Orders of the Day — Railways Bill

– in the House of Commons at 12:30 pm on 23 March 2001.

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Order for Second Reading read.

Photo of Eric Martlew Eric Martlew Labour, Carlisle 12:32, 23 March 2001

I beg to move, That the Bill be now read a Second time.

The Railways Act 2001 would sound very grand, though many hon. Members would like such an Act to be passed in a more radical form than my Bill. Many would support a Bill that would take Railtrack back into the public sector, but, because it is a private Member's Bill, the aim of my Bill is much more restricted than that. That said, it is a good Bill all the same.

My Bill would set up an inquiry that shall examine the effects of the existing system of ownership, control and management of the railway infrastructure". It adds that that inquiry should look into alternatives to the existing structure, and that its results should be placed before both House of Parliament within two years.

We need that because there is great concern throughout the country that Railtrack—any reference I make to the rail infrastructure refers to Railtrack—is failing to deliver in so many ways that we need to seek alternatives.

Photo of Eric Forth Eric Forth Conservative, Bromley and Chislehurst

It is customary for the promoter of a private Member's Bill to hold discussions with the Government on their attitude to the Bill. Will the hon. Gentleman share with the House the result of any such conversation with the Government? Does he believe that he will have their support for his Bill?

Photo of Eric Martlew Eric Martlew Labour, Carlisle

The right hon. Gentleman will have to wait to hear the Government's reply for an answer to that question. I am conscious that he was one of those who pushed the privatisation of Railtrack through. I hope that he will have time to apologise to the House before we rise this afternoon.

The reason for the Bill is that the railways are in a mess. There is no doubt about that. We have almost a wartime service throughout the United Kingdom. If we had criticised the planned privatisation of the railways when we were in opposition by predicting that there would be speed restrictions throughout the country and that the railway infrastructure would fall apart, we would have been accused of scaremongering. When the Conservative Government introduced the Bill to privatise the railways no one believed that things would end up so bad.

My Bill asks the Government to prepare a report on the current ownership, control and management of the rail network and the alternatives. In my constituency, the fact that the railways are not working to anything like their former efficiency is a disaster. It is impossible to travel from London to Carlisle, do a day or half a day's work and come back on the same day. Yesterday, I went up to meet the Prime Minister to discuss the serious problem of the foot and mouth outbreak in Cumbria. It took me six hours to get to Carlisle. I had to catch a train two hours before I needed to. During that time, I could not do work that I would otherwise have done. It then took me six hours to get back. That was not so bad because I was on the sleeper. My father used to drive steam trains on the west coast main line, and train journeys took that time in his day.

I wrote to various organisations and interested parties about my Bill. I can put on the record some of the responses. I received one from the chief executive of Great North Eastern Railway. He wrote a thoughtful letter that was critical of Railtrack, but said that all that was needed was that Railtrack should appoint a first-class chairman. I do not accept that that is all that we need, so I was a little disappointed with that response.

I wrote to the managing director of Virgin Trains, Mr. Chris Green, a man whom I admire greatly. If we had more professional railwaymen like him in charge, we would not have the problems that we have today. He did not agree with my Bill and specifically opposed the option of giving the Government a golden share. He went on to list the things that were wrong with the railways and Railtrack in particular and how they should be put right. He said that things had to change and various adjustments had to be made to the system because it was not working.

I wrote to the RMT, the Transport Salaried Staffs Association and ASLEF. They came back with a united voice; their campaign to take back the track is well known. They believe that the creation of Railtrack and the privatisation of all of the old British Rail has been a disaster. They believe that privatisation and the creation of Railtrack has reduced safety and siphoned money out of investment for profits, and that it has not worked.

I also received a letter from Tom Winsor, the Rail Regulator, for whom I have great admiration. He said that it was difficult for him to comment on record because several inquiries were going on into crashes. However, he sent me a copy of a letter in which he argued strongly against the regionalisation of Railtrack. He argued that it was not the right way to go.

I then got what I think was a letter from Sir Alistair Morton, the chairman of the Strategic Rail Authority. It was one paragraph long. I do not want to be over-sensitive, but it was an impertinent letter. I understand that several hon. Members have received impertinent letters from the SRA. I suspect that it will not do it any good in the long term to correspond in that way.

The final response was a two-paragraph letter from Mr. Steve Marshall, the new chief executive of Railtrack. The only defence he offers against changing the system is that further reorganisation of the railways at present would create more disruption. Surely, the chief executive of Railtrack could have made a clearer case as to why we should not have a report into alternative structures for the railway system. However, his sole defence was that it would cause more disruption so we should not consider it.

Most of those responses accepted that something radical needed to be done. Some accepted my Bill, while others opposed it.

What are the options? Transport 2000—a transport charity—commissioned six essays on the railway. The essays were issued last week; anyone who is interested in the railway should read them. I shall not go into them in detail, as I do not want to take up too much time.

The first argued for evolution rather than revolution. The author stated that, yes, there had been problems due to privatisation, but it had resulted in increased investment and more passengers. He argued that evolution rather than major structural change was needed.

Jimmy Knapp, the general secretary of the RMT, put the case for public ownership. He argued strongly that Railtrack had failed; there were safety problems and we should divert money from the shareholders either to be invested in the system or as profit for the Government.

A third essay argued for regionalisation of the railways based on the German model. That is a difficult idea to accept because we do not have the same structures in this country—we do not have regional government. Such a system would fail and create even more problems than there are at present.

The chairman of the train operators organisation argued that train operators should be given control of the system. I think the reason for that is that, under the original private railway system, the same companies owned the trains and the tracks. However, that, too, is not an option that should he taken up.

