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Orders of the Day — Railways Bill

– in the House of Commons at 3:32 pm on 6th December 2004.

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Votes in this debate

[Relevant documents: The Seventh Report from the Transport Committee, Session 2003–04, The Future of the Railway, HC 145-I; and Fourth Special Report from the Transport Committee, Session 2003–04, Government, Health and Safety Commission and Executive, and Office of the Rail Regulator Responses to the Seventh Report from the Committee, HC 1200.]

Order for Second Reading read.

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport 4:18 pm, 6th December 2004

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

The White Paper, "The Future of Rail", which I published in July this year, set out new proposals for reorganising the structure of Britain's railways. The Bill takes forward the legislative elements to implement that White Paper to simplify and restructure the railways and put right many of the problems caused by a botched privatisation 10 years ago.

The main provisions of the Bill are to wind up the Strategic Rail Authority; to transfer the railway safety functions to the Office of Rail Regulation; to change the way in which access charge reviews are calculated; to give the devolved Administrations more responsibility; to allow passenger transport executives and London to take greater responsibilities for services in their areas; to establish a rail passenger council as a single national body and end the formal federal structure of the passengers' committees; and to put in place a better way of changing rail services to allow more flexibility and to provide for rail, light rail and bus schemes. I shall return to all those points in greater detail shortly. Before I do, I should point out that other important changes need to be made, which were set out in the White Paper but do not require legislation, and I shall return to those later as well.

Before I turn to the provisions of the Bill, I want to put the proposed legislative changes in context. The railways are a vital public service and an essential part of the country's transport infrastructure. Whereas the railway industry was seen as an industry in decline in the early 1990s, today it is growing. Last year, more than 1 billion journeys were made—the first time that that milestone has been reached since 1961.

Photo of Patrick McLoughlin Patrick McLoughlin Opposition Deputy Chief Whip (Commons)

Does the Secretary of State put this renewed confidence in the railway industry down to the way in which the private companies have increased their customer numbers?

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

Actually, I would say that, despite the difficulties encountered by the railways over the past 10 years, it is to the credit of everyone involved that they are now carrying more people than at any time in the past 40 years. I am sure that the hon. Gentleman would agree that the railways have been through a very difficult time in the past 10 years, involving a traumatic privatisation—Railtrack was an absolute disaster in terms of its lack of stewardship of the railways and of its failure to get to grips with costs and allowing them to get out of control—and the dysfunctional organisation of the railways, some of which problems we are putting right in the Bill. I made it clear when I announced the review of the railways in January last year that the partnership between the private and public sectors is an important one in relation to the railways, but I am very sure that, without substantial public commitment—not just in organisational terms—and public investment, we could not bring in the corresponding private money, let alone anything else that is needed. I think that we part company with the Tories over this issue. Their idea is that all that they need to do is withdraw public funding—presumably the railways would have their share of the £1.8 billion of transport cuts that they are planning—but that would almost certainly result in a reduced amount of private money coming in. I am glad that the hon. Gentleman gave me the chance to make that point.

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

If the hon. Gentleman wishes to be as helpful, I shall certainly give way to him.

Photo of David Wilshire David Wilshire Assistant Chief Whip, Whips

I should be delighted to help my hon. Friend Mr. McLoughlin on this matter. If the Secretary of State chooses to describe privatisation as a disaster, how would he describe the creation of the Strategic Rail Authority? If that was anything other than a disaster, why is he abolishing it?

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

What I said was that the way in which the railways were privatised by the previous Conservative Government was a disaster. It was bad for the railways and hugely disruptive, and the decision to set up the SRA was—

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

No, it was an attempt to bring some order to a very disorderly railway system. Under its chairman, Richard Bowker, the SRA made a very good job of sorting out some of the problems that had resulted from the privatisation. I shall come back to the SRA shortly. The hon. Gentleman ought to be aware that the Conservative amendment implicitly calls for the retention of the SRA. He had better have a look at what he is being invited to vote for before he calls it a disaster.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

I welcome the development of a publicly owned railway system in this country and the measures that my right hon. Friend is taking to ensure that the railway is publicly accountable and publicly run. Is he prepared to go a little further and say whether the train operating companies and franchises should also be publicly owned and run, where appropriate, on the ground that that can be done very efficiently?

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

I shall come to the question of franchising later. If I do not say anything about my hon. Friend's point, perhaps he will remind me of his question; I shall certainly come back to it. That is one way of guaranteeing an audience for at least another 15 minutes, because he will have to stay put until then. I would say to the hon. Member for Spelthorne that he should not worry; this would not be the first time that hon. Members had been taken aback by the fact that their amendment did not say quite what they thought it did. He should have a good look at the one tabled by the Conservatives.

There has been significant success on the railways, which is a tribute to all who work on them. Moreover, our investment nearly doubles railway investment over five years. Total investment in the four years to 2006 will be almost three times the amount at the time of privatisation. It is important to make that investment to back up the Bill.

Just 10 days ago, when we were discussing the Bill in the context of the Queen's Speech, Mr. Yeo—the Conservative spokesman—made the surprising allegation that we had cut spending on transport. I did not intervene at the time, because I was puzzled by his assertion. Let me put the record straight now.

The hon. Gentleman compared the Department's spending according to the 2002 spending review—£11.2 billion—with that in the 2004 review, which he saw as £10.4 billion. The reason for the apparent reduction is that about £450 million of planned DFT spending is going into transport, £138 million of which is going into the ScotRail franchise and therefore goes through the Scottish Executive's books. About £300 million funds the Health and Safety Executive and goes through the books of the Department for Work and Pensions, while about £50 million goes directly to local authorities for concessionary fares. I do not want to labour the point, as I appreciate that it is some years since the hon. Gentleman was a Minister and the intricacies of public accounts are sometimes baffling, but I assure him that we have not cut transport spending. Only he and the Conservative party propose to do that.

Photo of Tim Yeo Tim Yeo Shadow Secretary of State for Environment, Food and Rural Affairs

Is it not the case that, even if we include all the figures that have been buried in other Departments' accounts but are—we are now told—available for transport spending, the figure for the current year will be substantially below that projected for the current year in 2002?

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

Those figures are not buried. They are properly accounted for, as is necessary unless we are to hear a row from the Public Accounts Committee. In fact, we are spending about £200 million more than we had planned. The hon. Gentleman should note that, because we are not going to let go of the fact that, between now and the next election, he will have to explain how he will get £1.8 billion out of transport. I shall say more about that later, because it is relevant to the amendment. I did not realise that he had rubbished the David James report on efficiency savings quite so much, but I shall leave him to ponder on that for a few moments.

Photo of John Pugh John Pugh Shadow Spokesperson (Education)

I do not know whether it was a Freudian slip, but the Secretary of State said that he hoped to get parts of the dysfunctional structure right. Are there other parts that he is not trying to get right?

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

Even for a Liberal Democrat, that is a pretty poor point. We had already fixed the other parts; now we are finishing the process. The Bill deals with only some of them.

The White Paper sets out six key changes that are necessary for us to build the right structure and which underpin the Bill. First, the Government will take charge of the strategic direction of the railways, because only a Government can do that. Over the years, at various times various governments have sought to distance themselves from the consequences of their spending decisions. I firmly believe that only the democratically elected Government of the day can decide how much to spend on the railways and roughly what their shape and size should be. That responsibility rests fairly and squarely with the Government.

When we looked at the organisation of the railways last year, we concluded that one of the first principles should relate to who is best placed to do what. When it comes to strategic direction, only the Government can decide.

Photo of Mr Brian White Mr Brian White Labour, North East Milton Keynes

The Railways Act 1993 placed a duty on the Secretary of State to promote use of the railways, which was transferred to the Strategic Rail Authority in 2000. Will that duty be transferred back to the Secretary of State?

Photo of Mr Brian White Mr Brian White Labour, North East Milton Keynes

I was referring to passengers and freight.

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

Of course, promoting the railways is one of the Government's duties. The 1993 Act explicitly gave the SRA a role, but that is not explicit in this Bill. However, it follows from everything that I have said that, where the Government have a responsibility to decide the size and shape of the network, it is for the Government to be accountable for that. It would be difficult to impose on a Minister a duty to promote the railways. We are different from the SRA in the sense that we are elected. It would be open to another Secretary of State from another party such as the Conservative party to say, "I was elected to do something completely different." One has to live with the electoral consequences of that but, as far as we are concerned, the strategic direction of the railways and the responsibility on funding lie fairly and squarely with the Government and therefore with the Secretary of State. That is the first key point of the White Paper. It is important that people recognise that only the Government can do that, but the Government are in a slightly different position from an organisation that they may set up that has more specific responsibilities. The Government have a more general responsibility. Let us not shrink from that. It is up to the voters which Government they elect. They may want to elect a Government who slash and burn the railways, but I do not think that they want the Conservatives just yet.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Conservative, Cotswold

The Secretary of State has said twice that it is only the Government who can choose a strategic direction for our railway system. Why therefore does the Bill give such big powers to the Mayor and Transport for London? The White Paper says:

"We will also consider whether . . . there should be any scope for Transport for London to take revenue risk from train companies".

Can the Secretary of State confirm that the Bill will not involve council tax payers in London taking risky ventures on railways in London or inflation-busting fare increases on top of the one that we have just had?

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

The Bill does not do that and I will come to London shortly.

The second key point of the White Paper was to give Network Rail clear responsibility for operating the network and for its performance, timetabling, route utilisation and so on. Thirdly, train and track companies must work more closely together, and they are doing that now. Fourthly, as I said, there will be an increased role for the Scottish Executive, the Welsh Assembly Government and the London Mayor, and more local decision making in London.

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

I will in a moment.

Fifthly, the Office of Rail Regulation will cover both safety performance as well as economic regulation. Finally, there is a better deal for freight, which will enable the industry and its customers to invest for the long term, which is an important point.

I want to talk about the proposals in the Bill that will help us to put in place some of those key changes. I will come on to the Scottish point, if that is what Pete Wishart wishes to raise, in a moment. First, clause 1 provides for the winding-up of the Strategic Rail Authority and will enable the Secretary of State, accountable to Parliament, to take charge of setting the railway strategy. That means that the SRA's strategic responsibilities and financial obligations will pass to the Secretary of State, although, in some cases, strategic responsibilities will also pass to the devolved Administrations. It also means that the Secretary of State and the devolved Administrations will take over some of the SRA's role, particularly that of awarding train company franchises. In order to put those changes into effect, it will be necessary for some staff to transfer from the SRA to the Department for Transport, or in some cases to Network Rail or the Office of Rail Regulation.

Again, I want to make an important point that has a bearing on the amendment that has been tabled by the Conservative party. This may be news to Conservative Members, but it wants, apparently, to keep the SRA because, it says, it does not want civil servants and/or politicians to take part in the award of contracts. Let us make one thing clear. Ministers will not be involved in evaluation and discussions in relation to the award of contracts. Of course they have to sign them off, as we did anyway with the SRA. When the SRA went through the contract process, of course it had to come back to the Secretary of State to sign off because there are huge financial implications.

As for the idea that people employed by the Department for Transport cannot do that work, they do it in the Highways Agency, which has long been recognised as an extremely good organisation in procurement. It is done on behalf of the Government, but the contract-awarding process is completely separated from Ministers, as it should be, so that will not happen. The idea that Ministers will be involved in negotiations or have any improper influence on awarding contracts is absolute rubbish, as the Opposition should know. The rail group within the Department is being reorganised to reflect that.

Photo of Gwyneth Dunwoody Gwyneth Dunwoody Labour, Crewe and Nantwich

Will my right hon. Friend make it clear that there is no question of any franchise being awarded on the basis of the known personalities or political connections of particular persons? The suggestion is going round the industry that a particular company will not get a franchise simply because of its direct connections with the Conservative party. That is ignorant nonsense and I want it denied here and now.

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

My hon. Friend is right to raise this point. I have not heard the suggestion to which she refers, but it is absolute nonsense and she can have the categorical assurance that she asked for. Franchises will continue to be awarded on the basis of completely open and transparent published criteria. Frankly, I do not care about the political allegiance of anyone running the railways; all that I want is for them to work and for the trains to run on time. That might not be a very high ambition but it is all that I want, and I doubt whether the public will care whether it is the Tories, Labour or even the Liberal Democrats who manage to do that.

Secondly, safety is of course of paramount importance, but we believe that it should be integrated more closely with other issues, which is why we want to combine the Health and Safety Executive's functions with those of the Office of Rail Regulation. The ORR will shortly consult on how it will organise itself to ensure that both its primary functions—economic regulation and safety—can be properly discharged.

Photo of Russell Brown Russell Brown Labour, Dumfries

On accident reports and investigations, schedule 3 states:

"The Office of Rail Regulation may authorise a person to investigate and . . . report on any accident".

Is that not duplicating the current work of the rail accident investigation branch, or is the intention to complement or supplement that work?

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

I see such work as complementary. It has been agreed that, from next year, when the RAIB is established, it will take the lead in the event of an accident, go to work as quickly as possible, find out what has happened and report as soon as it can, thereby operating in much the same way as the air accidents investigation branch and the marine accident investigation branch, which have worked very well for a number of years. In order that the rail regulator can discharge its safety obligations, it may well want to examine some of the issues arising from such incidents. What we are putting in place is a complementary system. On too many past occasions, there have been a number of people with a legitimate interest in investigating such matters. This will be a far better way of working.

My hon. Friend Mr. Brown will doubtless want to pursue this issue. If he is lucky enough to get a place on the Standing Committee, those of my hon. Friends who share that pleasure with him will be happy to go through the memorandum of understanding involving the RAIB and other organisations. However, I think that he will find that the system is complementary.

Photo of Patrick McLoughlin Patrick McLoughlin Opposition Deputy Chief Whip (Commons)

The Secretary of State seems to be saying that he wants to set up an organisation similar to the AAIB and the MAIB, but I think that I am right in saying that there has been no public inquiry into an air accident in this country since 1967. When the Government took office, they launched a public inquiry into the incident on the River Thames involving the Marchioness, even though the MAIB had already been set up. Is the Secretary of State saying that he hopes that, if the RAIB secures the same reputation as the AAIB, he would see no need for public inquiries in future?

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

No. First, the RAIB was in fact set up in legislation passed last year—this Bill is not setting it up—and it is due to come into operation early next year. Secondly, of course, no Secretary of State will ever be in a position to say that there will never be a public inquiry. The principal way in which such matters are handled is through the prerogative powers that Secretaries of State can exercise, and it would be very foolish to rule out such a possibility. What I can say is that I hope that the RAIB will do as the other investigation branches have done and satisfy many of the requirements that have hitherto led to calls for a public inquiry. Certainly, the MAIB and the AAIB—thankfully, major air accidents are comparatively rare—have proved very effective in getting to the bottom of such incidents, mainly because they begin on a no-blame basis, get on site and find out what happened. Certainly, of the three transport modes, air is probably the most mature in that everyone in an air accidents investigation branch is not bothered about whose fault it is; they just want to know what happened to ensure that it does not happen again. Ideally, that is precisely where we should be in respect of the railways.

I am not sure that Mr. McLoughlin was in his place when I made my statement following the recent accident at the level crossing in Ufton. What was good about those proceedings was that, rather than adopting a mood of identifying who was to blame, people focused on what was necessary to find out exactly what happened.

Thirdly, to return to the Bill, the Government want further to devolve decision making for public transport, including rail, to the Scottish Executive, the Welsh Assembly and to passenger transport executives, and a substantial part of the Bill deals with that.

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

I will give way shortly; I believe that I know where my hon. Friend is coming from.

We believe that, where it is possible to devolve powers, it is right to do so, because it makes for better transport planning. As to PTEs—

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

Hold on a moment. I promise that any hon. Member who wants to intervene will get to intervene, unless you, Mr. Deputy Speaker, call the Adjournment or something like it. It may be helpful to the House to say that I intend to say a few words about PTEs in England, then speak about London, then go to Scotland—actually, I would love to go to Scotland, but not just yet—and then back to Wales. My first subject is PTEs, so does anyone want to intervene?

Photo of Paul Truswell Paul Truswell Labour, Pudsey

Does my right hon. Friend acknowledge the important role that passenger transport executives have played in securing, developing and monitoring rail services during some very difficult post-privatisation times? If he does, why is he seeking to reduce and remove so many of their existing powers and, if he is mindful of restoring those powers under the Bill, would that not represent an unnecessarily bureaucratic and confusing process?

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

No, quite the opposite. I am glad that my hon. Friend intervened because I thought that he might say what he did and it provides me with an opportunity to explain what we are doing. At the moment, franchises are the joint signatory of both the Strategic Rail Authority as it is now and the PTEs. In some cases, where the franchises involve more than one PTE, they have more than one or two parties to the contract. That means that it is complicated, because more parties are involved in the negotiations, and it can lead—let us be blunt about it—to a lot of horse-trading. At the moment, the PTEs do not have to meet the full consequences of the services that they specify because it all comes ultimately from the Government. In operational terms, we can end up with more and more services being purchased to run through a network that may not be able to take them. It may not be able physically to do so. My approach was to try to simplify the structure as much as possible, to make it less complicated and therefore less expensive. The more people involved, the greater the expense.

I agree with my hon. Friend that the PTEs are very important, not least because they must have regard to all transport within their area—not just railways, but light rail, buses, cars and so forth. The Bill provides that the Secretary of State must consult the relevant PTEs before issuing an invitation to tender, so the Secretary of State knows what the PTEs want to buy. If they want to buy more services, they can do so; if they want fewer, we intend to arrange it for them to receive the money for that and be able to spend the remainder on other things as well. In other words, they will be given greater power.

The Bill is necessary to ensure that we have a far simpler system than the one we have at the moment. Since the publication of the White Paper, I have made one change that was not contemplated in it. Because it may be necessary, for contractual reasons, to have the PTE as a signatory, it can, at the invitation of the Secretary of State, be a co-signatory, if necessary. PTEs thus have nothing to worry about in respect of their interests, which will be taken into account. There is a statutory obligation to listen to what they have to say. What we are doing is to streamline the procedure and, critically—I make no apology for it—I am determined that, in future, if PTEs can buy more services, they must accept the financial consequences of what happens. The present position is a nonsense.

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Environment, Food and Rural Affairs), Shadow Minister (Transport)

The position in the constituency of Mr. Truswell may not be quite the same as the position that the Secretary of State has set out. What is the position when a PTE has entered into a franchise agreement already? Can it be retrospectively altered? For example, Nexus in the north-east has committed to making further improvements to the metro in Newcastle and Sunderland and to improving railway stations. Will its position be altered by the Bill?

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

No, because it is a general rule that legislation is not retrospective, except with the express consent of the Law Officers. The Bill will apply to new franchises. Existing franchises may be varied if that is agreed, but the Northern franchise was signed relatively recently. I remember an example that led me to believe that we needed a simpler way to deal with such negotiations. In the course of the negotiations on the Northern franchise, it emerged that one PTE had one service a day that went into the Northern franchise area, but it was able to hold up negotiations because it wanted something in its own franchise area. That is not a very satisfactory way of proceeding.

Photo of David Clelland David Clelland Labour, Tyne Bridge

Notwithstanding what my right hon. Friend has said about the safeguards that he hopes to build into the Bill for PTEs in the future, does he agree that removing them as co-signatories to franchises weakens their position with franchisees? Can he give some examples of the difficulties and complications that the present system has caused?

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

It would not weaken the PTEs' position. The newer franchises have a far greater degree of specification—of performance and so on—than the older ones. Those specifications can be enforced in the future because a contract to provide services can be enforced by the Department, which will be the contracting party. My difficulty with what my hon. Friend says is that negotiations have not been a matter only for the PTE and the SRA—or the Government in the future—and the TOC. Often, negotiations have been between the PTE and the Government or the SRA. Those discussions have held matters up on several occasions. To put it bluntly, sometimes matters have been resolved by a compromise under which the Government pay some money to the PTE. I can see why the PTEs might think that that is a jolly good arrangement, but it is not, to coin a phrase, a very good way to run a railway.

We are trying to develop a rational system that is simpler than the present one. It will not diminish the role of the PTE. Indeed, what we propose—this is the whole thrust not only of the railways White Paper, but of the transport White Paper published a few weeks later—is that over time we will decentralise funds as far as possible to give the PTAs greater power and, crucially, to give them greater flexibility. At the moment, railways are regarded as somehow different from the transport that PTEs do, such as bus and light rail, but they should all be considered together. In some circumstances, it might not be right to run heavy rail because light rail would do the job better.

We are planning to give the PTEs greater power; when they get greater control over the money, that will provide greater influence over the TOCs. No doubt such matters will be explored further in Committee, but our proposals are an improvement. I know that a group has been organised in the past two weeks to campaign against the proposals, but its concern is misplaced.

Photo of Graham Stringer Graham Stringer Labour, Manchester, Blackley

Will my right hon. Friend give way on that point?

Photo of Graham Stringer Graham Stringer Labour, Manchester, Blackley

While he is still in the metropolitan areas, I remind him that I chair the group that he has just mentioned. Will he agree to a meeting with us so that we may make representations on that issue?

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

I am sure that either my hon. Friend the Minister of State, who will take the Bill through Committee, or I will meet my hon. Friend. I have always made it clear that it is one of the responsibilities of Ministers to meet their colleagues and I am sure that we can arrange an opportunity to go through the arguments.

In relation to London, let us again be clear what we are talking about. The Mayor and TFL have substantial responsibility for most of London's transport. It is logical that, if we can bring rail travel within the Greater London authority closer to what TFL is doing, it will provide a better transport system for the public, not least in relation to fare structures and ticketing. At the moment, it is sometimes difficult to work out why it should cost more to go between one place and another by rail, by bus or by tube, so the principle of greater co-operation is a good one.

In relation to the Silverlink services in London, which run within the GLA boundary—with the exception of the service that goes to Watford—it seems sensible to say that if TFL is responsible for transport in London, it should look after those as well.

The allegation that sometimes arises, certainly from the Conservatives, is that, somehow, we will give the Mayor of London power over all the services that run into London. The hon. Member for South Suffolk is right: about 70 per cent. of train services in this country go to London. There is no way that we will hand over power for those services to the Mayor of London. What I said was that there may be a case, in discussion with the local authorities that surround London, for looking at services—especially commuter services—that come into London where the Mayor wants to specify greater stopping in his area. Clearly, that would have a knock-on effect on services going outside London. That needs to be discussed. That will be done on a slightly longer timetable—it will not happen imminently—but any sensible transport planner would accept that we need to consider the way in which those services are organised.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

I thank the Secretary of State for giving way on the question of London, before he goes off to Scotland. In his proposals for Scotland, the Scottish Parliament will be given control over the track. I welcome and support that. Does he envisage a situation where TFL and the Mayor would have control over trains in London, as well as the track infrastructure, particularly on the entirely suburban cross-London routes that are not inter-city by any stretch of the imagination?

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

No, I do not, and I had better explain why. In Scotland, most of the railway network is operated by one franchise, ScotRail. Although the Anglo-Scottish services run up to Glasgow, Edinburgh, Aberdeen and Inverness and include one or two sleeper services, the dominant provider of trains is ScotRail. The track will remain under the ownership of Network Rail, but the Scottish Executive are largely involved in specifications, enhancements, improvements and so on for ScotRail, the dominant operator, so it makes sense that they should specify what is appropriate for the track. Bluntly, if they want to open up services or take them away, that is a matter for them.

