Orders of the Day — Railways (Rateable Values)

– in the House of Commons at 5:40 pm on 29 March 1994.

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Photo of Tony Baldry Tony Baldry Parliamentary Under-Secretary (Department of Environment)

I beg to move, That the draft Railways (Rateable Values) (Amendment) Order 1994, which was laid before this House on 14th March, be approved. The order was made under the powers in schedule 6 of the Local Government Finance Act 1988, and sets the 1994–95 rateable values for the British Railways Board and Railtrack in England and Wales respectively.

Before I deal with the details of the order, it may be helpful if I remind the House about the prescription of rules for determining rateable values in England and Wales, and their application to the railways. In certain cases, assessment of non-domestic property by local valuation officers is impractical; the 1988 Act therefore contains powers for the Secretaries of State for the Environment and for Wales to prescribe rules for assessing such property.

I should point out that there is nothing new in that: it follows a long-set precedent. The practice of prescribing the rateable values of certain public utilities was started many years ago, to overcome various technical problems associated with assessment by conventional means. Indeed, the railways' rateable values were first set by statute in 1946, before nationalisation. The General Rate Act 1967 and the Local Government Act 1974 included powers to prescribe rateable values in such cases, and in effect the current provisions simply continue that treatment.

The national rail network comprises property of a highly specialised kind, which consequently presents complex problems of valuation. It is also so extensive that the resources needed to value it by conventional means simply have not been available. The powers to prescribe the rateable value for the British Railways Board for the 1990 revaluation were therefore used in 1989.

Those powers were also exercised at that time for the telecommunications industry, the water industry, canals, the electricity generation, transmission and distribution industries, gas supply, statutory docks and harbours, the London underground, the docklands light railway, Tyne and Wear metro and the Glasgow underground. British Coal, whose values had been set by statute, moved into conventional assessment for the 1990 revaluation.

I am aware that some industries that do not suffer from that manner of assessment consider it a type of beneficial special treatment. It is not. There is no financial benefit whatever to be gained from a rateable value that is prescribed rather than assessed by the Valuation Office agency or the Scottish Assessors Association; the end result should be, and is, the same.

The most important difference lies in the fact that, unlike businesses in conventional assessment, these ratepayers have no right of appeal against their assessments. We therefore intend to end the prescribing of rateable values by statute as soon as possible for all industries. To that end, the Valuation Office agency and the Scottish Assessors Association have conducted a review of the alternatives to prescribed assessment for the industries involved.

I am pleased to say that, as a result of the review, a number of industries will move to conventional assessment for the revaluation of 1995: the telecommunications industry, canals and certain light rail systems—Tyne and Wear metro, the docklands light railway and the Glasgow underground. The threshold at which docks and harbours will become subject to prescribed assessment will be raised from a turnover of £50,000 to a turnover of £1 million. We hope that, for the revaluation in the year 2000, the remaining docks and harbours, water and gas supply, electricity transmission and distribution will be conventionally assessed.

The main reason why it was not thought possible for them to move to conventional assessment in 1995 was that the resources to carry out such assessments were not available in the remaining time—not only at the Valuation Office agency and the Scottish Assessors Association, but in the companies themselves. A great deal of information about all the properties occupied by the companies concerned must be drawn up by those companies; that requires considerable time and effort, especially when national networks are involved.

To ensure that the necessary information will be available in good time for 2000, we are starting now. In discussions with the industries over the 1995 revaluation, attention is being given to what facts will be necessary, and to what time scale should be used to allow a move to conventional assessment in the year 2000. At this stage, however, the valuation difficulties involved in assessing the rail network and electricity generation seem unlikely to be resolved in time for the revaluation in the year 2000: those industries appear set to remain in prescribed assessment after that time. We intend, for the 1995 revaluation, to change the rateable values of the industries remaining in prescribed assessment by a factor based on the movement in comparable conventionally assessed properties; but that is for 1995.

The draft order that we are discussing deals with the financial year 1994–95. It makes provision for the change in rateable occupation of railway hereditaments in England and Wales as a consequence of the privatisation of rail services. The provisions of the Railways Act 1993 allow for transfers of property between the British Railways Board and other companies; the largest of those transfer schemes is the one concerning Railtrack. On 1 April this year, Railtrack plc will become a new Government-owned company, and the occupier of the majority of the property previously owned by British Rail.

We do not want the change in the organisation of the railway system to alter the local tax burden on the property. The order—I stress that it has an extremely narrow compass—simply divides up what would have been the British Railways Board's rateable values for 1994–95 between the board and Railtrack; no more and no less. The ratio of the split is 95 per cent. for Railtrack—including the operational track and stations—and 5 per cent. for the board. The values are given separately for England and for Wales. Attendant negative resolution regulations, laid before Parliament on 21 March, define the property to which those values apply.

