Rail Privatisation

Oral Answers to Questions — Transport – in the House of Commons at 12:00 am on 15 January 1996.

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Photo of Mr Kevin Hughes Mr Kevin Hughes , Doncaster North 12:00, 15 January 1996

To ask the Secretary of State for Transport what is his assessment of the progress of the Government's rail privatisation programme; and if he will make a statement. [7449]

Photo of Mr Jon Owen Jones Mr Jon Owen Jones , Cardiff Central

To ask the Secretary of State for Transport what plans he has to review progress on rail privatisation; and if he will make a statement. [7457]

Photo of George Young George Young Secretary of State for Transport

In December, the franchising director awarded the franchises for South West Trains, Great Western and LTS Rail. The award of four more franchises will be made as soon as practicable. Railtrack will be floated in May 1996. Twenty-nine businesses, with a combined turnover of some £1.4 billion, have already been sold. Further rail businesses and franchises with a combined turnover of nearly £3 billion are on the market.

I am satisfied with that progress and am confident that the progress will bring benefits to passengers and taxpayers.

Photo of Mr Kevin Hughes Mr Kevin Hughes , Doncaster North

Will the Secretary of State give me a guarantee today that, if privatisation goes ahead in full, there will be no reductions in the inter-city service to and from Doncaster? Does he accept that, if reductions take place, they will cause serious damage to the local economy in Doncaster? How will he justify that to the business people and local community in my town?

Photo of George Young George Young Secretary of State for Transport

The question that really needs to be asked is: if privatisation goes ahead, what on earth will the Labour party do?

On the hon. Gentleman's specific question, I hope that he will be greatly reassured by what has happened in the first three franchises: existing services have not just been maintained but, as we heard from my hon. Friend the Minister for Railways and Roads a few moments ago, additional services, which were not provided by BR, are being provided by those who are bidding for the new franchises. Far from providing a worse service, privatisation and franchising will enhance the level of service that passengers enjoy.

Photo of Mr Jon Owen Jones Mr Jon Owen Jones , Cardiff Central

During the passage of the Railways Bill, hon. Members on both sides of the House were given assurances that Railtrack would remain in the public sector. Given that that is not now the case, what reasons can the Government give for not allowing a debate and a vote on that issue? Surely it cannot be because of a lack of Government time.

Photo of George Young George Young Secretary of State for Transport

The Government have all the powers that they need to privatise Railtrack. It has been our clear purpose throughout the past Parliament to place Railtrack in the private sector, because only by doing that can one get the benefit of full privatisation, which comes from removing the restraints on public sector investment that will always remain while Railtrack is in the public sector. If the hon. Gentleman looks at the network management strategy published by Railtrack, he will see that it is planning to invest at a higher rate than British Rail. That is a clear benefit to his constituents and all those who use the railways.

Photo of Mr Bob Dunn Mr Bob Dunn , Dartford

Does my right hon. Friend agree that, when the state runs and owns everything, the people own and run nothing, and that is why it is essential to continue with the policy of privatisation, to open British Rail to consumer pressure for the first time since nationalisation in the 1940s?

Photo of George Young George Young Secretary of State for Transport

I am grateful to my hon. Friend. One of the things that we are doing is giving those who work for Railtrack an opportunity to acquire a stake in it. They will be offered shares in Railtrack when it is floated. All that we hear from Opposition Members is that they will resist if those workers acquire that stake. On the one hand, Opposition Members talk about a stakeholder economy; on the other, when we offer people a stake in their industry, they criticise us for doing that.

Photo of Mr David Madel Mr David Madel , South West Bedfordshire

Can my right hon. Friend confirm that Railtrack has given a firm commitment that, once it is privatised, it will get on with the modernisation of the west coast main line, which will result in better rolling stock and faster trains?

Photo of George Young George Young Secretary of State for Transport

My hon. Friend is right. The signalling contract is under consideration at the moment; it is hoped to be placed in March. It is indeed the case that Railtrack has as a priority the modernisation of the west coast main line.

Photo of Clare Short Clare Short , Birmingham, Ladywood

I am sure that the Secretary of State did not intend to mislead the House earlier, but I remind him that during the passage of the Railways Bill it was assumed by hon. Members on both sides of the House that Railtrack would remain in public ownership for the foreseeable future. As there is a massive difference between a rail network where Railtrack is in public ownership and one where it is in private ownership and the House of Commons has never been given the opportunity to vote on that issue, does the right hon. Gentleman agree that any party that claims to respect the sovereignty of the House of Commons should arrange a debate on the issue and be allowed a vote before Railtrack is floated?

Photo of George Young George Young Secretary of State for Transport

That is an extraordinary argument, produced by Opposition Members right at the end of the privatisation process. As I have said, the Government have all the powers that they need to privatise Railtrack. We do not need any more authority from the House. However, I would welcome a debate on rail privatisation, in which I would hope that the Labour party would at last come clean on what on earth its strategy is. As on so many issues, the Labour party is ashamed of its past and it is silent about its future.

Photo of Mr Nick Hawkins Mr Nick Hawkins , Blackpool South

Does my right hon. Friend agree that the privatisation of the west coast main line will provide tremendous opportunities for further investment raised in the private capital market, which would never be available if the line remained in the public sector? That investment will allow the electrification of the line between Blackpool and Preston that is so badly needed, and we shall be able to reintroduce for the benefit of my constituents the through services from London that nationalised British Rail withdrew.

Photo of George Young George Young Secretary of State for Transport

One of the prime reasons for privatising the railways is to make faster progress with investment than is possible in the public sector. We have already heard in this Question Time about the extra investment in rolling stock that has resulted from franchising. Following franchising, rolling stock has been refurbished and renewed at a faster rate than under British Rail, and Railtrack's investment plan shows that it plans to invest at a higher rate than British Rail. I agree with my hon. Friend: privatisation will accelerate investment in our railways.