Railways

HL Deb 19 January 2004 vol 657 cc858-71

4.3 p.m.

Lord Davies of Oldham

My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Secretary of State for Transport, on the railways. The Statement is as follows:

"Last year Britain's railways carried over 1 billion passengers for the first time in 40 years. That is a significant measure of success and one that has been achieved despite all the well-known difficulties facing the industry. Because in those 40 years the railways have suffered from substantial underinvestment, year after year. That was especially so in the years leading up to and immediately after privatisation under Railtrack.

"The Government will set out their spending plans through to 2008 in the spending review this summer. In advance of that, we need to look at the progress made through the increased investment already being put in place but at the same time to look at the structural and organisational changes we need to allow the railways to improve performance. This will enable us, as the spending review decisions are made, to publish proposals in the summer for a new structure and organisation for Britain's railways.

"Because of the history of underinvestment, as a first step it was necessary to put in place increased investment. In July 2000, therefore, the Government announced public investment of £33 billion over 10 years, doubling railway investment over a five year period. Total investment in the four years to 2006 will be almost three times the investment at the time of privatisation.

"That investment is now beginning to make a difference. But since that time it has become very clear that the scale of underinvestment and inefficiency in our railways, which built up over decades, was far greater than anyone believed at that time.

"The Hatfield accident in October 2000 exposed the poor state of much of the railway infrastructure and when Network Rail took over from Railtrack in October 2002 and started to go through the books, it became increasingly clear that Railtrack either did not know or did not admit to the sheer scale of the problems it was building up.

"It also became very clear that Railtrack had lost control of its costs. It had farmed out much of its decision making on what work was done, and therefore on costs, to private contractors. And, as everyone knows, forecast costs on the West Coast Main Line were totally unrealistic, rocketing from £2 billion to £13 billion in some five years.

"The recent regulatory review published last December confirms that the cost of upkeep of Britain's railways is £1.5 billion per year more than was thought necessary just three years ago. The review implied that Network Rail inherited a business from Railtrack with unit costs substantially higher than they ought to be. Network Rail is now tackling these inefficiencies and working hard to bring costs down.

"Taxpayers and fare-paying passengers alike need to know that their money is being well spent and that increased spending will improve performance. Cost control is essential.

"The £64 billion public and private investment announced in 2000 is making a difference. Over one third of train rolling stock is being replaced—half on London commuter lines. Major projects are being delivered, like the West Coast Main Line upgrade and the power supply south of the Thames. There is track and signal renewal going on all over the country and there are now 1,500 more services every weekday than there were in 1997. There has been a 20 per cent increase in passengers since 1997.

"Reliability, which is highly dependent on track and signalling maintenance, and which fell dramatically after Hatfield, is now improving, but it still has a very long way to go.

"But there remains a further and very serious difficulty facing this industry; that is, its structure and organisation. The way in which it was privatised has led to a fragmentation, excessive complication and dysfunctionality that have compounded the problems caused by decades of underinvestment.

"There are too many organisations, some with overlapping responsibilities. It has become increasingly clear that this gets in the way of effective decision making and frequently leads to unnecessary wrangling and disputes. That is no way to run a railway.

"The Government are committed to a partnership between public and private sectors. It happens on railways throughout the world. But the long-term inefficiencies and costs of the privatisation settlement have, as time has passed, become an even bigger barrier to the success of the railways. So, within the spirit of partnership between private and public sectors, we need to put right the problems that the authors of privatisation left behind.

"So we now need to build on the investment we have made and on the structural changes we have already put in place, not only to put the railway on a sound financial footing, but at the same time to provide it with the right structure and organisation to take it through the next 20 to 30 years.

"The Government will set out their spending proposals for transport at the conclusion of the spending review in the summer but that money must be well spent now and in the future. It is essential, therefore, that the railways establish far greater cost control so that the public and investors know that it is efficiently and effectively run. Before it takes on new projects we need to be satisfied that there is proper control over existing costs and a significant improvement in performance. The public expect no less.

"The Government remain committed to increasing spending on the railways because it is needed and because the railways are an essential part of the economic fabric of the country—millions of people depend upon it—but the public rightly expect rigorous cost control. After all, we pay for the railways through taxes and fares.

