HC Deb 22 November 2001 vol 375 cc547-59

6.4 pm

Mr. Eric Pickles (Brentwood and Ongar)

I beg to move, That the Railway Administration Order Rules 2001 (S.I., 2001, No. 3352), dated 6th October 2001, a copy of which was laid before this House on 8th October, be revoked. The order seeks to create a new form of insolvency. Although it is largely based on the insolvency legislation relating to the water industry, it purports to be something new. It is uncertain in its objectives and muddled in its thinking and it has generated considerable criticism from the Joint Committee on Statutory Instruments, which has taken the unusual step of issuing a short extract from its 10th report.

The Committee specifically draws the special attention of both Houses to these Rules on the ground that their Explanatory Note is incomplete. It reminds us that the explanatory note states: These Rules set out the procedure for the conduct of railway administration proceedings for protected railway companies under the Insolvency Act 1986 and the Railways Act 1993. They apply the relevant rules contained in the Insolvency Rules 1986". The Committee's view is that this note is self-evidently insufficiently informative … The Committee accordingly reports the Rules on the ground that their Explanatory Note is insufficiently informative and therefore incomplete.

Mr. Nick Hawkins (Surrey Heath)

My hon. Friend has rightly mentioned the Joint Committee's extraordinary decision to draw the House's attention to this matter. Does he believe that the Government's extraordinary omission—one might almost call it a sin of omission—reinforces the point that many Conservative Members have made, namely that the Secretary of State's decisions on Railtrack have been ill-informed, ill-judged, rushed and botched?

Mr. Pickles

I agree entirely. "Ill-informed", "rushed" and "botched" exactly describe what has happened. Because the explanatory notes are so inadequate, I will have to ask in my short contribution 12 specific questions that I would not have been able to ask if the notes on such an important order had been even slightly reasonable. In particular, I shall ask one or two searching questions about the amendment that the Government made to the order.

We want to know how quickly Railtrack will come out of administration and we will try to ensure that it will come out as soon as possible. We want to ensure that it will be able to provide vital improvements to our railway infrastructure but, above all, we need to know why it was thought that Railtrack was unable to meet its obligations. That is far from clear from the order or from the information supplied by the Government.

The Government's information seems to be contradictory. We have almost developed a five-point programme for Government information. The first stage is when someone—for example, the chairman of the Strategic Rail Authority, Rail track or the Rail Regulator—meets the Secretary of State and the second is when they reach an agreement. The third stage takes place when they produce a version of events and the fourth occurs when it is immediately rejected by the Secretary of State. The fifth and final stage is when those involved denounce each other in the press. Sometimes all the stages in the process occur simultaneously.

I notice that after the much-vaunted meeting between the Secretary of State and the shareholders action group, Mr. Simon Haslam, who chaired the meeting, said that the Secretary of State had said one thing to us and something else to the TV cameras". We are used to that. It is normal for the Secretary of State to say one thing to the television cameras, one thing to the Select Committee and another thing on the Floor of the House. I understand he might have an opportunity—

Madam Deputy Speaker (Sylvia Heal)

Order. I remind the hon. Gentleman of the narrowness of the debate. We are discussing the process of administration, not what took place before it.

Mr. Pickles

You are right to tick me off, Madam Deputy Speaker. I cannot understand how I allowed myself to be drawn away from this most important order.

Mr. Hawkins

Will my hon. Friend give way?

Mr. Pickles

I do not know; I am in the doghouse. I can give way only if my hon. Friend does not tempt me from the subject of the debate.

Mr. Hawkins

I assure my hon. Friend that I will not tempt him to incur the wrath of Madam Deputy Speaker. Although this is a precise order on the process of administration, does he think it remarkable, given the history of the problems that we have set out, that the Secretary of State does not have the courage to come to the House and deal with this important matter?

