§ 4.13 p.m.
§ The Minister of State, Department of the Environment (Lord Bellwin)
My Lords, with the leave of the House, I beg permission to repeat a Statement being made in another place by my right honourable friend the Secretary of State for Transport. The Statement reads as follows:
"With permission, Mr. Speaker, I will make a Statement on the Serpell Committee Report on railway finances.
"I am publishing today the full reports to me and copies are now available in the Vote Office. The committee was appointed on 5th May last year after the British Railways Board had proposed a review. As the House knows, the committee was chaired by Sir David Serpell, who has held many public offices including membership of the Railways Board for a number of years. The members were Mr. Bond, a member of the board of the Rank Organisation, Mr. Butler, a partner in Peat, Marwick, Mitchell, and Mr. Goldstein, a leading transport consultant and engineer. Their work was delivered to me immediately before Christmas, and I informed the House on 23rd December, and copies were sent forthwith to Sir Peter Parker. There is a majority report by Sir David Serpell, Mr. Bond and Mr. Butler and a minority report by Mr. Goldstein.
"The committee was asked to examine and report on the shorter term financial prospects of the railway and on the options for many years ahead. The majority document fully reflects this. The minority document by Mr. Goldstein gives more attention specifically to the longer term, and places a different emphasis on certain aspects.
"The Government are grateful to the committee for its hard work and speedy efforts. The reports 1543 explore the broadest range of issues about our railways of any inquiry since nationalisation. I should particularly like to take this occasion to pay tribute to Sir David Serpell, who has discharged a most difficult task with great ability and integrity.
"The railway serves many customers and communities. It also requires major support from public funds which this year will exceed £900 million. There has been growing concern about the state of the railways, their cost and their future. These reports now give us a basis for decisions and for action.
"The committee does not support the view that yet larger injections of public funds are needed to preclude extensive closures, or that large parts of the system are at risk from lack of maintenance with present levels of support. No major backlog of renewals was demonstrated to the committee's satisfaction. Nor did the committee accept the case for what it called 'a high investment option', although it recognised the need for some changes in existing investment priorities, and for possible increased investment in the late 1980s.
"Nor do the reports recommend huge rises in commuter fares, as some wild speculation has suggested. The best way to keep fares down is by cutting costs; the reports point to large scope for that. Nor do they suggest that safety should or would be prejudiced.
"The committee has given close attention to the opportunities for considerable improvements in efficiency and the reduction of costs over the next five years. It has drawn attention to particular areas where present shortcomings need to be remedied.
"I welcome the efforts by Sir Peter Parker and his board to improve their management arrangements, to reduce costs and to get rid of restrictive practices. The reports now published point to further large scope for improvements in efficiency. I have made it clear to the British Rail chairman that I regard these improvements as the top priority for action flowing from the committee's reports, and I remain confident that they can be achieved. Vigorous and immediate action by the board will have my full support.
"The committee has not made recommendations about closures or the longer term shape of the railways. It has set out broad illustrative options for consideration. It would be quite wrong to respond with snap judgments or closed minds to any of these ranges of options, whether they concern track and signalling, rolling stock, network size or fare structure, or new objectives for the Railways Board. The committee makes it clear that more work would be needed to be done to translate these illustrations into policy options. Indeed, it would be foolish to come to settled conclusions on any one of these questions in isolation. Other questions—such as the relationship between road and rail services and subsidies for public transport generally, the introduction of private capital and the relationship between British Rail and the private sector—also remain to be determined.
"The public have the right to know more clearly 1544 what value for money they are getting from their railway services and how funds for public transport can best be used. We now have the opportunity for informed discussion about the sort of railway that we want and are prepared to pay for. It is on this basis that the Government now propose to reach lasting decisions which will be in the best interests of the nation."
My Lords, that concludes the Statement.
§ 4.18 p.m.
