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Rail Fares

Volume 407: debated on Thursday 19 June 2003

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1.29 pm

With permission, Mr. Speaker, I would like to make a statement about rail fares.

The Strategic Rail Authority will be setting out in detail the results of its consultation later today, but I thought that I should set out the changes for the benefit of the House.

Last July, the SRA initiated a fundamental review of rail fares policy. Today, after public consultation, it is publishing its conclusions, which I believe reflect a realistic balance between what the travelling passenger pays and what the taxpayer contributes.

First, let me set out the context. We inherited a railway that had suffered from decades of under-investment and was left traumatised by a botched privatisation and the upheavals that followed. At the same time, because of economic growth and because we have got more people into work, passenger use has gone up by a third in the past few years. In fact, it is now at its highest level since nationalisation in 1947.

We set up the Strategic Rail Authority to provide the leadership and strategic direction that had been lacking to get a grip on the problems that we inherited. Network Rail, a public interest company, is now operating the track in the public's interest. We are also making funding available to make up for decades of under-investment. This year, the Government are spending £73 million every week to improve the railways, and bringing in a similar amount from the private sector. We have the biggest replacement programme for rolling stock ever seen in this country: more than a third of all rolling stock is being replaced in five years, and about half of that is happening on London commuter routes. Some £9 billion is being spent to maintain and improve the west coast main line, which is enabling more services to run faster, and £3 billion is being spent on new trains and a new power supply south of the Thames, which, when complete, will allow for more services and longer trains. All this has to be paid for.

Performance has improved but there is still a long way to go, which is why we have needed to take sometimes difficult decisions to improve the reliability of services. The House may recall that earlier this year we took a lot of criticism for the cuts that the SRA made to the timetable. It cut 180 services from the 18,000 train services that run every day. It is early days yet, but the evidence is that the decision was right. In the first four weeks of the new timetable, the performance of Virgin Cross Country trains was significantly better than at the same time last year, and despite the removal of some services, there are still more Virgin Cross Country services running every weekday than there were a year ago.

We now reach another difficult and necessary decision in relation to rail fares. When the current rail fares policy was introduced in 1996, it was always intended for it to be reviewed after seven years. The SRA launched that review last year with a public consultation, and its conclusions are available in the Vote Office.

Let me explain the existing fares arrangements on which the SRA consulted. About 45 per cent. of rail fares revenue comes from regulated fares, which are saver fares—or standard returns if no saver existed in 1995—standard class weekly tickets and London commuter fares. Since 1999, they have increased annually at 1 per cent. below inflation. Forty per cent. of people travelling to work in central London go by train, so the regulation of commuter and certain other fares is very important. That is why fare regulation will remain in place. Of course, the House will know that there are many far cheaper fares available than the regulated fares. Saver fares, for example, are not necessarily the cheapest deal on offer. The majority of fare income comes from unregulated fares, which include open and first class tickets as well as Apex and other low-price fares at off-peak times, many of which are now much cheaper than they were in the past.

The consultation showed that there was wide agreement that the existing policy needed to change. The Rail Passengers Council, the industry and local authorities all said that continuing to peg regulated fares below inflation was simply not sustainable.

There are only two main sources of funding for the railways: fares and the taxpayer. We have to strike the right balance between what the passenger pays and what the taxpayer pays. No nation in Europe has a passenger railway that runs without any form of subsidy, and nor do the United States or even Japan. Four years ago, rail fares covered 72 per cent. of the cost of running and improving the railway. That is now down to around 53 per cent., and the taxpayer pays the rest.

As I said, we have to ensure that there is a reasonable balance between what the taxpayer pays and what the farepayer pays. The SRA concluded that regulated fares should continue but that they should rise by 1 per cent. more than inflation—the retail prices index—from January 2004 for three years. It also examined the link between fares and performance. The mechanism put in place at the time of privatisation was supposed to link performance and ticket prices, but it has been widely discredited and there is no support for its continuation.

