Railways

– in the House of Commons at 3:32 pm on 16th January 2002.

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Votes in this debate

Photo of Don Foster Don Foster Liberal Democrat, Bath 3:42 pm, 16th January 2002

I beg to move,

That this House
notes the failure of the Government to tackle adequately the growing crisis on British railways;
and believes that the salary of the Secretary of State for Transport, Local Government and the Regions should be reduced by 1.8 per cent. and that payment of a further 22 per cent. be withheld until 31st March 2003.

I shall begin by agreeing with the Secretary of State that the state of British railways is, as he said, "unacceptable". With some justification, right hon. and hon. Members can point to the failure of past Governments to invest adequately in our railways as a possible cause. No doubt that was even true of past Liberal Governments. Past investment has, at times, been lamentable. With justification, many right hon. and hon. Members will also point to the problems of fragmentation caused by aspects of rail privatisation. Criticism may also be levelled, as it was by the head of the Strategic Rail Authority on Tuesday, at some of the management of our railways system—notwithstanding the excellent work done by many railway staff.

The Liberal Democrats accept that past underinvestment, privatisation and some poor management have all undoubtedly played a part in the current rail crisis. However, we have had a Labour Government for nearly five years and it is reasonable to question what they have done in that time to seek to rectify the problems of our railways. Have the Labour Government improved the situation or has it got worse? Public opinion is clear. The YouGov poll in The Mail on Sunday last weekend showed that 70 per cent. of people believe that the situation on our railways has got worse since Labour were elected in 1997.

I acknowledge that not all is bad; for example, there has been an increase in passenger numbers and in private investment in the railways, and the Strategic Rail Authority has been established. However, we also note that between 2000 and 2001 train delays increased by 70 per cent., meaning that, collectively, passengers wasted at least 4,600 years last year waiting for delayed trains. Cancellations increased by 45 per cent. in the same period. There is massive overcrowding—39 per cent. of rail journeys are overcrowded; as I pointed out yesterday, it is somewhat bizarre that the Government have introduced legislation to tackle the overcrowding of chickens but have taken no action to reduce the overcrowding of humans on trains.

The Government have said that they want our stations to be safer. They are right. Train use will not be encouraged if people have to wait in unlit, unstaffed stations at night, if information is inadequate, or if car parks are insecure. However, although the Government announced a secure station initiative in 1998, nothing was done. As a result, only about 120 of the 2,500 railway stations have so far achieved accreditation. At that rate, it will take a staggering 76 years before all stations are deemed safe.

What about affordability? Britain's railways are the most expensive in Europe—almost the most expensive in the world. In this country, passengers can travel, on average, 55 miles for £10. That compares with 128 miles in France and 806 miles in the Czech Republic for the same amount. Under the ridiculously complex fares structure through which passengers must wade, many of our fares are excessive; yet the Government have made no serious attempt to tackle that problem.

We need a safe, reliable and affordable railway system but we do not have one.

Photo of Simon Hughes Simon Hughes Shadow Spokesperson (Home Affairs)

Does my hon. Friend agree that the Government need to get a grip because the problem affects our reputation abroad? It affects investment in this country and the perceptions of foreign business and our trading partners when they see a railway system that does not deliver. Does my hon. Friend agree that the sooner there is a safe and correct decision on the London underground and the sooner there is investment, commitment and action as regards the rail network, the sooner the City, the business community—the chambers of commerce and the CBI—will feel that they can go back to selling Britain abroad, as they want to do and as I hope the whole House wants them to do?

Photo of Don Foster Don Foster Liberal Democrat, Bath

I entirely agree with my hon. Friend. Despite our criticisms of the current state of the railways, I hope that all hon. Members want our railways to succeed for the very reasons given by my hon. Friend. I certainly agree that not only must we have a quick decision from the Secretary of State on the London underground but it must be the right decision. I very much welcome the suggestion made today by the right hon. Gentleman that he may be more prepared than heretofore to consider alternative proposals—including the one first made by the Liberal Democrats—for a bond issue arrangement for the London underground.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

I am sure all hon. Members in the Chamber want the railways to succeed, but would that be helped if passengers took the advice of Mr. Oaten? On Meridian television, on Sunday at lunchtime, the hon. Gentleman advised people to break the law by refusing to show their tickets to railway staff. Is it right to incite passengers to break the law and to take out their frustration on the hard-working staff of the railways?

Photo of Don Foster Don Foster Liberal Democrat, Bath

The hon. Gentleman will be aware that the legal requirement is to have a valid ticket for travel. He will also be aware that many rail passengers are extremely fed up with the current state of our railways and the Government's failure to tackle it. I suspect that on 1 March many of them will find some way—whether through the suggestion of my hon. Friend or in some other way—to make known their concern about the current crisis and to put pressure on the Government. I note with interest and some pleasure that later today the Secretary of State is to meet some representatives of the passengers who are so deeply worried about the situation on the railways.

Photo of Don Foster Don Foster Liberal Democrat, Bath

I will a little later, but I want to make some progress.

As the Secretary of State said just two days ago in the House, we do not have a railway system that is fit for the 21st century. I welcome the right hon. Gentleman's candour then, and the candour that he showed earlier today when he was asked why Lord Birt had been brought in to advise on the railways. The right hon. Gentleman's succinct reply—that it keeps him occupied—betrays a great deal.

Even more forthright than the Secretary of State was the Minister for Europe, who told The Spectator magazine that we had the worst railways in Europe. Rail passengers are only too well aware of the problems of delays, cancellations, overcrowding and excessive fares. No wonder they are lobbying the Secretary of State later today.

Sadly, however, some information about the state of our railways is being denied to passengers. The Government seem unwilling to provide some very important facts. Just before Christmas, I submitted some 200 parliamentary questions about the state of the railways. The House may be interested in some of the replies.

I asked, for example, about collisions involving mark 1 rolling stock—the slam-door carriages. The Department answered by suggesting that the information was not available, yet I assure the Secretary of State that it can be found on page 94 of the Health and Safety Executive's annual safety report. The data show that, of the 106 train collisions that occurred in 2000–01, 58 were due to trains colliding with the open door on a slam-door carriage.

I also asked for a regional breakdown of speed restrictions, but the Department again felt unable to oblige. However, discussions with the train operating companies, and the data that they have supplied, mean that we know that the information is available.

I asked also for details of the proportion of track that does not meet minimum required standards. I was told that the information was not available to that level of detail. That was an odd response, as the information can be found in Railtrack's network management statement.

Many of my questions referred to safety improvements. I am sure the Secretary of State would agree that restoring confidence in the safety of our railways is crucial. Safety recommendations must be implemented swiftly and the public must be kept informed of progress on implementation.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion

Does the hon. Gentleman share the concern of many people in south Wales about the reports that emerged over Christmas and the new year regarding the condition of the track bed on the line between London, Swansea and Cardiff, which is subsiding? Does he share my concern, with regard to safety, that the Strategic Rail Authority's plan, published this week, makes no mention of any work being done on the line in the next 10 years? We will have to wait half a century before that line is upgraded.

Photo of Don Foster Don Foster Liberal Democrat, Bath

I agree, and the same applies in the south-west of England. Cornwall has been given objective 1 status by the Department, yet it does not enjoy a similar status when it comes to improvements in rail facilities.

Photo of Paul Keetch Paul Keetch Liberal Democrat, Hereford

With regard to safety, last week I met Chris Gibb, chief executive of Wales and West Passenger Trains. The meeting had been planned before Christmas, and we discussed the line that runs from Manchester, through Shropshire and Herefordshire, and down to Cardiff. He told me that when he lays on extra trains for rugby international matches at the Millennium stadium in Cardiff, he has to borrow coaches from a museum, as he has so little in the way of resources or infrastructure. Does my hon. Friend think that that is a safe way for passengers to travel to a rugby match?

Photo of Don Foster Don Foster Liberal Democrat, Bath

I suspect that my hon. Friend will not be surprised to hear that I do not believe that that is the right way to go forward. I am sure the Secretary of State will have heard what my hon. Friend said, and I hope that he will respond later.

Photo of Don Foster Don Foster Liberal Democrat, Bath

No; I want to make progress because many other hon. Members wish to speak.

The point is that safety recommendations need to be implemented swiftly. Following the dreadful Paddington crash, Lord Cullen made very many safety recommendations, 41 of which were due to be implemented before Christmas, by 19 December. When Lord Cullen published his report on 19 June, he recommended that a review of compliance with his recommendations should be conducted on behalf of the Health and Safety Commission within six months of his report, and that those reports should be published.

On the same day, the Secretary of State said that he wanted a report on implementation by 19 December. Despite asking questions about those 41 Cullen recommendations, we still do not know whether they have been implemented, yet I have received a letter from the Under-Secretary of State for Transport, Local Government and the Regions, Dr. Whitehead, that states:

"The review of compliance has been completed."

It goes on to say that checks on "areas of uncertainty" are being made and that the report will be published next March. That is simply not good enough; any accurate information on this crucial issue should be published immediately.

Yesterday, I incorrectly stated that the information was on the Secretary of State's desk. He has assured me that it is not, so I unreservedly apologise to him, but that raises a fascinating question: given that he wanted that report by 19 December and that the review of compliance has been completed, why is it not on the Secretary of State's desk? Why does he not demand that it be put on his desk immediately? Why does he not agree to publish the accurate information that it contains straight away?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

For the simple reason that, as the hon. Gentleman will know, the Health and Safety Executive is an independent body. At the moment, it is clarifying some of the reports that it received from the industry with regard to compliance by 19 December. It will report to the Health and Safety Commission in February, and I will receive a report after that. That is the sequence of events, and I am afraid that it is the price we pay for having an independent HSE that is not dictated to by party politicians.

Photo of Don Foster Don Foster Liberal Democrat, Bath

If the HSE is not dictated to by party politicians, it is slightly odd that the Secretary of State said in his press release on 19 June that he wanted that report by 19 December, and I hope that he will take that up with the HSE.

I hope that the Secretary of State will be prepared to intervene one more time. One of Lord Cullen's key recommendations was that signal improvements in the Paddington area should take place by 19 December. Does the Secretary of State know whether those improvements have taken place? Clearly, he has nothing to say. The travelling public will note that he could have obtained that information and asked for an answer to that specific question, yet it appears that he has failed to do so. That is typical of so much of what has happened under this Labour Government. The Minister for Europe also said in that article in The Spectator:

"We started transport investment far too late . . . We should have been more radical earlier."

Photo of Bill Rammell Bill Rammell Labour, Harlow

I hope that the hon. Gentleman will agree that investment is key and that people judge politicians not on what they say, but on what they do. Will he remind the House of how much additional money, above and beyond the Government's public expenditure plans, was included in the Liberal Democrat's alternative budget last year?

Photo of Don Foster Don Foster Liberal Democrat, Bath

Yes, I certainly can, and I shall come to that very point—[Interruption.] The answer is £250,000—[Interruption.] A figure of £250 million was included in the Liberal Democrats' alternative budget, but given that the hon. Gentleman is interested—

Photo of Bill Rammell Bill Rammell Labour, Harlow

Will the hon. Gentleman give way?

Photo of Don Foster Don Foster Liberal Democrat, Bath

No, I will not give way; I am still answering the hon. Gentleman's first question. As the hon. Gentleman is interested in government investment in the railways, I hope that he will do me the courtesy of waiting a couple of minutes before I tell him precisely what the Labour Government have invested in the railways.

Photo of Bill Rammell Bill Rammell Labour, Harlow

Does the hon. Gentleman agree that an additional £250 million in the context of an additional £33 billion is technically called "peanuts"?

Photo of Don Foster Don Foster Liberal Democrat, Bath

The hon. Gentleman is not comparing like with like. First, he has multiplied his Government's figure by 10 and compared it with a single year's figure. Secondly, in his comparison, he is referring not only to Government money but to expected and anticipated private sector money. If the chaos on the railways continues at its current level, there is fat chance that the Government will get the private sector investment that they expect.

Photo of Don Foster Don Foster Liberal Democrat, Bath

Although I wish to make progress, I shall give way to the hon. Gentleman.

Photo of David Taylor David Taylor Labour/Co-operative, North West Leicestershire

With an interesting statistic earlier, the hon. Gentleman spoke about the travelling public's aggregate waiting time for trains. With the aid of a ballpoint pen and the Order Paper, I have worked out that, since 1 May 1997, the electorate of the United Kingdom have waited an aggregate of 200 million years for a clear exposition of how the Liberal Democrats will finance their transport policies, and of where the taxes will fall.

Photo of Don Foster Don Foster Liberal Democrat, Bath

If the hon. Gentleman wants clear exposition, I will be more than happy to provide him with a copy not only of the Liberal Democrat manifesto—which was the only manifesto to contain full costings—but of the very detailed alternative Budget that we set out. It contains all those details. He need wait no longer; they will shortly be coming his way.

Photo of Don Foster Don Foster Liberal Democrat, Bath

I shall not give way, as I wish to make progress.

The real question is whether the Labour Government have made progress in solving the problem on our railways. I suggest that one reason why they have not made progress is that they have schizophrenia about the whole issue of privatisation. The House will be well aware that, when the Labour party was in opposition, it opposed rail privatisation. However, within two years of coming into power, it published the fascinating document "Releasing the Power of Rail", which offered a rather different view of privatisation.

I have referred to the document before, but it certainly deserves a second outing because it contains what a Labour Government said about railway privatisation. It states:

"Railways are back . . . Trains are cleaner, safer and often a good deal faster . . . There is, as a result of privatisation, new energy and enthusiasm in the industry."

Despite what the Government now say about fragmentation, the document even boasted:

"There are now 25 operating companies, instead of just one."

It concluded with this wonderful sentence:

"The arrival of competition has produced a surge of talent and innovation."

With such confidence in the system, it is hardly surprising that so little action was taken to get to grips with the problem.

Mr. Rammell raised the issue of money. On Monday, I asked the Secretary of State whether it was true that the Government will have spent less on the railways in their first five years than the Conservative Government spent in their last five years. He gave me a perfectly correct figure about total investment—public and private combined—over a 10-year period and, as I said earlier, I accept that there has been increased private sector finance. However, he failed to answer my question.

I will therefore answer the question for the Secretary of State from figures provided by the Library of the House of Commons. In the first five years of the Labour Government, total Government spending on the railways will have been £8.2 billion. In the last five years of the Conservative Government, total Government spending on railways was £13.3 billion. On the crucial issue of investment in the railways, the disparity is even more marked. In their first five years, the Labour Government will have spent £0.7 billion on investment whereas, in their last five years, the Conservatives spent not £0.7 billion but £5.7 billion. Little has been done. Despite the high-level meetings that the Deputy Prime Minister had when he was in charge of the railways, he did little and achieved little.

Then we had a new Secretary of State. Was he going to do anything? Initially, his departmental press release of 18 June, headed "Government Pledges Certainty to allow the Industry to tackle the tough job ahead on our railways", quotes him as saying:

"So I am not going to embark on big structural changes. What the industry needs now is a period of stability and certainty".

That was before his famous U-turn when he took action on Railtrack. We agree with the direction that the right hon. Gentleman wants to take on that. After all, it was a Liberal Democrat proposal of many months earlier. The point is, however, that the way the right hon. Gentleman handled that process has led to further confusion in our railways and worsened the situation.

Photo of John Redwood John Redwood Conservative, Wokingham

Has the hon. Gentleman also noticed that as recently as this week the SRA—the creature of the Secretary of State—praised privatisation for the 34 per cent. increase in passenger numbers and the 40 per cent. increase in freight achieved since privatisation? Even the Secretary of State is muddled over whether it is a good or bad thing.

Photo of Don Foster Don Foster Liberal Democrat, Bath

I think that many right hon. and hon. Members are confused about the Labour Government's view of privatisation. On Monday, the Secretary of State said that the third way is fraying at the edges and that the private sector was not necessarily the best way forward. The next day he supported the SRA, advocating the continuation of privatisation through the use of private sector money. We also heard the Secretary of State for Health talk about the privatisation of the national health service. I am as confused as the right hon. Gentleman about the Government's approach to privatisation.

Photo of Don Foster Don Foster Liberal Democrat, Bath

No, I want to make a bit more progress.

We have also seen the SRA's strategic rail plan, to which Mr. Redwood referred. I welcome it, although I would argue strongly that it has come far too late. Unfortunately, it contains much that is not new. Plans to introduce train protection warning systems have already been announced, as was the decision to buy new rolling stock to replace slam-door carriages.