Mr. Pickles

To be honest, I did not expect the Secretary of State to be present. He is probably going through texts of meetings and crossing things out. I will not stray further, Madam Deputy Speaker, although I hope that you will indulge me on a couple of points, such as the need to assess the background to the order.

Mr. Nicholas Winterton (Macclesfield)

I will stick religiously to the document, Madam Deputy Speaker. Paragraph 3.2 of part 3 is on verification, which, to me, means the truth. Is not my hon. Friend trying to get to the base of the problem and the truth of the issue? I am in no way questioning your ruling or observation, but are we not entitled find out the truth behind this administration order?

Mr. Pickles

My hon. Friend has enormous experience of procedures in this place and he sums up the situation. However, I am not going to take Madam Deputy Speaker on, certainly not on a Thursday evening. I respectfully explain that the order relates to affidavits and so on and I will touch briefly on such matters, including the Chancellor's approach to them, but before I do that I shall address matters of substance.

We need to understand what impact the order will have on Railtrack. Ministers have been kind enough to talk to us in the confines of the Lobby because they are unhappy with the Department for Transport, Local Government and the Regions. We understand that the order has cost £100 million to put together, which is to pay lawyers, accountants and financial advisers. We also understand that the Government have promised, in relation to the order and the way in which it comes into operation, £800 million to deal with the day-to-day operation of Railtrack, and that a further figure of £650 million is also to be used.

It is little wonder that officials who helped to draft the order told the Daily Mailthat they feel like deckchair attendants on the Titanic. They believe that Railtrack is under the control of an independent administration that cannot raise the cash in the City and that hundreds of rail improvement schemes are frozen. We need to discover how those matters will be dealt with in the administration process.

Mr. Hawkins

Does my hon. Friend agree that the problems that he identifies and the views of the officials would become much clearer if the Government were not ignoring their code of practice and their protestations on open government by blocking all the requests that we have tabled for the civil service minutes on the Secretary of State's private meetings on this saga to be placed in the Library and made open to the public gaze?

Mr. Pickles

I agree with my hon. Friend, and he is not the only one complaining; I remind him of the views of the Joint Committee on Statutory Instruments. The Government have paid no attention whatever to rules on openness, yet this most important of statutory instruments breaks new ground in laying down rules on insolvency in the railway industry. We will now have three forms of insolvency: one for the water industry, one for railways and a general set of rules.

I hope that the Minister will explain whether the company will be subject to European competition rules when it comes out of administration. He will no doubt recall that I asked a parliamentary question of his colleague the Minister for Transport and was told in a written answer: The Secretary of State will ensure that any proposals for restructuring the railway industry are compatible with European law."—[Official Report, 30 October 2001; Vol. 373, c. 570W.] Yet we know that that is not the case because the administrators, Ernst and Young, have made two contradictory statements, or rather they have issued a statement and a retraction. It was suggested that because a trust facility was being created, European rules would require commissioners to give permission, by 7 April, for distributions made under the order.

Mr. Don Foster (Bath)

Is the hon. Gentleman not aware that the same request had to be made to the European Union for sums that have already been given to Railtrack? There is no change in the procedures.

Mr. Pickles

The hon. Gentleman anticipates my next remark. I am just trying to lay the groundwork.

The substantive point is that we are unclear, from the order and from statements by the Secretary of State, who will ultimately make the decision about a buyer for the company. Will it be made by the administrators or by the Secretary of State? We have had conflicting advice. The hon. Gentleman may have read The Times on Monday, which quoted Mike Rollings, a senior Railtrack administrator, saying that the Secretary of State will make the decision, but in the same paper this morning, the administrators disclose that they might try to overrule any decision made by the Secretary of State. These are matters of considerable importance.

If this matter is subject to European competition rules, we cannot have the Secretary of State making decisions like a renaissance prince; we need clear procedures setting out who should make them. If they are to be made by the administrators, that all but puts a stop to the Government's preferred plan of setting up a non-profit company.

