. We must have a bus service instead." That is outrageous and shows that the Conservative party has a strange view of the world when it compares running a railway with running a high street shop. There is no parallel between running a railway, a public service that is provided to get people from A to B, and a high street tobacconist's shop, for example.

I have often heard directors and managers of train operating companies saying, "We run this nice little business like a high street shop." That cannot be done.

Mr. Pickles

I recall the hon. Gentleman's late father talking to me about the Keighley and Worth Valley railway. He said that if it was not run by a business, it would fail. Does the hon. Gentleman think that the Secretary of State is wrong when he says that buses might be an alternative to railways?

Mr. Cryer

I was coming to that.

The Keighley and Worth Valley railway is run not as a private business, but as a co-operative. Everyone who works on it owns it in part. If the hon. Gentleman had asked people in 1963, when Beeching let the axe fall on that railway and many other rural railways, "Would you like to set up a co-operative or would you like the railway to continue as a publicly owned enterprise?", they would have told him that they wished it to continue to be publicly owned. I accept that I might be speaking for some who have a slightly different view. However, the people who I know who are involved in the railway would have opted for public ownership at the time.

I hope that there will be a ministerial comment on rural railways. The Government should give a pledge that all such railways should remain and that there should be no closures. The Strategic Railway Authority should have those powers. There should be no railway closures under this Government. Indeed, there should be an expansion of the railway network.

That is not idle posturing. Looking back to what happened under Beeching in 1963 and thereafter because of the closure of railways, I accept that there was an economic argument for closing many small rural lines. However, their closure took out certain pieces of the national railway system jigsaw, which meant that at the end of the closures there was no longer a comprehensive rail network that covered Britain, so that people and freight could get from A to B.

It is true that no railway company, private or public, can hope to make any profit from many small rural lines. It was argued at the time of Beeching that on some lines British Rail could have afforded to supply a car to everyone who caught a train on them, that being cheaper than keeping the lines open. They were extreme examples. Chopping out bits of the railway network here and there destroys the comprehensive nature of the railway system. That process began in 1963 and it could reach its conclusion in the 1990s and the early years of the next century if we allow the train operating companies to get away with what they want to get away with—cutting back on certain railways and completely abandoning certain lines. It looks as though they are moving towards that.

Mr. Gerald Howarth

I am very interested in the hon. Gentleman's argument. Can he explain how the railway companies will make money if they end up closing all the lines?

Mr. Cryer

My answer is that they will not; we should take those companies back into public ownership, but that is my view.

The railway line that runs through my constituency ends in the constituency of the hon. Member for Rochford and Southend, East. The part of the line that runs through Rainham in my constituency is the Tilbury loop, which loops off the main line. Passengers who travel on that railway—and, to some extent, those who travel on the main line—frequently experience delays and train cancellations as well as all sorts of problems with the infrastructure and old mark I slam-door trains. Months and months ago, we were promised that the new stock would be introduced. Even when it is introduced in September it will not replace all the old rolling stock and, although it is difficult to say how much, a lot—perhaps even mark I slam-door trains—will remain in use.

Sir Teddy Taylor

Does the hon. Gentleman accept, as I am sure he does, that some of the delay was caused by Euro regulation? Largely because of the help provided by one of the excellent Ministers, we will be able to use the new stock; otherwise, it would not have been introduced at all. Does he appreciate that such delays are one of the many problems that British industry has to face up to because of the European Economic Community? We are particularly grateful to that Minister for helping us to resolve the problem.

Mr. Cryer

That is a fairly abstruse argument. My contention is that if the investment had been made rapidly enough, all the regulations could have been dealt with, including those dealing with access for disabled people. Arguments about that have been proceeding over the past few months, but they could and should have been dealt with a long time ago and the trains should be running on the London-Tilbury-Southend line. The fact is that they are not.

There is also the problem of crumbling stations as well as underinvestment by Railtrack—my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) referred to the fantasy figures that it has produced. The stations on the line in my constituency continue to crumble. Railtrack is responsible for the parts of stations that are at and below ground level; the train operating company is responsible for those parts which are above ground level. Admittedly, there has been underinvestment in that line for a long time—probably 30 years—but at least under public ownership a new signalling system was installed, which got that railway running reasonably. That had nothing to do with private enterprise. Public investment in a new signalling system costing £150 million got the railway moving.

I want to touch on a couple of points that have not been mentioned. I would like Ministers to say something about the people who work on the railway lines, particularly those involved in track maintenance. The Strategic Rail Authority does not cover them, although it could and should do so. Many of them are working for their fifth, sixth or even seventh employer since the privatisation of the railways only four years ago. They have lost many of their pension rights, they are working longer hours and generally their situation has deteriorated markedly since privatisation.

The hon. Member for Carshalton and Wallington (Mr. Brake) touched on safety, and I have brought a safety issue to the attention of Ministers previously. If a train was stranded in the middle of nowhere at midnight or 1 o'clock in the morning, British Rail was forced by law to use licensed taxis or proper buses to transport people, many of whom were women travelling by themselves, to their destination. Although I do not think that it was intentional—it was probably an oversight, in spite of my criticisms of privatisation—when the privatisation legislation went through Parliament the same onus was not put on such a service being provided by the train operating companies.

Mr. Efford

My hon. Friend makes an interesting point. When the use of taxis as replacements for train services was considered by the Deregulation Committee, the Department of the Environment, Transport and the Regions discovered that the regulations that had applied to British Rail had not been passed on to the new franchises. The requirement for train operating companies to replace discontinued or postponed train services with licensed taxis was removed by the Railways Act 1993.

Mr. Cryer

I am a member of the Deregulation Committee and my hon. Friend has made exactly the point that I was about to make. Never mind; it is always a pleasure to listen to him.

I am a London Member of Parliament. In the capital, train operating companies could be using unlicensed minicabs to transport passengers, although I do not know how many do so. Across London, about 60 or 70 rapes are committed in minicabs by minicab drivers every year, but no checks are made on their history or physical condition and there are no topographical tests. I have taken that issue up with Ministers and I was not altogether pleased with the response, which was that train operating companies should have some sort of voluntary code of practice. That is not good enough. I want the Government to intervene and say to the train operating companies, "Don't use unlicensed minicabs because they could be dangerous. Use licensed taxis or buses, and nothing else."

Mr. Quinn

May I offer the House different experience from a different part of the country? The Great North Eastern Railway and Northern Spirit—which are the train operating companies up in Yorkshire, the part of the world where I live—provide taxis and buses that follow the route so that people can continue their journey, and they do that to safeguard the commercial aspects of their business. My hon. Friend has hit on an important point that shows how the industry has fragmented: passengers in his part of east London receive a totally different service from passengers in Yorkshire, even though they all may not reach their ultimate destination.

Mr. Cryer

The railway industry is fragmenting and the previous Government effectively turned the clock back to pre-1924, or even the last century.

I want the railway industry to move forward to greater co-ordination and planning and to greater investment. I have made it pretty clear on a number of occasions that I would take the railways back into public ownership tomorrow if I had the power. I do not have that power, but the Railways Bill, which sets up the Strategic Rail Authority, is certainly a step in the right direction and I look forward to voting for it this evening.

6.18 pm

Mr. Eric Pickles (Brentwood and Ongar)

It is a great pleasure to follow the hon. Member for Hornchurch (Mr. Cryer). I have affectionate and happy memories of his late father and his involvement in the Worth Valley Railway Preservation Society, but the hon. Gentleman is entirely wrong in respect of his father's commitment to free enterprise. In October 1968, I attended my first meeting of the Keighley Young Conservatives, which the hon. Gentleman's father addressed on the subject of the Worth Valley railway. He rightly said that it would fail if all it was about was people playing on trains; it had to be commercial and competitive in its outlook. He was absolutely right and, largely because he was such an entertaining speaker, I decided to remain in the Young Conservatives; I therefore pay tribute to him.

The hon. Gentleman said that he would try to stay on-message this evening. In fairness, he did stay on-message—for two minutes and five seconds, according to my stopwatch. After that, he went distinctly off-message. If the Labour Whips had given him a pager, it would have been ringing on his belt.

One thing is certain: although there are grave reservations about the Strategic Rail Authority, the Bill is not a step towards renationalisation of the railways. It is proof of the success of privatisation that no Government member now seriously believes that renationalisation would be a good idea.

In an intervention on my hon. Friend the Member for Rochford and Southend, East (Sir T. Taylor), the hon. Member for Scarborough and Whitby (Mr. Quinn) said that the SRA was the light at the end of the tunnel. Conservative Members are concerned that it could be a train coming at high speed in the opposite direction.

I had the honour to serve on the Select Committee that originally put the report together. As the Secretary of State said that there was a broad consensus, it is only right that I should lay out our approach to that report. It was the first major Select Committee report since the general election to be debated on the Floor of the House, so the Conservatives had to decide how to approach the matter. The Bill was in the Government's election manifesto, so we had to decide whether to oppose every single issue or to try to find a way to make it work, given that the Government were so committed to the idea.

Given the Government's commitment to the Bill and the fact that the Select Committee report was the first to come out, it is interesting that we have had to wait for two years for a Bill. Eighteen months have passed since the Select Committee reported.

Mr. Gray

My hon. Friend will recall that, although he was strongly of the view that it was important to examine the paper on a Strategic Rail Authority and come to a unanimous conclusion on it, certain of his colleagues on the Conservative Benches in the Transport Sub-Committee, me in particular, took a different view.

Mr. Pickles

That is true, but it did not affect how my hon. Friend voted.

Although the report was a consensus report, it was some distance away from some of the recommendations. I agree that the Government should introduce pre-legislative reviews, and I certainly believe that the Select Committee forum is the right place to do that. This is exactly the kind of Bill that will benefit from pre-legislative scrutiny. I have seen examples of such scrutiny on the Select Committee on Social Security. However—this is why our reasoned amendment is so important—we should have had the benefit of the Select Committee's views before Second Reading because, without them, this debate is taking place in a vacuum. As we shall have no opportunity to hear the Select Committee's views until the Committee stage, a substantial number of hon. Members will be denied the opportunity of dealing with the Select Committee's recommendations.

I cannot understand why this Bill has been introduced at the fag-end of a parliamentary Session. My right hon. Friend the Member for Wokingham (Mr. Redwood) is right: it is probably because the Government are seeking to gloss over the problems between the Deputy Prime Minister and the Prime Minister. It has not been lost on many hon. Members that the delays in introducing this Bill have been greater than those in the services of the late lamented British Rail. Like a British Rail sandwich, the Bill is beginning to curl at the edges.

Mr. Gerald Howarth

My hon. Friend makes an important point. Given that he is in favour of pre-legislative scrutiny—perhaps we should call it "mid-legislative scrutiny"—how long does he think the Select Committee will take to consider the matter? As the Bill has been introduced at the fag-end of a parliamentary Session, we could be looking at the fag-end of the next Session before we get round to considering the detailed legislation.

Mr. Pickles

What my hon. Friend says about mid-legislative scrutiny is exactly right. We have been down this path before: we have seen the Government set up a consultation process before introducing a Bill, but then start to panic and introduce the Bill halfway through the consultation period. Just a few weeks ago, the House had before it a number of Bills for which the end of the consultation period was several months hence. Those Bills have now gone to another place and we must wait until they come back before we have an opportunity to discuss them.

The Transport Sub-Committee took a lot of hearings on this Bill and I am sure that we shall want to listen widely to consumer groups, public transport organisations, Railtrack and the various companies. I cannot see how the Committee could get through that work in fewer than 12 to 15 evidence sessions. Unless it is to meet through the long recess, it will have to deliberate well into the spring. My hon. Friend the Member for Aldershot (Mr. Howarth), who is an experienced Member, is right—it will take some time. My colleagues on the Opposition Front Bench have made the characteristically generous offer of a Standing Committee, to sit until the Bill is fully considered.

Mr. Gray

My hon. Friend obviously has not caught sight of motion 3 on the Order Paper, entitled "Business of the House (Railways Bill)", which stipulates that the Select Committee will report by 12 November 1999. Does he agree that that is a woefully inadequate time to consider this complicated Bill?

Mr. Pickles

My hon. Friend is absolutely right. I am extremely happy to agree with him on this intervention.

My hon. Friend the Member for Aldershot asked how long it would take the Select Committee to consider the Bill. It will take 15 sittings. Assuming that the House returns on 19 October, there will no hope of reporting by that date—unless the work is rushed through in two or three evidence sessions. However, I do not believe that that will happen. I have a great regard for the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), and I cannot see her standing for the suggestion that there should be a quick and cheap review. This is an important Bill; it contains many clauses, many of which are, admittedly, wide in their scope, not to mention many schedules. Fifteen evidence sessions would therefore be about right.

Mr. Howarth

I am sorry to pursue this matter, but it is rather important. If my hon. Friend is right to suggest that there will be 15 evidence sessions, the Select Committee will not reach a conclusion on the matter this side of next Easter. The revisions proposed by the Committee would, therefore, come before the House a year hence. They may then be delayed in this House for some other reason, and would not get to the other place until next autumn. Given that the Deputy Prime Minister thinks that this Bill is important, why is this procedure being used?

Mr. Pickles

I am at a loss to explain that—I am as mystified as my hon. Friend. Perhaps the Minister for Transport—we look forward to her reply to the debate—will tackle that point because it is a worry. It is happening as we speak: messages are going out from the Dispatch Box to find out exactly what the result is, but I have the following concern. I suspect that we will not wait until Easter. Scrutiny will be rushed again, and we will have pre-legislative scrutiny in name only.

Mr. Nick St. Aubyn (Guildford)

Will my hon. Friend contrast the treatment that has been proposed for the Railways Bill with that of the Financial Services and Markets Bill, for which there was an extensive period of consideration by a Standing Committee? It went through that only after First Reading, which meant that, before the new Bill was introduced, there could be substantial changes to the legislation to take account of the representations. How can the Government credibly come back after Second Reading and also after the long period of consultation that will be required?

Mr. Pickles

My hon. Friend is right. There are detailed questions to be addressed on the Financial Services and Markets Bill. People want to hear from experts. They want to consider what the various professions that deal with financial services are saying. Matters relating to the railways are no less technical, or daunting, than those relating to financial services, so we should be receiving the views of the Select Committee now. Of course, we will not have that opportunity; the Bill will be considered in Committee later.

We may have an opportunity by the time Third Reading comes around to make suggestions, but by that time, the Bill will be set in concrete. It will be difficult to change much of its central thrust. I find it a little strange that those who sit in another place will be in a stronger position than the House of Commons to determine the strength of the Bill, because they will have had the benefit of the Select Committee's examination of the various matters at stake.

We have had a number of interesting speeches. Three in particular have demonstrated the problem that we face. The more strategic the rail authority is, the better chance it has of success, but the more we debate it, the more Members and the Strategic Rail Authority will get themselves involved in detail.

The speech of the hon. Member for Crewe and Nantwich demonstrated that most clearly. She talked about the relationship of the shareholders, the responsibility of the company to make profits and to plough those profits back into dividends—contrasting with their public duty—and the Strategic Rail Authority interfering in commercial considerations with regard to the running of those businesses. If that happens, we will return to the problem of the dead hand of the old British Railways Board.

Mr. Quinn

Will the hon. Gentleman give way?

Mr. Pickles

I give way to the hon. Member who mentioned the light at the end of the tunnel.

Mr. Quinn

As someone who has been in that tunnel and knows the difference between daylight and a train, I can tell you that it is daylight that I was referring to. You rightly refer to—

Mr. Deputy Speaker (Mr. Michael Lord)

Order. The hon. Gentleman must use the correct parliamentary language.

Mr. Quinn

I apologise.

The hon. Gentleman rightly referred to the historical situation. I am sure that he recalls his leadership of Bradford borough council and his work, along with councillors in Leeds and other west Yorkshire councils, to introduce the West Riding electrification scheme, which benefits many commuters in that conurbation. Will he consider how much easier that process would have been if there had been a Strategic Rail Authority to work in partnership with those councils, rather than the situation that he alludes to? Is not that what the railway industry has needed—that strategic overview and interlinking with the other transport systems? I commend him for his work during that period.

Mr. Pickles

I am blushing: I am most grateful for the hon. Gentleman's comments. He is right to say that electrification of the line was important for economic development; but with regard to land development, I would talk to Railtrack, so it would not present a problem under the current situation.

Mr. Quinn

I am sure that the hon. Gentleman understands that he would have needed to talk not only to Railtrack, but to the train operating companies. At least three services run in that area, not to mention the freight companies. Surely, the key point is that we need that strategic overview to act as the cement to bring the constituent parts of the railway together, and to give that important voice to passengers and to community groups to ensure that not only national taxation but the local taxation that subsidises key services for the economic viability of that part of west Yorkshire provide value for money. That is what the legislation is about. Those are the principles behind the Strategic Rail Authority. Does he agree?

Mr. Pickles

The hon. Gentleman has given me an opportunity to recoil from my embarrassment at his kind words. He seems to think that I am suggesting that a Strategic Rail Authority will be wholly bad; I am not doing that. I am dealing in shades of grey.

Mr. Gray

Shades of Gray?

Mr. Pickles

With respect to my hon. Friend, no pun was intended. The more strategic the rail authority is, the better it will be. My concern is that it will suddenly get itself sucked into operational matters. In her excellent speech, the hon. Member for Crewe and Nantwich gave a clear example of exactly the type of detail that she would like the Strategic Rail Authority to be involved in. The detail that she suggests is not strategic, but wholly commercial and dangerous to the rail authority.

It is nice to see the hon. Member for Truro and St. Austell (Mr. Taylor) back in his place. He was complaining about the possibility of timetables being all wrong and having to try to integrate timetables. The position of the Liberal Democrats has changed somewhat, because last time we debated the matter, the hon. Member for Carshalton and Wallington (Mr. Brake), said: The Strategic Rail Authority should be about strategy and broad objectives; it should not be about timetabling of the 7.23 am Connex South Central services from Carshalton Beeches to Victoria."—[Official Report, 25 March 1998; Vol. 309, c. 444.] I agree, but the hon. Member for Truro and St. Austell is succumbing to temptation. He just wants to get his hands on a grown-up Hornby double-O train set, so that he can signal things exactly right. He should have stuck with the line from Carshalton.

Mr. Matthew Taylor

The suggestion of a double-O system is very tempting, but the point that I was trying to get across did not involve detailed timetabling across the system—that would not be practical or helpful. I did suggest, however, that the authority needed to look at issues such as the non-integration of timetabling, where services by one provider did not link to another provider, so a through service was not provided. There is a role for a co-ordinating body there.

Mr. Pickles

I accept what the hon. Gentleman says, but I think that, on close examination of Hansard tomorrow, he will find that he has backed himself against the buffers.

Mr. Gerald Howarth

I do not wish to prolong my hon. Friend' s speech, but may I ask him a question? Does he agree that it is in the interests of train operators to dovetail their services? The idea that they have a vested interest in preventing passengers from travelling around the country is wholly at variance with what is, in fact, their economic interest.

Mr. Pickles

I note that my hon. Friend the Member for Rochford and Southend, East is still diligently occupying the Chair. He will recall a meeting with LTS— soon to be called C2C—that we both attended last week. It was concerned with precisely that issue, and was considering ways of persuading more people to travel to work earlier—for instance, by means of inducements. My hon. Friend is right: we do not need a Strategic Rail Authority to get people from point A to point B. Those who operate the trains already want that to happen.

I believe that if the authority is hands on and is second-guessing commercial decisions, it will fail. If it seeks an overview—if it seeks to take some powers away from the Department of the Environment, Transport and the Regions—it may have a chance of success. Its principal role must be to ensure a balance between passengers and freight, and to achieve that it must—in the words of the Select Committee— foster a climate that encourages private investment in railways". I am not entirely convinced that the Bill tries to achieve that. Its intention appears to be to give the authority a hands-on role.