Finally the SRA's review considered the scope of regulated fares. There are two considerations on the regulation of saver fares. First, they are not necessarily the cheapest fare—the name is somewhat misleading. Secondly, they can result in the first off-peak trains being far more crowded than peak trains. Therefore, the SRA will work with train operators with a view to replacing the existing regime by 2006 with a better one that is more suited to passengers' needs. Saver fares will continue until 2006 unless it is possible to introduce a better regime earlier, provided that the proposal demonstrates clear benefits for passengers and taxpayers.

I believe that we need to do still more to encourage more people to travel by train, which is why I am asking the SRA and the industry to work together to develop a national discount rail card to achieve that. It is also why we are investing in the network. In the past few years, public spending on investment has increased by 164 per cent. We have taken the difficult decision that in future it is reasonable for fares to increase in line with investment. The franchise agreements that are in place mean that every extra £1 raised as a result of what has been announced today will go back into the railway network.

This was a difficult decision, but it is essential to strike the right balance between the contribution from the farepayer and the contribution from the taxpayer. We are sorting out the problems that we inherited. We are making the changes that we need to improve reliability and we are putting in place the investment vital for passengers and the future of the railway. I commend the statement to the House.

I thank the Secretary of State for his statement and for his customary courtesy in letting me have an advance copy.

Let me begin with two points on which I hope there will be broad agreement throughout the House. First, many passengers would be prepared to pay more for a better service, and secondly, an expanding rail system would be better for both safety and the environment. However, surely it is clear that that is precisely what is not on offer and what will not be delivered by the fare rises that the Secretary of State announced. Is he not asking passengers and taxpayers to pay more and more for less and less? Is he not replacing fares that are falling in real terms with fares that will rise in real terms? Does he concede that British rail fares are already the highest in Europe and that he said today that he wants them higher still? Yet, is he not presiding over a halt—indeed, a reversal—of rail expansion as many major infrastructure projects are shelved as money for the long term is gobbled up by the complete collapse of day-to-day cost control of the maintenance budget?

Will the Secretary of State confirm that the cuts to Virgin Cross Country services to which he referred are just the start? Will he confirm that further cutbacks on other rail franchises are in the pipeline and tell us today which services will be chopped? Will he confirm that he has abandoned the target in the 10-year transport plan of a 50 per cent. increase in rail passenger numbers?

Why are there more late-running trains now than before? The Secretary of State cannot blame a lack of long-term investment, because train performance was much better three years ago than it is now. He cannot blame the Conservative party, because even 18 months ago his predecessor said:
"There can be no more excuses. It's our responsibility. We can't blame the Tories any more."
He cannot blame the Hatfield crash in 2000, because train performance was better in 2001 than in 2002.

The Secretary of State has come up with a new explanation. He says that trains are late because there are too many of them, so he is axing a lot. He might be on to a point, because even I cannot deny that a train cannot arrive late if it does not set out at all. Do passengers not deserve better than that? Surely the real truth is that trains are running later while we are all paying more because of the Government's botched renationalisation of Railtrack.

Network Rail is expected to overspend its budget by a staggering £12 billion in the period to 2006. Will the Secretary of State confirm the Financial Times report that if Network Rail accounted for its assets in the same way as Railtrack, its losses in the past financial year would not have been the reported £290 million but £2.5 billion? Does he agree with the verdict of the rail regulator that the problem with Network Rail is that a complete absence of financial discipline has produced an explosion in costs?

If passengers and taxpayers are wondering why all that extra money, all those extra fares that the Secretary of State has announced and all the money that he is spending like water are buying a worse service, not a better one, has not The Daily Telegraph this morning provided the answer? Does he expect Back Benchers on either side of the House to be happy to discover that his Department will be footing a bill for £58,000—more than any Back Bencher's salary—just for the taxis hired by one of his sets of advisers for the period when Railtrack was in administration?

Will the Secretary of State comment on the fact that one signalling company told me that under Network Rail it costs more than £50,000 to apply for a simple contract to move one signal box 6 ft? Will he recognise that, although Conservative Members accept that there can be no return to Railtrack—not least because of what his Government did to its shareholders—taxpayers, shareholders and fare-paying passengers alike deserve none the less something a great deal better than the shambles that Network Rail has become under his supervision?

