Order for Second Reading read.
I should inform the House that I have selected the amendment in the name of the Leader of the Opposition.
I beg to move, That the Bill be now read a Second time.A year ago we published a new integrated policy. Ours is a transport policy, not just a policy for roads, which appears to be the policy of new Conservatism after the debate last week. Our aim is to improve choice. We want people to have greater choice, rather than a greater dependence on their cars. That means providing a better, more reliable public transport alternative. The Bill is about providing a more punctual, reliable, accountable railway system as part of an integrated transport system. [Interruption.] The right hon. Member for Wokingham (Mr. Redwood) is still making silly remarks. I should have thought that he had had enough of that this weekend.
Order. If hon. Members wish to contribute to the debate, they should seek to catch my eye before doing so.
The British Railways Board and the franchising director are already working closely together as the shadow Strategic Rail Authority. The Bill is about taking the "shadow" out of the title and putting in more powers to enhance the effort already being made on behalf of passengers in developing our national railways.The Bill meets our manifesto commitment and the policies described in our transport White Paper. It is consistent with the excellent report and recommendations of the Select Committee on the Environment, Transport and Regional Affairs. The Committee's all-party report on the Strategic Rail Authority and regulation said:
The Select Committee also said:"We support the Government's plan for a Strategic Rail Authority as a practical way of addressing the problems of the restructured railway."
Anyone reading that report will see that the proposal was universally welcomed by the range of people who will be affected by the authority's activities. Indeed, the other day, the right hon. Member for Wokingham was arguing on the "Today" programme with a representative of a rail users consultative committee, who was advocating the establishment of a Strategic Rail Authority."The proposal for a strategic body was universally welcomed by our witnesses."
The Secretary of State has just said that the Bill is in line with the recommendations of the Environment, Transport and Regional Affairs Committee. Why, then, is he using this procedure to send the Bill, which he says has been drawn up following the Select Committee's report, back to the Select Committee before it makes further progress?
Those are the new procedures that the House has developed to provide an opportunity for Select Committees to examine Bills. As the Select Committee in this case has reported on the Bill in a most comprehensive manner, I should have thought that it would welcome the opportunity of this debate and of further examination of the Bill. The new procedure treats our Select Committees very seriously.
May I point out that my Committee not only warmly welcomes the chance to examine the Bill but believes that, because it is founded on the work that we have done, in those very few areas where we shall want to raise the odd omission we can contribute something more to the discussion?
I am grateful for that statement of support. If a Bill like this is presented to a Select Committee, it involves hon. Members in serious examination of legislation—sometimes much better than the examination carried out in Standing Committees. Although I may claim from the Dispatch Box that the Bill is consistent with the Select Committee's recommendations, it will be better to listen to what the Committee has to say once it has examined the Bill in detail. That is right and proper, but I believe that the Bill is broadly in line with the Select Committee's recommendations.More recently, the support that I claim exists from the industry was confirmed by the Director General of the Railways Forum, David Morphet, who said:
I do not think that anyone could deny that."This Bill is good news for the railways and good news for the transport industry as a whole. As well as forming the basis for a genuine strategic partnership between the Government and rail companies, it ensures Britain's railways are at last at the top of the political agenda."
Will the authority's strategic role in promoting the railways explicitly extend to rural areas, not only preserving small stations but reopening some of the ones that we have lost in the past 20 or 30 years?
Very much so. The authority is concerned about the network and can recommend enhancements of the railway system. It has certain funds available to do that. That is one of the reasons why we have given it a strategic role. That will be an important advance in the powers that are available to develop a far better railway system.
My question follows on from that of the hon. Member for Somerton and Frome (Mr. Heath). As the right hon. Gentleman knows, long-haul civil aviation works only where we have good feeder routes and a through-ticketing system. When it comes to renew the franchises for long-haul railway services, will the new Strategic Rail Authority take into account the extent to which those companies are able to provide the feeder services? At the moment, people in my constituency are fortunate in having a bus service from Romsey to Winchester, but that is the only one that they have. Otherwise, they have to resort to the car. Track has been laid. If we do not make full use of that existing track to provide feeder services for long-haul services, they will not work. That is why I wish such services to be a criterion when the authority comes to renew licences, which should be for longer than seven years.
Enhancement of the system is very important, as is how the franchise negotiations take place. There will be some statements about that later, but we have to keep it very much in mind that we do not have to take the traditional patterns but should look at how we may enhance the railway system itself. That is one of the purposes of the Strategic Rail Authority—to take those points on board.The Central Rail Users Consultative Committee said—
Will the right hon. Gentleman give way?
May I give the quote? Then I will give way.I have said that the Select Committee has endorsed the Bill and will examine it further and that the industry has welcomed it overwhelmingly. The Central Rail Users Consultative Committee has said—I quote from the deputy chairman, Stewart Francis:
Therefore, the industry, the Select Committee and consumer representatives fully support the Bill."At last passengers will see the benefit of strategic rail planning, leading to focused investment to enhance the network. We have long campaigned for effective performance and the incentives and penalties in the Bill should start to deal with these concerns".
Will it be possible for passenger representatives to become members of the Strategic Rail Authority? It is not clear from clause 2 whether that is so. The right hon. Gentleman nods from a sedentary position; I take that as welcome evidence that they will be able to be so represented. Will it be possible, in the spirit of choice and of competition, for the rail authority itself to bid for franchises?
On the first point, consultative bodies can be represented. I intend to have them on the board of the Strategic Rail Authority, but not the chairmen of consultative bodies. I wish to keep the independence of rail consultative bodies, but they will keep a watchful eye on the role of the Strategic Rail Authority and will have direct representation in it. That is a proper balance, keeping that independence and accountability.With regard to whether the Strategic Rail Authority would have the power to bid for the franchises, it would not be involved in bidding for such franchises, but it has to reserve the power to do so. If there were a breakdown in negotiations, or a failure of a company, there would have to be an operator of last resort and that would be the authority. As anyone would know from examining the Bill and from debates in the House, that was the role that we gave the franchising director. As we are transferring the functions of the franchising director to the Strategic Rail Authority, the Bill does not change what was already in legislation.
My right hon. Friend has spoken of the importance of enhancing the system. Does that include the infrastructure and, in particular, stations? Has my right hon. Friend seen the condition of some of the great railway stations of this country? They are dilapidated; they are falling down; rubble is strewn across areas surrounding tracks. They were never like that in the old days of public ownership. [Interruption.] No, they were not. There has been a marked deterioration in the standard of stations throughout the United Kingdom, which any traveller will notice on the north-west line. Has my right hon. Friend anything to say about that?
The Bill is about raising standards. There has been a growing disparity between the state of our major stations, which have received massive investment and have improved considerably over the past few years, and that of stations that are used less often—and, indeed, some that are often used—and have been allowed to deteriorate. That disparity has prompted concern about investment. The Bill is about enhancement: it is about raising standards in the service, and seeing it as a national service rather than the fragmented privatised service that we inherited.
I welcome the broad thrust of the Bill, which deals with the planning of investment and with ensuring that the railways work effectively in an integrated transport network.Under clause 10, the Strategic Rail Authority will, ultimately, be empowered to run services if no other contractor or train operating company wishes to do so. What concerns me is the relationship with Railtrack, which is seeking a large amount of public money for its network improvements: some £11 billion is included in its proposals. Does the Bill provide any opportunity for even a proportion of Railtrack to become publicly owned so that the company—which, potentially, is to receive such a vast amount of public investment—can be made accountable to the public for the money, rather than money being passed to the shareholders in the form of the considerable profits that Railtrack is currently receiving?
The money given to the rail industry is given to the train operating companies, not to Railtrack. Railtrack raises its own resources and receives no public money except through access charges, which are subsidised. As the money does not go directly to Railtrack, the question of Railtrack's accountability for public money does not arise.An entirely different question is whether Railtrack should be accountable for network services and for the promised development of the infrastructure. One of the first things that I did when I took office was talk to the regulator, who told me that he did not have sufficient powers to force Railtrack to deliver on the promises that it had made about network services. That is why there is a new regulator, and why there are new powers for enforcement. The Bill will strengthen those powers, to ensure that Railtrack is accountable to the public for what is basically a public facility run in a privatised way.
Will the Secretary of State say something positive about the railways, instead of all these negative things? It should be borne in mind that the number of passengers has increased dramatically over the past four years, that fares have been cut in real terms, and that subsidies have been cut. If the right hon. Gentleman is in any doubt about the massive change that has taken place, let him visit Southend. We used to have a terrible railway line there, which has now been improved dramatically.Some very negative comments have been attributed to the right hon. Gentleman. Will he now give us some of the facts about the railways? They are much better and far less subsidised, and fares have been cut in real terms.
The problem with allowing so many interventions at an early stage is that it leads to criticism of that kind. I intend, later in my speech, to give due credit for the fact that the increase in passengers did not begin on the day that the Labour Government came to office, but was under way two years before that. That is in my speech.
Will my right hon. Friend give way?
I will give way one last time, and then get on with my speech.
I thank my right hon. Friend.My right hon. Friend has spoken of the accountability of Railtrack. Will he ensure in the Bill that Railtrack property development services are brought within the rules of accountability? Is he aware that the Luton railway interchange in my constituency—an excellent example of the linking of rail services and airports in an integrated way—is being held up because of protracted negotiations between Railtrack and its property development side? That is preventing a valuable part of the integrated transport system from opening, at the time when it is most needed.
That is yet another example of Railtrack's failure to live up to its promises and to take account of our integrated investment priorities. That is why we believe that a Strategic Rail Authority and a powerful regulator could play an important part, not only in establishing network investment but in ensuring that it is carried out.We often hear public statements by Railtrack about the many billions of pounds that it intends to invest. The previous regulator's complaint to me was that although those promises had been made, he could not ensure that they were kept. That was a weakness, and it is a reason why we have proposed a Strategic Rail Authority that will do much more to ensure that we have a network better than the one about which my hon. Friend is complaining. When we took office we found a fragmented railway that was all too ready to pass the buck when things went wrong.
Will the right hon. Gentleman give way?
Very well, but this must be the last intervention because I want to get on with my speech.
The Secretary of State is being generous in giving way. My point relates to the one that arose in the previous exchanges. Given his dislike of Railtrack's standards of service, will he now rule out giving Railtrack an inside track on one of the tube contracts? Will he now promise to open up that contract to proper competition? I read in a newspaper that Bechtel, rather than Railtrack, will be brought in on that contract. Is that correct?
There is nothing new in that proposal. I made that proposal for the channel tunnel rail link. If the previous Government had done the same for the Jubilee line extension, I would not be facing an extra £1 billion cost on a lousy contract that was not implemented properly. I brought Bechtel in on that contract to improve and tighten up the Jubilee line facilities and production, which it has done. I invited Bechtel to become involved in the channel tunnel rail link operation and I asked it to restore that operation following the contractor's request for an extra £1 billion as a result of the lousy contract entered into by the previous Administration.I learned from that experience to ensure that there is a good project organiser. That is why I have made it clear that I would not leave the tube contract solely in Railtrack's hands and that I expect a project management company to be involved. I have said that from the beginning; it is nothing new. The need for a good project organiser is the lesson that I learned from the inadequacies of the previous Administration's contract negotiations. They were part of the inheritance that I was faced with when I first began to renegotiate some of those contracts. We found that after an initial improvement in services following privatisation, there was an unacceptable deterioration two years later, which caused great concern. We found that disgruntled passengers did not know who to turn to when their trains were late, cancelled, dirty or overcrowded. We found a rail freight industry that was eager to expand but held back by red tape and underfunding. We found a lack of investment throughout the network and historical underfunding, and parts of the industry felt no sense of urgency about making up lost ground. In the first 12 months, the franchising director and the Rail Regulator told me that their sanctions were unwieldy and lacked teeth, so they could not enforce them and make the rail companies live up to their promises. Finally, we found that the passenger's voice was neglected. We took stock of that inheritance. We assessed the problems and the different solutions and then took decisive action. We set the franchising director new objectives, instructions and guidance to ensure high standards of punctuality, reliability and the protection of the passenger's rights. I made it clear that I expected a passenger dividend from franchise changes such as a change of control of a franchise company. With my encouragement, the Rail Regulator negotiated a voluntary change, called condition 7, to Railtrack's licence to ensure that Railtrack meets the reasonable demands of train operators and funders such as the Office of Passenger Rail Franchising and passenger transport executives. The new franchising director and Rail Regulator are working closely together, but I would prefer them to do so in the new, powerful framework that the Bill will provide. Last November, I made it clear to the rail industry that performance was unacceptable and that I would call its representatives to a summit the following spring to report on the commitments that they made. The rail summit in February was a turning point. The Prime Minister and I made it clear to the industry that things had to change. To its credit, the industry has started to respond. At the summit, it committed itself to year-on-year improvements in quality, particularly punctuality, which is what passengers value most. The industry committed itself to renewing half the entire rolling stock fleet by the end of 2002, and it is recruiting 800 new drivers. Having got rid of thousands of drivers, the industry found itself to be desperately short, which caused great delays. It has now started a recruitment programme. It has also set up a hit squad to tackle the 50 worst black spots in the railway system. The shadow Strategic Rail Authority started on 1 April, in the form of the franchising director and the British Railways Board working together under new leadership to get a grip not just on short-term performance, but on long-term planning. The Office of Passenger Rail Franchising will, from tomorrow, operate under the title of shadow Strategic Rail Authority. The franchising director and the British Railways Board will, of course, continue to exist as separate statutory entities with their own functions and responsibilities. The shadow Strategic Rail Authority is monitoring delivery of the summit commitments. It has also started the process of franchise renegotiation to put in place the high standards that the last Government sacrificed in their dash for cash and privatisation. The shadow Strategic Rail Authority is also developing a proper strategic plan for the railways, planning for the growth of freight as well as passenger traffic. We have revitalised the freight grants scheme, with awards totalling £60 million over the past two years—double the amount given by the previous Administration. The new Rail Regulator has already started asking some very searching questions of Railtrack: about the robustness of the statements in the network management statement about freight; about the absence of costed options for the freight routeing strategy; and about the robustness of proposals for gauge enhancement. He has asked for answers by 13 August. Railtrack will have to demonstrate that its investment plans are up to the task of creating an expanding railway. We have achieved a great deal within the constraints of the framework that we inherited. However, only primary legislation can remedy the fundamental flaws that I described earlier. I turn now to the Bill's main provisions. Part I of the Bill makes provision for the Strategic Rail Authority, and clauses 1 to 4 provide for its establishment. Clause 5 sets out the primary purposes of the Strategic Rail Authority: to promote the use of the railway network for the carriage of passengers and goods; to secure the development of the railway network; and to contribute to the development of an integrated system of transport of passengers and goods. Clauses 5, 6 and 7 impose a new duty on the Strategic Rail Authority to develop a strategy for implementing these objectives in consultation with the regulator. Clauses 8 to 17 confer on the Strategic Rail Authority the various powers, in the form of functions, which it can use to work towards its purposes and to achieve its strategies. It must use these powers in the manner best calculated to balance various considerations as listed in clause 7, subject to directions and guidance from the Secretary of State, and any payments which it makes must achieve value for money.