We have already engaged in discussion about clause 8. How far-reaching the clause will prove seems still to be a matter of conjecture. Subsection (1) states that the authority may make grants, make loans or give guarantees for any purpose relating to any railway or railway services". It goes on to refer to the nature of guarantees.

It is no good saying that all this was in the original privatisation Act, the Railways Act 1993. The provisions in that Act related specifically to matters concerned with peripheral grants. Clause 8 has the potential to undermine the relationship between Railtrack and train operators. Direct funding on a wide scale would make it difficult for Railtrack to run any schemes at all, if it involved the overseeing of its entire investment process; and it would reduce train operators' leverage on Railtrack. It would undermine a sensible programme of capital replacement. It would also undermine the replacement of trains, and the refurbishment of stations.

Mr. John Cryer

As the hon. Gentleman will know, Railtrack claimed to be investing £27 billion over the next 10 years. When the figure is broken down, as it is in the Select Committee report on integrated transport, it becomes clear that the only new investment in new schemes amounts to £1.4 billion over 10 years. Does the hon. Gentleman consider that adequate?

Mr. Pickles

If the Strategic Rail Authority is to achieve anything, it must, as the report suggests, create a climate for the encouragement of investment. The hon. Gentleman must ask himself whether clause 8 makes it more or less likely that private investment will be attracted to the railways. I contend that it makes it less likely. That may suit the hon. Gentleman's intentions, because he looks forward to the day when the railways can be renationalised; but if the idea is to secure private investment, clause 8 stands firmly in the way of it.

Mr. Quinn

The hon. Gentleman has made an important point about future investment in rail schemes. As he knows, City venture capitalists are looking for a return on their investment in any transport infrastructure project. Does he agree with the chairman of the shadow Strategic Rail Authority, Sir Alastair Morton, who rightly pointed out recently that about 10 years of work and investment will be needed? Surely the stimulus that the venture capitalists seek is the long-term rather than the short-term view. Is that not why, in the past, investment in companies such as SNCF in France has attracted them more than investment in Britain's railways?

Mr. Pickles

I am beginning to warm to the hon. Gentleman: I think he has the potential to become a free-thinking capitalist. He must understand, however, that clause 8 works against the very objective that he seeks to achieve. Let us consider what will be involved if the clause is taken to its logical conclusion. I am not talking about specific schemes or grants to encourage specific activities; but if the powers in the clause are used in regard to the general capital schemes that exist, they will act as a considerable disincentive in relation to the methods of capital-raising to which the hon. Gentleman referred.

Under clause 17, the regulator, at the request of the authority, may direct Railtrack to provide a new facility, or to improve or develop an existing facility. That undermines commercial freedom: essentially, it is second-guessing what Railtrack is doing. By its very nature, the Strategic Rail Authority is unlikely to have the detailed knowledge that would enable it to judge individual schemes against each other. A strategic authority should set itself broader objectives. If it becomes involved in supporting one form of investment against another, improvement of one station against improvement of another and one type of train against another, commercial decisions will be undermined.

As far as I could understand from what the Secretary of State said, that is not the Government's intention. He seemed to be saying, "I intend to use these provisions as a substitute for social provision with regard to particular lines, to ensure that a line or a service continues to exist for reasons of public necessity. I will not use them to set investment scheme against investment scheme." If that is the case, the Government should give an undertaking that they will restrict clause 17 to such considerations.

Dr. Whitehead

Is the hon. Gentleman saying that regulation whose aim is to restrict the market's ability to decide on a price or an investment is illegitimate in principle? If so, he is surely suggesting that the water and electricity regulators are wrong, and that the independent Radio Authority is wrong. All those regulators are trying to impose some sort of standard on investment and performance.

Mr. Pickles

The hon. Gentleman clearly has not been listening to what I am saying; nor does he appear to understand the role of the regulator. A regulator does not become involved in deciding whether a pipe should lead from No. 12 Acacia avenue to No. 13; he deals with strategic service matters. Clause 17 has the potential to undermine commercial decisions. The practicalities of the Bill must be examined. It is no good talking in terms of general, broad principles; the clause poses a real threat to the hitherto undoubted success of privatisation. It offers the prospect of deteriorating services, dropping passenger numbers, decreasing numbers of trains and a general closing down of the service.

Mr. Cryer

Currently, at least eight rural railways are under threat of closure. Many more rural and urban railways have had services cut since 1996. What does the hon. Gentleman make of that?

Mr. Pickles

Clause 17 simply makes it more likely that those services will be closed. If the clause were restricted to questions about the social provision of railway lines, the regulator would have a much better chance of ensuring that those rural services remained open.

I said that three speeches had illustrated the problem of drift from the strategic to the particular, and the hon. Member for Eltham (Mr. Efford) made a number of important points about freight. He was encouraged by his hon. Friends to say, "Isn't it rather wicked that all these lorries are travelling on the roads? Wouldn't it be nice if more freight were taken off the roads and put on the railways?" Everyone agrees with that proposition. However, we must understand that the impact on the general public would be the same whether the amount of freight transported by rail trebled, quadrupled or multiplied by seven.

I invited the hon. Member for Eltham to suggest what percentage of freight should be carried by rail and what percentage on the roads, but he did not want to be specific. However, he should have had an idea about that before he gave us a lecture about rail freight. At present, 6 per cent. of freight is transported by rail. That figure might be 6.5 per cent. this year because the situation is improving, but the amount of freight that is being transported is growing.

English, Welsh and Scottish Railway has done a tremendous job. For 20 years there was a decline in the amount of freight transported by rail. That decline has been halted and reversed, and in the past three years there has been a 35 per cent. increase. To increase the amount of rail freight, even to continental European proportions of 15 per cent. of all freight, will require a considerable effort.

I was interested to hear that the latest figures suggest that by 2010, if we pull out all the stops, it is likely that 20 per cent. of freight will be transported by rail. However, there will still be more tonnage on the roads then than there is now. There are certain constraints on transporting freight by rail.

Mr. Quinn

The hon. Gentleman makes an important point about freight, and I am sure that he is aware that EWS plans to triple its business over the next 10 years and to aim for the target of about 18 per cent. of freight being moved by rail, to bring us into line with Europe.

Does the hon. Gentleman agree that the previous Government's policies, which fragmented the Railfreight company into three distinct parts, caused the decline in rail freight to 6 per cent. of the total? Does he welcome the work of Ed Burkehart and EWS to glue back together those three parts so as to make one company and to bring in investment for that business from the capital sector? Does not that demonstrate faith in the future of the railway industry—

Mr. Deputy Speaker

Order. The hon. Gentleman's interventions are getting longer and longer, and I believe that he is seeking to catch my eye, so perhaps he should bear that in mind.

Mr. Pickles

Indeed; I was thinking of trying to intervene on the hon. Gentleman. Freight has been terrifically successful under privatisation. Let us consider the challenges that freight now faces in expanding. We should not forget that the target of 20 per cent. refers to a percentage share of a rising freight total.

There are a number of constraints on rail freight. The loading gauge on the west coast line, in particular, means that we are unable to take international carriages. If we could do so, we could increase our capacity by one third at a stroke. That would enable us also to engage in piggy-backing of freight, in which a road vehicle is moved straight on to a carriage. Currently, we do not have a loading gauge capable of doing that. If piggy-backing were possible, we could certainly increase the amount of freight being carried by rail.

A more important problem, which relates directly to the Strategic Rail Authority, is the conflict between rail and freight. It is ironic that every improvement in the passenger rail service works against the expansion of freight. The faster trains become and the more frequent the service becomes, the less able we are to expand freight transportation.

We have to remember that most freight is carried at night. That gives rise to certain environmental considerations, not least the noise. Complaints about the noise of rail freight have increased. No doubt those complaints are made by the people who are urging us to carry more freight by rail. As someone who lives by a railway line, I am acutely aware of the increased freight traffic at night.

If we are to increase the proportion of freight that is carried by rail to 20 per cent. or more, the Strategic Rail Authority will have to address the essential conflict between the two uses of the railways. We have to remember that most freight that is carried by rail is not time-critical, so it does not matter whether the load arrives on a particular day. That factor is largely historical and relates to the carrying of grain and coal.

To get above the 20 per cent. target, we shall have to start involving the railways in carrying loads that are time-critical. If, for example, a load left Aberdeen one day, we would then have to be reasonably certain that it would arrive in Brentwood the next day. That is an enormous task for the Strategic Rail Authority, and it is far more important than messing about on the various capital schemes that we have heard about.

Dr. Whitehead

Is not the hon. Gentleman arguing against himself, in that investment in a long-term freight strategy—which I agree we need—is not occurring precisely because Railtrack does not foresee the recovery of its investment in the short term?

Mr. Pickles

Again, the hon. Gentleman is viewing matters in black and white. I have made clear my position, as I did when I was a member of the Select Committee. I voted for the report. I believe that there is a case for a Strategic Rail Authority, but I am concerned because the remarks of the hon. Gentleman, the Secretary of State, and other hon. Members who have intervened suggest that we are about to set up not a Strategic Rail Authority but the British Railways Board mark II. We are a long way from what the Select Committee was suggesting, and we seem to have picked up all its bad recommendations instead of considering the positive aspects of getting more private enterprise involved.

I asked a question about international freight. My hon. Friend the Member for Rochford and Southend, East takes a keen interest in the channel tunnel. However, it seems that the tunnel has not been the catalyst for road hauliers that we hoped it would be. The tonnage of freight going through the tunnel is roughly 40 per cent. below what was predicted. I cannot understand why it costs three times as much to send freight through the tunnel as it does on the Shuttle service, which essentially uses the same track and the same tunnel. Why should it be so expensive? The cost of taking freight through the channel tunnel—this applies also to freight going out from our major ports—is only worth it if the journey goes beyond the Alps.

The problem is that continental railways are far too nationally focused. We need some progress from the Government in terms of breaking down the international barriers to see a better and freer distribution of freight throughout the continent. We will not see major benefits, and we will not see an increase on the 20 per cent. figure, unless hauliers are in a position to decide that using rail is a good option.

I am concerned by the Bill's proposals concerning the Welsh Assembly and the Scottish Parliament. The Bill talks about services wholly inside their respective countries being the reserve of the Assembly or of the Parliament. Are we about to make the same mistakes as in continental Europe by trying to have a national focus in Scotland and Wales, and not being able to make the correct decisions to ensure that there is a strategic overview across the country?

In conclusion, the Bill has the potential to do a great deal of good in terms of co-ordinating the railways. However, it has the potential also to do enormous damage to the rail network. Whether it is a saint or a sinner will depend largely on the determination of the Government to keep the authority strategic. Every indication from the speeches from Labour Members—and from the Liberal Democrats—is that we have strategic drift, and that, increasingly, the authority will want to get involved in the day-to-day operations of the railways. If it does, that is bad news for the railways and bad news for passengers.

7.2 pm

Dr. Alan Whitehead (Southampton, Test)

The speech of the hon. Member for Brentwood and Ongar (Mr. Pickles) was interesting because he appeared almost to suggest that the Strategic Rail Authority was a good idea. However, the Opposition motion suggests that they have no policy—all that they wanted before the debate was to suggest that it was not a good thing to have the Second Reading right now. There was nothing on the substance of whether the authority was a good thing or not. The opening speeches by Opposition Members amply confirmed that opinion.

Even if we took the Opposition argument seriously, the fact that we are debating the Bill tonight and allowing a range of views to be aired is a good thing for the forthcoming legislation. The whole House—not a pre-legislative scrutiny Committee—has an opportunity to discuss in detail what a strategic authority would look like and how it could be introduced.

The Opposition have declined to tell us anything about the authority. The explanation is that, if they engaged with the real issue before us today, they would have to admit that their arrangements at the time of rail privatisation for regulation were appalling, completely inadequate and not up to the task of regulating the consequences of privatisation.

The privatisation process was about as dignified and long-sighted as a distressed family shoving the furniture out the back door and selling it to a bloke with a barrow while the bailiffs were battering on the front door. It was a distress sale, and an attempt to try to remove everything possible from any sort of public scrutiny and accountability before the election, when a new Government might come in and provide some accountability for that service.

It is no wonder that the dreadfully bad value reported by the Public Accounts Committee was achieved from the flotation of Railtrack. A distress sale results in distressed prices. The problem with the original regulation proposed by the previous Government was that it went along with the notion of a distressed sale—it was a botched attempt to try to make some sense of a privatisation which, in its structure, made no sense at all.

The limitations of the regulation struck me following an event that occurred close to my constituency. I use a station, Southampton Parkway, to travel up to London. One might say that the station is a superb example of investment in the railways. South West Trains was enjoined to invest in the station, along with Railtrack, and some money came in from Hampshire county council. A splendid new Parkway station was built. The station has a ticket office, a small cafeteria, access for wheelchairs into the ticket area and level access without kerbs from the car park into the station. It is a great improvement.

The only problem is that, between the platform used by those going to London and the platform used by those arriving from London, there is a bridge. The bridge is very old with steep steps, and there is no possibility of any disabled person—particularly a wheelchair user—getting over the bridge to the other side. On the other side of the new ticket office, cafeteria and so on is Southampton airport. If a disabled person gets off the train at Southampton Parkway, having come from the south, there is no way that he or she could get to Southampton airport.

My colleague, the Minister of State, Department of Health, the hon. Member for Southampton, Itchen (Mr. Denham), and I raised this matter with South West Trains. My hon. Friend received a revealing letter from the managing director, which said: You are correct to identify the footbridge as a problem. This was not part of the scheme but we will do what we can to reduce the problems that it will cause. We are providing a passenger-operated call point on the platform nearest the airport to alert staff that assistance is required. For disabled passengers who simply cannot manage the steps, we will provide a taxi, at our cost, to transport them from one side of the station to the other. That was the solution proposed by South West Trains.

The obvious solution was to build a bridge that could take people from one side to the other as part of the strategic investment in the station. We were pleased that a taxi would be available to go from one side of the station to the other—that was good news for taxi drivers—but, we asked, what about the idea of a bridge? The managing director said that the problem with investing in such a bridge was that the company did not think that investing in a bridge as well as in the station was justified because of the length of the franchise. To build such a bridge would add considerably to the costs, so the company was not prepared to invest in it—unless, of course, the franchise were extended.

We asked Railtrack, the company's partner, why it was not investing strategically in the bridge. It said that South West Trains might lose its franchise, and the new franchisees might not honour the agreement on the station in the same way. Consequently, Railtrack was not prepared to invest strategically in the bridge either, because it did not know what would happen to the franchise.

That vignette seems to me to sum up the absurdities and limitations of the regulation system. We have a short-sighted system that concerns itself with punctuality, journey times and other such immediate performance criteria but completely fails to consider strategically what the rail service needs for the future.

There is another absurdity in my area, and I am sure that there are many throughout the country. A small train runs from Brockenhurst to Lymington and the main train from London also stops at Brockenhurst, but of course it is sometimes late. On Planet Brockenhurst-to-Lymington, the train has to leave on time to avoid penalties, so off it goes, even if there is no one on board, stranding those who wanted to change from the London train. There is no co-ordination or strategy in the regulation system introduced by the Conservative Government. We need a strategic regulation system. I suspect that that is what the hon. Member for Brentwood and Ongar was struggling towards.

A further important reason why we need a strategic authority concerns larger-scale investment for the future that anticipates events rather than simply following them. The hon. Member for Brentwood and Ongar said that the market must decide, but a weakness in the current system is that investment judgments are based entirely on what is happening now.

That is partly because the companies that took over on privatisation did so on the assumption that railway services would continue to decline. Their operating plans were based on how to make a profit by managing decline. That is true of both train operating companies and ROSCOs. Incidentally, I am sure that the Conservative Government did not predict that ROSCOs would be monopolistically integrated into the system by being bought by train operating companies, thus undermining the separation of ROSCOs, train operating companies and Railtrack.

Investment was designed to patch up a declining system while making a healthy profit for the companies and for Railtrack. The idea that the railways would boom and that we needed to design the system for a future in which more people and freight would travel by rail, in which traffic would move off the roads and in which new track might be needed to accommodate the changes, was wholly absent at the time of privatisation.

That was reflected in the strange way in which public money was put in. Far more subsidy was given to the privatised companies than had been given before privatisation. An appendix on page 25 of the Public Accounts Committee report sets out the relationship between total public support for train operating companies—adding passenger transport authority payments—and passenger access charges paid by the companies to Railtrack.

Hon. Members will not be surprised to know that, for each of the past three years, the figures almost exactly coincide. Railtrack makes investment only on the basis of the money that it receives from the train operating companies in the first instance, so the money from the public purse cannot predicate any strategic investment. The possibility of strategic investment has been designed out.

That is why clauses 8 and 17 are so important. They allow strategic investment at last to play a proper role in the railway world. The Strategic Rail Authority will be able to jump out of the circle of money from access charges predicating investment on the basis of whether those payments will continue rather than of whether a strategic change is needed in how the railway works.

The lack of strategic vision is clear in the freight sector. The Government's response to the Select Committee's report on the proposed strategic authority, published in July 1998, said: There is no focus within the privatised industry for long term strategic planning. Before privatisation, the British Railways Board was charged with monitoring passenger and freight demand and developing a strategy to provide the capacity to cater for it. Now, there is no equivalent planning body at work in the industry. It went on to say: The Franchising Director's remit is too narrowly focused on the passenger railway. As things stand, he has no powers in respect of freight on the railways and is heavily constrained in what he can do to support integrated transport initiatives. If we are to move freight from road to rail—I accept the caution of the hon. Member for Brentwood and Ongar about how much that will affect the overall position of road and rail—that will be part of an integrated transport strategy, not a panacea. It is a good thing to take freight from road to rail not only because, for example, it eases congestion, but because it is about seven times as energy efficient and seven times less polluting with greenhouse gases. Transporting freight by sea, on which I am also keen, is about 20 times less polluting, but that is another subject.

Mr. St. Aubyn

Does the hon. Gentleman agree that the figures depend partly on the engines being used and that road fuel gas, for example, which is being promoted for heavy goods vehicles, would substantially change those that he has cited?

Dr. Whitehead

That is a valid point. The emergence of new fuels presents us with a moving target. The hon. Gentleman referred to compressed natural gas, and there are other fuels that would change the equation a bit. However, the same argument, in connection with low-sulphur diesel, also applies to rail. Efficiency can work both ways, but my general point is that, in a ratio of about 7:1, it is environmentally friendlier—because it is much cleaner and more energy efficient—to carry goods by rail than by road. That much is indisputable.

Mr. Gray

The purpose of the diesel escalator is to change behaviour and get freight off the roads and on to rail. Does the hon. Gentleman agree that, even by the Treasury's measure, the strategy is failing, as the Red Book shows that the net revenue from diesel is to go up, year on year, for three years?

Dr. Whitehead

I was not making a direct relationship between the fuel escalator and rail transport. I said that, in the longer term, one argument in favour of encouraging the transport of freight by rail is that it is energy efficient and environmentally friendly. In any event, I remind the hon. Gentleman that the Budget gave a financial incentive for the use of low-sulphur diesel in all forms of transport, on the roads and elsewhere. That incentive has been very successful.

There is a third important element in the argument about freight. The hon. Member for Brentwood and Ongar was right to say that, if more than, say, 20 per cent. of freight were carried by rail, we should have to worry about the type of freight involved, and that considerations of time would also have to be taken into account. Although I do not agree with the hon. Gentleman's suggestion of 20 per cent., he was right to say that most of the increase in rail freight involves goods whose delivery is not time specific—bulk deliveries, aggregates, oil and so on. As long as those materials are delivered to the right place, the precise date of delivery, to within a couple of days, does not matter too much.

However, the development of such a just-in-time system for rail freight depends more on the reliability of a service to a given destination than on its speed. A freight service can be fairly slow, as long as users know that another element of the service is following close behind. That is what a just-in-time service is, and reliable capacity in freight services means that continuous shuttles such as I have described can be maintained.