Today the Secretary of State said that he will replace fares falling in real terms with fares rising in real terms; replace an expansion in train services with a cutback in rail services; and replace falling subsidies paying for more trains with rising subsidies paying for fewer trains. Under him, we have later trains, fewer trains, and now, vastly more expensive trains. Is that not the worst bargain in Britain? Is it not clear that we do not have the promised integrated transport policy, but instead a disintegrated transport policy? Do passengers and taxpayers alike not deserve the full-time energies of a full-time Secretary of State to sort out that complete shambles?

The hon. Gentleman would have a little more credibility—no wonder he is laughing— if he had a single policy to his name or a single strategy that he thinks would improve things.

Railtrack was a disaster for the railways. If privatisation was bad, what Railtrack did in the years when it was in charge was disastrous. There was no proper cost control and it did not understand its assets. We have to get on and deal with that legacy. Network Rail, to its credit, is doing things that Railtrack never did. For example, it is getting proper control of the costs, understanding the state of the network and ensuring that it can deliver a safe and reliable railway. Of course that will take time and of course people are frustrated, but the hon. Gentleman did not have a single word to say about what he would do except to hark back, rather fondly I thought, to Railtrack. The friends of Railtrack are a very small group, even smaller than the present Tory parliamentary party.

The hon. Gentleman rightly said that if passengers are to pay more, they should expect improvements. Let me give examples of improvements. On London commuter lines, brand new rolling stock has replaced the old slam-door stock on the London Victoria to Brighton line. Something like 2,000 new railway carriages are in place, with more on order. In addition, a new electricity supply is being installed south of the river. I mention that because it comes back to Railtrack's performance. Anyone who knew shat brand new, more powerful trains were coming on to the line should have thought about the electricity supply that was installed in the 1930s and asked whether it would be capable of running modern trains. Of course it was not capable of that, which meant that Network Rail had to find another £1 billion to put things right.

The west coast main line is receiving investment now. The improvements are disruptive while they take place, but as a result of the decisions we took last year, the work will be finished two years earlier than expected. An hour will be taken off the Glasgow journey. There will be a two-hour running time to Manchester and four trains an hour to Birmingham. That is an example of how improvements are coming on.

The hon. Gentleman asked about changes to Virgin services. It is essential to have a timetable that works, but not all the delays and problems of reliability are caused by congestion. Issues such as fleet reliability must also be taken into account. For example, when GNER completed the upgrading of all its locomotives on the east coast main line, it improved reliability dramatically. Frankly, the railway is doing now what it should have been doing years ago: managing the system as one railway.

It is pretty clear from what the hon. Gentleman said that he is against fares increasing. That is a credible position to take, but one of two things follows from that: either taxes have to go up to pay for the investment or, more likely, wholesale cuts in services—perhaps of 20 per cent.—will be necessary. At some stage, he will have to face up to reality. The money for the railways comes from two places: the fare-paying passengers or taxation. If he is against fares increasing, either taxes have to go up or services have to be cut. One day, perhaps he will tell us which it is.

I welcome without reservation the Secretary of State's proposals for a national discount rail card, which is long overdue. However, given that rail fares have already risen significantly above the rate of inflation, and the cost of motoring has fallen, how can he seriously believe that further fare increases will persuade people to get out of their cars and on to rail so that we start to reduce the remorseless increase in congestion on our roads? Where is the joined-up thinking? Have not rail passengers in the south-east already seen a significant increase in fares as a result of changes to the network rail card? That was a fare increase by stealth.

Surely the Secretary of State must acknowledge that he is giving the impression that he wants to manage the railways to improve reliability by significantly reducing the number of trains, and to reduce costs by significantly reducing the number of passengers by constantly ratcheting up the fares of those services. In the case of managed franchises and those non-managed franchises through the fares incentive adjustment programme, surely he must also acknowledge that the vast majority of the money from increased fares will go directly back into the SRA.Will he at least give an absolute assurance that we will not have a grand announcement from the Secretary of State some time in the future about yet more Government investment in the railways, when everyone knows that that money will have come from fare-paying passengers?