The situation is almost the opposite in London. As I said, 70 per cent. of train services in this country come into London, and a large number of them start well outside London. It would be very difficult—in fact, it would be administratively and operationally impossible—to extract those parts of the track in London that no one else but London uses. I do not understand the strength of doing that, so we do not propose to do it.

However, we recognise that where something is wholly within London—such as, for the most part, the Silverlink Metro services—it is logical that TFL should take it on. In relation to services that go outside London, if commuter services might usefully take people to places with no transport links in London, that ought to be discussed. But I repeat that it can be done only after discussion and a general agreement on the way forward with the surrounding local authorities. I am sorry to disappoint the hon. Member for South Suffolk, who would love us to propose a rather different policy, but there is no question of giving the Mayor say over trains that run outside London. That is not what we are proposing at all.

Photo of David Wilshire David Wilshire Assistant Chief Whip, Whips

TFL representatives tell me that they want to get their grubby little hands on all the tracks and stations in my constituency and that they plan to improve facilities by increasing fares. What guarantee can the right hon. Gentleman give to my constituents that the extra fares that they pay to TFL will be spent in my constituency, and not on some grandiose, half-baked scheme that Ken Livingstone thinks up?

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

I would be surprised if TFL put the proposals in the way that the hon. Gentleman describes. I do not want to repeat myself, but we have no plan at all to transfer the track, as I was just explaining to my hon. Friend Jeremy Corbyn; the hon. Gentleman is wrong on that.

Let me now deal with Scotland and Wales, although I have almost explained the Scottish policy.

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

I shall let both hon. Members intervene, but let me say first that the Scottish Executive has run the ScotRail franchise for two or three years, and the arrangement has worked well. There will have to be a transfer of resources to reflect the fact that the Executive is to take over responsibility for specifying what they want in terms of track; that is now being discussed.

Photo of Brian H Donohoe Brian H Donohoe Labour, Cunninghame South

Will that allow the Scottish Executive to have what is called vertical integration, so that one company is responsible for both track and the train operating company?

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

No, but the position in Scotland is better than in some other parts of the country. Network Rail and the TOCs are now setting up joint control rooms, so that ultimately, when the number of franchises has been reduced, we will have alignment between the Network Rail regions and the single franchises, which will allow closer co-operation between track and train. That is much easier in Scotland, because ScotRail is the dominant operator; although, because of the Anglo-Scottish services, it is not the only one.

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)

I have been keen to intervene to congratulate the Secretary of State on overseeing the biggest devolution of power since the Scotland Act 1998 was passed. It confirms the view of devolution as a process, not an event. Hopefully, the Railways Bill will represent the first of many steps in that process. However, can the right hon. Gentleman convince the House and Scottish Ministers that resources will follow the devolution of powers, so that the Scottish Executive can pursue their objectives in the coming years?

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

The Scottish Executive are well provided for thanks to the excellent spending settlement for the next three years that we were able to make in the summer because of the strong state of our economy and the strength that we derive from being part of the United Kingdom, something on which the hon. Gentleman might want to reflect. He should not count on a stream of further devolution measures regarding the railways; the Bill is sensible and practical, but it is all that is required.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Conservative, Cotswold

Returning to the subject of London, clause 15(3) refers to consultation that must take place before an invitation to tender for a franchise agreement is issued in respect of services that

"are or include London railway passenger services".

Given that 70 per cent. of all rail services pass through London, is not the Secretary of State setting up a huge bureaucracy, whereby he must consult and agree with the Mayor of London before such invitations are issued? If not, what will happen if there is disagreement between the two?

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

No, that is not so. The hon. Gentleman is letting his imagination run riot. The franchises will be awarded through a division within the Department for Transport set up for that purpose. Yes, we have to consult all sorts of people where appropriate, but the position will be infinitely simpler than it is now.

Photo of Mr Iain Luke Mr Iain Luke Labour, Dundee East

I welcome the proposals that will lead to the Scottish Executive having more influence in discussions with the Department for Transport and Network Rail on the strategic objectives of the system as a whole. That will require resources to be transferred. Is it clear that the Scottish Executive will be responsible for all improvements to rail infrastructure throughout Scotland, including the whole of the east coast main line from Edinburgh north?

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

The Scottish Executive will be responsible for specifying and paying for those enhancements that they want. As for the east coast main line, the Scottish Executive might want to administer a series of comparatively minor upgrades, but so might Network Rail, depending on its requirements for, say, Anglo-Scottish services. However, the White Paper makes it clear that if a major upgrade were in prospect like the one for the west coast main line, the decision would be made by the Department for Transport in association with the Scottish Executive. However, the Scottish Executive could decide to upgrade the line from, say, Edinburgh to Aberdeen—a stretch that my hon. Friend knows something about—if they chose to expend their resources in that way. The Executive will now have that power, which I think is a major step forward.

Under the asymmetrical devolution that we have in this country, each part of the country has to be dealt with differently. The Welsh Assembly Government will be able to, and will, specify the Wales and Borders Trains services, but we will remain responsible for the few Wales and Borders Trains services that operate wholly within England. That is consistent with devolution.

The Bill includes greater powers to make it easier to change services. Earlier, I spoke about wanting to encourage better decision making when choosing between heavy and light rail and so on. Such procedures must be changed because the SRA is going, but the procedures will be much better than those we have at present. Changes to the Rail Passengers Council have been largely instigated by the council itself to enable it better to represent passengers' needs and have been welcomed, by and large.

I said that there were other changes that do not require legislation. Network Rail will be given clear responsibility for operating the network and changes to the agreement between Network Rail and the Department are being discussed at the moment. In reply to my hon. Friend Mr. Donohoe, I said that track and train companies must work together more closely.

The House may be interested to know that, in January this year, I opened the first joint control centre between Network Rail and South West Trains. In the first nine months, performance has improved by 35 per cent. If anyone had any doubts about the wisdom of separating track and train, which was contemplated by the authors of privatisation, that example shows that there is a huge difference in performance, which will continue. I also said that there would be a reduction in the number of franchises; on 19 October, I said that they would fall to 19, and that there would be a further reduction to align them with the Network Rail regions. Network Rail will take over responsibility for drawing up utilisation strategies to make the best use of the network. Finally, the discussions on the rolling stock companies are continuing.

Before I conclude, I ought to do justice to the amendment tabled in the name of the Leader of the Opposition; it is only a courtesy to do so. I do not want to labour the point, but while it is critical of the Government, as one would expect, it is hardly illuminating about what a future Conservative Government might do. That is curious; at this stage in the electoral cycle—unless the hon. Member for South Suffolk is a 2006 man—one would have expected the Conservatives to give a hint of what they would do in the unlikely event of their being returned to power.

The hon. Gentleman is silent about the £1.8 billion-worth of cuts that he would impose. Implicit in his amendment is his wish to keep the SRA, given that he is critical of the changes that we are making to abolish it. I should tell him that Mr. David James, who was hired by the Tories to look at efficiency savings, has banked the savings that derive from abolishing the SRA. I was therefore surprised by the amendment, until my attention was drawn to something that the hon. Gentleman said in an environmental publication in September:

"There's no commitment to implementing these recommendations"— the efficiency savings—

"I'd be surprised if there is not some scope for efficiency savings but whether those are of the order that the James committee suggested I don't yet know. It isn't a priority for me—it's much more important to get our policy indicators clear so people know exactly what we stand for."

The hon. Gentleman has shot himself in the foot regarding savings; at the same time, he has disappointed us, as we do not have a clue about where he stands. We do not know what the Conservatives' policy is, except that they want to cut £1.8 billion from spending on transport. It is difficult to see how on earth we could have an effective railway system, especially as they have some history, or baggage, as the privatisers of the railway, which led to so much difficulty.

I believe that the railways in this country have a very good future. I accept that there are difficulties and problems to be overcome—reliability, for example, needs to be improved—but we now have the funding and management, and the right organisation, for the railways to make sure that they carry more people and freight. I am optimistic about the future of rail, and I commend the Bill to the House.

Photo of Tim Yeo Tim Yeo Shadow Secretary of State for Environment, Food and Rural Affairs 5:04 pm, 6th December 2004

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

"this House declines to give a Second Reading to the Railways Bill because it increases the extent to which politicians and civil servants interfere in the running of the railways;
gives the Mayor of London power over train services which begin or end beyond the boundaries of the Greater London Authority;
perpetuates instability in the rail industry with regard to franchising;
fails to encourage additional private investment;
offers nothing to improve conditions for passengers and the travelling public;
and exposes the Government's continuing disarray over the strategic direction of the industry."

I shall start by helping the Secretary of State, who looked frightfully pleased because his researchers had dug out a quotation from some remarks that I made in September about the recommendations of the David James committee. Had he or his researchers done their homework properly, they would have discovered that those remarks of mine made in September referred specifically to the David James committee recommendations in respect of the Department for Environment, Food and Rural Affairs, and that the more recent recommendations of the David James committee were, when published last month, accompanied by a specific statement from me, which said that any savings that were achieved as a result of those recommendations—I believe that significant savings will be made—will of course be redeployed entirely in the transport field. So I am grateful to the right hon. Gentleman for drawing attention to that point, which has clearly been causing some confusion in his mind and that of this staff.

The Secretary of State said that the Bill was needed to put right aspects of privatisation. Even by his standards of accuracy, that is a pretty extraordinary claim, because everybody knows that there is one reason, and one reason only, why the Government have introduced the Railways Bill: it is because they need to put right one of their own blunders. The right hon. Gentleman lapsed into his slightly more patronising style, as he does from time to time, when he said that it was some years since I had been in government. That is absolutely true. It is also true that he has been in government for quite a long time. One of the hallmarks of people who have been in government for quite a long time is that they acquire a complete inability ever to admit any mistake by their Government.

The Secretary of State would have been a great deal more convincing this afternoon if he had recognised publicly even for an instant that the Strategic Rail Authority was an utter and total failure. It turned out to have no strategy, no railway and no authority. Five years ago the Deputy Prime Minister said:

"The Strategic Rail Authority will put railways at the centre of an integrated transport system".

I wonder how that ties in with the decision of the Strategic Rail Authority to end the dedicated Gatwick express. I thought the Gatwick express was quite a good example of integrated transport, so that an international traveller, coming off an overnight flight, is at least guaranteed a seat. But the SRA, the body which the Deputy Prime Minister himself said would put

"railways at the centre of an integrated transport system" is proposing to put an end to the Gatwick express, so that international air travellers will come off an overnight flight and have to stand all the way to London because some commuter has got their seat, having got on the train at Hayward's Heath.

The quotation from the Deputy Prime Minister continued:

"with proper public accountability and investment, putting the passenger's interest at the top of the agenda in a long-term strategic framework with the focus on a plan for growth."—[Hansard, 20 December 1999; Vol. 341, c. 539.]

In 2001, Labour's election manifesto stated that the Strategic Rail Authority would provide a clear, coherent and strategic programme for the development of the railways so that passenger expectations are met. Just two years ago the Department for Transport's own review of the 10-year transport plan said that the SRA would provide

"the firm leadership envisaged for it, that of providing strategic direction and funding for the rail industry."

Today the Secretary of State is consigning the Strategic Rail Authority to the dustbin. Predictably, its failure has not led to a single ministerial resignation, even though £250 million of taxpayers' money has been wasted.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

As part of the public catharsis that he wants us all to go through, will the hon. Gentleman say a word about the fantastic costs of privatisation, the waste of resources that accompanied it, the sale of assets by Railtrack and the huge public subsidy to private rail operators that has often disappeared into profits? Does he not think that even a moment's apology for the privatisation strategy is worth giving at this time?

Photo of Tim Yeo Tim Yeo Shadow Secretary of State for Environment, Food and Rural Affairs

Indeed, I intend to touch on some of those issues later in my speech. It is significant that none of the issues that the hon. Gentleman has just raised are among the areas of policy that the Government are proposing to change. They have accepted hook, line and sinker every one of the points about which the hon. Gentleman seems so upset. My concern was that the Secretary of State has not admitted to the House that the reason he has to introduce the Bill today is that the Government made a blunder of the hopes that they had for the Strategic Rail Authority. Those hopes turned out to be unfounded.

For the avoidance of doubt—the Secretary of State seemed rather confused on this point—the Conservative party does not oppose the abolition of the SRA, but we condemn the muddle and incompetence of a Government who have had to oversee such a massive U-turn in the centrepiece of their railway policy—a Government who, after almost eight years of responsibility for railways, find that the main change that they need to make is to reverse one of their own decisions.

There are some aspects of the Bill that we do accept, such as the transfer to the Office of Rail Regulation of the functions previously carried out by the Health and Safety Executive, but we have very strong objections to several parts of the Bill, as our amendment makes clear and as I shall explain. The fundamental problem is that the Bill gives politicians and bureaucrats far more say in running the railways. That is the precise opposite of what the Government should be doing. Indeed, the only hope for railways is leaving management to get on with providing the service that customers want without constant political interference. Unfortunately, nothing in the Bill—not a single clause—will make life better for passengers, make trains more reliable, encourage more investment in the railways or increase the amount of freight carried on the railways.

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

Purely as a matter of interest, where would the hon. Gentleman transfer the SRA functions on the awarding of franchises and so on?

Photo of Tim Yeo Tim Yeo Shadow Secretary of State for Environment, Food and Rural Affairs

As I have implied, my view is that the companies that are closest to the customers should be given a bigger say, not a smaller one, in how the railways are run. I would discuss with the operating companies how the process of franchise allocation can best be made totally independent of political interference. The system that the Government have set up—I shall return to this point presently—increases the potential ministerial interference in franchise allocation. From a Government who have shown on more than one occasion that they are willing to bend policy in response to political supporters, donors to the Labour party and so on, the Bill introduces a highly dangerous situation.

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

If the hon. Gentleman wants to make franchise awarding independent of the Department and of Ministers, surely it means setting up another body or quango to do it?

Photo of Tim Yeo Tim Yeo Shadow Secretary of State for Environment, Food and Rural Affairs

As I said, I propose that we will have discussions with the industry and with those who are most affected by this policy area about how to ensure that important decisions about the allocation of franchises are taken out of the hands of Ministers.

Photo of Tim Yeo Tim Yeo Shadow Secretary of State for Environment, Food and Rural Affairs

In a moment.

It is not clear now what the Government think the railways are for. Are they there to carry commuters, run services between big cities, maintain rural and cross-country lines and to carry freight? Let us look at the record over the past seven and a half years, and in particular, compare it with what was said in the 10-year plan launched by the Deputy Prime Minister four years ago. According to that plan, trains were to be made more punctual. In practice, twice as many trains now run late as did so in 1997. According to the plan, the amount of freight carried on railways was to increase by 10 per cent. by 2010. In practice, in the past two years, the amount of freight carried has fallen. According to the plan, Thameslink 2000 and the East London line were both to be built by 2010. In practice, those targets cannot be met. Ministers promised that rail fares would not rise faster than inflation. In practice, they have done so, and the latest increase last week amounted to 4 per cent.—the second 4 per cent. rise in only two years. Last but not least, the British Transport police have just reported a worrying increase in violent crime on and near to the railways.

In summary, after seven and a half years of Labour government, train fares are up, trains are running later, freight is falling and new projects are either postponed or cancelled. Just last week, we learned that because Network Rail could not inform train operators of where it would be working on the lines over the Christmas holidays until extremely late in the day, the operators could not publish their Christmas timetables in a timely manner, thus making it hard for people both young and old, who particularly depend on the railways at this time of year to see their families, to make their plans.

I acknowledge that the situation on the railways is not bad in every respect. As the Secretary of State said, the number of passenger miles travelled is now at its highest for more than half a century. Investment in the railways has also risen sharply since the private sector became directly involved in their operation. Neither of those important achievements could possibly have occurred if the railways had remained entirely in the public sector, as the Secretary of State acknowledges.

I shall now set out some of our concerns about the Bill. First, as I said, it gives politicians more control over the railways. Let us start with London: more than two out of three of all train journeys begin or end in London, which is central to the success or failure of the railway system. If the Bill is passed, the Mayor of London, Ken Livingstone, will have a direct say in the running of all trains coming in and out of London, rather than trains that serve the Greater London area only. Clause 15 requires the Secretary of State to consult Ken Livingstone on how tenders for franchises are handled and allocated, on whom franchises are allocated to and on the terms on which franchises are allocated. It specifies that those powers, which Ken Livingstone will exercise, will apply to rail services anywhere in the country that begin or end in London.

I am glad that the Secretary of State is reading the Bill, because he may discover something that he did not acknowledge in his speech. Clause 15(7) defines a "London railway passenger service" as one which includes trains that travel to or from places outside Greater London. It is clear that the Secretary of State has not read the Bill, which he is examining with great interest. I know that he cannot wait for a Cabinet reshuffle—he has never shown great enthusiasm for his present brief—but he is deluding himself if he thinks that the Bill does not give Ken Livingstone the powers that I have described. If he thinks otherwise, he has obviously failed to read his own Bill.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Conservative, Cotswold

I intervened on the Secretary of State on exactly the same point. My hon. Friend will have heard the Secretary of State's complacent reply that the measure will not increase bureaucracy and council tax for the people of London and that it will not lead to inflation-busting fare increases. Given the record of Transport for London, of which the Mayor is in charge, on running the tube, on which fares have increased hugely, and the fact that the council tax for London has increased by more than 50 per cent. since the Mayor took over, does my hon. Friend think that the Secretary of State has any credibility on that matter?

Photo of Tim Yeo Tim Yeo Shadow Secretary of State for Environment, Food and Rural Affairs

My hon. Friend has made a powerful point succinctly, and he is right. The Secretary of State has tried to deny the contents of his own Bill, the effects of which will be exactly as my hon. Friend has described. I shall enlarge on those effects, because if the Secretary of State has not read the Bill, it is even less likely that he has read the regulatory impact assessment, to which I should like to draw hon. Members' attention.

The RIA makes it clear where the Bill is heading. According to it, clause 16 has been worded to ensure that there is

"flexibility built into the legislation that allows the Secretary of State to potentially extend the mayor's responsibilities for London rail services"— remember that the Bill defines those as any train that begins or ends in London, regardless of how far outside the Greater London area it travels—

"in line with policy development."

The RIA admits that

"potential costs include the risk of greater interference in the rail industry imposing delay and higher costs on train companies. There is also a risk that projected passenger benefits do not materialise . . . as previously noted, the incremental costs associated with policy implementation are not yet known."

The RIA blows the gaff.

I wonder what persuaded the Secretary of State, of all people, to give Ken Livingstone those powers. Was it the cost-effectiveness of the congestion charge, which, as hon. Members know, costs £97 million to administer and raises £68 million after expenses? Was it, as my hon. Friend Mr. Clifton-Brown has suggested, the rigorous way in which Transport for London has negotiated holiday entitlements for tube workers? Does the Secretary of State think that giving Ken Livingstone more power will make it easier to attract investment into the rail industry, and are the train operators clamouring for such a change?

One group of people who I am sure do not seek such a change are commuters who travel into central London from outside Greater London. They may find that instead of services being developed that make it easier for them to travel in from stations such as Colchester and Manningtree, which many of my constituents use, the congested tracks on which those trains travel may be occupied by services designed to suit the needs of Ken Livingstone's voters in the Greater London area.

Photo of Tom Harris Tom Harris PPS (Rt Hon John Spellar, Minister of State), Northern Ireland Office

I wonder whether the hon. Gentleman is making too personalised an attack on the Mayor of London. He has already mentioned the name Ken Livingstone six or seven times. The hon. Gentleman is, in effect, speaking against the principle of consulting locally elected politicians about rail services. If he is opposed to that power going to the Mayor of London, is he also opposed to provisions in the Bill that allow Scottish Executive Ministers to make exactly the same decisions about journeys that begin or end in Scotland?

Photo of Tim Yeo Tim Yeo Shadow Secretary of State for Environment, Food and Rural Affairs

No, because the situation as between Ken Livingstone and Scotland is wholly different. I mention Ken Livingstone because, as he happens to be Mayor of London, he is the person to whom these powers are to be transferred. Members of the Government might wish it otherwise; they might think, for example, that Steve Norris would have made a better Mayor. I mention Ken Livingstone also because his record of running almost any kind of service is one of appalling waste and extravagance. I can scarcely think of a single politician less suited to being given the responsibility that the Bill bestows upon him. The situation in Scotland is wholly different. Only a tiny fraction of the services for which the devolved Executive is responsible go outside Scotland, whereas a vast number—in fact, the majority—of services for which Ken Livingstone will be responsible begin or end outside London.

Let us move on from Ken Livingstone. Another big gainer of power is Network Rail. Having sought and obtained control over train timetables, its new responsibilities include devising route utilisation strategies, directing network operations, driving up operational performance, and delivering infrastructure maintenance and renewal. That sounds pretty impressive, but to whom exactly is Network Rail accountable? Certainly not to its shareholders, because it does not have any; certainly not to passengers, because it is not burdened with the inconvenience of coming into direct contact with them; and scarcely even to its members, one of whom wrote to me a few days ago, rather plaintively pointing out:

"We are appointed via a mystery process . . . We have no sanctions over the board . . . Unless Network Rail call the meetings we cannot claim expenses."

It does not sound as though the management of Network Rail has much to fear from anyone. I worry about the effect of that on services. Network Rail's first responsibility, as the Library paper helpfully points out, is to the track. It has no incentive to attract extra passengers on to the railways; indeed, it will be able to cut services if they interfere with its duty to maintain the track. It sounds suspiciously like the worst periods under British Rail, when, having complained about the poor service offered to my commuter constituencies in South Suffolk, I was often left with the impression that it would be able to run the trains much better if it did not have so many passengers to bother about.

What is more, how can we be certain that Network Rail, with its monopoly position in the industry, far-from-transparent operations, unconventional structure and curious lack of accountability, is operating efficiently? Are the cost and speed with which the railway infrastructure is maintained and improved in Britain comparable with the performance achieved in other countries?

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

Again purely as a matter of interest, can the hon. Gentleman tell us what his proposals for Network Rail are? Would he keep it, or privatise it, or nationalise it?

Photo of Tim Yeo Tim Yeo Shadow Secretary of State for Environment, Food and Rural Affairs

It is pretty clear that there is no possibility of Network Rail's being privatised, given the way in which the Government treated its predecessor body, Railtrack. That matter is still being pursued through the courts. If there had been any wish on the part of the Government to try to boost private sector investment into Network Rail, that wish was greatly obstructed by the way in which Railtrack's assets were seized by the Government and those associated with them.

Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport

I must press the hon. Gentleman for an answer. What are his proposals for Network Rail?

Photo of Tim Yeo Tim Yeo Shadow Secretary of State for Environment, Food and Rural Affairs

It is impossible to privatise Network Rail, because of what this Government did previously. No one is going to put money into assets that the Government seized from a predecessor body, so we have ruled that one out, at least for the foreseeable future. What is needed is a review of the structure of Network Rail to give it a clear line of accountability to passengers; to its customers, the rail operators; and, if necessary, to Parliament. However, it is clear that it suits the Government to be able to hide behind Network Rail. They will say that the industry is not nationalised or part of the Department but part of a separate body, which nobody quite knows how to call to account. I daresay my hon. Friends have had the same experience as me. It is difficult, even for those of us on the Front Bench, to get information about exactly what Network Rail is doing.