Mr. Julian Brazier (Canterbury)

I am most grateful to my hon. Friend for giving way generously, as usual. I just thought that he might like to remark that there are now only four Labour Members present—just rising to five as the Deputy Chief Whip sits down—for a debate on a matter of such importance to the country's commuters, rail passengers and pensioners.

Mr. Pickles

My hon. Friend's grasp of arithmetic is as good as ever.

If Railtrack is to come out of administration, could we talk a little about the potential bidders? Might the private bidders include the preferred bidders for the tube public-private partnerships? Will private railway companies in, say, Japan, the United States or France be given an opportunity? Such companies would regard a distress sale as a highly attractive opportunity. We also need to know whether Railtrack itself will be able to make an offer—to buy itself out. Under the order, what sort of long-term financial support do the Government intend to give to Railtrack and its successor? That is of considerable importance.

We have a series of questions. Under the licensing agreement between Railtrack and the Rail Regulator, even on the most optimistic estimate that the Government have produced so far, a compliance statement will be needed toward the end of March. We and most people in the industry believe that Railtrack's network management statement is now all but finished. We need to know whether, before the company comes out of administration, a railway network management statement will be put out by the company. That would normally be produced in conjunction with the Government. What provisions have they made in that respect?

Let us consider last year's compliance statement and the failure to fulfil condition 7. The Rail Regulator was riot satisfied with last year's compliance statement. Will Ministers say whether the regulator still has the power—my reading of the statutory instrument is that he does—to withdraw the licence if he is unhappy with the statement? To put it in simple terms, it appeared to me when I watched the Rail Regulator's appearance before the Select Committee that he was feeling a little bruised and somewhat resentful: withdrawal of the licence may well be Mr. Winsor's revenge on the Government. How do they intend to deal with such an eventuality?

We have a series of technical questions about the order, and I apologise to the House for having to go through them. Had the explanatory notes been clearer, I might not have needed to ask them.

The first question is, can the Minister give the House an assurance that the rules that were laid before Mr. Justice Lightman on 7 October contained the signatures of the Lord Chancellor and the Secretary of State by way of concurrence? One might consider the answer self-evident, but the Government have made an amendment to the regulations—hon. Members should turn to page 36—and the only reasonable explanation is that there was some sort of defect in terms of the signatories. Why was the correction on page 36 of the rules relating to dates of signing and the names of the signatories of both the Lord Chancellor and the Secretary of State made?

On what date was that correction printed and published by The Stationery Office? The correction itself simply states "October 2001". What was the exact date? Why did the Lord Chancellor and the Secretary of State decide to make the order on 8 October, to bring it into force on 7 October—the same date as the petition to the court and the administration order itself—and to lay the rules before Parliament on 8 October, after the court had ordered the administration of Railtrack plc? On what date was the hearing before the court set down?

Does the hon. Gentleman accept the criticism made by the Joint Committee on Statutory Instruments on Tuesday 20 November when the Committee reported the rules to both Houses? Does he accept the Committee's view that the Lord Chancellor's explanatory note is "self-evidently insufficiently informative"? Can the Minister explain which companies are affected by the rules and give a broader indication of the provisions that have still not been included in the Lord Chancellor's memorandum to the Joint Committee of 19 November?

Does the Minister agree that the policy reasons given by the Lord Chancellor's Department in its memorandum to the Joint Committee of 8 October—which infringes the requirements of statutory instrument practice—do not adequately explain in the public interest the failure to comply with proper procedure?

Will the Minister give the House his justification for presenting rules that alter the Insolvency Act 1986 in its application to Railtrack plc? Will he explain to what extent the contents of the affidavit presented to the court, the form of the petition, the filing of the petition and the choice of those who were able to appear before the hearing are consistent with the normal rules in administration procedure?

I am embarrassed at having to put those questions, but if the Secretary of State had obeyed the rules, we would not have to undergo the tedium of asking so many questions. We are about to dispose of Railtrack plc with only three or four lines by way of explanation, so we have to take up valuable time to debate them on the Floor. However, I am still encouraged, so I shall continue.