The plan has little detail on reducing fragmentation, excessive fares or overcrowding. Indeed, in the light of the earlier 10-year plan, the Government seem to be rowing back on some of their aspirations. On excessive fares, the 10-year plan says:

"Punctuality, reliability, affordability and comfort are what most passengers want from their trains. We will seek real reductions in the cost of rail travel".

The SRA plan simply says:

"We must focus on performance and reliability, the key issues that passengers say time and time again. The SRA will be carrying out a review of fares policy."

I hope that affordability does not drop off the agenda and that a wider range of fares will be regulated.

Photo of Gary Streeter Gary Streeter Vice-Chair, Conservative Party

Does the hon. Gentleman agree that one of the many defects in the 10-year plan released this week is that it has little to say about journey times and rail services in the far south-west? In particular, will he and his hon. Friends get behind the excellent campaign, now spearheaded by the Plymouth Evening Herald, to reduce the average journey times of trains to Plymouth to three hours? Does he agree that in the 21st century it is a disgrace that journey times from London to Plymouth are consistently around the four-hour mark? Will he back a three-hour campaign?

Photo of Don Foster Don Foster Liberal Democrat, Bath

I am delighted to give the hon. Gentleman the opportunity to guarantee him coverage in the next edition of his local newspaper. He has heard me say that rail transportation from Paddington to the south-west and to south Wales is totally inadequate. Unfortunately, it seems to be slipping further and further down the Government's list of aspirations with regard to the things they want improved.

Photo of Don Foster Don Foster Liberal Democrat, Bath

No—no more.

Under the Labour Government, we have had far too many false dawns. What are the successes of the national punctuality taskforce that was set up at the insistence of the Deputy Prime Minister in February 1999? What has happened to the train reliability action groups that the Government set up? How many different dates have we been given for getting back to normal? What happened to that fresh start for the railways promised by the Deputy Prime Minister in April last year?

Now the Secretary of State expects us to draw a line in the sand, but before doing so and moving forward to what we all hope will be a better and brighter future for our railways, let us not forget the five wasted years of Labour Government. The right hon. Gentleman wants to be held to account by the next election, but he must also be held to account for his and his Government's inaction to date. The Government are keen on performance-related pay, so with 22 per cent. of trains delayed, we should delay paying that proportion of the right hon. Gentleman's ministerial salary; with 1.8 per cent. of trains cancelled, we should cancel that proportion of his salary. Unless there are significant improvements on our railways before long, the Secretary of State's mother may defend him, but no one else will, and nor should they.

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions 4:11 pm, 16th January 2002

I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:

"believes that the railway infrastructure was badly damaged by decades of underinvestment and a flawed privatisation;
recognises that the Government made tough decisions in the first two years of the last Parliament to deliver the economic stability that means it can put record levels of investment into the railways;
notes that annual average total investment in rail over the 10 year plan will be £4.3 billion, compared to £1.4 billion for the period 1989/90–1996/97;
congratulates the Government on its decisive action over Railtrack, so undoing a failed Conservative privatisation;
welcomes the SRA's Strategic Plan that sets out an effective agenda for the railways;
calls for the resolution of the present industrial disputes through negotiation not strike action;
and believes that the steps taken have laid the groundwork for a railway system that will be fit for the 21st century.".

I congratulate Mr. Foster on introducing this timely debate on the state of our railways. I agree with him—in part because he was quoting me—that we do not have a railway system fit for the 21st century. That is despite the fact that many dedicated, highly motivated people work in the railway system. They are frustrated that they are not working in an organisation that is delivering for the travelling public. It is important that we acknowledge the good work being done by many people in the industry.

As I said in Monday's statement on the strategic plan, there are two principal reasons why we do not have a railway system fit for the 21st century. First, for decades now there has been chronic underinvestment in the railway system. The grand schemes of the 1950s and 1960s of modernisation being achieved through British Rail led us to the 1970s and 1980s when, to be frank, there was political disinterest in the railways. No real priority was given to the subject by Governments, both Labour and Conservative, during that period. In the 1990s, the railways were used to push forward privatisation, first with the train operating companies and then, later in the 1990s, with the privatisation of Railtrack.

Photo of Geraint Davies Geraint Davies Labour, Croydon Central

I have British Rail's 1980 annual report in which the then chairman, Sir Peter Parker, said:

"Planned limits on railway investment have remained virtually unchanged for nearly 10 years . . . If a rising profile of investment is not agreed, and desperately soon, much improvement in service quality . . . will be long delayed."

Does my right hon. Friend agree that the current calls for long-term investment should have been considered in 1980, when the Tories had the opportunity to invest?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

The record will show that I made it clear that both Labour and Conservative Governments did not invest during the 1970s and 1980s. At the time, many of us in the Labour party argued against the public expenditure cuts that were being made—that takes me back a few years. None the less, my hon. Friend makes an important point about the need to invest in public services.

The 10-year plan launched by my right hon. Friend the Prime Minister set out for the first time a framework in which not only railways but transport overall could develop and expand in future. We now need to respond to the extra demand within the system. More passengers are being carried and freight has increased significantly in recent years, but the system has not been able to cope with that increased demand. We must now ensure that we can meet the demand that has been created, and that we can achieve the increase that we want to see, which is one of our key targets in the 10-year plan.

Photo of John Redwood John Redwood Conservative, Wokingham

We were meant to have a plan at the end of 1999. A plan was launched in the summer of 2000, and another was launched on Monday, which was thin gruel with a few spin doctors' scraps in it. That so-called plan says:

"We need one plan" and achieving that

"is a key target for 2002".

Even the plan is delayed. When will we get the real plan?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

When the right hon. Gentleman has studied the plan, I hope that he will agree with me that it provides a comprehensive statement of exactly what benefits and improvements the travelling public can expect. Some people are critical because they do not think that the timetable is quick enough, and others ask questions about priorities. People may criticise, but for the first time the stall has been set out and people will be able to judge delivery.

The important point made in the plan is that this is not the end—it is not just the plan and that is it—it is a beginning, and there will be another plan next year, because it will need to be revised and reviewed in the light of experience. That is how it must be. It would be a terrible mistake if we thought that the plan was set in concrete and could not be changed in the future. The strategic plan was clear about what needs to be done.

The first reason for the under-performance in the railways is the chronic underinvestment over many years.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion

The Secretary of State has outlined past experience in the railways and the problems created by the chronic underinvestment, and I think that everyone agrees with him on that. Will he now put his mind to the chronic underinvestment in Wales in the next 10 years under this plan? Does he accept the figures produced by the Wales Transport Research Centre at the University of Glamorgan under Professor Stuart Cole, which show that the plan has only 17 per cent. of what the railways in Wales need for the next 10 years?

Is not the Secretary of State concerned that he could be storing up problems for the future in Wales by continuing the underinvestment under this plan, and that he could have the same problems as the Government had with the health service, when they addressed the problem of numbers on the waiting lists? They should be addressing the crucial infrastructure issue, rather than the number of passengers travelling in and out of London. Does the right hon. Gentleman accept the huge underinvestment in his plan for Wales?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

No, I do not accept that there is an underinvestment in Wales. The strategic plan shows that, for the first time, the Strategic Rail Authority, working with the United Kingdom Government and the Welsh Assembly, is identifying what needs to be done with regard to rail provision in Wales. We will open up the Vale of Glamorgan line for passenger traffic between Barry and Bridgend, which is a real improvement. Early next year, we will have a new franchise for Wales and the borders, which will significantly drive up and improve standards in Wales, and overcome some of the difficulties that we have heard about from Opposition Members. That is a significant move forward. I welcome the close working relationship that has already developed between the Strategic Rail Authority and the Welsh Assembly. Engaging in a proper and effective dialogue is the best way to address the concerns of the people of Wales.

Photo of Caroline Flint Caroline Flint Labour, Don Valley

Does my right hon. Friend agree that the Government have a role in driving the pace of change through the franchising process? I am sure that, like me, he welcomes the agreed two-year extension to the Great North Eastern Railway east coast main line franchise, which has resulted in 11 extra services running from Leeds to London. GNER will refurbish every train in the fleet and rebuild every locomotive. Is not that good news for the travelling public and for those of us who are taking action on the franchising process to make the private operators put in the required investment?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

When hon. Members have the opportunity to see the details of today's two-year franchise extension for GNER, they will realise that it will have real benefits for the travelling public. Most importantly, they will understand why there was a need to introduce a two-year extension at this time.

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

I want first to make the point about GNER because it is of concern to many Members. The extension is for two years because the detailed work to upgrade the east coast main line was not carried out by Railtrack. That work can now be done. When we come to re-let the franchise after the two-year extension, we will be able to consider awarding a five, 10 or 15-year extension for the franchise on that line. The nature of the upgrade will mean that the franchise lends itself to such a lengthy extension.

Several hon. Members:

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Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

I have a wonderful trio of Members to choose from. I will stick with Wales and the borders for the time being and give way to Lembit Öpik.

Photo of Lembit Öpik Lembit Öpik Liberal Democrat, Montgomeryshire

I acknowledge that there is significant investment for parts of Wales, but will the Secretary of State make a commitment to reconsider the plans for the more rural parts of Wales, particularly mid-Wales, which have not received the degree of attention that he implies they should have done?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

I shall draw the hon. Gentleman's comments to the attention of the Strategic Rail Authority, as I know that it is considering how it can respond to the needs of particular communities.

Photo of Pete Wishart Pete Wishart Opposition Whip (Commons), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Environment, Food and Rural Affairs), Shadow Spokesperson (Transport)

Does not the extension to the GNER franchise mean that the Secretary of State has reneged on the commitment that he made in July to replace the existing rolling stock on the east coast main line? Is not that another indication that the 10-year plan is really a solution for London and the south-east? Does the right hon. Gentleman agree that there is a growing perception that it offers very little for Scotland?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

The agreement announced today offers real benefits to people in Scotland. For example, there will be an extra carriage on each of the high-speed trains. My announcement last summer was basically a negotiating position aimed at finding out what the Strategic Rail Authority could secure from GNER. We never believed that all those objectives would be achieved. People will recognise the benefits that the changes will bring to passengers on the east coast main line and travellers to Scotland.

Several hon. Members:

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Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

Hon. Members are trying to divert me to Scotland. I shall visit the south-west in due course, but I shall go via Hereford.

Photo of Paul Keetch Paul Keetch Liberal Democrat, Hereford

The Secretary of State knows that he will be very welcome in Hereford whenever he wants to visit. Returning to Wales and the borders, the current owners of the franchise there told me that because they will not know for another 12 or 15 months whether they will be successful in retaining the franchise, they will not make any significant investment at all, which is understandable. Is there not a need for longer franchises to give a period of stability so that companies can invest as they should be doing?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

When the hon. Gentleman has the opportunity to read the new franchising statement from the Strategic Rail Authority he will see that it is considering a 15-year franchise, broken into three parts so that it is reviewed after five years. To be frank, I am concerned about what the position would be if, after five years of an extended franchise of 15 or 20 years, the company was clearly under-performing on its contract. It is important that we have break clauses in such franchises, and that is the direction in which the Strategic Rail Authority wants to go.

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

I shall make a quick visit to Scotland and then I shall go to the south-west.

Photo of Malcolm Bruce Malcolm Bruce Liberal Democrat, Gordon

Does the Secretary of State accept that his need to pursue private finance means that there is a danger that the money will go where the people are, as those are the areas in which private investors will be interested? Surely with a not-for-profit Railtrack he has a responsibility to invest in the infrastructure in areas such as the north of Scotland to ensure that businesses and people have choice and access to markets. Those areas should not be entirely dependent on their ability to attract private finance. Is the right hon. Gentleman aware that people on the Aberdeen to Inverness line are saying that they will no longer travel by train, not because the trains are not frequent enough but because they are so overcrowded that passengers cannot get on?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

The hon. Gentleman makes an important point. There will be parts of the rail network where the private sector is keen to be involved, but we should never forget that the network is for the whole country and there is public service provision in the railways. Some lines are not economic, but it will be a disaster for the network if we close them down to save money in the short term, because in the long term that will deny passengers to the main lines. We must not make that mistake. We know from the way in which the rail network has been misused over the years that easy decisions can be made, but in the end some lines will not be cost-effective and they will need a public subsidy. The 10-year plan contains scope for the public sector to make provision to secure those routes.

Photo of Mr Tam Dalyell Mr Tam Dalyell Labour, Linlithgow

Before my right hon. Friend leaves Scotland, there is a special problem which is something of a nightmare—the key Forth rail bridge, the greatest monument to 19th century engineering, with which there are expensive maintenance problems. I am not asking my right hon. Friend for an answer off the top of his head, but could he get his officials to look at where the boundary for responsibility lies between the Scottish Executive in Edinburgh and his Department? There are urgent matters and it may be a question of a stitch in time saving nine.

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

My hon. Friend makes an important point. Yesterday I had a meeting with the Scottish Minister for Transport and we looked at a range of issues to do with rail in Scotland. I am acutely aware of the need to make sure that the bridge is maintained safely and securely. Probably the best thing would be for me to do some detailed work and write to my hon. Friend so that he is fully aware of exactly what is being done.

Photo of Gary Streeter Gary Streeter Vice-Chair, Conservative Party

I am impressed by the Secretary of State's detailed knowledge of rail services in Wales, Scotland and all round the country, which is very much to his credit. However, will he turn his attention to the people living west of Exeter in the far south-west? Does he understand the dismay that there is literally nothing in the 10-year plan to encourage anyone living in Devon, Plymouth or Cornwall that unacceptable journey times will be speeded up during the next 10 years? Will he give hope to regular rail users and business people in the far south-west that during the course of the 10-year plan something will be done to speed up the time that it takes to travel west from Exeter so that we can have a three-hour journey from London to Plymouth and down into Cornwall? The situation is serious.

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

In an effort to join the hon. Gentleman on the front page of his local newspaper, I had the opportunity to speak with the editor of the Plymouth Evening Herald at a reception at No. 10 Downing street last week. He pointed out the importance of the rail link between Plymouth and Paddington, so I am acutely aware of the problem. Improved frequencies are mentioned in the strategic plan, but I accept the hon. Gentleman's point that journey times are important; I am sure that the SRA will want to consider that.

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

I want to make progress, but Cornwall is in the right direction.

Photo of Mr Paul Tyler Mr Paul Tyler Liberal Democrat, North Cornwall

To enable the Evening Herald to represent the views of the three parties, I point out that the Secretary of State has just touched on one of the major issues that we face in the south-west. He referred to the journey time to Plymouth, but there is a world beyond Plymouth; people do not realise just how far Penzance is beyond Plymouth. It is extremely important to recognise that we have a national railway system, to which he referred in the context of Scotland. If he does not represent the public interests of the more peripheral parts of the United Kingdom, nobody else will. The private investor never will.

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

When I was appointed Secretary of State, there was criticism of the fact that a non-driver had been appointed. However, when we have a debate such as this, it is useful to have a non-driver at the Dispatch Box. I have taken the train on most of those routes and I am aware that there are many miles the other side of Plymouth. There is a great need to make sure that Cornwall and many other counties in the south-west are effectively served by rail. The point is well made. I re-emphasise the fact that we are talking about a railway network. Of course, 70 per cent. of passenger journeys are in London and the south-east and there needs to be a concentration of resources to solve problems there, but not at the expense of other parts of the United Kingdom. The important thing is that the additional money that we have secured means that there will be funds to make improvements in those areas and ensure that we can discharge our responsibilities in London and the south-east where the bulk of passenger journeys takes place.

I was explaining that there were two principal reasons why the railway system was failing; the first was underinvestment and the second related to the failure of Railtrack. The House has debated that on many occasions, so I shall not go into great detail now. I just want to say something about the money that we are committing, as that was raised by Mr. Foster. In the next 10 years, £33.5 billion of public money will go into the railways. I gave evidence to the Select Committee on Transport, Local Government and the Regions and know that there is concern. I was told that it was good to have that money going in, but I was asked whether I could ensure that there was not large-scale underspending in the Department, which would prevent money from being spent on transport and railways.