"That work has already started. For example, Network Rail is taking maintenance back in-house to control costs. It is also looking at other areas in which they can do things more cost effectively. The regulator's review, which I welcomed in my Written Statement on 15 December, identified substantial cost reductions. But more can and must be done.

"As a country we must be able to make informed choices and decisions about rail and other forms of public transport. Too often these costs are far from transparent. The Government also believe that the opportunity should be taken to consider how to devolve more decisions on public transport — including rail—to the Scottish Executive and the Welsh Assembly, and at a regional level to PTEs within a nationally coherent framework.

"Local transport decisions are often best taken by the people who provide the service and who pay for it. They can be better placed to know what is needed and how best to provide it, as well as being able to make sensible and informed decisions as between bus, light rail and heavy rail, for example.

"Structural change is needed not just to make better spending decisions. It is also needed if rail is to operate effectively and to meet the needs of passengers and other customers.

"Privatisation had some disastrous and far-reaching consequences for the railway, such as Railtrack's performance, for example. But the private sector has brought considerable increased investment. In many cases, train companies have provided some innovation that was conspicuously lacking in the past. We want to build on that, which is why the Government believe that renationalisation would not solve the problems that the railway faces. It is essential to put in place a structure that works and which can deliver not just cost control, but a safe, reliable railway that works efficiently.

"Since 1997. we have put in place reforms to deal with some of the worst effects of privatisation. Richard Bowker and the Strategic Rail Authority have worked extremely hard with the industry, bringing greater leadership and strategic direction to the railway. They do so with our full support. The SRA is making much needed changes to the franchising, planning and route development.

"The Government remain committed to the minute that I laid before the House on 3 February 2003 covering obligations to the SRA, other financial obligations and the Government's other contracts. As the House expects, we shall remain at least as closely involved in expenditure decisions, financial commitments to the industry and those who finance it.

"We need a railway that makes the most of what both the private and public sectors can offer. The first stage of reform was to set up Network Rail, a private sector company operating in the public interest. It is already making significant progress improving the performance of the track and signalling, and is getting a grip on costs. It has a clear focus to operate in the public interest and to build a safe, reliable and efficient railway, and it will continue to do so. We now need to build on that with more fundamental reform.

"The second stage is, therefore, to streamline the remaining structure of the railway, and to examine the way in which the industry works together. The Government will be publishing their proposals in the summer.

"There are two key principles to underpin these reforms. First, the railway must operate in the public interest, while protecting the legitimate interests of investors. It must be for the Government to decide how much public money is spent on the railway and to determine priorities. Of course, no government department can, or should, attempt to operate the railway. However, the Government can put in place a structure and organisation so that it operates effectively and efficiently, and with a single point of decision making. Rail privatisation failed to recognise that there are some things that only government can determine in the public interest that cannot be left purely to commercial interests.

"Secondly, the principle of public and private partnership is right for the railway and it will continue. It brings in money from two sources, which is important. We are spending £73 million every week on the railway, and a similar amount from the private sector is levered in. That is why the principle of independent economic regulation for the railway is essential, and will be central to our proposals.

"The train operating companies have, in many cases, brought innovation to services that was lacking in the past. But we need to put in place the right organisation and structure so that both the public and private sectors can focus on meeting passengers' needs and delivering value for money. As rail also makes a valuable contribution to keeping lorries off the roads, we want to ensure that freight operators have access to the rail network on fair terms.

"We need the right framework to ensure that the railways operate effectively, so that key decisions can be taken in the best interests of passengers to provide a more reliable service.

"Our objective is a streamlined structure and organisation with clear lines of responsibility and accountability. Network Rail is already operating in the public interest, and with the right franchising arrangements so should the train operators But we have a clear responsibility to examine the roles and relationships of all the other organisations with a view to streamlining the present structure.