An interesting proposal was that Railtrack should become a non-profit-making trust with several stakeholders. I think it was based on the same principle as the Canadian air traffic control organisation. Safety would be given priority and any profits would be ploughed back into the infrastructure. That is a sensible alternative to bringing Railtrack back into the public sector.

The final essay argued that we needed fewer companies. Fewer players should be involved; we should simplify the system and go for bigger and better. Today, I do not argue for any of those options, but that the existing system needs serious examination. My Bill does that.

If I were the Under-Secretary of State for the Environment, Transport and the Regions, my hon. Friend the Member for Coventry, North-East (Mr. Ainsworth), I should argue that the proposals in my Bill on the SRA are premature. The Government have set up the SRA and it is implementing policies that the Government want to see. To some extent, I accept that argument. That is why my Bill specifies a time scale of two years—that is important. The public—especially the travelling public—are angry about the current state of the railways; they want a commitment from the Government to bring the system back into the public sector although they accept that that will not happen. However, if the SRA solution does not work within two years, a radical alternative will be needed.

There are indications that the SRA is having problems. I read in the press today that one of the retiring members of the SRA has decided that he can stay there no longer and that Railtrack is holed below the waterline". That is a very serious statement. I accept that the SRA has not had the time to carry out the work that is needed, but the Minister should consider that if it is no better in two years, a plan B must be ready to be implemented. I suspect that if the Minister accepts the Bill, that alternative will exist.

As the chairman of the west coast main line group, I have great admiration for Tom Winsor, whom I have met on several occasions. He is dynamic, and he wants to make progress, but there is a sense of frustration. He said again, only this week, that Railtrack should meet some deadlines and that he would force it to do so, but when asked whether he would fine it, he realised the pointlessness of the situation. If he fines Railtrack, it will have to ask the Government for more public money.

Photo of Eric Forth Eric Forth Conservative, Bromley and Chislehurst

The hon. Gentleman mentions the Rail Regulator, but will the Bill affect the regulator's role in any way? I can see no explicit reference to that in the Bill. I should not have thought that the references to the ownership, control and management of railway infrastructure would necessarily encompass the regulator's role, but perhaps the hon. Gentleman could help me.

Photo of Eric Martlew Eric Martlew Labour, Carlisle

I think that the right hon. Gentleman would accept that if the Rail Regulator were included, it would impinge on the final outcome of whatever decision the Government decide to take on the Bill. Obviously, if we decide to move forward, beyond the Bill, we will have to take a serious look at whether we need the Rail Regulator. I am sure that the provisions are correct in that context.

I do not know whether the Government will argue against the Bill, but they will argue against taking the railways back into the public sector, and I accept many of their arguments. For example, they say that it would cost £4 billion to take back Railtrack. The figure was £5 billion, but that was before the price of the stocks reduced considerably.

I met the previous chief executive of Railtrack before he resigned, probably last summer, and he suggested that he would be willing to accept a Government share in Railtrack. There is an argument that, without the Government, Railtrack is a bankrupt company; it depends totally on Government subsidy to keep going.

Photo of Mr Harold Best Mr Harold Best Labour, Leeds North West

Does my hon. Friend accept that there is a feeling among the public that such a Government share in the present arrangements might improve not only the efficiency and management of the railways, but the social responsibility to those for whom the service is supposed to be provided?

Photo of Eric Martlew Eric Martlew Labour, Carlisle

My hon. Friend puts that argument well. The Government's argument is that if they had, for example, a 25 per cent. share, they would be involved in Railtrack, but not in control. A while ago, when deciding who should become the chairman of Railtrack was an issue, the Government were told to keep out and that the company would decide. The suggestion is that if the Government owned 25 per cent. of the share, they would still not have the necessary influence, but I think that we might be better able to control Railtrack in those circumstances.

The major disaster that took place after the Hatfield crash was Railtrack's response to it, because a very junior official in Railtrack closed the west coast main line, which runs through my constituency and into Scotland, without telling anyone. That created chaos for more than 24 hours. If the Government had been involved, I suspect that the decision on speed restrictions would also have taken account of the consequence of people using cars instead of trains. Car use is likely to lead to many more deaths than people travelling by train.

Railtrack took no consideration of that point; it took a very narrow view. It was shell-shocked at the time. The Transport Committee has recommended that someone on the board of Railtrack should know something about railways. That case made it apparent that no one did. There is a case for Government involvement, but my Bill is not about that; it is about considering that possibility.

I know that other Members wish to speak about the other Bills on the Order Paper and I am sure that the right hon. Member for Bromley and Chislehurst (Mr. Forth) realises that it is very frustrating not to be able to speak on the Bill that one has introduced. Many years ago, I introduced a Bill dealing with the export of veal calves to the continent and some hon. Members read out the telephone directory in an attempt to stop me speaking on that Bill. I do not intend to do that.

A Minister has been prepared to come to the Dispatch Box to argue about this Bill. That is fine. We shall debate its provisions and come to a decision. However, the public demand that, once again, a Minister should come to the Dispatch Box and take responsibility for what is happening on the railways. Although we would not consider privatising the roads—the right hon. Member for Bromley and Chislehurst might—that is exactly what we did to the railways. That was a disaster and it must be very frustrating for my right hon. Friend the Deputy Prime Minister that he is not able to get to grips with Railtrack and instruct it on what to do. That problem might be overcome by the Strategic Rail Authority, but the public and, I think, the House would like the Government to be involved. My Bill would not do that in itself, but it is a paving measure.