§ Lord Underhill
My Lords, the House will be grateful to the noble Lord for repeating this Statement, and certainly we appreciate that time has been far too limited to assimilate all the details of this lengthy report and the substantial supplementary volume which accompanies the report. The Statement mentions the terms of reference, and the report itself says that the review has been concerned with railway finances and not transport policy. We do not believe that decisions can be made on the railway system in isolation from a comprehensive transport policy. Railway finances cannot be divorced from the aims and objectives desired for rail in transport policies. We are pleased that the Statement that has been read says that it would be foolish to come to any conclusions on any question in isolation.
I shall not attempt to deal with details of the report. However, the report seems to be critical of the injection of public investment, and the Statement of the Government would appear to go somewhat along those lines. The committee made no real investigation into the possibility of rail electrification, and did not appear to take this overmuch into consideration. The emphasis in the committee's report is on savings and efficiency. Of course, we all want to see the maximum savings made and efficiency in the railways, as in any other nationalised institution. However, there is need to take into consideration the analysis on productivity and performance issued only in the last few days by British Rail; no reference is made to that in the Government Statement.
Some of the savings which are suggested are rather worrying. For example, it is suggested that there should be a lower level of track maintenance and some savings on signalling costs. There would appear to be challenges to British Rail statements about the safety position at the moment of some levels of track maintenance. On those issues we need the views of practical working railwaymen. That is essential; but we do not have them. The report seems to be negative on most areas of possible growth. That is instanced by the comments on Speedlink, when it is suggested that the board should go easy on any preparations it feels are necessary to try to get increased custom for Speedlink.
Some of the six options for the future propose drastic curtailment of the network, and it has been suggested—as some noble Lords will be aware, this was stated clearly in the "Today" programme this morning—that some of the options do not reflect any real understanding of traffic flows and railway patterns. On those points we obviously need the views and observations of practical working railwaymen.
There is no account in the report of international comparisons. We must ask why Britain seems to be 1545 one of the few Western democracies which is behind in placing emphasis on the need for a strong rail system. The report is confined to railway finances, and that seems to have been the case in isolation from social concerns; inadequate attention would appear to have been paid to social needs, environmental considerations, safety aspects and energy savings. Indeed, those aspects seem to have been set on one side from the report.
The Statement refers to wild allegations about the report referring to high increases in London and the South-East. However, the report suggests that there could be a review of the season ticket discount, and obviously that would have a considerable effect. Later it admits that that could lead to the difficulties of increased road congestion. Therefore, we have a contradictory statement in the report.
There are proposals for the running down of British Rail Engineering; it is very critical of what most people regard as a very efficient undertaking. There is also the somewhat alarming suggestion that consideration might be given to the purchase of rolling stock and rails from abroad. I hope the Government will reject that out of hand, not only because of our efficient British engineering works but because of the exhortation to buy British wherever possible. I fully agree with the Statement's comment that there should be no snap judgments. I agree that there is need for informed discussion. It is therefore absolutely essential, if that is to be done, that we have the observations of British Rail on the proposals and suggestions in the Serpell Report.
One paragraph in the report says that the Secretary of State should set out publicly his policies on the network, with strategic objectives and financial support. We believe there is need for a full debate, not only of the Serpell Report but of the aspects which the report did not consider; that we should debate at the same time the comments and replies, which should be obtained, of British Rail, with preliminary reports from the Government, before firm decisions are taken on what is a vitally important matter for the whole nation.
§ 4.24 p.m.
§ Lord Tanlaw
My Lords, we on these Benches are grateful to the Minister for repeating the Statement which has been made in another place. We are also relieved that the leaks have stopped and that the report has at last been published. Indeed, at one stage the leaks became a positive deluge and it was difficult to know how to react. To add a further discordant note, as the noble Lord, Lord Underhill, mentioned, the report, to which we did not have access, was discussed on the radio programme "Today" this morning. When a controversial report of this importance is published and we do not have access to it, though journalists have, and we are expected to comment on it outside the Chamber, we are in very great difficulty. The Government should prevent that from happening, and perhaps they will give an explanation as to why it happened this time.