Separately, we are already consulting Railtrack and the board about the rateable values of their property, as part of the preparation for the 1995 revaluation of all non-domestic property. A separate order will reset the rateable values for the rail network in Scotland in the same way; but, as there are powers for that to be done with retrospective effect—that is not the arrangement for England and Wales—the order will be presented in due course.

We have consulted both the British Railways Board and Railtrack about the content of the order, and about the regulations. They are in agreement with the order, and I commend it to the House.

Photo of Keith Vaz Keith Vaz Shadow Spokesperson (Environment, Food and Rural Affairs) 6:07, 29 March 1994

When I heard that the Minister was to move the motion, I thought that he would try to beat his record of 66 minutes—established last Friday, when he spoke in the debate on inner cities. I am delighted that he bustled along, almost at the speed of a 125, to tell us all that he has to tell us about the order in the space of seven minutes.

That, of course, is what the Government would like us to do: they would like to enable the House to speed along in considering this important provision, so that no proper time is allowed for discussion of its merits and examination of its content in the context of the way in which the Government have approached non-domestic rating.

Yet again, the Government are trying to force through an order that will complicate our existing business rating system still further. As I said earlier, during the debate on the allocation of time, this follows in the footsteps of a debate that took place on 12 and 13 January, when the House discussed the Non-Domestic Rating Bill. I am sure that the Minister will remember that debate: he was present, as was my hon. Friend the Member for Bradford, South (Mr. Cryer).

On that occasion, for the fifth time in four years, the House was asked to discuss non-domestic rating legislation. This is another example of an order that must be discussed and passed, because the new company that will benefit from it will start trading on 1 April—in 72 hours' time. As with the non-domestic rating legislation, the time that we can spend discussing the order has been guillotined. The Opposition believe that it is extremely important that the House should be given sufficient time to discuss and contemplate the implications of such an important issue, especially as it will affect the amount of money that is to be distributed to local authorities.

In the previous debate, the Leader of the House threatened my hon. Friend the Member for Bradford, South and myself by saying that local authorities would lose £200 million if the Opposition refused to allow the order to pass. The Minister is the longest serving Minister in the Department of the Environment—I do not know what he has done right or wrong to be kept there while so many others have been moved on—and he and the Government will know that the Government have passed 155 Acts of Parliament over the past 15 years, and that the latest settlement for local authorities will greatly restrict the amount of money that they will receive.

So the idle threats about £200 million being lopped off the amount to be given to local authorities are not something which we take seriously. The Opposition want to know why the Government are so frightened that they will not allow sufficient time for a proper discussion of the order.

The order seeks to apportion the rating liability between British Rail and the wholly owned, stand-alone, Government company, Railtrack plc. I suppose that it is for that reason that the Minister for Public Transport has joined the debate. In effect, the Minister wants to apportion a bad system between two bodies. That does not automatically make right what the Government are proposing to do.

The system is intensely unjust, and it is time for new measures to be proposed so that it is equitable for small and large national companies. If that is not done, the burden on local authorities will become unbearable and, yet again, it will be the struggling businesses and home owners who are called upon to make up the lost revenue through higher taxes.

We have heard from the Minister a rather half-hearted argument in favour of formula rating. Perhaps his mind was not quite with us as he bustled along in his speech. Perhaps he is thinking about the tour of the far east that he is about to undertake. I did not think that he put his usual passion into arguing in favour of keeping formula rating—a system which has been discredited by everybody, and is now used by the Government only in order to complete the collection of the rates in an unfair and slapdash way.

As the Minister said, the Local Government Finance Act 1988 opened the way for phasing out all formula rating assessments. We know from previous debates that the Government have accepted that formula rating has outlived its usefulness as a means of valuation.

Photo of Tony Baldry Tony Baldry Parliamentary Under-Secretary (Department of Environment)

I just want to reiterate that point. I am not sure that the hon. Gentleman was listening. I said clearly that we feel that the system has outlived its usefulness, and that that is why we are changing it. I hasten to add that the system was introduced a long time ago, and was reintroduced by Labour Governments in 1967 and at other times.

Photo of Keith Vaz Keith Vaz Shadow Spokesperson (Environment, Food and Rural Affairs)

I did listen to what the Minister was saying, even though he spoke at such great speed.

The Opposition believe that the system that has been operating with regard to the public enterprises is inherently unfair. We should like to know when the Government propose to abolish the entire system. The Minister talked about 1995. As we know from previous debates on non-domestic rating legislation, the Government have promised that certain things will happen by certain dates but, like the Non-Domestic Rating Bill this year, they have not happened.

It is our view that formula rating never purported to be a proper and true reflection of rates liability, although it did serve a purpose when one Government body paid another Government Department. I am not impressed by the Minister's argument that lack of resources makes a proper assessment impossible. We do not believe that there should be a further delay until 1995 in the abolition of this unfair system. I hope that the Minister can give us a date a little nearer than the year 2000 for the removal of other items on the local rating list.