As the Select Committee heard this morning, at the end of March 2001 there was an underspend on capital of £350 million for that financial year—an underspend which is unacceptably high. As Secretary of State, I have tried to make sure that our capital programme is forecast correctly and spent on schedule. We are taking significant steps to achieve that. It was to make sure that we do not have a large underspend at the end of the present financial year, that on 28 November I wrote to all budget holders of capital spending in the Department and in our agencies. I shall quote from the letter, as it shows how seriously I as Secretary of State take the issue of making sure that we spend the money that has been allocated.

The letter stated:

"As a Department, we are responsible for a large proportion of the Government's capital investment programme. . . I am therefore concerned to ensure that we should be doing all we can to keep underspending to a minimum, consistent with value for money. I am, of course, aware that there is always a risk of slippage, particularly for large and complex capital programmes, and that there are other constraints relating to capital programmes. However, I attach great importance to ensuring that, with good management and forecasting, slippage should be kept to an absolute minimum. Where investment in one project is slipping, to compensate you should consider advancing spend on other committed projects."

That is necessary to make sure that money that is allocated is spent when it is needed. The measures that we have introduced in the Department will make sure that we overcome a large degree of underspending, while still achieving value for money.

Photo of Bill Wiggin Bill Wiggin Conservative, Leominster

One of the areas where the underspend was greatest was on the channel tunnel. Can the Secretary of State give me an assurance that the problems that freight trains have had getting through the tunnel because of asylum seekers will be ended, and that the underspend will not occur again?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

The underspend on the channel tunnel did not arise for that reason, but because there was no slippage. Delivery came in below the amount of money that had been allocated. That was good management. The project is going extremely well. It is on budget and on time.

The entire House agrees that we cannot allow people to enter our country illegally through the channel tunnel. We take a robust position on that. We have a good relationship and we have reached a satisfactory conclusion with the French in respect of Eurostar. We have effectively closed that route. We are putting great pressure on the French to adopt robust physical measures, such as fencing and proper lighting, and to ensure a police presence to deal with the problems of freight. Those issues must be addressed in a way that does not disadvantage the British freight business. We are urging the French to move. The Government are aware of the seriousness of the problem, and we will do all that we can to overcome it.

The hon. Member for Bath mentioned the spend under the previous Labour Government from 1997 onwards. We must acknowledge that in the first two years of that period, public spending was restricted to the programme laid down by the Conservative Government. It was not an easy decision to take. I was Chief Secretary to the Treasury for part of that time, so I bear some of the responsibility. I shall explain to the House why we adopted that approach.

When we came into office in 1997, the national debt stood at £350 billion. That was 44 per cent. of our gross domestic product and was costing £25 billion a year in debt repayments. National debt was not falling, but going up. In 2001–02, because of the measures that we introduced and the tough spending round for those first two years, debt will fall to about 31 per cent. of GDP, costing £18 billion a year to service, so already we have £7 billion a year extra for essential services—money which is not being spent on servicing the debt because the national debt has been reduced.

That was not an easy decision to take in those first two years, but the tough regime that we introduced ensured that, at a time when we were getting the economy right and it was growing, we could use the money to start to repay the national debt. As I said, the regime ensured that £7 billion a year extra is now available for investment in transport, health, education and so on. In addition, we reduced not only the national debt, but unemployment. The number of people in work has increased by 1 million since April 1997. As a result, we are now spending £4 billion a year less on unemployment.

So, those tough decisions that were taken early on have provided us with about £11 billion a year extra that we can spend on essential services, and we obviously have the benefits of the growing economy as well. Those are the reasons why we took those decisions. The Liberal Democrats can criticise us for that and complain about the spending levels that resulted, but because of the steps that we have taken we can deliver through the 10-year plan long-term, sustained investment in the railway network. The railways, perhaps more than any other area, need not merely the odd one or two years of investment, but a long period, and 10 years will make a marked difference to the railway infrastructure.

Photo of Don Foster Don Foster Liberal Democrat, Bath

I note with interest that the Secretary of State has not denied the proposition that I put to him on spending. I said that the Labour Government had spent less in real terms on the railways in their first five years in office than had been spent in the previous five years, during which a Conservative Government were in power. The right hon. Gentleman is now seeking to give the House the impression that there is to be a huge bonanza in additional Government money for the railways. Will he confirm whether my figures are correct, not least in view of the merriment about the additional £250 million a year proposed by the Liberal Democrats? Will he confirm the Library figures? On a 1999–2000 price base, they show that, in the last eight years under the Conservative Government, the total annual Government spend on the railways was £2.4 billion a year, while the figures in the 10-year plan suggest that that will rise to a staggering £2.5 billion—an increase of only £100 million a year.

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

The figures are clearly set out in the plan. The important point is that somebody travelling on the train will not be bothered too much about whether public or private money has been used to buy, for example, the rolling stock. People will want to know only that the train is in decent condition, that it will get to the destination on time and that it is safe. Such a division does not make sense in the real world. Surely, the key issue is the total investment that is being made in the railways, not whether it is public or private. A big increase is occurring in terms of public investment and I am confident that we will secure the private investment that will be necessary to support the railway network.

Several hon. Members:

rose

Photo of Eric Pickles Eric Pickles Shadow Minister (Transport)

I am most grateful to the Secretary of State. We generally agree that it does not matter where the money comes from, but may I remind him that, although he has just spent about five minutes explaining why he could not put any money in and telling us that happy times were here again, he has not only failed to deliver a single penny piece extra of public money for the railways, but has put private money in jeopardy by making his ill-considered attack on Railtrack?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

The hon. Gentleman returns to his refrain about the private sector not wanting to invest in the railways because of the action that the Government have taken on Railtrack and says that private companies will walk away. Interestingly, when we discussed the matter on 15 October last year, he said:

"Where is the £34 billion of private investment to come from? The best we can hope for is a 12-month delay in investment in such vital services as the west coast and east coast main lines".—[Hansard, 15 October 2001; Vol. 372, c. 957.]

[Interruption.] It is said that that is exactly what happened. Well, today, GNER has announced £100 million of private sector investment in the east coast line. That happened this morning.

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

It is private sector investment; it is new money. Last year, the hon. Gentleman said that there would be a 12-month delay in private investment in the east coast main line, yet today GNER is making a contribution of £100 million. Let us consider how the money will be used. There is a contribution to the infrastructure upgrade—that is the track, not rolling stock; £10 million for stations and integrated transport; money for rolling stock reliability and static converters, and for improvements to rolling stock and extra coaches. Every pound and every penny of the £100 million constitutes private sector investment. So much for the hon. Gentleman and the 12-month delay in private sector investment.

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

No, I have given way to the hon. Gentleman, and it was a bit embarrassing. [Interruption.] Oh, go on then.

Photo of Eric Pickles Eric Pickles Shadow Minister (Transport)

Let us be clear. Does the Secretary of State claim that the upgrade to the east coast and west coast main lines can be covered by such relatively small sums of money? Is that why he is trying to get out of phase 2 of the west coast upgrade? Is that why he is trying to negotiate to ensure that we do not get trains that travel at 140 mph? In the world that he occupies, are such little gifts regarded as major triumphs?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

We have 25 franchises, many of them for much longer than two years. A two-year extension secures £100 million of private investment. Conservative Members like to claim that the private sector is walking away from investing in the railways; it is not. When it perceives a good investment and a good return, as GNER and the rolling stock companies did with the east coast main line, it will make the investment.

The transport plan and the 10-year plan is clear and precise about the way in which the money will be spent. There will be a public sector contribution, much of which will be invested in the infrastructure, and private sector investment, partly through special purpose vehicles and partly through the new franchising arrangements.

Photo of Eric Martlew Eric Martlew Labour, Carlisle

Is my right hon. Friend aware that the last Conservative Chancellor gave only £500 million to upgrade the whole west coast main line? When Railtrack went into administration, the predicted cost for upgrading that line was £10 billion. It would have been cheaper to build a brand new line.

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

My hon. Friend has followed the vagaries of the west coast main line in considerable detail. He knows that the project was dogged first by a failure of political commitment by the Conservative party. We have tried to drive it through. As time goes by, the new management of Railtrack is beginning to realise the state of the project, and greater difficulties are becoming apparent.

However, it is important to acknowledge the significant contribution and investment that Virgin has made in the new rolling stock that it has earmarked for the line. That is another good example of private sector investment; the new trains are impressive. We must recognise Virgin's commitment. We have to work with Railtrack and the SRA to make sure that we conclude an agreement that will deliver on the west coast main line and make a genuine difference to the travelling public.

Photo of Bill Wiggin Bill Wiggin Conservative, Leominster

In the Select Committee meeting this morning, the Minister said that he favoured fewer train operating companies, perhaps because so many operate at a loss. Will GNER be one of the train operating companies that is likely to disappear?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

The fact that GNER has made a commitment of £100 million suggests that it will be around for the long term. I am confident that it will be involved in the refranchise when it happens because it offers a good service on the east coast main line. However, it is right to go through the franchise process to ensure that we make a genuine difference.

Conservative Members have often made points about private finance in the current circumstances. Much has been written in the Financial Times and other newspapers about the clear distinction that the City makes between the financial state of a private company such as Railtrack, and the sort of public-private partnerships and special purpose vehicles that we envisage for investment in the railways in the future. That is how it should be, and I think that there is a recognition that that is the case. GNER has clearly demonstrated this morning, with its £100 million investment, the way in which the private sector wants to continue to be involved.

I shall conclude with a few points about the SRA's plan, which was published on Monday. The short-term priorities identified in the plan reflect the need to tackle problem areas such as poor performance, to develop a new industry structure following the Railtrack administration, and to implement much needed improvements throughout the country. For the medium term, the Government have set three core targets for the railway industry through our 10-year plan, all of them to be met by 2010. Those targets are passenger and freight growth of 50 and 80 per cent. respectively, and a reduction in overcrowding in the London area. The 10-year plan also sets out a broader range of objectives for the railways, including improvements in safety, performance and quality.

Photo of Don Foster Don Foster Liberal Democrat, Bath

The Secretary of State has raised the issue of safety. Does he know whether Lord Cullen's recommendations on improvements in signalling in the Paddington area were implemented by 19 December last year, as they were expected to be?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

I understand that the train protection warning system was introduced fully in Paddington during the autumn of last year. The hon. Gentleman is right to pick me up on Cullen, because he raised the issue earlier and I must address it. Cullen asked for an investigation into whether compliance had been achieved by 19 December. That work has been concluded, and certain issues are now being clarified. As I said in my earlier intervention, the conclusions will be published in March. However, the delay that has been incurred has exposed a weakness in the Health and Safety Executive.

The delay came about because the HSE was not properly staffed to deal with that level of work in the time in which we all agree it needed to be done. I have made sure that it is to be staffed at a proper level. In 1999, there were just 56 railway inspectors at the HSE. I agree with the hon. Gentleman that this is a vital area, and the work was not being done quickly enough so far as I was concerned. As a result of the action that we have taken, there will be 196 railway inspectors at the HSE by March this year. The sort of delay that we have seen will not be repeated, and we can treat safety issues as a priority in the way in which the hon. Gentleman wishes us to do, in relation not only to Cullen but to the whole range of safety issues in the industry.

The broader range of objectives for the railways includes safety, performance and quality. Although the strategic plan focuses on the short and medium term, the longer term is not neglected. I have no doubt that the condition of the railways in the United Kingdom is not one of which anyone can be proud. I say that as Secretary of State for Transport, Local Government and the Regions. I took the decision that we were not going to tinker around at the edges of the problem, or muddle through; rather, we would take the necessary decisive action.

I have come in for a great deal of political criticism from Opposition Members for the actions that I have taken. I do not regret the decisions that we have taken, because decisive action was necessary if we were to create a railway system fit for the 21st century, and the one that the fourth largest economy in the world deserves. We have not got that yet, but I am confident that, because of the decisive action that we have taken over time—there are no quick fixes so far as railways are concerned—the travelling public will be able to see real improvements by 2005. By 2010, at the end of the 10-year plan, we shall have had the significant sustained investment that the railways need, which will change dramatically the quality of experience so far as the travelling public is concerned.

Priority will be given to railways; that is my commitment as Secretary of State. It is a commitment on which I intend to deliver for the Government and for the travelling public. On that basis, I ask the House to support the amendment.

Photo of Theresa May Theresa May Shadow Secretary of State for Transport 4:49 pm, 16th January 2002

I refer the House to the declaration that I made on Monday 14 January, which can be found in Hansard at column 33.

There can be no doubt that the state of the transport system in this country, and of the railways in particular, is a matter of prime concern to everyone. Central to that is the performance of the Secretary of State for Transport, Local Government and the Regions. He has repeated this afternoon what he said to The Guardian on Monday 14 January:

"There can be no more excuses. It's now our responsibility . . . I am taking responsibility."

So said the Secretary of State. Of course, his responsibility is at the heart of today's debate, because the motion is about whether we think that he is doing a good job on the railways.

It will surprise no Member of the House to hear that I think the Secretary of State is doing a pretty bad job. [Hon. Members: "Oh!] I realise that that is a revelation to every Labour Back Bencher, but nobody who has read the press or listened to commuters in recent weeks can be in any doubt that that view is widely held outside the House. Indeed, if the silence on the Labour Benches on Monday when the Secretary of State made his statement on the Strategic Rail Authority's 10-year plan is anything to go by, he can take little comfort in thinking that his colleagues have a better opinion of his performance.

It so happens that Newcastle's The Journal recently asked the Secretary of State about his performance:

"Are you confident you're up to the job?"

He replied:

"I've got no doubt. People will not take my word for it. They'll look to see what we deliver in practice. That's the acid test."

He is delivering in practice a 45 per cent. increase in train delays and what the Minister for Europe tells us is the worst railway in Europe.

We know that the Secretary of State has been undermined by the Prime Minister's appointment of Lord Birt to consider transport policy, and I am grateful to Mr. Foster for his reference to the fact that the Secretary of State thinks the Prime Minister has appointed Lord Birt in order to keep him occupied. The Secretary of State has been undermined elsewhere. He told readers of The Guardian that he might perform a U-turn on the London Underground public- private partnership, but the Prime Minister told us that the tube PPP is definitely going ahead.

The Secretary of State cannot now rely on the other blue-eyed boy of new Labour, the Secretary of State for Health. On Monday, the Secretary of State told us in his interview with The Guardian:

"There is not a love affair with the private sector."

However, the Prime Minister reminded us this afternoon that the Government's health service strategy is all about private sector partnerships for the future of the NHS.

In fact, the Secretary of State cannot even rely on himself. I wonder whether he remembers telling The Guardian:

"I do believe in the Third Way".

On Monday, he told us that he is backtracking from the third way because it is becoming "flaky". All that would be an amusing farce were it not for the fact that underlying it is something that matters to the quality of life of everybody in this country—the state of the railways. Passengers' quality of life is not the only issue, because the impact on the economy of having a decent railway system, or one that is not working properly, is also involved. The problem is not just the state of the railways today, but their state in the future.

Photo of Geraint Davies Geraint Davies Labour, Croydon Central

Dragging us back to the point, how much more would the hon. Lady like to be invested above and beyond the 10-year plan? Would she re-privatise the railways?

Photo of Theresa May Theresa May Shadow Secretary of State for Transport

I find the hon. Gentleman's second question a little surprising, because the train operating companies are still in the private sector. I apologise, because I cannot remember whether he was one of those who applauded the Secretary of State when he put Railtrack into administration.

Photo of Theresa May Theresa May Shadow Secretary of State for Transport

Excellent, but the hon. Gentleman may think twice about the Secretary of State's actions when he discovers that the company to replace Railtrack will be a private sector company. Far from changing the structure of the railways, which the Labour party has always said has so many problems, the Secretary of State is keeping the structure between Railtrack, the replacement Railtrack and the train operating companies exactly as it was under privatisation. The hon. Gentleman needs to find out more about his party's policy before intervening.

Photo of John Redwood John Redwood Conservative, Wokingham

My hon. Friend might refer to the Secretary of State's very own SRA plan, which says that

"almost all new projects will be financed by Public Private Partnerships" and not through capital support from public funds. He is hiding behind a private sector strategy in the document.

Photo of Theresa May Theresa May Shadow Secretary of State for Transport

I am grateful to my right hon. Friend, who is absolutely right. Now that this has been pointed out to Labour Members, I hope that they will start to understand a little more about what the Secretary of State's promises actually mean.