When will we see the new guidelines to the authority for the issuing of new franchises? Will any provision be made for the ending of existing franchises in the near future, or for renewed, extended franchises—perhaps for a 10-year period—to encourage the operating companies to invest in the new rolling stock required? I gather that some 7,000 wagons are possibly on order, but my constituents—like many others—are fed up with being treated like cattle and want to see the new rolling stock. The investment in rolling stock ought to be a criterion in granting the new licences.
The criteria to be considered in the renegotiating of franchises have been spelt out, and it is a pity that those criteria were not put in the earlier franchise agreements—the hon. Gentleman would not then be complaining to the House. My complaint is that promises were made but were not written into contracts. One of the advantages of having a contract is that those concerned can be held to it. If the contract makes no requirement for new investment, there is a difficulty.One of our major changes will be to consider the extension of franchises, although that does not necessarily mean that they will be in exactly the same form. However, the commitment to investment, quality and value for money for the taxpayer will be put in guidance to the Strategic Rail Authority for the negotiations, which are in their final stages. When these are completed, I will let the House know. As we said at the summit, that would be our broad approach to the renegotiation of franchises. Many of the franchises are set at seven years and they will all be up for renewal in one rush, a few years into the new millennium. I want the franchises to be spread out, so we can negotiate them individually to secure not only what is best for the passengers and for investment in the railway system but best value for the taxpayer, who is constantly involved in one way or another. If the hon. Gentleman waits for the guidance, he will see that it is very much in line with what he wants. It is a pity that such guidance was not issued in the first place, but the franchises were rushed through without any such requirement, and he voted for that. I am happy to say that we will do what we think is necessary to produce a good-quality railway system. That is what the Bill and the powers are about. I assume that the Opposition will support the Bill, although I cannot be sure what line new Conservatism will take. I know what old Conservatism did. I do not know whether the hon. Member for Croydon, South (Mr. Ottaway) is new or old Conservative, but he said:
That is certainly true. He continued:"Such a complex privatisation needs constant fine tuning."
That was old Tory; I await with interest to see whether new Conservatism is the same. Clause 8 gives the authority the power to give grants, loans and guarantees and to enter into agreements with third parties to secure railway investment. The guarantees can be backed by the Government, and the authority may borrow within prescribed limits. The borrowing limit is £3 billion, which is the limit inherited from the British Railways Board. Before anyone rushes in to ask whether that amount is available, it should be realised that almost £1 billion of British Rail debt is to be transferred to the authority. I shall want to consider precisely how the debt is to be managed. The previous Administration set up the changeover, and the debts and liabilities of the British Railways Board will be transferred accordingly."The previous Government would have concluded that a strategic rail authority was necessary during this Parliament."—[Official Report, 25 March 1998; Vol. 309, c. 452.]
I understand that the budget for the Strategic Rail Authority has not yet been determined. We will not hold the Secretary of State to the odd £10 million, but could he give us a rough idea of the figure?
The current Opraf expenditure will remain, as the body is transferring to the Strategic Rail Authority. We estimate that the extra cost for the authority will be about £5 million a year. That is why the House is to consider a money resolution.Clause 9 gives the authority the basic power to secure or provide railway services. That preserves the capacity to run services in the public sector in the last resort, as identified in our integrated transport White Paper. Clause 10 makes it clear that if there are no bids for franchises, or if the bids received are unacceptable, or in the event of a failure, the authority will become the operator of last resort. Many of the authority's powers, of course, will be inherited from the franchising director, the British Railways Board, the regulator and the Secretary of State. All the franchising director's functions and all the British Railways Board's property and liabilities will transfer. Transfers from the British Railways Board will include responsibility for the British Transport police. The shadow authority has considerable powers to do much of what is being done in the Bill, although perhaps in a different way. We do not have to wait for the Bill to be enacted to get on with modernising the railways.
Will my right hon. Friend give way?
Yes, but can I make this the last time?
The right hon. Gentleman has been very generous. He has taken about 10 interventions in 15 minutes. I have them written down here.
I appreciate the co-operation that my right hon. Friend has shown to Back Benchers.I am concerned about land in the ownership of the British Railways Board and the fact that, under the previous Administration, instructions were given to sell that land as quickly as possible. It is important to retain the land because we may need to open lines, especially in the north where we often travel east-west rather than north-south. I hope that my right hon. Friend will seriously consider requiring the Strategic Rail Authority to retain the land in case further development is required.
It will indeed, and I have given instructions to that effect. Some land contracts have already been let, but I have made it clear that land that could be used for expansion of the rail system should be retained.The powers that the authority will inherit include those of the franchising director and the British Railways Board, and they will be sufficient for it to begin work. The authority will also acquire responsibilities for consumer protection from the regulator, and for administering freight grants. The office of the franchising director, and the British Railways Board, will be abolished. All staff who transfer to the SRA will do so with their existing conditions of service preserved. Staff transferring are also assured that there will be full protection of pensions. Nothing in the Bill will override the statutory protection for pensioners in the Railways Act 1993, for which we fought so hard in opposition. The SRA will also assume responsibility for the continuity of the rail industry staff concessionary travel schemes. Part II of the Bill amends the regulatory regime set up under the Railways Act 1993. Clause 17 allows the SRA to ask the Rail Regulator to direct facility owners to provide enhancements to existing station and rail facilities—a point raised by my hon. Friend the Member for Normanton (Mr. O'Brien). That power could be used to achieve greater rail capacity in the network or even to secure new network. The 1993 Act has left the regulator acting in isolation, because the Secretary of State's power to give guidance expired in December 1996. I am pleased that the new regulator and the shadow SRA have already begun to work more closely together, and the Bill will confirm that. I have said already that the authority will need to consult the regulator on its strategies, and clause 18 provides for the regulator to facilitate the SRA's strategy. As Secretary of State, I will also have the power to give general guidance to the regulator. The measures will ensure that a coherent railway policy can be decided and then carried out consistently by the SRA and the Rail Regulator.
I am grateful to the Secretary of State for giving way, but I think that my question will help our deliberations. If the plans go ahead as described, will he say how much of the borrowing limit of £3 billion will be available in the first full year?
I have already made it clear that debts of about £1 billion will remain after the transfer. However, the right hon. Gentleman has asked a proper question, and I intend to make a statement shortly about how the debt will be managed and about the borrowing powers available to the Strategic Rail Authority.Clause 18 also provides that the duty on the Rail Regulator to promote competition will now be balanced by a requirement that competition must be for the specific benefit of railway users. The Rail Regulator needs to balance competition against the public interest of network provision. We are not concerned solely with the promotion of competition. The previous franchising director and Rail Regulator complained about the weakness of their powers to enforce the promises of train companies and Railtrack. The enforcement regime is tightened by the Bill. Monetary penalties, which must be of a reasonable amount, will be payable for all contraventions of licence conditions, franchise requirements and contraventions of orders made to secure compliance with a licence or franchise agreement. The Government have agreed in principle that the Strategic Rail Authority will be able to retain income from penalties and to reinvest it in the railways. I hope that the industry and the House will welcome the fact that that income will not be returned to the Treasury. That innovative approach is a one-off exception to the normal rules for such income. We are currently developing the details of the arrangement. It will be of interest to the House that clauses 21 and 22 amend the closure provisions, including some dealing with major closures. The Rail Regulator's functions are to be transferred to me, as Secretary of State. I, or any future Secretary of State, will be responsible for determining major closures, so I will be accountable to the House. I am sure that the House will welcome that approach. The definition of minor closures is extended to include the track involved in a minor closure. Under clause 23, the remit of the rail users consultative committees, whose sponsorship will pass to the SRA, is widened to cover all passenger services. The committees' independence will be maintained, and I referred earlier to the welcome that the independent central users committee has given to the Bill. Part III makes provision for the devolution of some functions to the Welsh Assembly and to the relevant Scottish Ministers. That provision delivers parts of the agreed settlement for devolution. Other elements have been handled by orders under the Scotland Act 1998. Part III also makes provision for the consequential amendment and repeal of other Acts. We will need to add to those provisions in due course. In conclusion—
Will the Secretary of State give way?
No, I am in my final stages.The way in which British Rail was privatised was a national disgrace. Our Bill brings public accountability back to the railway industry; it will allow the new SRA to plan for an expanding network; it will require those who own the network to meet their obligations; and it will require train operators to fulfil their franchise agreements. The railway industry has had plenty of well-deserved criticism but there are now positive signs of a revival of Britain's railways. Passenger traffic is rising. Over the past five years, passenger kilometres have increased by approximately 20 per cent., and roughly 14 per cent. of that growth has occurred in the past two years. Around 1,000 extra services are being run each day to help meet that growth. Rail freight is also increasing, and is up by roughly 20 per cent. in the past two years. The industry has promised that by the end of 2002 half the passenger fleet will have been renewed. Some 433 station car parks will soon have video camera surveillance. Twelve stations have been opened since May 1997, and four more are due to open this year. All that is part of the agreement that the previous Government failed to achieve with the industry. There is a new spirit of co-operation and responsibility in the industry, and a new attitude that we need to restore a national railway in the public interest. The Bill will reinforce those trends. It will create a new guardian of the public interest—the Strategic Rail Authority. It will plug the loopholes in the last Government's rail legislation, to provide tougher enforcement and to protect the passenger. I commend the Bill to the House.
I beg to move, To leave out from "That" to the end of the Question, and to add instead thereof:
I am grateful to the Secretary of State for making some of my speech for me. He concluded with sterling words about the successes of the privatised railway industry. I agree that there has been welcome progress over the past five years, and it was good of him to state that we had enjoyed the advantages of the privatised industry over that period, which takes us back to before the change of Government. Over the past four years, the number of passenger trains has increased by 14 per cent.—one extra train for every seven previously running. Passenger miles have increased by a quarter. We all want freight to transfer from road to rail wherever possible, and freight tonne miles have risen even more impressively—by 35 per cent. during the past three years. Those are impressive figures, but we are not yet satisfied. Privatisation has many more achievements to come, provided that the Government work with the industry rather than get in its way or mess it up. My worry is that the Bill has been drawn up by Ministers who do not like the privatised industry and who are secretly trying to find ways back to nationalisation. They do not seem to understand that the beginning of a transformation in our railway industry has occurred under Governments of both parties and as a result of privatisation. The industry never worked when it was nationalised, whether under Labour and Labour-Liberal Governments in the 1970s or under Conservative Governments in the 1980s. During the 1990s, it is beginning to work, and the Labour Government must not impede the progress of a very good Conservative policy."this House declines to give a Second Reading to the Railways Bill because the introduction of this Bill now, when it will inevitably fall due to lack of legislative time and will have to be reintroduced in the next Session, is not the best use of the time of this House and represents a new definition of pre-legislative scrutiny which the Government is using as a way of side-stepping its own decision-making responsibilities and covering its doubts and internal divisions about the wisdom of the measures which the Bill contains."
Before the right hon. Gentleman finishes his eulogy of the privatisation of the railway network, will he comment on the increase in the number of complaints against individual train operating companies, and on their inefficiency since privatisation began?
People think it more worth while to complain now than they did under nationalisation because there is a proper complaints system and it is more likely that something will happen. As a train user myself, I know that services in my area have improved, but also that they are not yet good enough. I want further progress to be made as a result of more investment and more enlightened attitudes. Services are a great deal better than they were 10 years ago, although considerable room remains for improvement. As the Secretary of State has often pointed out, performance around the country is patchy. We would welcome anything that could sensibly be done to raise the performance of many operators to the performance of the best.
The right hon. Gentleman should be wary of saying that services are a great deal better than they were 10 years ago. The passenger figures to which he referred followed a dramatic drop during the recession engineered by the previous Conservative Government. The numbers have risen merely back to where they were before that recession.
My point was well made from my own observation of standards of service in my local area. It can be borne out by many of my constituents, who recognise that there have been improvements in punctuality and reliability, but that there could be even more.
Does the right hon. Gentleman accept that the sale of Railtrack for £1.9 billion—it is currently valued at more than £8 billion—is a clear example of how the British taxpayer was ripped off by privatisation? Does he further accept that giving away Railfreight for £240 million of taxpayers' money, just so that people would take it off our hands, is a complete disgrace? Any idiot could have predicted the increase in freight transportation under Governments of either political persuasion. This Government have advocated constraining the growth of road traffic, and everyone wants to see more rail freight and greater profitability in that industry.
I remember how the then Labour Opposition succeeded in doing everything that they could to undermine the rail privatisation and sale. Labour did everything it could to damage the sale price and to lower the proceeds. We warned at the time that Labour was doing damage, and that is what occurred. The shareholders of that company are now benefiting from its success. It has picked itself up after that unwarranted criticism—and in the face of unwarranted criticism from the Secretary of State on bad Tuesdays—and has developed a much better business.
Will my right hon. Friend assure the House that, if the Government produce privatisation plans—they tell us occasionally that they will do so, as is the case with air traffic control—he will not call from the Opposition Front Bench for renationalisation? Will my right hon. Friend enable the Government to secure the true market value of the industry concerned—unlike Labour did to us?
My hon. Friend can rest assured that I am unlikely to call from this Bench for renationalisation. He will also be well aware that I am always in favour of taxpayers getting a good deal. Conservative Members will do everything in their power to encourage a fair—even a good—valuation of any assets that the Government wish to sell.
I recall that a previous Administration nationalised Rolls-Royce—but I shall leave that aside. Does the right hon. Gentleman remember that when the then Opposition attacked the then Government's privatisation programme for British Telecom—there was concern about the share price—the Government did what we advocated with regard to Railtrack: they waited until after the general election and then brought forward the proposal so that the taxpayer did not lose out in terms of the share price? The previous Government could have done that with Railtrack, but refused—presumably because they thought that they would lose the election.
We thought that we needed to get on with it because the railway industry deserved privatisation. We have seen that the results of the privatised industry are much better than those achieved under the nationalised regime.
Does my right hon. Friend agree that the hon. Member for Croydon, Central (Mr. Davies) has a brass neck to level the charge that he has just made? The twenty-fourth report of the Public Accounts Committee on the flotation of Railtrack, which was published on 13 July 1999, underlines precisely the point that my right hon. Friend has made—namely, that political opposition to the flotation undermined investor confidence and the share price. Does my right hon. Friend think that the hon. Gentleman should do his homework before contributing to the Second Reading debate?