What incentive is there for Network Rail to speed up the exploitation of its huge property assets? For more and more rail passengers, getting on a train at a provincial station is the same today as it was 100 years ago. The contrast between airports, which are firmly in the 21st century, and most stations, which remain in the 19th century, is painful. Massive amounts of capital can be drawn in from private investors for the benefit of the rail industry, without taxpayers or passengers having to fork out a single penny, simply by unlocking the huge potential of brownfield development opportunities in and around stations. Unfortunately, the Bill will make that process harder rather than easier.

The train operating companies are among the losers from the Bill. Their response has been muted so far, but it is hardly surprising when one realises that another change in the Bill would give the Secretary of State and his civil servants direct control over the allocation of franchises. Woe betide any train operator who dares to point out that the Bill does nothing to help passengers but merely cushions the lives of Ministers and bureaucrats. What chance would such a company have of getting a new franchise even if it was delivering a high quality service for its passengers? The nature of the changes in the Bill will silence opposition from potentially well informed sources, such as train operators, who are much closer to rail users than Ministers, civil servants or Network Rail will ever be.

There is no longer any pretence that the process of franchise allocation is independent of political interference. However, we know that passengers rank pretty low in the Government's priorities. That is clear from the changes to the way in which lines can be closed in future. Would it not be great to have a Bill that dealt with making it easier to open railway lines where demand existed? There is not much chance of that from a Secretary of State who has kicked almost every project for expanding railway capacity into the long grass.Unfortunately, the Bill is not about making it easier to open railway lines but to close them. To be more precise, the measure makes it easier to close lines and ensure that someone other than the Secretary of State gets the blame.

The rail network has remained roughly constant in size since one third of it was chopped in the Beeching cuts of the 1960s. It is widely assumed that the Government's latest wheeze, dressed up in the cuddly title of "the community rail development strategy" is little more than a smokescreen behind which Ministers will try to conceal a new round of Beeching-style cuts. It is a pity that the Secretary of State has not had the courage to come clean about that. After all, it is possible to make a logical case for saying that railways should concentrate on commuters, inter-city journeys and freight. If the Government thought strategically, they might want to do that. However, their transport strategy, like their strategy in almost every other policy area, is simply about spin and massaging public opinion.

The community rail development strategy transfers more responsibility for financing rail services to passenger transport executives—although, significantly, it does not transfer any extra money to them—while simultaneously taking away from those executives their role in determining the local rail franchises that should be awarded. To provide extra local services, a PTE must get approval from Network Rail. Since Network Rail cannot tell us, with three weeks to go, who can run services over Christmas, one can imagine the difficulty a PTE might meet if it had the cheek to say that it wanted to run a new service.

No such problem arises, however, if the local PTE wants to cut a service. In that case, it is free to switch the spending to "other transport modes" as the White Paper delicately puts it. That means a bus. Although Network Rail is there to block the provision of new train services if some of its engineers want to do that, there is no comparable hurdle to starting a new bus service, however congested the roads that the service may have to use.

An interesting insight into where the Government's sympathies really lie is provided by the fact that when new rail services are considered, the extra infrastructure costs and compensation to other operators must be calculated in advance and paid by the local passenger transport executive. In the case of new road services, however, such considerations apparently do not apply. In the White Paper, this is all hilariously described as "streamlining". What it really means is that the Government want to shift traffic from trains to buses, but do not want to say so, and—most of all—do not want to take the blame for the rail closures that they are planning.

I am not against facilitating decisions about new forms of transport service—light rail, guided buses and so on might well have a bigger role to play in the future—but I am utterly against a policy of closure by stealth, which has been designed to ensure that when closures are carried out, the local passenger transport executive will be blamed, although the Government are actually responsible. Furthermore, I share the concerns of the PTEs about the way in which the Secretary of State is removing some of their powers. Kieran Preston, the chairman of the Passenger Transport Executives Group, has said:

"it makes no sense to hand over the planning and management of regional rail networks to unaccountable civil servants in Whitehall who lack the local knowledge and expertise".

I turn now to an important relationship that the Bill will change: the relationship between the Secretary of State and the Office of Rail Regulation. Again, the change that the Bill will introduce increases the power of the Secretary of State and cuts that of the independent regulator. The effect of the change will be a return to the days when capital spending on the railways was subject to constant Treasury cuts, the consequence of which was the largely clapped-out rail infrastructure that resulted from half a century of state control.

At present, for all its flaws, the Office of Rail Regulation can act as a driver for new investment. Through the way in which it sets access charges, it can help to ensure that sufficient money is attracted to renewing and improving the network. The Treasury has now taken fright, however, at the way in which that process breaches its own power to exercise absolute control over public spending. I understand why the Treasury has taken that view, but the consequences are significant and potentially damaging. The terms of schedule 4 of the Bill make it clear that in future, whatever the Office of Rail Regulation decides in relation to access charges can be overruled by the Secretary of State. In the absence of assurances from the Secretary of State about funding levels, we have to assume that the Department for Transport will be under constant pressure to make such cuts.

The change will have another serious consequence. Until now, the Office of Rail Regulation has had the power to set access charges and a duty, in doing so, to apply an important list of statutory criteria, such as the promotion of efficiency and economy in the industry, the interests of freight and passenger users of the railway, and the growth and development of the industry. It is not allowed to apply political criteria, as it is recognised that the application of short-term political considerations is harmful to private sector confidence and to the medium and long-term needs of the railway industry. The establishment of independent economic regulation, free of political controls, is essential to private sector confidence and investment. That duty has no doubt provided comfort to private investors in the railways, but if they are putting money into new rolling stock and improved services, there must be at least a reasonable prospect that the infrastructure will be provided for the results of their investment to function.

Photo of Graham Stringer Graham Stringer Labour, Manchester, Blackley

I have listened carefully to the hon. Gentleman's arguments. Is he really saying that he is satisfied with a situation in which, over the past two or three years, the rail regulator has been able to add £7 billion in expenditure to the public purse without any recourse to the Government? If he is not saying that, what is he saying?

Photo of Tim Yeo Tim Yeo Shadow Secretary of State for Environment, Food and Rural Affairs

I am pointing out the consequences of the Bill. We are here to debate its Second Reading, and I am highlighting the areas about which the Opposition are concerned, which we shall seek to improve in Committee. The consequences of the proposal to allow the Secretary of State to overrule any recommendations from the Office of Rail Regulation will be quite serious, and we need to understand what they will be. The Secretary of State himself stated on 9 February that the Government

"rules out any change to the rights of third parties, which will be protected."

He also said that

"maintaining fully effective and independent economic regulation is critical for retaining investor confidence. There will be no diminution in the regulatory protection of the private sector investors in the railway."—[Hansard, 9 February 2004; Vol. 417, c.1237W.]

Just how that statement to Parliament can be reconciled with schedule 4 will be examined in more detail in Committee; just what its effects might be on future private investment in the railways may take rather longer to be revealed.

Photo of Gwyneth Dunwoody Gwyneth Dunwoody Labour, Crewe and Nantwich

Will the hon. Gentleman simply answer the question? Does he really think that the taxpayer should have no protection at all?

Photo of Tim Yeo Tim Yeo Shadow Secretary of State for Environment, Food and Rural Affairs

I am not suggesting that the taxpayer should have no protection. I am suggesting that when the Government effectively go back on an assurance to Parliament, the resulting instability makes it harder to attract the investment that the railways need if they are to be brought up to date.

My worries about the Bill are reflected in the Opposition amendment. While we recognise the need for the Government to reverse the mistake that it made in setting up the Strategic Rail Authority four years ago, we remain concerned about the impact that the Bill will have on the future of the railways. Even in the darkest hours of British Rail, even when state control of the railways was unquestioned, there was never a time when quite so much power was seized by the Secretary of State and his civil servants in the Department.

Following the SRA's demise, just who will have any duty or incentive to promote rail travel? Not the Secretary of State, not the Department's civil servants, not Network Rail, not even Ken Livingstone.

We will pursue our objections to the Bill in Committee and during its later parliamentary stages. As a regular user of trains all over Britain, I believe passionately in their future. I believe that their role in providing environmentally friendly, sustainable transport for freight, commuters and long-distance inter-city travellers could and should grow. I believe that that end can be achieved with far less taxpayer subsidy than is being poured into the railways now. I also believe that it will be achieved only if we draw in more private investment through intensive exploitation of the enormous assets of the rail network, if we allow train operators the freedom that they need to respond to consumer demand, and if we take politicians and officials in the Department and in London right out of the running of the railways—if, in fact, we do the exact opposite of what the Government now propose.

The difference between the Secretary of State and me is that I want our railways to succeed and believe that left alone they can do so, whereas the Secretary of State does not mind whether they succeed or not, but does want to make sure that if they fail, he does not get the blame. Tragically, if they do fail—which will be much more likely if the Bill is passed unamended—it will not be the Secretary of State or the Government who pay the price, but the travelling public and the British economy.

I commend our amendment to the House.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North 5:38 pm, 6th December 2004

I am almost aghast when I consider where to start. Mr. Yeo sounded to me like the leader of a gang of vandals blaming those trying to clear up the mess for creating it in the first place. I have my own speech to make, but I could spend an hour or so simply responding to what I have just heard.

I welcome the Bill in so far as it is another significant step away from the disasters of privatisation and back towards the sanity of public ownership of Britain's railways. I believe that it is a staging post towards transfer of power from the SRA to the Secretary of State, and towards public accountability. There are those who are concerned about that prospect because, although Ministers are known to be committed to the railways, the Department does not have a glorious record for supporting the railways. I hope that it has had a change of heart, and that it now has officials who are dedicated to the railways—as, indeed, am I. I speak as one who has travelled to work by rail every day for 35 years, and I have a considerable interest in railways, not just because I am a commuter but because I think that they are a vital part of our economy. Our economy could not operate without our railways. Indeed, I think that they should be expanded, to the benefit of us all.

There are ongoing concerns. Indeed, there are concerns about the Bill, but we should dwell on what has happened since privatisation, because that is where the problem has lain. The costs to the Exchequer have been enormous. Public subsidies per journey have been multiplied by five in 10 years, and track renewal costs have been multiplied by four. In British Rail's time, the average cost of a mile of rail track was about £350,000. It is now between £1.5 million and £2 million. That is way beyond inflation; even if one takes account of inflation, the cost is at least three times higher than it was.

Non-rolling stock investment has risen from about £1 billion 10 years ago to nearly £5 billion. I only wish that output had risen by the same amount. At that time there was a system for measuring output called CRWS. I cannot remember what the acronym stands for, but it was developed by BR to keep careful control of costs and ensure that it was getting value for money. That was conveniently junked by Railtrack when it took over, because it thought that markets and competition would take care of efficiency. How wrong it was.

The privateers have, effectively, been ripping off the taxpayer with a complex network of overlapping and interlocking companies paying each other out of public money. The Treasury has been treated as a milch cow by the private companies, and that is where the money has gone.

Let us look at some examples of how the scams operate. There are lots of agencies hiring staff to companies in the industry. Typically, an engineer may be paid £100 to £150 a day, but the agency hiring to the subcontractor will charge three times that amount, just pocketing the cash. A bridge should have cost £3 million to build but the charge was £12 million. The old BR engineers who know how much such things should cost were kept well away from the scheme, as was anyone who had anything to do with Government or the Treasury. Companies want to make sure that they get their money.

There are frequent press reports about the proportion of profit made by rolling stock leasing companies. Typically, there is a 30 per cent. leasing charge for rolling stock. As the money eventually comes out of the public purse or from the fare payer, they are not particularly worried, but 30 per cent. return for a leasing contract is outrageous—and as I have said, track renewal costs are now four times as high as they were.

What happens when a contract is undertaken? The company takes the specification and works rigidly to that specification, even if it is wrong and it can see that there are little mistakes, because it knows that it will be inspected, the mistakes will be found and it will get another contract to put right the mistakes that it failed to deal with in the first contract. It is making money—why should it worry?

Contrast that with the days of BR, when track work was undertaken by direct employees working to tight cash limits and making necessary corrections when jobs were in process. The recently published Catalyst report suggests that Britain's railways, far from being inefficient, were the most efficient in Europe. There was under-investment and they were under-financed, but they were efficient. They had the lowest subsidy, but the highest productivity. One can have high productivity in an under-invested company, because to keep the show on the road, it has to operate efficiently. That is what the railways used to do.

The shadow Minister said something recently about "ramshackle" BR—but Tom Winsor, the rail regulator, said in my hearing in the past year that BR handed over the industry to the privateers "in good order". Despite decades of under-investment, it was in good order. Engineers and people who worked directly in the industry really cared about what was happening. Contrast that with what happens now.

Public ownership worked and privatisation does not. Under public ownership, there was direct employment. We saw the integration of operations and track work. The cash limits made a real difference. At the time, perhaps we did not like cash limits because they made life more difficult, but we have engineers in the other place who say that they worked ingeniously to use the money as best they could to ensure that they did the best possible job within the cash limit.

Photo of Peter Atkinson Peter Atkinson Assistant Chief Whip, Whips

The hon. Gentleman is living in an unreal world. Any passenger who travelled regularly from the north-east of England to London in the days of British Rail, and who now travels under the auspices of the Great North Eastern Railway company, would say that the service is 10 times better than it was under British Rail. The idea that the service was better under British Rail is a complete fiction. It was awful.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

I am not saying that the railways are worse than they were, given the billions poured into them—they receive much more money than they did—and the fact that they are now more essential because more people travel by rail. The situation was, however, one of under-investment; when the amount of money that they received is taken into account, they performed brilliantly. I could quote examples at length to demonstrate that, and I refer Opposition Members to the report by Catalyst, which demonstrates it clearly.

Photo of Gwyneth Dunwoody Gwyneth Dunwoody Labour, Crewe and Nantwich

Does my hon. Friend remember that the line that GNER took over was not only modernised just before then, but had the best rolling stock and facilities? Indeed, it was a good cheap buy.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

I thank my hon. Friend for that helpful intervention.

As I said, I travel by train every day. I may be a bit of a trainspotter, but I listen for wheel flats—that is when the wheels make a banging noise on the track because they have not been reground. The ROSCOs—rolling stock companies—are not concerned, because it only damages the track, and they charge the cost to the public purse or the travelling passenger. Almost every train has at least one wheel flat and some have six or seven. That damages the track and the trains—but who cares, because someone else is paying?

My final point relates to public ownership. Ministers have said that that would cost a lot of money. The reality is that have we paid out such vast sums in the past 10 years that any cost of bringing the railways back into public ownership would be miniscule by comparison. The track is effectively in public ownership already. The franchises can be handed over to a public sector organisation as and when they mature. The rolling stock is the only thing that the public would have to buy back—but they do not even have to do that, because they could negotiate a better deal with the ROSCOs and pay less, at least for the foreseeable future. So there is no problem of cost.

The real argument is, unfortunately, political. When my right hon. Friend Mr. Byers did the necessary and important job of getting rid of Railtrack and bringing activities into Network Rail as a stage towards public ownership, I publicly congratulated him on that. He was applauded by Labour Members, although he got great deal of flak from Conservative Members, no doubt representing the shareholding interest.

We now know that my right hon. Friend was told by the Prime Minister that whatever he did, he was not to nationalise the railways. Unfortunately, that put on the brake. The Prime Minister is the leader of the Government and he had his say. However, I refer hon. Members to the recent report by the Transport Committee, chaired by my hon. Friend Mrs. Dunwoody, which says:

"the Government needs to keep an open mind on the provision of these services directly by the public sector."

I ask my right hon. and hon. Friends to take note of that, and to keep an open mind on public ownership in the future. That is the way forward. Privatisation has been a disastrous failure.

Photo of John Thurso John Thurso Shadow Secretary of State for Transport, Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Scotland), Liberal Democrat Spokesperson (Transport), Liberal Democrat Spokesperson (Culture, Media and Sport), Liberal Democrat Spokesperson (Scotland) 5:48 pm, 6th December 2004

The Bill sets out the legislation required to enact the changes to the railways and railway management consequent on the rail review in the White Paper. As the Secretary of State said, however, much can be delivered without legislation. The critical requirement is for a long-term strategy that has a clear vision of where the railways are going and how that will be delivered. In my view, that can be delivered only by Government. Consequently, the Bill's main principles are right. They are to establish clear responsibility for strategy, operation and regulation.

Clarity is required to ensure that those responsible for delivery in the three categories have a full understanding of what is required of them and what they are responsible for, as well as to ensure value for money, both for the taxpayer and for passengers, and clear accountability from each segment. We will, therefore, support the Bill on Second Reading.

Railways are and should be a vital part of our transport infrastructure. They can and should, however, be able to contribute more than they do. Many parts of the network are at capacity, which constrains growth and will continue to do so, yet we will look to the railways to contribute solutions to road congestion, both through carrying more passengers and more freight. Rail is therefore a national asset that deserves support and investment.

As the Secretary of State has often stated, and reiterated this afternoon, we have reached this point because of historic circumstances: decades of under-investment by Governments of all shades over many years and a privatisation that clearly failed to live up to its prospectus. It is important to understand the past, if for no other reason than to know where we are going in future. Passengers, however, are not particularly interested in the past and apportioning blame does not improve the network. What passengers want is an efficient network, which delivers a safe, reliable and affordable rail system and allows them to get where they want to go punctually. They want a clear strategy for achieving that, and a Department for Transport that is committed to supporting the railways and producing the railway that they want. I was interested by the comment made by Mr. Hopkins that the Department for Transport has a reputation of not always delivering that support. I hope that, under its current leadership, it will dedicate itself to ensuring that the railways operate well and efficiently.

Let me therefore begin with general principles. As I have said, there are three separate functions, and the first is strategy. There is a clear need for a strategy so that the public will know what is happening, when it is happening, and who is accountable for it. No one can pretend that waving a magic wand will cure all the troubles of the railways in an instant. That is simply not possible. It will be a long road to putting in the investment necessary for a modern infrastructure and delivering all the services as they should be delivered. Most passengers understand that. What they want is a strategy that sets out a route map for delivering that with clear milestones to be achieved. They want to see who is responsible for delivery in terms of operation. They want that clear strategic framework so that the operators can see what they are doing.

It is clear to me that strategy must be the responsibility of the Government because the Government specify policy and are responsible for public expenditure. The railways will receive public support for some years to come—of that I am sure—so it is absolutely right that the Government shoulder that responsibility clearly and unambiguously.

The second function is delivery. It seems logical that the delivery of the infrastructure should be the role of Network Rail and that it must deliver the operating plans to deliver the strategy. It is for the train operating companies to deliver the services. The way in which franchises can be developed has a role in this regard. I agree with the Secretary of State that there should be fewer franchises, which makes a great deal of sense, and I would argue that franchises should be much longer to encourage operating companies to commit to the line that they are running and invest in rolling stock.

One of the worst aspects of privatisation was the creation of ROSCOs. The fact that they are all now owned by banks merely indicates that they must have huge money-making potential, because banks do not buy things that do not make money. I believe that that money can be better spent elsewhere in the railways. Were there longer franchises, we could put together a system that would enable those who take on the franchise to invest in rolling stock, which would be a tremendous benefit.

Photo of Alan Beith Alan Beith Chair, Constitutional Affairs Committee

Does my hon. Friend agree that success should be rewarded in the franchise process and that, if Great North Eastern Railway's bid to renew its successful east coast franchise were to be rejected by the Strategic Railway Authority so that it could get a bigger premium from an operator offering a lower level of service, that would destroy the logic of the franchising system?

Photo of John Thurso John Thurso Shadow Secretary of State for Transport, Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Scotland), Liberal Democrat Spokesperson (Transport), Liberal Democrat Spokesperson (Culture, Media and Sport), Liberal Democrat Spokesperson (Scotland)

My right hon. Friend makes a point that I would have made later: success should be rewarded and, where a franchise operator is clearly delivering a good service to the public, within the parameters that have been set for it, there should be a degree of presumption that such an operator will have that counting in its favour at the time of renewal.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

The hon. Gentleman's point about ROSCOs is well made and well put. Does he therefore agree that it would be ideal for the national rail network to own the ROSCOs and therefore the rolling stock? Clearly, it is an extraordinarily profitable area with minimal risk involved.

Photo of John Thurso John Thurso Shadow Secretary of State for Transport, Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Scotland), Liberal Democrat Spokesperson (Transport), Liberal Democrat Spokesperson (Culture, Media and Sport), Liberal Democrat Spokesperson (Scotland)

The hon. Gentleman makes an interesting point. I have not studied the matter in sufficient detail to know whether that is the right answer. Other answers might work. For example, if we consider ferries, particularly in Scotland, the franchise is relatively short, but the Scottish Executive guarantee that, where an investment in a new ship has been made, at the end of the franchise, if the franchise company loses that franchise, the asset is transferred. The Scottish Executive therefore act as a kind of banker. The point is that no third party takes a cut on the way, which, as he would agree, is the evil that needs to be addressed.

The third function is regulation. My hon. Friends and I have long argued for a model of rail regulation more akin to that of the Civil Aviation Authority. The Bill moves in that direction and we are therefore happy to support it. We want a regulator that deals not only with financial aspects of regulation but with safety and, we would add, environmental matters.

The Bill puts both safety and consumer representation into the remit of the Office of Rail Regulation. I agree with the inclusion of both those, but as I have just mentioned, I would like responsibility for the environmental aspects of rail also to be given to the Office of Rail Regulation. Interestingly, in France, locomotives have generally become more fuel-efficient, but that is not the case in this country. That is because neither the size of the engine, nor the amount of fuel consumed, nor the amount of fuel per passenger is taken into account in the specification of the rolling stock. A whole list of aspects come in front of those and, if we are to ensure that rail is among the transport solutions that deliver in terms of using fewer carbon fossil fuels, we must include the environmental consequences in the mix. The best way to do that would be through the Office of Rail Regulation.

We therefore support those principles and the main thrust of the Bill, but there are considerable areas of concern in relation to the details. We look forward to working constructively with the Government in Committee in the hope that they might take on board some of those concerns.

My first concern relates to some of the consequences of the abolition, of which I approve, of the Strategic Rail Authority with regard to the powers that go to the Secretary of State and how he will accountable for them. An allied concern relates to the powers that will go to the devolved legislatures, to London and to the passenger transport executives. It seems to me that the objective is twofold. The first aspect, as I have said, is to have a clear strategy for the railways. It therefore seems extraordinary that the Bill does not lay a specific duty on the Secretary of State to publish that strategy, and neither does it do so on the national bodies. There is a clause in the Bill saying that the national bodies, the Scottish Parliament and the Welsh Assembly, may, if they so choose, publish a strategy, but not that they must do it. It seems to me that if the objective is to have a strategy, there should be a clear duty on both the Secretary of State and the devolved Administrations to publish that strategy.