I would like to refer to investment, and I shall do so briefly. I am grateful to the hon. Member for Bath for placing on the record the Library figures that compared the investment record of the last five years of the last Conservative Government with that of the first five years of this Government. The facts are clear. Investment in the railways during the last five years of the Conservative Government was higher than in the first five years of this Labour Government. The figures quoted by the Secretary of State on Monday are repeated in the Government amendment today, namely the investment in rail of £4.3 billion for the 10-year plan, compared to £1.4 billion for the five years up to 1996–97.

I have discovered how the Department came across these figures. I understand that it took the £49 billion of total public and private investment from 2000 to 2010, divided it by 10 and adjusted it for cash-expected prices. The Department then looked at the SRA national rail trend statistics on the SRA website—there are two different sources for the statistics—referring to Government support only, and averaged only public sector investment over the last five years of the last Conservative Government. The Secretary of State says that actually what people care about is the total amount of investment and not where it comes from, but they also care about the Government giving the facts correctly and not trying to spin fantasy figures to tell a political story that is not true. I hope that the Secretary of State will in future quote the right figures when he talks about investment.

Photo of Don Foster Don Foster Liberal Democrat, Bath

Is the hon. Lady aware that if one takes the much-vaunted £180 billion of investment for the 10-year transport plan overall and, instead of adding accumulatively the various amounts, studies it on a constant price basis, it comes to only £157 billion? By the time one takes out all of the money that is regularly spent each year, the hon. Lady will agree that it amounts—to use a phrase coined by a Labour Member—to not much more than a string of beans.

Photo of Theresa May Theresa May Shadow Secretary of State for Transport

That point about the Government's fantasy figures was taken up in the leader column of the Financial Times yesterday, which concluded:

"There can be only three conclusions. The promised enhancements will not happen; much greater public subsidy will be required; or the amount of double counting in the government's £180 billion 10-year transport plan is much greater than was previously clear."

We know that the Government double and triple count, and they have done that in terms of the railways and transport investment, but people know the reality because they know what they experience every day when their trains are not running on time or are cancelled.

Investment is a key issue in looking ahead to improving the railways for the future. There is a black hole at the heart of the Secretary of State's plans. He prays in aid the Financial Times in terms of looking at private sector investment for the future and says that the private sector will come forward with all of the investment, but yesterday the Financial Times posed a very important question to the Government:

"In its 10-year plan for transport, the government estimated that it could persuade the private sector to invest £34 billion in the railways over the period . . . The question is: where will the revenue come from to finance this new private investment?"

Even if money comes forward, it will do so at an increased cost; the price to the taxpayer or to the passenger, through fares, will be higher. We have had estimates that it could be as much as an extra £1.5 billion over two years. Again, I am grateful to the Financial Times, which said:

"If fares raise £3.4 billion, this achieves a maximum of £1.7 billion extra a year at the end of the plan. Not nearly enough to provide a commercial return on £34 billion of new private investment."

If the Secretary of State gets his money, it will be at a higher price to the taxpayer or the fare payer.

When the Minister for Transport sums up, perhaps he will tell the House what the Government estimate will be the extra cost of obtaining that £34 billion from the private sector, as a direct result of the Government's actions with regard to Railtrack, which have so damaged private sector confidence. [Interruption.] The Minister for Transport is laughing at that question so perhaps he would like to answer another one. How much of the private sector investment that is forecast in the 10-year plan from the SRA will he guarantee will have been put in to the railways by the time of the next general election?

The Government have created a problem for themselves through the way in which they handled Railtrack and put it into administration. That problem is accepted by the SRA which says in its plan that one of the milestones that needs to be passed on the way to delivering the strategic plan is the resolution of the Railtrack administration and the implementation of any financial and structural reforms that are needed as a result. [Interruption.] The Minister for Transport yawns when I mention the 10-year plan, but I thought it was the plan to end all plans and would give us all the answers on the railways. He is the same Minister for Transport who informed us that while the Secretary of State was on holiday in India he had not been in touch with the Department: it was not necessary, the Minister for Transport told us, because he was in charge so everything would be all right. He now seems to be bored by the issue.

Perhaps the Minister would explain to us when he thinks Railtrack will come out of administration and the costs will be closed down. The administrators have told me—it has been confirmed in written answers—that the cost up to March will be £2.9 billion. That is what they have asked the Government for. If Railtrack stays in administration for as long as is now predicted by commentators—until the middle of next year—an extra £7.5 billion will be needed to pay the costs of administration. The problem with that is the impact that it is having on the railways that the travelling public use. Delays have increased and people are suffering cancellations, but the 10-year plan gives no hope that they will see the increased capacity in the system that is needed if overcrowding is to be reduced and the quality of journeys improved.

The issue is not only about individual passengers, but about the impact on the economy. As the British Chambers of Commerce has pointed out to me:

"A coherent and comprehensive transport strategy is essential to UK business competitiveness . . . the Government has missed a once in a generation opportunity to plan ahead sensibly for the long term sustainable development of the UK rail infrastructure."

The problem is that the Government have not put that new capacity in place.

Other aspects of the plan should worry rail passengers. It suggests a reduction in the number of train operating companies and the merger of some franchises, but the SRA has also stated its aim of giving priority to express services, and that could lead to a worrying situation. I shall give an example from my constituency. Maidenhead and Twyford stations are served by Thames Trains. First Great Western goes from Paddington through to Reading without stopping at Maidenhead or Twyford. The SRA proposes that First Great Western and Thames Trains should merge. When they do and if express services are given priority, how many services that currently stop at Maidenhead and Twyford will be cut as a result of the Government's plan? Will the names of Byers and Bowker go down in the annals of rail history alongside that of Beeching? How many local services and stations will be at risk?

The Secretary of State says that he is responsible for the state of the railways. He promised us a 10-year plan that would give us a railway fit for the 21st century, but the real problem for passengers is that the 10-year plan does not deliver the increase in capacity that is necessary to improve services. The real problem is that the right hon. Gentleman does not know whether he can deliver a 10-year plan because he has no guarantee of future private sector investment or even of the public sector investment that he proposes. He is not delivering capacity, he is not improving services, and he gives passengers no hope.

Recently, in an interview, the Secretary of State said that his decision on Railtrack was high politics. It is time that he stopped playing high politics and started delivering the railways that passengers want and the economy needs.

Photo of Eric Martlew Eric Martlew Labour, Carlisle 5:05 pm, 16th January 2002

I speak in favour of the amendment and against the motion. In fact, the motion would have been better if it had included the words "When the Secretary of State is successful he will receive a huge bonus." I am convinced that my right hon. Friend would indeed receive that bonus.

I congratulate the Secretary of State on the good work that he is doing. I was delighted when he said that he wanted to stay in the job for many years. When we consider the history of transport in this country, we realise that one of the problems is that Transport Ministers do not stay in post for very long. I notice that the right hon. Member for North-West Hampshire (Sir G. Young)—a former Transport Minister—is in his place. Under the Conservatives, there were about a dozen Transport Ministers during 18 years, and under the Labour Government there have been four. That has added to some of the problems.

I hope that the Secretary of State and his team stay in their jobs. There is one reservation, however: we need a Secretary of State who has responsibility only for transport and nothing else. We should remove all other responsibilities. That was a problem under the previous Government. We should focus on transport, as it is important for the people of Britain and has an essential role for our future. It is wrong to add further responsibilities to the role of the Secretary of State. The role of a Secretary of State for Transport would be every bit as important to the daily lives of people in this country as that of the Foreign Secretary or the Secretary of State for International Development. I want the restoration of a Ministry of Transport.

Recently, the Secretary of State has been criticised unfairly—not least for his decision to ask that Railtrack be put into administration. There is no doubt why that criticism was made. Many wealthy and influential people lost a large amount of money. There was no cry from the Labour Back Benches or the general public to the effect that my right hon. Friend's decision was wrong—we think it was the right decision. However, some of the wealthy people who lost money are extremely influential—especially in the Conservative party.

Photo of Theresa May Theresa May Shadow Secretary of State for Transport

Is the hon. Gentleman suggesting that more than 90 per cent. of Railtrack employees, some of whom lost their life savings as a result of the Secretary of State's action, are all wealthy?

Photo of Eric Martlew Eric Martlew Labour, Carlisle

I am suggesting that I represent hundreds if not thousands of railway workers, but I have received only two letters from railway workers who actually lost shares. The rest of them accepted that Railtrack was not working, that the Conservatives had made a mess of things and that the only way to put things right was to put the company into administration and then into a not-for-profit trust.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

My information from friends in the rail industry is that they want secure jobs in an industry that will be secure in the future. They have written off their shares in Railtrack—they largely blame that on the Tories.

Photo of Eric Martlew Eric Martlew Labour, Carlisle

I wholly agree with my hon. Friend. If people want a job with a secure future, those jobs will be on the railways. I come from three generations of railway workers, but when I left school in the 1960s my father told me not to look to the railways for work because there were no jobs in the industry. The situation has changed and the industry now offers a secure future. Indeed, there are now too few skills in the industry—too few people know how to run a railway—and we need more skilled people.

Photo of Mrs Jackie Lawrence Mrs Jackie Lawrence Labour, Preseli Pembrokeshire

Is my hon. Friend aware that sickness rates among Railtrack staff plummeted after the Secretary of State's announcement that he was putting the company into administration? Is not the fact that the Government are taking an active hand a measure of the confidence of the staff?

Photo of Eric Martlew Eric Martlew Labour, Carlisle

I think that the high sickness rates were a measure of the lack of confidence in the people running the railways. The trouble with Railtrack was that it was run by accountants and not by railwaymen. [Interruption.] Perhaps Mrs. May wishes to declare an interest.

Back-Bench Labour Members support the decision to place Railtrack into administration, as does the vast majority of the general public. The decision came as a surprise, and it was a welcome reversal of Government policy. I remember asking my right hon. Friend the Prime Minister two years ago whether he would consider reversing the decision on rail privatisation. He told me that that was not necessary and that the SRA and extra investment would sort out the problems. Only recently has my right hon. Friend agreed that that strategy had failed.

On 23 March last year, I introduced a private Member's Bill. If it had been passed, it would have earned a rather grand title—the Railways Act 2001. The proposal was simply that we should look at how the rail infrastructure was being managed and controlled, and that a report should be prepared containing alternative options. I proposed six options, which included nationalisation, regionalisation and the establishment of a not-for-profit trust. Safety would have been the main priority of such a trust, with any surpluses being ploughed back into the infrastructure.

I am sad to say that the Government opposed my Bill very strongly. My hon. Friend the Under-Secretary of State for the Home Department, my hon. Friend Mr. Ainsworth, was the relevant Minister at the time. He spoke against the proposals with some conviction and passion, and anyone who reads column 639 of the Hansard record of 23 March 2001 will see the reasons for the Government's position at that time.

I am conscious of the fact that the present Secretary of State was not involved in the debate on my Bill. I was delighted when he took the decision about Railtrack—it sent the message that this country's rail system could never work under a privatised Railtrack. I would not disagree completely if the Government were to argue that they had given Railtrack an opportunity and that it had become obvious that the company was going to fail. I am pleased that we are where we are today, and I am sure that we can go on to better things.

I deal now with the west coast main line. I am sure that my right hon. Friend the Minister for Transport would not expect me to make a speech on the railways without talking about that line, which has been in a terrible state for many years and which is still crumbling. I formed the all-party west coast main line group 10 years ago this month. The group is very active, and we had the pleasure of the company of my right hon. Friends the Secretary of State and the Minister yesterday. A total of 50 people, from both the Commons and Lords, attended the meeting.

When she was Prime Minister, the then Mrs. Thatcher cancelled the advanced passenger train, also known as the tilting train. The Swedes and Italians subsequently pinched the technology for such trains, which are now being imported back to Britain for the west coast main line. That Conservative Government made no investment in the line, even though it is the country's main rail artery. Hon. Members from Scotland and Wales complained earlier about the lack of investment, but they must realise that an upgraded west coast main line is essential for improved services to north Wales and to Scotland.

The west coast main line has been allowed to decay to a terrible extent. I mentioned earlier that the last Conservative Chancellor, Mr. Clarke, suggested that the difficulties could be put right by the application of £500 million of Government money. The latest estimate is that continuation of the plans for the line proposed by the privatised Railtrack would cost £10 billion, and that it would be cheaper to build a brand new line.

I accept that the SRA is right to look at the project again, but it is a misconception to believe that work has not started on upgrading the line. A lot of work has already been done, and the first stage of the project should be complete by 2003. By the summer of this year, the first Virgin tilting train should be running, taking guests and competitors from London to the Commonwealth games in Manchester.

Within a year, 53 new train sets should be running on the west coast main line, giving us a good new service. I understand that the old rolling stock is to be scrapped, as it deserves to be, but decisions remain to be made. The first is whether to accept the proposal that trains on the west coast main line should be allowed to travel at a maximum speed of 140 mph. The first stage of the project will allow tilting trains to travel at 125 mph, but the trains are designed to do 140 mph, so the matter needs to be debated and discussed.

A second matter for discussion is the mix of services on the line. The hon. Member for Maidenhead mentioned her constituency, and it is clear that we must think about local traffic, cross-country traffic and freight traffic as well as express services. The SRA must come up with the mix that is best for the railways.

I was pleased that my right hon. Friend the Secretary of State was able to tell the all-party group that by the end of February the SRA will have produced a definite blueprint for the west coast main line.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Shadow Spokesperson (Communities and Local Government)

The hon. Gentleman will have read the SRA's document fairly carefully. It does not give any commitment as to when PUG2—passenger upgrade 2—will be completed. Was his all-party group able to obtain any commitment on that matter from either the Secretary of State or the Minister for Transport? Or does he think that the new Pendelino trains will run at 125 mph for the rest of their life?

Photo of Eric Martlew Eric Martlew Labour, Carlisle

I was in the chair at yesterday's meeting, which meant that I had the advantage of being able to put the first question to my right hon. Friend the Minister for Transport. That was the question that I asked, and his reply was that the matter would be decided by the SRA before the end of February. I believe that in some areas of the country it will be relatively cheap to allow trains to run at 140 mph, but that it will be very expensive in other areas.

A decision therefore has to be made, but there is no doubt that the original costings that caused Sir Richard Branson and Virgin to buy trains that could travel at 140 mph were sadly flawed. Those costings put the total amount of money involved at around £2 billion or £3 billion, not £10 billion. I believe that the train companies using the west coast main line will come to a sensible agreement on the matter.

Finally, I turn to that part of the SRA report that deals with the need for a National Rail Academy. I am pleased that it has finally been accepted that there is a massive skills shortage on the railways. I asked my right hon. Friend the Deputy Prime Minister and First Secretary of State about that two years ago, and he replied that serious problems existed. The SRA clearly accepts that.

Earlier in 2000, I had discussions with the then Minister for Lifelong Learning, my hon. Friend Malcolm Wicks. He came to Carlisle and we gave him a good demonstration of how the National Rail Academy could work. We showed how it could be funded, where it should be based and how quickly we could get the project off the ground.

My right hon. Friend the Minister for Transport will not be surprised when I tell him that all the available data pointed to the fact that the academy should be based in my constituency. However, if the SRA is serious about reducing the skills shortage quickly, a quick decision on the National Rail Academy is needed. Carlisle is one of the options for its location. If we do not get the skills, we will not complete the 10-year plan. It is simple as that, and it will not matter how much money is spent or whether it comes from the private or the public sector—if we have not got the skills, the plan will not work.

In conclusion, the Secretary of State has my full confidence. He has taken some hard decisions and a lot of criticism—he seems to be able to take a lot of criticism, and I applaud that as well—but he has to change the Government's policy on the railways and Railtrack, and the decision that he has taken will bear fruit in the future.

Photo of George Young George Young Chair, Standards and Privileges Committee 5:20 pm, 16th January 2002

Whatever disagreement Mr. Martlew may have had with the last Conservative Government, we did at least have his support on one issue—the fact that there was a separate Department of Transport for the whole period from 1979 to 1997, whereas Labour put transport back into a much larger Department. I clutch at that straw from his speech as a sign of support of the Conservative party's transport policy.

When I saw the Liberal Democrat motion on the Order Paper, my first feeling was one of sympathy for my successor but one at the Department of Transport—it is a difficult portfolio and a subject on which every citizen has a view and the press can be pretty merciless—but when I saw the Government amendment that feeling of sympathy soon passed.