Railtrack plc will be liable for only 95 per cent. of its current rating liability. Therefore, it will receive extremely preferential treatment, as it will be exempted from at least a full 5 per cent. of its liability. The Minister should explain how decisions were made about what level of rating liability was acceptable to the Department of the Environment and the Treasury, as the revenue that they are failing to collect is owed to the taxpayer. I know that the Minister said that he would prefer to have an opportunity to consult the various bodies involved. The two principal bodies are Railtrack plc and British Rail, so it should not be too difficult for him to explain why the percentages were agreed at that level.

It is important to know why the Government have decided to bring the order before the House only 72 hours before the new company starts trading. After all, as the Minister for Public Transport will know—he piloted this legislation through the House last year—the last pieces of the jigsaw fell into place in November 1993. Therefore, there has been plenty of time to bring this order before the House, and plenty of time to enable us to discuss the matter properly. As my hon. Friend the Member for Bradford, South has said, many points need to be raised.

Photo of Mr Bob Cryer Mr Bob Cryer , Bradford South

Does my hon. Friend think that the lateness of the order may be due to the fact that Railtrack plc in its embryonic non-trading stage will have had to take into account the payments in the order before deciding what sort of charges it will levy to franchisees? Does my hon. Friend agree that the recent announcement about the charges by Railtrack plc, which are much more enhanced than originally prescribed by the Department of Transport, might reflect the provisions of the order, and that the order was tabled late so that those calculations could be made?

Photo of Keith Vaz Keith Vaz Shadow Spokesperson (Environment, Food and Rural Affairs)

My hon. Friend has raised an important point. Unfortunately, because of the short time between the publication of Government business and the debate, it has been impossible for me to contact those who run Railtrack plc.

However, I have had discussions on the telephone with representatives of British Rail. They cannot comment on why the Government have decided to bring this order forward at this late stage—72 hours before the company starts trading. As I pointed out to them—I have yet to hear a different argument from the Government—there has been plenty of time to discuss this matter. There is no reason on earth why there could not have been a debate later this evening, when there would have been plenty of time to discuss these proceedings.

We have heard that the Government have extended the scope of formula rating, which will just serve to complicate rating law instead of simplifying it. The most pressing concern, as outlined by my hon. Friend the Member for Bradford, South, is that there is a possibility that the burden of rates that is to be placed on Railtrack will mean a subsequent increase in the amount that will have to be paid by consumers.

I see that the Minister is chatting to the Minister for Public Transport. Perhaps the latter is helping him on this point. I hope that the Minister will give assurances to the already hard-pressed train users—such as those who may travel to Leicester or Kettering through the constituency of the Minister for Public Transport—that they will not have to bear the burden of the increase in charges as a result of this order.

I know that my hon. Friend the Member for West Bromwich, East (Mr. Snape) will raise this matter should he catch your eye, Madam Deputy Speaker. I do not think that there is a Member of the House who knows more about the railway industry, and I look forward immensely to hearing what my hon. Friend has to say about these pertinent matters.

It is important for Ministers to understand that orders of this kind carry certain implications. It is quite easy for Members and Ministers to come into the House and make fine speeches supporting or opposing orders, but it is essential that we understand the implications of what we are doing.

They are precisely the lessons that we have had to learn from the way in which the Government have dealt with non-domestic rates. We learnt those lessons earlier this year, when the Non-Domestic Rating Act 1994 was forced through the House at such speed. The effect of that measure was a fundamental change in the way in which non-domestic rates were collected and the amount of money that went into the non-domestic national pool.

That is why we decided that it was important to discuss the proposal very carefully and highlight the changes that were going to occur. It is extremely important—especially as the Government are starting a new enterprise and they do not know what the future of Railtrack plc will be; it is a wholly new company—that we examine the measures very carefully.

Photo of Mr Bob Cryer Mr Bob Cryer , Bradford South

Does my hon. Friend not agree that the order is entirely inadequate? The legislation was originally designed for a national network, but British Rail is to be broken down into a series of separate operating entities. Therefore, there will, of necessity, have to be a breakdown in the charge for rateable valuation in the order. The public at large will have no knowledge—the order provides no such knowledge—of how the assessment was made. This means that Railtrack can argue for higher charges for each section based on this order, without providing detail which the consumer could challenge.

Photo of Keith Vaz Keith Vaz Shadow Spokesperson (Environment, Food and Rural Affairs)

My hon. Friend raises a very good point—he is tempting me away from what I intended to say. I hope that he will catch your eye, Madam Deputy Speaker, and therefore participate in the debate.