Two problems remain. First, the present just-in-time system for freight is predicated overwhelmingly on road transport. As congestion increases, so it will become more likely that road transport will lose its just-in-time status—that is, it will be increasingly difficult to deliver goods by road just in time. That will affect more important matters than getting sugar snap peas to supermarkets in time; we have to ensure that components are delivered to manufacturers, because the country depends on manufactured goods. That is a vital consideration for the future.

Secondly, as increasing congestion makes it more difficult to achieve just-in-time delivery of freight by road, the ability of drivers to deliver within their legal driving hours will decrease. Drivers will be forced to break their hours of work, or companies will be required to use a second driver to fulfil contracts. I understand that at least some road hauliers already run a modern version of the old stagecoach operation, with drivers waiting in motorway service areas to take over vehicles and complete journeys begun by others.

My general point is that it is wrong to think that we can rely on a just-in-time road transport system and that rail freight is the poor relation. We must achieve a better balance between the two modes of freight transport.

Mr. Geraint Davies

The National Audit Office report into the sale of Railfreight franchises shows that there was an enormous escalation in rail freight between 1994 and 1997, for the reasons outlined by my hon. Friend. Is it not a disgrace that the franchises were sold off at a cost to the Government of £242 million? They were given away, with extra money, even though it was known at the time that future Governments would cut road building and that more freight would go by rail. Does my hon. Friend agree that that sell-off represented an enormous loss to the taxpayer, and that the proper planning and management set out in the Bill is the way ahead?

Dr. Whitehead

My hon. Friend makes a sound point, which adds considerably to what I have always described as a distress sale. A vendor who wants to get buyers as quickly as possible is not going to be too worried about the long-term value of what is being sold.

Mr. Redwood

The hon. Gentleman has identified two powers that he wants the SRA to have. The first seems to be that, if a train is running late, other trains should be delayed—and therefore made to run late too—so that people on the first train can make their connection. That, of course, would cascade delays throughout the system. His second wish is that subsidies and Railtrack profits should be cut, although that would appear to lead to difficulties with the investment programme. Will he confirm that those are the two magic ingredients that he would like to be added to the strategic authority?

Dr. Whitehead

The right hon. Gentleman obviously has been thinking about those points for a long time, as I mentioned them much earlier in my speech. It is possible that the passage of time has lessened the accuracy of his recall.

I did not say that all trains should be held up to accommodate all connections. I made specific reference to one local service whose only purpose is to carry passengers to meet the main train from Lymington to London. In such circumstances, it makes sense to integrate services so that they work together. Of course, I take the point that a similar approach for every service would cascade delays through the system, but a strategic authority must be able to study the overall operation. It must not be rigidly confined to implementing certain performance criteria, regardless of whether they benefit passengers.

The right hon. Member for Wokingham (Mr. Redwood) also claimed that I wanted to reduce the subsidy, but I did not say that either. I said that, at present, subsidies are an under-performing merry-go-round. Subsidies from the public purse go to the train operating company, which then pays a rail access charge to Railtrack. As the right hon. Gentleman knows, those charges make up about 85 per cent. of Railtrack's income. Therefore, it is clear that the vast majority of the money available to Railtrack for day-to-day investment purposes comes from the access charges levied on the train operating companies. Logically, therefore, Railtrack's investment decisions are likely to relate to existing circumstances. Railtrack's investments are justified by ensuring that it continues to secure the rail access charges: they have little to do with factors that might make the railways better.

Mr. Quinn

I have listened carefully to my hon. Friend's remarks, and I understood that he was talking about the freight sector, for which the state provides no subsidy. He was talking about reliability, which the freight companies have improved through investment in locomotives and wagons. Was not that the main point that he was making, before he was interrupted?

Dr. Whitehead

Operating and franchising conditions for freight are different from those for passengers, but the franchising director's remit is based on passenger transport, and, because its operating charges come primarily from passenger transport, Railtrack's investment strategy is also based on passenger services. Freight must be taken seriously for the future, but services currently fall outside the remit of railway regulation. Railways are not just about passengers, and every success with passenger miles raises a further problem for the movement of freight by rail. We need strategic investments to prevent that.

The Select Committee on the Environment, Transport and Regional Affairs recently visited Holland, where the rail authorities plan a dedicated line from Rotterdam to Germany to take freight away from passenger lines. It is inconceivable that we could do the same in the UK under the present investment and regulation system.

Mr. Bennett

What about Central Trains?

Dr. Whitehead

My hon. Friend is correct to say that proposals exist, but the likelihood of our arranging a Dutch-style freight-only track is some distance off.

Freightliner and other companies are trying to increase the amount of freight that leaves the highly successful Southampton docks by rail. Most of our freight travels south to north, to the midlands, but there has been a heavy increase in passenger traffic on the London to Bristol route, from west to east. The two services clash around Reading, where additional track to stop rail traffic jams is urgently required, but seems unlikely to be provided.

The SRA will not be the monster suggested by some Conservative Members, but a sane reaction to the appalling bodge that the previous Government made of privatisation.

Mr. St. Aubyn

The SRA will receive £100 million in its first three years to deal with bottlenecks, but there are many of them. Does the hon. Gentleman know how much it would cost to put right just the one at Reading?

Dr. Whitehead

I do not have the exact figures before me, and the hon. Gentleman makes a good point. However, a company is not likely to put bottlenecks right if it bases its calculations simply on likely income from track access charges. Strategic investment for the whole railway system would make it work better.

Mr. Kerry Pollard (St. Albans)

Is my hon. Friend aware that Railtrack has identified 20 bottlenecks that require the urgent attention and serious investment that the SRA could provide?

Dr. Whitehead

Yes. I recently read details of the bottlenecks and the investment required to correct them, and I am sorry that I do not have those details to hand.

Mr. Gerald Howarth

As I have pointed out to several hon. Members, Railtrack has no interest in reducing the number of trains that gain access to the system, and everything to gain if even more trains use its system, thus generating more access charges. Far from encouraging bottlenecks, Railtrack fully intends to eliminate them and is setting aside £27 billion over the next 10 years.

Dr. Whitehead

That may well be true in the world of F. A. von Hayek. The hidden hand of the market may work in perfect competition, but it does not work so well in the specific circumstances in which Railtrack collects its income and takes, and proceeds with, its investment decisions. Secondly, as the Environment, Transport and Regional Affairs Committee has noted, the huge sum that the hon. Gentleman has mentioned looks less enormous when it is broken down. In fact, it is insufficient for the necessary strategic plans.

The difficulty in investing for the future is anticipating demand for services. The present regulation system makes it difficult to predict change, which is why the SRA is important. The travelling public know that rail privatisation has been desperately unsuccessful when considered against the claims made for it. Some improvements have occurred, but failure to deliver services punctually or even to keep them running is increasing. Substantial reinvestment is required, and there is a significant investment backlog. A sea change is required in our rail freight policy.

The SRA can address those matters and will be one of Labour's means of delivering an integrated transport policy. It will stand in contrast to the raft of populist measures outlined last week in the Chamber, which would move away from integrated solutions to our transport problems. We have heard all about the new Conservatives who work from year zero, repudiating all that happened under the previous Government. The fact that the public are crying out for integrated solutions to rail problems should surely lead those new Conservatives to demand an SRA. Perhaps the clearest proof that their policy still requires some work is the fact that, far from jumping up to argue for that, they seem thoroughly confused over whether they want a strategic authority at all.

7.38 pm

Mr. Nick St. Aubyn (Guildford)

I am no expert on railway matters, but my constituency is an important local railway centre. The network that traverses the south of England passes through our station, and many trains from London to the south coast cut across it too. Some 40 per cent. of rail commuters in south-west Surrey use Guildford station. In my two years as the local Member of Parliament, there have been substantial changes—on balance, for the better—in services at Guildford. South West Trains recently increased the number of services from Guildford to Waterloo—a journey of just over 30 minutes—from three an hour to four, and two of those four trains are modern, automatic-door trains, not the slam-door type. Even for those who are disabled, access to London is much improved by the benefits of railway privatisation.

I regularly use the service to come to this place, but I also use other networks. I frequently travel to the west country, and when I canvassed in the Eddisbury by-election, I enjoyed the benefits of Virgin Trains. I have heard much criticism, but Virgin's first-rate service to Crewe arrived pretty much on time, and the return was on time too. It was a most convenient way to reach my destination. As for the people of Eddisbury, I heard not one complaint about rail privatisation as I canvassed the constituency—most people said that they intended to support the Conservative candidate—but I heard many complaints about the Government's failure to deliver on their promises.

Mr. Geraint Davies

Does the hon. Gentleman agree with Central Trains' proposition to divert freight from throughout Britain through Guildford? That would be a welcome alternative to routeing freight through Croydon.

Mr. St. Aubyn

I will turn to the difficulties posed to Guildford and other railway centres by the growth in the railways which this Bill will do nothing to address.

We must recognise that, after more than 40 years of secular decline in the share of rail traffic, the policy of privatisation reversed the trend. For the first time, we have seen not only substantial growth in passenger traffic but significant growth in the share of all traffic being taken by rail. That gives the lie to those who have claimed this afternoon that the increase in rail traffic is a product of the growing economy. The volume of traffic varies with the economic cycle, but the share of traffic carried by rail is the key test. According to that test, privatisation was a defining moment: it changed 40 years of decline in the rail industry.

The Government are very confused about the Bill. Within a few months, the Secretary of State said that the railways are a national disgrace and then announced that he could deliver a modern railway only with a full and open partnership between the Government and the industry. Ministers have, on the one hand, tried to play the blame game with the private sector on the railways while, on the other, demanding that the private sector invest more and more money for an uncertain return under the framework that the Government have advanced.

The Government claim to believe in standards, not structures. Yet this Bill is all about structures and promises nothing for standards. I wonder what the Bill's real aims are. Clause 7(2)(c) charges the Strategic Rail Authority to act in a way that is best calculated "to promote efficiency and economy on the part of persons providing railway services". A similar preamble might have been attached to the nationalisation of the railways in the 1940s. It is not the job of Ministers to deliver efficiency and economy; it is the job of the market. The role of Ministers may be to temper the market in the wider social interest, but the idea that ministerial interference or intervention will promote efficiency and economy misunderstands the way in which the open market economy works.

Mr. Quinn

The hon. Gentleman seems to suggest that the privatised railway companies can use the simple market mechanisms to acquire the necessary investment and create the sort of service that his constituents need. How does the hon. Gentleman answer the evidence about the proposed rail authority that was provided to the Select Committee during its last sitting? Railtrack said that it would need assistance of about £100 million to help with the bottlenecks to which my hon. Friend the Member for Southampton, Test (Dr. Whitehead) referred.

Mr. St. Aubyn

The hon. Gentleman has almost made a complete speech. I shall come to the issue of bottlenecks, but, before I do, let us deal with clause 7(2)(c). So confusing is this clause that the explanatory notes to the Bill state: the Authority will not be required in every case to give effect to its purposes and strategies … Some of these considerations could contradict each other, so the Authority must undertake a balancing exercise in each case. The truth is that the Bill is a complete mess and the explanatory notes show that the clauses are quite confused. The sooner the situation is clarified, the better. I look forward to hearing the speech of the Minister for Transport later this evening—although I am not sure what she will say.

Bottlenecks pose another problem. There are about 30 bottlenecks in the rail network around the country and it costs about £30 million to cure the typical bottleneck. That is what the signalling at the west end of Leeds station cost, for instance, and experts in the industry estimate that that is the typical cost. Therefore, curing 30 bottlenecks at £30 million a time will cost nearly £1 billion. Yet the Government are providing only £100 million to tackle bottlenecks over three years, which will cure only three of the 30 bottlenecks.

I have a particular interest in this matter as the bottleneck at Waterloo is important to my constituents. That is an urgent consideration. The Government offer no clear solution to that problem in their plans for a Strategic Rail Authority.

Mr. Geraint Davies

rose—

Mr. St. Aubyn

I will not give way. If there is time later, I will be happy to take the hon. Gentleman's intervention.

I draw the attention of the House to another problem that is related to the success of the railways, which the Minister and I have debated before in the Chamber. I refer to the problem of railway noise. Those who live near the busy railway station in my constituency are facing an escalating problem arising out of investment programmes—none of which we want to discourage—including those of Railtrack. There is a particular problem with accountability. Railtrack has used subcontractors to carry out the work. We have written to Railtrack and, time and again, local residents, the council or I have obtained assurances about how work will be conducted in future. However, the message is lost by the time it reaches the subcontractor who is performing the work in our region.

I shall draw the House's attention to several alarming cases. A constituent describes a typical experience. She lives just up the road from the railway station and she writes: I do not think we have had an uninterrupted night's sleep this week. On Monday I was woken at 3 am by what sounded like someone throwing bricks at a metal sheet for half an hour. I could go on as there are many other similar examples. The council has done a lot of work in this area, and its report states: the normal background noise level of about 44 decibels was raised for periods as high as 76 decibels which is a loud and intrusive noise level. On that occasion, Railtrack took nine months to respond to the entreaties of local residents. It has promised that its intense programme of work in our area will end this month. However, we have identified the problem that Railtrack is not subject to the environmental noise rules under the Railways Act 1993. Breaches of that code are allowed unless councils taking action against Railtrack can show that the noise caused is "totally unreasonable". Experience reveals that that has given Railtrack and its subcontractors far too much leeway. I urged the Government 18 months ago to address that point in any Bill that they might be planning to introduce—such as this one. It will be a profound disappointment to people living near railway stations throughout the country that the Bill makes no specific provision to deal with the problem of railway noise. The Minister for Transport owes us an explanation. When she replies, she should explain why her Strategic Rail Authority is not specifically charged to deal with that problem, which has been raised on many occasions in the House.

In previous debates, we have already alerted the Government about the need for the Rail Regulator to beef up his act on that matter. In March 1996, the Rail Regulator issued a report on environmental guidance, in which he spoke of extensive and detailed legislation aimed at protecting the environment". Apparently, he was not aware that that legislation did not apply to the railways. We need clear guidance for the operators before the measure takes effect. We need a commitment from the Government that powers will be changed when the Bill comes back from the Select Committee.

Compensation is the final problem that needs to be addressed. Even if we deal with railway noise caused by mismanagement and poor handling by contractors, there will nevertheless be a steady growth in the noise generated by our railway system. That may be preferable to the noise generated by the road network—another problem that my constituents share with people in many other parts of the country. However, major improvements to the road network trigger a system of compensation under the Land Compensation Act 1973, whereas in respect of the rail network, because disused track is frequently brought back into service, no claim to compensation can arise.

Some of the rail network may have been disused for decades. In recent years, people will have bought properties with no thought that the almost derelict line near the end of their garden will ever be reactivated. On both sides of the House, we are agreed that our policy is to reactivate railway lines so that they can be used for the good of society. It is only right that we should treat those affected—who live along the edge of those lines—in the same way that we would treat someone who lived next to a new railway line that was built on virgin land. That is the only fair way to deal with the costs to the few of a policy that will benefit the many.

7.53 pm

Mr. Lawrie Quinn (Scarborough and Whitby)

I welcome the opportunity to speak in the debate because, as I have already pointed out several times, not only did I spend years as a member of staff working in the railway industry, but I am proud to speak as a member of a wide community—the railway community. I am proud to say that my father was a train driver and that, until recently—because I now spend time in my constituency—I always lived in railway towns. From 1979 until I was returned to this place, I worked as a manager and a civil engineer for the railways.

I shall focus on my constituency and the opportunities that will arise from the SRA. Recently, the Esk valley line, which runs from Middlesbrough, Teesside to Whitby has benefited and flourished through a communityrailway-train operator partnership. That partnership came about because of the support given by the local community. In that rural community, there was a desperate need for effective transport corridors to quite remote areas of the country. There was a need for access to the rest of mainland Britain, and—especially during the winter months—for a viable route into the port of Whitby.

The line offers a tremendous opportunity. I hope that, when the Bill is passed, I shall be able to argue the case for that currently little-used passenger line—there are about four trains into Whitby and four trains out—to be used to assist the great coastal port of Whitby to flourish. Those hon. Members who have visited my constituency will know that it includes a hilly and mountainous area—the North York Moors national park. Currently, there is a contract of about £6.5 million for the delivery of steel to the port of Whitby; as many as 20 lorries regularly carry steel from the unloaded ships over the North York moors, into the Vale of York, on to the A64 and the rest of the transport network. That steel has been imported from Holland. It seems stupid that a mechanism does not exist to ensure effective transport links for that steel and other commodities being unloaded at the port of Whitby—which is thriving and goes from strength to strength. There should be a rail freight system from the port of Whitby.

I should declare interests other than those of a professional civil engineer. Many hon. Members will be aware that I am proud to chair the all-party rail freight group. Several Members of this and the other place have seen the real benefits that are afforded by the flourishing and the further renaissance of rail freight. That has arisen from the excellent work carried out by English, Welsh and Scottish Railways and Freightliner Ltd.

Opposition Members referred to bottlenecks, especially in relation to rail freight. The problem is that, at present, Railtrack has clearly stated to the Government that it cannot fund from its own resources the improvements that are needed to deal with bottlenecks. Opposition Members have made that point. The company has asked the Government for extra assistance, but, although Labour Members acknowledge that matter, Opposition Members seem to believe that the whole principle of a Strategic Rail Authority working in partnership with freight companies to address those key problems is somehow not in order.

Mr. Jenkin

There is some confusion in the debate. We are discussing a Bill about the regulation of the railway and about the Strategic Rail Authority. We are not necessarily voting for increased money for the railway—that is a different debate. However, Labour Members seem to be conducting the debate on the premise that the Strategic Rail Authority means that there will be significant new resources. Of course, the problem of freight described by the hon. Gentleman has arisen because it is difficult to run commercially viable freight services on the railway. Access charges merely wash the face in respect of the current costs of Railtrack. We are not arguing against the application of additional funds to the railway case by case, but the funds will not flow automatically—as the hon. Gentleman seems to think— from the establishment of the SRA. Nor is it necessary to have an authority in order to get increased funds into the railway.

Mr. Quinn

Perhaps the hon. Gentleman did not quite hear what I said. I welcome the establishment of the SRA in principle, so that I and other hon. Members can argue our case for the renaissance of railways—whether passenger or freight. At present, when Railtrack is approached by freight companies, its prime obligation, under the current regulatory system, is to meet the requirements of the passenger network. That is what the company is paid for; that is why it receives the bulk of its resources—to sustain the current railway system. I and my constituents want strings to be attached to the considerable sums that are paid into the railway industry to ensure that the industry performs to its full potential and delivers its part in our nation's transport policies.

A considerable investment has been made in the rail freight sector by English, Welsh and Scottish Railways—a company that receives no support except on a case-by-case basis. Route availability is the mechanism by which companies decide whether bridges are strong enough or clearances in tunnels and bridges are sufficient to allow the trains to pass. In administering the mechanism by which a clear through path is provided for freight or high-speed passenger services, Railtrack concentrates on the here and now—it does not focus on future potential.

Whitby is an extremely important and vibrant community and it is located in a picturesque part of the country. Like my hon. Friend the Member for Hornchurch (Mr. Cryer), I have an interest to declare: with the hon. Member for Ryedale (Mr. Greenway), I am pleased to be a vice-president of the North York Moors railway. There is a transport corridor from Whitby to Pickering that has the potential to link into the rest of the rail network. That would afford a better lifeline to the communities in the Esk valley and the North York moors, not only by bringing in additional tourists and revenue through their sustainable tourism policy, but by providing the economic development that is vital to peripheral areas such as the one that I represent.