The Secretary of State says that we must face up to realities, so why is his statement devoid of any reference to the urgent need to address escalating costs within the railways? Is he not aware of the significant increase in the number of managers within the train operating companies? Is he not aware of the significant increase in the number of staff and in the use of consultants by the SRA? Is he not aware of the astronomical costs that are charged for renewal and maintenance on our railways? He himself acknowledged that it costs four times as much to build a lift shaft on the railways as it would to build it anywhere else. Why is that not the crucial and first priority of the Government when they tackle the problems on our railways?

We may well have one of the worst rail services in Europe. We certainly have the highest fares in Europe, if not the world. Yet under this Government, train cancellations have increased by 50 per cent. and delays have doubled. Surely if we are to increase rail fares further above the rate of inflation, passengers will simply pay more and get significantly less.

Again, the hon. Gentleman's difficulty is that he has not advocated an alternative way to improve the railways. I happened to notice that in relation to spending, the Liberal Democrats' economic spokesman made it clear that they pledge to do everything they can within current budgets. In other words, no more money is available. I also notice that they have to decide whether new pledges could be better delivered by the private sector as a first port of call. I think that came as something of a surprise to him and some of his colleagues.

On escalating costs, as I have acknowledged many times, it is essential for the whole industry—not just Network Rail, but the train operating companies as well—to get a grip of the costs. I understand some of the historical problems they face. To be fair for one moment to Railtrack, part of the regime it inherited from British Rail also had the problem that costs for installing points varied from region to region, between different parts of British Rail, because the unit costs were very different. It is only now, under a completely different management with different disciplines, that Network Rail is beginning to get to grips with those costs and starting to drive them down. However, we cannot get away from the fact that it is necessary to make up for decades of under-investment. The reason we are spending £73 million of public money at the moment is that we have to make up for the deficit in investment that we inherited. BR used to replace 500 miles of track a year. Under privatisation, only 200 miles of track a year were replaced. This year, 740 miles of track are being replaced or upgraded. The money is essential, but I agree with the hon. Gentleman about cost control.

As for prices and getting passengers on to trains, I said at the outset that the British railway system is carrying more passengers now than at any time since nationalisation in 1947, and there has been a 20 per cent. increase in the number of passengers. One reason is that the fares on offer are not simply the standard or regulated fares. For example, the standard class return fare for the London to Bristol journey is £80, the regulated saver fare is £36.40, and the Apex fare is £19. There are many examples of cheaper fares, and many passengers, from both the hon. Gentleman's constituency and mine, are taking advantage of them.

We are sorting out the management problems that the hon. Gentleman referred to and putting the money in, so reliability is slowly but surely improving. Of course, there is a long way to go, but neither he nor the Conservative party has a coherent or credible policy.

Half the people in Croydon who go to work commute to London, so obviously they will not welcome any increase in fares. However, can you reassure my constituents that the extra money that is being gathered will be reinvested in more reliable, frequent and comfortable trains? Will you also undertake to make a review of regional—

Order. The hon. Gentleman must use the correct parliamentary language.

Thank you very much for that advice, Mr. Deputy Speaker.

In giving those assurances, will my right hon. Friend undertake to review regional variations in fares across the country to ensure that people in London and the south-east get a fair deal?

I can certainly tell my hon. Friend that the money raised by those increases will go back into the railway network. As for Croydon, I mentioned earlier that about half of the new rolling stock is coming on to the London commuter routes, much of it on services that run through Croydon, so if they have not already done so, my hon. Friend and his constituents will be able to use new, modern rolling stock. I accept that they will not immediately see the benefits of replacing the power supply, but they will experience an improvement, as delays and breakdowns will be avoided. All of us want more to be done quickly, but our difficulty is that we have to do an awful lot because of decades of neglect of our railway system by successive Governments.

May I tell the right hon. Gentleman, who will be viewed by Londoners as the Secretary of State for Scotland rather than the Secretary of State for Transport, that Londoners are getting a dreadful deal from the Government? Is it not preposterous that in the capital city, which already has the highest cost of living in Europe, Londoners should face over the next three years an increase in rail fares of 1 per cent. above inflation, whereas it used to be 1 per cent. below inflation? They have no assurance that they will get a better deal in future—all they know is that a review will be undertaken in three years' time of the regulated fare system. Judging from the Secretary of State's track record, there is no chance that they will get a more cost-effective deal in future.