"The review will, therefore, also look at regulation of safety which, at the moment, is the responsibility of the Health and Safety Executive, Health and Safety Commission and the Railway Safety and Standards Board. Safety is of paramount importance. All those involved undoubtedly work hard to ensure a safe railway. But there are now a plethora of industry standards, some of which are over-cautious, or which are being applied in an overcautious way. Safety regulation needs to focus on the real risks to passengers and employees. It should not be an obstacle to providing reliable services. We need the right organisation to do that.

"Our reforms have to make the structure as simple and as straightforward as possible. The complex structure at privatisation has contributed to the daily frustrations of the public. Many of those frustrations are shared by the dedicated and committed people across the country who are working to improve the railways and deliver better services. There are many in the railway industry with ideas for reform. I am asking Richard Bowker and the SRA to evaluate ideas as they come forward, and then to let me have advice based on industry views, so that we can take them fully into account in reaching conclusions on the review.

"In the mean time, the priorities for the industry must be to focus continually on driving up performance and reliability and getting a grip on costs. Passengers are rightly impatient. Improvements have been made but more needs to be done. We are determined to bring to an end the problems caused by decades of under-investment, which have been compounded by an ill-thought-out privatisation. Rebuilding Britain's railways needs a long-term commitment, which we are determined to deliver. I commend this Statement to the House".

My Lords, that concludes the Statement.

4.17 p.m.

Viscount Astor

My Lords, I thank the Minister for repeating that Statement. I am afraid that it is another nail in the coffin of the 10-year transport plan that the Government published in 2002. It is a government policy that is caught between political dogma and Treasury concerns—a conflict between the two about public spending restrictions.

At least the Minister admitted that privatisation works for the train operating companies. We need only look at the huge investment. It should have worked for Railtrack. I have always admitted that we did not get the interface between Railtrack and the train operating companies right. But the Government did nothing for six years—before it was too late and then they renationalised it. Did that work? No. Network Rail has abandoned expansion plans and cut investment. Fares are rising and one in five trains runs late. The Government want to change it again, after only three years.

The Strategic Rail Authority was the brainchild of the Deputy Prime Minister, John Prescott, and Network Rail was the brainchild of Stephen Byers. Let us not forget the creation of the Rail Regulator, the Health and Safety Executive, the Health and Safety Commission and the Railway Safety and Standards Board.

We said from the beginning that there were too many bodies with conflicting interests. Who set them up? This Government. At least the current Secretary of State now agrees with us that the bodies set up by his predecessor do not work. They conflict with each other.

What is rather surprising about the Statement is that in September Alistair Darling, Secretary of State, said to the Transport Select Committee: I am loathe to start spending overmuch time on structural changes when I really want everybody in the railway industry to concentrate on delivery". What has happened since September to change his mind? Why the change of policy? Is the reason that the Secretary of State had to block the SRA strategic plan, which is due to be published this month, that he did not like its findings? When will it be published? Is it going to be published soon? If not, we shall begin to wonder why. What are the Government covering up?

Almost the only important sentence in the Statement was in paragraph 39, which talked about the structure and organisation, with a single point of decision making". What does the Minister mean by that? Will it be the Secretary of State, the SRA or some new person making decisions? Does it mean that the Government or someone else will be taking control? What is, a single point of decision making"? We cannot respond to a rail Statement without saying that it is always the poor long-suffering fare-paying travelling public who suffer from government policy. The one good thing about the Statement today is that, after seven years of government, they will be in no doubt who to blame—this Government and this Secretary of State. It was not really a Statement but a softening-up for further admissions of failure. It was a long Statement—13 minutes—which said very little. It could have said: "We have got it wrong; we shall go back to the drawing board and return to you in the summer".

4.21 p.m.

Lord Bradshaw

My Lords, perhaps I may start by apologising for having missed the first few paragraphs of the Minister's Statement, but I was urgently called away.

We had looked forward to today's Statement with some enthusiasm, but I am afraid that we are very disappointed indeed. We are first disappointed that the Minister did not refer to the railways being in a deplorable state and that they have suffered from 40 years of substantial under-investment—year after year. That was not the case before privatisation. There were low levels of investment but a management system which had learned to cope with them.

