Rail Passenger Services (Hansard, 18 May 2004)

§ 2. David Taylor (North-West Leicestershire) (Lab/Co-op)
What assessment has been made of the role for the public sector in the provision of rail passenger services. [173494]

§ The Secretary of State for Transport (Mr. Alistair Darling)
As I said in my statement to the House on 19 January, a key principle of the review is that the public and private partnership is right for the railways and will continue.

§ David Taylor
The Select Committee on Transport is disappointed in the Government's continued, apparently ideological insistence that the private sector is the only way in which rail passenger services can be provided. Will the Secretary of State explain why, if the public sector can be shown to be safer, more efficient and cheaper, it should not run rail passenger services? As a relatively dogma-free Minister, will he consider the Committee's call for a rethink about the option of retaining South Eastern Trains in public ownership?

§ Mr. Darling
On ideology, it is a big mistake to assume that everything that the public sector did on the railways was good and everything that the private sector has done is bad. My hon. Friend mentioned safety. The safety record of the railways has been improving year after year for several years.
Let me give hon. Members one reason why I believe that the public and private sectors should operate together. The private sector brings in approximately £11 million every day. Without the private sector, the public sector would have to find that money. I strongly believe that the public and private sectors can work together. That happens in many parts of the world. In this country, the relationship is not right and that is why I set up the review.

§ Mr. Archie Norman (Tunbridge Wells) (Con)
The Secretary of State will know that the publicly-owned South Eastern Trains has performed reasonably well since it came into being under the stewardship of Michael Holden. Does he know that there are sinister rumours of a possible delay in the franchising process because of the disputes about timetabling in mid-Kent? Does he agree that the franchising process is already inordinately long and creates enormous uncertainty for investment, passengers and staff? Will he commit himself to doing everything possible to ensure that the process progresses according to the original timetable?

§ Mr. Darling
The hon. Gentleman will know that the Strategic Rail Authority is consulting on the Kent franchise at the moment, and it is important that that consultation tries to build as much consensus as possible. He will also know that many people in Kent have reservations about what is being proposed and are making strong representations about it. We need to get this right, and I agree with him that the objective must be to ensure that the franchising process is completed as quickly as possible, so that we can have a degree of certainty. I do not think that anything we are doing in the review will affect the Kent franchise; it certainly will not hold it up. What is needed is for the review to reach a conclusion as to what trains are necessary and when they ought to run.

§ John McDonnell (Hayes and Harlington) (Lab)
Is the Minister aware that, according to a written answer from his Department, it is estimated that £3.85 million—nearly £4 million—is to be spent on tendering the 807 integrated Kent franchise to facilitate the privatisation of South Eastern Trains? How much money has been spent on negotiating new passenger franchises since 1997? Would not that money have been better spent on direct investment in the rail services, rather than on wasteful franchises such as these?

§ Mr. Darling
No, I do not agree with my hon. Friend. While there are undoubtedly examples of franchising, and some franchisees, not having been as successful as they should have been, other examples show a better quality of service and better provision for passengers than there was in the past. I am happy to defend the fact that there is inevitably some expenditure involved in the franchising process. I strongly believe that having both private and public sector involvement in the railways is good, but it is important to ensure that the right framework and relationships exist, which is what the review process is designed to facilitate.

§ John Thurso (Caithness, Sutherland and Easter Ross) (LD)
I am sure that the Minister is aware that, since the South Eastern Trains franchise became an SRA company, there has been a 9 per cent. improvement in services. We have already heard that the proposals for the integrated Kent franchise have been widely condemned by passenger groups, Transport for London and councils. Will he not therefore, accept the value of keeping that franchise in the public sector as a comparator of the public sector versus the private sector, especially as it seems rather a waste of £4 million to provide a franchise that does not meet passengers aspirations?

§ Mr. Darling
As I said when we discussed South Eastern Trains at last month's Transport questions, there has been an improvement it performance right across the train operating companies in the south-east—not just in South Eastern Trains. which, as the hon. Gentleman says, is now being operated on behalf of the SRA, but in the companies in the private sector as well. Naturally, I am very glad flat performance is improving. Indeed, at present, there are quite significant improvements in performance. The job for the railways is to ensure that that continues.

§ Mrs. Ann Cryer (Keighley) (Lab)
I wonder whether my right hon. Friend is aware that the recent report from the Transport Select Committee comments that: Nearly a third of the franchises were no longer expected to function in the entrepreneurial, risk-taking way that was one of the fundamental justifications for private sector involvement in running train services, but simply to function as fee paid agents of the SRA". What, therefore, is the justification for these services still being run by the private sector?

§ Mr. Darling
My hon. Friend is quite right, as was the Select Committee, to draw attention to the fact that, in 1995 and 1996, the then Government were anxious to get the whole franchise system away as quickly as possible. It is clear to me and every one else that some of the deals struck at that time were not good value for the taxpayer. It is well known that the promises made in 1995 and 1996 by one or two franchises in particular seem to have been built on wildly optimistic 808 assumptions. It does not follow from that, however, that having the private sector involved through franchises is wrong. Far from it: I believe that they can bring significant improvements, in terms of both financial discipline—and, therefore, costs—and customer service. There are many examples round the world of the public and private sectors working together. What was wrong in this country was that the model established during the privatisation in the early 1990s was flawed, and that is what we are putting right now.

§ Bob Spink (Castle Point) (Con)
Does the Secretary of State agree that the public sector might enable more coaches to be run on trains? Is he concerned that c2c is proposing to redeploy five of its four-coach class 357 trains to a different line, resulting in a phasing out of the 12-coach trains on the c2c line, which is already impossibly overcrowded? Does he think that the public sector could do anything about that?

§ Mr. Darling
I had not realised that the hon. Gentleman was so hostile to the private sector; perhaps he should have a word with some of his colleagues. Whoever is operating the trains, whether in the public or private sector, will redeploy them from one service to another. That is what happens when one is running a railway. I do not know why c2c has decided to redeploy these five trains, but I will look into it. Perhaps if the hon. Gentleman looks in the back pages ofRail magazine—the trainspotters' guide to where every carriage is—he will find out where they have gone.