The second objective is a clear line of accountability. The SRA failed largely because no matter what strategy it came up with, it had no way of putting it into operation; ultimately, it is the Government who have the power to do that. The Bill therefore puts strategy into the Government's hands—I hope that the strategy will be published—but there is no requirement for the Secretary of State to report to Parliament on what has happened during the year. I want him to have a duty to make an annual report, in which he comments on what he has done in the past year, on the bodies for which he is responsible and on updating the strategy. I genuinely hope that the Government will be receptive to that suggestion. It would make them more accountable for their actions and reinforce such actions, rather than diminish them.

I certainly agree with the principle of devolving power. I have always believed that the devolution principle should be, "What can be devolved should be devolved," so it is right that the existing powers of the Scottish Parliament and of the other devolved bodies be reinforced. However, I have two specific concerns, the first of which relates to the representation of passengers. The Bill foreshadows the Rail Passengers Council moving to the Office of Rail Regulation—absolutely right, as that is the correct place for it—but it also envisages the RPC becoming one body for the entire United Kingdom. There is much in that proposal that is good and the current RPC system is fairly unwieldy, to say the least, but while the Bill devolves power to Scotland and Wales so far as responsibility for delivery to passengers is concerned, at the same time it centralises passengers' ability to make representations. That is both illogical and perverse. At the very least, the Bill needs to state how the bodies responsible for delivery—the Scottish Executive and the Welsh Assembly—will relate to passengers.

My second concern, on which the Secretary of State briefly touched in response to an intervention, is how much money will be given to the devolved bodies. Nothing in the Bill sets out how the funding will be apportioned or how the investment will be made. I assume that the Government do not intend to cease funding the devolved bodies completely and say that everything for the rail network must come out of the existing block grants. I assume that there will be some finance, but there should be greater clarity as to what it will be.

The money required splits into two areas: maintenance and investment. Maintenance is not a problem as it can be dealt with on a straight per mile basis, but investment is more difficult. For example, how much money will go to Scotland for new investment? One could decide to use the Barnett formula, but that clearly would not work. It is based on a per capita calculation and works out at about 7.3 per cent.; at the very least, any ratio should be based on mileage. Scotland has some 13.3 per cent. of the national railway mileage, so that factor could be taken into account.

Alternatively, one could use a ratio based on current spend, but there is a danger in that method. The investments made in the past few years have largely centred on major English projects, particularly the west coast main line. Such a method of funding would therefore freeze in a future bias against Scotland. We need a formula that is reasonably flexible and that permits the Scottish Executive and the Welsh Assembly to know what funding they will have to introduce the improvements that they want to make. We want the Bill to ensure that improvements in the service from Edinburgh to Aberdeen or to Inverness are more likely, rather than less.

The Secretary of State's proposal concerning the ORR makes a great deal of sense, but we want to ensure that the safety duties are properly carried out and not conflated with the functional side. Part 3 sets out the modification to the Rail Passengers Council. As I have pointed out, the general principle is fine, with the proviso that we need to consider the important issue of how to deal with the devolved Administrations.

Perhaps my greatest worry relates to part 4, which appears to have only one purpose: to make closures and reduced services easier to implement. Why do the Government want to do that? In the light of that and of last week's announcement on community rail, there is serious concern that this could be another back-door Beeching. Beeching made some serious errors in his approach to the railways, not least in his appreciation of cost. One problem is that branch lines' costs are apportioned to them by Network Rail on an average cost basis—in the days of Beeching, they were apportioned by British Rail—but the true cost could be much less. In averaging out those costs, all the high-class, high-speed lines are included with the lower-class, lower-speed ones. It is the branch lines that tend to be the much slower, lower specification lines, and we need to ensure that a true costing of them is made, so that they are not closed in error. Beeching failed to take into account that closing branch lines removes passengers from main lines, because those who need to travel to a connecting line end up going by car, rather than taking the train.

The role of the railways in moving freight is also important and needs to be encouraged. I was sorry to discover that, in the more recent rail targets, the previous ones have been dropped. It is important that freight move from road to rail, so I hope that when the Secretary of State's long-term vision is published, it will not only make room for freight but clearly indicate that the Government regard rail freight as a way to help combat road congestion.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

Does the hon. Gentleman agree that there is a real need for new lines, particularly dedicated freight lines? Such lines might ease the pressure on passenger lines and allow them to run trains at much higher speeds; indeed, they might enable the creation of dedicated passenger lines.

Photo of John Thurso John Thurso Shadow Secretary of State for Transport, Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Scotland), Liberal Democrat Spokesperson (Transport), Liberal Democrat Spokesperson (Culture, Media and Sport), Liberal Democrat Spokesperson (Scotland)

I certainly agree that new capacity is needed. The biggest challenge that the Secretary of State for Transport will face—whoever it may then be—will be the lack of capacity. Indeed, many are saying that the east coast main line will run out of capacity by approximately 2015. However, I have a slightly different solution from the hon. Gentleman's. I would take the fast trains off the existing network, put them on a dedicated high-speed line and create a fast intercity connection, particularly on the north-south route. The capacity that such a removal of high-speed trains would deliver could then be used to create more freight lines and, indeed, more passenger lines.

Photo of Alan Whitehead Alan Whitehead Labour, Southampton, Test

Does the hon. Gentleman agree that we should also consider maximising the slots set aside for freight, which often has to compete with an increasingly overloaded passenger network in some parts of the country, through strategic methods such as upgrading lines and planning properly the interface between freight and passenger routes? Should not a key part of any strategic view of the future of rail be such an integrated view of freight and passenger travel?

Photo of John Thurso John Thurso Shadow Secretary of State for Transport, Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Scotland), Liberal Democrat Spokesperson (Transport), Liberal Democrat Spokesperson (Culture, Media and Sport), Liberal Democrat Spokesperson (Scotland)

I believe that a critical indicator on which the success of the Government's changes will be measured is whether that capacity for rail is maintained and maximised in the way that the hon. Gentleman suggested. I agree with him on that.

I have no doubt that the railways face considerable challenges in the years ahead. Quite apart from the investment needed to catch up on decades of under-spend, new investment will be required over the years. As I said, the east coast main line is forecast by many commentators to reach capacity by 2015. We will need new solutions and other areas will have similar problems. One day, I hope that we will accept the need for a dedicated high-speed rail network.

The Bill provides the framework in which a genuine and much needed long-term strategy can be put in place. That is why I and my hon. Friends will support it. However, it is for the Secretary of State and his Department to live up to the expectations created by the Bill. For the sake of future rail passengers, I sincerely hope that they are achieved.

Photo of Gwyneth Dunwoody Gwyneth Dunwoody Labour, Crewe and Nantwich 6:11 pm, 6th December 2004

I welcome the opportunity to speak after John Thurso because I have always wanted to say the name of that constituency, which is such a wonderful title.

The Bill is important, but small. If we choose to criticise certain aspects, it is not because we fail to regard it as a positive assessment of the real problems that the railway industry faces. Rather, it is because we want to tell the Government that they are doing pretty well, but ask them if they can please do a little bit better.

It is important to understand that some of the problems arising are not new, but need a bit of new and lateral thinking. It is essential for the Government to provide very firm leadership. The Strategic Rail Authority did not provide it and in the new round of franchises, we must be quite clear about what passengers want, what efficiencies are needed and what changes are necessary.

I hope that the Secretary of State will look closely into what is happening in the centre of the railway system around Birmingham. It is a sort of central node, yet the organisation of the services is, frankly, not working. People experience great difficulties there, but an opportunity exists now that much of the rolling stock and diesels have been freed up and are available to run longer services; from the south-west to the north-east and from the south-east to the north-west. By using those trains and providing an hourly service, we could begin to sort out some of those difficulties and provide a much higher standard of service for customers.

When one gets beyond the day-to-day determination of what is needed for the various franchises, it becomes clear that the Railways Bill, which has some useful parts, is worrying in one or two small details. I hope that the Secretary of State will forgive me if I highlight one of them, but I will not be doing the sort of rant about local government personalities that we have heard from Conservative Front Benchers tonight. When I hear determined attempts to make Ken Livingstone into a bogeyman, I wonder whether he has some arrangement with Conservative Members, by which they give him all that free publicity and build him up in a way that, undoubtedly, he warmly welcomes. If they could tell me what the arrangement is, perhaps I could make a contribution and they could demonise me in the same way. I am sure that it would improve my chances of re-election.

There are some real problems with the franchises. I want to comment briefly on those who are choosing to suggest, for reasons that I do not understand, that the next round of franchises will be greatly influenced by personalities and the relationship between various personalities and various political parties. Whatever one says about granting franchises and whatever one's view of companies' abilities to run the franchises that they take over, I do not think that anyone has seriously suggested that those decisions were taken on the basis of the popularity or otherwise of the management of the companies concerned.

Yet the rumour is now gaining considerable weight within the eastern region. A case is already being built; if there are any difficulties with GNER, they will be due entirely to the fact that the Labour Government are not prepared to allow certain people to take over certain franchises. That is so bizarre. Usually, I would not bother to comment on such things, but it is important to make it clear once and for all that if we are to retain a franchise system, it will be done simply on the basis of efficiency and value for money for the taxpayer and the passenger.

Personally, I would like to see much tougher conditions and quality of service written into the franchises. I am sure that the Secretary of State is not only alive to that possibility, but wants to ensure that it happens in the next round. We cannot allow the sort of interpretation of "flexibility of programming" whereby if an efficient and timely service cannot be run, bus substitution or some other cheaper way of providing a service is viewed as acceptable to assist the overall finances without consideration of what that means for the passengers. I am afraid that bus substitution is no substitution for an efficient and competent service.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

I wholly agree with my hon. Friend that bus substitution is no substitute; indeed, it often ends up driving people away from the public sector altogether. However, is she concerned about the possibility of the community rail initiative going in that direction, with the Devon and Cornwall branch lines, for example, being viewed as appropriate for bus substitution? That would be rather similar to what Beeching did for many of the Norfolk branch lines, as it resulted in fewer passengers using either bus or rail transport.

Photo of Gwyneth Dunwoody Gwyneth Dunwoody Labour, Crewe and Nantwich

The Secretary of State knows that the community rail partnerships are capable of producing really high-quality services. The combination of the needs of local people with the desire to provide a good railway system often improves not just the stations, services and passenger information, but even the quality of ride.

I sincerely believe that the Secretary of State wants to develop that and I do not concur with any suggestion that it is all about some hidden attempt to cut services. I know that my right hon. Friend will not expect us to sit quietly here, should there be a move, even by default, towards such a policy. He and I both know that using taxpayers' money well means providing what taxpayers want, which is continuing community involvement in railways and continuing provision of links between smaller railway lines and the main lines. We all know what happened in the past when, for one reason or another, those lines were discontinued. I am quite convinced that the Bill is not a back-door way of cutting community services. Indeed, I hope to see them developed and improved under the Bill.

However, I do have some concerns. I hope that the Secretary of State will make it quite clear that the rearrangement whereby safety becomes the responsibility of the Office of Rail Regulation should not be regarded by anyone as a cost-cutting measure. It will, I hope, produce a high level of safety, and we should not assume that it will be a cheaper service to run. I think that it will, in fact, be cheaper because it will be much more efficient. By definition, that should mean not having the same overheads, but it must be made clear to the people concerned that it is not a means of spending less on safety. We are seeking a higher standard and we want to maintain it across the network because we happen to think that that is how it should be in the future.

What will determine that will be the quality of the staff in the new office and their experience. Network Rail could undertake much of its own safety work, in the way that British Rail did, because of its particular involvements and the experience that it will build up. However, we need assurances from everyone that that particular development will not be regarded as a cheaper approach. For example, £578 million was spent on the installation of the train protection and warning system, but safety is not only a question of an immediate response to a problem, but of long-term value for money. That is essential. I also hope that the Transport and Works Act inquiry into the extension of the railway in the west midlands will be made available in due course, because it will have an impact on major lines.

I know that my right hon. Friend the Secretary of State intends to streamline the rail passengers committees, which will be an improvement. No matter how genuine and hardworking the individual members of those committees are, the structure is unwieldy. The passengers do not know where to go to complain, there is no clear line through which to answer complaints and many hon. Members have had to undertake inquiries that would be best left to the committees. I hope that the streamlining will include the provision of a reasonable advertising budget, so that in the future no one need be unclear about where to go to obtain redress for what are real problems.

I should have liked my right hon. Friend the Secretary of state to address the issue of rolling stock. We have already debated the untenable position of rolling stock companies or ROSCOs, which will walk away with large sums of money. Can my right hon. Friend give us an assurance that ROSCOs will be asked to contribute to retaining the rolling stock industry in the United Kingdom? That would be a source of great comfort. It is frightening that at a time when the taxpayer is at long last committing large sums to rolling stock, including improving general carriages, the work will go to overseas companies.

The companies, sensibly, have made strong efforts to produce the responses that the Government want, but we are losing jobs in the rolling stock industry very quickly. Once the expertise is lost, it cannot be regained easily or speedily. However, we know that we will soon need more and more new contracts fulfilled, and I want to see them fulfilled in the UK.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

Does my hon. Friend agree that one of the problems for the rolling stock manufacturers is that they do not have stable ordering programmes? Planning is required at a national level to guarantee stable orders for a long-term future.

Photo of Gwyneth Dunwoody Gwyneth Dunwoody Labour, Crewe and Nantwich

I agree. Indeed, the Government should accept that we must have a research unit—including manufacturers, universities with transport departments and the industry generally—that plans new rolling stock, freight services and new provision across the board. We are investing the cash, but we are losing jobs. People in the industry have the right to expect that their expertise be not ignored or forgotten. I am sad that the Bill contains no indication of any such development in the future.

The changes in the Bill are long overdue. The SRA, for reasons that are well known, was not working. It did not have the powers and it was not capable of translating imaginative leadership into practical results for the rail industry. We desperately need decisions to be taken now. There are worries about the removal of powers from the PTEs to sign rail franchises and the granting of franchises to those who run bus companies; those concerned regard rail and bus services as parallel and do not understand the differences between them. However, the Bill offers an opportunity to begin to bring the benighted rail industry into shape, so that passengers no longer have to demonstrate stoic resignation in the face of difficulties, but can say cheerfully that this is the first Government to commit large sums of money to the issue, the first to show imagination about the rail industry's problems and the first to deliver the goods.

Photo of David Wilshire David Wilshire Assistant Chief Whip, Whips 6:26 pm, 6th December 2004

The general thesis of this debate is that Britain's rail network is in a mess. That mess is of the Government's making. Even if Labour Members dispute that and claim that it owes something to privatisation, it is no justification for the Government to claim that it has nothing to do with them. The Government have had seven years to do something. To try to blame the mess on other people after all that time is total nonsense. The British railway system is in a mess and the Government have been the main architects of that.

The Bill will make matters worse rather than better. I am content to support some items in the Bill, but overall I oppose it. As the representative of the usual channels who will sit on the Committee, and unfettered by the rules that apply to my opposite numbers, I will be able to explain in some detail why I do so.

Photo of Tom Harris Tom Harris PPS (Rt Hon John Spellar, Minister of State), Northern Ireland Office

The hon. Gentleman opposes this Bill and I understand that he also opposed the previous Act. Would he have been content for the 1997 situation to continue unchanged?

Photo of David Wilshire David Wilshire Assistant Chief Whip, Whips

Of course I want to see the railways improved, but this Bill is the not the right way to go about it. If the hon. Gentleman is lucky enough to have to put up with me in Committee again, he will hear in some detail exactly why I think he is wrong and my party is right.

The Bill is an admission by the Government of their failures. In 2000, the Government told us that they had the answer to the railways' problems—the SRA. We did not think that the SRA was a good idea, and it gives me little satisfaction to say, "We told you so." We were told that the SRA was the solution, yet—without apology from the Secretary of State—we are now told that it is the cause of the trouble. The Government have failed, but either they cannot see that or they have the brass neck not to say sorry. That is a bit much.

The Bill also shows a failure to understand a basic truth that I like to think most people have now grasped. It is that politicians and bureaucrats are useless at running businesses. I am sorry that Mr. Hopkins is no longer in his place, because I listened with amazement—and a little amusement—to his contribution. It appears that dinosaurs are not extinct yet. The thrust of his argument was that nationalised businesses are good and the private sector is evil.

I thought about that for a moment, while the hon. Gentleman began to talk a load of other nonsense, and I realised that what I had heard from the Labour Benches was an argument that vehicle makers—the makers of aircraft, cars, trams and trains—should be nationalised because they are in the private sector, that private sector road builders and road repairers should be nationalised, and that airport builders and operators should be nationalised because they apparently do not work, according to the hon. Member for Luton, North. Of course, using the same argument that only nationalised businesses are any good if they are involved in transport, he would presumably advocate the nationalisation of airlines, bus operators and taxi operators. It is nice to know that good old-fashioned, left-wing Labour flourishes.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

My hon. Friend Mr. Hopkins is not in the Chamber, but one should give credit to his argument, which I support. The railways and the buses in particular in this country would not survive but for the massive public investment in them and public support for those services. Some £10 billion invested in rail subsidies has resulted in £1 billion of profit to the private sector. Is that a good return on public money?

Photo of David Wilshire David Wilshire Assistant Chief Whip, Whips

I disagree with that argument. Just because someone puts up the money does not mean that they must own everything. I am glad to see that the hon. Member for Luton, North has returned to the Chamber. I am sorry that he missed my comments, and I am sure that he will thoroughly enjoy reading them in Hansard in the morning.

Not only does the Bill fail to address past mistakes, but it will make at least another mistake that will make matters worse: it will give the Mayor of London more power. I take the strictures suggested by Mrs. Dunwoody not to give names to those people, but the Bill will give the Mayor of London, whoever it may be—the hon. Lady might want to stand for that post one day, who knows?—more power, particularly over things outside London. I shall say why that is a huge mistake in a moment. I worry about another issue that I fear could be a mistake. Again, I shall explain it in a moment. I am worried that, rather than improving safety, the Bill might run the risk of making matters worse in some respects.

As for the main part of the Bill—the abolition of the SRA—the Secretary of State said that things had gone wrong in the past, but he could not bring himself to say that the SRA was a disaster. It was a good thing—so good that he wants to abolish it. When I intervened on him about that, he accused me of not understanding the reasoned amendment tabled by the Conservative party. Despite the fact that the Secretary of State said that the reasoned amendment says that we want to keep the SRA, try as I might— reading and re-reading it—I have failed to find the words "We want to keep the SRA." The Secretary of State was wrong in attributing something to the reasoned amendment that simply is not there. All we say in respect of the SRA is that, in abolishing it, the Government are giving powers to politicians and bureaucrats. That is what we are against in relation to the SRA, as our reasoned amendment makes clear.

The SRA was not only ineffective, but a waste of money. Let us simply look at the facts of the matter. The Office of Passenger Rail Franchising cost the British taxpayer £13 million and employed 187 staff in 2000–01—its last year in existence before its replacement by the SRA. We are now asked to abolish its replacement, which costs the British taxpayer £102 million and employs 454 people. Not only was the SRA a failure, but it was a waste of time and money too.

I am only too pleased to support the abolition of the SRA in principle—to that extent, I support what the Government propose in the Bill—but I am not happy to pass the responsibility upwards to politicians and bureaucrats. I want the responsibilities and work passed downwards to where they can really make a difference—to the travelling public.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

I am following what the hon. Gentleman says; but in effect, this noble House keeps being maligned. Ultimate accountability will be closer to the House, so we will have some say in the costs and the running of the railways. We do not have that say now.

Photo of David Wilshire David Wilshire Assistant Chief Whip, Whips

One must distinguish the input of taxpayers' money from the operation of the service. I do not understand what is gained by passing responsibility and accountability for what the passengers must endure to the House. I accept that the hon. Gentleman is a regular passenger, but he has an input to make not in his capacity as the Member for Luton, North, but as a regular user of train services. The real accountability for the railways ought to lie with the people who depend on them and use them, not with politicians, because our record—I almost said track record, but I ask the House to forgive that sort of pun—in these matters is not something that we can be proud of.

The issue of the SRA, politicians and bureaucrats is not the only thing that concerns me; I am also concerned about giving more responsibilities to Network Rail—that wonderful, unaccountable organisation. We are not quite sure what it is, who is in it or how it is established, but the one thing that it is not is accountable to anyone. The White Paper made a fair point when it said that the franchise operators tended to try to pass the buck and that, somehow or other, they could wriggle around their responsibilities by pointing the finger at Network Rail.

What is the wondrous solution that the Government come up with? They want to make it easier for the franchise operators to say, "Nothing to do with me, guv." As we go through the Bill, we discover that Network Rail will be responsible for the performance of the railways. The people who operate the trains should be responsible for that. The Government will make Network Rail responsible for planning. Again, the people who operate the railways should be responsible for that.

Worst of all, the Government will make Network Rail responsible for the timetables. I find that quite extraordinary. If a train does not arrive or something is changed, my constituents rightly complain to South West Trains, asking, "What do you think you're playing at?" In the future, South West Trains and the other companies will say, "Nothing to do with us. This is what we were told to do." That is the exact opposite of making the franchise operators more accountable. Network Rail's job is to hold the operators to account, not to take the responsibility itself. When responsibility is removed, those involved become irresponsible.

Photo of Tom Harris Tom Harris PPS (Rt Hon John Spellar, Minister of State), Northern Ireland Office

On a point of information, the hon. Gentleman may well be right, but I understand that the SRA, not the train operators, sets the timetables. In fact, the situation for the train companies will remain the same when the Bill is enacted.

Photo of David Wilshire David Wilshire Assistant Chief Whip, Whips

The arrangements are all very vague at the moment. If I understand the White Paper correctly, the responsibility is split, but no one is quite sure. The allegation in the White Paper is that it is possible to pass the buck. To stop that happening in future, everything will lie with this wonderful thing called Network Rail.

The Secretary of State told us in magisterial terms—if I noted this down correctly—that only the Government can handle strategy. I think that he said that twice. That was his great assertion. Let us give a little thought to the Secretary of State's performance in respect of the strategic handling of the railways. My hon. Friend Mr. Yeo, who opened the debate for the Conservative party, mentioned the Gatwick Express. The strategic thinking about the future of the Gatwick Express involves getting commuters to use it, making life more difficult for air travellers, thus driving the people who use Gatwick back on to the roads. Is it joined-up thinking and an integrated transport policy to attack a success, turn it into something else and undermine the principles in the aviation White Paper? That is really "strategic".

Photo of Alan Whitehead Alan Whitehead Labour, Southampton, Test

I have listened carefully to the hon. Gentleman's alternative theory of how one moves towards a strategic view of the railways. Will he explain how, for example, one might increase and enhance freight capacity on the railways? Would that strategic responsibility lie in the hands of the freight companies or the passenger companies, or perhaps with the travelling public?

Photo of David Wilshire David Wilshire Assistant Chief Whip, Whips

I am sure that my opposite number in the usual channels will have listened with some care to that intervention and spotted another volunteer to sit on the Committee and listen to me explaining at some length the answers to precisely those questions. I am having difficulty finding people for the Standing Committee, but it appears that my contribution is helping to produce Labour Members who are willing to serve and hear my pearls of wisdom.

Photo of George Howarth George Howarth Labour, Knowsley North and Sefton East

Will the hon. Gentleman reflect on the fact that, as we listen to his speech, those of us who wish to serve on the Committee become less likely by the minute to do so?

Photo of David Wilshire David Wilshire Assistant Chief Whip, Whips

You ain't heard nothin' yet, is my response to that.