Will the Minister inform the House why creditors and others adversely affected by the rules were treated in a manner different from that normally applied under the insolvency procedures? Did any official consult the Strategic Rail Authority or the Rail Regulator about those rules?

We have been presented with an inadequate set of papers. The documents are technically and financially flawed. Their content is dubious and they are clueless as to the future: in other words, situation normal in the Department for Transport, Local Government and the Regions.

6.27 pm
Mr. Don Foster (Bath)

I am not sure whether I should begin by declaring an interest. Indeed, I suspect that all Members should declare the same interest, if the recent report in The Sunday Times is correct. It stated that as a result of the order the MPs pension fund has suffered to the tune of £400,000, so I declare an interest, just in case I should.

I hope that I shall not end up in the doghouse like the hon. Member for Brentwood and Ongar (Mr. Pickles) because of some of his earlier remarks, although having listened to his subsequent remarks, I think that the hon. Gentleman would be put in the doghouse by anybody who was looking forward to the cut and thrust of debate on this issue. None the less, although it may not have been an exciting speech, the hon. Gentleman put several important and significant questions.

I look forward to some detailed answers from the Under-Secretary of State for Transport, Local Government and the Regions. As the debate began so late in the day, I am sure that the hon. Gentleman will have been fully briefed on those points.

Perhaps it would be helpful to begin by reminding ourselves of exactly how we got into this position. On 7 October, the Secretary of State—

Madam Deputy Speaker

Order. It might indeed be helpful, but it would be entirely inappropriate.

Mr. Foster

Madam Deputy Speaker, if you will allow me about 30 seconds, you will see the complete relevance of my comments to the order.

On 7 October, the Secretary of State petitioned a High Court judge to put Railtrack into railway administration, specifically under section 60 of the Railways Act 1993. The order is based on the 1993 Act, section 59(2) of which states: The purpose of a railway administration order is the transfer to another company, or (as respects different parts of its undertaking) to two or more different companies, as a going concern, of so much of the company's undertaking as it is necessary to transfer in order to ensure that the relevant activities may be properly carried on". It is clear that a function of the administrator, as a result of the order, is to ensure the continued smooth running of Railtrack's operations so that all the requirements under the network licence pending transfer are met.

It is legitimate to discuss what has happened since the order was introduced and consider whether or not Ernst and Young are delivering the best value and quality service for passengers. Will the Minister explain why, in the six-week period following the administration order, according to the latest figures, there has been a 26 per cent. increase in delays on our railways? It is important for him to explain why, following the order, there has been a significant apparent reduction in investment in a range of improvements to which Members representing many different constituencies had been looking forward. If I were speaking purely as a constituency MP, I would press the case for the improvements to Freshford railway station that we have been waiting for. That is a specific example of the investment that now appears to be held up because of the administration order.

It is important to remember that section 59 of the 1993 Act states that the administrator has the task of acting in a manner which protects the respective interests of the members and creditors". Will the House bear that phrase in mind? The duties and responsibilities of the administrator are to protect the respective interests of the members and creditors". The Act does not say that the administrator is responsible for protecting the interests of the Secretary of State; it certainly does not say that he is responsible for protecting the respective interests of the travelling public and the taxpayer.

Having suggested that I am going to be a little critical of the way that things are going, I shall put firmly on the record my belief that the Secretary of State was right to introduce the order. If there were a Division tonight, I would recommend to those of my hon. Friends who might be around that they should join the Government in the Lobby, but we may not get to that. Nevertheless, the Government were right to introduce the order; Railtrack was in a mess and the travelling public were not being best served by its activities.

Mr. Pickles

Why does the hon. Gentleman think that Railtrack was insolvent?

Madam Deputy Speaker

Perhaps I can save the hon. Member for Bath (Mr. Foster) from getting into the doghouse by asking him not to reply.