My hon. Friend is right, but I must now make some progress.The Secretary of State began by saying that "A Fair Deal for Motorists"—a popular policy that we launched last week—represents the sum total of our policies in this area. He should know from our debate last week that our fair deal is popular, but it is only part of our transport policy. We also have exciting policies to promote more rail, tube and bus travel to ensure that people get out of their cars and on to the buses and trains. The Government still do not seem to understand that most people do not live by a bus stop or a train station. We need to make it easier for motorists to get to the bus stop or the train station and be able to park when they get there. That is a truly integrated transport policy—rather than the disintegrating policy over which the Secretary of State is presiding.
Is my right hon. Friend aware that the Public Accounts Committee report, to which my hon. Friend the Member for Buckingham (Mr. Bercow) referred, revealed that an unprecedented four pages of Labour's policy document spelling out what it would do with the railways should it be elected depressed the price of the sale by well over £100 million? Therefore, the Secretary of State cost the flotation of Railtrack more than £100 million.
My hon. Friend has admirably strengthened my point.
Is the right hon. Gentleman aware of one of the key findings of the PAC report? It states that:
Does that not completely undermine the case that the right hon. Gentleman is making?"The timing of the sale was a factor in the poor value achieved, and the Department themselves acknowledge that the large increase in Railtrack's share price since flotation was because it had been undervalued and sold in haste"
It reinforces my case. The main reason for any undermining was because Labour made matters as difficult as possible by putting the accent on all the negatives and on none of the positives—as they were so good at doing in respect of privatisation policies and much else.The Secretary of State said that the other day I was on the radio arguing with a train operating company representative over railway policy. He clearly did not listen to the broadcast. As I made clear on that programme, my argument is with the Secretary of State himself: it is his policy that has miscarried; it is his inability to persuade the Treasury to give him the money that he needs in order to do up public transport facilities; it is his transport policy that is falling to bits—clobbering the motorist but not providing a better alternative. I hope that the right hon. Gentleman will listen a little more carefully the next time that I am on the radio.
I am grateful to the right hon. Gentleman for giving way. As John Humphrys pointed out, we were talking about the Strategic Rail Authority—we can listen to the tape if the right hon. Gentleman cares to do so. The train operating company's representative made it clear that the operating companies fully supported the authority. That was his point. It was also John Humphrys' point—even though the right hon. Member for Wokingham wanted to talk about anything but the SRA.
My worry about the way in which the Government have presented the Bill to the public and to the House is that, until today, they have concentrated on only two clauses—those that relate to the power to fine companies that do not perform—and have ignored the wide-ranging powers contained in the other 32 clauses. Those powers will greatly strengthen the hand both of the Secretary of State and of his creature, the new quango. I have repeatedly made the point that that is a dishonest spin on a massive piece of legislation; it is a backdoor nationalisation measure, which would give the Secretary of State extremely wide-ranging powers to play at trains exactly as he sees fit.Today, the Secretary of State comes to the House unable to answer the most fundamental and obvious question: how much of the £3 billion in the borrowing limits outlined in the measure will be available as new money to spend on buying shares, making investments in railways, running train services and setting up new tramways? The Bill will give massive powers to a new quango and to the Secretary of State so that they can play at trains and tramways and provide all kinds of public transport facilities, but we do not know to within £1 billion or £100 million how much money the right hon. Gentleman will have to play with. How on earth can we treat the matter seriously?
The previous Administration gave exactly the same powers and resources to the British Railways Board—they already exist, and will be transferred to the Strategic Rail Authority. In respect of financing facilities, we have made it clear that it is not our intention to renationalise the railways. We made that judgment before we came into office. We want to make the system work. It is not necessary to have the borrowing powers to which the right hon. Gentleman refers. I said that I would report back on reconstruction because, as we know from the experience of the British Railways Board, whenever the debts were reconstructed, there had to be a report to Parliament.
I take that to be some kind of reassurance that the provisions will be used only for existing debts and not for new debts. However, that is not how the Bill reads. The Bill gives extremely wide-ranging and open powers; it leaves open the large amount of money—well in excess of what is needed—to handle the existing debts. The Secretary of State himself told us that about £1 billion of inherited debt had to be dealt with under the measure. We are entitled to ask why he needs a £3 billion borrowing limit for the body, when he thinks that the problem is about only one third of that amount. That is most suspicious.
Is my right hon. Friend aware of paragraph 73 of the Government's response to the PAC report? On the question of whether they would be interested in renationalisation, it states
Am I right in presuming that, if it is not a priority, it may be somewhere further down their agenda?"we have made clear that renationalisation would be … expensive, and cannot be a priority."
My hon. Friend has drawn out an interesting point—it is an interesting exchange. If the Bill is passed unamended, it will give the Secretary of State all or most of the powers that he would need to renationalise portions of the railway, and to set up a new nationalised railway or tramway system—or both—in parallel with the existing privatised industry. The measure offers no guarantees as to fare competition. There is nothing about fare levels and the rate of return that would have to be earned in order to secure fair competition. Some people in the industry are extremely worried by these wide-ranging powers. This whole piece of legislation has been dogged by controversy and trouble.
Is not the right hon. Gentleman's argument that the Bill needs careful scrutiny rather odd given the reasoned amendment, which complains about the scrutiny process?
I was just coming to our reasoned amendment. We believe that today's debate shows that the Secretary of State has failed to carry his colleagues. The Bill was cancelled last year and delayed this year and it might—if the right hon. Gentleman is lucky and we are unlucky—arrive late in the next parliamentary year. Today's debate is therefore a misuse of the House's time. We would be happy to have Second Reading and go straight into a Standing Committee in which the Bill could be given the detailed scrutiny it needs. If the Secretary of State is willing to proceed in that way, my right hon. and hon. Friends and I are more than willing to sit on such a Committee, starting as soon as possible, to give the Bill the necessary scrutiny. However, the right hon. Gentleman is no position to deliver. He has obviously been vetoed by the Prime Minister and other members of the Government, so the Bill has been shunted off into a siding and cannot make proper progress.
As the Chairman of that particular siding, may I ask the right hon. Gentleman one simple question? Are we to take it that he does not approve of Select Committees performing a pre-legislative function, or is it simply that he objects to my Committee performing that function?
I have no objection to the Committee considering the Bill, and may it take a good long time: there is much in the Bill that is disturbing, and I am not the one trying to rush through those provisions. However, let us look at matters from the perspective of the Secretary of State, who tells us that the Bill is crucial to his strategy and that he cannot have an integrated transport policy without it. If that is so, why are we having a Second Reading debate now, but no Standing Committee to follow? Why cannot the right hon. Gentleman get the Bill through more quickly?Why is the Bill being offered to the Select Committee? If the scrutiny that the Select Committee is to give it is truly pre-legislative, why have Second Reading? Why not have proper pre-legislative consideration in the Select Committee, whose members are wise and whose scrutiny would be useful? Then, the Government could amend the Bill and return to the House with a proper Bill that had been properly considered, on which we could then have a Second Reading debate. That would be far more welcome to us than the bodged approach that is being taken today.
The Secretary of State never addressed one of the points raised in our reasoned amendment. Why is the Bill being treated differently from all the others, which have been referred to Select Committees before Second Reading? Is it not the case that the process being used is a panic measure, initiated by Downing street to cover up the botch job that the Secretary of State has made of transport policy?
That is the only possible explanation. There has obviously been a compromise: the Secretary of State said that he must have his Bill, but the Prime Minister said that he could not have it, so they hit upon the ridiculous compromise—a camel instead of a horse, with everyone getting the hump—of the Bill being given Second Reading and then going off to the Select Committee, rather than through a proper Standing Committee.
I have made it clear on several occasions that the real problem with the legislative timetable is what happens in the other place, not what happens here. The other place is starting its recess later and returning earlier than this House. We can argue about who is responsible, but the fact is that legislation has to pass through both Houses. Under the new procedures arising from the modernisation process, Bills have been sent to Select Committees and Special Standing Committees for different forms of examination. The process adopted for the Railways Bill is simply another new way of proceeding.It will be useful to hon. Members and to people outside to know the House's opinion on the powers contained in the Bill. I hope that the House and the Select Committee will give the Bill an overwhelming endorsement. The right hon. Gentleman has not yet said whether or not he supports the Bill, and it would be useful to know that. If the House expresses its support in a vote today, it will be clear that the current actions of the shadow Strategic Rail Authority are consistent with the will of the House.
In that spirit, I shall press on to address the Bill itself, even though my right hon. and hon. Friends and I still think that we are following an odd procedure—one that tells us more about the divisions in the Government than about the need for proper scrutiny—or the need for a Railways Bill, which the Secretary of State has urged on his colleagues for many months.The Opposition are worried that the powers in the Bill are too wide ranging and lack specific drafting through which they can be controlled. I draw the House's attention to several of the important clauses. The purposes of the authority have already been read out to the House by the Secretary of State. They are extremely wide ranging and should be read in conjunction with the powers to borrow, direct, invest and spend money. The authority is allowed to promote the use of the railway network, to secure development of it and to contribute to the development of an integrated system of transport.
Will the right hon. Gentleman give way?
I will not give way to someone who has not been present throughout the debate. The hon. Gentleman should listen a little more before intervening. I have given way to everyone else.The wide-ranging purposes are backed up by the most enormous powers, which would leave the Secretary of State and his creature—the quango—free to run a railway within a railway and to buy up chunks of the existing network. Under clause 6(3), the Secretary of State is the person pulling the strings. The quango may be apparently independent, powerful, expensive and all such wonderful things—many millions of pounds will be spent on it—but the Secretary of State can be in charge if he so wishes. He can give the authority directions and guidance over all its strategies, stipulating what should be covered by them,
and how to update such strategies. That is extremely comprehensive. The Secretary of State wants to buy a train set to play with, and this Bill gives him the crucial powers."the issues to be taken into account … the strategy to be adopted in relation to any matter",
May we have clarity? Does the right hon. Gentleman agree that there should be a Strategic Rail Authority—yes or no—particularly given the words of the hon. Member for Croydon, South (Mr. Ottaway), who thought that there should be one? If there is a Strategic Rail Authority, should it have any budgetary powers? If so, which powers and how will it be accountable to Parliament? The right hon. Gentleman is very unclear.
I shall be crystal clear, as I have been on the powers and the conduct of these proceedings. The Opposition believe that there is a role for sensible regulation of the railway and support good regulation of it for as long as there continues to be monopoly elements and the power to use fares as surrogate taxation. It is most important to have a regulatory power. We do not support the creation of this regulator with these massive powers because the Secretary of State is trying to create not just a regulator but an actor, an investor and a business as well. In my experience, when the role of a regulator is muddled with that of someone providing services or interfering with service provision, one gets into difficulties, which can damage the taxpayer and the passenger or customer.
Does the right hon. Gentleman accept that it was a great mistake not to regulate the rolling stock companies when the railways were privatised? One witness told the Select Committee that ROSCOs were receiving a guaranteed income stream and profit under contracts that did not require them to invest, which led to their sale at double the price that the public got for them and their making a third of their capital value in profit? Does he accept that that was a huge mistake of the Conservatives' privatisation?
I am not sure how that problem is covered by the Bill. Perhaps the Committee disagrees with the Government in that area. We have already discussed at some length the history of privatisation, to which the Labour party, with its clumsy intervention, did much damage.Clause 8 sets out the functions. It states that the authority may
"Railways" for these purposes include tramways, and in certain conditions, bus and taxi services too. So this body will be enormously powerful and wide ranging. The grant, loan or guarantee may be subject to any conditions as the authority considers appropriate:"make grants, make loans, or give guarantees, for any purpose relating to any railway or railway services."
The powers are even stronger in clause 9, which states that the authority may provide"The Authority may enter into agreements for the purpose of securing the provision, improvement or development of any railway services or railway assets."
In other words, the Bill creates not just a regulator but a body that can take public money, with the Secretary of State's consent, and run passenger and goods railway services. Clause 9 states that the authority may include in that the provision and operation of"services for the carriage by railway of passengers and goods as the Authority considers desirable."
That is the kernel of our case—the power is a very wide-ranging one, allowing the backdoor—or frontdoor—renationalisation of the railways, should the Secretary of State be so inclined, and should he be able to persuade the Prime Minister and the Treasury of the need to do so."network services, station services and light maintenance services, entering into agreements … for … carriage … acquiring the whole or any part of an undertaking, and storing goods and consigning them from any place to which they have been carried by rail."
On the combined provisions of clauses 8 and 9, but especially the provisions of clause 8, surely the Strategic Rail Authority will not really have the expertise to second-guess the investment decisions of both Railtrack and the train operators. Essentially, the consequence of the provisions would be that those who make the investment decisions will not be able to raise necessary capital, as there would be no certainty that the Strategic Rail Authority will not change all the terms.
I certainly agree with that statement in the light of the fact that the Secretary of State would be pulling the strings and providing the advice.
Perhaps the right hon. Gentleman would like to explain.
We propose transferring already existing powers. The regulator is already able to require Railtrack to invest in the public interest, as that was a condition of the licence. If the regulator is not satisfied that Railtrack is meeting its requirements, he is able to enforce those requirements. Therefore, under powers created by the previous Administration, the regulator is able to act by asking for further investment. The powers are already there.The right hon. Gentleman should say what new extra enforcement powers he thinks could be created for the regulator. The complaint about both the previous and the current regulator is that, although powers were available to them, they did not use them. However, this one intends to use them.
The proposed power is a very new one, and it is much wider and stronger. It is one thing to say that a regulator is able to instruct a private sector company to make a bigger investment because it is in the regulated sector, but it is quite another to give a power to an authority to do anything that it considers desirable for the purposes of the provision of railway services. The proposed power is extremely wide ranging—
I hope that the Secretary of State will look again at the drafting, because that is not how it reads in the Bill. He may now be claiming that his intentions are rather more modest than they seem to be in the Bill. I therefore hope that he will re-examine that point.In Committee, the burden of the Opposition's argument will be that we wish to narrow the regulator's powers to that range of limited powers that the Secretary of State says that he wants and are necessary, so that the regulator—the authority—falls short of playing trains on a huge scale—which I still believe it would be entitled to do under the provisions of this very wide-ranging legislation. If the Secretary of State would like to look at clause 16, he would see how the powers are emphasised and underlined still further. The clause states that
"The Authority may do anything which it considers—
(a) is necessary or appropriate for or for facilitating … its functions. In particular, the Authority may
I am grateful to the right hon. Gentleman for giving way; he is generous with his time. However, is he really arguing that, if a private company were not prepared to continue the franchise or were offering a very bad deal, that the public sector should not, in the taxpayer's interest, have the right to maintain and run that service? The previous Administration accepted that argument. In their legislation, they gave the British Railways Board the right—which the Bill will be transferring—to intervene to secure such services. Such an intervention would be made by the public sector when the private sector failed to produce promised services.