If I and the hon. Member for Ryedale wanted to make the case for a link to fill the gap of about seven miles between Pickering and Malton, both of which stations lie in the hon. Gentleman's constituency, we would not be able to press our argument direct to Railtrack alone under the current regulatory system. We would have to approach Railtrack, Northern Spirit, and other operating companies to make the case. The simple business of running regular services on the North York Moors railway line into Whitby required the making of a special safety case and the establishment of a partnership between Northern Spirit and the North York Moors railway. That took many years to achieve under the current regulatory system. My constituents want action now—they want some of the tax money they pay to deliver for them, because they are not getting the benefit of existing potential.

Mr. Jenkin

The confusion still arises. The hon. Gentleman can bleat to his heart's content to the SRA making the case for a new rail link, but unless he can put some money on the table, he will get nowhere. If he could go to Northern Spirit and Railtrack and put money on the table now, he would find that money talks. What counts in transport infrastructure investment is money. He has an unrealistic expectation that, somehow, the SRA will have money coming out of its ears to lubricate the way of all those projects, but there is no evidence that that will be so, unless the Minister tells us tonight that far more public money will be made available. There are only two sources of money: the fare box or the Government.

Mr. Quinn

I thank the hon. Gentleman, but the North York Moors railway has in fact developed such a partnership; what it needs to do is engage other partners to come on board. Perhaps I am being idealistic and optimistic, but I am doing the best that I can for my constituents. I believe that the SRA will offer a forum in which such partnerships can be created, not only between the operating companies and Railtrack, but with the wider public sector, such as local authorities and the communities that rely on transport partnerships. I commend the work done by the Esk valley partnership, which has come to fruition in the past few weeks in the opening of the first integrated transport centre at Whitby station, where bus, rail and tourist information services for the area are all available.

Mr. Geraint Davies

Can my hon. Friend explain a paradox? The hon. Member for North Essex (Mr. Jenkin) says that there will be no money in the SRA, and implies that it might be better if there were. The hon. Member for Guildford (Mr. St. Aubyn) says that there is a little money, but not enough, and the free market should be allowed to sort things out. However, the right hon. Member for Wokingham (Mr. Redwood) says that the big problem is that there is £3 billion somewhere to be spent by the SRA. It appears that the Opposition do not know whether they are coming or going—perhaps my hon. Friend can tell me whether they are doing either.

Mr. Quinn

I thank my hon. Friend—he puts his finger on the central problem. The Opposition are so focused on the short term and so wedded to the notion that the market will deliver that they do not understand that the feelings and experiences of the travelling public are that privatisation has not delivered for them. The prospect of "bustitution", which is a real likelihood facing many rural areas, engenders fear in many rural constituencies because of the possibility that, especially in the winter months, the so-called replacement bus services that have been offered will not be able to make their way through to their destination.

I remind my hon. Friend of the experience of the community of Alston in northern Cumbria. A short branch line linked it to the Newcastle to Carlisle line and, when buses were promised to replace the rail link, the arguments about winter access were made. The simple realities of the weather in my part of northern England are that train services are the only transport service that can get through. I am making the case for communities and people, not for business.

Mr. Jenkin

I am grateful to the hon. Gentleman for giving way once more—I shall not interrupt him again. When the Conservatives privatised the railways, we pledged that we would never give in to "bustitution", so the change of policy under the Labour Government is a matter of concern. I certainly accept that the hon. Gentleman is arguing hard on behalf of communities.

The figure of £3 billion to which the hon. Member for Croydon, Central (Mr. Davies) refers is a borrowing limit, and a borrowing limit on a public authority must be sanctioned by the Treasury, because any borrowing turns up in the public sector borrowing requirement. That means that every decision by the SRA to borrow money will end up on the desk of the Chancellor of the Exchequer. Is that the way in which the hon. Member for Scarborough and Whitby (Mr. Quinn) wants the railways to be run?

Mr. Quinn

I thank the hon. Gentleman for his intervention, and I am pleased to hear that it will be the last.

The key point is that we want a transport policy that delivers for people. I represent a remote part of northern England that desperately needs economic development and sustainable transport systems. I perceive in the Bill the opportunity to create partnership and linkage for the benefit of the people I represent by enabling strings to be attached to the considerable sums of public money—their money, their taxes—that go into the coffers of Railtrack.

I remind the hon. Member for North Essex (Mr. Jenkin) that the railways industry is awash with money. My experience of working in the industry for many years from 1979, when the Conservative Government entered office, tells me that the presence of that money has not resulted in the sort of investment that our railways need. It has not delivered the new rolling stock that would result in trains running on the tracks more quietly, so that the constituents of the hon. Member for Guildford (Mr. St. Aubyn) were not disturbed in the night. Investment could be far better targeted and controlled to ensure far greater efficiency.

Time is limited and I want to allow others to contribute to the debate. My final point is a procedural one, concerning the business in this place. I take issue with the points made by the hon. Member for Brentwood and Ongar (Mr. Pickles), who is unfortunately not in his place to hear this. The offer of Select Committee scrutiny is an opportunity for all hon. Members to engage in wider debate, to describe their personal experiences of transport systems in their communities, and so ensure that we get policy in this area right. Far from detracting from overall scrutiny, we are extending debating time.

If we are wedded to delivering to our communities, passengers and people who are reliant on environmental improvements, by moving freight from road to rail, we must press on with this. I am a civil engineer; I believe in solving the problem. As I said, this Bill is the light at the end of the tunnel of Tory privatisation, which has done so much damage not only to the immediate railway family but to many communities throughout the land.

8.12 pm

Mr. Gerald Howarth (Aldershot)

I shall not follow the hon. Member for Scarborough and Whitby (Mr. Quinn) down the branch line to his constituency, save to say that he represents the authentic voice of the British Railways Board, which I thought we had ditched a long time ago. His speech was a little depressing, but I wish him well with his constituents. I am sure that his local newspaper will carry wonderful headlines about his call for new public investment in railways to extend to Whitby and Scarborough.

I am sorry that the hon. Member for Southampton, Test (Dr. Whitehead) is not in his place. He said that some of us Opposition Members were repudiating all that previous Conservative Governments had undertaken. I am delighted to say that, far from repudiating the Railways Act 1993, I entirely endorse it. I am only sorry that, unfortunately, I was resting between engagements and unable to vote for it which, had I been a Member at the time, I would have done with enthusiasm.

There has been an interesting display from Labour Members in this debate. We have had the full gamut—old Labour, represented by the hon. Member for Hornchurch (Mr. Cryer); some new Labour, and the authentic voice of the British Railways Board somewhere in the middle. Until recent weeks, it has been characteristic of the Labour party to run down the efforts of the privatised companies to provide a better service to the public. In opposition, Labour's policy of seeking to undermine the flotation not only of Railtrack but of the train operating companies unquestionably damaged very seriously the amount that the Treasury was able to raise from the sale of those national assets.

Mr. Geraint Davies

Is the hon. Gentleman interested to know that the £3.90 share price set by Warburg for the flotation of Railtrack was 10 times oversubscribed? Even ignoring the fact that the assets appreciated from a value of £1.9 billion to more than £8 billion, they were given away, and that is a national disgrace for which he should apologise.

Mr. Howarth

I am sorry to disappoint the hon. Gentleman, but I have no intention of apologising. I was neither a Minister nor a Member of Parliament at the time—nor was I one of the financial advisers in the City. The hon. Gentleman is so intelligent and so vastly superior to everybody else that I have no doubt that he knows precisely the price at which Railtrack should have been offered to the public and that he will tell us so now.

Mr. Davies

Another 15 per cent. should certainly have been added. Scenario planning—[Interruption.] Before speaking on these issues, the hon. Gentleman should read some of the National Audit Office reports. He is clearly abundantly ignorant on this matter and should stop talking about it.

Mr. Howarth

The next time I speak to my friends in the City, I shall recommend the hon. Gentleman as an up-and-coming potential investment banker. His considered view is that, at 15 per cent. extra, Warburg would have hit just the right price. I am sure that it will be delighted to know that.

Mr. Jenkin

The price would have been £4.48 instead.

Mr. Howarth

My hon. Friend has done the calculation; what a pathetic contribution from the hon. Member for Croydon, Central (Mr. Davies).

Mr. Davies

Will the hon. Gentleman give way?

Mr. Howarth

No, I have given way enough to the hon. Gentleman. My hon. Friend the Member for North Essex (Mr. Jenkin) is sorely tempting me to do so again, but I shall visit the hon. Gentleman later.

The Labour party has had a vested interest in underselling the success of privatisation. It keeps talking about the fragmentation of the railway system, and it has decried the operators and accused them of making money and of failing to provide an adequate service. It is interesting that the Minister for Transport's predecessor, the right hon. Member for Hamilton, North and Bellshill (Dr. Reid), finally understood that such a policy was leading nowhere, when he said in an interview with New Statesman in April: Over the past year we've moved away from standing on the side, criticising and using the rhetoric of threats. Instead we're going to work with the companies to get the best bargain for passengers". The right hon. Gentleman gave the game away: this Government were in the business of using threats, attacking and decrying. It was only with his appointment that some positive work began in recognising the contribution that the private sector could make to the success of the railways.

I see no intrinsic opposition to the Government's Strategic Rail Authority. The accusation is that the previous legislation was hurried. That is self-evident; we were trying to get it through before the election, something of which we should not be ashamed. We wanted to ensure that it was out of reach of the nationalisers, and in that we were supremely successful. I readily accept that improvements could be made; legislation is often enacted that subsequently requires improvement.

It was refreshing to hear the Secretary of State at last acknowledge that the private railway companies have had some substantial successes. I shall not rehearse them all, but I shall repeat some of them because there are still too many Labour Members who are not prepared to give the privatised companies the credit that the Secretary of State gives them. Whether that will put him in bad odour with his family, I know and hope not.

The Secretary of State was gracious enough today to acknowledge that, for example, the number of passenger trains has increased by 14 per cent. over the past four years, that freight tonne miles are up by 35 per cent., that 2,300 new carriages are on order and that there are 1,000 extra services a day—although I understand that it is even more than that. In addition, 12 new stations have been opened since this Government came to office, for which the Secretary of State took credit. I am not worried whether he takes the credit because it was our legislation that provided the means, and all such investment is to be welcomed. The £90 million investment of South West Trains in 30 new trains will be warmly welcomed by my constituents.

There has not just been new investment, however. There is a new attitude, too. There is a much more positive attitude about serving the customer. The other day, for example, on Farnborough station, in my constituency, I went to see the new emergency call arrangements. Regardless of whether a member of staff is on duty—which may not always be possible; for example, in the middle of the night—or is not accessible, the new arrangements enable any passenger who feels at risk or in danger in any way simply to press a button on a machine, putting him or her in direct contact with a helpline at a central control operation. That is the type of service that should have been introduced years ago. Why did the public sector—which, we are told, has great concerns about passenger welfare—not introduce that service?

The private sector has passenger welfare at the heart of its concerns because it knows that passengers pay the money for fares that enables it to generate income. The new emergency call arrangements at my station were a very good innovation, and they are typical of many developments.

At Aldershot station, it was some time before I realised that the flower baskets hanging from the station contained not real but plastic flowers. However, rather than leaving each basket of flowers in place for three or four years, station staff rotate the baskets about every six weeks so that it looks like there are new flowers. The whole atmosphere and presentation of the railways have been enhanced—[Interruption.]

Before the Minister starts rolling around, thinking that that is frightfully funny, I should tell her that, if she had paid a little more attention to what people really want and to presentation—as the Prime Minister's spin doctor spends all his time doing—she would perhaps understand that the railways have improved and the importance of the type of differences that I have been describing. Obviously, those changes are not the same as substantial investment in fixtures, fittings and rolling stock, but they are important.

Railtrack is prepared to invest £27 billion. Moreover, it will raise that investment not simply from access charges but from the markets. Before the water industry was privatised, we were told by some people that the £30 billion investment that it required—and which would not be provided by the Government—would not be produced by the private sector, which was interested only in making profits. However, the water industry delivered £30 billion well within the stated time scale.

I believe that Railtrack will provide the necessary £27 billion. As I told the hon. Member for Test, Railtrack has no interest in perpetuating bottlenecks.

Mr. Quinn

The hon. Gentleman mentioned the water industry. There is a regulation vacuum in our railway industry that, in the water industry, was filled by regulation containing a linkage to service delivery. As the hon. Gentleman favours such a linkage, surely he will agree that the SRA will provide us with an even better and more modern railway. I should also tell him that I did not attack proposals for putting extra money into the railways—far from it.

Mr. Howarth

The Bill is all about providing a different form of regulation. As I heard the Secretary of State say today, the SRA will inherit the powers of existing bodies. Therefore, the SRA will not obtain many more powers, but will inherit the powers of existing bodies and bring them together under one roof. However, there are proposals for some new powers, which I shall mention in a moment.

Some of the powers will be transferred from an independent organisation, which is not subject to political pressures, to the Secretary of State. The issue of closures is one that will be transferred to him. All I can tell him is that he had better look out, because if any closures are mooted he will be the beneficiary of all the deputations representations on them. We shall then be back to the pork-barrelling of the 1970s, when factories were closed and Labour Members trooped off to Harold Wilson to try to stop the closures in their constituencies. The same thing might happen again, so that the Secretary of State will have to make political rather than commercial judgments. I do not think that that would necessarily be the best thing for passengers.

We have to recognise that the Bill will give the Secretary of State responsibility that is currently held by an independent organisation. Although he said that the powers will generally be unchanged, how will they be used? Currently, the powers are exercised by those who are railways practitioners and who are interested not in politics but in efficient railway operation.

As my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) said, if the new regulator's role will be to second-guess the commercial judgment of train operating companies, surely the regulator will fail. The jury is very much out on that issue, but I have grave fears that we are entering a period in which politicians will take over and substitute their judgment for that of commercial operators.

Mr. Geraint Davies

Will the hon. Gentleman give way?

Mr. Howarth

No. I do not wish to be discourteous to the hon. Gentleman but, if he will forgive me, time is getting on.

Although the Secretary of State assures us that he is against renationalisation, we know that the hon. Member for Hornchurch is in favour of it. Moreover, the Bill will give the Secretary of State the power to renationalise. As Conservative Members have always argued on defence matters, it is not intention—which could change overnight—but capability that counts.

In the Bill, capability is provided in clause 16, enabling the authority to do anything that it considers necessary or appropriate, and, in particular, to form bodies corporate or acquire or dispose of interests in bodies corporate". Such a power could be used to run railway lines, to bid for franchises or to buy up railway companies. The authority will have borrowing powers of £3 billion, and the provision gives it other powers to use it.

I remind my hon. Friends of the Industry Act 1972, which was supported by my right hon. Friend the Member for Henley (Mr. Heseltine) and which we thought was designed to help the Government to promote industry, but which turned out to be the vehicle by which the Labour party could nationalise things after being elected in 1974. We have to be beware of the capabilities that this Bill will provide and the powers that it will confer on Ministers.

Clause 19 deals with the retrospective nature of penalties that may be imposed on operators who fall below required standards. The Bill contains no less than three and a half pages on penalties that may be imposed, which perhaps says something about the attitude of the Secretary of State and those who drafted the Bill.

The Association of Train Operating Companies is concerned about the way in which retrospection will work. When the Minister for Transport replies, I hope that she will deal with the association's specific concerns. To summarise, the ATOC is worried that it does not know what past failures will be taken into account in applying penalties. As David Morphet, the director general of the rail industry umbrella body, the Railways Forum, has said, performance "will improve with or without the threat of fines … the penalties are something of a blunt instrument … and the railways need a period of measured sustained investment". They do not need a load of new penalties. The Minister must answer that.

On clause 10, the ATOC has expressed concern that the Government could reject bidders. The Minister should spell out exactly how she sees the powers in clause 10 being used. I draw the right hon. Lady's attention to new section 25A(1), which reads: "This section applies where the Authority has issued an invitation to tender for the provision of any services under section 26 above but … it receives no tenders"— that is fair enough— or … it receives one or more tenders but determines that the services could be provided more economically and efficiently otherwise than under a franchise agreement entered into pursuant to any of them. Will the right hon. Lady tell the House what those more economical and efficient ways might be other than a franchise agreement? Would this be the state setting up its own railway franchise company? We should know the answer.

We have heard that the number of passengers on the railways has increased by about 25 per cent. over the past 10 years, after decreasing and then increasing. The railways are providing a service which, I accept, is not always ideal. My son complains about the Virgin west coast line when he goes up to the university of Manchester. He tells me that he always has to stand, which suggests that many people want to use those trains. Services are patchy, and it will take time before we see the full benefits of privatisation. Ultimately, it is down to the train operators to deliver punctual, reliable, clean and affordable services. Without those features, they will not attract passengers; without passengers, they will not generate revenue; and without revenue, they will not make profits. It is in their interests to provide a reliable, secure and punctual train service. Satisfied customers are the shareholders' guarantee of a return on their investment.

8.33 pm

Mr. Geraint Davies (Croydon, Central)

The new Labour Government inherited a pig's breakfast of a rail network. There was a fragmented and unco-ordinated service in the aftermath of a rip-off sell-off. As the National Audit Office report testifies, the flotation of Railtrack raised about £1.9 billion. It is now worth more than £8 billion. As I said earlier, the selling price was 10 times oversubscribed. The NAO suggested that if Railtrack had been sold off in parts we would have raised an extra £1.5 billion in addition to the £1.9 billion. The flotation was bad value for the public. The sell-off took place in political haste as we approached the general election. The way in which that happened was scandalous.

Railfreight was more than given away before the election. We gave £242 million of public money for a company to take Railfreight off our hands at a time when the amount of freight moving to rail was escalating. The Labour party was looking towards constraining the growth of road building, and there is evidence that, to some extent, the Conservatives would have taken that approach. At the same time, there was enormous growth in the movement of people and freight. Market expectations for more freight have been delivered, as would have been the trend anyway according to analysis. That shows that the British public were ripped off.

The right hon. Member for Wokingham (Mr. Redwood) made the ridiculous suggestion at the beginning of the debate that the Labour party talked down the price of the sell-off. In reality, there was no obligation on the previous Administration to sell straightaway. If the Conservatives had regained power and then sold, they would have secured a much better price. That would have been a fair and honest thing to do. Of course, they did not do that.

The idea before us is that of a Strategic Rail Authority that will have some regulating and co-ordinating powers across the fragmented network that we have inherited, in order to enable a proper network to operate and to give teeth to the regulator so that there is an operator of last resort. There need be no apology because if the private sector falls down in individual instances, the SRA should be able to act. It will be an authority that can administer fines to reinvest in the system.

We heard from the right hon. Member for Wokingham that the SRA should have less power than the British Railways Board. He expressed concern about the lending and borrowing that could occur for tactical reinvestment in areas where the network is not delivering for the public, and he seemed to think that that was somehow morally wrong. Although Conservative Members pay lip service to the Strategic Rail Authority, their policies have no continuity—they are a paper tiger that would not deliver anything.

The challenge for the Strategic Rail Authority is, apart from anything else, to facilitate and administer a partnership approach to the delivery of investment where it is needed. In an intervention, I gave the example of a modern light railway and getting partners together in a private-public partnership to create solutions to these problems. Surely that is the way ahead, but Conservative Members continue to hurtle towards privatisation. As we heard last week, one of their solutions to the problem of transport financing is to sell off the London tube. That would raise only £500 million, and they would never raise the money that is needed for reinvestment if they used the procedures that they used previously.

The Opposition's position on financing and delivering a successful transport strategy is completely incoherent. On the one hand, they want to abolish the fuel escalator; on the other, they want to get rid of traffic jams. They have displayed that incoherence again today and they provide no substantive opposition because they are playing a game of opposition: in their hearts, they know that it is right to have some co-ordination across a fragmented service and that the Government should be able to intervene where the market is failing.