In the weeks since Railtrack's collapse, the Government have sought to defend what they did by saying that privatising the railways was wrong, that it was a privatisation too far, that the structure was too fragmented and unsustainable and that there was therefore something of the inevitability of a Greek tragedy about what has happened in recent months. As one of those who was directly involved, I should like to put the opposite case, not just to explain why we did what we did, but, more important, because we will get the wrong solution if the wrong analysis is made of the current crisis. Simply parroting the words "botched privatisation" or "fatally flawed" gets everyone nowhere.

There was one overpowering argument for privatising the railways: privatisation would unlock the capital needed to modernise the rolling stock, the permanent way, the signalling and the stations and to build new links such as Thameslink 2000. Decades of underinvestment had to be confronted. That investment was, in turn, the key to a balanced and sustainable transport policy, reducing dependence on the car and the lorry by developing attractive alternatives and seeking to contain the never-ending demand for more roads. But there were other reasons as well.

Photo of Geraint Davies Geraint Davies Labour, Croydon Central

Will the right hon. Gentleman give way?

Photo of George Young George Young Chair, Standards and Privileges Committee

This speech will not stop at many stations, but I shall give way to the hon. Gentleman in a moment.

British Rail was inefficient, monolithic and hidebound by tradition. The skeleton of the advanced passenger train at Crewe is a monument to the problems that the public sector had in introducing new technology. British Rail's culture stifled the good management potential that was locked inside.

Privatisation was going to transform an industry that looked inwards to the Department of Transport for support into one that looked outwards to its market for custom. It was going to bring into a rather introspective and protected industry successful operators of other transport modes. It was going to reduce the subsidy for running trains, by removing some of the cosy practices that had grown up unchallenged for decades and freeing up the money for other public services. So the policy was not some mad ideological transfer—John Major was a pragmatist with a deep suspicion of ideology. We both wanted a better railway, and privatisation of transport was part of an approach to improving public services that had worked successfully elsewhere.

That starting point was underlined by my experience of getting money for transport when the railways were in the public sector. I would appear before EDX, or whatever Cabinet Sub-Committee was adjudicating on public expenditure, usually chaired by my right hon. and learned Friend Mr. Clarke. My colleagues would declare their pleasure at seeing me, saying how imaginative my view on the future of the railways was and how well presented was the associated bid for funds, but they would say, "But, George, you have to understand that our priorities are health, education and law and order. Colleagues in other spending departments have put forward equally interesting proposals, more central to our manifesto. We are sure you will understand if your bid is cut back, and your presentational skills will enable you to defend the settlement."

Although much has changed since 1997, that feature has not. In Labour's first term, only one section of the transport industry was starved of the capital that it needed—the only section still in the public sector: London Underground. Passengers faced fare rises higher than those on the railways, and the backlog of investment got worse.

As the Secretary of State said on Monday, passengers do not mind where the money comes from, and when the industry was moved from the public sector to the private sector, which is where I believe it should be, the dead hand of the Treasury was lifted. The constraint on expenditure was no longer how much I could get out of the Chancellor, but how fast the train operators, the train manufacturers and Railtrack could sensibly invest.

People might accept the strategic decision on privatisation, but have doubts about the structure—the so-called fragmentation. That is a highly complex issue on which I wish to make two brief points. The first point is simply that industry today is more disaggregated than it was 40 years ago. People make less themselves and buy more in from others. There is more specialisation, more subcontracting and greater flexibility in the market. Car manufacturing is a good example, with the manufacturers basically assembling bits made by other people. That specialisation and subcontracting is not just a feature of industry; it happens in medicine, education, the sciences and services. So the British Rail monolith was no longer the best model.

There is a second, more specific, point, however: the safest and most successful transport industry in this country is the most fragmented—civil aviation. That industry is subdivided into far more component parts than the railways. The stations—the airports—are in multiple ownership. Some of them are owned by the British Airports Authority, some by local authorities and others by bus companies. Signalling—air traffic control—is totally separate from the airports and the airlines. There are tens of different train operators—the airlines—and if a new airline puts on a new service from Luton to Glasgow, we do not say that it is an unwelcome fragmentation of the industry; we welcome the new service. The airlines do not own the aircraft; they lease them, and they are maintained and serviced by others. Someone else does the baggage handling and other companies do the catering. Civil aviation is a disaggregated, specialised industry, linked by contracts. Critics might call it fragmented, but it is safe, successful and popular.

Photo of George Young George Young Chair, Standards and Privileges Committee

I will briefly stop at Surbiton—an important suburban station.

Photo of Edward Davey Edward Davey Shadow Chief Secretary to the Treasury, Shadow Minister (Olympics and London)

Does the right hon. Gentleman have no regrets about the structure of the railways that he chose? For example, Japan went for a privatised railway that was regionalised but vertically integrated, and its railway has been terribly successful—unlike the model that he chose.

Photo of George Young George Young Chair, Standards and Privileges Committee

I do not agree with the hon. Gentleman. We looked quite hard at that model. It is very inflexible, and it is difficult to get in a succession of train operators if they also own the infrastructure. We set up a basic structure of unified network ownership: Railtrack; train operating companies, which run the services on franchises; and the so-called ROSCOs—the rolling stock companies—which own the rolling stock and lease it to the train operating companies.

Photo of Geraint Davies Geraint Davies Labour, Croydon Central

Will the right hon. Gentleman give way?

Photo of George Young George Young Chair, Standards and Privileges Committee

No. I must make progress.

There is also a transparent and independent system of regulation. As my hon. Friend Mrs. May said from the Front Bench, that core structure has rightly been virtually untouched by the Government.

However, another factor was at work before 1997, and it was every bit as important as the structure. We all know of some very odd structures that work well because people want to make them work. Before 1997, all the players were determined to work together to build a better and safer railway.

After privatisation, Ministers, Railtrack, the train operating companies, the franchising director, the regulator and all the new people who we attracted in from the other transport industries, such as shipping, aviation and buses, worked together with the excellent managers who joined from British Rail. We all believed that that was a new chapter in the history of the railways, in which we could access the funds we could never get from the Treasury, reverse decades of decline and play a key role in a more balanced transport policy. It may be an old-fashioned word, but there was trust between the key players.

Initially, things went well, and the number of passengers started to rise. Indeed, more people now travel on the trains than at any time since 1945. More train services were put on. Indeed, there are now 25 per cent. more trains. Freight was attracted back off the roads. Safety and punctuality continued to improve, and key fare increases were pegged to protect commuters. The subsidy paid to the franchise operators was less than the subsidy paid to British Rail to run the network, and the planned investment in new rolling stock and stations increased substantially. Railtrack began ambitious plans to build new links between the lines north of London and those to the south of it and, as we have just heard, to modernise the west coast main line. Those who were running the system genuinely believed that there had been a renaissance in our railways and that, after decades of underinvestment, a new future was opening up.

Then we lost the 1997 election. It would be naive to blame everything that has gone wrong on the change of Government in 1997. I am not politicising the problem, and nor would I wish to. One of the difficulties that I faced was the absence of a consensus on how the railways should be run. Had we been re-elected in 1997, I am sure that we would have wanted to make modifications in the light of experience—as we had done with other privatisations—but I am convinced that we would have avoided the debacle of last October.

The key factor that I have just mentioned—the determination to make the new system a success, with everyone working as a team—began to be eroded after June 1997. The new Government had opposed privatisation, but they had neither the funds to renationalise the railways nor the political will to make privatisation work. Ministers started to settle old scores, sniping at some of the new train operators and at Railtrack. The team spirit gave way to the blame culture. The regulator was sacked, and a new and at times aggressive rail regulator began to make it difficult for Railtrack to raise the capital it needed. A new Strategic Rail Authority was set up between the Government and the industry, making things more complicated rather than simpler. The letting of new franchises was suspended, with short-term renewals instead of long-term contracts, and personality conflicts got in the way of the industry's needs.

Crucially, there were management failures at Railtrack and elsewhere. I was interested to read page 15 of the strategic plan, which states:

"Whilst it is true that some structures can be more unwieldy than others, it remains fundamentally the case that neither contracts nor regulation manage companies: people do. It is the failure of the management process in the railway industry that is at the heart of what needs most to be corrected."

I agree. Management failures, principally at Railtrack, began the process of erosion of public confidence. After Hatfield, Railtrack lost its nerve. Then Gerald Corbett resigned and it lost the confidence of politicians and the City.

Without being party to the negotiations with Railtrack last summer, it is difficult for an outsider to comment on what went wrong. However, something clearly went wrong in the management of the dialogue between Railtrack and the Government. It may be that a key ingredient was missing—the will to find a way through the problem. The Secretary of State may never have wanted a deal, or the Treasury may have made it clear that it would not fund one at any price.

If that is the case, Railtrack should have spotted what was going on and not overplayed its hand. If Railtrack's dividend policy was a problem, it should have put that issue on the table for discussion with the Government. If its policy on executive pay was a problem, that should also have been put on the table for discussion. If the Government had doubts about the competence of management, those doubts should have been talked through.

What actually happened, however, was that the Secretary of State was leaning over the patient discussing a cure at the same time as he had his foot on the oxygen pipe. Not surprisingly, the patient expired. Eventually, we will find out what went wrong, but the breakdown of that dialogue was a disaster. I have no doubt that the National Audit Office and the Public Accounts Committee will want to inquire into the actions of the Department for Transport, Local Government and the Regions. They rightly did that for the privatisation process and I have no doubt that they will do it with equal vigour for the de-privatisation process. I hope that they ask whether the Government costed the alternative when they pulled the rug from under Railtrack.

If the Secretary of State thought that he had a new, inexpensive and popular solution, he was wrong. His action has raised more questions than it has answered. The railways now face a period of uncertainty, with a question mark over investment and a field day for the lawyers. There will be more disruption, more delay, more discontinuity, more short-term franchises and an exodus of talent. I have no doubt whatever that the taxpayer and the passenger will pay more than they would have done if a sensible deal with Railtrack had been arrived at and that improvements will take longer.

The private money that was going to be invested by Railtrack in modernising the railways—£34 billion—is no longer available on the same terms, if at all. The Government will have to find more money themselves, and the history of the railways shows that Governments do not put up the money that is necessary. The action that the Government have taken to put Railtrack into receivership will have repercussions way beyond the railways. They will reverberate throughout the growing dialogue between the public and private sectors on joint ventures, and make the City and international investors ultra-cautious about investing in projects in partnership with the Government.

I note in passing that the Government's policy for the railways sits uneasily with their policy for London Underground. With the underground, the Government want to keep the operation of the trains in the public sector but use the private sector to modernise the infrastructure. However, with the railways, the Government are leaving the running of the trains in the private sector while the public sector assumes responsibility for the infrastructure. It is difficult to see a coherent approach in their transport policy.

What happens next? Let us look to the areas of agreement across the Floor. I accept, as do the Government, that there should be unified ownership of the railway network—the bits that do not move—and that the company that owns it, the son of Railtrack, should look to the private sector for the capital that is needed to modernise it. That should be off the Government's balance sheet. I have no difficulty with special-purpose vehicles, which are a new form of financial rolling stock.

We agree that the trains should be run by companies in the private sector on franchises that are competitively bid for. Those companies can be sacked if they under- perform. We could never sack British Rail, so we have created something that we never had before—a competitive train operating industry. We agree that the companies should lease their trains from others if they want to. We also agree that there should be transparent and independent regulation of the industry to ensure fair play. So there is a quite a lot of common ground.

What is fragmented is the Government's response, with the Secretary of State and his Department being second- guessed and shadowed by Lord Birt and others in a number of unaccountable bodies at No. 10. It must be up to the Transport Secretary, who is accountable to Cabinet and answerable to this House, to come up with the strategy.

We have to sort out Railtrack quickly because that lies at the heart of the system. Without Railtrack or its successor functioning properly—instead of being run by receivers—there is nothing on which to build. If there is a way through the litigation and the various bids, it must be pursued. New long-term franchises must be let before blight descends, and we must stem the exodus of skills from the industry.

Finally, it is vital to restore the confidence of the private investor, as the Treasury will never fill the funding gap. That can be done if the will is there and if trust can be rebuilt. However, I do not believe that the current Secretary of State—admirable qualities though he may have—is the right person for that task. Having drawn his line in the sand, he is on the wrong side of it. The Prime Minister should ask someone else to begin the process of rebuilding.

Photo of Mrs Jackie Lawrence Mrs Jackie Lawrence Labour, Preseli Pembrokeshire 5:38 pm, 16th January 2002

I shall use my time in the debate to be somewhat parochial and to consider what the strategic plan means for Wales and Welsh railway services.

I have been here since the start of the debate and listened to the arguments of Conservative Members. I am stunned that, in every contribution that they have made, there has been no whisper of an apology for the fact that rail services are in their current state as the result of what has happened, not overnight, but over 20 or 30 years. I shall cite some examples from my area that show that it is a travesty that the Opposition have not had the courtesy to apologise for the fact that this debate has had to be called today. Mrs. May referred to the Secretary of State taking responsibility. However, from a Back Bencher's and rail user's point of view, that is a refreshing and welcome change. Opposition Members have never taken responsibility.

I welcome the Strategic Rail Authority's plan and what it means for my area. I welcome the investment but, perhaps more than just the money, I welcome the overall co-ordination of rail services. I hope that we can stop the buck being passed, because I know from listening and talking to my constituents that one of passengers' major concerns is that, when they have a problem with the railways, they do not know where to go to obtain redress. That is why they come to me. They are stumped, in short. I write to rail companies and their responses often blame another rail company. Pinning them down has been one of the major problems for my constituents and passengers from west Wales.

The railways are important to west Wales. From the days of Isambard Kingdom Brunel, who saw the potential of having a railway junction in west Wales, which was also where ships could dock for transatlantic travel, we have had a long and noble tradition in the railways. We were fortunate to keep our rail link through the 1950s and 1960s and the days of Dr. Beeching. The railways are important because two ports still rely on them—Stena at Fishguard and Irish Ferries at Pembroke dock. Many of their passengers are foot passengers who travel by rail to cross to Ireland.

Our area is dependent on tourism. Part of our economic development strategy has been to preserve the beauty of the area and to encourage people to come to us by rail. We have tried to increase cycling and walking holidays, which has meant encouraging people to come by train. There are social considerations, too. Many people in Milford Haven, in my constituency, do not have personal transport. The rail link between Milford Haven and Haverfordwest is a valuable lifeline to our county town.

I mentioned the lack of an apology from the Tories. We can talk about money and the facts and figures until the cows come home, but it is the evidence on the ground that is important. In the 1980s, we lost our sleeper service to London. In the 1990s, before 1997, we lost our daily 125 service to London. That was an important factor for economic development; it prevented individuals from taking a day trip to London for business purposes or other reasons, because they cannot get back to Pembrokeshire and west Wales in the same day.

That problem was compounded by flawed privatisation, which is the most apt description of privatisation. Pre-privatisation, it took two hours 45 minutes to get from Paddington to Swansea; it now takes three hours. A cynical person could say that the extra 15 minutes were added on so that the privatised rail companies were less liable for compensation if things went wrong. Several hon. Members—notably from south-west England—have complained about journey times. I wonder whether their experience is the same as mine, because journey times in west Wales are certainly 15 minutes longer than they were pre-privatisation.

The other problem we face—again, it may be common to the south-west—is the replacement of train services by bus services. I inquired about that when it first happened because there seemed to be no logical reason, such as conflicting services, why the train should not carry on. The answer was simply a shortage of drivers. Since fragmentation and privatisation, drivers have been employed by different companies, so there is no pool of drivers to call on to take the trains to the end of the line. In addition to having an impact on links to the ferries, it also affects elderly and disabled passengers. They often catch the train because of the facilities and services that it offers and so that they do not have to lug their luggage on and off a bus.

Another important problem is that of local train connections. They have had a dramatic impact on train services to our area. The local linking train used to wait in Swansea for passengers from the mainline train. Post-privatisation, that changed. The train waits for a maximum of seven minutes because, after that, the other train operating company becomes liable for compensation. What are the benefits of that for passengers and customers? In my experience, privatisation has detracted from the service and removed choice and quality.

I mentioned my personal experience of passing the buck. I welcome the change at the top of the SRA. As a Member of Parliament who wrote to it, I have been unhappy that it appeared to be an apologist for the rail companies. The plan and the change at the top will, hopefully, lead to an improvement and to those companies being called to account across the board so that the buck can no longer be passed.