It is important for the Minister to understand—he alluded to it in his introduction—that formula rating was originally introduced to deal, as my hon. Friend the Member for Bradford, South said, with national enterprises. It was introduced to deal with very large publicly owned companies which could not be assessed at a local level.

The Minister is saying—I am sure that my hon. Friend the Member for West Bromwich, East will pursue this point also—that we are no longer in that situation. Because of the work of the Minister for Public Transport, we face the prospect of the huge rail network being divided into little pieces, as a result of which it will be much easier to have an assessment of each area. I do not welcome that, because I think that what the Government have done will come back to haunt them. We do not support the breaking up of our railway system, but I do not wish to rehearse the arguments advanced during the passage of the Railways Act 1993.

The break-up of the railway system shows that it is possible to make a proper and effective assessment; an assessment that is much more just than the current system and an assessment that will result in a much more accurate account of the various parts of British Rail.

With regard to non-domestic rates, at the moment local businesses are paying their money to central Government. It is being paid because of the national system that was devised by the Government—a national system that is still not in place. As we heard in the debate on 13 January this year, the Government are not sure of the precise nature and scheme of the non-domestic rating legislation that will have to be debated in the House again next year. Local non-domestic rates paid by local businesses to the Government constitute a local tax for local services, but there is no local accountability, because the tax is national and not local.

We have seen yet again the Government's multistandards—I was going to say "double standards", but the Government have so many standards when dealing with local authorities and local enterprises—as they have tried to hide the real situation from the House. We call for more time to debate this measure, and to get a clearer picture of the Government's intentions, so that the proposals can be considered much more fully.

The current situation is a negation of democracy. The Government have all the resources—an army of civil servants are assisting the Under-Secretary of State, advising him, tending to his every whim and providing him with all necessary advice. They have had more than four months in which to bring this measure before the House so that we could discuss it calmly and properly, not under threat of guillotine and without the knowledge that in three days' time a new company would take effect.

The House deserves an explanation of why it has taken so long for the order to be brought before us. We also need an explanation of why it is going to take so long to bring the discredited system of formula rating to a close.

Photo of Mr Peter Snape Mr Peter Snape , West Bromwich East 6:26, 29 March 1994

As my hon. Friend the Member for Leicester, East (Mr. Vaz) has said, there is little point in rehearsing the arguments against privatisation that we debated at length during the passage of the Railways Act, which brought about this unhappy situation. The Government proved not to be amenable to listening to reason during the passage of that legislation and there is no reason to suppose that they have become more sensible since then.

Having listened to the Under-Secretary, one can understand my hon. Friend's reference to the battery of loyal and dutiful civil servants. The Under-Secretary is the perfect Minister. My hon. Friend wondered why the Under-Secretary has been in his post for so long. I can answer the question: he is the perfect Minister; he gabbles through prepared briefs without deviating, by one word, from what is written for him. I am sure that the Department of the Environment hopes that he will carry on in his present position for many years.

The Under-Secretary did not give any explanation for the enormous sums that we are being asked to approve in this order. They are not inconsiderable sums by any stretch of the imagination, totalling as they do £209.4 million. The fact that that is money which, in the opinion of most, would be better spent within the railway industry than on the matters that we are debating tonight is amply illustrated by news from the railway industry over the past week or so. For example, there was the loss of 700 jobs at Derby and the last-ever press release from the Central Transport Users Consultative Committee. The committee chairman, Major-General Lennox Napier, said: Unless there is a high level of sustained investment in rolling stock and infrastructure, privatisation will not be a success from the passenger's point of view. I think that we all agree with General Napier. Why are we spending £209.4 million under the terms of this order and why did the Minister—or his civil servants—not provide a comparison so that we could judge the expenditure of £209.4 million? As my hon. Friend and the Minister reminded us, the railway industry has paid rates for a considerable number of years—not, understandably, on stations and signal boxes but on land that it owns, on office blocks, with which I shall deal in a moment, and on other parts of what I shall call the support tail of the railway industry.

There is an easy comparison that the Minister could have drawn had he chosen to do so or if his civil servants had written the brief accordingly. He could have compared the amount being paid in rates this year by all sectors of British Rail with that being demanded from British Rail and Railtrack in the next financial year under the order. The Minister nods his head, but he did not give us the comparison—I do not know whether the figures were prepared for him or whether he chose not to deliver them but I shall read them out.

In the current financial year, which ends on Thursday, all sectors of British Rail are paying a total of £98.1 million in rates but, under the terms of the order, British Rail and Railtrack together will be paying £209.4 million. The Minister for Public Transport shakes his head, but they are the facts and there is no denying or gainsaying them. If he wants to intervene instead of sitting there like a nodding dog, I shall be delighted to allow him to do so.

Photo of Mr Peter Snape Mr Peter Snape , West Bromwich East

The Under-Secretary of State for the Environment must have another brief.