We have now, at last, teased out of the Secretary of State the power's importance. In Committee—if the Bill reaches that stage—we shall be pressing hard to try to limit the power rather more than he has done.Currently, the power is far too wide ranging, and the Bill does not make it clear that it will be used only in extremis, after something has gone horribly wrong—something far worse than has yet happened in the privatised industry. I think that it is very unlikely that something will go wrong on that scale. if the Secretary of State saw fit, the power could be used in totally different conditions—and it is to that that I and my right hon. and hon. Friends shall be objecting. I hope that the Secretary of State now has a clear understanding of the Opposition's view of the Bill. We believe that it needs a fundamental rewrite. We are all in favour of sensible regulation, but we think that the Bill goes far too wide.
I am still not absolutely clear about the official Opposition's position. Do they wish to keep the present regulatory structure as set up at the time of privatisation, or do they accept that that has proved inadequate and that there needs to be a strengthened regulatory structure, albeit not the one presented today?
We would be happy to examine a sensible revision of the structure. It is always possible to improve things in the light of experience. However, I do not think that the Bill presents the right approach. It is clear that it goes considerably further than the Railways Act 1993, for example. The powers of that Act are expressly amended by provisions set out in the Bill. It is proposed to make things tougher and to give the regulator more wide-ranging powers to intervene and to interfere in the running of the railways.We are suspicious of the costing of £5 million per annum for the authority. That may prove to be an underestimate given the enormous range of strategies and functions that the authority will have foisted upon it. We wish to return to the question of £3 billion. It is most important to know how much of that money will be available to do the sometimes worthy things that are demarked in the Bill. We are worried about the length of franchises and we believe that decisions are pending. These decisions have been delayed for many months and this is becoming an impediment to proper investment and success in the railway industry. I have heard complaints from those in the industry that decisions have been sitting in the Secretary of State's "in" tray for many months. That is a great pity. I thought that there was cross-party support for the idea that the privatised industry should be given its head to make the necessary investments. We are all impatient to see new rolling stock and better services. The Opposition urge the House to adopt our reasoned amendment to the procedure for the handling of the Bill. An enormous mess and muddle has been revealed at the top of Government, a huge row between the Prime Minister and his deputy and obvious second thoughts around the ministerial table about the wide-ranging powers that are being offered through the Bill to the Secretary of State and to the quango creature that is being established beneath him. If this were the world of "Thomas the Tank Engine", this would be the Bill to make the Fat Controller wax lyrical at night at the great strengthening of his powers. We shall be offering strong scrutiny of the Bill. It is not the right Bill at the right time. The Secretary of State should concentrate on better tube investment, better car parks at stations and easing the flow of cars to stations. We could then have an integrated transport policy. We see chaos and disintegration surrounding the Secretary of State. There is a lack of ability to win the investment that he needs for public enterprises from the Treasury and a willingness to get in the way of sensible investment by the private sector. The Bill will not help and that is why we are opposing it tonight.
The Strategic Rail Authority is the first intelligent attempt to bring together a proper planning system for the future of a new and modern railway system, and is a long overdue recognition of the fact that the privatisation and fragmentation of the railway system unfortunately resulted in the passenger receiving a far from acceptable level of service.In its report on the Strategic Rail Authority, the Transport Sub-Committee made it clear that there were considerable problems if a modern railway was to be worked in the disorganised and disorientated manner that had ensued with privatisation. It made it clear also that we would not be able to remedy the situation without some reintegration of the various companies and an acceptance of the fact that some of the powers handed to both the franchising director and the Rail Regulator were not sufficient to cope with the lacunae that had appeared in both the administration and operation of the railways. Today's debate is not only extremely welcome, but long overdue. My Committee warmly welcomes the opportunity to examine the Bill in considerable detail. We believe that it contains many aspects of policy that we have already examined in such detail, but inevitably there will be areas where the Committee will want not only to make suggestions but to consider the wording. Given the way in which, in recent years, some legislation that has been put before the House has not been in its final form, it is tremendously important to use such a Committee to consider the detail, as a pre-legislative Committee can do. Far from the Select Committee delaying the passage of this legislation, it can, if need be, produce a polished Bill and perhaps even a better formulation—if my right hon. Friend the Secretary of State will forgive me for saying so.
Am I right in thinking that the hon. Lady's Select Committee, on which I serve, reserves the right to make possibly trenchant and fundamental changes in the Bill, or will it merely be a rubber-stamping operation?
I do not know to which Select Committee the hon. Gentleman is referring. If he seriously thinks that any Committee that I chair would be known as a rubber-stamp Committee, I can only assume that his frequent absences from the Committee have been such that he has forgotten what goes on.My right hon. Friend the Secretary of State will have noticed that the business motion on the Order Paper suggests a date by which the Select Committee's examination of the legislation will conclude. That is helpful. By next Session, the legislation will have been considered and extra evidence will have been taken. Points that need to be made by the operating companies or various other elements, including passengers, will be not only welcomed but registered in a way that ought to be constructive and useful. The Bill contains tremendously important provisions. Railtrack will now have to comply with investment requirements not simply by producing a number of wish lists, but by demonstrating that it is serious about its investment programme. I do not want to digress by discussing some of the more interesting recent developments, but I would mention the network statement, for which Railtrack got the support of consultants who said that they had not checked any of Railtrack's figures but could nevertheless project them into the future to produce particular results. That is not the sort of expertise or, frankly, detailed work that my Committee finds acceptable. Clearly, Railtrack must not merely talk about what it intends to do but demonstrate that it means to do it. It must produce concrete plans that are not just based on extra money from the taxpayer. If Railtrack is to fulfil its responsible role, it has to get on with a programme to deal with its very old infrastructure. Railtrack has known for a long time about the problems of pinch points, for example, and of some track that needs considerable maintenance and improvement. It knows of the need for reinvestment in lines such as the west coast main line. The sooner it makes those changes rather than talking about them, the better the passenger will be served.
I know my hon. Friend's constituency well. As she is aware, I spent some time as a railway engineer maintaining bridges in and around Crewe. Will she tell the House whether Railtrack has delivered on its promises and commitments on bridges in the relatively small area in and around her constituency; and will she tell us how detrimental its failure to produce has been to the immediate economy of her constituency?
I do not want to get diverted, but people who enter my constituency have to cross antique rail bridges; indeed, three of the main roads are on rail bridges. The previous time one of them was examined and modernised, it managed to sink 11 inches during one night, so I am somewhat sensitive to the difficulty arising from trying to rebuild an ancient system. Not only will working on bridges be an urgent part of Railtrack's work, but it will have to work closely with others to provide a properly programmed advance in the provision of proper infrastructure.
Will the hon. Lady at least admit that investment expenditure under Railtrack is more than double what it was under British Rail? If British Rail had not been privatised, where would her Government be getting that money from, given that public investment in transport, for which the Deputy Prime Minister is responsible, is being cut?
I am getting pretty bored with these absurd interventions from Conservative Members. The whole of the west coast main line would be modernised today and there would not be such poor standards if the money that was spent on privatisation—including that which was identified by the Public Accounts Committee as going directly to people whose only contribution was making the most absurd suggestions about how particular contracts should be framed—had gone into the railway system. Rail companies certainly would not be adding 10 to 15 minutes to every timetable in the pretence that services are getting somewhere near their original arrival times. I am bored with all that and the time for going over and over such absurd suggestions is gone.The Strategic Rail Authority will be able to retain fines, rather than pass them back to the Treasury, and spend them on the infrastructure. That is not only a sensible development, but one that will soon be seen to be advantageous. I believe that the acceptance of a public sector benchmark, which will provide for the assessment of all franchise bids, is not only long overdue, but will mean that the passenger will be much better served in future. The Strategic Rail Authority will have responsibility for publicising rail services—not, if I may say so, for providing beautiful posters at conferences saying what a wonderful investment programme there will be in the next 30 years. It will tell rail travellers, "In future, you will be able to travel safely, cleanly and punctually." At present, all those "minor" points are not taken seriously by many of the companies. I believe that open access and the changes proposed in the Bill will make a difference. Companies will not only have to face up to the real problems of competition, but seriously consider what to do in order to attract more passengers. Some aspects of the Bill, such as the permission to promote light rail, will transform a lot of other railway services. People want clean and comfortable access to various forms of rail transport and they believe that an integrated system means getting on a train at their chosen station, comfortably and safely, and getting off where they want to be—not a considerable distance from their ultimate destination.
When my hon. Friend's Committee examines the Bill and other developments in railways legislation, will she look enthusiastically at the possibility of reopening a large number of mothballed, underused or unused lines so that we can develop properly integrated local transport systems? We should bear it in mind that some lines would be loss makers initially, but over time integration would encourage people off the roads and on to the rail system, which they are not attracted to at present because they live too far from the main lines.
I hope that the Strategic Rail Authority's powers to borrow will enable it to look forward to means of developing the network; it should not simply rest on the present system. Although my hon. Friend specifically mentions services that may have been mothballed, there are all sorts of other developments. For example, many of us look forward to a real increase in freight once lines are available. If there were a new freight line through the centre of England, we would begin to see a serious movement of large amounts of freight off the roads and on to the railways, where it belongs. That would not only promote a better environmental response in many areas but would demonstrate efficiency and represent something that people genuinely want. Part of the SRA' s powers will be to consider such schemes and the occasions on which investment should be made in them, and to encourage others to take up new and more imaginative schemes.
Will the hon. Lady give way?
Yes—for the hon. Gentleman, I shall of course give way.
The hon. Lady is most gracious. If she is right in suggesting that investment will be considered for light railways and the reopening of disused lines, might not we have to consider a considerably higher budget than the £5 billion that the Deputy Prime Minister mentioned in answer to my earlier question? The central railway line alone would take £5 billion, plus some change.
As the hon. Gentleman knows, many people would be interested in such a development and might be prepared to talk seriously to the SRA about how it could be financed.
Will my hon. Friend give way?
I am trying to make a shortish speech, but I am getting so much help.
Is my hon. Friend aware that, in Croydon, the Tramlink project that is due to be completed at the end of this year involves both private money—to the tune of £75 million—and public money? Moreover, it uses a disused railway line to create a new commuter link, which is proving popular. We have the finance, and I hope that my hon. Friend will come to Croydon at the end of the year when we open the line.
My hon. Friend tempts me into all sorts of interesting debates about how passenger transport authorities' and local authorities' transport plans can be fed into the plans for a shiny new railway system. That is what I look forward to in the next millennium, but I do not wish to speak for too long today.My right hon. Friend the Secretary of State would not expect me simply to tell him that the Bill is absolutely marvellous, because it has left out some of the bits that I think are important, and I shall want to ask him a number of questions in the future. I hope that the SRA will have the power to prevent another round of rural closures. Many of us who have lost railway stations know that that directly contributes to a drop in the number of passengers in some areas. Some of the stations that are now being warmly welcomed by the Opposition were paid for by local authorities, which got absolutely no credit and were then told by Railtrack that they would have to pay towards the maintenance.
Oh—I am most honoured to give way to my right hon. Friend.
Perhaps I can satisfy my hon. Friend by saying that, when the closure of a line is requested, the decision will no longer be dealt with by the regulator but will come directly to me as Secretary of State. It will be a decision for which I shall be answerable to this House.
I welcome that tremendously important development; passengers will want not only to see it carried through, but to have an input into any decisions that are taken.I hope that the public borrowing figure for the SRA, which seems pretty generous to us, will be fairly secure and that the whole question of whether the SRA can borrow on the open market will be discussed. If the SRA is to create public sector comparators for franchise bids, that will be helpful, but if for any reason the franchises collapse—I am afraid that, if we are not careful, privatisation will create a two-tier railway system in which some companies can run well but others will come perilously close to being non-viable—the SRA may need to assess accurately exactly what should happen to their bids. It will therefore need a base so that it can consider whether it can run those services as the owner of last resort. I take the point that my right hon. Friend made earlier in the debate about the absurdity of the Opposition objecting to the transfer of powers that were in the hands of the British Railways Board before the introduction of this Bill. One aspect, however, has not been transferred. I am a bit anxious about it. My Committee made it clear that it thought that BRB should not sell rail land before decisions that could have an impact on the railway system. The Secretary of State knows better than anyone that, in the previous century, railway companies were extravagant in their acquisition of land. It would be extraordinary if we were trying to plan for a new system but, because of a hangover from previous legislation, the BRB was selling sites. There will always be some bits of land that it is happy to let go, but it is important that strategic decisions be taken in relation to particular land before it is put on the open market. I know that the Select Committee will want to examine the difference in the powers between Wales and Scotland. It will also want to examine the role of the London mayor and whether, in the Bill, the mayor's powers should appear transparent to the voters. I was glad that the Secretary of State mentioned that he wanted passenger representatives to be on the Strategic Rail Authority. It is extraordinary that we all talk about the internal debates between the operating companies, Railtrack and Ministers, but that, even with the only slightly improved passenger rail authority set-up, we still do not hear the voice of the passenger as strongly or as usefully as we should. It is vital that passengers, freight users and railway employees should have a direct input, so that their views are heard. I am not suggesting that they should automatically be given precedence over other aspects of rail policy, but unless their voice is heard there will be a real worry. One hopes that the new consumer structures will be broader than existing ones. I hope that, somewhere in the legislation, we can look at the whole question of rail safety. Despite its age, the railway system is very safe. People are carried safely, but there are still problems about some of the slam-door stock and the speed at which it is being replaced. There are worries, too, about the signalling system and about its age. Without being unkind about it, if Railtrack feels that it is necessary to issue a notice to its contractors saying, "Please do not touch the signalling because the wiring is so old it may automatically go wrong," we have to worry about some aspects of the working of the system. We need to look at them closely. Will the Strategic Rail Authority have the right to say to companies, "We do not want you to carry on with some of the rolling stock—certainly, mark one rolling stock—and we want it to be replaced as quickly as possible"? The Government so far do not seem to have told us exactly how many train operating companies they believe should be in existence. It is possible that, at the end of the franchise renegotiation, there will be no need for quite so many companies. It would be helpful to know exactly what my right hon. Friend has in mind for the future. I am concerned about the tension between competition policy and the integration of a railway system. We know that, once there is privatisation, there is a need for regulation. Those two things are likely to grate against one another. The arguments advanced by individual operators are the sort of arguments that have been used by some Conservative Members today: when it comes to the crunch, the shareholder and profit-maker must take precedence over the passenger and the need to run the system. That is not in anyone's interests. I hope that it will not be the case when the time comes for a renegotiation.
Will the hon. Lady give way?
No. I am coming to the end of my speech and many hon. Members are waiting to speak.I welcome the opportunity that the Secretary of State has given my Committee to look closely at the Bill. It is long overdue. It has tremendous opportunities for every one of us. It is the first time for many years that any senior Minister has come to the House with a plan for the future that is optimistic. My right hon. Friend's plans relate to the future, not the past—whatever that murky and unhappy place may be. I assure my right hon. Friend that we shall play our part in the passing of the legislation, and the securing of the examination, on time. I trust, however, that he will not expect us to work at quite the same pace for the rest of the current Parliament; if he does, we may have the odd thing to say.