Contrary to what the hon. Member for Guildford (Mr. St. Aubyn) said, the free market system cannot be expected to deliver when there is not a proper competitive market. After all, these markets represent segmented areas of the country where franchises are given and the operators are not subjected to true competition, which is why we need proper regulation. To support that, penalties must be re-invested and the Government should have the opportunity to intervene, in the last resort, in the interests of the public. Competition in this market is not like competition in the baked beans market. The market structure is quite different and we need to apply ourselves to that appropriately.

The hon. Member for Aldershot (Mr. Howarth) made the point strongly that there is no room in rail decisions for anything other than commercial considerations. He used the example of the closure of a station being referred to the Secretary of State, saying that that would be quite wrong because that closure should be decided purely on commercial grounds. I put it to him that other considerations, such as the social interest and the provision of network services to certain areas, are considered alongside commercial issues in any public service or in any public involvement in a public service. For example, he must accept that it is legitimate in certain circumstances to site a station at the margins, even though that would not be done if the decision were taken on purely commercial grounds.

Mr. Gerald Howarth

The hon. Gentleman makes an entirely fair point. Of course I accept that considerations other than commercial ones are involved, but my point is that many political representations would clearly be made before a commercial decision was taken, and such a decision would be purely political under the new arrangements. The power to take such decisions will be vested in the Secretary of State and he is, by definition, a political animal.

Mr. Davies

No, that is not a fair point. When he weighs up such decisions, my right hon. Friend the Secretary of State will clearly consider commercial issues alongside other matters. The public interest should be weighed up when such decisions are made. We need a cost-effective, viable system across Britain that serves the interests of the public and makes business sense. He may award a franchise, subject to certain requirements for network works servicing, that is the most cost-effective and that will deliver the incremental improvements in respect of stations that we have been talking about. A balance must be struck, and this is not merely a question of commercial considerations.

I shall now make my final points because other hon. Members want to speak and I have spoken for eight or nine minutes, which is quite long enough. The hon. Member for North Essex (Mr. Jenkin) said that borrowing is different from other forms of expenditure. I do not accept that. We are discussing what level of public funds should be invested strategically. The right hon. Member for Wokingham seemed to suggest that there should be virtually none, whereas the hon. Member for North Essex said that there would be some, but that there should not be. The hon. Member for Guildford then said that the Conservatives wanted the free market to operate with no public investment, but that there was not enough money for the bottlenecks because there was only £200 million and more was needed. Thus there has been enormous contradiction among the very few representatives on the Opposition Benches. There has been no coherence in their arguments. The hotch-potch of arguments that we have heard represents the fragmented chaos that we inherited as a new Government.

Labour's objective is, in simple terms, joined-up thinking in government and in the railway service, and a joined-up railway system.

8.40 pm

Mr. James Gray (North Wiltshire)

It is a refreshing pleasure to follow the hon. Member for Croydon, Central (Mr. Davies), who exposed his straightforward, old-fashioned, old-Labour approach to regulation and control of the railways. He talked about a hotch-potch of different views on the Conservative Benches. It has been extraordinary to hear the mixture of speeches from Labour Members this evening. They have ranged from a relatively straightforward regulatory, interventionist old-Labour speech from the hon. Member for Croydon, Central, to some very new-Labour-type speeches from others.

The procedure that we are initiating this evening seeks to deal with the Government's muddled thoughts. The Government have not thought this matter through and they now hope that, somehow or other, the Select Committee—on which I have the honour to serve—will think it through for them.

All that I would say to the hon. Member for Croydon, Central is that he should not give up his day job and should get in touch with Warburg's. Even by his own account, if the price achieved for the privatisation of British Rail were 15 per cent. higher than that which was achieved, it would have been some £4.50 per share. That is lower than the figure that Warburg originally proposed, which was driven down simply because of the political uncertainty caused by the then Opposition's pledge to renationalise the railways. Incidentally, like so many of their other pledges before the election, the Government have chosen to ignore that pledge.

Mr. Quinn

Will the hon. Gentleman give way?

Mr. Gray

It is early in my speech, but I happily give way to the amusing hon. Gentleman.

Mr. Quinn

Will the hon. Gentleman explain why the idea of privatising the railway industry was never part of the general thrust of the noble Baroness Thatcher's free market mentality? Is it because she recognised the importance of the railways to the community?

Mr. Gray

I rather wish that I had not given way. The hon. Gentleman obviously does not know that my noble Friend Baroness Thatcher wholeheartedly supports railway privatisation and that she talked about it as long ago as the 1970s, saying that it was her ultimate goal. As Prime Minister, she privatised British Airways, the British Airports Authority, British Telecom, water and gas. Believe it or not, she even privatised the car industry. It is hardly surprising, therefore, that she left the ultimate privatisation—it was the ultimate privatisation until now, because Labour is pressing ahead with privatisations that we had not even considered, such as the National Air Traffic Services—until last because it was extraordinarily complicated and required a complex piece of legislation. The hon. Gentleman can hardly blame my noble Friend for failing to address it.

Mr. Geraint Davies

Will the hon. Gentleman give way?

Mr. Gray

I should like to press on a little, because I am keen to leave some time for hon. Members on both Front Benches to wind up the debate.

Mr. Davies

There is loads of time.

Mr. Gray

In that case, I shall give way to the hon. Gentleman.

Mr. Davies

Does the hon. Gentleman accept that the National Audit Office concluded that, had Railtrack been sold off in two tranches, we would have raised an extra £1.5 billion? Does he accept that, with hindsight, that would have been the right thing to do for the public purse?

Mr. Gray

Indeed, with hindsight it would have been the right thing to do. However, anybody in the City would tell the hon. Gentleman—clearly, he knows little about the City, as he has already admitted this evening—that hindsight does not exist there. One has only to look at what happened with the privatisation of BP. The price was struck at a relatively high level and, within days of the privatisation, the price collapsed and those who paid the issue price were extremely unhappy about it. Thus hindsight in investment is a valuable commodity indeed.

The price that was struck was the best that could be struck at the time, and it was to Warburg's credit that the sale was oversubscribed. The price would not have been so low had it not been for the activities of the Labour party at that time, which drove the price through the floor through its unfulfilled promise to renationalise.

Conservative Members have no outstanding principled objection to the Bill because the notion of a Strategic Rail Authority is, I suppose, good enough. None the less, the Bill is flawed because it is designed simply to do two things. First, there seems to have been an extraordinary split at the highest level of government between the Secretary of State—the Deputy Prime Minister—and the Prime Minister. The Secretary of State has come up with all kinds of notions on which he would like legislation. In two and a half years, he has not achieved a single Bill in his transport portfolio. Come to that, he has been equally remarkably unsuccessful with his other portfolios.

We taunted the Secretary of State about that during the debate on last year's Queen's Speech, to which his retort was, "Do not worry. I will come along with lots of draft Bills, pre-legislative scrutiny and other new mechanisms. That proves that I am quite a gutsy and powerful legislator." However, all we have seen is procedure such as the one on this Bill.

Later this evening, we will again discuss the procedure that is proposed for the scrutiny of the Bill. It seems extraordinarily flawed and seems not to address the central parts of the Bill; it will not scrutinise the Bill at all. It has been introduced possibly just to give the Secretary of State something with which to cover his legislative nakedness.

Secondly, the difficulty with the Bill is that Labour came to power with a promise in its manifesto that there would be immediate benefits to the travelling public. This scrappy little Bill, which puts in place the Strategic Rail Authority, is all that it has to show for it—that is, if we turn a blind eye to what the Government have done to the motorist and to transport users throughout the nation. It is the only Bill that they have been able to come up with. Frankly, it does not amount to much.

The Strategic Rail Authority was said to be the flagship—the great thing that Labour would go for—but it seems to be just a face-saving gesture to disguise the extraordinarily low priority that the Cabinet Committee has chosen to give any Department of the Environment, Transport and the Regions Bills.

Parliament will not have enough time to debate the Bill in the current Session. It may have time next Session, but there is no guarantee even of that, unless the Minister for Transport has a different view and is happy to give us some guarantee that it will be in the Queen's Speech. Perhaps she would like to do that in her winding-up speech; we doubt that she will.

Above all, it is far from clear how and why the Strategic Rail Authority will do anything to improve Britain's train services. The hon. Member for Scarborough and Whitby (Mr. Quinn) gave us a picturesque tour of his constituency and said how nice it would be if there were assorted rail connections, but, as my hon. Friend the Member for North Essex (Mr. Jenkin) said, there is no greater likelihood of achieving those rail connections. I dare say that it gives the hon. Gentleman a fine local press release, but there is no extra money in the Bill.

There is no extra money in the SRA. Indeed, it will cost more than the current structure to run, so there may arguably be even less money for the railways. Ministers may choose to correct me on the point if they wish, but there is no indication that the hon. Gentleman's fantasy of rail connections in Scarborough and Whitby are one inch closer to being achieved.

I tell the hon. Gentleman one thing: if the railways had not been privatised and we were dealing with the old-fashioned British Rail and the sort of investment that Governments of all kinds chose to make in it, he would stand no chance, now or in the future, of achieving what he wants. The remote possibility that he will achieve it has been created by privatisation. He should be thankful to the Conservative party for that.

As I have said, Conservative Members are not necessarily opposed to the principle of the Strategic Rail Authority. There may be some merit in it. I was one of those who voted in favour of the Select Committee's report on the subject—[Interruption.] Hon. Members mutter from a sedentary position, but I am not ashamed of the fact that I voted in favour of the report, although there were some aspects of it on which we did divide the Committee, particularly the question of investments. Regrettably, we were in the minority on that. Of course, there are some arguments in favour of a Strategic Rail Authority. The reasoned amendment makes it plain that we are not necessarily opposed to the principle of the authority, but that we oppose the procedure by which we are considering the Bill and are concerned about a number of its aspects.

I hope that I am not caricaturing what the Government are saying, but all our objections could be narrowed down to one thing. Labour's approach to railway privatisation is to say, "We do not like it ideologically. We think that there is something wrong with it, although, incidentally we are benefiting quite a lot from it, but we realise that we cannot renationalise it—we simply do not have the money to do so. Therefore, we will renationalise by stealth. We will introduce regulations—interventions of one sort or another—that will result in some kind of nationalised railway. It will result in a railway controlled from the centre: a railway controlled by us, by Labour, in the centre. We know about these matters, and we want to control the railway. By using this means, we shall be able to achieve what we could not achieve through renationalisation."

The Under-Secretary of State, the hon. Member for Hampstead and Highgate (Ms Jackson), laughs at that. She pretends that the Labour party has no interest whatever in finding some way of controlling the railways. If that is so, why, throughout the general election campaign, did Labour go to such lengths to suggest that a centrally controlled national railway was exactly what it wanted, and that it intended to find a way of securing that? Not only is Labour—apparently—not trying to do that in the Bill; the mere suggestion that it should think about doing it is met with ribaldry by the Under-Secretary.

I refer the hon. Lady to the Government's response to the Select Committee's report. As she will recall, the Government say in paragraph 73: we have made clear that renationalisation of the railways would be very expensive, and cannot be a priority given the other demands on public expenditure. That suggests that renationalisation cannot be a priority, simply because it would be very expensive, but that the Government may consider it at some other time.

If my reading of the report, received from the Government recently, is incorrect, the Minister for Transport may wish to correct it when she winds up the debate; but it seems to me that a number of elements in the Bill send out hidden signals of Labour's desire to renationalise.

Like my hon. Friend the Member for Aldershot (Mr. Howarth), I am proud of what we have achieved since privatisation. The number of passenger trains has increased by 14 per cent. The number of passenger miles—incidentally, I do not know why the Minister keeps referring to passenger kilometres: in this country, we still deal in passenger miles—has increased by 25 per cent., and the number of freight miles has increased by 35 per cent. At the same time, fares have been cut.

The use of the railways has risen enormously, and fares have been cut. How have we achieved that since privatisation? We have achieved it by means of private investment. This year, 2,000 new passenger vehicles have been delivered. Since privatisation, Railtrack's investment has risen by 85 per cent. As other Conservative Members have pointed out, Railtrack has spent £2,700 million on the railways. I challenge Labour Members to tell me that one tenth of that would have been spent had we not privatised. The Government—their complexion was irrelevant—were not spending money on the railways, which is why they are in their present state. Only privatisation could have produced an investment of £2,700 million by Railtrack alone.

There is a further flaw in what the Government say about the Strategic Rail Authority. They seem to think that, because this is clever old new Labour sitting in Whitehall, they know what is best. Apparently, they are going to tell the nation, "This is what is best for your railways. You do not know; the privatised companies do not know; Railtrack does not know; but we, clever old new Labour, know, which is why we are going to introduce regulations and structures that will impose our will on all of you."

That strikes me as an odd approach. I should have thought that those who know best what their customers wish to buy are the companies. Surely, the privatised companies should be told, "You make a profit, you allow your share price to be high, you pay your people a decent amount—and you can do that by selling people what they want to buy. If you try to sell something that people do not want to buy—if your trains are going to the wrong place, at the wrong time, or if you are providing a low-quality service—people are not going to buy it."

As I said a moment ago, when I gave some figures, the buy has gone up, and is going up all the time. People are voting with their feet: they are saying, "We like the privatised railways." In my view, the train operating companies can best judge how to provide the service that passengers want, and my dear, bored colleagues the civil servants in Whitehall are the wrong people to judge that. They could sit in their ivory towers from now until Christmas, but they have not the remotest idea of what people want from the railways, and that is exactly where the old British Railways Board went wrong. It did not know what people wanted and it did not know how to put the railways right, but privatised companies do.

Mr. Quinn

Will the hon. Gentleman explain how, under the system that he is outlining, the current track constraints would be dealt with? How would more freight be able to come on to our network and sit happily alongside passenger services?

Mr. Gray

The hon. Gentleman makes a partially reasonable point, which is that Railtrack has less incentive than train operating companies or freight companies to provide the service that customers want because access charges are unlikely to increase in direct proportion to the amount of investment that would be necessary to remove the bottlenecks that the hon. Gentleman has mentioned, such as those around Reading.

The Strategic Rail Authority may well, therefore, have a role in telling Railtrack what it must do, even though those instructions may not be commercially of the first order. However, Railtrack may be inclined to do what the authority suggests, because the more passengers there are on trains, the more access Railtrack will be able to charge for. Even Railtrack has an in-built reason, albeit to a lesser extent than the train operating companies, for wanting ever-improving services for passengers and freight.

It is curious that when people talk about the railways, as when people in my constituency discuss GWR, they constantly criticise the present and look back to what they believe to have been the golden age before privatisation, when trains ran on time and were clean, warm and dry and we had first-class sandwiches and every service was brilliant. The reality was woefully different. Apart from the weather, one of the favourite topics of conversation for the British is the inadequacies of our transport systems, whether by road, rail, air or sea.

For 40 or 50 years, British Rail provided one of the worst services that I have ever seen anywhere in the world, and I have travelled the railways around the world. Our service was absolutely appalling. Privatisation has already begun to take significant steps towards providing the service that people want. I do not believe that an entrepreneur such as Richard Branson would take on a business and then provide a service that people do not want. He will make the service first class, as he has done with his airline. He will charge people a decent price, he will make a profit, and he will personally make a great deal of money out of the service. I say, "Well done" to him, although the sour faces of Labour Members demonstrate what they think about the profit motive.

The truth is that privatisation works well. The £2.7 billion of investment by Railtrack and other investment by train operating companies and others will mean that in 10 or 15 years, we shall be able to look back at the debate and say, "Privatisation worked well and delivered to the people precisely what they wanted."

Conservative Members are not opposed to the SRA, but we do not believe that it will deliver the results that some hon. Members have claimed for it this evening. We do not think that it is a magic wand that will turn what was, until privatisation, a rundown railway into the modern, attractive railway that we all want.

The Bill is typical of so much of what new Labour does. It gets as far as the launch and clever expressions such as, "The SRA—driving the railways forward to the new century." There is spin and cleverness, but when we read the Bill, we find that there is not much in it. One of my hon. Friends said that the Association of Train Operating Companies is reasonably happy with one or two of the Bill's proposals, but it also says that the proposals are missing other proposals that would have made it a much better Bill.

We have reservations about clause 7 because we are concerned about the authority's purpose and function. No less an authority than the House of Commons Library said: Clause 7 is rather confusing: it states that the Authority shall exercise its functions"— the next part is very new Labour— 'with a view to furthering its purposes in accordance with any strategies which it has formulated with respect to them.' The Explanatory Notes on the Bill do not make this much clearer. It says: 'However, the Authority will not be required in every case to give effect to its purposes and strategies regardless of all other considerations. Rather, it will be required to exercise its functions … so the Authority must undertake a balancing exercise in each case.' That is completely meaningless waffle, like so much else in the debate about the SRA and the Bill. We have reservations about clause 8 and the way in which the SRA is to be funded. That was a matter on which the Committee was divided, with Conservative Members making it clear that we were not happy.

The Bill is by no means what we are looking for. We have some significant reservations about the way in which it is being considered, and we will have an opportunity to express those later this evening. The Bill is an inadequate, face-saving manoeuvre by the Secretary of State, who has offered so little in terms of transport legislation so far. The Government have had two years of dithering and delay on rail policy. Now is the time for the Government to start to deliver on their promises.

It is time for the Secretary of State to say what real and practical benefits the Bill will bring to rail users. It is time for him to say how many new trains will be ordered as a result of the Bill, and when. Labour's real priorities, such as reform of the House of Lords and the abolition of fox hunting, are peripheral, but they have come ahead of what really matters to people in this country—such as getting to work on time. Labour promised immediate benefits to the travelling public. It is time for Labour to start delivering on those promises.

9.1 pm

Mr. Kerry Pollard (St. Albans)

Like my hon. Friend the Member for Hornchurch (Mr. Cryer), I have fond memories of steam. I remember standing with my father on a footbridge 200 yd from our local station as a great thundering black beast hurtled down the line towards us. I remember standing in fear, but with some excitement, as the steam enveloped me. Since then, I have been hooked on steam. Sadly, that line went during the Beeching era. I remember days out with a picnic basket in the Newton Heath sheds, and also Crewe sheds—a Mecca for those who took train numbers and names at the time.

Mrs. Dunwoody

And now.

Mr. Pollard

Absolutely. The highlight of that nostalgia was my time spent on the footplate of the Britannia, a blue-liveried steam engine—a truly tremendous thing.

I welcome the Bill, and I commend my right hon. Friend the Secretary of State for introducing it. It has been sorely needed since privatisation. Much has been made of the importance of freight in our economy, and the increasing importance that it will have over the next few years. So important is it that, about a year ago, the all-party rail freight group visited Newark, New Jersey. I must say that Newark is not the most picturesque part of the United States. None the less, we took note of what went on there.

I remember in particular seeing the train from Chicago come in one morning. It had four engines pulling it and one at the back, and took 10 minutes to go past. I have never seen a train like it in my life. The train was double-banked, with one container on top of another.

The United States is much further forward than we are. It has the advantage of space, with massive freight liner depots covering hundreds of acres—something we cannot manage because of the green belt and the scarcity of land. America also has massive sidings. American railways are cost-effective because of the huge distances travelled. The distance from Chicago to Newark was 900 miles, and the train took all night. We cannot match those distances, but if we took into account the journeys through the channel tunnel and into Europe, our journeys would become cost-effective, as we could add the mileage done abroad to that done in this country.

In my constituency, 12,000 travellers a day commute by rail into the City. This number is increasing year by year at the rate of about 12 per cent. The system is just about coping. Some trains are seriously overcrowded, which causes great concern for passenger safety. The main provider is Thameslink, and Silverlink provides the rest of the services on another line.

Several thousand commuters a day still drive to London from my constituency. I am sure that some could be persuaded on to the rail network if the service were reliable, cheap, comfortable and safe. Thameslink is trying its best to improve comfort and safety for passengers. It is scouring the country for spare suitable rolling stock, so far to no avail. The strategic authority could help with that.