Mr. Foster

I will do everything that I possibly can to stay out of your doghouse, Madam Deputy Speaker, and shall merely refer the hon. Gentleman to the speech I gave in the House on 13 November, when I gave an answer to that very question. In that speech, I made a point relevant to the order. Some confusion has arisen as a result of the Secretary of State's initial failure clearly to distinguish between Railtrack plc, which is being put into administration, and Railtrack Group, which is not. I criticised the Secretary of State on 13 November for not being clear enough about that. It is not easy to make even the simple distinction between Railtrack plc and Railtrack Group, as the administrator, Ernst and Young, is finding out.

We understand, although we have not been officially told, that Ernst and Young is earning £500,000 a week for its activities. It was interesting that the firm's first action on being appointed administrator was to ask the Secretary of State for an extension of time to carry out the work. It has been told that it can have six rather than three months to do it, but there are many in the City who suggest that the firm will be at it for much longer than that. The comment of the hon. Member for Brentwood and Ongar about the amount of money being made from the exercise is a point well made.

There is huge confusion even now about Railtrack plc and Railtrack Group. It is difficult for Ernst and Young, as administrator, to sort that out. Railtrack Group has a large number of component parts. Perhaps the Minister can clarify one example. Railtrack (Spacia) Ltd. is the United Kingdom's largest small business landlord, with 22 million sq ft of property, which it leases. It is part of Railtrack Group, but its assets—the properties that it leases out—belong to Railtrack plc. I am not sure whether the properties belonging to Railtrack (Spacia) Ltd. are covered by the administration order, as Railtrack (Spacia) Ltd. is in Railtrack Group, which is not in administration, yet it can succeed only if the properties, which belong to Railtrack plc, are available to lease.

Mr. Andrew Turner (Isle of Wight)

Would the hon. Gentleman be surprised to know that the Government appear to have learned from the difficulties of introducing the order, if the Evening Standard today is anything to go by? It states: The private sector taking over large sections of the Tube … will be safeguarded against major financial risk if things go badly wrong". The Government are clearly determined not to repeat the experience.

Mr. Foster

I take note of the hon. Gentleman's comments. I shall deal later with the financial arrangements proposed as a result of the order.

I have a further example to illustrate the potential confusion facing the administrator. Can the Minister tell us anything about the demise of Totaljourney Ltd.? Totaljourney Ltd. is part of Railtrack Travel Ltd., which is within Railtrack Group, but on 15 November it ceased to operate. Was that the result of the work of the administrator, or was a decision made to close the company down because it was not working well?

I seek an assurance from the Minister in respect of the operation of the order and of the administrator. I understand from the media that the administrator is planning to hive off the IT activities within Railtrack plc. We use the name "Ernst and Young" as shorthand for the administrator, but in fact the firm is Cap Gemini Ernst and Young. Cap Gemini is a major IT firm. I hope that the Minister can give us an assurance that there will be no conflict of interest between the administrator hiving off to a potential bidder the IT activities of Railtrack plc. and the administrator itself, which has a particular interest in that area.

Mr. Pickles

I agree entirely with the hon. Gentleman. The order shows that those issues are exclusively in the hands of the administrator. The Minister is impotent in the matter. He can do nothing about it.

Mr. Foster

I am rather hoping that the Minister will demonstrate that, before the administrator was selected and the appointment made, assurances about those very matters were sought from the firm that was chosen. I hope that we will get a positive answer on that point.

I want now to focus specifically on the question asked by the hon. Member for Brentwood and Ongar about who will make the decision on the future organisation of Railtrack. I asked the Secretary of State that question on 13 November, but I did not get a very clear answer. Of course, he could have given me such an answer, because it was there for all of us to see in black and white, in schedule 7 to the Railways Act 1993, on which the order is based. Paragraph 2(2) of that schedule states that the scheme shall not take effect unless it is approved by the Secretary of State". That makes it absolutely clear that it is the Secretary of State who has the power to make the decision. I note that he also has the power to modify a scheme before approving it. If that is the case, will the Minister tell us why a number of newspapers, including the Financial Times of 12 October, have been indicating that there is a possibility of the train operating companies having some sort of veto? I would certainly be interested to know whether he believes that that is the case.