The lack of joined-up strategic thinking by the Government does not end with the Gatwick Express. It has taken some effort to beat off the stupid idea that the Heathrow Express should be turned into part of Crossrail and made to stop here, there and everywhere. Not only do the Government want to undermine Gatwick's success, but they want to undermine Heathrow's as well and put at risk a large number of jobs in my constituency.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

Will the hon. Gentleman reflect on the fact that the Heathrow Express is the world's most expensive railway, bar none, to travel on? Would he not be better employed in endeavouring to bring its prices more into line with those on other train services that operate along almost the same piece of track, apart from the short distance into Heathrow airport itself?

Photo of David Wilshire David Wilshire Assistant Chief Whip, Whips

The cost of the Heathrow Express is a separate issue from the attempt to prevent it fulfilling its function, which is providing a service to Heathrow for passengers. I hear the hon. Gentleman's comment about the cost—I, too, have reservations in that respect—but the cost has nothing to do with trying to close it and turn it into part of Crossrail.

It is not only with the Heathrow Express that the Government's joined-up thinking comes adrift. Consider the attempts to build Airtrack at Heathrow. The Government produce an aviation White Paper that states that Heathrow has a role to play in the future of air transport in this country, but it can develop only if surface access is via public transport, not by road. However, we encounter attempts to stop the Heathrow Express, which is part of that strategic policy, and obstacles in the way of building Airtrack, which is a route from Heathrow into my constituency and thence to Waterloo or Victoria. That has happened because the Government choose a priority—commuters—and do not think through the implications for something just as important, namely, the successful continuation of British aviation. That does not make sense.

The position worsens when we examine the Bill's provisions for London. All the rail services into my constituency and all the stations in my constituency are targets for Transport for London—its representatives told me so in a meeting on 19 October and made their desire to take over all of that crystal clear. When I asked them what they meant by taking over, they told me that TFL wanted to organise the timetables: never mind my constituents, it would be done for the convenience of London. They said TFL wanted to control fares: never mind what rail travel ought to cost my constituents, fares would be decided according to what is good for London. They told me that TFL would be responsible for improvements made to train services in its greatly expanded empire. That worried me, because I saw what happened to the buses in London—the huge expenditure and losses, and fares jacked up to pay for them. I realised that my constituents were in danger of having their rail fares increased to pay for—who knows what? Almost certainly not rail services in Spelthorne.

South West Trains has a programme of improving stations and platforms in my constituency and others outside London. I have no confidence, unless the Bill is amended, that money taken from commuters living in my constituency will not be squandered elsewhere in London for some politically correct programme that Transport for London prefers to helping my constituents. I cannot help wondering whether the plan goes further than the Bill admits. The Mayor of London has an undisguised desire to grab areas surrounding London and make his empire even bigger and he has made it crystal clear that my constituency is one of his prime targets. Perhaps he thinks that if he gets control of my rail services, he will be able to argue that Spelthorne ought to be part of London, after all.

The Bill suggests that we can overcome the problem of taking representations from people who do not live and therefore do not vote in Greater London by having two members of the board of TFL from outside the capital. I thought that, in principle, that might work, but then I looked at the details, and what did I find? The Mayor has to consult the regional assembly—that discredited body that no one in the south-east wants. What do people on the Isle of Wight have to contribute to a discussion about what is best for rail services in my constituency and Heathrow? Nothing. Surely consultation ought to be with those who will be affected by the change. Another thing I have discovered about the arrangement to try to buy us off and keep us quiet is a restriction that only two members of the board of TFL can be elected members of a principal council.

Photo of Greg Knight Greg Knight Shadow Minister (Environment, Food and Rural Affairs)

My hon. Friend is making a powerful point. Is it not possible to engage in consultation, then totally ignore the views expressed therein? Is that not likely to happen in the situation that he is describing?

Photo of David Wilshire David Wilshire Assistant Chief Whip, Whips

That is precisely what the Department for Transport seems to specialise in doing. It consulted on dualling the A303 in south Somerset down into Devon, and the proposal commanded widespread support from local councils, which thought it was precisely the right thing to do, but the Department ignored their views—a wonderful arrangement.

As I was saying, only two members of the board of Transport for London may be councillors. I have not discovered what the present membership of the board is, but let us suppose that there are two elected members on it. Even if people outside London are given some sort of representation on the board, therefore, they will be barred by statute from being represented by persons who have a democratic mandate to speak on their behalf. That is not democracy. It is a sop to try to keep us quiet—but we have spotted it.

I mentioned my concern about safety—an issue that I raise with some trepidation. I know that one of the responses is that the proposed arrangement is modelled on the air accidents investigation branch and on the Civil Aviation Authority's system, about which I know a fair bit and which seems to work. However, I have always had some reservations both about the CAA's safety arrangements and the AAIB. I note that as well as being responsible for safety, the Office of Rail Regulation is responsible for performance and costs. I would not mind if it was only responsible for safety—we could have a discussion about that. However, trying to improve performance and keep costs down often produces pressure to cut corners, and if an organisation that is responsible for safety faces that pressure to cut corners, I worry. I am sure that my concern can be laid to rest and that the Government can deal with the issue, but I believe that, as the Bill stands, there is a risk to the safety of rail passengers.

The hon. Member for Crewe and Nantwich said that it might be cheaper to transfer functions carried out by the Health and Safety Executive to an existing body. I accept that argument, and understand why some people say that the CAA carries out such a role for air travel. However, there is a fundamental difference between air travel and surface transport. Everything that happens in the air can easily be brought within the ambit of aviation, so a single-issue approach is appropriate. However, on the ground, railways and roads are both involved, so people would ask whether something was wholly a railway matter, it partly a railway matter or something else. There is a danger of duplication, so perhaps we should consider making surface accidents the responsibility of a single organisation. Although I am concerned about those issues, I am not prepared to assert that I am right. I hope, however, that the Government are prepared to address them.

The Bill represents yet another missed opportunity by the Government, who are merely moving deckchairs around the Titanic. The White Paper said that the railways should be "more customer-focused" and "more passenger-friendly." The Bill, however, does the exact opposite. It marginalises people who work with customers and weakens passenger input, substituting remote national politicians and the unaccountable Network Rail. It is, as I said at the beginning of my speech, an admission of the Government's failure, and it will make matters worse, not better.

Photo of Graham Stringer Graham Stringer Labour, Manchester, Blackley 6:51 pm, 6th December 2004

To reassure Mr. Wilshire, I can tell him that the railways were in charge of their own safety for many years before that responsibility was handed over to the Health and Safety Executive. There has been a century of improvement in railway safety, so although the hon. Gentleman made some interesting points, we do not need to worry about them.

Our debate has lacked annoyance, perhaps even anger, at what has happened to our railways in the 11 years since the Railways Act 1993. To try to gain some perspective, I looked at the Second Reading of the Bill that set up the Strategic Rail Authority in July 1999. Fascinatingly, in that debate, Opposition Members were completely satisfied with privatisation. I am caricaturing, of course, but the essence of their argument was that nationalisation of the railways had never worked and never would, thus justifying the extremely high costs incurred in selling the railways to Railtrack. Interestingly, in 1999 the railways were valued at six times the price at which they were sold off—the Public Accounts Committee concluded that the railways had been undervalued and sold in haste.

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

Does the hon. Gentleman think that by any chance the attitude that the Labour party took at the time of privatisation had some influence on the price?

Photo of Graham Stringer Graham Stringer Labour, Manchester, Blackley

The major influence on the price was the deep underlying philosophy of the Conservative party that it had to do something to get the problem off its hands. On the other side of the equation, ROSCOs—rolling stock companies—were sold off in an unregulated way and were sold on almost immediately for a third more.

That was the situation that we faced, but it became a great deal worse. Labour Members were keen that the SRA should provide a sensible direction for the disparate rail industry, which, admittedly, was giving a good financial performance. Sir Teddy Taylor, for example, said on Second Reading of the Railways Bill in 1999 that eventually the railways would be operated without any cost to the public sector. Even though he was right according to his own terms of reference, events proved him wrong.

Railtrack was not a railway company, so it was not controlled. It turned into a rapacious property development company that paid scant regard to the safety of travellers and passengers. "Broken Rails" by Christian Wolmar sets out in great detail the way in which privatisation of the railways and the establishment of Railtrack led to poor railway maintenance. The chief executive of Railtrack got off extremely lightly. Hon. Members may not know that before the accident at Paddington he claimed that the station was the safest in the world. That was mere bravado, and he was not interested in the problems. Subcontractors to Railtrack and smaller groups were operating at a large profit without any direct control, so it was clear that the chief executive had no idea what was going on.

Railtrack has now been replaced by Network Rail, and there is a huge subsidy for the railways. It is difficult to know from the figures what is investment and what is subsidy, but the Government have made two attempts prior to the introduction of the present Railways Bill to put things right. I have already talked about Network Rail—[Interruption.] Opposition Members may laugh, but I do not think that the Government got it right at the time, and I do not wish to defend everything that they did. They acted to provide a sensible direction for a disparate industry, which was beginning to show the cracks.

It is clear, however, that the overlap between the responsibilities of the SRA and the rail regulator were not properly thought through. In its report on the future of the railways, the Transport Committee said that the rail regulator could effectively overrule the SRA, the Secretary of State for Transport and the Treasury and decide how much money went into the railways. I do not believe that that situation was envisaged by the then Secretary of State in 1999; it was a mistake that led to the spending of a great deal of public money, not all of it on investment.

The Government made another attempt to put things right when they created Network Rail after Railtrack had failed both as a property company and in its fundamental duty of running the railways. Network Rail is an improvement, but it is an odd body, and it is difficult to know whether it is in the public or the private sector. It cannot continue in its present form for long, because there is clearly no direct accountability for the money that is spent, either to shareholders or to the Government. It is run by people with vested interests in the railway system. It may work better than Railtrack did, because those people have the interests of the railways at heart, but it will not work in the medium term.

I am disappointed that the Bill does not provide for an improvement in the structure of Network Rail. I see the Bill as a step forward, and in the right direction, but I do not believe that Network Rail is the right medium or long-term solution for the railways. We do not know how taxpayers' money is being spent in the rail system. Network Rail is a vehicle for keeping £100 billion worth of debt off the public accounts. Everybody knows that, and it does not seem sensible to keep an unsatisfactory structure in place to hide something that everybody has seen. That is not a long-term solution.

On the amount of extra money that has been spent and attempts to disaggregate it, Professor Roderick Smith told the Transport Committee that for between £11 billion and £27 billion—the amount of money wasted in the rail system is probably within that range of expenditure—we could have had a new rail system. That is the extraordinary sum that has been wasted.

I support the Bill, and I will vote for it on Second Reading, because it addresses some of the problems in the rail system. Primarily it addresses the need for public accountability for money. Mr. Yeo did not tell us how the large amounts of public money that have been put into the rail system should be accounted for. I believe that there should be accountability for taxpayers' money, and the Bill makes the Secretary of State accountable. That does not mean that the Secretary of State will control the entire railway system. Many of those responsibilities will remain within the rail regulatory system and within Network Rail, but the Secretary of State will take responsibility for the public money and some of the major strategies involved.

There are three aspects of the Bill, to which I shall speak briefly. I mentioned the first in response to the contribution from the hon. Member for Spelthorne—the removal of responsibility for health and safety in the rail system from the Health and Safety Executive. I fully support that decision. It is clearly a brave decision for a Secretary of State to take, because if there is an accident—and there can be an accident in any system— people will tend to point the finger at him. That would be the wrong conclusion to come to. It is clear from the evidence to the Select Committee of Mr. Osborne, who for a period was in charge of safety at the HSE, occupying the position recommended by the Cullen inquiry, that the rail industry had lost confidence in the HSE to pursue safety in the rail industry.

The Select Committee also found many cases of gold-plating—public money spent on minor safety improvements. The money would have been much better spent elsewhere within the transport system. Spending £1 billion in one place to achieve very little improvement in safety means that £1 billion less is being spent elsewhere—for example, on the roads, where 3,000 people a year are killed. I am pleased with the change, and I would hate to see it misrepresented. I was a great supporter of the Health and Safety at Work, etc. Act 1974 when it was introduced—

Photo of Greg Knight Greg Knight Shadow Minister (Environment, Food and Rural Affairs)

The official Opposition broadly agree with the points that the hon. Gentleman is making about the Health and Safety Executive. Subject to hearing what the Minister has to say further in Committee, we think that the decision is broadly the right one.

Photo of Graham Stringer Graham Stringer Labour, Manchester, Blackley

I am grateful to the right hon. Gentleman. I am not sure that it is always career-enhancing to have Opposition Members agreeing with me, but I thank him for that intervention.

The other two aspects on which I shall comment are, first, rail substitution, and then the right of passenger transport executives to sign franchises. On rail-bus substitution, there is an implication in the Bill of a one-way ratchet. If the PTEs are willing to take the money currently applied to rail lines and put it into bus services, as a reward for transferring that money they will be allowed to regulate those buses. In some cases that might be sensible. In some urban areas there are probably a very few railway lines that do not have a future use. None the less, I ask the Secretary of State why, if a failing railway line triggers bus regulation, bus regulation is not triggered by failing bus services, such as those in north Manchester, and other major cities and metropolitan areas? It does not make sense to say that if a railway fails the PTE can regulate the buses, but if buses fail, there is no competition and the bus companies rip off the public sector with cartels, the PTE cannot undertake regulation.

There is a further point about rail-bus substitution. Regulation and quality contracts will be allowed if the Secretary of State agrees and they are within the terms of the local transport plan. The local transport plans have been given four objectives by Government—to reduce congestion, improve road safety, improve accessibility and reduce pollution. Nobody could disagree with those aims, but having served on a passenger transport authority and on a city council for a long time, I know that those are not the only objectives of public transport systems. They are good objectives, but two related objectives that should be recognised are getting more people into city centres and something that is probably even more important—supporting urban regeneration schemes.

There are some urban regeneration schemes in Greater Manchester that will not happen if there are only bus services. They need light rail and in some cases heavy rail, or light rail substitution for heavy rail. The Government are too narrow in their objectives for local transport plans if that is the basis on which they allow the substitution of heavy rail for buses. When I asked the Secretary of State about that in the Transport Committee, he said that it was very difficult to measure urban regeneration. Indeed it is.

It is very difficult to measure congestion. The Department for Transport and the Secretary of State have failed for some years to come up with a universally agreed measure of congestion. I ask the Secretary of State a simple question: is Leeds more congested than Manchester? Is Leeds more congested than Birmingham? Is Birmingham more congested than Manchester? If there were a simple measure, there would be a simple answer. The degree of difficulty in measuring something does not mean that it should not be measured. For most councils and most passenger transport authorities, one of their top priorities would be urban regeneration.

The issue of the passenger transport executives' right to sign franchises has been touched on by other speakers. I have said on a number of occasions that I agree with the Government's declared intention to devolve responsibilities to the passenger transport executives, and I listened carefully to what the Secretary of State said in response to a number of interventions on that subject. To summarise, he said that there had been at least one difficulty when a PTE had used a delay in signing to haggle for extra resources. Surely he could take to himself the power to intervene if PTEs unreasonably withheld the signature; I do not seen any problem with that.

It was also suggested that it would be simpler if the Secretary of State took control and effectively devolved responsibility back to the PTEs, allowing them to sign franchises if he agreed. I think that that is a complicating factor, as PTEs and members of PTAs are much more likely to end up spending a lot of time negotiating with Whitehall officials, who will almost inevitably not understand the circumstances in Manchester, Birmingham, Leeds, Newcastle or elsewhere. That arrangement will be more time-consuming than allowing PTEs to do what, with only one exception, they have done successfully and without any problems.

I welcome the fact that the Secretary of State told the Select Committee that on that matter he would consider representations, and what was said in the Standing Committee. He also said today that he would meet a delegation from the House of Commons passenger transport executive group, which has recently been set up. I hope to persuade him in those discussions that the current proposals are centralising ones that conflict with the objectives set out in the White Paper, with which I agree.

I support the Bill as a step forward and a way of ensuring more accountability for public money. It does not go as far as I would like, it leaves some odd structures in the railway industry that are probably not as effective as they could be and will not deliver as well as they should, and there are some detailed parts of it that I look forward to discussing in Committee.

Photo of Richard Younger-Ross Richard Younger-Ross Shadow Minister, Office of the Deputy Prime Minister Local Government & the Regions 7:12 pm, 6th December 2004

I wish to start with an apology, as I will shortly be chairing a meeting that I have organised and must leave the Chamber immediately after my speech. No disrespect is intended.

It is a matter of only a few weeks since the tragic rail disaster at Ufton near Newbury. My constituent, Emily Webster, a schoolgirl, was sadly one of the five who died. I have since had conversations with her family and her father, and they are all concerned about rail safety. Her father in particular has raised the issue of seat belts in trains, which I shall come to later. The Bill transfers health and safety responsibilities to the Office of Rail Regulation and the question that we must ask now and on which we have to test the Government in Committee is whether that will improve rail safety.

My hon. Friend John Thurso likened what is proposed to a Civil Aviation Authority approach. The one thing about the CAA is that it responds and carries out its inquiries quickly and looks into what needs to be remedied, after which the air industry does its repairs promptly. One aspect of the rail inquiries that we have had in the past is that they have taken a long time. Recommendations made in other inquiries are often not fully taken up and are sometimes not implemented. It is all very well to say that rail travel is a safe mode of transport. Yes, it is—it is far safer than flying or driving—but that is no excuse for saying that we should not improve standards even further.

I had a conversation earlier with my hon. Friend Mr. Rendel, two of whose constituents tragically died. He cannot be present because of previous commitments, but he raised a number of safety issues relating to the Ufton disaster. It appears that the emergency hammers that are used to break the glass broke before the glass did, so the windows could not be knocked out. Perhaps people were hitting the windows in the wrong place, but could not see the emergency signs. He asked whether there should be additional emergency lighting.

It appears that the points near the crossing may have added to the disaster. If that is the case, it is a safety issue that needs to be explored further. Perhaps all crossings near points need to be looked at in detail to see whether it is possible to ensure that a chain of events that was perhaps a freak, but a tragedy none the less, cannot be repeated.

Another point that my hon. Friend made was about people leaving the accident scene without their names having been taken. That may cause problems in relation to post-traumatic shock, but evidence is a problem. We have referred to the noises that passengers hear, perhaps from the rails, but it is a problem if they cannot be contacted to find out whether they have any evidence. I hope that the new safety mechanisms will ensure that such details are not only looked at, but acted on, as I am sure they would be in many other areas.

I come now to the concern of Peter Webster, who has raised the issue of seat belts. I often use a term used by John F. Kennedy:

"ask not what your country can do for you—ask what you can do for your country."

It is not a matter of whether we should have seat belts, but a case of why we should not have them. Seat belts demonstrably improve safety in the air and on cars. Common sense says that, if somebody is in a moving vehicle that comes to a halt very abruptly at high speed and turns over, a seat belt will aid their chances of survival and reduce any injuries that they receive.

The Finnish transport authority is often quoted as saying in part that such a proposal could not be recommended, largely on the ground that people would not wear seat belts. Passengers felt that there should be seat belts, however, and the authority felt that they would reduce the number of injuries and deaths. Peter Webster has done his own research on a train. He spoke to a large number of passengers and gave them a quick survey to fill out. He found that the vast majority were in favour of seat belts on trains. When it came to children, the vast majority of passengers said that although they might not wear belts themselves, they would insist that their children did so. That may have saved Emily's life. We do not know.

Photo of John Bercow John Bercow Conservative, Buckingham

I respect the sincerity of the hon. Gentleman's argument, but I would take a great deal of persuading about the merits of installing seat belts, which it would presumably be compulsory to wear. However, may I put to him this prosaic but serious question: what about those on trains who are standing?

Photo of Richard Younger-Ross Richard Younger-Ross Shadow Minister, Office of the Deputy Prime Minister Local Government & the Regions

I take the point. I think that I recall that the number of people standing on the train was a contributory factor to the injuries sustained in the Clapham rail disaster and that the injuries in the Paddington rail disaster were compounded by passengers standing up and moving through first class to the front of the train, as the train came into the station. Standing passengers on a train are at risk. People do not spend a lot of time standing on trains—if seats are available, they may go to and from the buffet car. Peter Webster researched how long people spend out of their seats, and, by and large, people on long journeys spend only a few minutes out of their seats.

Some trains are overcrowded. In my constituency, some people are left on the platform because the trains are too full, which is unacceptable. In the transition to full privatisation, the overcrowding on trains in my constituency led to the rail company putting up fares to try to relieve congestion. In that case, the rail company doubled school fares because the trains were too crowded. It did not put on extra carriages and tried to force people off the trains to reduce overcrowding. We need investment in the rail service to increase the number of seats on trains and to reduce the chance of people standing.

Seat belts on trains need not be compulsory—Mr. Bercow referred to that issue, which is not the point—but they should be optional and they should be there to give passengers the chance to affect their lives and those of their families. That does not cover all eventualities, and I do not say that it does. On an aeroplane, one is not compelled to wear a seat belt all the time, but one is compelled to wear one on take-off, landing and when the pilot says so. Vacuums occur, and people have been injured in accidents because planes have suddenly lost height. One cannot take account of such events, although I am not saying that one should take account of all eventualities, because we would wrap everything in cotton wool if we did so.

In my view, the provision of seat belts would certainly aid safety at a cost that would not be considerable. A company has contacted the rail companies and offered to fit out carriages on a trial basis. Why not? Rail companies should fit out a carriage or two to measure use and passengers' responses. Having done that, they might say, "No one uses seat belts. They are a waste of money," which might be a valid argument in those circumstances. Until someone does that, however, they cannot argue that point.

Finally, I shall comment on some other issues. The accident at Ufton involved a car on a crossing in which a train hit the car and derailed. Crossings are seen as a problem for the rail operator, but I should like to ask why, because the Bill does not address that point. A crossing is an interconnection between road and rail. If improvements to the crossing are needed for rail safety, they are also needed for road safety. Whether the matter involves a trunk road or a county or other local authority road, the road authority should logically bear part of the cost of improvements, which might involve constructing a bridge.

The road authorities often pressurise Railtrack on gate-closure times, which is one of the reasons why indicators on crossings may not work—the train stopping time may be greater than the time that the gate is shut for traffic. If the length of time that a gate is down is a traffic concern and if a congestion problem relates to that period of time, the road authorities should perhaps deal with the situation by constructing an underpass or bridge.

If one constructs a bridge or alters access, one requires planning consent. One of the Bill's oddities is that rail authorities have permitted development rights: they can put up mobile phone masts for their own use along the track and do a lot of other work without planning consent. On planning, Network Rail and the rail operators should be accountable for all that they do. They may not need full planning consent, but they should be accountable, which does not mean the limited accountability to which they are subject at the moment.

The Bill touches on finance. My background is in architecture. One can examine the costs of running an organisation in terms of whole-life costs or on a cash-flow basis. One of the problems with rail privatisation is that it considered the rail companies in terms of cash flow rather than in terms of whole-life costs. When we examine the costs and how we fund the railways and discuss budgets with the Chancellor of the Exchequer, we should do so not only in terms of today's budget, but in total and in the round. If one always worked on cash flow, total costs would exceed the costs if one had built in maintenance costs from the beginning. The road network is a classic example: if a county council cuts its maintenance programme to save money, the structure of the road is eventually damaged, which means that structural repairs are required.