A pie chart in the SRA's strategic plan shows that Railtrack is responsible for 42 per cent. of rail delays whereas the train operators are responsible for 43 per cent. I had a meeting the other day with First Great Western trains. It gave me another pie chart that showed that Railtrack was responsible for 74 per cent. of the delays. Other reasons for delays, including the state of the fleet, were down to 26 per cent. That again shows the need for the vision and co-ordination that the SRA will offer from now on.

In my meeting with First Great Western, we obviously focused on a Welsh perspective. I want to draw the attention of the House to one or two things that I think can improve services in Wales. I also want to show that investment further up the line can have a dramatic impact on our services. It has been brought to my attention that there is no signalling in the Severn tunnel, which means that there is a seven-minute gap between every train that goes through it. If signalling were put in the middle of the tunnel, capacity would be increased and trains could go through every four minutes. Clearly, that would have a dramatic impact on the service to Wales in terms of capacity and reliability. I am told that only £2 million of investment is needed to do that, which seems a small sum in terms of the benefits that it could bring to Wales.

Junctions at Cardiff and Newport, which are especially slow, add to journey times and affect track capacity. That is another issue. First Great Western raised several problems further down the line. With regard to Swindon and Didcot, the joint use by slower freight trains has an impact on services to Wales. There are also concerns about the Reading bottleneck. That is a good example of how investment all the way down the line in the UK has an effect on the whole of Wales.

As a rail user, I have one small additional matter to raise: car parks. In my area, it can be a 40-mile journey to the nearest station to get a long-distance train. One problem is the lack of car parks and the security in them. Friends of mine have returned after four days to find the wheels missing from their cars. If we are to meet the Government's targets for rail use, it is vital that the problem of secure car parking be addressed.

Finally, one welcome feature in the strategic plan that has not been mentioned is the idea of providing accessibility for all and what that offers for disabled people on trains. The fact that all new vehicles will be fully accessible and that additional funding will be available to make all stations accessible is important, especially if rail is to play an increasing role in public transport in this country.

Photo of David Heath David Heath Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry) 5:48 pm, 16th January 2002

I do not think that Mrs. Lawrence should be in any way apologetic for taking a parochial view in the debate. If the debate is to serve any purpose, and I think that it serves many, it is for us to express on behalf of our constituents the cri de coeur that derives from their daily experience of public transport. If there is one thing that unites the House, it is the lamentable state of the railway system.

All hon. Members recognise that the travelling public's patience with the railway system is exhausted. They have to go through a daily misery, whether it is on the trains, the tube system in London or in the alternative forms of private transport on the roads that they choose to use instead of public transport—there is a knock-on effect. The most common sentiment that I discern among my constituents is a fatal resignation to the idea that the trains will not do the job that they want them to do. They are resigned to the fact that they will not arrive when they expect them to and that things are not getting any better.

Not only is that view expressed by people throughout Britain, but it is alarming to note that it is also expressed abroad. I draw the House's attention to an article in Le Monde this morning—I shall not attempt to read it out in French. Under a heading that includes the phrase "the worst railway misery in Europe", the article states:

"One cannot begin to find an end to the list of the difficulties that millions of users live with every day: breakdowns, accidents, delays, overcrowding in the coaches . . . "—

I suspect that that series of dots leads on to a gallic shrug. If that is the impression gaining currency both in this country and abroad, something must be done.

My constituency is served by several railway systems, not least of which is South West Trains. I do not want to dwell on SWT's problems today, save to say that the mud wrestling in misguided pursuit of machismo that has featured in industrial relations within that company does neither the railway industry nor passengers any good. The sooner a settlement is reached, the better for all concerned.

For every person in my constituency who struggles with SWT, there is a person who shares the experience of the hon. Member for Preseli Pembrokeshire of trying to use First Great Western, which operates the alternative route to London, or someone who has attempted to use the almost mythological cross-country service—everyone knows that starting in the south-west and trying to get anywhere other than London involves at least a day's journey, because the connections simply do not work—or local services. I am not over-sentimental about filling the gaps that Dr. Beeching left behind, although I remember as a child seeing from my bedroom window the old Cheddar Valley steam train. That track will not be brought back into service, but there are serious questions to be answered about infrastructure and the provision of better local services.

The knock-on effect of not providing a rail service is misery on our roads. It is instructive that on the first day of the industrial action on SWT it was almost impossible to use the A303 and M3. I am told that the traffic was backed up from London all the way to Winchester, which is not something that anyone with an appointment in London was prepared to countenance.

Our constituents expect, and it is reasonable to do so, reliability, efficiency, safety and affordability in their train services. They are sick and tired of the merry-go-round of excuses. The hon. Member for Preseli Pembrokeshire mentioned the buck passing from one company to another, each denying responsibility for the day's delays in the service. There is a merry-go-round of excuses at official level, among Ministers, Departments, and the various bodies charged with regulating the rail industry. Those merry-go-rounds are now matched by the carousel of consultants, some of whom have scant experience of the rail system, who have been brought into advise Ministers and the rail service. What on earth John Birt's role can be, I do not understand. No expert on the police, he does not appear to have improved that service, and he is certainly no expert on trains—indeed, it is reported with some degree of authority that he is averse to using trains in both his personal and business life.

Now we have the strategic plan. As is typical of the railway system, it is late in arriving, we are not quite sure in which direction it is going, and there is no indication that it will ever reach its destination. Those of us from the west country who read that compendious document find little to support investment in the west of England. The best expression of any interest in the west country is the glossy picture in the section headed "Conclusions", which shows Bristol Temple Meads station. Unfortunately, there is no train in sight, only a rather nice new bus. That says everything about the services we can expect to receive.

Photo of David Heath David Heath Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry)

Yes, I would, if a railway element were included; currently, however, none is.

On Monday, the Secretary of State told us that

"The strategic plan for railways draws a line in the sand and represents the point at which we say enough is enough."—[Hansard, 14 January 2002; Vol. 378, c. 33.]

We agree—enough is enough. However, the amnesia that has afflicted members of the previous Government—as evidenced by the speech of the former Transport Secretary, the right hon. Member for North-West Hampshire (Sir G. Young)—has spread to the current Government. When Ministers talk about decades of underinvestment in the railways, they forget that we have had half a decade of underinvestment under a Labour Government.

Where did all the promises made by the Deputy Prime Minister during his period of responsibility for the railway get us? How did they improve the system? Instead of improvements, the right hon. Gentleman bequeathed a system in chaos to the current Transport Secretary, who now wants to start with a blank sheet. It is a nice trick—if it can be pulled off—to start with a blank sheet half way through a Government, but I doubt that the travelling public will accept that, or that they will judge the Government's performance by any yardstick other than whether their travelling experience improves or continues to deteriorate.

Photo of Malcolm Bruce Malcolm Bruce Liberal Democrat, Gordon

My hon. Friend is rightly highlighting the growing cynicism of a public who were faced with the fuel escalator, which gave huge revenues to the Exchequer but did not result in any investment in the public transport to which they were asked to switch. Now, they have no confidence in the future of the plan. Not only the short-term objective of a decent transport and communications policy, but confidence in our ability to get people off the roads and reduce emissions in accordance with our long-term Kyoto commitments, are being undermined by a Government who have failed to inspire confidence in the future of public transport as a viable alternative to the roads.

Photo of David Heath David Heath Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry)

My hon. Friend is absolutely right. That is the crux of the matter. If we are to attract people back to public transport and the railway system and get them to leave their cars at home, we must first reverse the disintegration of the railway system that resulted from privatisation and has been continued by the current Government. Secondly, we must create a fair fares structure to encourage people to believe that they can afford to use the railways.

Thirdly, we must secure the infrastructure investment and development that are needed. I have a modest request to make on behalf of my constituency. We have been trying to use the Great Western line to Penzance as a means of providing local services by reopening stations at Somerton, Langport and Witham Friary. Although that reached "feasibility" stage under Railtrack, the plan has now disappeared from the map, which is regrettable.

We need a safe system. I was alarmed by the Secretary of State's comments on the Cullen recommendations for Paddington. Those of us who use the station want to know that Paddington is safe to use, but it appears that the right hon. Gentleman himself does not yet know whether the recommendations that emerged from Cullen have been implemented. That is a disastrous omission on the part of the Secretary of State and his advisers.

Photo of Don Foster Don Foster Liberal Democrat, Bath

My hon. Friend might be even more alarmed to learn that when purportedly giving information about signalling improvements in the Paddington area, the Secretary of State assured the House that the required TPWS—train protection warning system—improvements had been made. My hon. Friend is aware, although the Secretary of State clearly is not, that Lord Cullen made two wholly separate recommendations. We still have not heard about the recommendations on signalling.

Photo of David Heath David Heath Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry)

That is precisely the case. The Secretary of State does not know whether signalling improvements have been made. He is waiting for the Health and Safety Executive to report—three months late. He is apparently not curious about whether that critically important safety improvement has been made—an improvement that would allow passengers to travel safely into Paddington. That speaks volumes about the Government's priorities.

Privatisation was a terrible adventure for the rail industry. Coupled with underinvestment over a long period, it has had disastrous consequences. The fact remains that the Government were elected five years ago to do better. They have failed to improve the system over that period, and for the public it is now time for delivery or removal.

Photo of Mark Lazarowicz Mark Lazarowicz Labour/Co-operative, Edinburgh North and Leith 6:00 pm, 16th January 2002

This is the fourth occasion in recent months when Opposition parties have initiated a debate on aspects of the railways. The Conservatives have secured three debates, and the Liberal Democrats have selected the topic for today's debate. I do not think for one minute that anyone in the House would criticise Opposition parties for raising the subject of the railways, because it is clearly an important issue that concerns the public. Many Members experience rail travel in their daily lives.

I suspect, however, that members of the public who have followed the debates in the past few months would not have been impressed by what we have heard from the Opposition parties, such as the Conservative party spokesperson's staggering refusal to explain its policy on the railways. Mrs. May was pressed by my hon. Friend Geraint Davies, and she failed to answer his question about what the Conservatives would do and how much money they would put into the railways. If a member of the Conservative Front-Bench team replies to the debate, perhaps they could at least give us an inkling of Conservative party policy on the railways—how much money it would put in, what it would do about Railtrack as it now stands and whether it supports or opposes the Strategic Rail Authority's 10-year plan. I do not think it too much to ask for the House to be given an inkling of Conservative party policy on the railways.

I listened carefully to the opening speech of Mr. Foster. I was genuinely interested to find out about his party's constructive policies on the rail network, but I did not hear too much about that.

Photo of Don Foster Don Foster Liberal Democrat, Bath

The hon. Gentleman may be aware that on 14 February we published our detailed proposals for the future of the railways. We are delighted that the Secretary of State has now adopted some of those proposals on the future of Railtrack. We are hopeful that he will shortly adopt our proposals for the future of the London underground too.

Photo of Mark Lazarowicz Mark Lazarowicz Labour/Co-operative, Edinburgh North and Leith

I am obliged to the hon. Gentleman. It seems that the Liberal Democrats support the Government's proposals on Railtrack and the 10-year plan, which makes me wonder why the motion was tabled in such terms. Perhaps the Liberal Democrats should support the Government amendment.

I am sure that the public welcome the fact that the SRA has a 10-year plan, which, together with the Government's 10-year plan, provides a real strategy for improving rail services. Some of the improvements in the rail network that have already been made since the election of a Labour Government have been possible despite the lack of investment in safety and the fragmentation of the network that we inherited.

In a few months, for the first time in 40 years, rail services will return to a line in south-east Edinburgh, where two new stations have been provided with funding from the Scottish Executive and the SRA. Those improvements can be built on under the SRA's plan, and I welcome that strategic plan and the Government's response to it.

Of course many of us would like to expand on the SRA's proposals. We have our own ideas. Because of the nature of the transport sector, it is almost impossible to please everyone all the time, because people have their own strongly held views on this area of policy.

Even in a sector that tends to be critical of initiatives from Governments of whatever colour, there has been a guarded but positive response to the SRA's plan from the industry and from industry commentators. That suggests to me that the SRA is acting on the right lines, at least in broad terms.

Having raised in parliamentary questions and in correspondence my concerns about the future of rail services in and around Edinburgh, I want to put on record my acknowledgement of the response from the SRA and from Ministers to concerns expressed by me, by other hon. Members and by many outside bodies. I welcome the decision announced today on the two-year franchise for GNER. Unlike Pete Wishart, who has now left the Chamber and has been the only member of the Scottish National party present during the debate, I recognise the benefits that travellers in Scotland and in the rest of the country will enjoy as a result of that two-year extension of the franchise.

My right hon. Friend the Secretary of State listed some of the improvements that have been made. I refer also to the improvements to the diesel train sets, which provide the train service to north-east Scotland and which the hon. Member for North Tayside did not acknowledge in his criticism of the Government.

I particularly welcome the decision to give the go-ahead to the rebuilding of Edinburgh Waverley station, which is essential for the east coast main line upgrade. It is also essential for the planned improvement to local services in the Edinburgh and south-east Scotland area, and is vital for the better development of Edinburgh city centre.

I also welcome the confirmation that the east coast main line upgrade is to be included in the medium-term programme. I note that the SRA will be bringing forward detailed proposals in the near future. That upgrade is vital not just for Edinburgh but for cities and communities along the line from Edinburgh to London. It is vital for tourism, business, leisure travel and freight.

I note that the SRA makes it clear that it will take the lead in the joint venture set up to take forward the east coast main line upgrade. I strongly urge the SRA to ensure that it provides strong leadership, because none of us wants the east coast main line upgrade to be bedevilled by the problems that affected the west coast main line upgrade because of the complexity of the contractual relationships that were necessary to take that project forward.

I welcome many other aspects of the SRA plan. They bring benefits to my constituency and to Scotland as a whole. Even the improvements in the east coast main line outside Scotland will bring benefits to people in Scotland. They travel to London and use trains that start in London. Their trains are affected by delays in the south-east commuter network. Benefits from the upgrade further south will also be felt in Scotland.

There are always more things that can be done and further improvements that can be made. The SRA is right to give a high priority to achievable objectives in the short term, but what I find particularly exciting about its proposals is that it identifies a list of longer-term projects that should be investigated for possible future development. Those projects would revolutionise rail travel in many parts of the country. From my constituency perspective, and as a Member from Scotland, I am excited about the vision of a new north-south, high-speed line, which would offer immense possibilities for leisure, tourism and business travel, would take pressure off the road network and air services, and would also help to bind the United Kingdom together as a concrete embodiment of the benefits to Scotland of our links with England.

I hope that the Minister will favourably consider the proposals for a new high-speed line from the south of England to the north. Such projects require costings and value-for-money analysis, but they also require a leap of faith. I urge the Government to take that leap of faith, and to take the SRA's lead in developing that idea. What better monument could there be to the Government's commitment to modernising the rail network than to open such a line? It would mean that people in this country would no longer look to the continent for its high-speed, modern services and look in despair at the largely 19th century railway network in this country. I urge the Government to do what they can to take that proposal for a high-speed line further forward at the earliest opportunity.

Photo of John Redwood John Redwood Conservative, Wokingham 6:10 pm, 16th January 2002

I have declared my interests in the Register.

I had hoped that we would have a proper debate on the so-called 10-year plan, which was issued on Monday with such a fanfare and received a pretty disappointing press thereafter. Perhaps we have not done so, other than some interesting detailed observations from Members with constituency interests, because there is so little in the plan before us. Perhaps it has dawned on Labour Members that they have been rather let down.

If we look to the plan for a promise that 140 mph trains will be bought and will operate on the west coast main line, we look in vain. If we look to the plan for a guarantee that the full west coast main line upgrade will go ahead, we see instead that it is subject to review and very likely to be downgraded. If people in my part of the world, the Thames valley, seek the promise of a solution to the problems of conflict and lack of capacity on the lines through Reading into Paddington and Waterloo, they will be answered only with a deafening silence.

There will be no solution to the obvious problem that after a very successful period immediately after privatisation, in which there was a big surge in the usage of the railways, the Government have, during the past five years, failed to make the commitment to invest in the new capacity that is so obviously needed to respond to that successful growth.