I have regular meetings with the operators. They want rail to succeed and are anxious to invest, but for reasonable risk borrowing they need the comfort that future assured franchising will bring. One of the main constraints on improving rail services in my constituency is the decision—shortly to be made, I hope—on the St. Pancras box, which is connected with the channel tunnel. I urge my right hon. Friend the Secretary of State to get the matter sorted out as rapidly as possible.

There is a single-line service from St. Albans to Watford, linking several villages and then connecting to Euston. My right hon. Friend the Minister for Transport visited the line some time ago. It carries hundreds of passengers a day, providing a vital link for workers and shoppers. There is a proposal to do away with the line and install a bus route over the track. I oppose that, and I am pleased that my right hon. Friend the Secretary of State said that any line closure would need his express approval. We in St. Albans welcome that, and I am sure that my friends in the Abbflyer group will be delighted at his intervention.

I especially welcome clause 8, which would enable the authority to provide grants to local authorities in support of railway services provided or funded by them. In my area, Sunday and late-night Saturday services linking villages are provided with county council support. Clause 8 will definitely help.

I welcome the Bill and wish it well.

9.8 pm

Mr. Andrew F. Bennett (Denton and Reddish)

I welcome the Bill and the proposals for its scrutiny. I have been puzzled by the Opposition. Half the time they have criticised my right hon. Friend the Secretary of State for not getting the legislation in fast enough, and the other half they have carped about what is proposed. They should make up their mind: either they want the legislation, and they should try to get it through the House as quickly as possible, or they do not, and they should welcome the fact that it is moving slowly.

The Government have done well in trying to develop pre-scrutiny of legislation. The hon. Member for Aldershot (Mr. Howarth) said that we too often pass legislation that needs to be refined and changed soon afterwards. It is important to get our legislation right before passing it.

Not only scrutiny by the Select Committee but scrutiny by anyone who is interested is important. Everybody in the country can read the legislation, and if they have views on it, they should submit them to the Select Committee, so that by the end of September we have a body of views that can be tested. In some cases, the Committee will ask people to give oral evidence; in others, it will simply look at the evidence submitted. When the Select Committee reports to the House, the Government can refine the proposals to take the public debate into account.

If that important process is done well, I hope that we can get on quickly with the Bill in the next Session of Parliament. If the Opposition genuinely believe that the measures are needed quickly, they could agree to a new carry-over procedure, so that legislation begun in one Session could be completed in the next. That may be a sensible way forward, but I want to emphasise the importance of the pre-legislation scrutiny.

Although I welcome the Bill, a couple of its elements cause me some unease. Clause 29 is a Henry VIII provision if ever there was one, as it would allow the Secretary of State to change previous Acts of Parliament by statutory instrument. What are the Government's intentions with clause 29—or has it been inserted in the Bill simply because the parliamentary draftsmen were worried that the Bill might not cover everything?.

I am also worried about closures, the present approach to which is a total farce. In my constituency, there is a railway route that is very hard to justify. For the past seven years, one train a week—when it runs—has travelled in one direction only, from Stockport to Manchester Victoria, merely to provide statutory proof that the line has not closed. The line, which goes through Reddish South and Denton, is useless. The train runs on a Saturday afternoon, but there are good bus services from Stockport to Reddish South or Denton, and the sensible way to get to Manchester Victoria from Stockport is to go to Manchester Piccadilly and catch the metro.

On the whole, the only people keen to use the line are railway buffs wanting to travel every bit of track in the United Kingdom. However, the train is often cancelled, and on those occasions people are told that a taxi will be called for them. Although that may be fine for people who merely want to travel into town, it is an insult to those who want to experience that section of track. It is an example of what happens when there is no proper closure procedure.

I should be very glad if I could claim that Reddish South and Denton stations had a useful function. Unfortunately, they do not fit in with the ways in which local people want to travel to work, to the shops or anywhere else. I therefore accept that they may be closed. Perhaps I could have claimed that it was a matter of civic pride between Denton and Reddish as to which locality had the most rundown, disreputable and scruffy station in the United Kingdom. However, not even that is true, as most people in Denton and Reddish no longer know where the stations are.

I welcome the fact that the Bill will try and sort out the problem of closure. I should love to be able to say that there ought to be no more closures, but it is clear that closures will be necessary in certain circumstances. I hope that the Government will guarantee that more new railway lines and routes will be opened up, so that every closure is balanced by a more effective replacement.

During 18 years of Tory Government, when North sea oil revenues were pouring in, there was very little investment in a proper rail network. I feel very bitter about that. In 1979, when I was narrowly re-elected for the old Stockport, North constituency, I moved house to be near the former Heaton Chapel station. It is just outside my present constituency, but it serves many of my constituents. When I moved to the area, the station sold more than 1,000 tickets a day. Most were for Manchester, fewer to Stockport. Over the years, the decline in the service has sent the number of tickets bought at that station down, and still further down.

Staff were removed, so people did not feel safe to return to the station in the evening. Those who did not feel safe coming home by train did not go out by train in the morning. The station was not attractive; it was allowed steadily to deteriorate. A commuter station that could have reduced the number of cars that travel into Manchester was whittled away, and the service was reduced from every 10 to every 20 minutes.

Services also failed to connect; I used them regularly to come to the House when I could walk to the station in five minutes, spend three minutes on the train to Stockport, wait five minutes there and then join the London train. As frequency and reliability diminished, the local train became less and less attractive. Either my wife ran me into Stockport or, more recently, I flew to London. The deterioration of the past 18 years must be put right, and I welcome the Bill for that reason.

When we consider closure and development, we must think about the role of light railways, such as the Manchester metro. City centre running is important to the metro, but the lines to Altrincham and Bury are old railway lines. I hope that my right hon. Friend the Secretary of State for the Environment, Transport and the Regions will try to find ways in which the line can go to Oldham, which would require conversion of a railway line. It could also go to Audenshaw and Ashton and to the airport on old rail lines.

The critical mass is in place for the metro, and extra investment would allow many people to travel into the centre of Manchester as well as improving the entire network. Greater Manchester has the critical mass to support the metro, which could be turned into a first-class service for the north-west of England and a world-beating system. In considering the Bill, which will help us to move towards an integrated transport system, we should bear in mind improvements to the network for conurbations such as Greater Manchester.

I do not blame the previous Government for the state of Stockport station. It is the local council's fault. A major redevelopment—known as Grand Central—was carried out beside the station. It should have provided a great opportunity to provide a bus and rail interchange, such as is to be found at both Bury and Altrincham in the Greater Manchester area. The local council was keen to gain as much development as possible, however, and building went right up to the station. As a result, the nearest bus is 200 yd away.

That sort of problem makes it extremely difficult to establish integrated transport, and I hope that the Strategic Rail Authority will be able to talk to local transport planners, to provide a proper integrated system. I hope that the Bill can pass the scrutiny process in the autumn, and that it can be enacted early in the next Session of Parliament.

9.20 pm

Mr. Bernard Jenkin (North Essex)

As I listened to the hon. Member for Denton and Reddish (Mr. Bennett), I made the mistake of thinking, "I hope that he will serve on the Committee, because he will make a useful contribution." However, we are not to have a Standing Committee on this Bill. I shall not dwell on that point at length at this stage because there is a debatable motion on that subject later. Our amendment reflects our belief that the Government's procedure is a mess. It is a feeble attempt by the Deputy Prime Minister to save face after his failure, until now, to find space for this Bill in the legislative timetable. It would have been better if the Government had referred the matter informally to the Select Committee and we had started afresh with a new Bill in the new Session.

The hon. Member for Denton and Reddish said that he was looking forward to seeing the Bill play a constructive role in his metropolitan district. The next time that he is speaking to representatives of the passenger transport executive in his area, he might explain how their money will be withdrawn and local matters will be dealt with by the Strategic Rail Authority. As a consequence of the Bill, those representatives will no longer deal directly with train companies operating in that area.

This has been an interesting debate. One advantage of a quiet debate is that there is usually more debate, and that has proved instructive in this case. Several Conservative Members have contributed to the debate. My hon. Friend the Member for Rochford and Southend, East (Sir T. Taylor) offered a stout defence of the successes of privatisation. My hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) warned of the thin-end-of-the-wedge nature of the Bill and how its powers could lead us back to a renationalised railway. My hon. Friends the Members for Guildford (Mr. St. Aubyn) and for Aldershot (Mr. Howarth) also made contributions. My hon. Friend the Member for North Wiltshire (Mr. Gray) described the increased investment that has been achieved under privatisation.

Labour Members have exhibited a curious schizophrenia about the achievements of the privatised rail industry. I have a leaked Labour party briefing that is the Government's response to our "A Fair Deal for Motorists" publication, which has caused the Government many difficulties. The briefing lists Labour's achievements as: 1,000 more train services a day, 16 new train stations, 17 new freight terminals, a massive increase in secure park-and-ride facilities at stations, 433 station car parks with CCTV surveillance, 100 towns with new bus links with through ticketing, and increases in bus investment of 80 per cent. and in rail investment of 33 per cent. All that was achieved while the bus and rail industries were firmly in private sector hands. They have not received assistance from a single dot or comma of Labour legislation. That is the reality. The Labour party is hitting back at Conservative party policy initiatives by pointing to the successes of our privatisation policy.

I remind the Deputy Prime Minister and the Minister for Transport, who is to reply to the debate, that the privatised industries are increasing their investment while those for which the Deputy Prime Minister is responsible—particularly the tube and the road network—have had their investment slashed. That is the achievement of the Labour Government. Sir Alastair Morton, the chairman of the shadow Strategic Rail Authority, addressed a conference on 30 June and said: Let me start with a few remarks about the state of our railways, as they seem to me at first sight. First, they are in better shape than I expected". If he had listened to the outrageous propaganda—

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Glenda Jackson)

After two years of Labour Government.

Mr. Jenkin

The Minister is desperate. The Government have done nothing for two years; they have introduced no legislation. Sir Alastair Morton has read too much of the newspaper hype circulated by the Government at rail summits rather than looking at the actual state of the railways. He said that he was pleasantly surprised by how much was being achieved under privatisation. He stated: I believe our railways have moved into a growth scenario above and beyond the economic cycle." [Interruption.] The hon. Member for Truro and St. Austell (Mr. Taylor) should listen to the chairman of the shadow SRA. Sir Alastair Morton continued: In the past few years domestic rail passenger kilometres have risen over 20 per cent. and freight something not dissimilar or better. One thousand extra trains are running every day. This is not failure, neither at the policy nor the practical level. It is about time that the Government stopped running down the industry that is so vital to delivering their policy of integrated transport. [Interruption.] The Secretary of State is now roused. Sir Alastair Morton said that privatisation has led to a much stronger complaints culture in respect of the railways. The Opposition welcome that—as should the right hon. Gentleman. It should not be a matter of dispute between political parties.

I shall continue to quote from Sir Alastair Morton, because his comments are instructive for our consideration of the Bill. He said: I have found in my first three months a battered, historically under-funded, previously non-growth system now in the process—the painful process—of transforming itself"— no credit for the Government there— into a modernised, growth oriented, larger and better system. The trouble is that while management can improve service quality in months, system capacity takes years not months. The Government should learn that lesson. Sir Alastair continued: The correct question is:—Is it happening? And not:—Why hasn't it happened already? He mentioned the requirement for a "decade of change" during the 10 years after privatisation. We are now in the middle of that.

Labour's attitude, which lies behind the Bill, is that everything to do with integration will lead to central planning and to greater planning, and that anything to do with competition is bad. If there is competition on the railway, that is fragmentation. [Interruption.] That is the general thrust—if there is competition, it is bad. One would never believe that, for example, perhaps the most complex international transport system is that of the many privately owned airlines; they fly into privately owned airports, and each airline has its own ticketing, staff and investment programme. That is a fantastically complicated system, but it works.

The system works through competition. Innovation, investment and all the benefits that passengers want thrive under competition. However, Labour are still living in the past—where the railways have to be treated like some socialist relic from a bygone age. Old Labour are out in force today to defend the old icons of a publicly controlled railway. They are defending not a Bill that is overtly for renationalisation, but one that is certainly surrogate renationalisation. [HON. MEMBERS: "Vote against it.") We shall certainly vote against the Bill—let there be no doubt as to that.

Sir Alastair Morton said repeatedly that the future of the railway is about "investment, investment, investment". I thoroughly agree with that sentiment. In relation to the Bill, the problem is not whether we have a Strategic Railway Authority, but the danger that the objective of achieving greater investment will be deeply counterproductive.

There are three connected problems. First, the Bill gives excessive powers to the Secretary of State, the SRA and the regulator. Secondly, money has been liberally discussed as though it would be the special project of particular hon. Members, but no guarantees have been given. The third problem is where the capital will come from—in fact, it will be through the confidence of private investors.

The excessive powers for the SRA and the Secretary of State reflect the vigorous Government rhetoric that is strongly anti-privatisation. The regulator's new powers were reflected in a somewhat alarming speech to train operators earlier this month. There was a suggestion of the danger that those powers will be used liberally, extensively and punitively. That may well reflect the prejudices of Labour Members who were against privatisation in the first place, but I counsel them that it might not help the process of investment and confidence building in the railway system that we need.

During their speeches, Labour Members constantly expressed totally unrealistic expectations, as though new powers for the SRA, the Secretary of State and the regulator would deliver new money into the system. That brings us to the second problem: where is that additional money going to come from? Because of their financially illiterate background, Labour Members fail to realise that every penny of investment has to be paid for: either it has to be paid direct from the taxpayer, or it is capital that has to be serviced, has to provide a return and has to be repaid out of money from fares or from additional public subsidy.

In another interesting extract from his speech, Sir Alastair Morton fired the opening shot in the battle that will rage between the SRA and the Treasury, saying of the franchises: The Treasury must not see their emergence from subsidy as a continuing source of 'tax' revenue. He clearly believes that the subsidy that the Government are withdrawing from the railways cannot be withdrawn if the sort of investment that he wants is to be delivered. That underlines a question that the Bill does not begin to resolve. The briefing on the Bill was all about how to "force" Railtrack to make more investment, yet Railtrack is already committed to a £27 billion investment programme—

Mr. Prescott

That is rubbish.

Mr. Jenkin

Railtrack has published a network statement—[HON. MEMBERS: "Oh!"] I can see that relations between Railtrack and the Government are blossoming. If Railtrack publishes a prospectus for £27 billion of investment, one would have thought that the Deputy Prime Minister would take every opportunity to help it to make that investment, rather than criticising the company, running it down and making its job more difficult. In addition to that investment, the train operating companies and the leasing companies have committed billions to new rolling stock. All that investment has to be paid out of revenue, either fares or money from the taxpayer. More investment needs more income.

Mr. Bennett

The hon. Gentleman was a Member of Parliament when the privatisation set-up was established, under which the subsidy was to continue to decline. Is he now in favour of the subsidy declining, or does he want it to be increased?

Mr. Jenkin

One of the successes of privatisation is that the industry is becoming less reliant on the taxpayer. However, the hon. Gentleman should not ask me that question—he should ask Sir Alastair Morton. He is the one who says that he cannot do his job if the Treasury keeps taking the subsidy away from the railways, so I suggest that the hon. Gentleman makes his inquiries of him. I am a member of the Opposition, whereas Sir Alastair is going to be chairman of the SRA.

The question of money leads us to one of the most interesting clauses in the Bill, clause 17, on which the Secretary of State bases his claim that he will force Railtrack and the train operating companies to invest. The clause would insert into the Railways Act 1993 new section 16A, which states: The Regulator may, on the application of the Authority,"— that is the SRA— give to a person who is a facility owner in relation to an existing railway facility, a direction … to provide a new railway facility; or … to improve or develop the existing facility.

Mr. Prescott

That is true now.

Mr. Jenkin

If the Bill contains no new powers, why are we bothering with it? Perhaps the right hon. Gentleman can tell me that.

The regulator can give such a direction only if he is satisfied that the person will be adequately rewarded for providing, improving or developing the facility, taking into account any receipts or benefits that may be received. Even the Secretary of State, in a new Bill, cannot magic money out of the air—that is what he is pretending to the British public, especially the travelling public.

That leads us to a third problem, which relates to clause 8. Clause 8 gives the authority power to make grants, make loans, or give guarantees…and enter into agreements for the purpose of securing the provision, improvement or development of any railway services or railway assets. We know what the hidden agenda is: to change the railway's financing structure because the Secretary of State does not feel that he has enough power over it. He feels that it is not right to put subsidies through a market mechanism to generate spontaneous market-led innovative investment. He wants to apply subsidy where he can lever in investment himself.

As my right hon. Friend the Member for Wokingham (Mr. Redwood) said, the Deputy Prime Minister wants to play trains, does not understand the private sector and thinks that, in order to facilitate investment in the railway, he must have the whip hand. If he has the whip hand over the money, his decisions, which will be second-guessed by the Treasury, will increasingly become the governing factor in the financial viability of the entire railway. Every time that the SRA wants to apply some of the £3 billion borrowing facility to a new project, the decision will finish up on the desk of a Treasury Minister. That will drag the railway back, away from the free-market investment that has doubled investment in the railways since privatisation, to investment programmes that are second-guessed by Ministers.

As a result, the City will lose confidence in the railways, in which it has some confidence at the moment. We saw how the share price started low because of Labour party attacks, but rose as confidence grew in the fact that the railways would be allowed to function. The Railtrack share price peaked at more than £17. Six months' work by the Deputy Prime Minister has got that share price back down to tonight's closing value of £11.83. That is what his policy is doing to investors' confidence in the railways. His policy is undermining investors' confidence.

Mr. Prescott

They want money.

Mr. Jenkin

The right hon. Gentleman is showing contempt for the process of capitalism, which is his only hope for delivering investment in the railways.

As a result, the companies on which the Deputy Prime Minister depends, against which he has briefed day after day since the election, will be less able to deliver the investment that they want. The SRA and the Secretary of State's powers will hugely increase the role of the state, crowding out the investment that the private sector wants to make.

Mr. Gerald Howarth

My hon. Friend is entirely right. Is he aware that Railtrack has written to us all, saying: Direct funding on a wide scale would make it more difficult for us to raise capital to fund our investment programme and would reduce the train operators' leverage on Railtrack. Is that not the answer to the Deputy Prime Minister?

Mr. Jenkin

That is absolutely right, and what analysts will tell the Government. How can investors in Railtrack possibly have confidence in a company whose profits will be subject to the day-to-day decisions of Ministers and the Treasury? That is the way to wreck the privatisation that the Deputy Prime Minister inherited from the Conservatives.

Let us hear about the wish lists; every Labour Member who spoke had one. The hon. Member for Crewe and Nantwich (Mrs. Dunwoody), for example, wanted to re-open moth-balled lines. The hon. Member for Southampton, Test (Dr. Whitehead) wanted Railtrack to invest in his footbridge. The hon. Member for Scarborough and Whitby (Mr. Quinn) wanted to open a new rail link in his constituency.

Mr. Quinn

What is wrong with that?

Mr. Jenkin

Those are all laudable aims and projects, but the Bill will, once again, make the railway the plaything of politicians—a political football.

Old Labour—out in force today—has lost none of its anti-privatisation venom. Such an attitude has motivated the Government in proposing the Bill. The Deputy Prime Minister himself has no understanding of the private sector, but simply wants to play trains.

Labour inherited a railway system that was doubling investment and improving service to passengers. The Government are in danger of destroying everything that has been achieved by the industry in the past five years.

Mr. Prescott

Sit down.

Mr. Jenkin

I shall sit down—as it is about time that we heard from the Minister for Transport what the Government will do to increase investment, rather than pandering to the neanderthals on the Government Back Benches.

9.40 pm

The Minister for Transport (Mrs. Helen Liddell)

New Conservative; old arrogance—there has been absolutely no indication that Conservative Members have learned anything from the failure of their 18 years in office.