I know that other hon. Members with to speak about other Bills and I suspect that the right hon. Member for Bromley and Chislehurst wants to say something about this one. However, I make it clear that it is not my intention to divide the House, because I am sure that there are not enough Members in Parliament to get my Bill through. I think that this is a good Bill, but I do not want to waste time. Other Members should be able to speak about their Bills.

Photo of Eric Forth Eric Forth Conservative, Bromley and Chislehurst 12:52, 23 March 2001

That was an interesting conclusion to the speech of the hon. Member for Carlisle (Mr. Martlew). Part of me hesitates to intrude on private grief among Labour Members, because, in a sense, this is an internal argument for them. However, it raises much wider issues and I take seriously the role that private Members' Bills play in our proceedings. Fridays such as this are parliamentary sitting days, the House is sitting and we are potentially making law. In fact, a short time ago, the House gave an unopposed Second Reading to a Bill on a completely different matter. The hon. Gentleman has brought his Bill to the House and it deserves the same attention as any other Bill.

Photo of Eric Martlew Eric Martlew Labour, Carlisle

If my Bill is likely to receive an unopposed Second Reading, I shall not withdraw it.

Photo of Eric Forth Eric Forth Conservative, Bromley and Chislehurst

Of course, it is for any hon. Member to promote a Bill and decide whether to seek to divide the House on it. The promoter of the Bill has certain privileges, but he does not have a monopoly of them. Therefore, the House is entitled to take its view as to whether a Bill should proceed. I want to consider the Bill to see what I make of it.

The hon. Gentleman's Bill makes some interesting assumptions about the railways. Like a lot of Labour Members, he seems to look back to what he regards as the golden era of British Rail. That has always intrigued and fascinated me.

I am old enough to remember travelling on steam trains, which I used to do in my youth in Glasgow. It was an exciting experience for a young person. However, I have little memory of British Rail in the 1950s, 1960s, 1970s and 1980s being a paragon of efficiency and a model to which we would all aspire. Yet this has become the atmosphere in which Labour Members would like these debates to take place. They want us to have a fond memory of British Rail, as opposed to what they would say are the evils of privatisation.

Figures that I have suggest that in the 40 years from 1952, the share of passenger journeys made by rail fell from 17 per cent. to just 5 per cent., while the percentage of goods moved by rail dropped dramatically from 42 per cent. to 7 per cent. Even if one measures the success of the publicly-owned, state-run British Rail against the sort of criteria that Labour Members mention, British Rail failed dismally in almost every respect. It is common ground between us that there was a lack of investment in the railway system throughout those decades, when government oscillated between the Labour and Conservative parties. If there is shame or something to be admitted, we must all share in it. That, I suspect, is common ground. We must look at what the Bill proposes against that background.

As recently as 1995, the Labour party opposed rail privatisation, which is the Bill's target. In 1995, no less a figure than the present Prime Minister said that privatisation would replace a comprehensive, co-ordinated national railway network with a hotch-potch of privatised companies, linked together by a giant bureaucratic paper-chase of contracts, overseen, of course, by a clutch of new quangos". There were some good Blairite soundbites there.

However, by the 1997 Labour election manifesto, the line had changed completely to say: The process of privatisation is now largely complete. Our task will be to improve the situation as we find it. I do not sense that the spirit of the Bill is to improve the situation as the hon. Member for Carlisle finds it. I doubt whether that would be satisfactory to him. The whole thrust of the Bill suggests that he wants something more radical.

Photo of Eric Martlew Eric Martlew Labour, Carlisle

During what will probably be a lengthy speech, will the right hon. Gentleman outline whether he is happy with the fact that he voted for privatisation and whether he thinks it is a success? If it is not a success, why not? What are the alternatives?

Photo of Eric Forth Eric Forth Conservative, Bromley and Chislehurst

I am grateful to the hon. Gentleman for giving me prompts, which are always useful. I am an avid supporter of private ownership and control as opposed to state ownership and control in all respects. I believe that private ownership is morally and operationally superior. I strongly supported the privatisation of the railways, as I supported the privatisation of so many other things undertaken by the Conservative Governments of Lady Thatcher and my right hon. Friend the Member for Huntingdon (Mr. Major). However, I will concede, with hindsight, that the way in which rail privatisation was carried out was not ideal and could have been better. In that respect, there is scope for revisiting the issue to see whether a better regime could be devised. Funnily enough, if I thought that that was the object of the Bill, I might be prepared to give it some positive consideration. However, since I suspect that that is not its motivation, I cannot support it.

I can see that it is a difficulty for the hon. Gentleman and his Front Benchers, rather than for me, that the Labour party felt obliged—apparently—to change its hostility to rail privatisation in 1995, as articulated by no less a person than the Prime Minister, to an acceptance of reality in 1997. I welcome that. It provides the background to the Bill.

I would claim that, in many respects, the railway network has improved considerably since privatisation. For example, the number of passenger journeys has increased, which, ironically, is one cause of the present problems on the railways. The system is almost a victim of its own success.

Photo of Eric Martlew Eric Martlew Labour, Carlisle

Does the right hon. Gentleman accept that those data are now out of date?

Photo of Eric Forth Eric Forth Conservative, Bromley and Chislehurst

Because of the Government's recent cock-ups, the trend has been momentarily interrupted, but until their grotesque overreaction to some tragic accidents on the railway, which I submit is the cause of most of our current problems, there had been a steady and welcome increase in the number of passengers and rail mileage after privatisation. The trend was there for all to see. In addition, domestic rail freight has increased, more trains are being run, rolling stock is being dramatically modernised and there are new stations and freight terminals. I will not go all the way through the catalogue, but it is an early indication of the justification for private, as opposed to public, ownership.