Photo of Tony Baldry Tony Baldry Parliamentary Under-Secretary (Department of Environment)

The hon. Gentleman is labouring under a number of misapprehensions. The figures in the order are exactly the amount that British Rail would have paid if it had remained a nationalised industry. The order simply divides the amount between Railtrack and BR and does so on the basis of the proportion of property. In addition to the property highlighted by the hon. Gentleman, prescribed rating includes such matters as the track bed and other property owned by Railtrack, so the portfolio is rather wider than the hon. Gentleman suggested.

Photo of Mr Peter Snape Mr Peter Snape , West Bromwich East

I realise that that is the case and I was unaware that I had even implied otherwise. I hope that the Minister is not questioning the two figures. I have ascertained from British Rail and all its constituent sectors exactly what is being paid this year and what will be demanded under the order, and the figures are as I read out. There will be a total increase of 213.5 per cent.

Photo of Tony Baldry Tony Baldry Parliamentary Under-Secretary (Department of Environment)

In his desire to comment on privatisation, the hon. Gentleman is confusing rateable values and rates. We are dealing with rateable values, not rates. If the hon. Gentleman asks the wrong question, he of course gets the wrong answer.

Photo of Mr Peter Snape Mr Peter Snape , West Bromwich East

I am not unaware of the difference between rateable values and rates. I said what I did because I was surprised that the Minister did not raise the issue in the first place. We are discussing the rateable values of properties owned by BR and Railtrack in the forthcoming financial year. The reason for the enormous disparity in rateable values—I accept the Minister's correction because I mentioned rates rather than rateable values—is the mushrooming bureaucracy which we warned would be a direct and inevitable consequence of privatisation. The Minister looks a bit doubtful while the Minister for Public Transport, who has at least stopped shaking his head, looks shocked.

I have here a copy of British Rail's house magazine Railnews, which has the somewhat optimistic headline "A New Era Dawns". It states: A new railway was born on April 1st. Never let it be said that British Rail is always behind the times—its magazine is talking in the past tense two days before we reach the dawning of the new era. In a box to one side but also on the front page a small heading states: The new railway: your full colour guide to all the changes in the centre pages". I have extracted the centre pages and I have here details of the new railway. Alas, it is the old railway for which the rateable values are being increased under the order.

The magazine's chart includes a long list of offices that have been opened in the past few months and which form the bulk of the rateable values under the order. For example, in Birmingham the administration tail of various sectors of BR in that part of the world operates from a building called Stanier house in the centre of the city. Under the new railway, as from 1 April, not only is Stanier house to be occupied by no fewer than two train operators or shadow franchises and one Railtrack headquarters and zone but other organisations will also be based in Birmingham directly as a result of privatisation. Two will be at Meridian house in Smallbrook Queensway and one at Quayside tower, although I am not sure where that is in Birmingham. They are the direct result of privatisation and form part of the total rateable values in 1994–95 under the order.

I draw the attention of the House to the right-hand side of the chart. Running the length of the page is the list of offices for the new privatised railway structure in London.

Photo of Mr Peter Snape Mr Peter Snape , West Bromwich East

When I have finished this point, the Minister can of course intervene.

That list contains no fewer than 14 buildings which were not listed as being under the control of British Rail or any of its sectors before the nonsense of privatisation on 1 April. Unless the Minister can tell me otherwise, I presume that they, too, will form part of the burden under the order.

Photo of Tony Baldry Tony Baldry Parliamentary Under-Secretary (Department of Environment)

I hate to spoil the hon. Gentleman's speech, because he is obviously enjoying himself. The truth is that the list of offices to which he referred is nothing to do with the order because, being offices, they are conventionally assessed and do not come under the prescribed rating. The prescribed rating is to cover those aspects of British Rail's estate, such as the track bed, signalling and other equipment which, since before nationalisation in 1945, it has always been accepted were too difficult to assess under conventional assessment. The list of offices that the hon. Gentleman read out in great fun are conventionally assessed and are not part of the order. I hate to destroy his point.

Photo of Mr Peter Snape Mr Peter Snape , West Bromwich East

May I ask the Minister another question? Exactly which parts of railway-owned property are covered under the terms of the order? Will he accept that, traditionally, stations and signal boxes are not covered? I and the House should have great difficulty in believing that we could reach a total rateable value of £209.4 million based only on the 11,500 miles of track and the signals—not the signalling, because I have already said that signal boxes are outwith the terms of the order—that British Rail currently has. If the Minister can prove to the House that none of the buildings that have fallen into British Rail's ownership or leasing arrangements in the past year is covered by the order, I shall of course have to accept it, but it is incumbent on him to prove that point. People outside the House who follow our debates with some interest will have great difficulty in believing that such is the case.