I am glad that at long last—more than two years after the general election—some transport legislation is before the House. I have repeatedly offered the Secretary of State our support for the passage of the Bill at the earliest possible opportunity, and I am disappointed that it will clearly not be enacted until some way into the next Session. The travelling public will be disappointed as well: they have not seen the improvements that they may have expected following the change of Government. Those improvements are vital, and we will do what we can to ensure that the Bill is passed sooner rather than later. The Secretary of State's role has, I think, been to do all that he can internally, within the Government, to speed up the process.
How does the hon. Gentleman intend to give the Bill a fair wind, given that no member of his party serves on the Select Committee on the Environment, Transport and Regional Affairs which will consider it?
We have negotiated to enable the sole Liberal Democrat member of that Committee to work on its Transport Sub-Committee in this instance, for the very reason that the hon. Gentleman has given. I personally feel that, if Select Committees are to be split into two sections—as not only this Committee but at least one other has been—they should have enough Liberal Democrat members for our party to be involved in both parts of their work.
As the hon. Gentleman will know, we have agreed to the provision of a place for his colleague for the purpose of consideration of the Bill. I am sure he will understand, however, that the Committee of Selection—on the basis of the rules of the House—decides how many Liberals should be on a particular Select Committee. If I may say so without being immodest, the Select Committee that I chair has done an enormous amount to try to ensure that there is a balance. I hope that the hon. Gentleman is not suggesting that the addition of another Liberal to the Committee would solve the problem; in fact, it would cause some difficulty.
I do not think that you will allow me to proceed much further with that subject, Mr. Deputy Speaker. I must say, however, that, although the Committee of Selection is responsible for the numbers on Select Committees, it is not responsible for decisions made by those Committees about the division of their work. We should consider whether Select Committees should be all-party or not, and whether all-party reports should be published. I personally feel that they should be—although I am delighted to say that on this occasion the problem does not arise. That is the answer to the very reasonable question asked by the hon. Member for North Wiltshire (Mr. Gray), and, indeed, asked by me at an earlier stage.Although the Bill is welcome, I do not think that we can pretend that it will solve all the industry's problems. Those problems can be traced back a long way: the railway industry has not had an easy time for most of this century. Opposition Front Benchers seem to forget that nationalisation was not carried out on an unwilling private industry, and that it was intended to rescue an industry that was rapidly going bankrupt. The privatisation conducted by the Conservatives caused problems. We argued that it would, and so did the Government, when they were in opposition. I listened with interest to the Conservative Front-Bench spokesman, who skirted around the issue, as he and his colleagues do in their amendment. Do they believe that the system of regulation and the system for co-ordinating the development of the rail industry are inadequate, or do they believe that they got them right? They skirt around those questions in their amendment, which simply says that they are not in favour of the way in which the Bill is being introduced. They do not say that they do not like the proposal in its own right. The right hon. Member for Wokingham (Mr. Redwood) argued that the Conservatives do not like this particular proposal but that they are not necessarily opposed to taking action. That is about as near as the House is likely to get to an admission from those on the Conservative Front Bench that something must be done. They were not prepared to state that, however, and they were certainly not prepared to apologise. Once again, the Conservative spokesman needs to listen to his leader, who said that Conservative Front-Bench spokesmen should be willing to apologise for the mistakes that they made in government. The right hon. Gentleman should not, therefore, feel embarrassed about doing so. The right hon. Member for Wokingham admitted, however, that regulation of the industry needs to be more robust. It will be interesting to see whether the Conservatives can bring themselves to make any constructive proposals to achieve that. Privatisation has not been the success that they suggested it has been, and if they listened to passengers for one moment, they would understand that passengers do not believe that it has been a success. As the economic cycle dipped, passenger numbers fell, and as it recovered, they increased. When I have met rail executives, they have said that they are pleased with what they have achieved, but they have admitted that the increases in passenger numbers are largely equivalent to a recovery to pre-recession levels and no more. They do not know, any more than the rest of us do, whether the same decline would occur if there were another recession, causing severe problems to the industry's investment plans. The punctuality figures show no sign of improvement and those on reliability remain below the desired level. Complaints continue to soar. The Conservative party, therefore, has reason to acknowledge that there needs to be an improvement in the strategic co-ordination of the industry and the powers of regulation and enforcement. The regulators have asked for that improvement, and it is noticeable that the Association of Train Operating Companies, rail operators and Railtrack are not opposed to the principles behind the Bill. Liberal Democrats should have preferred a more comprehensive Bill to implement the entire transport White Paper. I hope that before too long there may be legislation to tackle the wider issues raised in the White Paper. We should have preferred the Bill to set up an authority with a role similar to, but not as great as, the proposed Strategic Rail Authority to resolve problems in the bus industry. The current competition authorities in that industry are far too slow to tackle effectively many of the problems, including anti-competitive practices which are not in the interests of the consumer. We want the proposed authority not only to co-ordinate rail, which is just one part of an integrated transport strategy, but to draw up plans for all public transport within that strategy. The Secretary of State could consider those plans and the House could debate them. Will the House have a chance to debate the authority's annual reports? Will any strategic proposals that are made be reported to and debated by the House? There is a proper role in that process for the Secretary of State, but there is also a role for the House in a wider debate on transport.
I believe that those matters should be debated in this House. I want a public debate about the strategic network, and the approach adopted by the Strategic Rail Authority should be debated by the House. I am sure that that will happen.On the integration of bus services, the hon. Gentleman is right to criticise the competitive forces and the slowness in dealing with the deregulated bus industry—a major issue, requiring legislation. However, the integration can be achieved within the local transport plans that I have asked local authorities to produce and for which I have found £800 million to enable that work to start now. They are producing those plans; that does not require legislation.
That is half the answer, but not the full one as it does not allow the regulator to tackle problems. Bus privatisation saw a massive decrease in the level of bus services, particularly in rural areas such as my own. In contrast, passenger use in London has increased—partly, at least, because there is an effective co-ordinated and regulated network. I am not arguing for the formal regulation of every single bus route, but we need a body with the ability to crack heads together, given some of the appalling anti-competitive and anti-passenger practices of some of the bus operators.
The hon. Gentleman suggested earlier that the train operating companies are not opposed to the Bill, although they have expressed some comments. Perhaps one reason why they are not being too vigorous in their opposition is that whereas, previously, the renewal of their franchise would have been the responsibility of the franchising director, under the Bill it will be the responsibility of the Secretary of State. Therefore, the companies do not want to upset him.
The hon. Gentleman may be right, but given the poor public service record of some of the companies, the public might rather welcome the idea that they will be cowed into submission.With the train operating companies' subsidies set to fall over the coming years, real questions arise about how we get the investment that is needed in rail infrastructure so that the second if not third-class travel conditions that passengers have too often suffered are improved and match the first-class returns that shareholders have enjoyed. I hope that the Strategic Rail Authority will be able to address directly the high levels of profits, the high returns for shareholders and the high levels of pay for some of the bosses in the rail industry, as well as the low returns to the travelling public.
Does my hon. Friend agree that however the Strategic Rail Authority is established, it should not impact upon existing projects such as the revamp of Sutton station—a joint venture by the British Railways Board, Connex and the local authority, which should proceed smoothly and quickly?
I hope that that will be the case, although there will be a number of investment decisions that perhaps will be a little harder for the companies than that one.At the moment, Connex is likely to be told to replace the slam-door trains—something that was not negotiated in the original contract, wrongly. The Government have also refused the franchise extension where that was offered—I think rightly, because I am not keen on franchise extensions that are not open to competition. It is difficult for the Government necessarily to get the best deal if they do not know the other available offers. There may be other ways in which to allow companies to protect their capital investment when it comes to the handover of one franchise to another rather than simply extending the existing franchise. A new franchisee should be subject to the right contractual requirements to take on some of the obligations agreed with the Government, because that would be better than a simple franchise extension. Over the next few years, resolving some of those issues will be extremely difficult for the Government as they face pressure from some operating companies to exchange or extend franchises without proper competition and without seeing whether others can offer a better deal.
The hon. Gentleman betrays a lack of knowledge about the existing franchise system. The trains are owned by rolling stock companies—finance companies—precisely because the train leases are transferable, so if one franchisee loses a franchise, the rolling stock can be transferred to the new franchisee. It is erroneous to suggest that one needs to extend franchises in order to encourage investment, although if the company has its franchise extended it obviously has a bigger stake in the long-term performance. There is no financial or legal barrier to the transfer of the operation of the leases.
The hon. Gentleman betrays more ignorance of what is happening in practice than I did of the legislation. The ROSCOs have not been making that investment unless companies have been prepared to underwrite it. The issue is precisely whether the operating company is prepared, either itself or through offering guarantees, to underwrite the investment, and companies do not want to do that when they do not know their franchise extension position and they have no protection.I am suggesting a solution that would overcome the practical problem, and explaining why the people who originally bought the ROSCOs walked away with enormous profits at the taxpayer's expense. The Government of the day failed to regulate the ROSCOs effectively and prevent that from happening. We have heard much from Conservative Front Benchers about the increase in the cost of motoring. Between 1974 and 1996 that cost fell in real terms, but over the same period the cost of rail travel went up by nearly 75 per cent. and bus fares rose by nearly 60 per cent. The people who have had a really bad deal are those travelling by train or bus in the past couple of decades. Companies may well want to increase prices further to provide the enhanced services that are needed. I hope that both the Secretary of State and the regulatory authority will play a robust role in ensuring that that does not happen. The present planned decline in public investment in the railways may have to be reconsidered. There is serious doubt whether the proposals for cuts in support negotiated by the Conservative Government will allow the less viable lines to keep going. There are ominous signs. In my area, Wales and West Passenger Trains has cut a substantial number of local train services on the branch lines because it is not under a specific obligation to run them. That has happened in Cornwall and Devon, and similar cuts have happened elsewhere. The companies have not made the investment in increasing passenger numbers that we were originally told they would make; instead, they have simply cut services, decreasing the overall viability of rural lines and putting on pressure for their closure. The most worrying sign from the Government came when the Under-Secretary, the hon. Member for Hampstead and Highgate (Ms Jackson), said that the Government do not rule out "bustitution"—the substitution of rail services with buses. That has been a disaster before and it would be a disaster again. It would be terribly short-sighted of the Government to allow the companies to go down that route. We want clarification on many specific issues, including the relationship between the regulator and the authority; the need for direct accountability; and the ways in which Parliament will scrutinise the authority's workings. I am grateful for the Secretary of State's comments on that a moment ago. I hope that we will have the chance to debate both the annual report and the strategic proposals. We want clarification on resource allocation and the authority's role in it, as distinct from direct support to the rail operators, which I notice is an issue about which Railtrack is concerned. We are concerned about the safety of users and how the Bill will improve rail services for women, disabled people and pensioners. What role will the authority play in considering the safety aspects of private operation, which the Labour party rightly raised in opposition? The unions have highlighted real concerns about cuts affecting safety. Another important question has to do with the way that the one-stop-shop public transport information system that the Government have promised will work in practice, and the role that the SRA will play in that. We believe that the SRA should have responsibility for overseeing the co-ordination of the national timetable. Problems with the timetable mean that passengers are dropped at stations when no train is available for them to complete their journeys. That problem is especially acute when a train run by one operator is late and the operator that runs the connecting service chooses to let its train leave on time to avoid a fine.
Will the hon. Gentleman give way?
I cannot, as I have spoken for too long already.The SRA should also be required to oversee improvements in the rail network. Although the Bill implies that responsibility, much detail is needed to explain how that will happen. The SRA should play a key role in the renegotiation of minimum passenger service requirements. That may be one of the answers to the problem of maintaining rural lines, although the toughening-up process involved would be difficult. We believe that the SRA should be empowered to ensure that Railtrack and train operators do not earn excessive profits, and to set targets for the growth in passenger numbers for each franchise. It should also be charged with improving access and safety for all passengers, and with conducting an immediate examination of existing freight-only lines to determine the potential for new passenger services. Also, the SRA should undertake an immediate re-examination of the potential for building new stations, for reopening lines and for developing new ones. We need growth in the rail industry to avoid the road traffic congestion that would be the consequence of failure. It is vital to have an effective rail system, and the Bill is a first step in the right direction, albeit a limited one. I look forward to the introduction in the near future of a bigger Bill implementing the major proposals in the White Paper. That is what is needed to make this Bill the success that it should be.
I welcome the Bill, and the fact that it will be examined by the Environment, Transport and Regional Affairs Committee, which has a great deal of expertise in transport matters. Its deliberations and advice will help to improve the Bill considerably.A strategic approach to all forms of transport, including the railways, is vital if we are to achieve an integrated transport system. Such a system seemed to be a mythical beast under the previous Administration, when investment in rail services was cut. An example of that process from my area is what happened with the channel tunnel rail link, when the previous Conservative Government tried to blight communities stretching from Kent to London. The reduction in the value of the housing stock meant that the cost of introducing the link was lower. However, even in Kent's leafy suburbs—the strongholds of many Conservative Members—people banded together to oppose the Conservative Government's outrageous approach to providing an essential transport link between one of the Europe's major capitals and the continent. It was left to this Government to pick up the pieces of that failed strategy and to press ahead a project whose benefits we should have enjoyed for years already.
I was in the House when the Channel Tunnel Act 1987 was passed. At the time, the House was assured that the channel tunnel would be such a wonderful financial success that there would be no need for Government funding for rail links. I disagreed and was one of the minority who voted against that legislation. Does the hon. Gentleman accept that the channel tunnel rail link has not in any sense been a huge financial success, and that all the assurances given at the time have been broken?
May I say that the contract between France and Britain was a problem that Labour inherited? I opposed the contract when the House dealt with it, so I understand the concerns expressed by the hon. Member for Rochford and Southend, East (Sir T. Taylor). However, we have changed the contract, and all the signs are that the venture is likely to be successful.
I am grateful to my right hon. Friend. I should take this chance to point out the approach taken by the French Government towards compensation for people who had to relocate so that the rapid transport link could be built between Paris and the channel tunnel.
Would the hon. Gentleman aid our debate by telling us when, during 40 or more years of nationalised railways, a rail project was delivered by the Government of the day on time and within budget?
We are talking about the provision of public transport, not about whether the channel tunnel rail link should be a public or private service. The Conservative party has promoted privatisation as a panacea for rail problems, but it has proved to be the opposite, as thousands of commuters who travel to and from London every day—often through my constituency—would vouch.The Conservatives published a new plan for transport last week. The Strategic Rail Authority and—via the rail regulator—the rail companies, Railtrack and the rolling stock companies must achieve a more co-ordinated approach to public transport and the growing problem of traffic congestion. We must provide a strategic approach that gives people choice. We are not anti-car, nor do we want to tax people off the roads.