I am not able to go into the detail of the matter—for the reason that has been given, the shortage of time—including some of the matters with which the noble Lord, Lord Underhill, dealt. I would ask the 1546 Government a question for guidance. The independence of the Serpell Committee is already questionable by the very fact that two members of the four-man committee used their own partnerships to present reports to the committee itself. There is nothing wrong in that, but it is particularly worrying when one member of that committee writes—at 10 days' notice, according to the opening letter of the report—an independent report of his own using his own specialist consultants to do so. I am simply asking whether there is a ruling on this matter. Otherwise, without such guidance, it must devalue the independence of such a report, and it must be a little unorthodox, to say the least, with a report of such a controversial nature.
Like the noble Lord, Lord Underhill, I should like to know when a debate on the report will take place. I have a Motion down on the subject, but I should like guidance from the Minister on when we are likely to have an opportunity to debate the report in full.
§ 4.27 p.m.
§ Lord Bellwin
My Lords, I am grateful to the noble Lords, Lord Underhill and Lord Tanlaw, for their observations. Lord Underhill said there was need to take into consideration, first of all, the latest statement issued by British Rail on efficiency. Absolutely certainly. I am sure that that is so, and I am sure it will be taken into consideration. He was concerned about the options proposed—a drastic curtailment of the network, he said—when the Statement makes it quite clear that what are put forward are simply options, not proposals. They are options available, and hopefully they will stimulate debate, but they are no more than that. The noble Lord then said that the views of others needed to be considered, including those of British Rail, and I absolutely accept that, too; they most certainly do, and they will be considered. I assure him of that.
He said there was no report on the international pattern. In fact, the committee was not asked to look at the international scene. Foreign circumstances vary considerably, not least because of geography and social practices, and it is difficult to draw anything from them other than conclusions. The noble Lord then said that the report was very critical of British Rail Engineering. Indeed it was. The Government's reaction is that we shall want to examine the options identified by the committee, but basically this is really a problem for BREL's management, and they will certainly need to seek greater effiency in their organisation as a whole. The noble Lord did not—and I know he would not—quarrel with that as a philosophy. Finally, he hoped there would be much debate before decisions, and I gladly confirm that that is exactly what the Government have in mind.
I was concerned about what the noble Lord, Lord Tanlaw, said concerning the observations made this morning, before the report was published. I can only tell him that no copies of the report were issued, not even to journalists, until 2.30 this afternoon. If the noble Lord then asks, "How, then, did it come about that such comments were made?" I can only reply, would that he would but come into the department in which I work and tell us how to prevent it. It would also have been necessary to tell the previous Government how to prevent it because, so far as I am aware, 1547 there is as yet no solution. Maybe one day—who knows? I can only regret, as does the noble Lord, that this took place, sympathise and feel equally badly about it.
The noble Lord then said that it was perhaps unfortunate that there was a minority report. In all committees of this kind there can always be, and often are, minority reports. I, myself, sat on such a committee for 15 months, at the end of which there was a minority report. It is perhaps better if there is unanimity but, on the other hand, it might fairly be said that that is the strength of the whole procedure, that an individual can feel free to disagree with his colleagues; and that is what has happened in this case. As to when a debate will take place, I am sure that the noble Lord would agree that the most important thing is that there should be, first of all, broader debate generally and then, certainly through the usual channels, I am sure there will be no difficulty in arranging a debate in your Lordships' House. I hope that I have covered the points raised by noble Lords.
§ 4.31 p.m.
§ Lord Taylor of Gryfe
My Lords, I should like to associate those on these Benches with the congratulations and thanks of other noble Lords to Sir David Serpell, for a number of years a former colleague of mine on the British Rail Board. I very much respect his judgment and his wisdom. May I add my personal congratulations to the noble Lord, Lord Bellwin, as this is the first opportunity I have had of addressing a question to him since his elevation.
Despite my deep concern on railway matters, I cannot be tempted into a debate on the subject, since we had the report only at about 2.45 this afternoon, but I very much welcome the final statement of the noble Lord, Lord Bellwin. He said that it is on this basis that the Government now propose to reach lasting decisions—"lasting" is a strong word—which will be in the best interests of the nation. Like the noble Lord, Lord Underhill, I hope that this further look at the railways within the context of a transport policy in general will not delay some of the changes that are suggested in the Serpell Report.