Let me turn to the crucial issue. The Secretary of State has asked the administrator to consider a range of different options for the future. He has made it absolutely clear that that is the case, but the problem for the administrator is that, while he has asked it to make a range of proposals, he has at the same time employed an organisation to prepare an option that he wants to put forward: the company limited by guarantee. How it can be that one body, the administrator, is charged with considering the range of options and making a proposal to the Secretary of State, while he is employing yet more people to develop a particular model that is based on what he says that he wants: the company limited by guarantee? We all know that it is the Secretary of State who is going to make the decision. Presumably, he will decide on the model that he wants anyway. So, I simply fail to understand, on the basis of the order, what is going on and why Ernst and Young is spending all its time in discussions with the train operating companies, WestLB, Barclays, Citigroup, Alchemy, Nomura and many others. The matter becomes almost inexplicable in relation to what Partnerships UK is going to do, other than effectively make the decision itself in its recommendation to the Secretary of State.

Finally, as I said, the Secretary of State has asked Partnerships UK to develop a solution that is based on his requirement for a company limited by guarantee. However, Partnerships UK is a body in which there are a number of different partners, and 49 per cent. of it is owned by the Treasury. Thus, the Treasury holds 49 per cent. of the shares in the body that will provide the new solution. Furthermore, we know that, while the work has been developing, it has had its hands in the whole issue. I know that the Minister is not responsible for Treasury matters, but given the significant involvement of the Treasury in this matter, will he explain why it has refused to give evidence to the Transport Sub-Committee of the Select Committee on Transport, Local Government and the Regions? I agree with the press report published by that Committee, which states that that refusal is disgraceful.

Although I am delighted that the order was made to get us out of the mess that Railtrack had created for the travelling public, I believe that a large number of questions need to be answered. We look forward with great interest to hearing the Minister's attempts to provide those answers.

6.44 pm
Mr. Nicholas Winterton (Macclesfield)

I had prepared a major speech for the debate after spending considerable time trying to digest such a complicated document. I am pleased to follow the hon. Member for Bath (Mr. Foster), but I regret that he took so long to make his remarks because we have limited time in which to discuss the important order. I want to give the Minister an opportunity to respond in full to the many important questions that have been posed. I shall therefore disregard my speech and speak almost entirely as a constituency Member of Parliament.

I was deeply concerned to hear from the hon. Member for Bath that the parliamentary pension fund may have suffered to the tune of some £400,000 through Railtrack's failure and the Government's actions. I shall make no more of that. I am approaching retirement age, but I have no intention of retiring from the House in the foreseeable future. I hope that I shall continue to get my constituents' support.

The hon. Member for Denton and Reddish (Andrew Bennett) urged me to raise a specific constituency point. Many hon. Members who are present are worried about the modernisation and upgrading of the west coast main line. It is crucial not only to hon. Members' ability to get to the House, but—

Madam Deputy Speaker

Order. The hon. Member has been present throughout the debate and is aware of the constraints on it and its narrowness.

Mr. Winterton

As ever, I am grateful for the courtesy that you show to hon. Members, especially to me, Madam Deputy Speaker.

How will administration affect the investment that was planned and scheduled for the west coast main line? It is crucial to the economic potential and success of the north-west. How will the Railway Administration Order Rules 2001 that we are considering tonight, albeit too briefly, affect the line?

There was a partnership between Railtrack, Virgin Trains and Macclesfield borough council to find the necessary further investment for Macclesfield station and upgrade it to fulfil the requirements of my constituents, who use the rail service.

Mr. George Osborne (Tatton)

I use Macclesfield station twice a week; many of my constituents use it because it is the main—

Madam Deputy Speaker

Order. The hon. Member tempts his hon. Friend to go down a route that he would prefer not to use.