The whole reason the Conservative Government considered private ownership, control and management of the railway system was systematic under-investment over several decades. Indeed, the Bill, to which I will come shortly, makes mention of levels of investment in railway services". To that extent, the outcome of the investigation and analysis proposed would be interesting. My submission would be that it is already evident, even without the proposed inquiry, that investment in the railways has improved significantly since privatisation, and continues to do so. The difficulty for those who argue for a return to public ownership and Government control is that history shows that rarely do a Government consistently over a period of time set aside sufficient funds for investment.

The background to the Bill is muddled. I am clear about my position and that of my party. We believed in the 1990s—and believe now—in the merits of private ownership, management and control. The governing party's position is not at all clear, although the Minister will no doubt shortly help us. The hon. Member for Carlisle and I await with bated breath his comment on the Government's attitude to the Bill. I am disappointed for the hon. Member for Carlisle that either he could not extract the Government's view from the Minister, or the Minister is too coy to tell the House. One way or another, all will be revealed when the Minister gets to his feet. Knowing him as I do, I expect that we shall hear a blunt and forthright expression of the Government's views. But, he should not rise just yet, because I shall now analyse the Bill.

My first problem with the Bill is that I am not sure that it is a proper role for statute to do what the very first line of clause 1 seeks to do and use the law to require the Secretary of State to hold an inquiry. Interestingly, that is an echo of the statement made not two hours ago by the Deputy Prime Minister on a different matter altogether, in which the very subject of inquiries and their status and relationship to Government came up. The Deputy Prime Minister, no less, said in his excellent statement—and in the course of his excellent replies to the questions that followed it—that he believed that the relevance and appropriateness of inquiries must always be a matter for proper discretion and judgment on the part of the Government and Ministers of the day. I agree with his view.

If that is indeed the case, I suspect that the Government will have a problem with the very first line of the Bill, which is at odds with what the Deputy Prime Minister told the House. I can see immediately that there is a potential conflict between the thrust of the Bill and the view of the Government, as expressed by no less a figure than the Deputy Prime Minister.

The Bill proposes that the Secretary of State "shall hold an inquiry". That, I feel is the wrong way in which to use statute. It goes on to say that the inquiry would be into the ownership, control and management of railway infrastructure in the United Kingdom. The hon. Gentleman explained why he considered that necessary, but I do not consider it necessary.

I have said that I support privatisation as a concept and a policy, and I certainly do; but I am not necessarily prepared to defend the way in which railway privatisation was carried out. We knew at the time that there was a spectrum of possible methods. One method was selected, and, with hindsight, we may not consider it to have been the best.

Photo of Eric Martlew Eric Martlew Labour, Carlisle

The right hon. Gentleman was a Minister in the last Government. Did he make private representations about his reservations at that time? Will he give us more information about where the privatisation went wrong? Could it be that the Government pushed it through too fast because they wanted to get it through before the general election?

Photo of Eric Forth Eric Forth Conservative, Bromley and Chislehurst

All those things are possible.

My role was not particularly glorious. At the time—around 1994–95—I was a relatively junior Minister working in the foothills of the Department for Education, which became the Department for Education and Employment, and doing my best for the country's schools, colleges and universities. The hon. Gentleman has been here long enough to know that a junior education Minister has a relatively minor input in matters such as privatisation of the railways. I am sure that if he consults the Minister later, he will learn that that is the case even now.

If we were to quiz the Minister about the niceties and intricacies of, say, the hospitals system or overseas aid, we would probably be given a dusty answer. The Minister would tell us, quite rightly, that he spends all his time looking after such things as the railways. I have no difficulty with that, or even any embarrassment. As the hon. Gentleman knows, I am unembarrassable anyway. However, the second part of his question is important and relevant.

I mentioned hindsight. We should probably look at the arrangements again, but not by means of an inquiry of the kind suggested by the hon. Gentleman. We should examine them in the normal way in which Government should examine how arrangements are working—perhaps even with the advice of the regulator. We should always be prepared to look again at the way in which matters as important as the railway network are structured, organised, managed and so on, but we should do so more through the regulatory regime than through—as the Bill suggests—a radical investigation of the ownership, control and management of railway infrastructure". I have real difficulty with clause 1(1), which I believe is significantly misdirected.

The Bill goes on to set out in detail what would be, in effect, the terms of reference of the inquiry that the hon. Gentleman seeks by law to establish and impose on the Secretary of State of the day. He proposes that the inquiry shall examine the effects of the existing system of ownership, control and management of railway infrastructure"— in other words, privatisation and Railtrack, very largely—on, first, public finances.

That is the crux of the matter. What the Government will have to grapple with, and what the hon. Gentleman rather slid over, are the implications of a radical change to, in particular, the ownership—let us leave aside control and management for a moment—of the railway infrastructure in terms of public finances.

The hon. Gentleman should come clean, and I shall give him the opportunity to do so if he wishes to take it. Is he suggesting in any way that the railway infrastructure should be taken back into public ownership? If so, there would be a very considerable implication for public finances. Does he want his inquiry to examine that issue? Some people would think that that is the hidden agenda behind the Bill.

Some of the people whom the hon. Gentleman mentioned in his speech are enthusiastic about that idea. I do not have much to do with trade unions in the usual course of events, although I suspect that he has much to do with them, and good luck to him if he does. However, I wonder whether they are urging him, through the Bill, to press the Government to bring back into public ownership the railway infrastructure.