We see the schizophrenia on this issue not only in the statements of various Ministers and, as my hon. Friend Mrs. May admirably pointed out, in the contradictory statements made by the Secretary of State, but in the words of the newly appointed chairman of the Strategic Rail Authority. In his foreword to the plan, he points out that privatisation has been a great success, and he draws great comfort from the fact that there has been a 34 per cent. increase in passenger usage of the railways, a 40 per cent. increase in freight and a 20 per cent. increase in train usage of the network.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

Is it not the case that the main factor behind that increase is the recent growth of the economy under a Labour Government, and in fact it has nothing to do with privatisation?

Photo of John Redwood John Redwood Conservative, Wokingham

I do not accept that, because we had periods of substantial economic growth when the industry was nationalised, and it never succeeded in increasing passengers and freight as it did in the beginning of the railways' remarkable renaissance after privatisation. I know from experience in my own area that we had a strong economy in the late 1980s, and we did not see anything like that growth in passenger usage of the railways in those days. When we introduced privatisation, there was successful growth in the industry—services improved and companies accommodated more passengers. That growth was, rightly, proudly trumpeted by Ministers until recently, and in the plan it is proudly trumpeted by the chairman of the SRA.

The chairman goes on to explain, however, that all is woe on the railways because of the obvious failure, which has been most pronounced in the past five years, to make any response to that success or to make a commitment to the new rail capacity and the investment required to cash in on that success and further expand the railways. The chairman's prose is not particularly elegant, but its meaning is devastating. He says:

"We have to rediscover the service ethos and an accountable delivery culture, rediscover industry-wide investment planning and rediscover how to train, manage and motivate our people so that the team works together like an efficient machine."

This is after five years. It is after the Government introduced their chosen vehicle, the SRA, appointed a boss, gave him his head and then, for some unknown reason, decided to sack him and replace him with someone else.

How long will it take for the Government to get the SRA up and running in the way that they would like? Why is it that, five years in, we hear from their recently appointed nominee this devastating indictment that practically all the measures that the Government said are necessary to perfect privatisation have not been taken because they chose the wrong person and did not get the SRA straight?

Photo of Kevan Jones Kevan Jones Labour, North Durham

Does not the right hon. Gentleman admit that the privatisation introduced by his Government is the reason for the current fragmentation and disjointedness in the rail service to which he is referring? It is not down to people's failure to work in teams; privatisation was flawed and has led to the breaking up of the railways. Under this Government, the SRA is trying to put strategy and vision back into our rail service.

Photo of John Redwood John Redwood Conservative, Wokingham

I wish that that were true, but I take the view that the original structure as set out by my right hon. Friend the Member for North-West Hampshire (Sir G. Young), the Transport Secretary at the time, was beginning to work extremely well. There was a great increase in rail usage, but the intervention of the SRA and the Deputy Prime Minister, in his role as Secretary of State for the Environment, Transport and the Regions, completely undermined the working relationships in the industry and put on ice quite a lot of the investment. The Government deliberately stopped investment by refusing to renew or extend franchises for companies that would otherwise have made big investment commitments. They worked away gradually to undermine Railtrack, leading to its administration, as we saw.

Mr. Jones smiles and he is sure that he is right, but he ought to read the plan because it is a great admission of failure. It is all about the failure of the Government's body, the SRA, which was going to solve the problems that they thought existed but which has clearly made them all worse. The chairman goes on to say in his foreword:

"We will change the way the SRA is structured and managed to deliver this new railway."

Here we are, five years on, and two or three years after the SRA got up and running, and we are told that the body was completely wrong. That is the view of the Government's chosen agent, and the SRA must now be fundamentally restructured. Will the Minister tell us how long that complete restructuring of the SRA will take? How long will it be before the SRA stops looking at itself and engages with the chief executives and chairmen of the private companies running the industry, gets them on side, gets us back to work and gets the industry investing again?

This is not so much a plan as a plan to have a plan. Again, the chairman lets the cat out of the bag in his remarkably forthright foreword. He says that we need one plan, and that is the key target that he has set himself for 2002. This is not the plan; it is a plan to have a plan. The plan is even more delayed than the trains that it is talking about. The Government say that they believe in planning; they set up a body to make a plan; they have two launches of a plan that is not a plan, and they then decide that the latest plan is a plan to have a plan at some unspecified date this year.

Photo of Bob Russell Bob Russell Liberal Democrat, Colchester

It has nice pictures though.

Photo of John Redwood John Redwood Conservative, Wokingham

Some of the pictures are quite jolly, but the Government seem to be interested in photographing buses and empty railways because they are rather embarrassed by the shortage of good train shots caused by the cancellation of so many trains due to strikes, absent plans and the failure of investment because franchises have not been renewed in time.

We are told that the Government have embarked on creating a new type of vehicle. They should be rather more honest with their supporters about what is going on. The Secretary of State has been absolutely masterful in leading many of his Back Benchers, who never really liked privatisation, to believe that in some mysterious way he is renationalising the main part of the railways, Railtrack. Some of them are happy because they think that that is what is happening. However, if they read the plan carefully they will be deeply disappointed.

We have a private company that was put into administration by a Secretary of State who wanted to waste taxpayers' money and give far more money to the receiver than he would have had to give the company to keep it flourishing in the private sector. We now have a private company, run by private sector accountants in a private sector administration, which the Government are looking to sell on to another private company in due course. The Government say that they may come up with a new type of private sector bid—a company limited by guarantee that is not for profit—but it will be difficult to attract capital into a venture that makes no money for its shareholders.

From what I have read in the newspapers this week it will be even more difficult to raise bond finance for such a company. I hope that Labour Members understand how serious the matter is. Apparently, a group of convertible bond holders voted against the scheme of arrangement for the bond finance in Railtrack which the Government hoped would go through. The Government are now in an invidious position, and some people believe that they, through the administrator, may not meet all the payments on the debt. If we get into an Argentinian situation with Railtrack bonds, the Government will find it difficult to raise money from the City for a future vehicle, if they manage to construct one that is a front for the Secretary of State.

The Minister has leave, if he wishes, to intervene and assure me that the Government will make every payment on those bonds and guarantee that the bondholders will have all their interest and money repaid. I am happy to give way if he wishes to give that assurance. The fact that he cannot do so and is trying to smile and pretend that it does not matter means that I have touched a sensitive nerve; the Government are trying to launch a company on bond finance but, at the same time, they cannot give a guarantee that they will be any better than the Government of Argentina on a bad day in meeting obligations incurred by a company that has almost become a creature of the state.

The Secretary of State has enormous influence and a lot of responsibility for the railways. He made a big error in putting a private company into private bankruptcy, but now hopes that he can get it back into the private sector. He has underwritten the position, presumably because the Treasury insisted that he do so, by stating, through the chairman in the 10-year plan, that practically all the projects of the new Railtrack will be privately financed; that will be done through public-private partnerships, not private capital. For a long time, I have tried to get the Government to tell the markets and the travelling public their plans for granting money to the new Railtrack, whether it is taken on by a company limited by guarantee, as they wish, or some other private bidder.

That question is not unreasonable; the Government will have to reveal the answer before they can have a competition to get Railtrack moved back into the private sector, up and running and perhaps investing again. Answer came there none until we had the strategic plan, which includes a little clue. It says that out of the £33.5 billion of public money, some £26 billion will subsidise the existing railway, quite a lot of which will be routed through the train operating companies. Only £7.5 billion therefore could conceivably be for Railtrack-type investment over the whole 10-year period, which demonstrates that unless something dramatic happens, there will be a fall in investment in mainline railway activities compared with the poor totals managed in the years prior to privatisation. That is an extremely disappointing outcome, which Ministers should take more seriously.

The chairman of the SRA has a delightful sense of humour. In his foreword, he gives one of his aims:

"I want to see fewer accountants, fewer lawyers and fewer consultants. Instead I want to see more engineers, more operators, more project managers".

To assist the chairman, the Government put all of Railtrack into the tender loving care of a set of accountants in administration, then went off and hired a whole load more consultants, lawyers and accountants to advise the Secretary of State. Railtrack plc, which is in administration, has to have that sort of advice, as does Railtrack Group. It is therefore turning into a field day for a lot of hard-working and intelligent lawyers, accountants and consultants.

I have previously estimated that the total cost of Railtrack administration in lawyers' fees, administrators' fees, accountants and consultants will be more than £100 million. No Minister has ever been prepared to gainsay that figure, and I am now beginning to feel that my expectation is far too modest; the legal complexities, with failed bondholder issues and possible lawsuits from Railtrack group, will be such that millions more pounds could be spent on those fees.

Photo of Don Foster Don Foster Liberal Democrat, Bath

The right hon. Gentleman and I may fundamentally disagree about the ideal future for son of Railtrack, but would he at least agree that he has just made a significant point, which is amplified by the bizarre situation? The administrators Ernst & Young, with all their consultants and advisers, are currently working up a number of alternative models while, at the same time, the Secretary of State is bringing in further advisers to come up with his own preferred model. That will then be put to Ernst & Young which, in turn, will have to put it to the Secretary of State who, at the end of the day, will make the decision and choose his preferred option. Why Ernst & Young is wasting all that time and spending all that money is frankly beyond me.

Photo of John Redwood John Redwood Conservative, Wokingham

Perhaps I can help the hon. Gentleman. The Secretary of State is in such a complex and difficult legal position that he has to allow work to continue on other options besides his favoured option. He has to be careful, if he thinks that he can make those decisions himself, not to be conflicted when he comes to make the ultimate judgment. It would be difficult for him if his company limited by guarantee were up and running and had put in a bid, but it was not quite the best bid on the table. If he were behaving honourably, as I am sure that he will, he would have to award the contract to the best bidder. However, if the two bids are dissimilar—if a direct comparison is difficult and it is arguable which is the best bid and which is not so good—he has to make sure that he has avoided any conflict during the process and has given a fair chance to the other bidders. It would be much better if one Minister were the advocate for the company limited by guarantee and someone else made the decision; otherwise the Government could well have even more expensive legal actions on their hands.

For reasons of natural justice, the Government need to be fair-minded, but they must also satisfy a series of legal problems. First, they must demonstrate to the administrators and, through them, the Railtrack shareholders, that the best possible deal has been done for the shareholders, who still have rights. As my hon. Friend the Member for Maidenhead always points out, many of them are railwaymen and many are pensioners living on their pension funds; they are not rich and would like to get something back from this awful mess.

The Secretary of State also has to satisfy European competition law. If it appears that he only ever had in mind one option, which then wins the competition, there could be difficult questions to answer in Brussels and the European Court about whether European competition law had been properly observed. A private sector company is in private sector administration, and has to be properly open for tender and bid. It is also a private sector company with a strong Government interest—the Government are the subsidiser of last resort—and has a strong monopoly position in a particular sector of the British transport market, which means that regulators and lawyers will take a strong interest in it.

We see from the document that an important part of the task of the chairman of the SRA in 2002 is to try to attract private capital for the railways. Hallelujah—that is exactly what is needed. Many Members have said that it is difficult to see how all the money in the modest plan will be drawn in. It is certainly difficult to see how there will be anything but delay in the really big sums needed in 2002 and 2003, given the uncertainties. The problem for the SRA and the Government are the contradictions. They say that 2002 is the year for delivery and the year to bring in private capital, but they are not making the decisions that they need to make today to maximise their chances of attracting that capital.

I put two simple points to the Government; if they seriously want lots of private capital, the first thing that they should do is get Railtrack out of administration and into workable ownership and management as quickly as possible. If reports are true—they may well be—and there is no chance of Railtrack being out of administration before this autumn, and possibly not until next year, we will have wasted more than a year. There can be no effective negotiations on private financing in conjunction with Railtrack because everyone will say, "We need to know who will own the company, what the rules are and what its balance sheet is before we can make an assessment."

The second thing that Ministers should do if they want private capital is settle the franchise position, which they undermined by granting short franchises or delaying franchise renewals. Instead of apologising for that mistake and agreeing proper franchise periods which could lead to those companies making a lot of new investment in new trains, which my constituents and others want, Ministers have compounded their error by saying through the SRA that they now wish to amalgamate franchises. The amalgamation of franchises is not a simple task. It means asset swaps, asset mergers, takeovers; all sorts of complicated corporate finance and legal activity; great complexities in bringing the franchises together under new and existing owners; and sorting out the resulting financial and asset complications, which would result in much more delay. By their decision, the Government have guaranteed a big gap in the order pattern for new trains in many parts of the country while we sort out who will run the franchises and when they will be up and running.

The chairman of the SRA says:

"The clear message . . . is that the prospects for Britain's railway have never been better."

However, that does not seem to follow from all the other things that he said in his foreword. A few paragraphs earlier, he told us of a state of confusion; the Secretary of State has given him the impossible task of trying to stabilise an industry when the Government are making up policy as they go along. This is the man who is told that most of the money must be from the private sector, but we must not tell the Labour Back Benchers because they think that it will be a public sector operation.

My constituents and I want a big expansion in railway capacity. We want to be able to drive to the station, park in a decent car park with proper security, and find that there is a regular service to London and other important towns in the neighbourhood. We want four or five trains an hour to London, not two or three, as we have at present. I can promise Ministers that there is plenty of business out there if the companies are allowed to get on with it.

I have been asking endlessly for Ministers to give an assurance that a scheme that I have backed, and which is wanted by the local train operating company and the local council, and was wanted by Railtrack before it went into administration, for a new station and better waiting facilities and for work to begin on improving the track, would go ahead despite the administration. There is no such reassurance, and there can be no such reassurance, I fear, because although Ministers have heavy influence and are paying very big bills, they are not in control, nor is the SRA, and they are not driving forward the better railway that we want.

When the story comes to be written in a few years' time of the Secretary of State's decision to put Railtrack into administration, it will go down as one of the biggest bungles in the interface between politics and business over which any Minister has ever presided. We will discover during the next two years that it will have been massively more expensive to have that animal in administration than it would have been to do a deal with a private sector company. We will discover that the Government do really want to get it back into the private sector, because the Chancellor does not want all the money on his Budget for the massively expensive upgrades and improvements in the railway.

We will discover that while the Government and their lawyers, accountants and consultants are busily arguing with each other and trying to protect the Secretary of State against a minefield of legal actions, the travelling public have walked away, bought a load more new cars, and are sitting in traffic jams because they have no choice.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North 6:32 pm, 16th January 2002

I have very little time, so I shall make just a few key points. I regret that the Liberal Democrats have chosen to throw barbs at my right hon. Friend the Secretary of State, instead of the brickbats that are due to the Conservatives, who caused all the problems. My right hon. Friend is doing a tremendous job in extremely difficult circumstances. He has my strong support and that of my hon. Friends. I look forward to his success in future years.

Sir George. Young, in his own elegant way, put a wonderful gloss on a national transport disaster perpetrated by his Government. We are trying to pick up the pieces—rather belatedly, I think. We should have taken action in the first week of May 1997. We have taken action only now, but we are at least beginning the process, which will be long and difficult.

My right hon. Friend has taken the first necessary step, but he must go a lot further. He should look at the state-owned, integrated national railway systems on the continent, which are light years ahead of our railway system. They are integrated and publicly owned and rely on public investment. We must review the way in which we invest not only in the railways but in other parts of the public sector and question the Treasury rules on borrowing. Many other countries in the European Union park such investment off their public sector borrowing requirement so that they can get inside the borrowing limits of economic and monetary union and the stability and growth pact. They are right to do that and we should follow their example. If they can get away with it, so can we. We could solve many problems in the public sector if we did that.

There are two fundamental problems arising from privatisation—fragmentation, about which we have heard much, and the fact that it is finance driven, not public service driven. I take issue with the right hon. Member for North–West Hampshire, who compared railways with airlines. If airlines have a route that is failing, they take it off. There is no problem. However, we cannot take off the Circle line. It is part of the fundamental infrastructure that is necessary for the functioning of our country, not to mention its capital city. There is a difference between the vital infrastructure of the railway network and airlines, which can change.

We heard reference to Railtrack being the problem, whereas the train operating companies seem to be blameless. According to the strategic plan published this week, the total delays caused by train operators were 43 per cent., and the total delays caused by Railtrack were 42 per cent. so they are equally to blame. We heard today that the train operating companies have serious financial problems. We must look to reintegrate the train operating companies, the track and the engineering work into one integrated railway industry—we must get back to what we had before.

The problem with British Rail was not that it did not work, but that it was starved of finance. If we had invested in British Rail in the way that the continentals have invested in their railways, we might be where they are now. I recently visited SNCF in France and saw developments that we will not see in this country for a decade, even with the best will. I spoke to an SNCF engineer and asked where the finance came from. He said, "In France, when we speak of PPP, we mean public, public, public." I urge my right hon. Friend to consider the possibility of going back to a properly integrated state-owned railway system.