Photo of Mr Bob Cryer Mr Bob Cryer , Bradford South

Would it not have helped the users of the statutory instrument if what the Minister is saying had been set out in the explanatory note? It would have shown that he had some confidence in his assertion and it would have helped the users. The explanatory note is brief to the point of obscurity. As the order will apply to a new organisation in a supposed new era which, I am sure my hon. Friend will agree, is an era of potential disaster, the participants should at least be informed that the order is in fact a Titanic.

Photo of Mr Peter Snape Mr Peter Snape , West Bromwich East

I thought—seemingly erroneously, from what the Minister has said—that 'English railway hereditament' means a hereditament described in regulation 2 of the Non-domestic Rating (Railways) and Central Rating Lists (Amendment) Regulations 1994", to quote from the new part VI that is to be added to the Railways (Rateable Values) Order 1989. It was always my understanding that that regulation applied to office blocks under the control of, or owned by, or leased by, British Rail, rather than purely the railway installations, which the Under-Secretary has outlined. If I am wrong, I am obviously prepared to concede that.

Photo of Tony Baldry Tony Baldry Parliamentary Under-Secretary (Department of Environment)

As I have already made clear, the offices that the hon. Gentleman has listed are conventionally assessed, they have always been conventionally assessed and shall continue to be so. The order is repeating what has happened year on year for a good number of years over the prescribed rating of certain estate belonging to British Rail. The property covered is explained, if I may respond also to the point made by the hon. Member for Bradford, South (Mr. Cryer), in the attendant regulations SI 834 of 1994.

To answer another point made by the hon. Member for West Bromich, East (Mr. S nape), freight depots are included in the prescribed rating system. It is set out in some detail in the statutory instrument. That is nothing new. It will not come as a surprise to anyone at BR or associated with BR because it is a pattern which has occurred year on year for a long time. All that is happening in the current year is the division of that sum between Railtrack and BR. That is all that the order does, no more and no less. As I said, it turns on a very narrow compass.

Photo of Mr Peter Snape Mr Peter Snape , West Bromwich East

I accept what the Under-Secretary says and the "narrow compass" as he has defined it. I find it amazing, to say the least, that a figure has been provided for which I can find no comparable figure in the existing financial year. I hope that, in his winding-up speech, he will explain to my satisfaction, and that of the House, that apparent disparity.

I shall conclude as I began. The order may well be fairly narrow, but in the long term, the railway customers will pay for the costs of the futile privatisation. We shall see many more debates on orders such as the one before us and, of concern to the Minister for Public Transport, on legislation emanating from his Department over the next 12 months.

Photo of Mr Bob Cryer Mr Bob Cryer , Bradford South 6:41, 29 March 1994

The Minister introduced the order by saying that it was a traditional method of assessing rates. I am familiar with the system of assessing rates because, unlike him, I have been a director of a private railway company and I was the chairman of the Keighley and Worth Valley Railway Preservation Society. It was one of the pioneering railway preservation societies, it was formed in 1962 and it negotiated a separate rating and valuation system for five miles of track—as distinct from British Rail. It was one of the first railway societies to do that following nationalisation in 1948 and the compulsory purchase legislation in 1922.

Before that, there were 140 separate railway companies in the country. The order does not recognise the fact that the aim of the Government is to take us back to before that 1922 compulsory amalgamation of the railways, which created the four big railways—London and North Eastern Railways, Great Western railways, Southern Railways and London, Midland and Scottish railways, which were subsequently nationalised. I am fully aware that valuation of the track bed, the track and the signalling equipment has been done in the past and that the valuation normally included operating facilities as well. No doubt the order does that, too.

It would have helped the user of the statutory instrument—which costs 65p for a single sheet—if the explanatory note had not merely referred to other parts of legislation, but had put in the whole background. Various Government Departments imagine that every citizen—the order applies to every citizen—is governed by legislation. When people travel on the train, they will be governed by the order, indirectly and perhaps remotely, so why should not an interested citizen have access to legislation? Why do not the Government include an explanatory note which covers all the parts of the delegated legislation to which the order refers, instead of referring to the original Railways (Rateable Values) Order 1989, as though anybody knows what that order does, except if they working in the Department, specialise in that section and have it coming out of their ears? The Minister did not know what the Railways (Rateable Values) Order 1989 did until somebody told him. He is no different from any other citizen, so why not provide explanatory notes that explain the backgrounds?

The distribution of Hansard, if people are interested, is not very wide; it costs too much. The information from Parliament, of which, unfortunately, the Government are in control, is now so costly that ordinary people simply cannot get hold of it. It is 65p for a sheet of paper and if an order runs to two or three sheets, they can cost £2, £3, £4 or £5. For example, the Register of Members' Interests for the House of Commons costs £20, so ordinary citizens cannot possibly find out what their Member of Parliament is up to and whether they are moonlighting and lining their pockets, let alone deal with rating and valuation. I make a plea for a better explanatory note.