Bypass loops past stations such as Newton Abbott and opening up platforms to improve capacity would improve the Waterloo rail line. Creating an alternative route to Cornwall for whenever Virgin Trains get stuck at Dawlish because water is on the line or because a storm has damaged the sea wall is vital for the Cornish economy. Whenever the Tamar bridge is closed for repairs, it affects districts and towns further down the line.

Thank you, Madam Deputy Speaker, for the opportunity to contribute to today's debate. I ask members of the Committee to examine and test improvements to health and safety, and the measures that I have described will work to that end.

Photo of George Howarth George Howarth Labour, Knowsley North and Sefton East 7:27 pm, 6th December 2004

In view of the source behind the observations of Richard Younger-Ross, I am sure that they will be listened to seriously. The points that he raised, particularly in relation to the sad accident that involved one of his constituents, will be taken seriously.

I originally intended to speak on local matters. Having listened to the hon. Members for South Suffolk (Mr. Yeo) and for Spelthorne (Mr. Wilshire), however, neither of whom is currently in his seat, I think it is appropriate to make some observations about the argument between the Opposition and the Government. Those speeches were similar and addressed the same issues. My hon. Friend Mrs. Dunwoody commented earlier on Conservative Members' antipathy towards the Mayor of London. We all have our own opinions about the present incumbent, but Conservative Members have overreacted in basing a large part of their opposition to the Bill on their fears about what the Mayor of London might do.

The role of central Government is the second issue that divides us. The hon. Member for Spelthorne put it more robustly, but the hon. Member for South Suffolk made the same argument; the more the Government are out of the railroads, the better the railroads will be. That argument may or may not be true, although I reject it, but the question is this: who created the problem in the first place? It was not this Government; they did not allow many years of underinvestment in the railway system or create a botched privatisation system, the consequences of which we are still trying to recover from.

I have to say to Opposition Members, in a spirit of great friendship, that if they intend to sustain their opposition to the Bill through Standing Committee and beyond, they will need to find a better set of arguments, because on the basis of what they have said today, they simply do not have any. It is opposition for opposition's sake.

The Government, rightly, wish to ensure that we get for value for money in our expenditure and that what is spent is invested wisely in the network. My interest in the Bill relates particularly to the Merseyrail electrics network, a unique system in the United Kingdom. It is local, segregated and electrified, and constitutes a regional metro system.

In July 2003, Merseytravel—the passenger transport executive for Merseyside—and the passenger transport authority took over responsibility from the Strategic Rail Authority for letting and managing the contract to provide passenger services on the Merseyrail electrics network. I should say a few words about Merseytravel, particularly its chief executive and director general and its chair. My hon. Friend the Minister, who is preoccupied elsewhere in the Chamber, knows very well Neil Scales, the chief executive and director general of that esteemed body, and is also very familiar with the work of Councillor Mark Dowd, who is its chair.

Photo of John Bercow John Bercow Conservative, Buckingham

He is now searching for inspiration elsewhere.

Photo of George Howarth George Howarth Labour, Knowsley North and Sefton East

Councillor Dowd does not need to seek inspiration from anywhere; he is a very inspired politician.

The Government had enough confidence in those involved to let them have this unique arrangement. They have proved in many ways how capable they are, and it is a tribute to them and to the authority that the Government allowed them to go ahead on that basis. Merseytravel accordingly awarded a 25-year contract to Merseyrail Services Holding Company Ltd.—Merseyrail—which is a joint venture between Serco, NedRailways and Merseyrail itself. That marked a new era in the provision of local rail services on Merseyside through the creation of a long-term and genuinely locally controlled public-private partnership between the public transport authority and the train operating company. The confidence that the Government showed in Merseytravel and Merseyrail has proved well merited.

Since these new arrangements have been in place, performance on the network has been transformed. It is currently operating at more than 94 per cent. PPM, which, I am reliably informed, stands for passenger performance monitoring; whatever it is, we have achieved 94 per cent. of it. Punctuality and reliability are at record levels and, according to the latest Strategic Rail Authority figures, Merseyrail is the best performing train-operating company on the UK mainland. Next January's fare rises are one of the lowest in the UK mainland and are pegged to the level of inflation.

Photo of John Pugh John Pugh Shadow Spokesperson (Education)

Before the hon. Gentleman goes too far in his praise of Councillor Dowd, may I point out that when I last went back from London on Thursday the train broke down on me?

Photo of George Howarth George Howarth Labour, Knowsley North and Sefton East

I hesitate to say that Councillor Dowd might have been aware of who was travelling on it; I am sure that that was not the case. Every system has its failures, and it is unfortunate that the hon. Gentleman was caught up in one of those. Nevertheless, the fact remains that it is the best-performing train service in the UK, and I am sure that he is as proud of it as I am.

The experience of the Merseyrail electrics network demonstrates the benefits of enabling local people to deliver local solutions to local issues. That is entirely consistent with the objectives set out in the White Paper. Full local decision making will place overall responsibility for the railway infrastructure, alongside overall responsibility for passenger services, in the hands of Merseytravel. That transfer will ensure that this unique local railway is locally controlled and can deliver further improvements to the community on Merseyside that uses it. The people of Merseyside will therefore benefit from local people taking local decisions for long-term and day-to-day management of the entire segregated network. Merseytravel will ensure that local solutions to local problems are provided quickly and properly; indeed, it has a long track record of doing just that. The result will be a more efficient service to passengers with greater accountability and responsibility, as well as reduced operating costs.

Although the transfer is technically possible under the existing legislation—indeed, it took place—it would be prudent for the Government to include in the Bill a reserve power to ensure that Ministers can be satisfied that all railway infrastructure is managed as efficiently and effectively as possible.

I commend the Bill and hope to return to some of the issues if I am fortunate enough to serve on the Standing Committee.

Photo of Robert Syms Robert Syms Shadow Minister (Office of the Deputy Prime Minister) 7:36 pm, 6th December 2004

We have had a fairly wide-ranging debate, which is not surprising given that we are talking about changing structures in the industry.

Richard Younger-Ross argued for seat belts in trains. He has a case, and it should be investigated. However, all the research and evidence shows that seat belts work well in cars because they are attached to the frame of a vehicle, which provides their strength. That is less applicable to coaches, because seat belts tend to be attached to the seats, and someone involved in an accident can find themselves attached to a seat that is itself moving. I suspect that there may be a similar problem in trains. Moreover, as my hon. Friend Mr. Bercow observed, in a train many people will be standing. Last time I went on the train between London and Reading well over 100 people were standing until Reading, when they started to thin out a bit. In that situation, one is likely to be hit by a flying passenger or an object such as a bicycle, so there are wider issues beyond seat belts to be considered.

When my hon. Friend Mr. Norman was shadow Secretary of State for Environment, Transport and the Regions in the last Parliament, he thought that the issue of passengers standing should be dealt with, and suggested for starters that they should not have to pay a fare as they had not got a seat. If one does not get a seat on an aircraft, one does not travel, but on the railways one pays the full cost and has to stand in the aisles. Many people greeted his suggestion with horror. Nevertheless, we must consider the wider issues of people standing and of bags in corridors. Some trains are so crowded, partly because of the success of privatisation, that getting out of them can take a while even in normal conditions, let alone in an emergency or an accident.

Photo of John Bercow John Bercow Conservative, Buckingham

Does my hon. Friend accept that although the hon. Member for Teignbridge gave a thoughtful answer to my question, it raised a problem, for did not he suggest that either far more seats should be provided, which would be an extremely expensive and long-term enterprise for any Government, or all carriages should be all-seater in the interim in any case, which would serve only to exacerbate passenger frustration and the length of the delays that people experience?

Photo of Robert Syms Robert Syms Shadow Minister (Office of the Deputy Prime Minister)

The hon. Member for Teignbridge made a thoughtful contribution that doubtless reflected the genuine concerns of his constituents. However, his questions raised even more questions about the way in which we manage the railway and whether there should be more seats or more cars added to trains. Nevertheless, I am sure that the Minister heard his comments and will consult his civil servants about what can be done.

We tend to concentrate on first principles and I am sure that a few unreconstructed Members would like to revert to the nationalised rail structure. The railways in Britain were a great private sector success. We have heard much about fortunes made and lost and that certainly happened in the mid-Victorian era. The private sector ran the railways for 100 years before it was decided to take them into public ownership. Apart from the ideological concerns of the then Labour Government, it happened because the railways played a major part in our economy in the second world war. They were heavily used and needed massive investment, and it was believed that the public sector would be better able to provide the investment for them to grow in the post-war years.

As many hon. Members, including John Thurso, said, decades of under-investment under British Rail caused the railways' problems. However, if one considers the matter, it is inevitable that a publicly owned railway system, in which the investments are measured against education, health, foreign aid and everything else in the public sector, will be affected by investment rationing. I remember talking to a Minister in the first Thatcher Government of 1979 who worked at the Department of Transport. That person said that, when the Government came to office, any capital investment in British Rail of more than £250,000 had to be referred to the Secretary of State. That was 25 years ago and £250,000 would be some millions today. Nevertheless, that was essentially the cost of a station refurbishment and it had to be referred to the political masters. No railway can run in the long term if politicians deal with that amount of detail.

Photo of Tom Harris Tom Harris PPS (Rt Hon John Spellar, Minister of State), Northern Ireland Office

I am sure that the hon. Gentleman knows that the Bill explicitly provides that proposals to refurbish stations will be in the remit of Network Rail, not the Secretary of State.

Photo of Robert Syms Robert Syms Shadow Minister (Office of the Deputy Prime Minister)

I am glad the hon. Gentleman pointed that out.

We reached the point when the Conservative Government decided to privatise the industry. Did they get it completely right? No. We have acknowledged that from the Opposition Benches. My hon. Friend Mr. Jenkin acknowledged on several occasions that we would do some things differently. The industry was probably too fragmented. Various local operating companies did not have long enough to undertake the work; seven years was too short for specific contracts. It is a matter of common concern that too many experienced people who had worked for British Rail took the opportunity to leave the industry. That meant that it was bereft of many experienced people.

I am a veteran of the Transport Act 2000. Apart from the aspects that affected National Air Traffic Services and quality contracts with buses, it also created the Strategic Rail Authority. On Second Reading, the Deputy Prime Minister said:

"The Strategic Rail Authority will be the new guardian of the public interest: it will plug the loopholes in the Government's rail legislation, and will provide tough enforcement to protect the passenger."—[Hansard, 20 December 1999; Vol. 341, c. 540.]

The Government did not essentially change the architecture that they inherited from the Conservative Government, except to provide for another tier in the SRA.

When other hon. Members and I asked in Committee from where people would come to work for the SRA, it was said that some of the BR people had transferred to the Department for the Environment, Transport and the Regions on privatisation and that they would doubtless work for the SRA. There was already a shadow authority, but the staff would move. Four years later, we are now suggesting that those people will move back to the Department. We are shuffling people around and the magic solution of four years ago has turned out not to be magic. As my hon. Friends said, the Government have acknowledged it to be a failure but it would have been better if they had not pursued it four years ago.

The major change has occurred through Railtrack's financial difficulties, leading to the creation of Network Rail. Several hon. Members have said that there is unfinished business to do with Network Rail, not only on public debt but on accountability. Many of us who have had dealings with Network Rail do not find it the most responsive organisation in the world when it tackles constituents' problems. Perhaps the Bill would be more welcome to Opposition Members if we were tidying up some of the details or at least aiming to do that when some of the legal actions had been expended.

Although privatisation was not perfect, it has led to a vast expansion in rail travel. As the Secretary of State said, we have more than 1 billion passengers for the first time since the 1960s and 45 per cent. more freight on the railways than in 1995. There has been much success and the Conservative Government who provided for that should be congratulated more. If there were a free vote on the matter, the result would be interesting because I suspect that many Labour Back Benchers hark back to the old BR days.

There are several other concerns. I was pleased when the Secretary of State reiterated at the beginning of the debate the duty on Government to promote the use of the railways for the carriage of passengers and goods, for which the Railways Act 1993 provides. I am glad that that remains in place; several people were worried about it. People are generally happy about provisions to allow the Welsh Assembly and the Scottish Executive to prepare strategies for those parts of the United Kingdom but there is no reference to a railways strategy for England. That should be considered when the Committee examines the Bill in more detail.

As several hon. Friends said, the number of clauses that deal with closures is interesting. Clauses 22 to 44 deal primarily with closures and there is anxiety about what will happen in future. Concerns have been expressed about the community strategy and several hon. Members have mentioned Beeching. I therefore look to the Minister to provide reassurances, and perhaps a much broader explanation of the extent of the focus on closures, in his winding-up speech.

Several explanations have been given about accident reports and investigation. I will not dwell on that, but the subject causes concern. There is also anxiety about schedule 4 and the ability to determine the scope and size of the network. Concern exists about its general wording and especially proposed new paragraph 1G. It has been suggested that the provision, in granting the Secretary of State the ability to determine the scope and scale of the network, allows him to override private sector contracts, contrary to his undertaking to Parliament earlier this year. The Bill is silent on compensation if that were to happen and I hope that the Minister will comment on that.

We have a private sector industry that has done pretty well. It was not in a perfect state and, in retrospect, things could have been done better. The SRA was the Government's big idea. Earlier, I cited the Deputy Prime Minister's words on that. They were similar to those of the Secretary of State, who said that the Government were tidying up the problem and that, when they get rid of the SRA, they can sort things out. Yet the structure remains essentially the same as that that they inherited. The Government ought to back the system that they have inherited and stop fiddling around with other tiers. People would have rather more respect for them if they did that. At the moment, civil servants, having been transferred out of the Department for Transport to the SRA, are now being transferred back to the Department. Seven and a half years on, the private sector has been running the railways for longer under this Government than it did under the previous Conservative Government, and I think that people would expect the Government to have achieved rather more than they have done through the structural changes that they have introduced.

Photo of Tom Harris Tom Harris PPS (Rt Hon John Spellar, Minister of State), Northern Ireland Office 7:50 pm, 6th December 2004

Madam Deputy Speaker, I must begin by apologising to you and to the House for being absent for a short period at the start of this debate. My presence was once again required at a delegated legislation Committee.

I broadly welcome this new legislation. For the three years immediately before my election to the House, I worked as chief public relations and marketing officer for Strathclyde passenger transport executive. I note that, since I left, the executive faces being wound up and merged with a new organisation. Perhaps it is a tribute to my work there that those who make these decisions waited until I had gone before deciding to abolish it. Or perhaps not.

We must accept that there is a high level of public cynicism whenever a Government—however well meaning—try to reform the railway system in this country. Politicians tend to talk in the abstract on this subject, while voters tend to talk in the specific. One example of that occurred a few weeks ago, when Pete Wishart was telling a delegated legislation Committee about how awful the railways in Scotland were, based on his own recent experience of a delayed train journey. I pointed out to him that the Scotrail franchise had in fact performed better than all other rail franchises on the mainland of Great Britain, excluding the Isle of Wight. I accept his point, however, that a swathe of statistics will not provide much consolation for someone stuck on a delayed, dirty or cold train.

The main debating point so far today has been the abolition of the Strategic Rail Authority, and the House has the right to ask whether the Government got this one wrong in the first place. Mr. Wilshire asked why the Government had not apologised for creating the SRA, only to abolish it four years later. This Government could learn lessons from the Conservatives in regard to instituting legislation that turns out to be wrong but refusing to accept that it is wrong. I am grateful to Mr. Syms, who came as close as any Conservative Member has done to apologising for the way in which the rail industry was privatised. However, his comments—conciliatory as they were—were in marked contrast to the belligerent tones of some of the other Conservative Members who have spoken today.

I am glad that we have a Government who are willing to change direction when circumstances demand it. I am reminded of John Maynard Keynes's saying:

"I change my mind when the facts change. What do you do, sir?"

The answer from the Conservatives seems to be, "We maintain that we were right in everything that we have done." They ought, however, to accept that the general public see the privatisation of the rail industry as an unmitigated disaster. They should also examine the part that that privatisation played in their eventual electoral demise in 1997. There were clearly a number of factors involved, and the privatisation of the railways was only one small part of the fabric, but they should be aware that their own focus groups and internal polling—if they can still afford to carry out internal polling—will surely provide evidence that the general public view is that privatisation in 1993 was an unambiguously bad thing.

I am glad to see that Sir George Young has returned to his place. It is one thing not to apologise for rail privatisation, but it is quite another for him to stand in this Chamber and claim that the capital value of the rail industry was so low when it was privatised because of scare tactics on the part of the Labour party. It beggars belief to suggest that the Labour party was in any way responsible for the disaster that was the Conservative rail privatisation.

Let us examine the history behind the Conservative Government's decision to privatise the railways. Baroness Thatcher had refused to privatise the industry because she recognised that it would be far too difficult and electorally unpopular. However, when the new Conservative leader, John Major, took office, he knew that because most of his support came from the right wing of his party, he had to prove his privatisation credentials. The rail industry was the obvious target, and he went ahead without taking due cognisance of the dangers and pitfalls that his predecessor had recognised. We are paying the penalty for that action today.

The SRA has not been a success. It has achieved very little over the past four years, and at very high cost. Another change that is being proposed, alongside the abolition of the SRA, is a fundamental change to the way in which the Office of Rail Regulation works. It is remarkable that some Conservative Members seemed to suggest that taking away the powers to invest and to set budgets from the ORR and giving them to the Secretary of State for Transport was somehow undemocratic. You say "tomayto"; I say "tomahto". You say "political intervention"; I say "democratic accountability".

It was remarkable that Mr. Yeo spent so much time criticising the fact that locally elected politicians, including the Secretary of State, who are accountable to the House were to be given more responsibility. Yet the Conservatives also criticised the fact that Network Rail was not accountable to shareholders. Apparently, it is perfectly acceptable for a company as important as Network Rail to be accountable, but unacceptable for democratically elected politicians—Members of this House—to be accountable in this regard. There is a fundamental flaw in the Conservatives' thinking on this issue.

I wish that Mr. Forth were present in the Chamber this evening. He has very sound views on unelected quangos and commissions—I regard the SRA as such—having some kind sovereignty over this Chamber, and having the final say on budgets, which Members of Parliament do not have. The very idea that the Office of Rail Regulation can set budgets for investment in the rail industry, while this House is powerless to do so, would be anathema to the right hon. Gentleman, and I wish that I could hear his views on the matter. I am sure that they would be more in accord with mine and those of my hon. Friends than with those of his Conservative colleagues.

I hope that Conservative Members will accept—even in their opposition to the Bill—that certain achievements are real and can easily be measured. Is the 28 per cent. increase in passenger miles since 1997—the highest figure since 1946—something that the Government should be ashamed of? Would the Conservatives wish to denigrate that? The 27 per cent. increase in passenger numbers, which have reached 1 billion for the first time since 1961, is also something about which we have every right to be proud. Furthermore, there has been a 27 per cent. increase in the amount of freight carried on the railways, which is important when we consider the need to cut congestion on our roads. Those achievements are to the credit of this Government, and it is simply not enough for the Conservatives to say that our stewardship of the rail industry has not been successful.

I want to take this opportunity, however, to point out that neither I nor the vast majority of Labour Back Benchers share the views of my hon. Friend Mr. Hopkins on the renationalisation of the rail industry. The travelling public are entitled to something a bit more substantial than the sterile old 1980s view that everything in the private sector is bad and everything in the public sector is good—or vice versa, depending on which side of the political spectrum we come from. I actually think that there is a third way. I think that there is a possibility of the genuine public-private partnership that the Government are trying to achieve.

It is too easy to look at the effects of privatisation with blinkers on. It is too easy to say that privatisation is all about private profit and lack of investment in the industry. The facts do not support that. The truth is that there is more investment in the privatised rail industry today than there was under British Rail, partly because, pound for pound, public money is being matched by private investment. We should not give that investment away lightly, and we would lose it if we opted for renationalisation.

One example of the benefits of the current arrangement is Chiltern Railways, nowhere near my constituency. A local train service has blossomed and increased capacity and reliability specifically because of a local franchise that was withering on the vine under nationalisation. We should try to duplicate that best practice throughout the railway network.

I want to concentrate on the threat that the Bill poses to passenger transport executives. As I said, I am a former employee of Strathclyde PTE, which has existed for more than 30 years and is the oldest part of Scotland's local government set-up. Unfortunately, as we speak legislation is winging its way through the Scottish Parliament that will eventually abolish the PTE, or at least merge it with a wider body covering the whole of Scotland. I think that regrettable, because Strathclyde PTE's achievements speak for themselves. During its time in charge, there has been an unprecedented expansion in the Greater Glasgow rail network and in other train and underground services, not to mention ferry services.

I fear that, not just in Scotland but throughout the country, PTEs will lose their right to sign rail franchises. In Scotland the justification is that we have a Parliament, and Ministers in the Executive who are responsible for transport. Although I have reservations about that, there is a clear democratic argument for saying that Ministers rather than the PTE should have signatory powers. I understand that argument, but I would prefer Strathclyde PTE to continue to exist and to be co-signatory to the franchise in the west of Scotland, along with the Scottish Transport Minister. In England there are a number of passenger transport executives with a similarly successful track record, and although local services have improved under their stewardship they are being told that they will no longer have signatory rights following the Bill's enactment.

I hope that the Minister will deal with this when he sums up the debate. If the reason for removing signatory powers in England was the same as the reason for removing them in Scotland—the prospect of a devolved Administration—we could ask whether, given the difficulties in the roll-out of regional assemblies in England, the argument had not been somewhat weakened. Might the Government consider changing those provisions in Committee? If I am lucky enough to be appointed to the Committee, I shall hope to table amendments to that effect.

Ironically, in Scotland—particularly in the west, where my constituency is—because of devolution we face an immense amount of centralisation. In the context of this Bill and the Transport (Scotland) Bill, the situation is bizarre: having started with devolution, we are ending up with the centralisation of services. At present, passenger transport decisions are made by democratically elected councillors in the west—in Glasgow. Those decisions affect the daily travel of members of the public, including my constituents. Following the changes made by the two Bills, they will be made in Edinburgh by the Transport Minister, who is currently an MSP representing an Aberdeen constituency. I think my constituents have a right to be concerned about the fact that local knowledge developed over 30 years by Strathclyde PTE will be wasted, and they will no longer have any say over their own affairs.

Photo of Greg Knight Greg Knight Shadow Minister (Environment, Food and Rural Affairs)

I am following the hon. Gentleman's argument closely, and I wonder where it is leading. Is he about to suggest that we should abolish the Scottish Parliament?

Photo of Tom Harris Tom Harris PPS (Rt Hon John Spellar, Minister of State), Northern Ireland Office

Heaven forfend. The Scottish Parliament has many great achievements to its name, and I am sure that it will have a similar success rate in relation to transport. What I am saying—setting aside the fact that Scottish legislation would get rid of Strathclyde PTE in its present form—is that there is a strong case for allowing the PTE to become a co-signatory to the ScotRail franchise in the west, given the experience of its personnel.