Photo of Tom Brake Tom Brake Opposition Whip (Commons), Shadow Secretary of State for Communities and Local Government 6:35 pm, 16th January 2002

I thank my hon. Friend Mr. Foster for introducing the debate in his usual forceful and entertaining manner. He painted a bleak but accurate picture of the railways today: train delays up 70 per cent., cancellations up 45 per cent. and overcrowding running at 39 per cent.

My hon. Friend focused on some of the key unanswered questions in relation to Lord Cullen's recommendations, which were due to be implemented by 19 December, and he set out a number of Liberal Democrat proposals which, if adopted, would ensure that the line in the sand drawn by the Transport Secretary would not be washed away by the waves created by the next multi-billion pound infrastructure overrun, or the failure to secure the very high levels of private investment that are needed to deliver his 10-year plan.

Significant contributions were made by other hon. Members, and I shall touch on those briefly. I echo the comments of the Secretary of State about the dedication and commitment of the people who work in the railway industry, and I welcome his honesty about the state of our railways. Mrs. May posed a number of pertinent questions to the Minister, particularly about the cost implications of the fact that Railtrack has been put into administration, and how that will affect the private finance that the Government seek to secure, in relation to both the rail industry and the PPP for London Underground.

Mr. Martlew made an interesting bid in support of past Conservative policies to reintroduce a Department of Transport. Sir George Young, who is in his place, used a French term—renaissance—to describe the railways under the Conservatives. I would use another French phrase to describe his attitude— "Je ne regrette rien." However, I agree with the right hon. Gentleman's point about contradictions between the Government's policies in relation to rail and to the tube, where the approaches that they have adopted with regard to who runs what are diametrically opposed.

Mrs. Lawrence said that she would make parochial points. There is nothing wrong with that; our constituents often want us to raise matters that are relevant to them. My hon. Friend Mr. Heath said that the mud-wrestling at South West Trains must stop, and I agree with him entirely. On Lord Birt's involvement, that is startling.

Photo of Norman Baker Norman Baker Liberal Democrat, Lewes

Does my hon. Friend agree that it is rather odd that Lord Birt has been appointed to his new role? When he was at the BBC, he took a unified structure, split it into little pieces, set them against each other and put a bureaucracy on top. Given that the Tories did that with the privatisation of the railways in the first place, what useful contribution can he now make?

Photo of Tom Brake Tom Brake Opposition Whip (Commons), Shadow Secretary of State for Communities and Local Government

The Transport Secretary stated what Lord Birt's involvement will be. His involvement with the railways is simply to keep him occupied, although I hope he does no damage in the process.

Mr. Lazarowicz wanted to know more about Liberal Democrat policies. Several of his hon. Friends are consulting our paper "Transport for People", so I advise the hon. Gentleman to speak to them about that.

Photo of Paul Farrelly Paul Farrelly Labour, Newcastle-under-Lyme

I have indeed examined "Transport for People", which has a very catchy title. I congratulate the Liberal Democrats on specifying—although they have not used any figures—where they would get some of the extra investment that they propose. The proposals include congestion charging and workplace parking taxation. Does the hon. Gentleman accept that that will be a revelation to Liberal Democrats in my constituency, who have been criticising the Labour party for allegedly taxing motorists off the road?

Photo of Tom Brake Tom Brake Opposition Whip (Commons), Shadow Secretary of State for Communities and Local Government

I thank the hon. Gentleman for his intervention, although I had hoped that it would be slightly shorter. The Liberal Democrats are happy to let local communities make their own decisions on congestion charging.

I agreed with the comments of Mr. Redwood about the plan. If there is anything in it, it is simply reheated existing policies. It is certainly long overdue. He will not tempt me, however, into talking about Argentina's economy—a matter for another debate. Mr. Hopkins said that there was a difference between aviation and the Circle line, as one cannot shut down the Circle line, but I am afraid that London Underground currently does that far too frequently and easily.

In the remaining few minutes, I should like to concentrate on two matters that have not been discussed in any detail: the supply of power to trains and carriages, and the future of London Underground. If the issue of power is not resolved, it is extremely unlikely that the Transport Secretary will be able to deliver his plans. We know that the SRA strategy has announced 1,700 new trains, although they are not really new trains and this is not news, as they have been on order for some time and their delivery is already way behind schedule. Some 2,019 new carriages have been ordered, but only 195 have so far been delivered. The train operating companies will have to get 12 of the vehicles into service every week. Will the Minister tell us how the Government will ensure that they do so? That target sounds extremely ambitious.

None the less, when and if the trains are delivered, they will need a power supply. The arrangements in Railtrack southern region are in disarray. It is thought that the power network cannot be upgraded there by the deadline of the end of 2004. It appears that many millions of pounds have been spent on trains that cannot be used for a number of years. Who is responsible for the blunder? According to the Secretary of State, it is pre-administration Railtrack. However, Modern Railways magazine disagrees. It believes that Railtrack simply did not have enough notice to upgrade the power supply in time. As I said, that means that the commitment of £1 billion-plus on new carriages and trains could be jeopardised, as those trains will not be able to run on the system once they are available. Southern region representatives say that it will take at least another six months before even the scale of the upgrade is known. Additional work needs to be done in respect of 630 substations and so on. Apparently, the equipment could be ready for that, but there is a significant problem—I know that the Secretary of State is aware of it—in terms of the manpower that will be needed to do the work.

Will the Minister tell us whether he believes that that is a failure of Railtrack, as the Secretary of State said, or of the train operating companies or, as Modern Railways suggests, the Strategic Rail Authority and possibly the Department for Transport, Local Government and the Regions? I await his response. I hope that he will answer a very simple question: will the power be ready at the right time and in the right place to allow all the trains to run when they are available for service? A simple yes or no will do.

The second issue on which I want to focus is the London underground. Many hon. Members are as perplexed as I am about the fact that the Government appear to be committed to recreating on the London underground many of the structural failures that we have seen on the railways. Indeed, they are almost building in the same faultline. Furthermore, the tube PPP has many other faults. One of my main concerns is the almost excessive secrecy and commercial confidentiality that have been involved, which seems incompatible with the democratic need for accountability. That has led to some disturbing incidents.

In 1999, the Deputy Prime Minister said that a £4.5 billion saving would be achieved through the PPP. Since he made that statement, I have been trying to pin the Department down on the subject. I received a response on 14 November 2001 telling me that the £4.5 billion figure was meant only to "inform the debate". Can we really believe any of the figures that are spouted by the Government, or must we assume that they are all about spin and have no financial substance? The obsession with commercial confidentiality means that we have to rely on the media to find out—we hope—about the state of the PPP.

Photo of John Redwood John Redwood Conservative, Wokingham

Does the hon. Gentleman realise that if the rumours are true and the Government have become bored with the PPP and do not think it can work, massive cancellation fees will have to be paid to the unsuccessful bidding parties, on top of the £100 million that has already been incurred in advisory fees?

Photo of Tom Brake Tom Brake Opposition Whip (Commons), Shadow Secretary of State for Communities and Local Government

I have pursued the Government on that subject, but they have been unable to supply me with information about the additional costs not only of consultants but of the whole process.

As I have only one minute in which to conclude my remarks, I return to the motion and our proposal to dock the Transport Secretary's pay on the grounds of poor performance. Part of the remuneration of the chairman of the Strategic Rail Authority, who has just been appointed by the Government, is received in a bonus, and train operating company managers are also paid by results, so I think it is entirely fitting that the Transport Secretary's pay should also be performance related. To date, his achievements are less than remarkable. As I said at the very start of my speech, train delays are up by 70 per cent., cancellations are up by 45 per cent. and overcrowding is running at 39 per cent. The right hon. Gentleman is presiding over a rail system that is on the verge of collapse. Madam Deputy Speaker, it is fortunate for him that we have a minimum wage, because his performance to date warrants nothing more.

Photo of John Spellar John Spellar Minister of State (Department of Transport, Local Government and Regions) (Transport) 6:47 pm, 16th January 2002

I do not know whether the hon. Gentleman's comment was in the same league as a remark made by a departed colleague, Simon Mahon, a long-standing member of Bootle council who prefaced his peroration in the Chamber, "Finally, Mr. Mayor." I am sure that you will let the comment pass with your usual graciousness, Madam Deputy Speaker.

Fortunately for you, Madam Deputy Speaker, you did not have to sit through the debate. This was not a great parliamentary occasion. Indeed, the motion set the tone for the debate. No answers and no policies were given by Opposition Members. There was also considerable confusion. My hon. Friend Paul Farrelly drew attention to the Liberal Democrats' policy of paying for the railways out of congestion charges and workplace parking charges. Their spokesman answered that it was their policy to let local communities make their own decisions on congestion charging. Perhaps they will not accept my suggestion that that is not exactly the firmest base for financing the national railway system, let alone that there might be some disparity between the two.

Photo of Tom Brake Tom Brake Opposition Whip (Commons), Shadow Secretary of State for Communities and Local Government

Is the Minister really suggesting that the national railway system should be financed through local congestion charging schemes?

Photo of John Spellar John Spellar Minister of State (Department of Transport, Local Government and Regions) (Transport)

Of course not; I was citing paragraph 317 of the Liberal Democrat document. If the Liberal Democrats have their way, it will be difficult to fund anything out of congestion charges. My hon. Friend the Member for Newcastle-under-Lyme suggested that there were local differences, so I checked today. I asked whether any Liberal Democrat councils were progressing with proposals on congestion charging. For once, Mr. Redwood is right: the answer is none. I am willing to stand corrected, but as far as I know, no Liberal Democrat-controlled authorities are pushing for congestion or workplace charging in their areas. There is a slight hole not only in their policy but in their finances.

Photo of Don Foster Don Foster Liberal Democrat, Bath

The Minister is right; I know of no Liberal Democrat-run council that currently proposes congestion charging. However, in London, where the first scheme is most likely to take place, the Liberal Democrats are backing it, unlike Labour members of the Greater London Authority, who refuse to support a proposal that was introduced by a national Labour Government.

Photo of John Spellar John Spellar Minister of State (Department of Transport, Local Government and Regions) (Transport)

I understand that Liberal Democrats are happy to jump on someone else's bandwagon whenever possible, but taking responsibility is different; that is why the motion contains no details about their policy or any alternatives. We are considering a franchise party, which has a rag bag of policies. I note that Mr. Marsden is not here today; he is continuing the habits that he had when he was a Labour Member. What other party that believes in increasing fuel prices would welcome into its ranks the only Labour Member who said that we should have given in to the fuel protesters and cut fuel prices? What a shower!

Mr. Davey issued a rail users survey. He asked what we should do about it. I expected him to present a policy.

Photo of John Spellar John Spellar Minister of State (Department of Transport, Local Government and Regions) (Transport)

Let us consider Liberal Democrat policy. Liberal Democrat Members believe that the company that runs the trains should also be responsible for the tracks and signalling. However, their document states that their proposed form of Railtrack should take care of the tracks and signalling. Their policy is, "Tell us what you want, and we will propose it." However, they did not propose much tonight. There was therefore some confusion on the Liberal Democrat Benches.

Before I consider the rest of the Opposition, I want to refer to the positive and thoughtful speech of my hon. Friend Mr. Martlew. He has long played a positive role with regard to the west coast main line and he drew attention to some of the genuine problems that have to be faced. I shall deal with their origin shortly. He mentioned potential conflict between express, local and freight trains.

Mrs. May made the same point, although her surprising conclusion was that proposals for one operator for each London terminal would exacerbate the problem. It is generally agreed in the industry that those proposals would improve matters. We are prepared to consider the problems that she believes might arise, because doing that, and examining the way in which we create extra capacity, can lead to their resolution.

My hon. Friend the Member for Carlisle rightly identified the skills shortage in the industry, much of which was created by management failures at the time of privatisation. For example, the train operators made approximately 1,000 drivers redundant. The results have been only too clear in recent weeks. The same applies to track engineers. Much expertise left Railtrack; in some cases, it went to the subcontractors, but in others it left the industry. According to the Railtrack mantra of the times, skill and expertise in the industry were perceived as a cost which had to be driven out. Instead of regarding the skills base and the experience as an asset, Railtrack viewed them as costs to be reduced.

I was slightly surprised and disappointed by the contributions of the right hon. Members for North-West Hampshire (Sir George Young) and for Wokingham (Mr. Redwood), who were joined at one stage by another old lag, Mr. Clarke. They presided over doubling the national debt in five years, adding £175 billion to it. That constituted a huge burden on future generations and an enormous problem that the Government had to solve. We have done that. Conservative Members often talk about the confidence of financial institutions and the City. The financial community probably has more confidence in a party and a Government who have put the national finances on an even keel than a party that doubled the national debt in only five years.

The right hon. Member for North-West Hampshire identified one of the difficulties. He said that Gerald Corbett had resigned and that Railtrack had lost the City's confidence. That was a charitable admission that Railtrack's problems had long and deep roots in its senior management. Contrary to the scare stories that some newspapers are publishing, the majority of the reduction in the value of the shares—from nearly £18 to £2.80—happened as a result of the judgment of the markets on Railtrack's management. Not once did Opposition Members give the slightest indication of what they would have done with a Railtrack that was failing organisationally and financially.

Railtrack management approached our predecessors in the Department in April and secured a commitment of some £1.5 billion. That was honoured. However, the company returned in July and claimed that without new and additional money, it would not be able to describe itself as a going concern.

Photo of John Spellar John Spellar Minister of State (Department of Transport, Local Government and Regions) (Transport)

I shall give way if the right hon. Gentleman tells us what he would have said to Railtrack managers came back with a begging bowl, in the words of the regulator, in only a few months.

Photo of John Redwood John Redwood Conservative, Wokingham

Anyone sensible would have sat down with Railtrack's management, haggled, negotiated and worked out what the Government wanted to secure in terms of strengthening the board and in return for promises of money, and provided the money. The Government had already promised some money. A deal then would have been billions of pounds cheaper than their current actions.

Photo of John Spellar John Spellar Minister of State (Department of Transport, Local Government and Regions) (Transport)

The right hon. Gentleman claims we should have done a deal with that company when we had sat down, negotiated, haggled and done a deal with its representatives in April, only for it to return in a few months—not influenced by Hatfield or any other event—to say that the money was not enough and that it had no idea about the amount of the final bill. Not only Ministers, but others in the industry judged that Railtrack had no control over its costs. That was apparent on the west coast main line. Mr. Pickles asked about that line, on which the costs rose by some £2.3 billion to more than £7 billion.

Photo of John Spellar John Spellar Minister of State (Department of Transport, Local Government and Regions) (Transport)

The Opposition did not mention John Armitt, the new chairman of Railtrack. He is a highly respected civil engineer, who is pulling things round. Although the right hon. Member for Wokingham sneered at the appointment of Richard Bowker to the SRA, I believe that the new team will provide a new vision for the industry.

I have said a number of times in previous debates that the Tories were not only unfit to be the Government but unfit to be the Opposition. I suppose that meant that there was a vacancy for an Opposition. Well, it was certainly not filled today by the Liberal Democrats.

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. The Minister is obviously not going to give way.

Photo of John Spellar John Spellar Minister of State (Department of Transport, Local Government and Regions) (Transport)

The only party dealing seriously with transport is the Labour party, and that is why I have no hesitation in calling for the rejection of the Liberal Democrat motion and the carrying of the Government amendment.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 207, Noes 339.

Division number 134 Railways

Aye: 207 MPs

No: 339 MPs

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments), and agreed to.

Madam Deputy Speaker forthwith declared the main Question, as amended, to be agreed to.

Resolved,

That this House believes that the railway infrastructure was badly damaged by decades of underinvestment and a flawed privatisation; recognises that the Government made tough decisions in the first two years of the last Parliament to deliver the economic stability that means it can put record levels of investment into the railways; notes that annual average total investment in rail over the 10 year plan will be £4.3 billion, compared to £1.4 billion for the period 1989/90–1996/97; congratulates the Government on its decisive action over Railtrack, so undoing a failed Conservative privatisation; welcomes the SRA's Strategic Plan that sets out an effective agenda for the railways; calls for the resolution of the present industrial disputes through negotiation not strike action; and believes that the steps taken have laid the groundwork for a railway system that will be fit for the 21st century.