Photo of Eric Martlew Eric Martlew Labour, Carlisle

I thought that I made it clear at the beginning of my speech that I wanted to introduce a Bill to achieve what the right hon. Gentleman has described. However, my constituents, and not the trade union movement, are behind the Bill. I represent a city with a tremendous railway history, and the railway people in my city realise that we now have a mess that makes BR look very good in comparison. I suspect that his constituents also are behind the Bill. I imagine that his constituents who are delayed on commuter lines on their way to work are fed up with current arrangements, and that they are among those who want the railways taken back.

Photo of Eric Forth Eric Forth Conservative, Bromley and Chislehurst

I would be astonished and profoundly shocked if the people of Bromley and Chislehurst wanted BR back. I also doubt that socialism has lingered sufficiently in Carlisle for the good burghers of that city to want BR back.

I am surprised at this, because I respect the hon. Gentleman's knowledge in these matters, but I think that he is confusing the effects of privatisation as such with recent events in which Government mismanagement—probably coupled with a combination of some mismanagement by Railtrack, pressure by Government and Railtrack, and the intervention of the regulator—has led to lamentable railway performance. That is not the result of privatisation as such. He and I will have simply to disagree on that.

Photo of Mr Harold Best Mr Harold Best Labour, Leeds North West

Can the right hon. Gentleman give a reason other than privatisation for the lamentable performance? Privatisation has created the difficulties and utter chaos that I have to face when travelling from Leeds. Privatisation is the reality that we have to manage. Railtrack would have difficulty organising—I do not know how best to say this—a short period of intoxication in a brewery, and it is certainly having difficulties in organising its railway services.

Photo of Eric Forth Eric Forth Conservative, Bromley and Chislehurst

That may be true. I do not want to digress unduly, and the matter may be for another occasion, but I suspect that that has everything to do with the Government's tendency to micro-manage, overreact and panic, and the relationships that they have developed and imposed on the regulator, Railtrack and the operating companies. Those are complex relationships, and I believe that the Government have got them completely wrong. I suspect that the blame—if we are going to get into this ghastly blame culture, in which we all wallow almost constantly these days—has to be shared among all those participants. That is why I am resisting the suggestion which Labour Members seem to want to make that privatisation per se is responsible for the current poor performance of the railways. On that, the hon. Member for Leeds, North-West (Mr. Best) and I will have simply to disagree.

I was talking about clause 1(2)(a), which explicitly mentions the public finances. I hope that the Minister, in his reply, will tell us whether the Government believe that the public finances could be used to bring back the railway infrastructure into public ownership. That is obviously what some Labour Members—perhaps many Labour Members, for all I know—want. We have to know right at the start whether the inquiry that the Bill would impose on the Government would have any chance of succeeding in relation to clause 1(2)(a) on the public finances. There is no point in our proceeding much further than that until we have some indication from the Government about whether that is case.

Clause 1(2)(b) refers to the levels of investment in railway services. Unless the hon. Member for Carlisle corrects me, I assume that the provision widens the scope of the Bill to include railway services. It could apply to rolling stock and so on, and rightly so because in making an assessment of management, ownership and control we cannot divorce the infrastructure from the services. However, the provision broadens the scope of the Bill considerably and must inevitably bring in considerations affecting the operating companies as well as those affecting Railtrack.

The levels of investment are a crucial consideration. Apart from the moral case for private ownership that I mentioned earlier, the primary purpose of privatisation was to attract investment. Without doubt, privatisation—whether it involves telecommunications, railway services or anything else—has demonstrated over the decades that if an industry is turned over to private ownership and control and properly managed, it can attract a higher level of investment and therefore provide a much better service. So, an interesting question to pose in respect of clause 1(2)(b) is what are or have been the levels of investment in railway services. The Minister's response will be helpful in assessing whether the Bill is necessary.

When we talk about public finances or levels of investment, we are on relatively firm ground, but clause 1(2)(c) refers to the efficiency and effectiveness of railway services and that is much more difficult territory. A common fault in government—and even here in the legislature—is to use such terms as efficiency and effectiveness as if we all knew exactly what they meant. However, I am not sure that that is entirely clear in the context of railway services. Recent events have illustrated that all too well—some may say all too tragically. For example, how does one balance considerations of frequency of service, timeliness, promptness of arrival and passenger security with passenger safety? Let me make a distinction. When I talk about passenger safety, I refer to the traditional approach to the number of deaths and injuries that are caused per passenger mile.

We do not often talk about passenger security, but I believe that one factor that deters many people from using the railway services on short-haul commuter journeys and long-haul intercity journeys is the risk that they perceive, rightly or wrongly, that they may be subject to abuse or attack. That particularly affects women and those travelling late at night. How does one factor all that into efficiency and effectiveness? They are very real considerations for passengers.

As a railway passenger, I am interested in a variety of different factors affecting the efficiency and effectiveness of the railway services. I certainly take into account the frequency of the services. The hon. Gentleman complained about the infrequency and unreliability of the service from Carlisle, but he did not complain about feeling threatened. It may be that the service runs so rarely and so few people use it that he is almost on his own and there is nobody to threaten him. I am much more familiar with the commuter services, on which such matters are a real consideration, particularly late at night.

Am I looking at the issues as a taxpayer or as a passenger? Inevitably, we are all both and we want the facility to take into account as taxpayers and as rail users what we would like in terms of efficiency and effectiveness, frequency, timeliness, security and safety and fares. They are all important considerations. Therefore, I am at a loss as to just how efficiency and effectiveness will be defined in the Bill without knowing a lot more about what is in the minds of the hon. Gentleman and, perhaps, the Minister.

The Bill then moves on to the cost and safety of railway passenger services and services for the carriage of goods.