The railways were in a very good state when they were handed over on privatisation. The fact that Railtrack subsequently failed to invest, to control its contractors and to put the interests of its shareholders first lies at the heart of the problem. That is the fault not of the Government but of the previous administration.

We need to act radically and quickly if the Government are to salvage something from the deplorable state that the railways are now in—and which are in fact getting worse rather than better. I suggest that the Minister must go for some simple solutions. He must combine the regulator—who by the way was not invented by the Labour Party or its previous Ministers, but by the previous Conservative administration—with some kind of oversight body that contains the economic regulator. That is the model under which the CAA has worked, and has worked extremely successfully. I doubt whether anyone knows the name of the economic regulator of the CAA—Harry Bush—but they certainly know the name of Tom Winsor very well because almost every statement is preceded by the personal pronoun.

We should make franchises longer. They should roll forward subject to meeting performance criteria, and they should be more comprehensive. In order to get the railways back into a manageable form, Network Rail should gradually surrender to the franchisees its responsibilities for timetables, for signal operations, for possession and planning, and then, in the fullness of time, it should surrender track and signalling in order to get the railway back into a manageable form. It was a fundamental error to split the track away from the trains, which were so deeply ingrained. Alone of the regulated industries, the railways have proved absolutely unsuitable for the form of nationalisation which was chosen—mainly by people who did not know what they were doing.

All the safety responsibilities to which the Minister referred should go to the newly created Railway Inspectorate and not the Health and Safety Executive with its "safety case" culture. While I agree that safety is paramount, it does not need layer on layer of bureaucrats supervising and interpreting responsibility, so that what goes for the fastest part of the railway is applied willy-nilly to the smallest branch line.

The Minister should tell the OFT that combined ownership of bus and rail is not objectionable and that bus and train companies should be allowed to cooperate in the public interest.

The rumours we have read in newspapers about the appointment of eight tsars may or may not be true. What I would say is that if there are eight good people available to direct the railways, they are needed to run the railways and not to direct them. If there are eight not so good people then the result will be more, rather than fewer, turf wars.

The SRA, the railway directing body, or whatever it is called, should be small and clearly aware which are its responsibilities and which belong to the Department of Transport. There should be no doubt in anyone's mind. Perhaps the Minister can clarify that issue.

I conclude by saying that we on these Benches are very willing to help rescue the railways. The Government should not rely simply on advice filtered through Richard Bowker, who, despite the Financial Times describing him as an experienced railway manager, is in fact nothing of the sort. We are keen to see that the lot of the passenger and freight-user is put first.

Lord Davies of Oldham

My Lords, I am grateful for the two Front-Bench contributions. It is a function of the Official Opposition, I suppose, to criticise and never at any stage either to admit mistakes of the past when it was in government or to advance a proposition that is remotely constructive in relation to our present problems. The noble Viscount, Lord Astor, fulfilled that role admirably. He referred to the issues with regard to Network Rail and its difficulties as though Hatfield had never happened. He must surely appreciate that the enormous problems which have engulfed Network Rail are a reflection of what the Hatfield accident threw up, and that the problems, therefore, of the railways were far greater than even the worst analysis had shown at the time of the botched privatisation.

The noble Viscount asked me one specific question. He asked what will be the single point of decision making. He will recognise that the Statement's purpose is to make clear to the industry and to all those with a contribution to make in improving our rail performance that in the summer we intend to reform the railways' organisation to have this crucial single point of decision taking. We are aware that the plethora of competing points of decision is causing enormous problems in the railways by failing to produce a structure to tackle these outstanding issues.

Of course we are consulting on this issue. We expect the industry, and all those interested in it, to put forward ranges of proposals so that we can arrive at the right structure to stand the country in good stead for the decades ahead.

I am grateful to the noble Lord, Lord Bradshaw. He addressed some crucial areas where he thought there were points that we should take on board. In his comments regarding safety, I accept that we need to rethink the position. It is quite clear that that has been one of the railways' significant problems. We all put the highest priority on safety, but we cannot run the railways solely on the presumption that safety takes predominance over every other factor. Otherwise, no train would ever move at any speed at all. We are aware that we need to look at the safety side. I am grateful for the noble Lord's constructive point.