In fact I must thank the last Conservative Government, who accepted the argument for PTEs to be signatories. Strathclyde PTE has made a huge difference to the negotiations on the ScotRail franchise, first when it was won by National Express and again when FirstGroup won it this time. It devoted many thousands of staff hours to negotiating with the franchisee on all sorts of standards and efficiencies, and on demands that democratically elected politicians in the west of Scotland were naturally making for rail services. As a result, we in the west of Scotland have a much higher level of satisfaction with rail services.

In my constituency, I am privileged to benefit from the Cathcart circle, which is heavily used by my constituents and by people throughout the city, particularly in the south. My constituents also rely heavily on the Strathclyde PTE underground, colloquially known as the clockwork orange. I shall explain that later: I see a quizzical expression crossing the face of the hon. Member for Poole. It is the third oldest underground system in the world, after those in Budapest and London. That may interest the train anoraks. In fact, it is called the clockwork orange because when it was reopened in 1980 after refurbishment the carriages had been painted orange, and they are entirely clockwork.

Photo of Robert Syms Robert Syms Shadow Minister (Office of the Deputy Prime Minister)

I thought for a moment that it had something to do with ancient sectarian politics.

Photo of Tom Harris Tom Harris PPS (Rt Hon John Spellar, Minister of State), Northern Ireland Office

I would not blame anyone for assuming that. It was probably a risky nickname, but it was not conferred by any authority in the city; it was conferred affectionately by some members of the community.

When I was in charge of public relations for the clockwork orange—the Glasgow subway—I came in for a huge amount of personal criticism. My job was to publicise the underground, and one of my brainstorms was to suggest to the travelling public that football fans should not use the underground to travel to Ibrox, the Rangers football club ground, because the system was not big enough for that to be safe. Allowing 6,000 fans to travel to Ibrox station in the space of half an hour would run a high risk of people being thrown on to the track in front of trains. I will not repeat the language that was used about me in certain Rangers fanzines; I will merely say that all that was said was untrue, but I did not sue.

I go back to the serious issue of local transport services, how those are developed and how political decisions are taken in the west of Scotland post this Bill and post the Transport (Scotland) Bill. There is already a perception that transport infrastructure projects such as the Edinburgh airport link and the light rail transport system in Edinburgh have been given precedence over similar projects in Glasgow, simply because the political focus has inevitably shifted in Scotland from Glasgow to the east coast, because of the Scottish Parliament. That is probably a welcome development for some MPs, for example, the MP for an Edinburgh constituency, say, Edinburgh, South or thereabouts—

Photo of Tom Harris Tom Harris PPS (Rt Hon John Spellar, Minister of State), Northern Ireland Office

That is what I was thinking of. Those MPs may not have any objection to that, but for those of us who represent a constituency in Glasgow, it is worrying.

Let us remember the ethos behind setting up the passenger transport executives in the first place. They were initially proposed in the White Paper published, I think, by Barbara Castle in 1968. The whole point of them was that they focused on the country's conurbations. A conurbation was defined then, as now, as a metropolitan area whose population exceeded 1 million. Using that definition, and no one has come up with an improved one, Strathclyde remains the only conurbation in Scotland, yet effectively, we are about to lose the passenger transport executive that was set up specifically for that conurbation.

That is a huge shame and I deeply regret it. I only hope that, post the changes, politicians in Edinburgh will be able to work closely with politicians in Glasgow and in the west of Scotland to ensure that some of the infrastructure changes for which we have campaigned for many years, including the Glasgow airport link and Crossrail, are not left to wither on the vine, as some people fear they may be.

The community rail partnerships have been denigrated by some Conservative Members. I am surprised at that. This week, The Economist rather unkindly referred to the people running community rail partnerships as do-gooders and train nuts. That is a bit harsh. We are talking not about a back-door way of the Government closing under-used rail services, but about the possibility of rural rail services being brought out of mothballs and run by the local community—by people who are extremely interested and enthusiastic about running local rail services. That may not be appropriate for every mothballed service but 40 of those partnerships already exist in Britain. Surely, if they work—it is probably a bit early to decide whether they do—and if they provide what is intended, which is the rejuvenation of small lines with variable passenger numbers, every hon. Member, whatever side of the House they sit on, will welcome it.

Economies of scale are mentioned in the White Paper and in the Bill. One of the problems with the existing regime of the SRA and the Office of Rail Regulation is that costs are running out of control. As I have said, currently, Ministers have no legislative right to call those costs into line or to question how the ORR is coming up with those sums of money.

It happens with every capital project in this country and it has become a truism: anything that we buy in Britain costs more than what we would pay for it on the continent, whether we are downloading music, buying a suit or eating in a restaurant. It is accepted that in Britain things cost more money. That does not explain why in Germany the cost of building a new train station is the equivalent of £240,000 but in Britain we would not get much change from £1.5 million.

The Government must look at that urgently. If we are going to get value for money for our constituents and to make the money that we spend, and that is a lot of money, go as far as possible, we must ensure that every penny is spent wisely. Why are capital projects on the railways costing six to eight times the amount that the same projects cost on the continent? We must look at project supervision, at building standards and at the process for initiating those capital projects.

As I have said, I warmly support the Bill. There is a level of cynicism among our voters and the general public. Whatever improvements are made in rail services, it is no consolation to be told that a particular franchise has been performing well when one has been stuck on a cold and dirty train for two hours after it broke down. That is a difficult public relations barrier to get over, but I feel quite optimistic about the Bill. Some hon. Members are being unnecessarily oppositionist in their approach to it.

Photo of Greg Knight Greg Knight Shadow Minister (Environment, Food and Rural Affairs)

One of the reasons why Conservative Members have concerns is that there are 22 clauses in the Bill to do with closures. Does not that worry the hon. Gentleman?

Photo of Tom Harris Tom Harris PPS (Rt Hon John Spellar, Minister of State), Northern Ireland Office

That is an issue that I look forward to debating in Committee, if I am lucky enough to be appointed to it, but few of the criticisms made by the hon. Member for South Suffolk focused on the closure clauses. Most of his criticisms focused on the SRA. He criticised it, but then he criticised the Government for wanting to abolish it. He also criticised the amount of money that has already been spent on the rail industry under the Government's stewardship. Few of the criticisms focused on closures. However, all of us have railways in our constituency. Obviously, none of us wants to see any particular line closed. That is a legitimate concern, but it is not what we have heard this evening from Conservative Members. We have heard criticisms, a defensive attitude and, with the honourable exception of the hon. Member for Poole, a reluctance to admit that most of the problems we face in the rail industry stem from the botched privatisation. I see the right hon. Member for North-West Hampshire shaking his head, but he is not getting up to intervene and frankly I do not blame him.

The Conservative Opposition confirm public perceptions. Having made a mess of privatisation, they have no solutions to offer. We have sat in the House for quite some time and we have heard many positive ideas from the Labour Benches—from the Back Benches and the Government Benches. We have heard almost nothing from Conservative Members that will address the problems that we all face day-to-day on our railways.

I hope that the Conservative party continues with that attitude for the next five months at least. I hope, too, that the hon. Member for Spelthorne will be appointed its transport spokesman and put on the "Today" programme and on "Newsnight" every night between now and the general election, because that would do us nothing but good.

The Conservative party has not learned the basic lesson from its defeat of 1997. It has not learned to say sorry. Even when the Leader of the Opposition is questioned on pensions, instead of saying, "We got it wrong 20 years ago and we are trying to put it right now," which is what he should have said, even though he would be wrong in doing so, he said, "We were right then and we are right now." The Conservative party cannot win the debate on transport by saying that it has always been right and has never made a mistake—but strength to its elbow. That is exactly what it is doing and I hope that it continues to do it for a long time to come.

Photo of John Pugh John Pugh Shadow Spokesperson (Education) 8:18 pm, 6th December 2004

I seem to have temporarily become a Front-Bench spokesman—but I appeal to you, Madam Deputy Speaker, not to be taken in by that.

It is some years since I was on the Select Committee on Transport, or the Transport Sub-Committee of the Select Committee on Transport, Local Government and Regions as it was then known, under the benign and kindly chairmanship of Mrs. Dunwoody, but I hope to be on the Standing Committee and I will venture a few modest observations at this stage.

Under the stewardship of Mr. Byers, railways were right up the political agenda and debate was febrile and heated. Under the current Secretary of State, however, the atmosphere is calm, even at times positively soporific. We have the illusion that all is going well under his steady control, but that is not quite the case. Were he the captain of the Titanic, no one would be unduly alarmed and all would be calmed by his generally mellifluous tones. However, the essential problems of the railways still exist and, as many hon. Members have said, have been there since privatisation.

Fragmentation was the buzz word when I was on the Select Committee. It is still manifestly present, several times over and writ large, in recent reports. The Transport Committee says precisely that in "The Future of the Railway", its most recent report. It comments that fragmentation is not only still in evidence, but in some ways more in evidence than ever before.

The Bill appears to get rid of one fragment—the SRA—by taking powers upwards to the Department for Transport and devolving some powers downwards to the PTEs. That is the central thrust, as I understand it. The rest of the Bill is largely concerned with strategies for what is called "network modification", which is ministerial talk for closure and contraction. As has been explained, that is what most of the clauses do. We are in a new phase. Gone is the bold new dawn of the 10-year transport plan. In theory I cannot, and my party certainly cannot, object to one fragment less. However, as many hon. Members have stressed, that falls short of linking track and train, which others have asked for and see on the horizon. It leaves all the old excuses for failure in place, with each side claiming that the other side is at fault.

I come from an area in which the railway service is performing relatively proficiently, as Mr. Howarth said. We come from the same area, and I can testify to the fact that the Merseyside passenger transport authority is go-ahead and positive in its general effect. However, every local authority—even the most positive and compliant—should always fear a Government bearing gifts and devolving powers, because it often means little more than transferring the responsibilities for subsidies, or transferring only part of the subsidy. The sub-plot is for central bodies to subsidise less and local bodies to subsidise more. That leads to the prospect of underfunded lines being closed by underfunded PTEs, and the Government not taking the rap for it.

If that is what results—and it need not necessarily be the case—it is hard to see that as a complete answer to fragmentation. However, I venture to say, possibly in compensation and perhaps to excuse the Government, that there cannot be a worse and less efficient public subsidy system than the one that we had before. I defy human ingenuity to come up with something less competent.

In my area—if I can put in a plug for it—a pittance spent on restoring one mile of rail track—the Burscough curves—could turn the whole Mersey railway system from a radial shape to an efficient loop, increasing massively the utility of disconnected railway lines, such as the Ormskirk to Preston line, currently vulnerable and seemingly under threat. That would provide enormous customer and economic benefits. We could do that with the small change, or even the tea money, from projects like the west coast main line or Crossrail. In many ways, PTEs can achieve far better effects.

My local PTE would not fall for the suggestion that the Southport to Manchester airport line was vulnerable or uneconomic, which it was listed as a few days ago. That is an SRA view. The real reason for saying that is that it might delay for a few seconds the west coast Glasgow to London main line, on which so much money has been spent—expenditure that the Government must try hard to justify. It is as though those few seconds matter more to passengers, whose main gripe on that line is overcrowding on trains that are half empty because half the carriages are first class, and a first-class ticket costs the same as a week in the Algarve.

If the Bill passes power to the PTEs, I genuinely do not think that they can do a worse job unless—perish the thought—they do not get properly resourced. The Bill can be read—although this is perhaps a cynical reading—as providing what the accountants used to call a special purpose vehicle. They used to say that when they were closing down Railtrack. Its special purpose could be to please the Treasury and contract the network, which has hitherto been so hopelessly mismanaged. I would go into Committee with an open mind to discover what the Government said about their legislation, but their approach could give the signal, which it should not, that they have given up on railways, and perhaps also on public transport as a whole.

Photo of John Martin McDonnell John Martin McDonnell Labour, Hayes and Harlington 8:25 pm, 6th December 2004

We heard the Secretary of State present the Bill with his usual efficient good nature. We heard a range of views from the Conservative party, its Front-Bench spokesman and others, in defence of privatisation. We also heard the views of the Liberal Democrats from John Thurso and, more recently, the views of new Labour.

I thought that I would speak on behalf of the Labour party and address the Bill on the basis of Labour party policy, which was fairly straightforward at the conference in October this year. It does not seem to be contained in the Bill, but not to worry, because I shall draft a new clause, which I am sure will be acceptable to the Front Bench as it will reflect the partnership in power policy-making process that the Prime Minister introduced into the Labour party to enable people to introduce a minority report on a particular decision and policy. That is then brought to the Labour party conference, and delegates at the conference, which is the supreme policy-making body of the party, vote on it. In this case there was an overwhelming vote in favour of what can only be described as a policy to introduce legislation for an integrated, publicly owned and public accountable railway system. That is what I shall suggest the Bill be amended to reflect.

Photo of Tom Harris Tom Harris PPS (Rt Hon John Spellar, Minister of State), Northern Ireland Office

I do not want to pre-empt my hon. Friend's comments, but I assume that he is about to mention that 78 per cent. of constituency delegates voted against that policy.

Photo of John Martin McDonnell John Martin McDonnell Labour, Hayes and Harlington

What is interesting about that statement is that I did not support the partnership in power process that the Prime Minister introduced into the Labour party—but it is supposed to have an impact on the Government's policies as part of democratic accountability. However, there is a break in the chain of the accountability of the Prime Minister to the Government to party. Overwhelmingly, the Labour party conference—

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. This is a Second Reading debate, and I request the hon. Gentleman to confine his remarks to the Bill.

Photo of John Martin McDonnell John Martin McDonnell Labour, Hayes and Harlington

Certainly.

The overwhelming decision at the Labour party conference was for the Government to introduce legislation to bring rail back into public ownership. The Bill does not do that. It does not do what the Labour party decided, but this is the view of the Government. I thought that someone in the Chamber should at least represent the Labour party in the debate, and that is what I am trying to do. In addition, the Bill also does not implement London Labour party conference decisions made on Saturday—I think unanimously—to ensure that South East Trains is kept in public ownership and control, so that it continues to be publicly run. Again, I thought that someone should stand up and represent the London Labour party as well.

The gap in the Bill is that there is now no clause to bring forward public ownership and public accountability. I agree with my hon. Friend Mr. Hopkins that this is one in a transitional series of Bills that overcome the problems of privatisation introduced by the previous Government. Slowly but surely we are reintroducing a publicly owned and publicly accountable railway system. The first Bill that the Government introduced tried to overcome some of the problems of privatisation by trying to establish at least some form of rational structure for strategic policy making, and established the Strategic Railway Authority, which was neither strategic nor much of an authority on railways. The Government are seeking to address that through legislation that will bring many of its powers back under their control. I welcome that as the next staging post to a fully publicly owned and publicly accountable system.

Why are the Government moving towards the reinstatement of a mechanism that is like British Rail? The reason is clear. In every opinion poll, two thirds of the British public say clearly that they want a move back to public ownership and public control. Why are they introducing this legislation today? It is a reaction to privatisation over the last decade and a half.

It was clear from the comments of some Opposition Members who have tried to justify privatisation that lessons have not been learned. As a country, we poured £10 billion in subsidy into private companies, which took the profits from the privatisation, £1 billion of which went directly into the pockets of shareholders. Each time, the argument is that if legislation is enacted to end privatisation, we will lose the supposed £70 million a day subsidy from the private sector. At some stage in the debate, we must go past GCSE economics—"failed". Where does the £70 million from the private sector come from? It comes from the public subsidies that we pour into the private companies, making their profits, or from the fares that we impose on passengers. It is recycled public money, for which we are supposed to be grateful. In the days of British Rail, it came as a direct subsidy. We have heard a lot of criticisms of British Rail today, but if we read the Catalyst report that was prepared, we see that pound for pound, in terms of investment and return, British Rail, despite being starved of resources for a long period, was the most efficient and productive railway system in Europe.

What could this Bill do? First, it could introduce a new clause bringing rail back into public ownership and making it publicly accountable. I will draft that clause for the Minister later. Secondly, it would be easy to amend clause 12 so that South East Trains is not forced out into another franchise. I agree with my hon. Friend Mr. Harris—if it ain't broke, don't fix it. At the moment, South East Trains is proving to be an effective and efficient railway service within the public sector. And what are the Government doing? They are privatising it again. Bizarrely, it is likely that South East Trains will probably still be state owned—but it will be owned by the Danish state railway company, which will bid for it in future.

The Bill therefore has the potential, first, to hold back further privatisations, and secondly, to include a simple clause to enable the Government to take back into public ownership individual franchises as they run out over the coming years. In that way, without any cost—although we have heard from the Secretary of State previously that the cost of bringing rail back into public ownership would vary from £3 billion to £20 billion, to which it increased at the Labour party conference—rail could be brought back into public ownership, as the public demand.

I do not think that the Government have the guts to go along that path. In due course, however, they will, and new legislation will be introduced. This Bill is just a staging post. In the meantime, let us at least use it to address some of the anomalies within the industry.

First, I want the Government to address the anomaly of a two-tier work force in the rail industry, particularly with regard to travel facilities. I have drafted an amendment—it will be available to Ministers in Committee—which will end the two-tier work force, whereby staff employed prior to privatisation enjoy safeguarded travel facilities, whereas those employed following privatisation do not have such a guarantee. Before the privatisation of the rail industry, all British Rail staff received nationally negotiated travel facilities, which were subject to the same universal rules and principles.

In a written parliamentary answer in 1993, the then Minister confirmed that about 500,000 people enjoyed such concessionary rail travel, and that the cost was negligible and largely administrative. More recently, the National Union of Rail, Maritime and Transport Workers secured with one infrastructure company a 75 per cent. reduction on standard fares for staff when travelling on services provided by three train operating companies. The scheme costs £1,000, which covers basic administration costs for 475 workers. The cost is fixed, and would not increase if more workers used it. As a result, the company has provided travel facilities for its staff at a cost of just over £2 per worker. It would be easy to amend the Bill to establish a universal scheme, thereby ending the two-tier rail work force.

Another anomaly under the current system is that the SRA can intervene in industrial disputes. It can subsidise companies engaged in disputes with their work force simply by guaranteeing, through the grant regime, that companies affected by industrial action will not disbenefit financially in any way by failing to meet their targets. There is thus no incentive for such companies to settle disputes. That power, which currently pertains to the SRA, is being transferred to the Secretary of State. I did not think that it was the Secretary of State's role to intervene in industrial disputes in any industry. In fact, in dispute after dispute the Government have consistently made it clear that it is not their role to intervene between management and workers. Yet if this provision is retained in the Bill, that power will be transferred to the Secretary of State. Again, a simple amendment to clause 1, which deals with the transfer of functions, would enable the Secretary of State to have clean hands and not become part of the rail industry's industrial relations machinery.

There are some other worries that we need to express today. I reiterate the concerns expressed about the transferring in clause 2 of the Health and Safety Executive's rail safety functions to the Office of Rail Regulation. My simple amendment would do away with that proposed transfer, and would enable an independent safety regime to be maintained. The problem with transferring safety to the ORR is that it is not guaranteed to be independent of economic pressure. The Government's proposal subordinates rail safety to economic regulation and brings the two elements within the same organisation. That flies in the face of Lord Cullen's recommendations following the Ladbroke Grove train crash.

During the consultation process, I urged the Government to listen to the organisations that deliver the service. During the rail review, the Health and Safety Commission, the HSE, the TUC and the rail unions all made strong representations to the Government opposing the transfer of Her Majesty's rail inspectorate from the HSE to the ORR. The TUC fact sheet, which was distributed to many Members, said:

"If safety regulation formed part of any body that made decisions about funding and/or economic regulation, there would be a real risk that safety would be compromised when economic decisions are made that have safety dimensions."

At one point the Secretary of State made clear the priority that he gave to safety. He said that it should be "in with the bricks" of any organisation. But many of us believe that the transfer of responsibility is motivated by a desire to placate elements of the private sector that hold the mistaken view that railway safety regulation is gold-plated—an expression that has been used in the Chamber today. Those on one side of the industry are seeking to push down costs, some of which the management themselves are responsible for. However, saving costs on safety measures is a false saving. Anyone with a constituency involvement in Southall, Paddington or any other place in which a recent rail disaster has taken place will understand the implications of putting cost savings before safety.

The other concern that many of us feel—it has been expressed today—is about clause 39, which links in with clauses 40 and 41. Those provisions relate to the powers that will now be given to end certain services, and sometimes to replace them with bus services. The concept of "bustitution", as it is now called within the industry, has opened up a vista, which some hon. Members have described today as a vista of a new Beeching, and the end of small community lines, which we thought were being protected over the year.

Launching the rail review in January 2004, the Secretary of State said that decisions on the provision of local transport were often best taken by the people who provide and pay for the service. Devolved decision making would enable sensible and informed decisions to be taken between bus, light rail and heavy rail. "The Future of Rail" White Paper of July 2004 made it clear what the Secretary of State meant when he spoke about "sensible and informed decisions" back in January. It said that the document promised to put in place arrangements making it easier for bus quality contracts to be introduced as part of a strategy that included reductions in rail services.

The Bill confirms that position. Clause 39 gives passenger transport authorities the power to make a quality contract scheme "if they are satisfied" that it is

"an appropriate way of securing that the transport needs of the potential users of a relevant railway service that has been or is to be reduced or discontinued are met".

That opens the door for what many fear will be large-scale reductions in rail services.

Clause 40 allows the Scottish Executive and the Welsh Assembly to provide a substitute road service route where

"a railway passenger service has been discontinued", but it

"need not correspond precisely to . . . the discontinued service if . . . it is not practicable . . . to do so; or . . . the substitute service broadly corresponds to the discontinued service in terms of the localities served."

The danger is in the wording "broadly corresponds", which could lead to existing communities currently served by rail not being so served in future, but being offered replacement road services. Experience of the Beeching cuts shows that the patronage of bus services introduced to replace rail is fairly low, leading eventually to the bus services themselves being removed, leaving whole areas without public transport.

The threat of bustitution is compounded by other proposals in the Bill, which will make it easier for funding authorities to close railway lines. Clause 42 will weaken the safeguards against line closures. Previously, the criterion was whether closure would increase passenger hardship, but the new guidelines provided by the Secretary of State also cover economic, financial, environmental and social factors. The assessment will no longer be made by regional rail passengers committees, but by the funding authorities themselves—those who are making the proposals for closure in the first place.

My final, more general point was made early in the debate, but glossed over in ministerial responses. The failure to transfer to the shoulders of the Secretary of State the current duty of the Strategic Rail Authority to promote rail is a real concern. Previously, clause 205 of the Transport Act 2000 set out clearly that the SRA had the responsibility

"to promote the use of the rail network for the carriage of passengers and goods . . . to secure the development of the rail network, and . . . to contribute to the development of an integrated system of transport of passengers and goods."

All that now goes, and all we are left with is a general commitment by the Government to improving the overall transport system—not specifically rail. That is a real worry. There is now no voice for the rail industry overall. That is why this legislation should transfer the previous powers, responsibilities and duties of the SRA at the very least to the Secretary of State, if not to a new agency.

I make one final prediction. We shall return to debating this subject within five years, and new legislative proposals will be before us. They will probably scrap most of the proposals in the Bill, and may well attempt to set up some form of public railways agency that will bring the railways back into public ownership, making them publicly accountable, publicly funded and generally popular with the British public.