It would be extremely sad and unfortunate if the momentum of change which has been initiated under Sir Peter Parker's régime were to be held up until we conclude long debates and comprehensive reviews on the whole transport policy of this nation. I would welcome an assurance from the Minister that that momentum of change will not be suspended merely because this report has arrived in this House. May I also ask him to comment on the references of British Rail to the model on which the network size was calculated. They raise some serious questions about the credibility of the mathematical model on which the size of the railway network conclusions were based.
May I also ask the Minister that when preparing his submission following the examination of the report and the general public debate, he will look at the British Rail Engineering Works problem which is highlighted in the report, and look at propositions in terms of a mixed-economy solution, with the involvement of private capital along with state capital in the 1548 development of this powerul engineering concern. These are the matters which concern us greatly. Like other noble Lords, I welcome the reference to "no snap decisions" but no undue delay, and I look forward to the opportunity of discussing this report in great detail.
§ Lord Bellwin
My Lords, I am grateful to the noble Lord, Lord Taylor of Gryfe, for his personal congratulations; I thank him sincerely. His point about there being no loss of momentum of change is a very valid one and I would suggest that the fact that the work of the committee was first started in May and that my right honourable friend had stressed that he needed to have something without undue delay, indicates the Government's concern that there should be action, that we should not lose the momentum. Certainly, we have no intention of doing so. On the other hand, there is the point made by the noble Lords, Lord Underhill and Lord Tanlaw. I think everyone will go along with those. It is very important that if there are to be "lasting changes" then there is all the more reason that they have to be very well thought through and talked through—which is not to say that procrastination is the answer. It is not; and we do not intend that it should be. We intend that there be every opportunity for everyone to put their view, albeit not in a long cycle of time. On that I certainly assure the noble Lord.
As to the other points that he made, we will take careful note of what he said. He has much experience with this whole matter, and I hope that when the opportunity arises he will put forward his personal views and make sure that they are understood, and we will want to hear them.
§ 4.37 p.m.
§ Lord Nugent of Guildford
My Lords, may I thank my noble friend for his Statement, and he and his right honourable friends for setting up this inquiry. May I also thank Sir David Serpell and his committee for the report. Is my noble friend aware that we appreciate that the Government are trying to strike the right balance between this huge sum of money, £950 million a year, which the taxpayer is now providing for subsidising the current operations of the railways, and the sort of natural sympathy which most of us have for the railways themselves? I dare say that in my generation it dates back to our childhood wish to be an engine driver but, certainly, the sympathy is there and we do feel for the railways, especially if we could see a steam engine. That really does give us a thrill.
Is my noble friend aware that there is no doubt about the over-capacity of the existing system and the overmanning of the existing system, and that what the general public is worried about is the danger that there may be a further modernisation of the already overbuilt system? In these post-war years there has been a tendency to modernise the outdated system. Is my noble friend aware that what we are looking for now is a realistic appraisal of what the rail system for the future is required to be—and then a modernisation of that? That is not going to be an easy thing to achieve between the logistics of a railway, on the one hand, and the feelings of public sympathy, on the other.
My noble friend concluded by saying that his wish is to give value for money to the taxpayer. Would my 1549 noble friend take note that at least on this side of the House (and, I believe, on all sides of the House), this is something that we all most earnestly wish to see, and that we understand that he has a formidable problem to modernise the ideas of the workforce in the shape of the trade unions and the NUR, and especially the drivers, who show themselves most reluctant to recognise the realities of the situation?
§ Lord Bellwin
My Lords, I am grateful to my noble friend for reminding us that that is precisely what the Government are trying to do, to strike a balance. No one quarrels with the objective of striving for efficiency. It is vital when we are talking of sums of this magnitude that we have efficiency. There is also the angle of the social aspect of all transport, including railways. The trick is to find the right balance.