Mr. Winterton

I thought that I had gone down that route. I do not know whether that was a coded message, but I shall take it.

I appreciate that the Minister wants eight to 10 minutes to wind up, but I hope that he can deal with my points and perhaps help other hon. Gentlemen who have not been able to speak. [HON. MEMBERS: "And Ladies."] And hon. Ladies, although I am concentrating on investment in the west coast main line, which does not affect my hon. Friend the Member for Maidenhead (Mrs. May), who is present. However, she and her constituents are clearly affected by rail investment.

I have great regard for the Minister and his endeavours to deal with matters that hon. Members have raised. If he can give me an answer, I shall not try to divide the House at the end of the debate. The Minister is now giving me his attention again. If he can deal with the simple questions that I put to him, I hope that hon. Members will agree, albeit reluctantly, to the administration order.

6.49 pm
Mr. Mark Field (Cities of London and Westminster)

I thank my hon. Friend the Member for Macclesfield (Mr. Winterton) for ensuring that I have at least a couple of minutes. I realise that he had to give up his long speech. As my parents-in-law live in the constituency of my hon. Friend the Member for Tatton (Mr. Osborne), I have also used the west coast main line. I fear that that is the last time it will be mentioned tonight.

This situation is something of a mess. A number of questions need to be answered before we give our consent to the administration order, as the hon. Member for Bath (Mr. Foster) and my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) pointed out.

I wish briefly to discuss two minor issues. The notion that the 71-page document that we are discussing would take a week to prepare is sheer nonsense. Anyone who has worked in the City of London, as many hon. Members have, will realise that these are boilerplate documents that can be turned round in hours in a global financial world.

Part 5 of the order deals with the role of the administrator. On the one hand the Secretary of State and the Minister have insisted that shareholders will not get a penny from the taxpayer. As a number of speakers have pointed out, however, the administration structure is an extremely costly exercise and will remain so. Apparently, Ernst and Young, the administrators, are getting in excess of £500,000 per week. The lawyers, bankers and various other consultants seem to be engaged in a process that resembles an inversion of Christ's miracle of the loaves and fishes.

A vast amount of public money is being frittered away and, meanwhile, what will be happening to the railways? How will Railtrack's statutory duty continue to be fulfilled? Even in the past six or seven weeks it has seemed that the answer to that question is: "not terribly well". Delays are up by about 30 per cent. throughout the country.

I hope that the Minister will also be able to explain to some extent the slashing of the various investment programmes that has taken place, many of which were under way in the first half of this year. Obviously, I would be interested to hear some up-to-date details in that regard.

No blame should be attached to the administrators. They are dealing with the paraphernalia of a very complicated process, not least in the document itself. The patience of shareholders and passengers must fast be running out with this whole circus, in particular as it will career on for at least six months or so. As there are only eight minutes left, I will give the Minister a full opportunity to answer the various questions raised in the debate.

6.52 pm
The Parliamentary Under-Secretary of State for Transport, Local Government and the Regions (Mr. David Jamieson)

I am delighted to be able to respond to this debate. When the hon. Member for Brentwood and Ongar (Mr. Pickles) was speaking at the beginning of the debate, his hon. Friend the Member for Surrey Heath (Mr. Hawkins) intervened on him, using the words, "ill-informed, rushed and botched". I thought for a moment that we had got off the subject and were talking about the privatisation of the railways in the first place.

As I have such a regard for the hon. Member for Macclesfield (Mr. Winterton), I will respond to his questions. I can assure him that investment in the west coast main line will be going ahead. I can also assure him and the hon. Member for Tatton (Mr. Osborne)—they will be on the platform at Macclesfield station together—that they will be able to continue to use that line and that the improvements will be taking place.