Cost is a simple word, but it encompasses some complex notions and variables. The cost to whom—the taxpayer, the community at large, the environment, the passenger or all of those? Logically, it must be all of them. The scale of the inquiry is starting to burgeon, so one wonders how long it will take—we will have to consider further the time limit suggested in clause 2.

What I had intended to call the hidden agenda is in fact contained explicitly in clause 1(3): The inquiry shall consider whether alternative systems of ownership, control and management of railway infrastructure would provide greater benefits. Let us examine what that might mean. "Alternative systems of ownership" is a dead giveaway. The idea is to take the railway infrastructure back into public ownership. Does the hon. Gentleman have any idea of the likely cost and of where the money would be found? The Chancellor keeps boasting about how much extra money he has. We all know that, because he has taken it from us in tax, and we feel every penny of it. Then he says that much of it has gone into national debt repayment. Lady Thatcher must be delighted. Having spent all that money, is he going to re-borrow it to fund railway infrastructure renationalisation?

"Alternative systems of ownership" conjures up intriguing possibilities. Are we talking about variations on the theme of private ownership or about full-blown public ownership? The clause also refers to "control and management". Does that allow the inquiry to extend to the role of the regulator? Whether the regulator controls or manages is open to question. If the inquiry does not cover the regulator, we cannot have a comprehensive look at the system. There is an unfortunate element of doubt about what was intended.

All that pales into insignificance when one comes to the phrase "would provide greater benefits". That may seem easy enough to assess, but such a simple phrase usually conceals more than it reveals. Benefits to whom: the passenger; the taxpayer; people who do not use the railways; or someone else? How on earth does one provide a framework in which greater benefits can be assessed? Given the role that the railway network and infrastructure play in our daily lives, all or any of us can be affected in many different ways. We have to consider the cost of moving freight; the cost to passengers; our safety and well-being; and the claimed environmental advantages of rail. How much do we take such matters into account and what weight do we give them? People do not often rate them equally. For example, if I rarely used the railway system, as a taxpayer, I might want less of my taxes going to subsidise it, and passengers to pay more. However, a regular passenger would be entitled to take the opposite view. Someone who is concerned about the environment and pollution would have a different view of the railways from a person for whom those are not important. I might be indifferent to the railways.

I accept that it is the Government's role to make a judgment about such matters. I hope that the Minister will help us when he responds. We need to know how the Government interpret the simple phrase "would provide greater benefits". Where will their emphasis lie when they approach that difficult problem? We have our own preferences. I suspect that mine are different from those held by the hon. Gentleman and the Government, but we should know where we stand. We do not even know whether the hon. Gentleman's view of benefits is the same as the Government's. He did not spell that out because he was so anxious to sit down and let other debates take place, in his typically generous way. We are no further on with regard to that matter.

Clause 1(4) is a seductive subsection. The stipulation that The inquiry shall take into account the views of … users of railway passenger services … users of services for the carriage of goods … operators of railway assets and other such persons is an attractive notion. It has become fashionable in government to take account of the views of surveys, focus groups—referendums even. They could all he covered by the broad phrase, shall take into account the views of". However, it would be difficult to take account of the views of users of railway passenger services because I imagine that they vary enormously. Suppose that I travelled on the train to Carlisle with the hon. Gentleman and we went up and down the carriages asking people about their priorities, and that the hon. Gentleman then travelled with me on the swift and efficient service between central London and Bromley and we asked fewer questions—because we would have much less time. I suspect that we would get different responses.

It is taken as read that everyone would like a service that is fast, cheap, safe and arrives on time. However, to get underneath that, we would have to ask people how much they were prepared to pay, how crowded they were prepared to be and how they rated safety and security over price. There could be an armed guard in every carriage to make people feel really safe, but that would be expensive. Each lady passenger could be personally escorted by a railway employee, if that made her feel better, but that would also be expensive. Simply to say that we will take account of the views of users of railway passenger services does not take us as far down the track as the hon. Gentleman imagines.

That is even less true when one considers the users of services for the carriage of goods by railway"— freight, in other words. There must be interesting different views about priorities with regard to the scale of the network. As a layman, I have always suspected that more freight is not moved by rail because the rail network is limited and inflexible in comparison with the road network. One way to deal with that would be to reverse Beeching. There are probably not many other hon. Members present who can remember the good Dr. Beeching. I studied his report when I was at university, which was between 1962 and 1966. Dr. Beeching had become famous not long before for wielding his axe and reducing dramatically the scope of the rail network. One of the results of that process was that the level of service that could be offered to freight users was severely limited and the amount of freight carried was therefore reduced.

Against that background, a lot of the users of services for the carriage of goods by railway as clause 1(4)(b) so quaintly puts it, might have a very different view. Some might want their goods to be taken on a much more comprehensive rail network to all conceivable parts of the British Isles. Some might want a very fast service, while others might want it to be as cheap as possible. One can imagine a wide variety of views. Where would that leave us in trying to take those views into account?

The operators of railway assets will have different views altogether. No doubt they would see the matter, quite properly, in terms of their shareholders, their profitability, their ability to reinvest in the service and their ability to attract greater numbers of passengers and a greater volume of freight. Those would all be relevant considerations for the rail operators who would rightly and legitimately have a different perspective from that of the passengers and the freight users.

Clause 14)(d) refers to the old favourite: such other persons or organisations as the Secretary of State thinks appropriate. The mind boggles, but the Minister may be prepared to lift the curtain and allow us to peep through into the Secretary of State's mind as to what other persons or organisations the right hon. Gentleman might see fit to consult. The number of organisations could, on the one hand, be fairly limited, such as the rail users' organisations or simply people closely related to the rail system. On the other hand, almost any organisation could be included, such as environmental organisations, local authorities—goodness knows who. It would be useful if the Minister could give us an idea of how far he believes the scope of clause 1(4)(d) might take us in finding out views on these matters.