Do not do it then.
Your own transport policy was predicated on introducing road—
Order. Let me remind the hon. Gentleman to address other hon. Members in the third person.
The hon. Member for North Essex (Mr. Jenkin) forgets that his Government's public transport policy included the possible introduction of road and congestion charging, and that a great deal of money was spent on investigating the possibility of introducing such charges. We need take few lectures from the Conservatives on that subject.In fact, the Conservative policy on the future of road transport is about as anti-car as it is possible to be. It offers a free-for-all on road transport, suggesting little more than car parks near stations—something we would all support. It does little to promote public transport, and nothing to increase capacity on public transport or provide more integrated transport to address traffic growth. In a parliamentary answer, the Department of the Environment, Transport and the Regions told me that it expects a 50 per cent. increase in traffic over the next 30 years. The speed with which traffic can move is expected to reduce by 10 per cent., and by 14 per cent. in the area around London. The previous Government significantly reduced their own road building programme because they realised that it was not possible to build our way out of the problem as new roads generate traffic.
What has all this to do with the Railways Bill?
The hon. Gentleman's sedentary question shows why the Conservatives came up with their policy. Rail transport is essential if we are to address road traffic congestion. Ask any commuter to London—whether he or she drives a car or is squashed in as a pixie, a passenger in excess of capacity, on a train—whether trains have anything to do with the issue of road transport and reducing traffic congestion.We need a strategic approach to providing transport—whether it is trains, buses, light rail, guided buses or taxis—in order to make public transport attractive to people. People must consider whether it is in their best interests to use their cars. That is not an anti-car policy; that is a sensible policy for the environment and for the convenience of the travelling public.
I know of my hon. Friend's great personal experience as a driver in and around the London area. Would he care to share with the House his experience of the excessive freight transport that moves around the London area? What role does my hon. Friend think that the Strategic Rail Authority should play in easing the problems caused by excessive freight movements on the capital's roads and in our inner cities?
I am grateful to my hon. Friend for giving me the opportunity to consider that matter. The increase in axle weight introduced by the previous Administration has had a dramatic effect on my constituency. It is situated at the junction of the A20 and the A2 which leads from the channel ports, and there has been a massive increase in the number of heavy goods vehicles polluting and congesting local roads. It is clear that we must adopt a strategic approach and shift that freight from our roads and onto the rail network.
Given the hon. Gentleman's expertise in this matter, will he give the House an estimate of what percentage of freight should be carried by rail within the next 10 years?
The hon. Gentleman tempts me to hazard a guess when I do not have the statistics that enable me to do so, but let me give him an example to illustrate the problem.It is projected that the completion of the expanded development at Ebbsfleet is likely to put about 23,000 extra heavy goods vehicles on the south-east road network. We should make immediate plans to address that enormous injection of road traffic in that area. The Strategic Rail Authority and an integrated approach to dealing with transport issues would address such matters. I point out to the hon. Gentleman that the previous Administration had 18 years in which to deal with the problem but all we got was jam on our roads and jam for the privatised rail industry. The travelling public—and certainly the commuters who travel through my constituency—want the Strategic Rail Authority to deliver a more effective way of imposing sanctions on the transport operating companies that fall foul of their contractual obligations. Only last week, Connex, which serves my area, suffered severe delays on three consecutive days. On Monday, there was a broken-down train at Kidbrooke. On Tuesday, a broken-down train at Welling delayed my journey from Eltham to Charing Cross, which took an hour and a half—a journey that should take 25 minutes at the most. On Wednesday, there were significant delays to trains travelling to Victoria—at least, the train on which I was travelling was delayed. The travelling public in south-east London are suffering enormously. As I have said before, people from south-east London, north Kent and East Sussex rely heavily on the commuter train network to travel to and from London because we have no other forms of public transport. We do not benefit from the London underground in south-east London. The bus is not yet seen as a reliable alternative to the train, mainly because the roads are so heavily congested. Improvement in rail services from the south-east to central London is essential; the working day is disrupted for thousands of people because of delays on those services. That is not acceptable and we must ensure that the SRA brings about an improvement.
Will the hon. Gentleman tell us which clauses will put right those problems?
The Strategic Rail Authority will be given powers to require—through the regulator—investment that would bring improvements to public transport services. I think that clause 18 introduces that power.
I accept that correction from a sedentary position.It causes me some concern that the regulator must be satisfied that any such investment would bring about a return for the train operating company. The explanatory notes point out that we are shifting the emphasis from the need for the train operating companies to show a return for their investment to the need to provide improved services to the passenger. That element of the Bill should be strengthened. There is a lack of investment—for example, in improving the door-locking mechanisms on the networker trains, which cause enormous delays every day. Railtrack has also failed to invest, and it has become more of a property-owning company than a rail-operating one. The company needs to invest more in signalling systems in order to improve efficiency and the frequency of trains; an investment in new technology for such systems is long overdue. There is certainly the potential to increase capacity on the south-east network, but improvements are blocked because of the signalling system.
Will the hon. Gentleman clarify how the insertion, under clause 17, of 16A after section 16 of the Railways Act 1993 will work? He rightly says that the regulator can be directed by the authority to require new investment, provided that the investing company will make a return. If a company can invest for a return, why would it not be investing anyway? The great increase in investment in the railway that has already taken place came about precisely because companies can invest for a return. The problem arises when the Government, and other people, require investment where there ain't no return. How does the clause deal with that problem?
Two points arise from the hon. Gentleman's question. The first is that sometimes investment in public transport is designed to provide a service from which sometimes there may be no return. However, the second point is that there are times when the train operating companies invest in their existing services rather than considering long-term planning and the strategic role of the transport system. They do not plan or invest for the longer term. That disease of short-termism was encouraged under the previous Administration. It related to the provision of all kinds of public service and investment. If we are to deliver a strategic transport policy, at times it may be necessary for the train operating companies, the ROSCOs and Railtrack to be eased along the path to integrated transport.A strategic approach to our rail network is long overdue and we need greater accountability among our train operating companies. Two years ago we inherited a lack of investment, no co-ordination and above-inflation fare increases for rail travellers. Over the past two years, those problems have been overcome and a significant increase in the number of people using public transport has been recorded. However, today's reality is that, under the current system, without the Strategic Rail Authority, passengers will continue to suffer every time the profits of the privatised rail operators are threatened. Since the powers of the Secretary of State to control the companies were removed, the situation facing many of those who rely on rail services has worsened, so a return to the Secretary of State being able to provide guidance to the companies is welcome. I believe that the Strategic Rail Authority will bring about a better integrated transport system, which is long overdue.
I have been in a minority in the House on many occasions and I am afraid I am again today, because I am one of the few who are not looking forward to the Strategic Rail Authority and who believe that, because of its excessive powers, it will undermine the good performance achieved by the railways since privatisation.The hon. Member for Eltham (Mr. Efford) offered several generalities, but we should try to work out the truth. He said that privatisation had resulted in increased fares, but the information I have received from what I regard as a reliable source is that, although fares consistently went up under nationalisation, there has been a reduction of 1 per cent. in real terms since privatisation. That is either true, or it is not.
The hon. Gentleman might disagree, but he should go along to the Library of the House of Commons, get some impartial information and see for himself.
I seek clarification: in respect of fare increases, is the hon. Gentleman talking about fares as they stood in May 1997, or as they stand today?
I am talking about what has happened since privatisation, which is a fair way to look at the question.
Would it not be fairer to talk about what has happened since the election of the Labour Government, who have required a better public transport service? Would not that provide a more accurate interpretation?
Not at all. We have to look at the facts, not try to make points about what has happened since election day.
My hon. Friend is quite right. It is wrong of the hon. Member for Eltham (Mr. Efford) to try to claim credit for the fact that privatisation set up the mechanism whereby fare increases were restricted to 1 per cent. below inflation. That has nothing to do with the Labour Government or with changes made since the general election. It is about time that Labour Members understood that life did not begin in May 1997.
My hon. Friend is absolutely right. He is, as usual, spot on—his observations are the most accurate in the House of Commons. However, I am not trying to make a political point, but merely trying to get across some of the facts.I travel a great deal by train. Because I have unusual views, I get invited to speak in unusual places all over the country, to which I travel by train. There is no doubt that, however one looks at it, there has been a substantial improvement in rail transport. Let us take the subject of investment. We all knew that investment was deplorable when British Rail ran the network. That was not its managers' fault—they were nice people—but trains were getting old and signalling systems wildly out of date, so the service was becoming infinitely worse. Since Railtrack was established, investment has increased by 85 per cent.—not because its managers are nice people but because of the change in the system, Some might say that Railtrack talks too much about what it wants to do or what it might do, but the fact is that that increase has occurred. A further point that my colleagues often forget is that there has been a substantial reduction in the public subsidy. There has been a massive cut. Since privatisation, the subsidy has fallen from £2 billion to £1.3 billion. It would probably have gone up a great deal if privatisation had not gone ahead. The subsidy per passenger mile has decreased by 41 per cent. We know that the number of passengers has increased substantially, that the number of freight miles has increased dramatically, that the subsidy has fallen, that investment has risen and that services have been bettered.
Is the hon. Gentleman aware that about £600 million worth of investment is outstanding on slam-door mark 1 rolling stock, which is one third more dangerous than the modern equivalent?
I can talk only about my line, the Southend line. As he represents the Liberal Democrats, the hon. Gentleman will know that although there are no Liberal Democrats in my constituency, there are many in the next one, who I am sure have used the line. The line to Southend was the most dreadful line. I travelled on it and it was appalling; it was known as the misery line.
Notwithstanding the point that the hon. Gentleman is making, does he agree that there is still a predominance of slam-door mark 1 trains on the London-Tilbury-Southend line, four years after privatisation and about a year after we were promised that there would be new trains?
I had a meeting with LTS just this week about that. There was a press conference in Room W3 to which about 14 hon. Members were invited, although I was the only one who turned up—[Interruption. I am the only one, apart from my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles), who always turns up for meetings to do with Essex and whose commitment is an example to us all. He will confirm the full story that the new rolling stock is to arrive from September.As the hon. Member for Hornchurch (Mr. Cryer) is well aware, we were told that investment would not be forthcoming while the line was nationalised, and now it is forthcoming. That is not because people who run privatised companies are nice and those who run nationalised industries are nasty—far from it. It is merely that investment comes through the capitalist system; the Government save a great deal of money in subsidy and, by and large, services are improving. There may be one or two terrible services. I am told that the Virgin line—wherever that goes—is deplorable, although I travelled on it once and it was fine. If the Government are trying to run an industry as complicated as the railways, which is a very difficult industry to run, why the blazes can they not just admit that there are some failures and some successes, and start naming the success stories? I am not in any sense pushing LTS, although it has been very successful. I am asking why, for the sake of the industry's morale, we cannot say that things are getting better instead of constantly bashing the rail network. The Government have a duty to try to help the image of the railways, especially when it comes to attracting people to the industry. Some professions, such as teaching which is a perfect example, have a bad image. My third child is just finishing university and has no thought—nor have my other children or their friends—of going into teaching. It is unfortunate, but many say that teaching is not the way to make big money and get on. That is wrong. I am afraid that the same is true of the railways. Because they have a bad image, many people will not work for them. I happen to think that the railways are doing well and that we should encourage them.
As someone who worked for the railway industry since 1979 until I entered this place, I am very pleased that the hon. Gentleman has commended all the many members of the railway community. For the assistance of the House, will he please explain the damage that his Government did over 18 years, which caused the loss of many thousands of jobs and a paucity of services? He said that excessive powers would be granted to the Strategic Rail Authority. While he is on his feet, will he please explain exactly what those excessive powers are and why they do not complement the development of our railway industry?
I shall certainly speak about those powers in detail, mention the relevant clauses and provide all the details for the hon. Gentleman. However, I hope that he will accept that it is simply not possible for the Government—whether Labour or Conservative—to find money for railway investment. As he will well know, when the Conservatives were in power, for a long time, money was demanded for many things, such as the health service, but the necessary finances were simply not available.I felt sorry for British Rail, which was not receiving the investment that it required. The consequence of that lack of investment was that the industry became a shambles. Exactly the same has befallen London Underground. However, the problem with London Underground has not been its managers but the fact that the necessary investment was not forthcoming. Privatisation, which may be unacceptable to some, is a way of dealing with the investment problem. Although the Government are making arrangements with Railtrack that they hope will raise some extra money, we have to solve the problem of finding the necessary investment.
I am sure that the hon. Gentleman will be well aware that a consequence of the fragmentation of our railway industry is that an organisation that formerly was a whole now has more than 100 parts. As for giving excessive powers to a Strategic Rail Authority, surely the creation of such an authority will provide a focus for developing our railways—essentially bringing Humpty-Dumpty back together again—and ensuring that we really are looking forward so that, for the first time in about six years, we and our railway industry might see some light at the end of the tunnel.
As I said, the subsidy has fallen whereas, this year, 2,000 new passenger vehicles are being delivered. In the old days, that simply did not happen. Privatisation—I am not talking about a group of nasties or of nice people—is producing facilities that simply did not exist before.What about the new authority's powers? Although a crowd of new authorities is being established, the Financial Services Authority is the one that horrifies me most. It is the most appallingly powerful body, using its powers to treat cruelly and heartlessly those who run a business. Some of those businesses have been operated for years by very reputable people. Clauses 8 to 17 deal with all the issues of the Strategic Rail Authority's powers of central direction. If those running the authority want to use those powers to the full, they will be able to rush around and direct those who, in a difficult situation, are trying to run the railway. The Bill will also provide the authority with the power to impose massive fines. Clauses 19 and 20 will allow people at the authority to impose massive fines and to say, "We don't think that the railway is being run correctly. It's all wrong." Those idiots, who will probably be on very high salaries, with lovely big offices and enormously large staffs, will be able to tell railway companies, "We think you've made a muck of it. Here is a fine of half a million pounds." To whom will the companies be able to appeal? To whom will they go? The answer is to no one. They will be allowed to appeal the merits of a fine, but not the size of a fine. Therefore, people who are running a railway company and think that they are, despite all the difficulties, doing the best job they can will have to face a massive new organisation, which will be run—according to rumour; the Minister may confirm it—by the person who told us how wonderful the channel tunnel rail link would be and how much money it would make. Clause 17 will allow the authority to say to a company, "We want you to invest. We want you to spend all this money doing this." How does the new rail authority know whether that investment will be profitable? What special knowledge will the authority have? Will it employ consultants or bring in experts? I fear the consequences of the power provided in clause 17, especially when it is allied with the rather frightening power, to make grants, provided in clause 8.
