HL Deb 28 April 1993 vol 545 cc344-5

2.54 p.m.

Lord Clinton-Davis asked Her Majesty's Government:

Whether they have had further discussions with British Rail concerning their refusal to permit it to tender for franchises in connection with Government proposals to privatise British Rail.

The Minister of State, Department of Transport (The Earl of Caithness)

My Lords, no.

Lord Clinton-Davis

My Lords, is the Minister aware that that is a great pity? Is he further aware of, and does he agree with, the views expressed to the Select Committee in another place dealing with railway privatisation by Mr. Hugh Rees on behalf of the European Commission, that under public procurement rules there is no way in which the Government can exclude publicly-owned enterprises in other member states from tendering for franchises? In other words, that includes the German and French railways. Is it not therefore manifestly absurd and discriminatory so far as concerns British Rail, and probably unlawful, for the Government to seek to debar British Rail from so doing in this country?

The Earl of Caithness

My Lords, the answer to the noble Lord's first question is no. On the remaining questions, our policy is to maximize private sector involvement in the railway operations, and that is what the Bill provides for.

Lord Clinton-Davis

My Lords, does the Minister agree that the Government could not exclude state-owned enterprises from other Member states from so tendering? If that is right, does not he regard that as being utterly absurd? Therefore, would not the Government think it prudent to reconsider the position, especially since it is probably unlawful for the Government to take the action that they are taking?

The Earl of Caithness

My Lords, I do not believe that it is unlawful to take the action that we are taking in the Bill. I look forward to discussing that issue with the noble Lord in the near future.

Lord Ezra

My Lords, does the Minister agree that the main objective of all these prospective changes in the railway system is to obtain a better system? As British Rail is among the leading experts in the country operating the system, it seems rather strange that it should be debarred from competing with the private sector.

The Earl of Caithness

My Lords, I am glad that the noble Lord shares our aim of improving the railway system in this country. We believe that that is best done by the private sector. So far as concerns British Rail, I can assure the noble Lord that we welcome and positively encourage the possibility of management buyouts.

Lord Stoddart of Swindon

My Lords, is the Minister aware that his answer to my noble friend Lord Clinton-Davis, was unsatisfactory as it did not give any information? My noble friend asked him whether it was not strange that British Rail should be precluded from bidding for the British Rail franchise but that a foreign, publicly-owned railway should be able to do so. Does not the Minister agree that that is a serious question which deserves an answer?

The Earl of Caithness

My Lords, our aim is not to extend the public sector involvement in the railways. The franchising director would want to look closely at the basis of any bid from an operator receiving any state aid.

Lord Elton

My Lords, is not this a matter that we shall be discussing in detail in legislation, and is not this the wrong time for this debate?

The Earl of Caithness

My Lords, on behalf of the Government, one can only do one's best to answer the questions posed, but my noble friend is right. We look forward to having a long and substantial debate in the near future.