Once we had taken into account the views of all these different people, how would we put those views together and make sense of them, particularly if they were—as inevitably I think they would be—in conflict with one another? I know that it is trendy, modern and inclusive to use phrases such as take into account the views of but I have always had my doubts as to whether doing so would be of real value.

It has just occurred to me that the one group with probably more influence than any others would be the focus group. We know that focus groups largely determine what the Government do and think. We know that they decide, very substantially, the thinking in No. 10. Would focus groups be included in the list, I wonder? There must be somewhere to fit them in. Yes, it would be under clause 1(4)(d): such other persons or organisations". Is the Minister going to tell us when he sets about interpreting clause 1(4)(d) that he believes that focus groups would have a proper and legitimate role in deciding what should be done?

Then we come to clause 2. The good news is that when all this excellent work has been done, the Secretary of State will lay copies of the report before each House of Parliament. We should be grateful for that. He will also make the report of the inquiry publicly available by such other means as he sees fit". I still believe in the good old printed page. I hope that by the time this happens, if it ever does, there will be no nonsense about websites and the like. I have never consulted a website in my life—I do not know how to and I hope I never have to. I hope that instead we will have a nice chunky report, printed on paper and available in the Vote Office. At least Members of Parliament will then be able to have a good look at it on the written page. I hope that it will be properly available to the public on the same basis.

It worries me that clause 2 says that the report should be laid before Parliament and made publicly available within two years of the date of commencement of this Act. The hon. Gentleman wants the result of his excellent Bill to be available as soon as possible, but I am worried about the placing of such an artificial time constraint on this important work. Is two years enough to do justice to the work that I have described? I have skipped through the Bill only in the most skimpy detail. I could have spent much more time on each of the provisions in clause 1, but I did not want to delay the House unduly. In the brief and sketchy summary that I have given, there was more than enough scope for an inquiry to last a considerable time. If it is to be done properly, an artificial time limit of two years from the outset is a misjudgment.

The hon. Gentleman desperately wants the inquiry to be carried out as quickly as possible—presumably he wants to put the Government on the spot—magically to improve the service between Carlisle and London. He would argue that if we changed the ownership of the railway infrastructure he would have a better time travelling from Carlisle to London. The hon. Gentleman may not have to travel from Carlisle to London for much longer. I saw him on television last night, and an insensitive person from the television station referred to his majority and an upcoming election. I would not dream of doing that.

Photo of Eric Martlew Eric Martlew Labour, Carlisle

I am sure that I shall be re-elected. I have no intention of joining the chicken run.

Photo of Eric Forth Eric Forth Conservative, Bromley and Chislehurst

I am sure that that is a relief to every other constituency in the country. We shall leave that judgment to the people of Carlisle in the election, which is or is not about to happen. No one seems to know because the Prime Minister cannot make up his mind.

I was querying whether two years is a sufficient time in which to conduct such an important and comprehensive inquiry. I have serious reservations about that. I do not think that it is.

Clause 3—"Inquiry procedure: supplementary"—bothers me somewhat, because it says: The Secretary of State may by direction make provision supplemental to that contained in sections 1 and 2 in relation to the procedure to be followed by the inquiry. I am not sure whether the clause is necessary. I do not believe that Bills that could become law should contain otiose provisions. If the Secretary of State is required to hold an inquiry, as set out in detail, I doubt whether we need to say that he may make provision supplemental to that contained in clauses 1 and 2. Those clauses contain catch-all provisions such as subsection (2)(e), which refers to such other matters as the Secretary of State may prescribe and subsection (4)(d), which refers to such other persons or organisations as the Secretary of State thinks appropriate". Given the scope of those provisions, I doubt whether clause 3 is required.

The Bill may seem innocuous at first glance, but it provides for a wide-ranging and costly inquiry that I do not think would be very fruitful. We already have mechanisms, such as rail users consultative and representative bodies, the Rail Regulator, company law, which provides a framework within which the railway operators work, and the Health and Safety Executive. Whether such an inquiry would bring any improvement at all remains to be seen.

Although the hon. Member for Carlisle was a little too coy to say so, I am sure that he is really after the return of British Rail. If that is so, it is incumbent on the Minister to be open about how the Government see that idea and about where it might lead us. I have already quoted the Labour party manifesto from the last election, which said: The process of privatisation is now largely complete … Our task will be to improve the situation as we find it". Those words are not at one with the aims of the Bill before us.

I have, I hope, raised a few pertinent questions and given the Minister some material to get his teeth into. look forward to hearing what he will say so that the House of Commons may judge whether the Bill deserves our support.

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Robert Ainsworth):

This has been an interesting debate. My hon. Friend the Member for Carlisle (Mr. Martlew) spoke with obvious conviction, and I thank him and the right hon. Member for Bromley and Chislehurst (Mr. Forth) for their contributions. I recognise the concerns so clearly articulated in the debate, but the Government cannot support the Bill. I will clarify why that is so. Some, though not all, of the reasons for our response became apparent during the debate.

Since Hatfield, several options for restructuring the management and operation of the national rail network have been put forward, particularly in relation to the future ownership of Railtrack. I shall deal with each of them in turn. The Government have made it clear that we have no plans to bring Railtrack back into public ownership. To do so would probably take a couple of years and involve complex and controversial primary legislation. During that time, the industry would effectively be paralysed.

