British Rail: Privatisation (Hansard, 14 December 1995)

§ The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen)
My Lords, yes.

§ Lord Dubs
My Lords, is the Minister aware that the first contracts for the privatisation of British Rail's services, which the franchising director wants to issue shortly, allow the private companies to cut services? Is it not deplorable that even before the services have been privatised, further cuts in services are already being contemplated by the franchising director?

§ Viscount Goschen
My Lords, the noble Lord should take on board the fact that the passenger service requirement means that for the first time there will be a guaranteed level of service. Of course, operators will be able to offer other services if they see commercial advantage in doing that, but for the very first time the guaranteed minima are laid down.

§ Lord Clinton-Davis
My Lords, is the Minister aware that his so-called "guarantees" are almost certainly a prescription for cuts? How does the noble Viscount explain how the franchising director could have considered as preferred bidders a company called Resurgance Railways when its managing director had been a director of a double-glazing company which had gone into liquidation owing£60,000, and was someone who had no experience at all of railways? How could the Government have considered Stagecoach, one of the biggest bus operating companies in the country, when 24 inquiries had been made by into it by the Office of Fair Trading and the Monopolies and Mergers Commission, and when one of its subsidiaries was described in August as adopting predatory and deplorable actions against the public interest? What are the Secretary of State and the franchising director up to in allowing such companies to emerge as bidders?

§ Viscount Goschen
My Lords, I am certainly not going to discuss the individual companies which may or may not be bidders for the individual franchises at this stage of a competitive bidding process. To do so would be irresponsible and I shall not follow the noble Lord down that route. The franchising director is following the role that was set out for him by Parliament. He is doing so and is making good progress in taking the franchising programme forward.

§ Lord Peyton of Yeovil
My Lords, I recognise that it will probably be well beyond the ordinary bounds of optimism to expect the franchising director to take much notice of what is said in your Lordships' House, but 1373 could my noble friend arrange for the franchising director to receive a small nudge and to be told that hope springs eternal?

§ Viscount Goschen
My Lords, I was trying to work out a clever answer to that, but I am afraid that I fail to understand exactly what my noble friend wants me to do apart from bringing to the attention of the franchising director the proceedings in your Lordships' House, which I certainly undertake to do.

§ Lord Clinton-Davis
My Lords, the Minister dismissed the idea that people who really have no business entering the franchise stakes should even be considered in this House, but will he perhaps consider how the French state railway could begin to acquire a stake in British Rail's rail freight network when British Rail is not permitted to hold on to it? Is not that absolute nonsense?

§ Viscount Goschen
My Lords, the noble Lord opposite is opposed to the whole policy of rail privatisation. He has stated his reasons on a number of occasions. We take the contrary view. We believe that it will result in better services for passengers and better value for taxpayers. Those must be the essential considerations which take us forward.

§ Earl Russell
My Lords, does the Minister agree that the franchising director's powers are those which he may exercise under the relevant Acts of Parliament and the secondary legislation under them, and that in case of dispute the extent of those powers is a proper question to be decided by Her Majesty's judges?

§ Viscount Goschen
My Lords, I believe that the noble Earl is referring to a case that is before the courts at the moment and which concerns the franchising director. Beyond recognising that that is the case and that these matters are sub judice, I do not believe that it would be appropriate for me to comment further.

§ Lord Dixon-Smith
My Lords, would my noble friend agree to draw to the attention of the franchising director the present performance of SNCF in considering any tenders that might be coming with regard to franchises that might be let in the future?

§ Viscount Goschen
My Lords, I believe that the franchising director is extremely well aware of the performance of railway companies not only in the UK but overseas also.

§ Lord Monkswell
My Lords, is the Minister aware that Stagecoach, which is, I believe, one of the bidders for the Great Western Railway franchise, does not have any bus operations in Hampshire? What guarantee will the Government give that trains on the Great Western Railway will actually stop in Hampshire in future?

§ Viscount Goschen
My Lords, as I explained earlier, the guarantees are provided in the passenger service requirement, which, for the first time, lays down the minima in terms of service provision.

§ Lord Berkeley
My Lords, a recent report from the rail regulator, referred to in the press at the weekend, 1374 referred to contracts between the franchising director and franchisees, making it clear that franchisees could cut their services if ticket demand fell, if the government subsidy dropped and, lastly and most surprisingly, if the franchisee loses more than 10 per cent. of his rolling stock through poor maintenance. Therefore, is it not in the franchisee's interests to let his rolling stock run down, take the subsidy and then run away?

§ Viscount Goschen
My Lords, no, I do not believe that that is the case. It is in the train operator's interests to make sure that he gets the maximum number of passengers on his services and that he provides the best possible service to his customers so that he can then go on to negotiate further service agreements after the expiry of his contract.

§ Lord Pearson of Rannoch
My Lords, is my noble friend—

Noble Lords
Next Question!