The hon. Gentleman must face up to the fact that during the 18 years in which the Conservatives were in government, they did not make the necessary year on year investment that might have prevented some of those problems. The one big contribution that they made to the railways was privatisation, which was an utter shambles.

As for London commuter services, new rolling stock and carriages are being introduced, thus improving the quality of transport. As I said, we are replacing the power supply south of the river. That should have been done years ago, but was not, because nobody thought it necessary. Improvements are being made, but the hon. Gentleman must come back to the central point, as must the hon. Member for Westmorland and Lonsdale (Mr. Collins). If the hon. Gentleman believes that passengers should not pay any more, one of two things follows—either taxes go up to pay for that or services are cut. He must choose.

Surely, if we have to accept price increases, the service should improve. New infrastructure has been successfully introduced in my part of the world, but problems have been identified in two areas. First, at the busiest times, trains arrive consisting of three carriages instead of six. Secondly, again as a result of the railways' success, station car parks are full by 7 am. Can my right hon. Friend put more emphasis on those matters when talking to the Strategic Rail Authority?

One problem that we face—in some ways it is welcome—is that more people want to use the trains, but they are trying to use a system that was never designed for the current passenger load. That is why we are putting more money into the railways and replacing rolling stock. My hon. Friend's constituents will benefit, on some occasions at least, from the money that is going into the west coast main line. Local services are also receiving new money. Nobody would take lightly a decision to put up fares, but it is equally clear that the regime set up in 1995 was not sustainable. Interestingly, no significant body of opinion consulted by the SRA thought that it was. The Rail Passengers Council, for example, said that fares ought to go up in line with inflation. Nobody argued that the regime set up in 1995 was going to last, which I suspect is why the previous Government thought that it ought to be reviewed after seven years.

In his statement, the Secretary of State referred to the need to strike a balance between the interests of farepayers and of taxpayers. He is right, of course, but is there not a need to strike another balance, which he did not mention, between the cost of travelling by public transport and the cost of travelling by private transport? If we want a balanced and sustainable transport policy, is it not important that the cost of travelling by public transport does not rise faster than the cost of travelling by private transport? Is it not a consequence of his announcement that that is exactly what will happen? The signal that he is giving people who are thinking of switching from private transport to public transport has changed from green to amber.

The right hon. Gentleman, I presume, is not arguing for an increase in motoring costs. If he is, I do not think that he will do so in his constituency. However, he is right that people make choices, which is why, two or three weeks ago, in common with a number of other people, I said that we needed to look at the question of road transport, how we can better manage demand for road space and so on. That is a long-term issue, but it clearly needs to be looked at. If people are to be encouraged to go on to the trains, reliability is paramount—if the trains are not reliable, they will not win more passengers. Relative costs are important, but as I said in reply to the hon. Member for Bath (Mr. Foster), many fares are not regulated. In fact, the majority of income comes from non-regulated fares, which offer very good deals for passengers and are one reason why train usage has gone up so much.

The Secretary of State referred to discussions with train operators. Does he agree that it is also important for the SRA to consult passenger committees and regional authorities so that it can deliver a rail service that meets economic, environmental and social objectives? Has he had time to look at the Select Committee's report on railways in the north, which was published this morning? If so, can he explain how the fares policy announced today will relate to making an improved service for people in the north?

I have not had an opportunity to read that report. However, I am aware that there are a number of things that need to be done in relation to rail travel in the north. First, we must improve the reliability of the fleet, as there has been a problem with some trains in the north. Secondly, we must ensure that the track is reliable and is not prone to breakdowns. However, my hon. Friend is right that there are other issues, and local authorities and passenger transport executives can play a major role in ensuring that rail travel is attractive. Price is another factor, but we must ensure that the service is reliable and an attractive alternative to the car. If we can do that, we will get more people to use it.

I am pleased that there is much evidence, not least from the Mersey train service, that reliability has improved and, in the case of that service, reached approximately 90 per cent. A few years ago, reliability was bad, so we have an example of how things can be done.