Bringing Railtrack back into public ownership would cost the taxpayer around £ 4 billion at the current stock market valuation—I appreciate that the stock market is a movable feast at present. but that is the approximate price. None of that would be spent on rail investment, since it would all go towards compensating shareholders.

After years of instability caused by the break up of the railway system into more than 100 separate companies, the Government do not wish the industry to undergo further years of upheaval. That would be in no one's interest. It would divert valuable public resources that would be better spent on direct investment in improvements and expansion. We believe that over-hasty privatisation left the system with real problems, but our task remains to deal with the railways as we found them and to make sure that they operate in the public interest.

The right hon. Member for Bromley and Chislehurst seemed anxious that we should all share in the blame for what happened, but invited us to accept that he himself was guarding the foothills of the Department for Education and Employment at the time. He was not, he implied, responsible—his way of saying with a bit of extra flair, "Not me, Guy". The right hon. Gentleman was, however, a member of the then Government, and I believe that collective responsibility was supposed to apply. He should at least be prepared to accept that he was part of the process. If he wants to share the blame with anyone, he should share it with the people with whom he was in power.

Mr. Ainsworth:

Thank you.

The Government's present stance reflects the decision taken at the last Labour party conference. Acquisition by the Government of a minority shareholding in Railtrack would not give us control over the company's policy. Under company law, stakeholders have a fiduciary duty to put the interests of the company first, not their own.

The Government would not be able, for example, to use a 25 per cent. stake in Railtrack to force decisions in line with Government policy. As a minority shareholder, we would not have control of the company or its policy. We would therefore have responsibility without power. Rather than increasing control over Railtrack, an equity stake in the company could result in the Government seeming to be complicit in all Railtrack decisions—including those taken in the interests of the majority of shareholders, which may be at odds with public policy. It is better management and planning which will deliver improved performance for the company.

Support has been articulated today for converting Railtrack into a public non-profit stakeholder trust. Under this option, the company would be run by a Government-appointed stakeholder board of train operators, the Strategic Rail Authority, customers, employees and so on, with no single party exercising majority control.

However, a public trust would almost certainly be subject to public expenditure controls. It would not guarantee the necessary investment without having to find it from public resources, which we believe would be better invested in education and health, for which no alternative sources are available.

The requirement on the Government to underwrite the bond issue to purchase Railtrack from the current shareholders would impose a further potential burden on public expenditure. Buying out shareholders would divert funds earmarked for investment. The costs of non-commercial projects, cost overruns and poor performance would fall to the taxpayer, rather than to operators and customers. The inability to offer a return to investors would reduce Railtrack's current access to private investment capital.

It is far from clear that the proposed composition of the stakeholder board, in which none of the partners has a majority, would facilitate policy agreement or decision making, or that the engineering and asset management skills fundamental to improving safety and raising train performance would predominate.

There is a role for stakeholder input, but this is at the strategic level when plans are being drawn up by the Government and the Strategic Rail Authority. The role of the Railtrack board is to deliver the infrastructure element of these plans, not to decide what they are.

Splitting Railtrack geographically would produce further fragmentation at a time when it is generally accepted by the industry that the overriding need is to achieve coherence. It would further reduce the company's ability to raise capital for investment.

The concept of vertical integration—to enable franchises to include operational responsibility for track—has also found recent support. However, this would reduce the autonomy of franchisees and undermine the current and proposed franchises. It would complicate the role of the Rail Regulator and might result in the promotion of regional interests ahead of the delivery of a national strategy for a renaissance of our railways. It is not clear how vertical integration of passenger franchises would help cross-franchise operators such as freight.

I share the conviction of my hon. Friend the Member for Carlisle that mistakes were made in the privatisation process. Indeed, since Hatfield the architects of that process have admitted that they got it wrong. The right hon. Member for Bromley and Chislehurst came pretty close to admitting it today. But after years of fragmentation and instability, the answer is not yet more upheaval. What we now need is evolution rather than revolution.

The Government believe that the major changes proposed today to Railtrack's ownership, operation and accountability are not necessary to ensure that the company meets its public service obligations. We have appointed a tough Rail Regulator to ensure that Railtrack delivers on its licence requirements and does not abuse its monopoly position.

We are not keen to implement options that entail reorganisation, upheaval and the loss of management focus and strategic direction, or increase the Government's costs as a result of compliance with market rules governing share acquisitions—knowledge of our intention to acquire Railtrack stock would drive up the company's share price. Instead, the Government have decided that the time is better spent putting in place the new coherent industry arrangements contained in the Transport Act 2000 and that the money is better spent as part of the £60 billion provided for in our 10-year plan for transport, published last July.

The Prime Minister made it clear last month that the only way to cure the problems on the railway is through proper strategic control and urgently needed investment. We have created the Strategic Rail Authority to tackle fragmentation and to provide strategic leadership. We are working hard to correct decades of underinvestment through our 10-year plan.

The Government's interest is to ensure that Railtrack implements the national track recovery plan as it has promised, following the disruption from gauge corner cracking, and that it invests in a safer, punctual and efficient railway, backed by the massive investment programme in the 10-year plan.

The issues proposed for review by my hon. Friend the Member for Carlisle have already been covered by a recently undertaken parliamentary inquiry—that of the Select Committee on the Environment, Transport and Regional Affairs into rail investment—to which my noble Friend the Minister for Transport gave oral evidence on 12 December. The Transport Sub-Committee's report is expected shortly. Because of that and for the reasons that I outlined, the Government will oppose the Bill.

Photo of Eric Martlew Eric Martlew Labour, Carlisle

In view of the Minister's response, but, more important, for reasons of time, I beg to ask leave to withdraw the motion.

Motion and Bill, by leave, withdrawn.