I have been following the hon. Gentleman's argument very carefully but am not quite sure whether he is against regulation completely. Is he in favour of a completely unregulated privatised system—which, effectively, would be a monopoly? Is he also making the case that when public subsidy is being provided to the railway—he has been generous enough to acknowledge that the subsidy is now twice what it was before privatisation—the public should not have a say in how it is used? He has acknowledged that the privatised system is not working perfectly, but is not the legislation intended to make it work better?
Subsidy has fallen—not increased—from £2 billion, to £1.3 billion this year. Although those reported figures may or may not be accurate, my advice is that subsidy has decreased and, eventually, will fade away.
I was making the point that, on privatisation, subsidy doubled, and that—since then, not only in the past 12 months—it has been higher.
The hon. Gentleman should appreciate that we have no concept of what might have happened to the subsidy in the absence of privatisation. I have been an hon. Member for a long time. During that time subsidies have consistently been increased and, as the companies were getting into such a financial mess, hon. Members have consistently asked for more.The plain fact is that, since 1996, subsidy per passenger mile has fallen by 41 per cent. Again, the percentage may or may not be accurate, but subsidy has decreased substantially. I accept that we must have some type of public control in public services. However, we are building up a series of quangos with horrific power and run by those who think that they are terribly important. I think that hon. Members who have worked in the industry will realise that it is not easy to run a railway which has, for example, to be run at unusual hours. Staff, who may have their own problems, are required to cover those services at unusual hours. Railways also have to deal with the public who, as we well know, are not perfect in how they deal with public property. If the proposed and rather grotesque organisation uses all its powers to the full—as it probably will, given the type of people who, we hear, are likely to run it—railways will be even more difficult to run.
Does the hon. Gentleman accept that he has perhaps not painted a full picture of the provisions of clause 17? The clause states that a facility may be provided, improved or developed if the regulator is satisfied that
Does that not seem to deal with the points that the hon. Gentleman is making?"the person will be adequately rewarded for providing, improving or developing the facility".
How will the regulator, who is not running a business, know whether a venture will be profitable? If I am running a railway company, shop or factory, and I put my own money in it, I shall have to make judgments on whether investments will be profitable. Now, this guy—who will be called a regulator and will probably be on a very high salary but not answerable to anyone—will be able to tell me, "I think that that will be profitable."
I thank the hon. Gentleman for his great generosity in giving way. However, on expertise in running a railway, would he like to comment on the fact that the vast majority of those who are now running privatised railway companies had little or no prior experience in the railway industry? Would he also like to give the House his reaction—or perhaps that of his constituents—to the recent Public Accounts Committee report on the Railtrack valuation and sell-off, and on whether that sell-off ensured value for money for his constituents and the country?
Although I have already spoken for far too long, I shall deal with the specific points that the hon. Gentleman has made. He will know that political complications made it difficult to value and sell Railtrack. My impression of the sale is that the previous Government obtained the maximum possible market price. As it turns out, Railtrack was worth more than that, so the investment was very profitable for those who made one. However, that was not the previous Government's responsibility.The fact is that Railtrack has been run very sensibly, so it has been able to obtain otherwise unobtainable resources. Does the hon. Gentleman think that, if he were a merchant banker, it would have been possible—this is the real test—to obtain a lot more for Railtrack? I believe that the answer to that question is no, and that the Railtrack privatisation has been a success story. It is not the job of a regulator—or of someone who has run that ridiculous venture, the channel tunnel rail link, which was going to be so profitable—to say whether he or she thinks that an investment will be profitable. Surely such decisions must be made by those who are running the industry. If they think that something will be profitable, they should go ahead with it. I accept that there must be some regulation to ensure that the public are protected. However, for goodness sake, let us not establish a series of crazy and expensive organisations that will cost a fortune, tell the rail companies exactly what they have to do, how they have to do it and for what they will be fined. I say to the Government seriously that when we have a success story—there have been failures, but by and large the railways have been successes in that passenger numbers and freight mileage have increased, and they are operating well—we should single out the companies that have done well and encourage them to try to improve the image of the industry so as to attract others to it. I think that the Bill goes too far. The Strategic Rail Authority will be far too powerful. It will become a horrendously expensive and powerful organisation that will make it more difficult for others to run a railway. Generally, I think that our railways are being well run at present.
First, I should declare an interest. Although I have never gone a bundle on share owning, I own three shares in the Keighley and Worth Valley light railway. It is the railway on which my father drove steam engines for many years. I am probably the only Member of this place who has shovelled coal on the "Evening Star", which was the last steam engine built in this country before steam engines were finished.Broadly, I welcome the Bill, like my hon. Friend the Member for Islington, North (Mr. Corbyn). We are both on-message this afternoon, which is unusual. I shall try not to spoil the situation, but I probably will because I usually do. The key to transport policy and the running of a future transport system is the integration of transport and the moving of freight and people from roads on to railways and other forms of public transport. I can speak from bitter personal experience. Like the hon. Member for Rochford and Southend, East (Sir T. Taylor), I travel from the east London-Essex area into central London every day. I use the tube and the overground railway. I see overcrowding and trains in a bad state of repair. I see also the consequences of underinvestment, sometimes in the form of delays. This is on both the overground railway and the tube. On the rare occasions when I drive into central London along the A13, the journey is not exactly a bundle of laughs. The A13 is frequently congested, often with heavy and lighter good vehicles. I occasionally drive a 1958 Armstrong Siddeley with, among other things, packed-up wipers along this route, and it is not a laugh a minute. The key to getting people and freight off the roads and on to railways and other forms of public transport are public intervention and public investment. The Bill will take us some way in that direction and some way to solving the massive problems that we have had in the railway system. History demonstrates that the railways work best as a publicly owned and controlled monopoly. That is why in 1924 the Baldwin Government, at a time when the free market was virtually an icon, forced the regrouping of the hundreds of railway companies that then existed. That Government realised that the railway system was crumbling and falling apart. There was underinvestment and rolling stock was in a chronic state in many instances. Regrouping took place and there were four large railway companies. It became clear by 1948 that regrouping had not worked properly. There was still massive underinvestment in the railway system, and in many areas there was virtual anarchy in the way in which the system was run, especially in rural areas. Hence we had nationalisation in 1948. It was introduced to meet exactly the sort of problems that we face now, namely, massive underinvestment and a crumbling infrastructure. I am not saying 120 per cent. that the private sector should have no involvement in public transport. For example, throughout the era of public ownership of London Buses there was always a contract between the public and private sectors to maintain and supply tyres. That contract came up for renewal every year, and I suppose Dunlop, Goodyear and other companies would submit a plan for the next year that set out how they would maintain the tyres of London Buses. That contract was continued within a specific and particular framework and was tightly controlled and administered. That is a far cry from the present position on the railways, where we have billions of pounds going into privately owned railways. At the same time, there is a still a threat to many rural railways as well as other lines. Back in January 1996, one of the most revealing articles about rail privatisation appeared in the City pages of the Daily Mail, that great organ of the Tory party. Mr. Michael Walters wrote:
That situation is very different from the one outlined by the hon. Member for Rochford and Southend, East. Michael Walters's comments spelt out the reality of Conservative plans for the rail system. The Conservatives saw their proposals as enabling the handing over of assets to the private sector, whether in the City or anywhere else. Of course, the private sector and the City financed Conservative party election campaigns, which was a convenient relationship. That was part of most of the privatisations of the 1980s and 1990s. Even today, with all the billions of pounds ploughed into the private railway companies—far greater subsidies than we ever saw under public ownership—rural railways are still under threat. Privatised train operating companies are saying to the Government, "We might have to cut back on this railway or get rid of it completely. We must have a bus service instead." That is outrageous and shows that the Conservative party has a strange view of the world when it compares running a railway with running a high street shop. There is no parallel between running a railway, a public service that is provided to get people from A to B, and a high street tobacconist's shop, for example. I have often heard directors and managers of train operating companies saying, "We run this nice little business like a high street shop." That cannot be done."Beneath the financial filigree, Railtrack is a conduit for distributing State monies to private investors. All being well, the train operating companies collect subsidies and pass them to Railtrack to pay as dividends to shareholders."
I recall the hon. Gentleman's late father talking to me about the Keighley and Worth Valley railway. He said that if it was not run by a business, it would fail. Does the hon. Gentleman think that the Secretary of State is wrong when he says that buses might be an alternative to railways?
I was coming to that.The Keighley and Worth Valley railway is run not as a private business, but as a co-operative. Everyone who works on it owns it in part. If the hon. Gentleman had asked people in 1963, when Beeching let the axe fall on that railway and many other rural railways, "Would you like to set up a co-operative or would you like the railway to continue as a publicly owned enterprise?", they would have told him that they wished it to continue to be publicly owned. I accept that I might be speaking for some who have a slightly different view. However, the people who I know who are involved in the railway would have opted for public ownership at the time. I hope that there will be a ministerial comment on rural railways. The Government should give a pledge that all such railways should remain and that there should be no closures. The Strategic Railway Authority should have those powers. There should be no railway closures under this Government. Indeed, there should be an expansion of the railway network. That is not idle posturing. Looking back to what happened under Beeching in 1963 and thereafter because of the closure of railways, I accept that there was an economic argument for closing many small rural lines. However, their closure took out certain pieces of the national railway system jigsaw, which meant that at the end of the closures there was no longer a comprehensive rail network that covered Britain, so that people and freight could get from A to B. It is true that no railway company, private or public, can hope to make any profit from many small rural lines. It was argued at the time of Beeching that on some lines British Rail could have afforded to supply a car to everyone who caught a train on them, that being cheaper than keeping the lines open. They were extreme examples. Chopping out bits of the railway network here and there destroys the comprehensive nature of the railway system. That process began in 1963 and it could reach its conclusion in the 1990s and the early years of the next century if we allow the train operating companies to get away with what they want to get away with—cutting back on certain railways and completely abandoning certain lines. It looks as though they are moving towards that.
I am very interested in the hon. Gentleman's argument. Can he explain how the railway companies will make money if they end up closing all the lines?
My answer is that they will not; we should take those companies back into public ownership, but that is my view.The railway line that runs through my constituency ends in the constituency of the hon. Member for Rochford and Southend, East. The part of the line that runs through Rainham in my constituency is the Tilbury loop, which loops off the main line. Passengers who travel on that railway—and, to some extent, those who travel on the main line—frequently experience delays and train cancellations as well as all sorts of problems with the infrastructure and old mark I slam-door trains. Months and months ago, we were promised that the new stock would be introduced. Even when it is introduced in September it will not replace all the old rolling stock and, although it is difficult to say how much, a lot—perhaps even mark I slam-door trains—will remain in use.
Does the hon. Gentleman accept, as I am sure he does, that some of the delay was caused by Euro regulation? Largely because of the help provided by one of the excellent Ministers, we will be able to use the new stock; otherwise, it would not have been introduced at all. Does he appreciate that such delays are one of the many problems that British industry has to face up to because of the European Economic Community? We are particularly grateful to that Minister for helping us to resolve the problem.
That is a fairly abstruse argument. My contention is that if the investment had been made rapidly enough, all the regulations could have been dealt with, including those dealing with access for disabled people. Arguments about that have been proceeding over the past few months, but they could and should have been dealt with a long time ago and the trains should be running on the London-Tilbury-Southend line. The fact is that they are not.There is also the problem of crumbling stations as well as underinvestment by Railtrack—my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) referred to the fantasy figures that it has produced. The stations on the line in my constituency continue to crumble. Railtrack is responsible for the parts of stations that are at and below ground level; the train operating company is responsible for those parts which are above ground level. Admittedly, there has been underinvestment in that line for a long time—probably 30 years—but at least under public ownership a new signalling system was installed, which got that railway running reasonably. That had nothing to do with private enterprise. Public investment in a new signalling system costing £150 million got the railway moving. I want to touch on a couple of points that have not been mentioned. I would like Ministers to say something about the people who work on the railway lines, particularly those involved in track maintenance. The Strategic Rail Authority does not cover them, although it could and should do so. Many of them are working for their fifth, sixth or even seventh employer since the privatisation of the railways only four years ago. They have lost many of their pension rights, they are working longer hours and generally their situation has deteriorated markedly since privatisation. The hon. Member for Carshalton and Wallington (Mr. Brake) touched on safety, and I have brought a safety issue to the attention of Ministers previously. If a train was stranded in the middle of nowhere at midnight or 1 o'clock in the morning, British Rail was forced by law to use licensed taxis or proper buses to transport people, many of whom were women travelling by themselves, to their destination. Although I do not think that it was intentional—it was probably an oversight, in spite of my criticisms of privatisation—when the privatisation legislation went through Parliament the same onus was not put on such a service being provided by the train operating companies.
My hon. Friend makes an interesting point. When the use of taxis as replacements for train services was considered by the Deregulation Committee, the Department of the Environment, Transport and the Regions discovered that the regulations that had applied to British Rail had not been passed on to the new franchises. The requirement for train operating companies to replace discontinued or postponed train services with licensed taxis was removed by the Railways Act 1993.
I am a member of the Deregulation Committee and my hon. Friend has made exactly the point that I was about to make. Never mind; it is always a pleasure to listen to him.I am a London Member of Parliament. In the capital, train operating companies could be using unlicensed minicabs to transport passengers, although I do not know how many do so. Across London, about 60 or 70 rapes are committed in minicabs by minicab drivers every year, but no checks are made on their history or physical condition and there are no topographical tests. I have taken that issue up with Ministers and I was not altogether pleased with the response, which was that train operating companies should have some sort of voluntary code of practice. That is not good enough. I want the Government to intervene and say to the train operating companies, "Don't use unlicensed minicabs because they could be dangerous. Use licensed taxis or buses, and nothing else."
May I offer the House different experience from a different part of the country? The Great North Eastern Railway and Northern Spirit—which are the train operating companies up in Yorkshire, the part of the world where I live—provide taxis and buses that follow the route so that people can continue their journey, and they do that to safeguard the commercial aspects of their business. My hon. Friend has hit on an important point that shows how the industry has fragmented: passengers in his part of east London receive a totally different service from passengers in Yorkshire, even though they all may not reach their ultimate destination.
The railway industry is fragmenting and the previous Government effectively turned the clock back to pre-1924, or even the last century.I want the railway industry to move forward to greater co-ordination and planning and to greater investment. I have made it pretty clear on a number of occasions that I would take the railways back into public ownership tomorrow if I had the power. I do not have that power, but the Railways Bill, which sets up the Strategic Rail Authority, is certainly a step in the right direction and I look forward to voting for it this evening.
