Railtrack: Investment (Hansard, 14 January 1997)

§ Viscount Goschen
My Lords, prior to its stock market flotation in May last year, Railtrack operated under the constraints of public funding. Since privatisation the company has increased spending on the rail network. In the first six months of this financial year, over £100 million more was spent on 103 infrastructure investment than in the same period last year. I understand that Railtrack intends to increase that level of spending and will publish a detailed statement of its expenditure plans next month.

§ Lord Clinton-Davis
My Lords, does the Minister agree with the regulator, Mr. John Swift, that the underspend on maintenance and investment by Railtrack of £709 million—money which, after all, has been provided by the taxpayer—is totally unacceptable? Further, is it not a fact that that underspend contributes very substantially to the profits that have been declared by Railtrack thus far?

§ Viscount Goschen
My Lords, I understand that the regulator has commented on the level of Railtrack's investment this year. It must be remembered that the company has existed in the private sector for only nine months. It has put forward very bold expenditure plans for investment in the rail network and is committed to implementing them. It has not been able so far to put into place the systems to deliver that targeted level of investment. It will publish its report which the regulator will see. The company intends firmly to meets its investment targets. I repeat that in the first six months it has spent £100 million more than in the previous year, which is an increase of about 25 per cent.

§ Lord Clark of Kempston
My Lords, does my noble friend agree that an investment by the new company, Railtrack, of over £100 million augers very well for the future, given that further investment by Railtrack will not affect the public sector borrowing requirement and any inhibitions on the PSBR will disappear? Does he agree that criticism of privatisation comes ill from spokesmen opposite in view of the fact that in this country privatisation has been a great success and is copied worldwide?

§ Viscount Goschen
My Lords, my noble friend is absolutely right about the success of privatisation, which even the parties opposite acknowledge these days, in stark contrast to their views when these privatisations took place. Railtrack has announced very bold investment plans. Indeed, it intends to invest £8 billion in the network over the next five years. It is working hard to put that investment in place and set up systems that did not exist when Railtrack was in the public sector to ensure that that spend occurs. It will be publishing its detailed plans.

§ Lord Cledwyn of Penrhos
My Lords, Railtrack may have spent the sum of money to which the noble Viscount has referred, but it has not been spent in Wales. Is the Minister aware that yesterday I sought to catch the 8.58 train from Holyhead to Euston and the engine broke down and the service was late and uncomfortable? Is he also aware that the Welsh people are very tolerant and patient in these matters but that the situation will be different if he does not do something about this matter?

§ Viscount Goschen
My Lords, I have personal experience of the tolerance of Welsh people—and very 104 great it is too. The accusations (if I may so describe them) that the noble Lord makes are addressed to the wrong body. Railtrack is the organisation that owns, maintains and runs the track. It has greatly improved its operational performance since privatisation, and it has invested money. Some of that investment will have taken place in Wales.

§ Lord Bridges
My Lords, I should like to ask the Minister a particular question of which he has knowledge. A few weeks ago I wrote to him to ask what plans were being made to improve the performance of the rail connection between the port of Felixstowe and the rest of the country so as to reduce the number of containers and freight consignments travelling by road. I am grateful to him for his reply, which in general is not unsympathetic and points to certain possibilities of which I am aware. However, why does the Minister's letter omit any reference to the broader statements of policy which the Government have made about the need to transfer traffic from road to rail for environmental reasons? A number of important statements have been made on this subject in the past, for example in the significant paper on the subject of sustainable development, but the noble Viscount makes no reference to these aspects of government policy in his reply. Surely, it is wrong to omit any consideration of those matters also. Is the noble Viscount guilty not so much of forgetting Goschen but of Goschen forgetting in this case?

§ Viscount Goschen
My Lords, it is very difficult to discuss the text of a letter at the Dispatch Box. I am more than happy to place the correspondence in the Library of the House, if that is the wish of noble Lord. The noble Lord asked me specific questions and I attempted to respond to those questions with direct answers. As luck would have it, I have with me a copy of the letter. My eye is drawn to a section where I describe the freight facilities grant scheme, which is to do with the environmental benefits of transferring freight to the railways or inland waterways. Under that scheme an application for grant for capital facilities can be made to the Government in just the circumstances that the noble Lord describes.

§ Lord Marlesford
My Lords, does my noble friend at least admit that in the case of Felixstowe this is a major problem? Our biggest container port is linked with the rest of the rail network by a single track which uses the 19th century token system of signalling. Of the 1 million containers that go to and leave the port of Felixstowe each year by land only 17 per cent, are carried by rail. Does the Minister recognise that that represents a failure over several decades to make adequate provision for part of the transport infrastructure of this country? Are the Government going to do something about it and not just say it is up to Railtrack?

§ Viscount Goschen
My Lords, I do not agree with my noble friend that there has been a failure in this direction. I understand that Freightliners, which is the company that is responsible for moving containers on 105 the line to which my noble friend has referred, recently broke the all-time record for the number of containers moved through Felixstowe in a single day. I understand that currently Freightliners operates 18 trains every day and Railtrack believes that there is sufficient capacity for at least two further trains per day. In view of that, I cannot possibly agree with my noble friend. Certainly, in the first instance it is for Railtrack as the owner and operator of the line to decide where its investment priorities lie.

§ Lord Clinton-Davis
My Lords, will the Minister answer my initial Question? Does he agree with the strictures of the regulator, Mr. John Swift, that the underspend by Railtrack is totally unacceptable—yes or no?

§ Viscount Goschen
My Lords, these are the views of an independent regulator which are directed to an independent commercial company. The Government have put the regulator in place to do exactly that. It is not for me to express an opinion on whether or not I agree with the regulator. He is doing his job, and shortly he will receive the detailed plans of Railtrack as to how it intends to spend these record amounts of money on the railway. This is what we see emerging from privatisation. There is an increased amount of money being put into the railway. This year 25 per cent, more has been spent on the infrastructure than last year. By any standards that is a considerable improvement.