Some interesting points have been made in the debate, but among them I do not include those made by the hon. Member for Aldershot (Mr. Howarth)—who was enervated by plastic versus real flowers in hanging baskets. However, I am sure that my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) looks forward to when the Select Committee considers the Bill, so that it may debate whether the boxes contained geraniums or lobelia.

The right hon. Member for Wokingham (Mr. Redwood) and the hon. Member for North Essex (Mr. Jenkin), yet again, find themselves in a minority. I listened carefully to the 20 minutes of waffle from the hon. Member for North Essex, but did not once hear the word passenger. Ultimately, if we do not provide a rail service that meets passengers' needs, we shall have great difficulty. Despite all the evidence, Conservative Members continue to re-write history.

I noticed that at no point was the hon. Member for North Essex prepared to take on board the points made in the Public Accounts Committee's examination of the Railtrack flotation. On a number of occasions, he even tried to pretend that it was the previous Opposition's fault that the initial Railtrack share price was so low. I therefore commend to Conservative Members the PAC's Twenty-fourth report, which states: The timing of the sale was a factor in the poor value achieved, and the Department themselves acknowledge that the large increase in Railtrack's share price since flotation was because it had been undervalued and sold in haste.

Mr. Jenkin

Paragraph 4 of the report states: Stated political opposition at the time to the sale … adversely affected investors' confidence and therefore the share price. There the right hon. Lady has it.

Mrs. Liddell

That was not in the report's conclusions. I have here the report's conclusion—[Interruption.]

Madam Speaker

Order. The hon. Member for North Essex (Mr. Jenkin) should not be so churlish.

Mrs. Liddell

Conservative Members do not like the truth. In the PAC report, the hon. Member for Cotswold (Mr. Clifton-Brown), who must be at his aerobics class today—he spends so much time going from the Back Bench to the Front Bench—stated: I suspect that this company was mis-sold. It was sold on the basis that it was a railway company with an uncertain future. In fact, it had a very certain future, it had a known income stream, it had a substantial property portfolio and yet it was sold at the top of the yield table". That is a clear statement that the Conservative party has learned absolutely nothing.

No one in his or her right mind would suggest that the railway is currently working fully in the public interest. I apologise to the hon. Member for Rochford and Southend, East (Sir T. Taylor) for saying that, because, usually, he is in his right mind. However, he has failed to recognise the concerns of the travelling public and of those of us who are interested in the United Kingdom economy.

The Government inherited a fragmented system that had been privatised in a hurry by a Government driven by a narrow ideological perspective that frustrated proper thought. When we came to power, we found no strategic vision for the development of the network. There was a regulatory structure that even the previous industry regulator has acknowledged to be confusing and lacking in teeth. We inherited a railway system that was ill equipped to play a major role in our integrated transport policy and which was inadequately regulated.

The hon. Member for North Essex was anxious to quote—

Sir Teddy Taylor

Will the Minister at some convenient time come down to Southend on the LTS—London-Tilbury-Southend line—and ask the passengers, but not me, what the service was like before privatisation and what it is like now? There has been a dramatic change. It used to be called the misery line and now I find that it is an excellent service.

Mrs. Liddell

The hon. Gentleman makes my point for me on the fragmentation of the network and the patchy services that are to be found throughout it.

The hon. Member for North Essex was anxious to quote selectively from Sir Alastair Morton, who on 30 June said that he had found in his first three months a battered, historically underfunded, previously non-growth system now in the process—the painful process—of transforming itself into a modernised, growth-oriented, larger and better system. On passenger franchises, he said that his initial reactions had ranged from pleasure at the improvements that many had introduced through to concern at the performance gaps to unease at the weakness of "their posture towards Railtrack". If we quote selectively, we fail to get a proper picture of what is happening.

We have seen the hon. Gentleman and the official Opposition generally casting around for a fig leaf to cover their lack of vision. They criticise the procedures of the Bill—

Mr. Lindsay Hoyle (Chorley)

Is my right hon. Friend aware of Railtrack's lack of investment in the station at Chorley? The station has no public conveniences. When I sent a letter to Railtrack—my right hon. Friend may not be aware of the matter but I am sure that she will be able to take it up—to ask for public conveniences to be provided, its answer was simple. I was told that the local authority should provide conveniences on railway stations. That being so, the danger is that the authority should provide them at motorway service areas and everywhere else. Does my right hon. Friend agree that the lack of public conveniences is the result of Railtrack's lack of investment?

Mrs. Liddell

My hon. Friend's point is one of a sequence of points made to me this evening by hon. Friends, who have expressed their frustration at the quality of service in some parts of the country. It is amusing that Conservative Members are criticising us for the timing of the Bill's introduction. They waited almost 18 years before publishing a transport Green Paper, right at the end of their Administration. We quickly published the first comprehensive transport White Paper for almost 20 years. We have introduced the Bill within 12 months to put right the fundamental flaws in the regulatory system that we inherited. The Bill will make a real difference to the way in which the railway is planned and operated.

Mr. St. Aubyn

Will the Minister give way?

Mrs. Liddell

No. I would like to make some progress.

Privatisation was based on the assumption of a largely static railway where shareholders mattered more than the travelling public. That is very much the message that we have received from Opposition Members this evening.

Mr. St. Aubyn

On a point of order, Madam Speaker. Is it in order for the Minister to give way to a Member who was not present during the debate and to deny any time to someone who was present for the debate?

Madam Speaker

The hon. Gentleman knows that it is for whoever has the floor to decide whether to give way.

Mrs. Liddell

As I was saying, privatisation was based on the assumption of a static railway. Our priorities are exactly the opposite. The Bill provides for a growing railway at the heart of an integrated transport system. It provides for proper accountability and it puts passengers' interests where they belong, which is at the top of the agenda. The rail industry needs this stable framework to deliver long-term investment and better services.

Several hon. Members—

Mr. Pickles

Will the Minister give way?

Mrs. Liddell

No. I would like to make some progress. Many hon. Members, including the hon. Gentleman, have made many points to which I wish to respond.

There is a sense of frustration among my hon. Friends about the service that some of their constituents are experiencing. We have always made it clear that we will not accept poor performance from train operators or from Railtrack. Passengers have a right to expect something better. Poor performance will not be tolerated and train operators that fail to meet the required standard will have no future in the railway industry.

At the national railway summit, which my right hon. Friend the Secretary of State held on 25 February, it was clear that we were moving to substantial co-operation between various parts of the industry to improve performance. A second summit will be held next year to review progress in respect of the rail industry's commitments. We are also willing to renegotiate franchises in return for guarantees of better services for passengers. All requests for renegotiation will have two basic tests to fulfil: they must provide a real dividend for the passenger in terms of greater investment and better performance and they must deliver better value for the taxpayer.

My hon. Friend the Member for Crewe and Nantwich made her usual wise and authoritative speech. She has regularly pressed for such a Bill and I share her pleasure at the fact that we are now seeking statutory backing for the Strategic Rail Authority. My right hon. Friend the Secretary of State has outlined the role that she and her Select Committee will undertake in consideration of the Bill. I believe that tonight's debate has gone a long way to informing the Committee of the concerns of Members from across the House and the issues that they want to be addressed. That process concerns the modernisation of the procedures of the House, as well as the modemisation of the railway system, and ensuring that there is proper pre-legislative scrutiny. We want to ensure that the needs of those who use the rail network are taken into account.

I pay tribute to the Committee's work on transport policy and look forward to reading its report on the Bill. I note that my hon. Friend again referred to Railtrack's poor performance and its much publicised £27 billion figure for investment. She urged that Railtrack should be obliged to meet its commitment and I believe that that is a fair response to Railtrack. It is only fair that it should meet its commitments and the new Rail Regulator has made it clear that he will not hesitate to use his powers to enforce licence obligations and to protect the public interest. His powers are considerable and they include the power to enforce licences and amend them by consent. The Bill will strengthen the powers of the regulator and the Strategic Rail Authority to enforce licences and franchises.

The right hon. Member for Wokingham and a number of his hon. Friends described the Bill as a route to renationalisation. That is arrant nonsense. We want to establish a power that will make sure that there is a route to ensuring that a service can be provided if a service fails or if there are no acceptable bids for a franchise service. That is what clause 9 will provide: it will allow the public sector to stand in if the private sector fails to deliver train services. That is basic common sense, but the lack of common sense from Conservative Members has been quite overwhelming. There are real safeguards against the abuse of the powers in the Bill: the authority has to satisfy itself that there is a more economic way of providing a service, then the Secretary of State must agree to that and a bidder can apply to the courts for a review of a decision to dispense with franchising. I repeat—that is plain common sense.

The right hon. Member for Wokingham also asked about the Secretary of State's power to give guidance to the Rail Regulator. The provision is for general guidance only; it does not cover the details of the independent economic judgments, which the Rail Regulator will have to make, and it will help to ensure that we have a single policy and direction for the railways, not a directionless mishmash, which is what the previous Government created.

My hon. Friend the Member for Crewe and Nantwich raised some important points about British Rail land. The British Railways Board has suspended land sales and we are considering its report. Some very limited land sales had to take place because contracts had previously been signed, but the shadow SRA will give advice on the report and we shall consider the process that must be undertaken.

My hon. Friend also made an important point about safety, which was picked up by the hon. Member for Truro and St. Austell (Mr. Taylor). The Government are determined to ensure that, as part of improving the railways in the interests of passengers, safety is not compromised. Rail continues to be the safest form of surface transport, but there is always room for improvement. The Health and Safety Executive will remain the sole safety regulator for the railways and, in exercising its functions, the SRA will have a duty to protect people from danger.

The hon. Member for Truro and St. Austell also asked about integrating rail services with bus services. Under clause 5(c), the SRA must contribute to the development of an integrated transport system, so it can and should promote rail and bus initiatives. The hon. Gentleman also asked why this is a railways Bill and not an integrated transport Bill. The Queen's Speech was clear: we announced that we would publish a railways Bill, not a transport Bill, in draft this Session. We have gone a stage further by publishing the Bill that we are debating this evening.

I want to deal with the issue described as "bustitution". A number of Opposition Members suggested that the Government have been changing their position in relation to that. We have no plans to replace loss-making rural services with buses. Key services are contractually safeguarded through the passenger service requirements. Where rural services depend heavily on subsidy, they will be based closely on the timetable in operation prior to franchising.

The hon. Member for Rochford and Southend, East referred to the success, as he saw it, of privatisation. Privatisation smashed the rail industry into hundreds of different pieces, and put private shareholders before the travelling public. The aim of this Bill is to put the network back together, so that it operates as an entity in the interests of the travelling public. It will make railway managers properly accountable again to their passengers.

My hon. Friend the Member for Hornchurch (Mr. Cryer) asked about the threat to rural lines. The point that he made about rural railways was responded to by my hon. Friend the Member for Denton and Reddish (Mr. Bennett), who said that not all rural lines make common sense or are viable. He referred to a line in his constituency, where one train a week runs mostly so that railway aficionados can say that they have travelled on every railway in the country, but on which there are often no other passengers. It makes much more sense to ensure that rural railway lines are in use.

Mr. Jenkin

Will the Minister give way?

Mrs. Liddell

No, I should like to respond to the points that have been raised.

The hon. Member for Brentwood and Ongar (Mr. Pickles) referred to clause 17, which is designed to ensure the proper provision of network facilities. That is in the interests of those who need to use the facilities. It will not inhibit the commercial decision making of the companies. He also referred to the powers of the Rail Regulator in Wales and Scotland. Ninety-nine per cent. of railway issues are reserved matters, so the SRA will cover the matters that he wished to see considered.

The hon. Member for Guildford (Mr. St. Aubyn) referred to clause 7(2)(c). He did well to state that he was no expert on railway matters, because that duty is identical to the current duty on the Secretary of State and the Rail Regulator under the Railways Act 1993.

Many hon. Friends raised a considerable number of points about the relevance of this Bill. It is an important Bill, which is revealed by the fact that it has widespread support in the House. Even Opposition Members could not find a proper argument against the SRA. The Bill will put right the serious weaknesses in the rail network. I commend it to the House.

Question put, That the amendment be made:—

The House divided: Ayes 123, Noes 330.

Division No. 249]	[9.59 pm
AYES
Ainsworth, Peter (E Surrey)	Hammond, Philip
Amess, David	Hawkins, Nick
Ancram, Rt Hon Michael	Heathcoat-Amory, Rt Hon David
Arbuthnot, Rt Hon James	Horam, John
Atkinson, David (Bour'mth E)	Howard, Rt Hon Michael
Atkinson, Peter (Hexham)	Howarth, Gerald (Aldershot)
Baldry, Tony	Hunter, Andrew
Bercow, John	Jenkin, Bernard
Beresford, Sir Paul	Key, Robert
Body, Sir Richard	King, Rt Hon Tom (Bridgwater)
Boswell, Tim	Lansley, Andrew
Bottomley, Peter (Worthing W)	Leigh, Edward
Bottomley, Rt Hon Mrs Virginia	Letwin, Oliver
Brazier, Julian	Lewis, Dr Julian (New Forest E)
Brooke, Rt Hon Peter	Lidington, David
Browning, Mrs Angela	Lilley, Rt Hon Peter
Bruce, Ian (S Dorset)	Lloyd, Rt Hon Sir Peter (Fareham)
Burns, Simon	Loughton, Tim
Butterfill, John	Luff, Peter
Cash, William	Lyell, Rt Hon Sir Nicholas
Chapman, Sir Sydney (Chipping Barnet)	MacGregor, Rt Hon John
	MacKay, Rt Hon Andrew
Chope, Christopher	Maclean, Rt Hon David
Clappison, James	McLoughlin, Patrick
Clarke, Rt Hon Kenneth (Rushcliffe)	Malins, Humfrey
	Maples, John
Collins, Tim	Mates, Michael
Colvin, Michael	Maude, Rt Hon Francis
Cran, James	May, Mrs Theresa
Curry, Rt Hon David	Ottaway, Richard
Davies, Quentin (Grantham)	Paice, James
Davis, Rt Hon David (Haltemprice)	Pickles, Eric
Day, Stephen	Prior, David
Duncan, Alan	Redwood, Rt Hon John
Duncan Smith, Iain	Robathan, Andrew
Evans, Nigel	Roe, Mrs Marion (Broxbourne)
Faber, David	St Aubyn, Nick
Fabricant, Michael	Sayeed, Jonathan
Fallon, Michael	Shepherd, Richard
Flight, Howard	Simpson, Keith (Mid-Norfolk)
Forth, Rt Hon Eric	Soames, Nicholas
Fowler, Rt Hon Sir Norman	Spelman, Mrs Caroline
Gale, Roger	Spring, Richard
Garnier, Edward	Stanley, Rt Hon Sir John
Gibb, Nick	Steen, Anthony
Gill, Christopher	Streeter, Gary
Gillan, Mrs Cheryl	Swayne, Desmond
Gorman, Mrs Teresa	Syms, Robert
Gray, James	Tapsell, Sir Peter
Green, Damian	Taylor, Ian (Esher & Walton)
Greenway, John	Taylor, John M (Solihull)
Grieve, Dominic	Taylor, Sir Teddy
Gummer, Rt Hon John	Townend, John
Hague, Rt Hon William	Tredinnick, David
Hamilton, Rt Hon Sir Archie	Trend, Michael

Tyrie, Andrew	Wilshire, David
Viggers, Peter	Winterton, Mrs Ann (Congleton)
Wardle, Charles	Winterton, Nicholas (Macclesfield)
Waterson, Nigel	Woodward, Shaun
	Yeo, Tim
Wells, Bowen	Young, Rt Hon Sir George
Whitney, Sir Raymond
Widdecombe, Rt Hon Miss Ann	Tellers for the Ayes:
Wilkinson, John	Mrs. Jacqui Lait and
Willetts, David	Mr. Geoffrey Clifton-Brown.

NOES
Abbott, Ms Diane	Cohen, Harry
Adams, Mrs Irene (Paisley N)	Coleman, Iain
Ainger, Nick	Colman, Tony
Allan, Richard	Cook, Frank (Stockton N)
Allen, Graham	Corbett, Robin
Anderson, Donald (Swansea E)	Corbyn, Jeremy
Armstrong, Rt Hon Ms Hilary	Cotter, Brian
Ashton, Joe	Cousins, Jim
Baker, Norman	Cox, Tom
Banks, Tony	Cranston, Ross
Barron, Kevin	Crausby, David
Battle, John	Cryer, Mrs Ann (Keighley)
Bayley, Hugh	Cryer, John (Hornchurch)
Beard, Nigel	Cummings, John
Beckett, Rt Hon Mrs Margaret	Cunliffe, Lawrence
Begg, Miss Anne	Cunningham, Jim (Cov'try S)
Beith, Rt Hon A J	Curtis-Thomas, Mrs Claire
Bell, Stuart (Middlesbrough)	Dalyell, Tam
Benn, Hilary (Leeds C)	Darling, Rt Hon Alistair
Benn, Rt Hon Tony (Chesterfield)	Darvill, Keith
Bennett, Andrew F	Davey, Valerie (Bristol W)
Benton, Joe	Davidson, Ian
Berry, Roger	Davies, Rt Hon Denzil (Llanelli)
Best, Harold	Davies, Geraint (Croydon C)
Betts, Clive	Davis, Terry (B'ham Hodge H)
Blears, Ms Hazel	Dean, Mrs Janet
Blizzard, Bob	Denham, John
Blunkett, Rt Hon David	Dismore, Andrew
Boateng, Paul	Dobson, Rt Hon Frank
Borrow, David	Donohoe, Brian H
Bradley, Keith (Withington)	Doran, Frank
Bradley, Peter (The Wrekin)	Dowd, Jim
Bradshaw, Ben	Drew, David
Brake, Tom	Drown, Ms Julia
Brand, Dr Peter	Dunwoody, Mrs Gwyneth
Brinton, Mrs Helen	Eagle, Angela (Wallasey)
Brown, Russell (Dumfries)	Eagle, Maria (L'pool Garston)
Browne, Desmond	Edwards, Huw
Bruce, Malcolm (Gordon)	Efford, Clive
Buck, Ms Karen	Ennis, Jeff
Burgon, Colin	Etherington, Bill
Butler, Mrs Christine	Fearn, Ronnie
Cable, Dr Vincent	Field, Rt Hon Frank
Caborn, Rt Hon Richard	Fitzpatrick, Jim
Campbell, Alan (Tynemouth)	Fitzsimons, Lorna
Campbell, Mrs Anne (C'bridge)	Flint, Caroline
Campbell, Ronnie (Blyth V)	Flynn, Paul
Campbell-Savours, Dale	Follett, Barbara
Cann, Jamie	Foster, Rt Hon Derek
Caplin, Ivor	Foster, Don (Bath)
Casale, Roger	Foster, Michael Jabez (Hastings)
Caton, Martin	Foulkes, George
Chapman, Ben (Wirral S)	Galloway, George
Chisholm, Malcolm	Gapes, Mike
Clapham, Michael	George, Andrew (St Ives)
Clark, Rt Hon Dr David (S Shields)	George, Bruce (Walsall S)
Clark, Dr Lynda Edinburgh Pentlands)	Gerrard, Neil
	Gibson, Dr Ian
Clarke, Charles (Norwich S)	Gilroy, Mrs Linda
Clarke, Rt Hon Tom (Coatbridge)	Godsiff, Roger
Clelland, David	Goggins, Paul
Clwyd, Ann	Golding, Mrs Llin
Coaker, Vernon	Gordon, Mrs Eileen
Coffey, Ms Ann	Griffiths, Jane (Reading E)