Is not the Secretary of State embarrassed to tell my constituents that they face an increase in ticket costs that is above inflation? Since 1974, the cost of rail travel has increased by 85 per cent. in real terms, whereas that of motoring has decreased. Is it his policy to increase rails fares and decrease motoring costs? The Government deal with congestion on roads by building more roads, and with congestion on trains by having fewer trains. Money spent on railways is considered to be subsidy, whereas that spent on roads is perceived as investment. Is not that a topsy-turvy transport policy?

Not really. I look forward to visiting Lewes to hear the hon. Gentleman advocate increasing the price of motoring to his constituents.

Sotto voce, I expect. The hon. Gentleman knows that there has been substantial investment—some £3 billion—in trains south of the river. The investment is in new rolling stock as well as track improvements. As I said, that must be paid for. The money can come only from the fare-paying passenger or from taxation. There is no other way. That is why he and others who believe that we are wrong or that there is a better way must state the source of income that they favour. Perhaps, like the Tories, they should be upfront and say that they would cut the available services.

I welcome my right hon. Friend's comments about a national rail card and the investment in new rolling stock. However, many of my constituents, who constitute the captive cashbox for South Central trains and commute daily from Brighton—a high housing cost area—to London, will find it difficult to understand the increase in train fares. Will he consider reviewing the system of inflation plus I per cent. earlier than the three-year deadline that he specified? Will he also require the train operating companies and Network Rail to set out a clear timetable for the improvements that the investment brings so that my constituents understand what they will get for their money?

I travelled on the London to Brighton line recently. My hon. Friend knows that it has new rolling stock, which is expensive, good and reliable. Unfortunately, as is the way of things, it must be paid for. As I said earlier, it can be financed from only one of two sources. The price of an annual season ticket for London to Brighton will increase by approximately £2 a week as a result of my announcement today. I know that any increase is unwelcome, but if we are to invest the money that we need in the railways—in the track, the power supply or the stock—it must be financed. We cannot get away from that. A railway cannot be upgraded and improved for nothing.

I wish that successive Governments—in the past, Labour Governments were as guilty as Tory Governments—had done the same as other countries and ensured that we invested money in the railways decade after decade. Our problem is that we now have to make up for years of underinvestment quickly.

I greatly welcome my hon. Friend's comments on the rail card, but my announcement on fares is for three years, and I cannot undertake to reconsider the matter before the end of that time.

The Secretary of State's price-volume analysis is wrong. If we increase the number of passengers, we increase the funds. We should therefore increase capacity, not fares. Fenchurch Street passengers have suffered too long. Will he ask the Strategic Rail Authority to consider a new terminus station at Canvey Island, which would create an increase in capacity, with a link to the Pitsea interchange, and to reduce c2c fares so that Fenchurch Street passengers can get the decent deal that they deserve?

The hon. Gentleman mentions c2c. He knows that the line is one of the most reliable in the country and has much improved from the misery line that it once was. That happened through investment, which had to be financed, and through better management.

I note the hon. Gentleman's comments about wanting a new station in his constituency. It never ceases to amaze me that Conservative Members oppose raising money but greatly favour spending it. They have obviously been listening to the Liberal Democrats. If we support improvements such as those on c2c, and want more stations and better interchanges, they must be paid for. I have tried to strike the right balance between what the fare-paying passenger and the taxpayer pay. It is not easy, but it is right to ensure that the balance is fair and sustainable.

I welcome the negotiations and discussions on the national rail card. Many of my constituents are commuters and railway users. They will want to know that the increase in rail fares means a better service than the current service, not only on commuter services but on the west coast main line. I am worried that, as we increase rail fares, we may also increase the number of people on the roads. An individual is six times more likely to be killed or injured on the roads than on the rails. What assessment has my right hon. Friend made of the additional health, social services and benefits costs to the taxpayer that will result from the rail fare increase?

I welcome my hon. Friend's comments on the national rail card. I am sure that it will be valuable and another useful way in which to encourage more people to use trains.

The west coast main line illustrates my point. When the improvements are completed—the first wave will be evident from the end of next year—they will allow more trains to run into Euston, greater frequency and far more capacity. After a back-of-an-envelope calculation, Railtrack believed that such improvements would cost £2 billion. By the time the company left, the figure had increased to £13 billion. The current cost, according to Network Rail and the SRA, is £9 billion. That is a huge investment, which will make a huge difference to my hon. Friend's constituents and to commuter lines as well as long-distance lines on the west coast.