The statutory instrument is not defective. It is quite true that it falls within the narrow terms of the legislation. As Chairman of the Joint Committee on Statutory Instruments, I can tell the House that if the instrument had been defective, the Committee would have reported it as such. Whether that report would have been in time for the debate is a matter of conjecture because the business managers of the House do not always trouble themselves to take into account the Committee's reports.

As I said earlier, the order is based on having a national railway network, but that is not the point of the legislation that governs it. The point is that we should not have a national network owned by a central body and providing rate revenue on a rateable valuation nationally. The network will be broken into various organisations which will take over sections of track that are to be owned by Railtrack plc, as set out in the order. What concerns me is the basis on which the charge to the franchisee will be made in incorporating the rate payments which will have to be made—approximately £200 million. If each section of track were assessed separately, it would obviously reflect the value of that track.

Let us take, for example, the east coast main line which has been recently electrified. The Yorkshire Post, as one would expect, takes a considerable interest in that main line between Leeds and London and further north through York to Aberdeen and Edinburgh. The electrification of the line presumably means that it will carry a larger proportion of the rateable value laid down in the order and therefore a larger proportion of the amount of money that Railtrack will have to hand over as rate revenue to the Treasury because of the national assessment. Is that part of the charge that Railtrack is proposing? It would make the operation by a franchising operator virtually unprofitable.

Take, for example, another section of line that is not yet electrified, but is in the process of being electrified—the line between Leeds and Bradford, through Airedale to Skipton and Ilkley. That will surely attract a higher charge by Railtrack plc because it will be regarded as a more attractive piece of real estate. It will, therefore, be subject to a higher yield of revenue than a single branch line with relatively low standards of maintenance with, perhaps, dodgy fencing and bridges with inadequate coping stones. The section of line from Leeds to Bradford—

Photo of Mr Bob Cryer Mr Bob Cryer , Bradford South

May I finish the point? The Leeds to Bradford and Airedale branch line has just been provided with new fencing and new bridge parapets for protection, because the 25 kV overhead electrification has been installed and, no doubt, some of the track work has been improved. I should have thought that that would reflect a higher charge.

The Minister may regard that as extremely inconvenient, but it will happen because, instead of dealing with a national network, we shall be dealing with many smaller networks operating within the framework of the 11,000 route miles as a whole. That will give rise to complications in the operation of the order. One of my concerns is the fact that, because it is based on legislation for a national system, the order does not provide the breakdown.

Photo of Dr John Marek Dr John Marek , Wrexham

My hon. Friend is right that we shall be dealing not with a national integrated network but with many different routes throughout the country with little connection between them. However, I believe that my hon. Friend is wrong that Railtrack will apply a system of charges such as he describes. I suspect that Railtrack will succumb to Government pressure and apply charges in the best possible way to franchise out the various lines. If the lines can be franchised more easily, the charges will reflect that fact, and be higher or lower according to that main criterion, rather than according to any of the sensible criteria to which my hon. Friend seeks to draw the attention of the House.

Photo of Mr Bob Cryer Mr Bob Cryer , Bradford South

I am grateful to my hon. Friend for that intervention, but the truth is that we simply do not know. The opaqueness of the explanatory note for the order is not exceptional. Government Departments have a certain style—and the orders are always signed by Ministers; it is they, not civil servants, who take the responsibility. Departments seem to consider that one of their aims in life is to issue opaque explanatory notes for equally opaque statutory instruments, so that the general public cannot understand either the instrument or the explanatory note. This order is no exception to that rule.

Whatever the basis of the charges, the rating and valuation is likely to be a component. The Government will not like it, but there may be some cross-subsidisation between one section of the railway and another. One section will be more attractive in terms of route mileage, so the charges may not be worked out using a strict and accurate accounting system. We simply do not know.

If that large charge of £200 million is drawn out of the railway network when it is being broken up, at a time of much greater administrative costs, services will inevitably suffer. If I am right that the rateable valuation allotted to modernised sections of railways is higher and will therefore result in higher charges, potential franchisees will not be able to afford Railtrack's charges. If they pay those high charges they certainly will not be able to obtain the new rolling stock necessary, for example, on the Airedale and Leeds-Bradford lines.

The Minister for Public Transport, having lost the Menwith Hill station the other week, can now consider the Leeds-Bradford route mileage to find out whether, before we get into the mess of privatisation, we can secure an order for new rolling stock on that section of newly electrified railway. The charges may be levied on the sort of basis that I have suggested—but the Minister will not know about that, because he is not really concerned about the charges. He is concerned only with getting the order through. Then, by hook or by crook, the revenue will come in as laid down on the valuation assessed under the order. The Minister will not be able to tell us what will happen, because he does not know. Frankly, I suspect that, provided that the revenue comes in, he does not much care.