On combined ownership, the Statement indicated that we are looking at how we can devolve some areas of decision taking down to local passenger transport executives and local structures. The Scottish Parliament and Welsh Assembly can play their part on a rather more significant scale. The concept of seeking to devolve some aspects of decision taking to a more local level would fit in with the proposition that the noble Lord advanced. That needs to be considered further. I also accept that we cannot get this single point of decision right if we lack a clear definition of the responsibilities between such a body and the Department of Transport. That is absolutely critical to the effectiveness of the review.

I conclude on the obvious point. If we had come along with a cut-and-dried solution to a very difficult problem, no doubt we would have been challenged about giving insufficient signals for consultation on what should be done. We are allowing five months which will ensure that we hit our intended objectives for the railways.

4.32 p.m.

Lord Peyton of Yeovil

My Lords, the Front Bench speakers have had a long time. I am glad that Back-Benchers at last have their chance. Is the Minister aware that if he had gone further back into the past then his criticisms of privatisation would have been much more valid? The past is important in the railways. First, they were run into the ground by six years of war, very intensive use, and nothing was spent on them. After the war, the railways had the colossal misfortune—visited on them by the party opposite—of having the Treasury as a banker. That is an untold misfortune. I am sure the noble Lord, Lord Marsh, will be the first person to agree with that.

The Minister has to understand that words will not help. A major casualty is that the morale and pride of railwaymen has been lost. That is the first thing to restore and only then will there be a competent organisation. I am quite conscious of the fact that privatisation as an attempt to get the railways off the hack of the Treasury was flawed in many respects. There cannot be that confusion of responsibility and one cannot have too many players in the game. The whole thing becomes too complex. It was a rather long Statement. I hope the Minister will lend himself not to words but to action.

Lord Davies of Oldham

My Lords, I assure the noble Lord that the Front Benches had the time they were allocated for questions. If anything, they were slightly economical. If we did run over-run I did not notice that we had—then the blame rests with me in my answers and not my two inquisitors from the Opposition Front Benches.

On the more general issue of history, I bow to the greater knowledge of the noble Lord. He used to occupy a very significant position in transport and I have no doubt that he studied the history of the railways at that time. I agree with him that the present situation is too complex. There need to be clear points of decision and we need to get the relative rail responsibilities sorted out accurately. That is what we intend to do. I emphasised the other point that he will recognise; the future of the railways will not just be dependent on what the taxpayer contributes through the Treasury. There will also be additional investment from the private sector.

Lord Faulkner of Worcester

My Lords, I agree with every word said by the noble Lord, Lord Peyton, whose time as Transport Minister is still viewed by many people in the rail industry as perhaps the golden age in the post-war period. His comments about morale are ones that the Government must take very seriously.

I say to my noble friend that there is a huge amount in the Statement today that will be welcomed by the travelling public and by the industry. There are aspects of it which are long overdue and very sensible. I particularly welcome the full support that it gives to the Strategic Rail Authority and its chairman, Richard Bowker. I hope that, contrary to the mendacious reports appearing in the press over recent days, he will have a long-term role in the industry and play a part in the new structure that emerges from this process. My noble friend's comments about safety in the industry will be welcomed. It is grotesque that there is such an imbalance between the way in which road safety and rail safety are treated. If that leads to a more satisfactory consideration in the future, that will be very welcome indeed.

Finally, does my noble friend agree that while the review is underway the industry should not take its eye off the ball and lose sight of the need to continue with improvements and cut costs?

Lord Davies of Oldham

My Lords, I am grateful to my noble friend for reminding me that the noble Lord, Lord Peyton, introduced that very important concept of the morale of the workforce. There is no doubt that morale can lift with investment in the railways with people then driving and serving on vastly superior rail stock. One should bear in mind the speed with which the rail stock is being improved. However, as any railwayman will tell any passenger at any time, morale is only as high as the punctuality of that train. Passengers wish to travel on a comfortable train but, above all, they want that train to arrive on time. Those are the issues that we have to address if we wish to raise morale of the rail workers who have such an important role to play.