It is a great pleasure to follow the hon. Member for Hornchurch (Mr. Cryer). I have affectionate and happy memories of his late father and his involvement in the Worth Valley Railway Preservation Society, but the hon. Gentleman is entirely wrong in respect of his father's commitment to free enterprise. In October 1968, I attended my first meeting of the Keighley Young Conservatives, which the hon. Gentleman's father addressed on the subject of the Worth Valley railway. He rightly said that it would fail if all it was about was people playing on trains; it had to be commercial and competitive in its outlook. He was absolutely right and, largely because he was such an entertaining speaker, I decided to remain in the Young Conservatives; I therefore pay tribute to him.The hon. Gentleman said that he would try to stay on-message this evening. In fairness, he did stay on-message—for two minutes and five seconds, according to my stopwatch. After that, he went distinctly off-message. If the Labour Whips had given him a pager, it would have been ringing on his belt. One thing is certain: although there are grave reservations about the Strategic Rail Authority, the Bill is not a step towards renationalisation of the railways. It is proof of the success of privatisation that no Government member now seriously believes that renationalisation would be a good idea. In an intervention on my hon. Friend the Member for Rochford and Southend, East (Sir T. Taylor), the hon. Member for Scarborough and Whitby (Mr. Quinn) said that the SRA was the light at the end of the tunnel. Conservative Members are concerned that it could be a train coming at high speed in the opposite direction. I had the honour to serve on the Select Committee that originally put the report together. As the Secretary of State said that there was a broad consensus, it is only right that I should lay out our approach to that report. It was the first major Select Committee report since the general election to be debated on the Floor of the House, so the Conservatives had to decide how to approach the matter. The Bill was in the Government's election manifesto, so we had to decide whether to oppose every single issue or to try to find a way to make it work, given that the Government were so committed to the idea. Given the Government's commitment to the Bill and the fact that the Select Committee report was the first to come out, it is interesting that we have had to wait for two years for a Bill. Eighteen months have passed since the Select Committee reported.
My hon. Friend will recall that, although he was strongly of the view that it was important to examine the paper on a Strategic Rail Authority and come to a unanimous conclusion on it, certain of his colleagues on the Conservative Benches in the Transport Sub-Committee, me in particular, took a different view.
That is true, but it did not affect how my hon. Friend voted.Although the report was a consensus report, it was some distance away from some of the recommendations. I agree that the Government should introduce pre-legislative reviews, and I certainly believe that the Select Committee forum is the right place to do that. This is exactly the kind of Bill that will benefit from pre-legislative scrutiny. I have seen examples of such scrutiny on the Select Committee on Social Security. However—this is why our reasoned amendment is so important—we should have had the benefit of the Select Committee's views before Second Reading because, without them, this debate is taking place in a vacuum. As we shall have no opportunity to hear the Select Committee's views until the Committee stage, a substantial number of hon. Members will be denied the opportunity of dealing with the Select Committee's recommendations. I cannot understand why this Bill has been introduced at the fag-end of a parliamentary Session. My right hon. Friend the Member for Wokingham (Mr. Redwood) is right: it is probably because the Government are seeking to gloss over the problems between the Deputy Prime Minister and the Prime Minister. It has not been lost on many hon. Members that the delays in introducing this Bill have been greater than those in the services of the late lamented British Rail. Like a British Rail sandwich, the Bill is beginning to curl at the edges.
My hon. Friend makes an important point. Given that he is in favour of pre-legislative scrutiny—perhaps we should call it "mid-legislative scrutiny"—how long does he think the Select Committee will take to consider the matter? As the Bill has been introduced at the fag-end of a parliamentary Session, we could be looking at the fag-end of the next Session before we get round to considering the detailed legislation.
What my hon. Friend says about mid-legislative scrutiny is exactly right. We have been down this path before: we have seen the Government set up a consultation process before introducing a Bill, but then start to panic and introduce the Bill halfway through the consultation period. Just a few weeks ago, the House had before it a number of Bills for which the end of the consultation period was several months hence. Those Bills have now gone to another place and we must wait until they come back before we have an opportunity to discuss them.The Transport Sub-Committee took a lot of hearings on this Bill and I am sure that we shall want to listen widely to consumer groups, public transport organisations, Railtrack and the various companies. I cannot see how the Committee could get through that work in fewer than 12 to 15 evidence sessions. Unless it is to meet through the long recess, it will have to deliberate well into the spring. My hon. Friend the Member for Aldershot (Mr. Howarth), who is an experienced Member, is right—it will take some time. My colleagues on the Opposition Front Bench have made the characteristically generous offer of a Standing Committee, to sit until the Bill is fully considered.
My hon. Friend obviously has not caught sight of motion 3 on the Order Paper, entitled "Business of the House (Railways Bill)", which stipulates that the Select Committee will report by 12 November 1999. Does he agree that that is a woefully inadequate time to consider this complicated Bill?
My hon. Friend is absolutely right. I am extremely happy to agree with him on this intervention.My hon. Friend the Member for Aldershot asked how long it would take the Select Committee to consider the Bill. It will take 15 sittings. Assuming that the House returns on 19 October, there will no hope of reporting by that date—unless the work is rushed through in two or three evidence sessions. However, I do not believe that that will happen. I have a great regard for the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), and I cannot see her standing for the suggestion that there should be a quick and cheap review. This is an important Bill; it contains many clauses, many of which are, admittedly, wide in their scope, not to mention many schedules. Fifteen evidence sessions would therefore be about right.
I am sorry to pursue this matter, but it is rather important. If my hon. Friend is right to suggest that there will be 15 evidence sessions, the Select Committee will not reach a conclusion on the matter this side of next Easter. The revisions proposed by the Committee would, therefore, come before the House a year hence. They may then be delayed in this House for some other reason, and would not get to the other place until next autumn. Given that the Deputy Prime Minister thinks that this Bill is important, why is this procedure being used?
I am at a loss to explain that—I am as mystified as my hon. Friend. Perhaps the Minister for Transport—we look forward to her reply to the debate—will tackle that point because it is a worry. It is happening as we speak: messages are going out from the Dispatch Box to find out exactly what the result is, but I have the following concern. I suspect that we will not wait until Easter. Scrutiny will be rushed again, and we will have pre-legislative scrutiny in name only.
Will my hon. Friend contrast the treatment that has been proposed for the Railways Bill with that of the Financial Services and Markets Bill, for which there was an extensive period of consideration by a Standing Committee? It went through that only after First Reading, which meant that, before the new Bill was introduced, there could be substantial changes to the legislation to take account of the representations. How can the Government credibly come back after Second Reading and also after the long period of consultation that will be required?
My hon. Friend is right. There are detailed questions to be addressed on the Financial Services and Markets Bill. People want to hear from experts. They want to consider what the various professions that deal with financial services are saying. Matters relating to the railways are no less technical, or daunting, than those relating to financial services, so we should be receiving the views of the Select Committee now. Of course, we will not have that opportunity; the Bill will be considered in Committee later.We may have an opportunity by the time Third Reading comes around to make suggestions, but by that time, the Bill will be set in concrete. It will be difficult to change much of its central thrust. I find it a little strange that those who sit in another place will be in a stronger position than the House of Commons to determine the strength of the Bill, because they will have had the benefit of the Select Committee's examination of the various matters at stake. We have had a number of interesting speeches. Three in particular have demonstrated the problem that we face. The more strategic the rail authority is, the better chance it has of success, but the more we debate it, the more Members and the Strategic Rail Authority will get themselves involved in detail. The speech of the hon. Member for Crewe and Nantwich demonstrated that most clearly. She talked about the relationship of the shareholders, the responsibility of the company to make profits and to plough those profits back into dividends—contrasting with their public duty—and the Strategic Rail Authority interfering in commercial considerations with regard to the running of those businesses. If that happens, we will return to the problem of the dead hand of the old British Railways Board.
Will the hon. Gentleman give way?
I give way to the hon. Member who mentioned the light at the end of the tunnel.
As someone who has been in that tunnel and knows the difference between daylight and a train, I can tell you that it is daylight that I was referring to. You rightly refer to—
Order. The hon. Gentleman must use the correct parliamentary language.
I apologise.The hon. Gentleman rightly referred to the historical situation. I am sure that he recalls his leadership of Bradford borough council and his work, along with councillors in Leeds and other west Yorkshire councils, to introduce the West Riding electrification scheme, which benefits many commuters in that conurbation. Will he consider how much easier that process would have been if there had been a Strategic Rail Authority to work in partnership with those councils, rather than the situation that he alludes to? Is not that what the railway industry has needed—that strategic overview and interlinking with the other transport systems? I commend him for his work during that period.
I am blushing: I am most grateful for the hon. Gentleman's comments. He is right to say that electrification of the line was important for economic development; but with regard to land development, I would talk to Railtrack, so it would not present a problem under the current situation.
I am sure that the hon. Gentleman understands that he would have needed to talk not only to Railtrack, but to the train operating companies. At least three services run in that area, not to mention the freight companies. Surely, the key point is that we need that strategic overview to act as the cement to bring the constituent parts of the railway together, and to give that important voice to passengers and to community groups to ensure that not only national taxation but the local taxation that subsidises key services for the economic viability of that part of west Yorkshire provide value for money. That is what the legislation is about. Those are the principles behind the Strategic Rail Authority. Does he agree?
The hon. Gentleman has given me an opportunity to recoil from my embarrassment at his kind words. He seems to think that I am suggesting that a Strategic Rail Authority will be wholly bad; I am not doing that. I am dealing in shades of grey.
Shades of Gray?
With respect to my hon. Friend, no pun was intended. The more strategic the rail authority is, the better it will be. My concern is that it will suddenly get itself sucked into operational matters. In her excellent speech, the hon. Member for Crewe and Nantwich gave a clear example of exactly the type of detail that she would like the Strategic Rail Authority to be involved in. The detail that she suggests is not strategic, but wholly commercial and dangerous to the rail authority.It is nice to see the hon. Member for Truro and St. Austell (Mr. Taylor) back in his place. He was complaining about the possibility of timetables being all wrong and having to try to integrate timetables. The position of the Liberal Democrats has changed somewhat, because last time we debated the matter, the hon. Member for Carshalton and Wallington (Mr. Brake), said:
I agree, but the hon. Member for Truro and St. Austell is succumbing to temptation. He just wants to get his hands on a grown-up Hornby double-O train set, so that he can signal things exactly right. He should have stuck with the line from Carshalton."The Strategic Rail Authority should be about strategy and broad objectives; it should not be about timetabling of the 7.23 am Connex South Central services from Carshalton Beeches to Victoria."—[Official Report, 25 March 1998; Vol. 309, c. 444.]
The suggestion of a double-O system is very tempting, but the point that I was trying to get across did not involve detailed timetabling across the system—that would not be practical or helpful. I did suggest, however, that the authority needed to look at issues such as the non-integration of timetabling, where services by one provider did not link to another provider, so a through service was not provided. There is a role for a co-ordinating body there.
I accept what the hon. Gentleman says, but I think that, on close examination of Hansard tomorrow, he will find that he has backed himself against the buffers.
I do not wish to prolong my hon. Friend' s speech, but may I ask him a question? Does he agree that it is in the interests of train operators to dovetail their services? The idea that they have a vested interest in preventing passengers from travelling around the country is wholly at variance with what is, in fact, their economic interest.
I note that my hon. Friend the Member for Rochford and Southend, East is still diligently occupying the Chair. He will recall a meeting with LTS— soon to be called C2C—that we both attended last week. It was concerned with precisely that issue, and was considering ways of persuading more people to travel to work earlier—for instance, by means of inducements. My hon. Friend is right: we do not need a Strategic Rail Authority to get people from point A to point B. Those who operate the trains already want that to happen.I believe that if the authority is hands on and is second-guessing commercial decisions, it will fail. If it seeks an overview—if it seeks to take some powers away from the Department of the Environment, Transport and the Regions—it may have a chance of success. Its principal role must be to ensure a balance between passengers and freight, and to achieve that it must—in the words of the Select Committee—
I am not entirely convinced that the Bill tries to achieve that. Its intention appears to be to give the authority a hands-on role. We have already engaged in discussion about clause 8. How far-reaching the clause will prove seems still to be a matter of conjecture. Subsection (1) states that the authority may make grants, make loans or give guarantees"foster a climate that encourages private investment in railways".
It goes on to refer to the nature of guarantees. It is no good saying that all this was in the original privatisation Act, the Railways Act 1993. The provisions in that Act related specifically to matters concerned with peripheral grants. Clause 8 has the potential to undermine the relationship between Railtrack and train operators. Direct funding on a wide scale would make it difficult for Railtrack to run any schemes at all, if it involved the overseeing of its entire investment process; and it would reduce train operators' leverage on Railtrack. It would undermine a sensible programme of capital replacement. It would also undermine the replacement of trains, and the refurbishment of stations."for any purpose relating to any railway or railway services".
As the hon. Gentleman will know, Railtrack claimed to be investing £27 billion over the next 10 years. When the figure is broken down, as it is in the Select Committee report on integrated transport, it becomes clear that the only new investment in new schemes amounts to £1.4 billion over 10 years. Does the hon. Gentleman consider that adequate?
If the Strategic Rail Authority is to achieve anything, it must, as the report suggests, create a climate for the encouragement of investment. The hon. Gentleman must ask himself whether clause 8 makes it more or less likely that private investment will be attracted to the railways. I contend that it makes it less likely. That may suit the hon. Gentleman's intentions, because he looks forward to the day when the railways can be renationalised; but if the idea is to secure private investment, clause 8 stands firmly in the way of it.
The hon. Gentleman has made an important point about future investment in rail schemes. As he knows, City venture capitalists are looking for a return on their investment in any transport infrastructure project. Does he agree with the chairman of the shadow Strategic Rail Authority, Sir Alastair Morton, who rightly pointed out recently that about 10 years of work and investment will be needed? Surely the stimulus that the venture capitalists seek is the long-term rather than the short-term view. Is that not why, in the past, investment in companies such as SNCF in France has attracted them more than investment in Britain's railways?
I am beginning to warm to the hon. Gentleman: I think he has the potential to become a free-thinking capitalist. He must understand, however, that clause 8 works against the very objective that he seeks to achieve. Let us consider what will be involved if the clause is taken to its logical conclusion. I am not talking about specific schemes or grants to encourage specific activities; but if the powers in the clause are used in regard to the general capital schemes that exist, they will act as a considerable disincentive in relation to the methods of capital-raising to which the hon. Gentleman referred.Under clause 17, the regulator, at the request of the authority, may direct Railtrack to provide a new facility, or to improve or develop an existing facility. That undermines commercial freedom: essentially, it is second-guessing what Railtrack is doing. By its very nature, the Strategic Rail Authority is unlikely to have the detailed knowledge that would enable it to judge individual schemes against each other. A strategic authority should set itself broader objectives. If it becomes involved in supporting one form of investment against another, improvement of one station against improvement of another and one type of train against another, commercial decisions will be undermined. As far as I could understand from what the Secretary of State said, that is not the Government's intention. He seemed to be saying, "I intend to use these provisions as a substitute for social provision with regard to particular lines, to ensure that a line or a service continues to exist for reasons of public necessity. I will not use them to set investment scheme against investment scheme." If that is the case, the Government should give an undertaking that they will restrict clause 17 to such considerations.