Photo of Mr Peter Snape Mr Peter Snape , West Bromwich East

Will my hon. Friend reflect on the likely outcome of the electrification of the Aire valley line? In the short term, the passenger transport authority will have to pick up the additional bill, but if the rateable value is increased once the overhead electrification masts are replaced and switched on, that will make it less likely that new rolling stock can or will be introduced.

Photo of Mr Bob Cryer Mr Bob Cryer , Bradford South

My hon. Friend is right. We have been battling to try to persuade the Government to incorporate expenditure on new rolling stock for the new electrified railway. In view of the massively increased administrative charges under privatisation and the difficulties that will occur in any event, the Government might have taken the expenditure into account in assessing the rateable values, and reduced the totals significantly so that the charges would represent an encouragement to provide services rather than a disincentive. I fear that there will be disincentives. My fears are not based on a belief that privatisation will be a success; privatisation is a potential disaster, as I said when the legislation was before the House—but I do not want to go over those arguments again.

I am concerned about the passengers, because it is they who will pay the revenue stipulated in the order. The passengers and freight users will be the means of providing that income. When starting on this disastrous course, the Government might have at least considered the passengers and freight users, so that we could expand the use of the railway network rather than diminish it. Under the order, I fear that it will be diminished.

Although there are emergency provisions in the legislation, if a service is diminished because a franchisee goes into liquidation and cannot sustain it, the rate revenue will be required whatever the circumstances. That is a grave fault.

Photo of Mr Brian Sedgemore Mr Brian Sedgemore , Hackney South and Shoreditch

My hon. Friend mentioned Menwith Hill station. I understand that that is a GCHQ listening station, so can my hon. Friend explain why British Rail is being charged on its rateable value?

Photo of Mr Bob Cryer Mr Bob Cryer , Bradford South

My hon. Friend is right. Unfortunately, the Minister for Public Transport mistakenly thought that Menwith Hill station, which is a spy listening station, was a British Rail station. I mention that by way of explanation in response to my hon. Friend's intervention, Madam Deputy Speaker. When the Minister asked British Rail where the station was it could not tell him, for the simple reason that Menwith Hill is a 250-acre site on the moors above Harrogate, with 21 radomes. It would have made a most unusual railway station. I shall not go any further down that road, Madam Deputy Speaker, having clarified the question. Unfortunately, the mistake was due to the lack of knowledge—some may say ignorance—of the Department of Transport and of the Minister for Public Transport.

The debate has been useful and the fact that it has not gone to its full length should not detract from that. Its brevity is partly due to the narrowness of the debate and the minimal amount of information conveyed in the order, which simply refers to the current state of legislation. If British Rail is broken up—I hope that, because no franchisees come forward, that will not happen—the Government will have to examine their method of applying the rateable value, because it will no longer be possible to apply it nationally.

Because the arrangements will apply in a completely new context, I urge the Minister to provide a better explanation. There should be an explanatory note on every statutory instrument, to enable the user to understand the background as a whole. Understanding should not depend on possessing all the other relevant statutory instruments. Although no consolidation is required in this instance, statutory instruments often span a wide range of activity. It is unfair that people should have to buy three, four, five or six statutory instruments to obtain a full explanation and full knowledge of the position.

That is unfair because, as with every other activity, the Government impose a charge of such magnitude to cover services provided. People are denied the right to information, but every week cartons and cartons of discarded current public documents are taken away from this place for shredding. If the statutory instruments were given away for nothing the Government might have a case—but as they charge so much for them, the explanatory notes should give as full an account as possible.

Photo of Tony Baldry Tony Baldry Parliamentary Under-Secretary (Department of Environment) 6:59, 29 March 1994

The Opposition have tried very hard, and on occasion quite humorously, to make this order appear much more complicated than it really is. I believe that everyone now accepts that we are simply dividing 100 per cent. of what would have been paid by British Rail, if it had remained a nationalised industry, between two bodies—the British Railways Board and Railtrack. The split represents the rateable value of the prescribed property occupied by both bodies. The reason for the impossibility of bringing the order before the House earlier is that care needed to be taken in arriving at proportions for division of the relevant property. But the same property as last year stays in the formula rating; nothing changes there. The rate bill stays exactly the same as would have been the case if British Rail had remained a nationalised industry; nothing changes there. The effect on the money going to local authorities is exactly the same; nothing changes there. And the amount of money that the railways have to pay out is exactly the same as would otherwise have been the case; nothing changes there, and any suggestion that more money is being extracted from the railways is complete bunkum.

The order simply adds one ratepayer. It does no more and no less, and on that basis I commend it to the House.

Question put and agreed to.

Resolved, That the draft Railways (Rateable Values) (Amendment) Order 1994, which was laid before this House on 14th March, be approved.