I would not go quite as far as my noble friend Lord Faulkner in suggesting that the press were mendacious over the weekend. I have too many friends in the media to accuse them in quite those trenchant terms—inaccurate, certainly, wide of the mark and speculative in the extreme. He asked whether we will ensure that there will be no loss of activity on improvements while decisions are taken on the new streamlined arrangements. We are talking only in terms of four to five months. There is no intention on anybody's part to let up the drive towards improving the railways.

Lord Marsh

My Lords, I apologise for losing a few minutes at the beginning of the Statement. The encouraging aspect is the speed at which a massively dangerous financial situation is now confronting whichever party is in power, not whether trains run five minutes late or 10 minutes late. In my view, the current organisation is financially totally out of control. Both parties have played a real role in that. Against advice from many people in the industry, the Conservative Party decided that not only would it seek to privatise the railway—despite people arguing that it was not like the electricity board or the water board—but also that it would separate the track from the operation of the organisation. That was a fundamental mistake. What has happened now is that there is such a multiplicity of management points that it is impossible to decide who is responsible for what.

At the previous general election I was encouraged when reading through the Labour manifesto. I came to the conclusion that 99 per cent of it should be disregarded. Then I fixed on a small part which said it was the intention of the Labour Party to bring the railway system back under public control. I have the greatest respect to the noble Lord, Lord Peyton, whom I regard—I have never made any secret of it—as the best of six Ministers I encountered, not least because the two of us, whenever we met, cursed his colleagues with equal enthusiasm. However, there is no way that a passenger railway system of this size can escape a position where the Government are the ultimate bankers. That dogs the whole thing.

This is a complex subject. I hope that nobody really believes that this problem will be solved in the next four or five months. There is a need to take what urgent action can be taken, but I think it would be perfectly sensible to have an outside commission go back to the drawing board and provide a number of options, because there is no simple solution to the problem.

I know of no major passenger railway system in the world which breaks even, let alone makes a profit. The cosmetics of railway accounting are wondrous, but the realities are that ultimately they require very large subsidies for a number of reasons, one of which is the most simple and powerful of all. The passengers never come in a nice neat flow—they come in peaks and troughs throughout 24 hours. That requires a massive infrastructure investment for the whole of the 24 hours which could never be met by passenger fares.

Many of these problems are fundamental and basic. I congratulate the Government on at least saying that they recognise that there is a serious problem. I think it will take longer; there is a need for a long-term look at the problem, because railways can be a very, very hungry beast.

Lord Davies of Oldham

My Lords, I am grateful to the noble Lord, with his vast experience, for emphasising just how investment in the rail industry is such a costly burden for both taxpayers and farepayers, who are the only other source of revenue. The figures in the Statement about investment over the next decade are very substantial indeed.

On staff morale, the noble Lord is also right that so long as crucial resources appear to be ebbing away because of a loss of control over crucial costs, morale in the railway industry will of course be low. By taking the projects in-house, Network Rail has set about getting a grip on those costs. I assure the noble Lord that the timescale of four to five months will give all those who have a clear interest in the industry—all who have imagination and perspective—the time to go hack to the drawing board and present the Government with how the crucial decisions should be taken and what structure is necessary for that to happen. I am sure that we will benefit from that consultation over the next five months.

Baroness Scott of Needham Market

My Lords, I welcome the fact that the Government have, albeit belatedly, agreed with what we on these Benches have been saying for some time—that the structure of the rail industry is at the heart of the problems we face today. Indeed, the highly fragmented nature of railway decision-making and provision has resulted in a system which is far more costly than need be, and far more heavily regulated and bureaucratic. Most seriously of all, it has ended in a sort of institutional paralysis, so that the Government's efforts to invest more and Network Rail's efforts to cut costs have, to a large extent, been wasted because the structure is wrong.

Can the Minister be a little more specific about the nature of the consultation and how it will take place? We should also like to pin him down a little more on the question of four or five months. I suggest that, on the subject of railways, it is not unreasonable to have a timetable.

