Railway Policy

Part of Bill Presented – in the House of Commons at 4:01 pm on 26th June 1990.

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Photo of John Prescott John Prescott Shadow Secretary of State, Member, Labour Party National Executive Committee, Shadow Secretary of State for Transport 4:01 pm, 26th June 1990


My response to the quotation about whether the quality of the service has deteriorated, is that it clearly has. The Secretary of State often refers to investment—no doubt we shall hear a lot more about it today—so I must advise the right hon. Gentleman that the report of the Monopolies and Mergers Commission made it clear, when comparing the investment made by the Labour and Tory Governments at 1985–86 prices, that that investment was far better under Labour than under the Tories.

I shall not ignore the fact that more money is going into the railway system. However, the right hon. Gentleman knows as well as I do that the average age of the equipment in 1979 was 19 years. Once that equipment is 27 or 28 years old, it begins to get clapped out and investment decisions cannot be put off. I hope that we can all agree that capital investment decisions have been affected under both Labour and Tory Governments because the Treasury takes a short-term attitude to capital investment in British Rail.

The tragedy for the Government is that the profile age of the capital equipment was about 28 years. That means that it had to invest, because the equipment could not keep going any longer. Therefore, I readily accept what the Secretary of State says about the current investment rate being the highest for 25 years. Indeed, the last time it was really high was in 1955, when the same thing happened and the equipment had to be replaced because it was totally clapped out.

In 1981, the British Railways Board issued a warning to the Government:

A crucial decision has to be taken soon about the future of British Rail. BR must be prepared to take either the path of progress by re-equipment and modernisation, or that of decline through a gradual but deliberate run-down of the system. We cannot continue as we have done in the past. We are reaching the dividing of the ways. The Government's answer was to bring in Professor Walters, slash the public service obligation from the 1983 levels at a loss of about £2 billion to BR and, through its financial framework, to make it much more difficult for British Rail to make adequate provision of services and proper investment. The Government ignored that need, saying, "We will cut your public services. We will give you higher rates of return. We will make that much more difficult to achieve. We hope that, when we have done that you will sack more workers, sell more land, privatise the sector, and make up the difference." Basically, that is what British Rail did, and that is how it ran its finances.

When the Secretary of State tells us about investment, I hope that he will tell us how much of the investment is provided by the Government. Conservative Members often tell me that the Government have put money into the railway system, so I hope that they will tell us what proportion of investment has come from fares and how much has come from the Government. I hope that the Secretary of State will not tell us how much investment the Government have sanctioned, because legislation requires them to give that sanction. I want to know how much the Government have actually given. That is the key question. Because of this system, the passenger is taking the strain, not the British Rail system.

The Government's attitude has created real problems. The financial framework has caused considerable difficulties. Today's edition of The Guardian provides further examples. We see that the public service obligation target for the south-east region might have to be reduced and that it is hoped to eliminate it by 1992. That will mean higher fares. Because the corporate review assumed that growth would be twice the rate that it is, and that property prices would be higher than they are, British Rail is now facing a financial crisis. In the next month, it will make further great losses and will be unable to meet its financial targets. Once again, it will be on the financial rack and no doubt the Government will come along and change the corporate plan. The Secretary of State knows that, when he announced the corporate plan, I said that it could not work, that there would be financial difficulties and that he would have to review it. I shall wait, and then I shall again say, "I told you so."

Although the Secretary of State need not take any notice of me because many other people are saying the same thing, he should consider whether there is any substance in those arguments and if there is, he should heed them. The Secretary of State fails to listen to any arguments—