Railtrack: Investment (Hansard, 29 March 1999)

§ The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty)
My Lords, Railtrack's 1999 Network Management Statement was published last Thursday. We made it clear at the national rail summit earlier this year mat we should be looking closely at the 1999 NMS to see whether Railtrack's proposed investment is sufficient, and that is what we shall do. We feel strongly that Railtrack must meet the needs and expectations of the public and the industry. The NMS has only just beer published and it is too early for us to be able to comment on its contents.

§ Lord Berkeley
My Lords, I am grateful to the Minister for that Answer. Is he aware that out of Railtrack's quotes £27 billion investment over 10 years, less than one-third is new investment? That is meant to cope with the doubling of the number of trains in 10 years. Is he satisfied that of that new investment, Railtrack intends itself to pay less than 40 per cent. of the investment for passengers and virtually none of the investment for freight. How can the Government achieve their growth targets if Railtrack does not invest more of its money?

§ Lord Whitty
My Lords, the programme which Railtrack has put forward provides a 30 per cent. growth 2 in passenger miles and a 200 per cent. growth in freight volumes over 10 years. However, my noble friend is absolutely right that for a significant portion of that, Railtrack is looking to others to provide the finance. That presents us with some strategic decisions which will be taken when we have analysed fully the implications of the NMS. It is an extremely complicated proposal and serious strategic decisions will need to be faced. The setting up of the strategic rail authority will greatly assist us in making those decisions.

§ Lord Marsh
My Lords, has the Minister seen reports which suggest that the Government may wish to take control of and responsibility for Railtrack's investment? Given the record of both governments over many years while being responsible for investment, does he agree that whatever the existing company may do wrong, it could hardly do worse?

§ Lord Whitty
My Lords, I am tempted to say that the noble Lord clearly has some experience of these matters. The Government's intention is to make the regulatory regime work. If that requires changes to the regime, we intend to make them, if necessary by legislative means. It is important that both the regulator and the strategic rail authority help Railtrack to meet the objectives set out in our integrated transport policy. That will require both funding and more investment, as the Prime Minister has made clear.

§ Baroness Sharp of Guildford
My Lords, I travel regularly by train and suffer the vicissitudes of delays and cancellations, particularly on the London commuter line. I notice that in this over-large and glossy volume which Railtrack has produced, it is proposed that the improvements to the London commuter lines, and, in particular, the London to Brighton main line, will be funded in partnership with others. That seems to imply a subsidy from either central or local government. Since 3 the Minister is not very keen on local government subsidising those matters, from whom does he believe the subsidies will come?

§ Lord Whitty
My Lords, it would be premature for me to respond in detail to that question. Railtrack has said that the funding for some of the improvements will either be from partnerships, or Railtrack will act as contractor and others will have to pay substantial amounts. Whether some of that falls on national government will depend on subsequent decisions. The work of the strategic rail authority, which we are about to establish, will inform our decisions in relation to that.

§ Lord Brabazon of Tara
My Lords, will the Minister not welcome the fact that Railtrack is proposing to invest £27 billion? Is that not a sum of money which would have been beyond British Rail's wildest dreams in its old nationalised days? Does that not contrast very sharply with the investment which is to be put into London Underground, which, after all, carries roughly the same number of people per day as the national railway, and in relation to which we have heard nothing about the public-private partnership?

§ Lord Whitty
My Lords, as regards London Underground, the noble Lord is right that the rather detailed negotiations on the public-private partnership have still to be completed. Nevertheless, we expect that we shall mobilise resources to meet the needs of London Transport. On the investment of £27 billion, we clearly welcome Railtrack's commitment to analyse the priorities as set out in this document, large and glossy though it may be. However, as my noble friend Lord Berkeley has already pointed out, not all of that will be met from Railtrack's own finances. Therefore, government, operators and other interested parties will need to fund a substantial amount to reach that £27 billion. Nevertheless, we now have a strategy from Railtrack which in itself is welcome.

§ The Lord Bishop of Hereford
My Lords, does my noble friend realise that the letter killeth, but the spirit giveth life"? In the light of that knowledge—which he has now, even if he did not have it before I rose to my feet—is my noble friend prepared to press Railtrack to honour its commitment under Condition 7 of its licence, not grudgingly in the letter but generously in the spirit, to meet the reasonable expectations of its customers? Even though he is not able to tell us where any public money may come from, is he prepared to press Railtrack to put more of its own money into the urgently needed works which have to be carried out to gauge enhancement and track capacity to meet the rapidly rising and welcome increase in demand for rail freight?

§ Lord Whitty
My Lords, I am always anxious to encourage generosity of spirit by Railtrack and other operators within the rail industry. However, they are 4 commercial enterprises and they have hard-headed decisions to make, subject to the regulatory mechanism.
Railtrack is prepared to engage in some investment in increasing the gauge, but, under its plan, the bulk of the resources for freight would be provided by others. Therefore, those negotiations have to continue. It is certainly the Government's intention to provide sufficient resources, both in infrastructure and in operating costs, to ensure that there can be a genuine and a significant sustained shift to use rail freight rather than road transport. That is part of our integrated transport policy. The achievement of that will take some time, but the rail freight industry has made a significant and welcome start.

§ Lord Clinton-Davis
My Lords, does the Minister agree that the failure of the previous government to recognise the need for a strategic rail authority, or even an integrated transport policy, has cost this nation very dear indeed?

§ Lord Whitty
My Lords, I am very happy to acknowledge that. Probably the worst aspect of that was the rushed and much-botched approach to privatisation, which has left us with many of the problems that we, Railtrack and the operators are still addressing.

Earl Ferrers
My Lords, as the noble Lord, Lord Clinton-Davis, was wrong last week in the Question that he asked on immigration, is he not also wrong this week in the question that he has just asked?

§ Lord Whitty
My Lords, in my experience, my noble friend Lord Clinton-Davis is rarely, if ever, wrong.