Finally—and I say this with every respect for Richard Bowker and the Strategic Rail Authority, although I know it is not always shared—I question whether the Strategic Rail Authority is the right body to carry out this study. I say that not least because it is crucial that whatever comes out at the end has, if not the agreement of all the players, the respect of all the players. I am nervous that the SRA will be seen as a partial body, and that we may start off doing the right thing for the right reasons but end up with something that does not command the respect of the rail industry. That would be nothing short of tragic.

Lord Davies of Oldham

My Lords, I am grateful for the noble Baroness's comments. I emphasise that of course the SRA will have a role to play with regard to this review. However, it is a Government-led review, and we intend to get the position clarified and the new structure proposed by the summer. So we are working to a tight timetable, with ministerial drive behind the review. As the noble Lord, Lord Marsh, indicated, a number of quite radical concepts may come forward in the review. The Government have made it quite clear what principles they will be working on for the new streamlined organisation. However, I emphasise again that this is a Government-led review and Ministers will take responsibility for the outcome.

Lord Berkeley

My Lords, I welcome the Statement, which is very positive. It is a positive commitment to freight—I declare an interest as chairman of the Rail Freight Group—and to the principle of economic regulation, which is so important in attracting private sector finance. I am sure that all noble Lords will agree on that point.

I particularly welcome the review and its attack on costs. Several noble Lords have mentioned costs; we need to move on to the question of the causes of costs—standards, regulations, and so on. There is a general feeling that costs in the railways are about four times what they were for the same output with British Rail. That is quite unsustainable.

Back in the summer, when we were debating the Railways and Transport Safety Bill, my noble friend Lord McIntosh of Haringey spoke about common values for preventable fatality on safety between road and rail, which was very positive. The Minister of State for Transport, my honourable friend Kim Howells, has been saying similar positive things about road and rail safety since then. However, I do not see any leadership or action from the SRA, the Rail Safety and Standards Board or Network Rail on this issue. I urge my noble friend to ensure, in the five-month period, that the message continues to come from Ministers and that these organisations do what they should be doing with regard to leadership and action. When they report and the Government finally decide, at the end of July, what will happen, the industry will already have taken a lot of action.

Lord Davies of Oldham

My Lords, I am grateful to my noble friend. I want to reassure him that the point he makes is central to government thinking. It came up a little earlier in this question and answer session in terms of the morale of the industry. While costs were escalating under Railtrack, this was deeply demoralising for the industry because scarce resources were clearly not being invested where they needed to be— in improvements to the industry—but were being wasted. I assure my noble friend that that is an important principle behind the structure of the outcome of the review. I also emphasise that, against this background, he will recognise that we must not only get costs under control, but also that we need to build upon the much increased investment which the Government have pledged and are committed to over this 10-year period and which we are also deriving from private sector resources. Once the right structure and leadership are in place, that will give the industry real hope for the future.

Viscount Goschen

My Lords—

Lord Shutt of Greetland

My Lords, there are 57 paragraphs in this Statement—no wonder there are varieties. Two paragraphs have been referred to specifically. In paragraph 39, the Statement refers to, a single point of decision making". That, in my view, is centralising. Paragraph 27, however, talks about devolving more decisions. That is devolutionary. Which way are the Government travelling? I hope that they could be travelling in a devolutionary way by devolving to the Scottish Executive and the Welsh Assembly and also at regional level to PTEs. Often the most important places where rail can make a contribution, particularly with congestion, is 10 miles further than the PTE boundaries. I worry that two-tierism is happening with that as well as the Government facing in two directions.

Lord Davies of Oldham

My Lords, I emphasise that parts of the Statement envisage greater participation by passenger transport executives. We have already seen illustrations in places such as Liverpool, Manchester and several other of our great cities of the integration of transport modes where rail plays a crucial part. It is right that local PTEs should make an increased contribution to that work. However, that in no way collides with the central thrust of the review, which is to guarantee that decisions affecting investment strategies, the shape of the railways and the obligations of the big players—who account for a substantial amount of public money—are taken along clearer lines than is now the case by a plethora of agencies. The railway industry is of overwhelming concern to our fellow citizens. The clearer decision-taking process will enable Ministers to exercise their proper judgment about the development of the railway and be answerable to the nation through Parliament.