Grogan, John	McNamara, Kevin
Gunnell, John	McNulty, Tony
Hain, Peter	MacShane, Denis
Hall, Mike (Weaver Vale)	Mactaggart, Fiona
Hall, Patrick (Bedford)	McWalter, Tony
Hamilton, Fabian (Leeds NE)	McWilliam, John
Hancock, Mike	Mahon, Mrs Alice
Hanson, David	Mallaber, Judy
Harman, Rt Hon Ms Harriet	Marsden, Gordon (Blackpool S)
Harris, Dr Evan	Marsden, Paul (Shrewsbury)
Harvey, Nick	Marshall, David (Shettleston)
Heal, Mrs Sylvia	Marshall, Jim (Leicester S)
	Marshall-Andrews Robert
Healey, John	Meale Alan
Heath, David (Somerton & Frome)	Merron Gillian
Henderson, Doug (Newcastle N)	Michie, Bill (Shef'ld Heeley)
Heppell, John	Milburn, Rt Hon Alan
Hesford, Stephen	Miller, Andrew
Hewitt, Ms Patricia	Mitchell, Austin
Hill, Keith	Moffatt, Laura
Hinchliffe, David	Moonie, Dr Lewis
Hodge, Ms Margaret	Moran, Ms Margaret
Hoey, Kate	Morgan, Ms Julie (Cardiff N)
Hood, Jimmy	Morgan, Rhodri (Cardiff W)
Hoon, Geoffrey	Morley, Elliot
Hope, Phil	Morris, Ms Estelle (B'ham Yardley)
Hopkins, Kelvin	Mullin, Chris
Howarth, George (Knowsley N)	Murphy, Denis (Wansbeck)
Howells, Dr Kim	Murphy, Jim (Eastwood)
Hoyle, Lindsay	Naysmith, Dr Doug
Hughes, Ms Beverley (Stretford)	Norris, Dan
Hughes, Simon (Southwark N)	Oaten, Mark
Hurst, Alan	O'Brien, Bill (Normanton)
Hutton, John	O'Brien, Mike (N Warks)
Illsley, Eric	O'Hara, Eddie
Jackson, Ms Glenda (Hampstead)	Olner, Bill
	Organ, Mrs Diana
Jackson, Helen (Hillsborough)	Pearson, Ian
Jenkins, Brian	Pendry, Tom
Jones, Rt Hon Barry (Alyn)	Perham, Ms Linda
Jones, Mrs Fiona (Newark)	Pickthall, Colin
Jones, Ms Jenny (Wolverh'ton SW)	Pike, Peter L
	Plaskitt, James
Jones, Jon Owen (Cardiff C)	Pollard, Kerry
Jones, Dr Lynne (Selly Oak)	Pond, Chris
Keeble, Ms Sally	Pope, Greg
Keen, Alan (Feltham & Heston)	Pound, Stephen
Keen, Ann (Brentford & Isleworth)	Powell, Sir Raymond
Keetch, Paul	Prentice, Ms Bridget (Lewisham E)
Kelly, Ms Ruth	Prentice, Gordon (Pendle)
Kemp, Fraser	Prescott, Rt Hon John
Kennedy, Charles (Ross Skye)	Purchase, Ken
Khabra, Piara S	Quinn, Lawrie
Kidney, David	Radice, Rt Hon Giles
Kilfoyle, Peter	Rapson, Syd
King, Ms Oona (Bethnal Green)	Raynsford, Nick
Kirkwood, Archy	Reed, Andrew (Loughborough)
Ladyman, Dr Stephen	Reid, Rt Hon Dr John (Hamilton N)
Laxton, Bob	Roche, Mrs Barbara
Leslie, Christopher	Rooker, Jeff
Levitt, Tom	Rooney, Terry
Liddell, Rt Hon Mrs Helen	Rowlands, Ted Ruddock, Joan
Livingstone, Ken	Russell, Bob (Colchester)
Lock, David	Ryan, Ms Joan
McAllion, John	Salter, Martin
McAvoy, Thomas	Sanders, Adrian
McCabe, Steve	Sarwar, Mohammad
McCafferty, Ms Chris	Savidge, Malcolm
McDonagh, Siobhain	Sedgemore, Brian
Macdonald, Calum	Sheerman, Barry
McDonnell, John	Sheldon, Rt Hon Robert
McGuire, Mrs Anne	Simpson, Alan (Nottingham S)
McIsaac, Shona	Singh, Marsha
McKenna, Mrs Rosemary	Skinner, Dennis
Mackinlay, Andrew	Smith, Rt Hon Andrew (Oxford E)

Smith, Angela (Basildon)	Turner, Dr Desmond (Kemptown)
Smith, Rt Hon Chris (Islington S)	Turner, Dr George (NW Norfolk)
Smith, Miss Geraldine (Morecambe & Lunesdale)	Twigg, Derek (Halton)
	Twigg, Stephen (Enfield)
Smith, John (Glamorgan)	Tyler, Paul
Snape, Peter	Vaz, Keith
Soley, Clive	Vis, Dr Rudi
Spellar, John	Walley, Ms Joan
Squire, Ms Rachel	Ward, Ms Claire
Starkey, Dr Phyllis	Wareing, Robert N
Steinberg, Gerry	Webb, Steve
Stevenson, George	White, Brian
Stewart, David (Inverness E)	Whitehead, Dr Alan
Stewart, Ian (Eccles)	Wicks, Malcolm
Stoate, Dr Howard	Williams, Rt Hon Alan (Swansea W)
Strang, Rt Hon Dr Gavin
Straw, Rt Hon Jack	Williams, Alan W (E Carmarthen)
Stringer, Graham	Willis, Phil
Stuart, Ms Gisela	Wills, Michael
Sutcliffe, Gerry	Wilson, Brian
Taylor, Rt Hon Mrs Ann (Dewsbury)	Winnick, David
	Wise, Audrey
Taylor, Ms Dari (Stockton S)	Worthington, Tony
Taylor, David (NW Leics)	Wray, James
Taylor, Matthew (Truro)	Wright, Anthony D (Gt Yarmouth)
Temple-Morris, Peter	Wright, Dr Tony (Cannock)
Tipping, Paddy	Wyatt, Derek
Tonge, Dr Jenny
Touhig, Don	Tellers for the Noes:
Trickett, Jon	Mr. Kevin Hughes and
Turner, Dennis (Wolverh'ton SE)	Mr. Robert Ainsworth.

Question accordingly negatived.

Main Question put forthwith, pursuant to Standing Order No. 62 (Amendment on Second or Third Reading):—

The House divided: Ayes 329, Noes 121.

Division No. 250]	[10.15 pm
AYES
Abbott, Ms Diane	Brake, Tom
Adams, Mrs Irene (Paisley N)	Brand, Dr Peter
Ainger, Nick	Brinton, Mrs Helen
Allan, Richard	Brown, Russell (Dumfries)
Allen, Graham	Browne, Desmond
Anderson, Donald (Swansea E)	Bruce, Malcolm (Gordon)
Armstrong, Rt Hon Ms Hilary	Buck, Ms Karen
Ashton, Joe	Burgon, Colin
Baker, Norman	Butler, Mrs Christine
Banks, Tony	Cable, Dr Vincent
Barron, Kevin	Caborn, Rt Hon Richard
Battle, John	Campbell, Alan (Tynemouth)
Bayley, Hugh	Campbell, Mrs Anne (C'bridge)
Beard, Nigel	Campbell, Ronnie (Blyth V)
Beckett, Rt Hon Mrs Margaret	Campbell-Savours, Dale
Begg, Miss Anne	Cann, Jamie
Beith, Rt Hon A J	Caplin, Ivor
Bell, Stuart (Middlesbrough)	Casale, Roger
Benn, Hilary (Leeds C)	Caton, Martin
Benn, Rt Hon Tony (Chesterfield)	Chapman, Ben (Wirral S)
Bennett, Andrew F	Chisholm, Malcolm
Benton, Joe	Clapham, Michael
Berry, Roger	Clark, Rt Hon Dr David (S Shields)
Best, Harold	Clark, Dr Lynda (Edinburgh Pentlands)
Betts, Clive
Blears, Ms Hazel	Clarke, Charles (Norwich S)
Blizzard, Bob	Clarke, Rt Hon Tom (Coatbridge)
Blunkett, Rt Hon David	Clelland, David
Boateng, Paul	Clwyd, Ann
Borrow, David	Coaker, Vernon
Bradley, Keith (Withington)	Coffey, Ms Ann
Bradley, Peter (The Wrekin)	Cohen, Harry
Bradshaw, Ben	Coleman, Iain

Colman, Tony	Henderson, Doug (Newcastle N)
Cook, Frank (Stockton N)	Heppell, John
Corbett, Robin	Hesford, Stephen
Corbyn, Jeremy	Hewitt, Ms Patricia
Cotter, Brian	Hill, Keith
Cousins, Jim	Hinchliffe, David
Cox, Tom	Hodge, Ms Margaret
Cranston, Ross	Hoey, Kate
Crausby, David	Hood, Jimmy
Cryer, Mrs Ann (Keighley)	Hoon, Geoffrey
Cryer, John (Hornchurch)	Hope, Phil
Cummings, John	Hopkins, Kelvin
Cunliffe, Lawrence	Howarth, George (Knowsley N)
Cunningham, Jim (Cov'try S)	Howells, Dr Kim
Curtis-Thomas, Mrs Claire	Hoyle, Lindsay
Dalyell, Tam	Hughes, Ms Beverley (Stretford)
Darling, Rt Hon Alistair	Hughes, Simon (Southwark N)
Darvill, Keith	Hurst, Alan
Davey, Valerie (Bristol W)	Hutton, John
Davies, Rt Hon Denzil (Llanelli)	Illsley, Eric
Davies, Geraint (Croydon C)	Jackson, Ms Glenda (Hampstead)
Davis, Terry (B'ham Hodge H)	Jackson, Helen (Hillsborough)
Dean, Mrs Janet	Jenkins, Brian
Denham, John	Jones, Rt Hon Barry (Alyn)
Dismore, Andrew	Jones, Mrs Fiona (Newark)
Dobson, Rt Hon Frank	Jones, Ms Jenny (Wolverh'ton SW)
Donohoe, Brian H
Doran, Frank	Jones, Jon Owen (Cardiff C)
Dowd, Jim	Jones, Dr Lynne (Selly Oak)
Drew, David	Keeble, Ms Sally
Drown, Ms Julia	Keen, Alan (Feltham & Heston)
Dunwoody, Mrs Gwyneth	Keen, Ann (Brentford & Isleworth)
Eagle, Angela (Wallasey)	Keetch, Paul
Eagle, Maria (L'pool Garston)	Kelly, Ms Ruth
Edwards, Huw	Kemp, Fraser
Efford, Clive	Kennedy, Charles (Ross Skye)
Ellman, Mrs Louise	Khabra, Piara S
Ennis, Jeff	Kidney, David
Etherington, Bill	Kilfoyle, Peter
Fearn, Ronnie	King, Ms Oona (Bethnal Green)
Fieid, Rt Hon Frank	Kirkwood, Archy
Fitzpatrick, Jim	Ladyman, Dr Stephen
Fitzsimons, Lorna	Laxton, Bob
Flint, Caroline	Leslie, Christopher
Flynn, Paul	Levitt, Tom
Follett, Barbara	Liddell, Rt Hon Mrs Helen
Foster, Rt Hon Derek	Livingstone, Ken
Foster, Don (Bath)	Lock, David
Foster, Michael Jabez (Hastings)	McAllion, John
Foulkes, George	McAvoy, Thomas
Galloway, George	McCabe, Steve
Gapes, Mike	McCafferty, Ms Chris
George, Andrew (St Ives)	McDonagh, Siobhain
George, Bruce (Walsall S)	Macdonald, Calum
Gerard, Neil	McDonnell, John
Gibson, Dr Ian	McGuire, Mrs Anne
Gilroy, Mrs Linda	McIsaac, Shona
Godsiff, Roger	McKenna, Mrs Rosemary
Goggins, Paul	Mackinlay, Andrew
Golding, Mrs Llin	McNamara, Kevin
Gordon, Mrs Eileen	McNulty, Tony
Griffiths, Jane (Reading E)	MacShane, Denis
Grogan, John	Mactaggart, Fiona
Gunnell, John	McWalter, Tony
Hain, Peter	McWilliam, John
Hall, Mike (Weaver Vale)	Mahon, Mrs Alice
Hall, Patrick (Bedford)	Mallaber, Judy
Hamilton, Fabian (Leeds NE)	Marsden, Gordon (Blackpool S)
Hancock, Mike	Marsden, Paul (Shrewsbury)
Hanson, David	Marshall, David (Shettleston)
Harman, Rt Hon Ms Harriet	Marshall, Jim (Leicester S)
Harris, Dr Evan	Marshall-Andrews, Robert
Harvey, Nick	Meale, Alan
Heal, Mrs Sylvia	Merron, Gillian
Healey, John	Michie, Bill (Shef'ld Heeley)
Heath, David (Somerton & Frome)	Milburn, Rt Hon Alan

Mitchell, Austin	Smith, Miss Geraldine (Morecambe & Lunesdale)
Moffatt, Laura
Moonie, Dr Lewis	Smith, John (Glamorgan)
Moran, Ms Margaret	Snape, Peter
Morgan, Ms Julie (Cardiff N)	Soley, Clive
Morgan, Rhodri (Cardiff W)	Spellar, John
Morley, Elliot	Squire, Ms Rachel
Morris, Ms Estelle (B'ham Yardley)	Starkey, Dr Phyllis
Mullin, Chris	Steinberg, Gerry
Murphy, Denis (Wansbeck)	Stevenson, George
Murphy, Jim (Eastwood)	Stewart, David (Inverness E)
Naysmith, Dr Doug	Stewart, Ian (Eccles)
Norris, Dan	Stoate, Dr Howard
Oaten, Mark	Strang, Rt Hon Dr Gavin
O'Brien, Bill (Normanton)	Straw, Rt Hon Jack
O'Brien, Mike (N Walks)	Stringer, Graham
O'Hara, Eddie	Stuart, Ms Gisela
Oner, Bill	Sutcliffe, Gerry
Organ, Mrs Diana	Taylor, Rt Hon Mrs Ann (Dewsbury)
Pearson, Ian
Pendry, Tom	Taylor, Ms Dari (Stockton S)
Perham, Ms Linda	Taylor, David (NW Leics)
Pickthall, Colin	Taylor, Matthew (Truro)
Pike, Peter L	Temple-Morris, Peter
Plaskitt, James	Tipping, Paddy
Pollard, Kerry	Tonge, Dr Jenny
Pond, Chris	Touhig, Don
Pope, Greg	Trickett, Jon
Pound, Stephen	Turner, Dennis (Wolverh'ton SE)
Powell, Sir Raymond	Turner, Dr Desmond (Kemptown)
Prentice, Ms Bridget (Lewisham E)	Turner, Dr George (NW Norfolk)
Prentice, Gordon (Pendle)	Twigg, Derek (Halton)
Prescott, Rt Hon John	Twigg, Stephen (Enfield)
Purchase, Ken	Tyler, Paul
Quinn, Lawrie	Vaz, Keith
Radice, Rt Hon Giles	Vis, Dr Rudi
Rapson, Syd	Walley, Ms Joan
Raynsford, Nick	Ward, Ms Claire
Reed, Andrew (Loughborough)	Wareing, Robert N
Reid, Rt Hon Dr John (Hamilton N)	Webb, Steve
Roche, Mrs Barbara	White, Brian
Rooker, Jeff	Whitehead, Dr Alan
Rooney, Terry	Wicks, Malcolm
Rowlands, Ted	Williams, Rt Hon Alan (Swansea W)
Ruddock, Joan
Russell, Bob (Colchester)	Williams, Alan W (E Carmarthen)
Ryan, Ms Joan	Willis, Phil
Salter, Martin	Wills, Michael
Sanders, Adrian	Wilson, Brian
Sarwar, Mohammad	Winnick, David
Savidge, Malcolm	Wise, Audrey
Sedgemore, Brian	Worthington, Tony
Sheerman, Barry	Wray, James
Sheldon, Rt Hon Robert	Wright, Anthony D (Gt Yarmouth)
Simpson, Alan (Nottingham S)	Wright, Dr Tony (Cannock)
Singh, Marsha	Wyatt, Derek
Skinner, Dennis
Smith, Rt Hon Andrew (Oxford E)	Tellers for the Ayes:
Smith, Angela (Basildon)	Mr. Kevin Hughes and
Smith, Rt Hon Chris (Islington S)	Mr. Robert Ainsworth.

NOES
Ainsworth, Peter (E Surrey)	Browning, Mrs Angela
Amess, David	Bruce, Ian (S Dorset)
Ancram, Rt Hon Michael	Burns, Simon
Arbuthnot, Rt Hon James	Butterfill, John
Atkinson, David (Bour'mth E)	Cash, William
Atkinson, Peter (Hexham)	Chapman, Sir Sydney (Chipping Barnet)
Baldry, Tony
Bercow, John	Chope, Christopher
Beresford, Sir Paul	Clappison, James
Boswell, Tim	Clarke, Rt Hon Kenneth (Rushcliffe)
Bottomley, Peter (Worthing W)
Bottomley, Rt Hon Mrs Virginia	Collins, Tim
Brazier, Julian	Colvin, Michael
Brooke, Rt Hon Peter	Cran, James

Curry, Rt Hon David	Malins, Humfrey
Davies, Quentin (Grantham)	Maples, John
Davis, Rt Hon David (Haltemprice)	Mates, Michael
Day, Stephen	Maude, Rt Hon Francis
Duncan, Alan	May, Mrs Theresa
Duncan Smith, Iain	Ottaway, Richard
Evans, Nigel	Paice, James
Faber, David	Pickles, Eric
Fabricant, Michael	Prior, David
Fallon, Michael	Redwood, Rt Hon John
Flight, Howard	Robathan, Andrew
Forth, Rt Hon Eric	Roe, Mrs Marion (Broxbourne)
Fowler, Rt Hon Sir Norman	St Aubyn, Nick
Garnier, Edward	Sayeed, Jonathan
Gibb, Nick	Shepherd, Richard
Gill, Christopher	Simpson, Keith (Mid-Norfolk)
Gillan, Mrs Cheryl	Soames, Nicholas
Gorman, Mrs Teresa	Spelman, Mrs Caroline
Gray, James	Spring, Richard
Green, Damian	Stanley, Rt Hon Sir John
Greenway, John	Steen, Anthony
Grieve, Dominic	Streeter, Gary
Gummer, Rt Hon John	Swayne, Desmond
Hague, Rt Hon William	Syms, Robert
Hamilton, Rt Hon Sir Archie	Tapsell, Sir Peter
Hammond, Philip	Taylor, Ian (Esher & Walton)
Hawkins, Nick	Taylor John M (Solihull)
Heathcoat-Amory, Rt Hon David	Taylor, Sir Teddy
Horam, John	Townend, John
Howard, Rt Hon Michael	Tredinnick, David
Howarth, Gerald (Aldershot)	Trend, Michael
Hunter, Andrew	Tyrie, Andrew
	Viggers, Peter
Jenkin, Bernard	Wardle, Charles
Key, Robert	Waterson, Nigel
King, Rt Hon Tom (Bridgwater)	Wells, Bowen
Lansley, Andrew	Whitney, Sir Raymond
Leigh, Edward	Widdecombe, Rt Hon Miss Ann
Letwin, Oliver	Wilkinson, John
Lewis, Dr Julian (New Forest E)	Willetts, David
Lidington, David	Wilshire, David
Lilley, Rt Hon Peter	Winterton, Mrs Ann (Congleton)
Lloyd, Rt Hon Sir Peter (Fareham)	Winterton, Nicholas (Macclesfield)
Loughton, Tim	Woodward, Shaun
Luff, Peter	Yeo, Tim
Lyell, Rt Hon Sir Nicholas	Young, Rt Hon Sir George
MacGregor, Rt Hon John
MacKay, Rt Hon Andrew	Tellers for the Noes:
Maclean, Rt Hon David	Mrs. Jacqui Lait and
McLoughlin, Patrick	Mr. Geoffrey Clifton-Brown.

Question accordingly agreed to.

Bill read a Second time.