The problem of overmanning and over-capacity is not something peculiar to this particular industry. It is something which we see in so many other areas as well. It is a problem of our times. In looking for solutions, I think that one has to have courage not to fall into the pitfall that my noble friend properly mentions. At the same time, we bear in mind that there may be other views as well and we must listen to them. That is what we are trying to do. I conclude answering my noble friend by repeating again that the one thing we will not do is to procrastinate and refuse to do something where it ought properly to be done.
§ Lord Somers
My Lords, I also thank the noble Lord for repeating the Statement. May I ask him whether he has noted that I have at present a "No Day Named" Motion about the future of the railways? If the noble Lord thinks that it would be better to wait until the Government debate takes place, I shall gladly withdraw my Motion.
§ Lord Bellwin
My Lords, I am grateful to the noble Lord. I suggest that he discusses that with the usual channels, who will best advise him. So far as I am aware, we have no date as yet for a specific debate. The noble Lord will do best to raise the matter in that way.
My Lords, may I too thank my noble friend for the Statement. Will he let me know whether there are to be consultations with people in various areas? We were very successful, for example, in keeping Pewsey station open, because we had a very good committee. Mr. Lloyd of Paddington is a very good manager. Has he been consulted, and will he be consulted about the details? The suggestion on page 77 regarding trains terminating at Exeter will be disastrous to the tourist trade, and it will also make difficulties for the servicemen and women returning to Plymouth and Devonport.
§ Lord Bellwin
My Lords, I am most anxious to stress that the report refers to options. It is no more than that. I entirely take the point that my noble friend Lady Vickers makes. Her main concern is that there should be consultation. Of course that is right; but I want to stress that it is not consultation on a proposition, because that is not what the Government are bringing forward today.
§ Lord Northfield
My Lords, I appreciate what the noble Lord says about no procrastination; but may I put one simple point to him: Is it not the case that many of the peripheral counties of the country, which were previously part of my responsibility at the Development Commission, are having enough difficulty in attracting new industry to diversify their employment base, and if there is much delay those difficulties of getting new industry to replace the old and to rebuild their economies are going to be enormously increased? Industry and new investors are going to wait to see whether any extreme option is chosen by the Government. Therefore, is it possible for the noble Lord to convey to his right honourable friend the point that it would be a good idea if an early Statement were made saying whether any extreme options were under serious consideration?
§ Lord Bellwin
My Lords, I hear what the noble Lord, Lord Northfield, says. Certainly everything said in this debate will be brought to the attention of my right honourable friend. I feel sure that he will not want to jump the gun at all. I understand exactly the point that the noble Lord is making, and its importance.
However, this is not something that is arriving here in connection with a new situation; this is something which has been going a long time. It is the Government's concern that a report of this kind should be brought forth without delay, as it has been. I am saying that in terms of time what we now have to do is make sure that we get it right—and all the more reason if it is to be lasting. His point is valid and we shall think about what he says.
§ Lord Glenkinglas
My Lords, will my noble friend accept that we all appreciate what he says about the security of this report? Does he not remember that in the old days there was a Mr. Chapman Pincher who had a direct line to the Ministry of Defence? This now seems to have spread to every single Ministry. He may remember—but I cannot—one single report that has not been leaked to the press in some form or another in the past year or two. It really is an insult to Parliament.
§ Lord Bellwin
My Lords, I deeply sympathise with what my noble friend says. Perhaps—mentioning the Ministry of Defence in particular—now that someone else is there they will do it better; but they did not do it better when he was in the other department. We suffered as much as everybody else.
§ Lord Ardwick
My Lords, the question of leakages is running rather hard politically. May I confirm what the noble Lord has said? I was with some of my old colleagues, leader writers in Fleet Street, at lunchtime. They were not expecting to get their copies of the report until 3.15 this afternoon, and they were worried to death, for they have to analyse this report between 3.15 and "close copy" time, which is about 8 o'clock nowadays in Fleet Street offices.
§ Lord Bellwin
My Lords, what can I say except—being on the receiving end, as I and my colleagues so often are—"would that there was a solution"?