Passenger Rail Franchises (Hansard, 17 July 1996)

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

§ Lord Peyton of Yeovil
My Lords, I hope that my noble friend will realise how grateful I am to him for his very expansive reply. Is he aware that at least on the surface some of the franchisees have set themselves or have accepted some very stiff targets?

§ Viscount Goschen
My Lords, I agree that the targets which have been set are properly ambitious. Those high targets mean better levels of service to the travelling public and more investment. I believe that that is greatly to be commended. Those promises are matters of contract and are legally enforceable.

§ Lord Cledwyn of Penrhos
My Lords, can the Minister give an assurance that the oldest named train in the world is not interfered with? I refer to the train from Euston to Holyhead which is known as the Irish Mail.

§ Viscount Goschen
My Lords, the noble Lord, Lord Cledwyn, raises a subject with which I am not especially familiar. I shall endeavour to find out the details that he requires. I am not entirely sure whether he refers to the locomotive itself or to the line. What is clear is that under franchising the passenger gets a better deal, and more investment is put into the network to the benefit of all concerned.

§ Lord Ezra
My Lords, does the noble Viscounnt agree that over the years one of the biggest problems suffered by the railways is under-investment? Does he consider that under the franchising arrangements that have been made that will be put right, particularly as far as concerns rolling stock?

§ Viscount Goschen
My Lords, I believe that the benefits of the privatisation programme will flow in terms of investment. The noble Lord is quite right. In the past British Rail has had to compete with all kinds of other areas of government spending for access to capital. We believe that under the new arrangements it will be much easier to bring in new sources of capital and there will be considerable improvements.

§ Lord Taylor of Gryfe
My Lords, is the noble Viscount aware that once a week I travel by train from King's Cross to Aberdeen, which is a considerable distance? In the past that service has been one InterCity service. I am advised that now the InterCity service ceases at Edinburgh, which means that the rest of the journey is made via ScotRail. Can the Minister assure me that, as there is a complete change of regime and personnel, there will be satisfactory co-ordination between the private owner of InterCity East Coast main line and the public owner of the Edinburgh to Aberdeen line via Leuchars?

§ Viscount Goschen
My Lords, I give the noble Lord the assurance that train operating companies will work together. Very shortly, we hope to see all train operating companies in the private sector, which will be to the considerable benefit of the country. I am glad that the noble Lord has referred to the InterCity East Coast main line. We have seen a further £7 million of promised investment in the refurbishment and improvement of rolling stock and a £15 million programme of station improvements, including security, accessibility and so forth. Those are examples of the improvements in the InterCity East Coast main line which have been promised. We certainly believe that they will be carried out.

§ Viscount Caldecote
My Lords, I should like to ask my noble friend whether the Government will encourage the new companies to buy British-made rolling stock and other equipment.

§ Viscount Goschen
My Lords, I am certain that the new train operating companies will work very closely with the rolling stock leasing companies in identifying the kind of rolling stock which will be to their benefit. I am sure that they fully realise the capacity and capability which this country has for manufacturing the same.

§ Lord Berkeley
My Lords, when the Minister for Roads and Railways welcomed the franchises for South West Trains and the East Coast Main Line, particular emphasis was placed on the integration of buses and trains in the same service to create a network. It was thought that this was a good idea. When the Midland Main Line was recently franchised the Office of Fair Trading said that buses must be removed from the operator if it was to avoid 830 a reference to the Monopolies and Mergers Commission. Can the Minister explain to the House whether it is a good or a bad idea to have a network between buses and rail? Further, can he confirm that the real competition is not between rail and bus but with the motor car?

§ Viscount Goschen
My Lords, I am interested to hear the views of the noble Lord about where competition lies between the different modes of travel. The Secretary of State for Trade and Industry announced on 27th June that he intended to refer the acquisition of the Midland Main Line franchise by National Express to the MMC unless undertakings were given by National Express to remove competition concerns arising from the acquisition. I understand the current position to be that the Director General of the Office of Fair Trading is seeking such undertakings from National Express. In view of that, I do not believe that it is appropriate for me to comment further at this moment.

§ Lord Clinton-Davis
My Lords, can the Minister indicate the extent to which the line that he takes this afternoon about the benefits to the public arising from his fragmented system is consistent with a letter from the customer relations department of Central Trains Limited? The letter states: other rail operators do not discuss with us what plans they have for their services. Our priority has to be to provide the best service possible for our own customers". East Coast replied to a not dissimilar complaint in the following terms: The issue of routing has become very complex and both staff and customers alike are confused as to which lines their tickets are valid upon … one franchise does not want passengers using its services if the payment for the ticket [goes] to another operator. As a result, the rules governing 'any reasonable route' are being given further consideration". Are replies of that kind not absolutely inconsistent with the assurances that the Minister has given over a long period?

§ Viscount Goschen
My Lords, I regret that I have not read every single piece of correspondence from every single train operating company. However, the noble Lord may recall that a year or so ago there was a tremendous scare, fuelled by members of the party opposite, about the network benefits. It was said that through-ticketing would not exist and that all of this would go to the wall. That has turned out to be rubbish. Operators are obliged to provide through-ticketing to all destinations. Ticket inter-availability is being protected broadly in line with inter-availability of BR services. Railcards for the elderly, disabled and young people will continue. I believe that that firmly gives the lie to what was said about the abolition of network benefits.

§ Lord Clinton-Davis
My Lords, is the Minister saying that the replies of Central Railways and East Coast—they are typical of many, many replies—are a tissue of lies?

§ Viscount Goschen
My Lords, I have not read the private correspondence put forward by the noble Lord. He cannot possibly expect me to comment on 831 correspondence to other people from private companies. Networker benefits are protected. That is written down. Those are the rules, and they cannot be sidestepped.

§ Lord Ewing of Kirkford
My Lords, will the Minister tell your Lordships whether those eight franchise holders are paid the fuel rebate on the diesel fuel that is used? If so, how much is paid by the Treasury on behalf of taxpayers to the holders of those eight franchises?

§ Viscount Goschen
My Lords, I do not have that information, but I shall be delighted to find out and write to the noble Lord about it. He might be interested to know, on another fiscal matter relating to the eight franchises, that by year seven of the franchises, the net burden on the taxpayer will fall by about £186 million per annum, which will be some 61 per cent. compared to the budgeted levels of support for BR in 1996–97, net of administered profit.

§ Lord Clinton-Davis
Wait and see!

§ Viscount Goschen
My Lords, the noble Lord says, "Wait and see". That is not the case. These are contractual matters.