I shared the concern of the hon. Member for Macclesfield about what the hon. Member for Bath (Mr. Foster) said about our pension fund. The hon. Member for Macclesfield is perhaps a little nearer the time when he will be drawing his pension than the hon. Member for Bath and I.

Andrew Bennett (Denton and Reddish)

I am sure that my hon. Friend could please the hon. Member for Macclesfield (Mr. Winterton) by telling him that they could rename his station "Macclesfield International".

Mr. Jamieson

I thank my hon. Friend for that suggestion.

Mr. Pickles


Mr. Jamieson

I will not give way to the hon. Gentleman for a moment. I have only been on my feet for two minutes. He spoke for 23 and I stopped counting his questions when he got to 50. I will now attempt to answer some of those questions.

We should put on record why the order is being made and what the provisions are. The railway administration provisions of the Railways Act 1993, as amended by the Transport Act 2000, can be applied in the event of insolvency of what is termed "a protected railway company" carrying out "relevant activities", or if anyone applies to wind up such a company. That, of course, was embedded in the 1993 Act.

A "protected railway company" is a private sector operator with a passenger licence, or a network, station or light maintenance depot licence, and its relevant activities are, as appropriate, the carriage of passengers or the management of the network, station or light maintenance depot described in the licence. It is important to place that on record. It is also important to note that the provisions thus cover, among others, the 25 train operating companies as well as Railtrack.

Although firmly based on existing administration procedure, the key difference in the railway administration process in the 1993 Act is that, although the relevant company must be managed by a special railway administrator in such a way as to protect the interests of members and creditors, he must also ensure—this is the important point—that the company's activities continue to be carried out while it is in administration until it, or an appropriate part of it, can be transferred to another party who will similarly ensure continuation of those activities.

In simple terms, that means that while the primary duty in a non-railway administration is protection of the interests of the creditors, there is in a railway administration an equal duty to ensure that the train services, or at least the network, are kept running.

I am sure the House agrees that ensuring the continuity of train services, including those on the west coast main line, which the hon. Member for Macclesfield (Mr. Winterton) mentioned, must be vital to any railway administration process. [Interruption.] Now he is not listening to me, but I see that he has other interests. The hon. Member for Congleton (Mrs. Winterton) may be telling him that his tea is ready. It is a rare moment in the House when the hon. Gentleman blushes, but I seem to have succeeded.

I was waiting for the hon. Member for Brentwood and Ongar to say what he would have done in circumstances similar to those we found ourselves in during September and early October. [Interruption.] Well, he had 23 minutes to tell us, but he did not do so. He may tell us in another debate. He used a nonsensical expression, saying that hundreds of schemes would be frozen. I can tell the House that that is untrue. I shall deal with other points he made.

Mr. Graham Brady (Altrincham and Sale, West)

Will the Minister give way?

Mr. Jamieson

Will I give way? Oh no.

The hon. Member for Brentwood and Ongar asked whether the Secretary of State was bound to choose his own proposal. As set out in the legislation, the decision to approve any transfer scheme suggested by the administrator must be taker by the Secretary of State. I hope that that clears the matter up for the hon. Gentleman. He asked about European Union competition laws. I assure him and the House that the successor company to Railtrack will be selected in compliance with EU laws.

As always, the hon. Member for Bath made a thoughtful contribution. [Interruption.] If the hon. Member for Brentwood and Ongar stops interrupting and allows me to do so, I may get to some of his other questions. I have not finished with him yet and I assure him that the sting is in the tail of the debate.

The hon. Member for Bath rightly said that the order allows the smooth running of the company. That was ignored in the debate, so he was right to make the point. It would be in nobody's interest if things did not run smoothly and properly. He asked specific questions about Railtrack's Spacia company, which deals with advertising signs. It is not in administration, but all its dealings will lie with the administrator until Railtrack's future is decided.

The hon. Gentleman also asked about the dips in performance. Those are generally expected at this time of year, as performance is lower. Obviously it is too early to say whether going into administration—

It being Seven o'clock, the debate stood adjourned.