Again, I stress that the investment must be financed, one way or another. Our transport system—not only the railways but the roads—faces tremendous financial pressures not only on the railways but on the roads. If we want to get more people on trains, we must ensure that the trains are reliable, comfortable and an attractive alternative to cars. We can and will do that but we need to face the fact that we must get the right, reasonable balance between what the taxpayer and the passenger pay.

How far have the Secretary of State's remit and financial calculations taken Eurostar's growing crisis into account? Unless tackled, uncompetitive fares, decreasing usage and massive losses will quickly lead to demands for a large-scale Government rescue operation.

I would not bank on that. Eurostar has to ensure that it gets its finances in order and that it runs a sufficiently attractive proposition to get passengers. The channel tunnel rail link, which is the first major new rail line in Britain for more than 100 years, will open later this year, and enable faster journey times between London, Paris and Brussels. That should give the train company an opportunity to attract more passengers.

As an annual guest at the quarterly meeting of the RMT Scottish at Perth, what should I sensibly say about the balance between the 72 per cent. four years ago and the 53 per cent. today? What is the ideal balance that the Secretary of State supports?

As a supporter of the national discount rail card, may I ask when it is likely to be introduced and what the Secretary of State hopes it will achieve?

As a member of the friends of Nirex—a body that is even smaller than the friends of Railtrack—I ask my right hon. Friend what his attitude is to charging for the transfer by rail of hazardous substances?

On the last point, it might be better if I were to write to my hon. Friend rather than trying to hazard a guess as to what the position might be. I agree that the rail card will be very welcome, but the object must be to encourage people who do not use trains at present to use them with the card. We want to avoid a situation in which people who would have made a rail journey anyway use the card, so that the Government have to subsidise the journey unnecessarily. The object must be to get more people on to the trains. I agree with those hon. Members who have said that one of the objectives must be to get people who do not use the railway to use it. The discounts now being offered by GNER on return tickets mean that they can be bought for a remarkably small amount, and that is one of the reasons why the trains are so crowded. The other reason is that, thanks to a large amount of money being spent on the track, journey times are improving and the service is becoming more reliable.

My hon. Friend asked me what he should say to the RMT. I can think of many things that might be said to the RMT, but sadly, I have not been invited to address it. There is no ideal scientific balance between what the fare-paying passenger should pay and what the taxpayer should pay. I just think that it has got out of balance at the moment. I know that people do not want this increase, but unless we take steps to ensure a proper, sustainable balance, we shall reach the stage at which the railways start to run out of money. When the Conservatives privatised things, I believe that they envisaged that the railways would decline and run out of money, which is why they were not that bothered about it. I believe in the railways, however, and I am determined to ensure that they are properly managed and properly funded.

My constituents in south-west London want to see much more money being spent on the rail service. Does my right hon. Friend accept, however, that if we are to do this not only through increased public investment but through limited fare increases, we need a service that is not only reliable and efficient but much more responsive to customer needs? If, having waited in a queue for 15 minutes because stations are understaffed and the automatic ticket machines are not working, customers are unable to get the through ticket that they need, we are unlikely to see the benefit of those increased fares, because many people will choose not to travel by rail at all.

I agree: the whole experience of going by train needs to be attractive. People do not want to be held up, and they do not want the trains to be late. At least some of my hon. Friend's constituents will be pleased to know that South West Trains is about to introduce a new fleet of trains, which will be a vast improvement on the old slam-door trains that should have been replaced years ago. I suspect that those trains were running when he and I were children, if not before. That is a welcome investment, but I return to the same point: people will welcome all this new investment, and reliability will improve, but in their heart of hearts, people know that we have to put money into the system, and that it has to be paid for in some way—either through fares or through taxation. However, I strongly agree with everything that has been said today about the industry having to understand that if it does not get a grip on reliability and costs, it will face an uphill struggle. Based on what I have seen, however, I am optimistic. I know that this will take time, and there are no quick fixes, but I believe that it can be done. Indeed, for the good of the transport system in this country, it needs to be done.