HC Deb 20 July 2004 vol 424 cc142-5
8. Mr. Peter Luff (Mid-Worcestershire) (Con)

Which body will have future responsibility for setting priorities for rail investment. [184922]

The Secretary of State for Transport (Mr. Alistair Darling)

In future, the Government will have control of the level of public expenditure and set the national strategy for the railways, but operational responsibility will pass to Network Rail. Full details of the responsibilities and future structure of the rail industry are set out in the White Paper that I published last week.

Mr. Luff

I wonder whether I can tease out that answer a little more. I have three very different rail investment needs in my constituency. One—the small change in Network Rail's budget to increase capacity between Worcester and Droitwich by new signal and new track—is quite modest. The second—a private sector bid to build a new Worcester Parkway railway station—is a significant investment that will also involve public money. The third is a major re-dualling exercise between Worcester and Oxford to improve reliability for passengers on that line. Each is very different from the others. Who will decide between them and set the priorities in the new railway environment?

Mr. Darling

In future, those matters will be decided by Network Rail unless they involve major investment, in which case they will come to the Department because we have to provide such funding anyway.

In relation to the particular problem that the hon. Gentleman raised last week concerning the trains from Worcester to Birmingham, the SRA, which will deal with such matters on a day-to-day basis until it is wound up next year, is to carry out a consultation exercise later this year as part of the route utilisation strategy.

On investment, the hon. Gentleman will have to square his remarks with the fact that he supports a proposal to cut transport spending by £2 billion. That is not the way to get more railways.

Mr. Kelvin Hopkins (Luton, North) (Lab)

My right hon. Friend may not yet have seen a report published this morning by Catalyst, the left-wing think-tank. It shows that in the eight years before privatisation, Government support for railways was on average a quarter of European average spending, yet in the same eight years productivity in British Rail was substantially higher than the average for European railways. Despite my right hon. Friend's welcome statement, does he accept that we will not get real value for money from the public purse until the railways are back in public ownership?

Mr. Darling

No, I do not. I have said that many times before. My hon. Friend needs to reflect on the simple fact that every week we spend about £73 million of public money and get about £73 million of private money. If we nationalise the railways, we say goodbye to £73 million a week. Equally, we find that buying back the railways would cost perhaps in excess of £25 billion, which we do not happen to have in the till at the moment. If my hon. Friend does not believe me, I can do no better than to refer him to ASLEF, whose input into the rail review was quite interesting. It said: The proper debate should not be about public or private ownership but about the appropriate relationship and dividing line between the two. I commend that statement to him.

Mr. John Horam (Orpington) (Con)

Whoever decides priorities on rail investment—I am not clear who it will be; it seems to depend on size—will the Secretary of State give me an undertaking that he will give higher priority to the many relatively inexpensive, small-scale schemes in the London area that could make such a big difference to the plight of the London commuter? I am thinking of an extra platform at London Bridge, for example. Will he undertake to give that kind of scheme a higher priority?

Mr. Darling

Those are matters that Network Rail will need to consider, but a number of measures have already been put in place. Two major measures are helping London commuters and the hon. Gentleman's constituents in particular. One is the upgrading of the power supply to trains going south of the River Thames, which is costing just under £1 billion. That was money that Railtrack did not even think about spending, so it is an example of how additional money is making a difference. The hon. Gentleman will also have noticed that we have new rolling stock in all London stations, particularly those from which trains go south of the river. It is now very obvious that that rolling stock is being put in place. At some point, the hon. Gentleman should have a word with his Front-Bench colleagues, because none of that could be done if £2 billion were cut from transport spending.

Mr. Bill Olner (Nuneaton) (Lab)

The Minister will be aware that Nuneaton has had two brand new platforms as part of the west coast main line modernisation, but in the new set-up of changes in responsibilities, who will look at getting value for money from the contractors who work for Network Rail?

Mr. Darling

Network Rail will, and the contracts will be supervised by the rail regulator, who has imposed a requirement to find 31 per cent. efficiencies, making about £1.5 billion a year, which is quite a significant sum. I welcome what my hon. Friend said about the west coast main line. When the first phase is completed at the end of September, it will make for a much better journey. I know that it has been a long haul and that there has been a lot of disruption, but it will make journeys better. This is an example of what can be done if Governments are prepared to make steady, sustained high levels of investment, as opposed to cutting transport spending, which would have completely the opposite effect.

Pete Wishart (North Tayside)(SNP)

I suppose this question would be a bit easier to answer in Scotland, as the Secretary of State helpfully transferred power to the Scottish Executive in his statement last week. Can he confirm that the necessary resources will accompany the transfer of power, so that the Scottish Executive will be able to pursue their rail objectives and priorities? Will he tell us how Scotland's share is to be calculated, given that he is about to announce massive infrastructure building in London and the south-east on the Crossrail project?

Mr. Darling

We are also spending rather large sums in other parts of the country. In particular, Network Rail spends more in Scotland than it gets back in track access charges. One of the reasons why the Forth bridge, which we all know and love, has been kept going is that Scotland has that bigger spending power. That is all part of the benefit of being part of the United Kingdom, on which the hon. Gentleman might like to reflect. On the resource transfer, I said last week that that was something that we and the Scottish Executive needed to discuss. However, the general principle behind my proposal has been widely welcomed in Scotland. There are advantages to being part of the United Kingdom, as most people in Scotland accept. That is why the poor hon. Gentleman is sitting there all on his own.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich) (Lab)

Does the Secretary of State accept that it is consistency of investment that is warmly welcomed, along with the fact that the Government are committed to long-term plans? Will he give us an undertaking, however, that he will look closely at the rate of return of contractors and rolling stock companies, which really are walking away with gold bars at the expense of the taxpayer?

Mr. Darling

Again, if my hon. Friend is around shortly, she will hear that I have more to say about longterm spending plans when I set out the spending plans for some years to come. On value for money, she is quite right; she is equally right about the rolling stock companies. Last week in my statement, I specifically said that the contracts that were signed at the time of privatisation did not represent good value for money, and that we need to ensure that we get better value for money. I am sure that she and her Committee will return to that issue sooner rather than later.

Mr. Tim Yeo (South Suffolk) (Con)

The Secretary of State acknowledged in an earlier answer the vital role that is played in investment by the private sector. Does he recognise that investment by train operators would increase substantially if the Government replaced the present system of two-year rolling franchises with contracts that gave the train operators a long enough period in which to make investments for the benefit of passengers and to see a return on those investments? Why is it the Government's policy to cut private investment in railways?

Mr. Darling

I think that I was kind enough, as the hon. Gentleman acknowledged, to send him my rail review proposals more than a week ago. He will have seen, therefore, that our proposal is not for a two-year rolling contract. There was a press report to that effect, which the hon. Gentleman seems to have confined himself to citing. I advise him that that is never a great idea. We envisage a seven-year, renewable franchise. In addition to cost and performance, the company's past performance would be taken into account. Interestingly, after last week's announcement the rail companies responded positively, because they recognise that it is a much better system than we have at present. The hon. Gentleman tries to make out that if he cuts £2 billion from transport spending he will recoup it from the private sector, but there is not a shred of evidence to suggest that. Cuts of £2 billion in transport spending would have a devastating effect on rail and road services.