Photo of George Young George Young Chair, Standards and Privileges Committee 8:44 pm, 6th December 2004

It is a pleasure to follow John McDonnell. It would be fair to say, however, that he and I approach the railways from different philosophical perspectives. I hope that the Government will resist his blandishments to take the railways back into public ownership, but as a member of the Selection Committee, I also hope that, when we meet on Wednesday to appoint the Standing Committee, the Government Whips will have the good sense to appoint him, so that the radical amendments that he trailed in his speech can be fully considered.

In my brief contribution, I wish to examine what has remained the same in the past 10 years and what has changed. The landscape still contains many familiar features. The track, signalling and stations are in unified ownership and depend predominantly on the private sector for funding—on Railtrack in the past and now on Network Rail. The rolling stock companies—ROSCOs—are in private ownership and lease the rolling stock to the train operating companies. A series of TOCs, which are in the private sector, compete for the various franchises of different lengths. The basic landscape has not changed that much in the past 10 years. We have had an element of stability, to which my hon. Friend Mr. Yeo referred.

What has changed is the focus. When the industry was privatised, we tried to set up a structure in which the TOCs looked outwards towards their customers—their market—to make the industry more responsive to the needs of the consumer. At the funding end, we wanted an industry that looked to the private sector—the City—to raise the capital needed to fund the improvements that we all agreed were necessary. That outward looking industry was an essential component of the reforms that we introduced.

The Bill will change those two perspectives and move back towards the situation that existed before 1993, when the Government and the Secretary of State had a more important role. That is likely to lead us back to the position of the 1980s and 1990s, when the industry simply could not access the capital it needed for modernisation. I remember when I was Secretary of State for Transport under the last Conservative Government. I attended a series of Cabinet Sub-Committees that were deciding the allocation of public expenditure. The argument was that the Government's top priorities were health, education and law and order, so the resources for transport came well down the list. That was one of the reasons for privatising the railways, as it had been for privatising other nationalised industries. It was done to open up access to capital and to bring the industry into the 21st century.

Following the debacle of Railtrack, the industry once again has to look to the Government for more and more of its capital to keep it going. Some of the ambitious projects that we hoped to get off the ground a few years ago have now gone back to the end of the queue. I am very disappointed that Thameslink, which I thought that I had signed off nearly 10 years ago, is still nowhere near inception. I had also hoped that we would have started on Crossrail by now, but it is still a dream with no serious Government commitment to it. That is one consequence of the industry becoming once again more dependent on the Government for its funding than the structure that we envisaged at the time of privatisation.

I was interested to look at the back of the Bill to see how many pages of repeals there were. I see that there are about the same number of repeals of the provisions of the Transport Act 2000 as there are of the Railways Act 1993.

I hope that the Secretary of State will use the powers he receives under the Bill to allocate longer franchises. I am sure that I am not alone in having several stations in my constituency that need investment. Andover, Grateley, Whitchurch and Overton stations all need larger car parks to cope with increased demand for the railways. However, the TOC has a short franchise and cannot justify the substantial investment necessary to expand the car parks. The TOC referred me to Network Rail, but it does not have the capital to make those modest improvements because it has all been spent on the west coast main line and other desirable projects. I hope that we can seriously consider granting longer franchises to give the TOCs the incentive to invest in improvements to stations, car parks and security.

My last point relates to clause 6, under which the Secretary of State will be given powers to give guarantees and to make grants and loans, and to the classification of the guarantees and loans that the Government will provide under that clause. As the House may know, there has been an argument between the Office for National Statistics on one hand and the National Audit Office on the other about the status of the guarantees that have been given through the SRA to Network Rail. With the SRA disappearing from the equation, those liabilities will now fall on the Secretary of State.

When the Secretary of State made his statement earlier this year, he said:

"It follows, therefore, that the Strategic Rail Authority will be wound up, and that the majority of its functions, including all its financial obligations, will be transferred to the Secretary of State."—[Hansard, 15 July 2004; Vol. 423, c. 1547.]

One might assume from that that the SRA's liabilities will be absorbed into the Department for Transport and that Network Rail's liabilities will therefore end up on the Department's balance sheet. If so, the Chancellor's statement last week would be seriously affected, because some £9 billion of borrowing would then reappear on the Government's balance sheet. I want to press the Minister to make it clear that, under the new structure, Network Rail's liabilities will indeed be Government liabilities.

Chapter 3 of the White Paper says:

"The Secretary of State . . . will take responsibility for setting the national-level strategic outputs for the railway industry, in terms of capacity and performance."

It continued:

"This means that the Government will be responsible for deciding the overall size and shape of the network; the key time-table outputs; policy on regulated fares; minimum performance targets; enhancement priorities", and so on. In respect of the criteria used by the ONS to determine on whose balance sheet such things appear, the ONS says:

"the guiding principle for classifying institutions as public or private is who exerts control over general corporate policy, including the appointment of directors."

It is absolutely clear that, under the Bill, Network Rail is, in effect, an agency of the Government. Any concept that Network Rail is simply an ordinary private company, doing what it wants and borrowing against its own credit in the market, is strictly for the birds. It will do what the Government ask it to do. No one would dream of lending money to Network Rail unless a Government guarantee was behind it.

I hope that the Minister will address a specific question in winding up the debate: will he confirm whether, when the Bill is passed, Network Rail's debts will appear in future as Government debt and be part of the public sector borrowing requirement?

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North 8:52 pm, 6th December 2004

I apologise to the House for missing three of the past four contributions—I was attending a meeting—but I was here at the start of the debate.

I welcome the Bill in principle, as it goes some way towards addressing some of the problems of the rail industry, which is very important in this country. I particularly endorse the work done by my hon. Friend John McDonnell in chairing the RMT group in Parliament and the speech that he gave this evening.

The Bill gives us the possibility of getting rid of the SRA and of both unifying national decision making where it ought to be made—by the democratically elected Government in the House of Commons—and introducing regional activities through the Scottish Parliament, the National Assembly for Wales, TFL and the PTEs around the country. I shall say more about that in a moment. All that is welcome and a good step forward, but we must look at the Bill against the background of what was a sad and disastrous period for British railways before the Government's election in 1997 and, indeed, British Rail's treatment as an organisation in the past.

British Rail was starved of investment for many years and its services suffered as a result. It was universally pilloried and made a joke of by large sections of the media, but in many ways it was an innovative organisation. It achieved a great deal for train travel through the development of the high-speed train and the advanced passenger train. Those passing through Crewe can see the sad wreck of an APT, which has been parked in the sidings for years. The APT was overtaken by the Pendolino train run by Virgin—but where did the technology for the west coast main line Pendolinos came from? It came from the work done by British Rail Engineering and British Rail Research in Derby, which developed the APT. Sadly, the project was abandoned because the Government of the day were not prepared to see it through, and as a result we have had to buy in the technology from elsewhere. My hon. Friend Mrs. Dunwoody made some valuable comments on research and development in the railway industry.

The position after privatisation is interesting. Immediately before privatisation, the Conservative Government increased investment in the railways to form the basis for privatisation—in other words, they fattened them up. They then sold the whole industry off at knock-down prices and all the ensuing scandals and problems continue to haunt us today. Huge profits were made from rolling stock companies that were bought by former BR managers then instantly sold on; they are now extremely profitable enterprises. Huge profits were also made by people dealing in railway infrastructure and land sales immediately after privatisation.

We have made some progress since then, but the fact is that Britain now invests and spends more on its railways than any other European country. We provide a far greater subsidy than was ever enjoyed by British Rail at any stage in its history, yet enormous profits are being made from our railways by the train operating companies. When the original GNER franchise was handed out, the director of the company that got it admitted that he did not really know what he had got. He knew that he had the right, the obligation and the duty to run a train service along the north-east coast main line, but he also knew that his costs in running that service were guaranteed. Therein lies the problem: we are pouring huge sums into train operating companies, and much of the money disappears only to emerge elsewhere as profits.

When the companies fail to deliver and collapse, someone has to step in and take over, as happened in the case of South East Trains. Now, however, we are told that the public sector is not good enough to run the services and they have to be passed to someone else. I ask the Minister who will reply to give us some clear answers. South East Trains is better run and more efficient and the public are happier with it, so why not stick with the arrangement and allow a publicly deliverable service to remain in public hands? To do so would be a useful step forward and demonstrate a commitment to the principle of public operation of our railways, as well as public investment and public ownership of the track itself.

One part of the Bill that I welcome is the transfer of some powers to Transport for London and the accompanying possibility of integration of services. TFL is to take over the franchising operation for Silverlink Metro services. I assume that other services—not inter-city mainline services, but regional and local services that go in and out of London—could also be administered by TFL, by agreement. If that happened, we might see more imaginative developments of services. Let me give an example.

For a long time, Silverlink has run services on the north London line, which extends from Richmond to North Woolwich, and trains then run up to Northampton, Rugby and Birmingham. It also administers trains on the Barking to Gospel Oak line which, like the north London line, runs though my constituency. The Barking to Gospel Oak line is a sadly underused line, which has been kept going only through the diligence of a local users' group that has campaigned assiduously for many years. The service has improved somewhat and I hope that when TFL takes over administration of the franchise we will see far more imaginative services and the development of an outer-London rail ring.

I agree with the Secretary of State that the harmonising of ticketing and travel arrangements in greater London would do much to integrate tube, rail and bus transport with many other essential services.

Photo of Diane Abbott Diane Abbott Labour, Hackney North and Stoke Newington

Does my hon. Friend agree that the north London line is vital for my constituents in Hackney, as it is the main interchange for access to the underground? While we welcome the line being handed over to TFL, we hope that the organisation will have the capacity to raise money so that that important line for the people of Hackney can receive the investment that it needs.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

My hon. Friend makes a good point, as Hackney is the only borough in north London that does not have any access to the tube network at all. However, one exit from the Manor House tube station is in Hackney, so there is a connection to the borough. My hon. Friend refuses to accept that assertion, even though she and I have walked up that very staircase while campaigning—one simply cannot persuade some people on those matters.

My hon. Friend is right about the improvements to the north London line and the need for integration. For people in most parts of Hackney, the north London line is the only east-west public transport route that they can use, but some of the stations are, frankly, grim and dangerous. The number of crimes in those stations is tragically high, and they are not safe places late at night. More investment is needed and, whatever arrangement TFL reaches with Silverlink or any other operator, I hope that it will insist that every single station is staffed, as that is the only way in which we will attract people back to the railways. They want to travel on them, but if the stations are not safe at night, they will not.

The Mayor and TFL have reached an agreement, which I believe the Government support, about reopening the east London line extension. It was short-sighted to close it, so I welcome its reopening. I have nothing against Hackney—it is a wonderful place that I love dearly—but why should the east London line stop there?

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

Some people may wish to get off in Hackney and shop in Kingsland road, but others, understandably, wish to travel on to Islington. It is short-sighted to spend a large amount of public money on rebuilding the area around Bishopsgate and rebuilding the line up to Dalston only to fail to link it to the existing track on the north London line. It could run on to Highbury and Islington in the first stage of development, with the option of extending it to Finsbury Park, which would develop into a local hub. I look forward to some imaginative ideas and I hope that, when TFL takes over, it will be able to put them into effect and develop new stations, including one at Tufnell Park on the Barking to Gospel Oak section of the line.

Turning to the notion of a community railway, there are concerns about bustitution. The railway map of this country shows a dotted line in north-west Norfolk, pretending that there is a rail substitution bus service from King's Lynn to Hunstanton and on to the network at Cromer. That is not, by and large, the case. The service was provided as a sop to people who, in the 1960s, opposed the Beeching closure of those lines. If we overlay the current railway map with a pre-Beeching one we can get an idea of the huge number of lines that we have lost throughout the country. My hon. Friend Mrs. Dunwoody, who chairs the Transport Committee, is right that bustitution is a quick fix. In the short term, it is cheaper and simpler to operate a bus service than a railway. However, many passengers are lost, and people are encouraged to use cars to reach the main line terminus. Having driven there, they then decide that they might as well drive the whole way.

If we are serious about encouraging people in the long term to make journeys by rail, that will not be achieved by bustitution and branch line closures. The examination of branch line use is an undeveloped science and some of it is extremely short-sighted.

When I was first elected to the House, my great friend, the late Member for Bradford, South, Bob Cryer, was campaigning to prevent the closure of the Settle to Carlisle line. He sat where the Liberal Democrat spokesperson now sits and he asked hundreds and hundreds of questions. He bored the House rigid on the subject of the Settle to Carlisle line. He was told that it was expensive, that it was a waste of money, that the bridge infrastructure was decrepit and so on. But the line was saved. It was not closed. Now ask any rail operator, "Should we close the Settle to Carlisle line?" and they would say, "You could not think of closing it. It is a vital bypass for the west coast main line when that does not work, a large amount of freight goes along it, and it has been a contributory factor in bringing some tourist and other life to the villages along the line." It is now seen as a valuable network.

Think of that campaign and compare its success with the suggestion that some branch lines—for example, those in the west country, such as the Exeter to Barnstaple line—are too expensive and should be made ripe for bustitution. That does not help. It diminishes the railways as a whole.

Photo of Tom Harris Tom Harris PPS (Rt Hon John Spellar, Minister of State), Northern Ireland Office

I know that my hon. Friend was not present in the Chamber for my outstanding contribution, which I am sure he would have enjoyed. He may be too negative about what community rail partnerships could mean. I accept that he is raising a real concern, but throughout the country community rail partnerships are providing an opportunity to bring out of mothballs rural lines that were previously closed and could now be reinstituted by local people and interest groups. I am sure that he would welcome that.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

Yes, and I am sorry that I was not present for my hon. Friend's speech. I recognise, and I am sure that the Select Committee Chair would agree, that community rail partnership in the best sense can be the saviour of lines and lead to their development. What concerns me is that it costs money to run a local line and it should not be seen as solely a local cost or resource but as part of a much bigger and wider network. I know that there are examples such as the development of the Alloa line in Scotland and the reopening of part of the Waverley line. I hope that the whole of the Waverley line will eventually be reopened, right through to Carlisle. That is another area of the country that should have been redeveloped.

I hope that the Bill will not be the start of some subtle Beeching-type closure by a curious form of voodoo economics that decides that particular parts of lines are not profitable enough. I hope that the Bill will instead be the protection and renaissance of such lines. There are, however, some strategic decisions that need to be taken. Why, for example, after all these years have we still not achieved a decision on the reopening of the east-west route? The reopening of the line between Bletchley and Bicester, linking up with Bedford all the way through to Cambridge, March, Felixstowe and the east coast ports, would be a massive development and improvement for the rail network. We are speaking about reopening only 25 or 30 miles of track, the bed of which is already in place and in quite good condition. That is the kind of imaginative decision that I look forward to.

I hope that the Bill can be amended in Committee and strengthened in many ways. We are putting large sums of public money into the railway system and the railway network. I welcome that and support it. The productivity of rail workers is as high as or higher than anywhere else in Europe. The amount of public money that goes in is as high as or higher than anywhere else in Europe. Surely there ought to be greater accountability for what happens to that money.

Those of us who read the entrails of the railway press see that large sums of money are being made by some of the train operating companies, even when they are receiving large subsidies for the running of their services. The case for public ownership, where appropriate, of the railway network, particularly of the leasing companies and rolling stock, is overwhelming. Retaining in public ownership franchises such as South East Trains is extremely important.

I agree with my hon. Friend the Member for Hayes and Harlington that the Bill is welcome as a step forward and a stage of improvement. I wish that it went a lot further, however, and I suspect that we will be back here taking it that stage further in a few years' time.

If anyone thinks that railways are a thing of the past, they should look at a little story that appeared on the front page of yesterday's The Independent on Sunday saying that this country was running out of car parks. That may be the case, but if we continue to promote the car industry and road freight at the expense of rail freight, it will be a problem for all of us. Railways are more efficient and better users of land, as the White Paper's simple picture of a Eurostar train running across the Medway and using only a few square metres of land shows when we look at the space and cost of the motorway running alongside that track, carrying fewer people. We must look to a future that is more sustainable, and railways provide us with that opportunity and future. It is a good public investment to invest in railways and it is an even better public investment to invest in railways and own them at the same time.

Photo of Greg Knight Greg Knight Shadow Minister (Environment, Food and Rural Affairs) 9:11 pm, 6th December 2004

We have had an interesting debate and heard some high-quality contributions from both sides of the House.

Mr. Hopkins said that he hoped the Bill was a step towards the sanity of public ownership. I say to him that this step will never be a staircase. As we and the Ministers know, the reason why is that, to quote the words of the Secretary of State,

"the principle of public and private partnership is right for the railways, and it will continue. It brings in money from two sources, and that is important."—[Hansard, 19 January 2004; Vol. 416, c. 1078.]

I fear that the hon. Gentleman's aspirations for the old-style wholesale nationalisation of the railway network will not be fulfilled, whatever happens to the Bill.

The theme of the speech made by John Thurso was that railways should contribute more than they currently do. Most of us would agree. He accepted the case for developing the way in which franchises work. We welcome his support for Conservative policy on longer franchises. We feel that longer franchises should be given to train operating companies, but I was disappointed with his conclusion that he intends to support the Bill.

Mrs. Dunwoody made an interesting and, as we would expect, informed contribution. She lamented the idea that she was not demonised by Opposition Members, but she is far too sensible and down to earth to be so caricatured. She spoke against bus substitution and expressed fears about loss of expertise in the rolling stock industry. That point struck a chord with Opposition Members and with me in particular, as I formerly represented the seat of Derby, North. I hope that Ministers will heed her comments about expertise in the industry.

My hon. Friend Mr. Wilshire wants an apology from the Secretary of State on the SRA. The best advice I can give to my hon. Friend is not to hold his breath. He made a powerful speech, and his main concern was that Transport for London and the Mayor have plans to take over rail routes in his constituency. I share his fear that, in the case of the current Mayor of London, consultation would not lead to dialogue, but would be a process of going through the motions before the Mayor continued on his own way in any event.

My hon. Friend expressed some concerns about safety. I hope and believe that his concerns were unfounded, as I broadly agree with the comments of Mr. Stringer on this subject. Subject to what the Minister has to say under cross-examination in the Standing Committee—if we get that far—I think that the Government are broadly right in seeking to streamline the proposals in that regard.

Richard Younger-Ross, who was courteous enough to say that he could not join us for the winding-up speeches, spoke movingly about the recent accidents. We all take the view that any loss of life is a tragedy that we should take all reasonable steps to prevent. I hope that the Minister will look into the point raised by the hon. Gentleman about the emergency hammers breaking before the windows of the carriages in the recent crash, because we clearly need to examine that matter.

I cannot say that the hon. Member for Teignbridge took me with him when he suggested that we should fit seat belts to trains. That idea is a non-starter in a mode of transport in which people expect to move around freely and use facilities such as the buffet car or the lavatory in other parts of train. He also mentioned other aspects of safety; those points need to be examined and, as I have said, I hope that the Minister will do so.

The hon. Members for Knowsley, North and Sefton, East (Mr. Howarth) and for Glasgow, Cathcart (Mr. Harris) supported the Government, which we expected. However, the hon. Member for Knowsley, North and Sefton, East was unfair when he referred to the "sterile debates of the old days". I hope that I shall make it clear—I thought that my hon. Friend Mr. Yeo made it clear—that we support parts of the Bill, which we do not seek to oppose this evening just because it is from a Labour Government.

Photo of George Howarth George Howarth Labour, Knowsley North and Sefton East

The right hon. Gentleman will find that my hon. Friend Mr. Harris said that, not me.

Photo of Greg Knight Greg Knight Shadow Minister (Environment, Food and Rural Affairs)

I stand corrected.

My hon. Friend Mr. Syms said that he has always had reservations about the Strategic Rail Authority, and his misgivings have been proved to be right.

The hon. Member for Glasgow, Cathcart was frank enough to praise the last Conservative Government on passenger transport executives, for which I thank him. He also candidly indicated that he has some reservations about how devolution is working, and I therefore hope that he is one of the hon. Members selected to go on the Standing Committee, so we can explore in further detail the extent of his concerns.

Dr. Pugh said that he is worried about the future of our railways and mentioned one or two constituency points.

John McDonnell expressed strong concern about the Government's policy. He showed an independence of mind and spirit, which, I fear, may keep him off the Standing Committee. I hope that I am wrong and that the Whips are brave enough to put a dissenting voice on the Labour Benches, because our deliberations would be enhanced by his presence, which some would say is the true voice of the Labour party.

In a knowledgeable and compelling speech, my right hon. Friend Sir George Young highlighted the hands-on role envisaged in the Bill and the problems that that policy will create. I agreed with every word and he underlined the reasons why we are right to urge the Government to embrace longer franchises. He made an interesting point about clause 6, and I hope that the Minister is prepared to respond to it. What will be the status of the guarantees and loans? Will Network Rail's liabilities end up as part of the public sector borrowing requirement, and if not, why not?

Jeremy Corbyn showed that he is, as Conservative Members would expect, firmly in the Luton, North and Hayes and Harlington camp.

Photo of Greg Knight Greg Knight Shadow Minister (Environment, Food and Rural Affairs)

As someone who is interested in classic cars, I have always associated the red triangle with Alvis, which used to make cars in Coventry. On the subject of old cars, I join the hon. Gentleman in paying tribute to our former colleague, Bob Cryer, who campaigned tirelessly for the Settle to Carlisle railway to remain open. That is an epitaph of which he would have been proud.

The Bill has various objectives, and we certainly do not oppose everything in it, as we have made clear.

Only two years ago, in 2002, the current team of Ministers promised that the SRA would provide

"the firm leadership envisaged for it—that of providing strategic direction and funding for the rail industry".

However, in February this year the Select Committee on Transport reported a completely different story—that the SRA

"appears utterly incapable of managing significant improvements."

It also made it clear that

"the fundamental failure of the railway is one of Government policy."

Hon. Members may recall that the SRA took over responsibilities from the Office of Passenger Rail Franchising, which my party set up when we were last in Government. My hon. Friend the Member for Spelthorne mentioned the statistics. In 2000–01, that office cost the taxpayer £13 million and employed 187 people. By 2003, the SRA's staffing costs had grown to £102 million, and by 2004 it employed no fewer than 454 people. In operating costs alone, the SRA has cost us all more than £25 million since it was established in 2000.

Despite costing so much, the SRA has manifestly failed to do its job. The Minister need not just take my word for it; the facts are there to prove it. Train reliability is worse than it was in 1997. Despite this Government's pledge to increase rail usage by 50 per cent. by 2010, only 5.8 per cent. growth has been achieved since 2000. The British Transport police's 2004 annual report showed a 4 per cent. increase in violent crime and a 12 per cent. increase in sexual assaults since 2003. Rail freight has dropped for the past two years, despite a promise by Ministers to increase by 10 per cent. the amount of freight carried. It is therefore hardly surprising that we say that the SRA has been a waste of time and money. It has failed to improve services for passengers and should never have been established in the first place.

Photo of Tom Harris Tom Harris PPS (Rt Hon John Spellar, Minister of State), Northern Ireland Office

The right hon. Gentleman is being somewhat selective in his choice of statistics. Is it not the case that rail freight has increased by 28 per cent. since 1997?

Photo of Greg Knight Greg Knight Shadow Minister (Environment, Food and Rural Affairs)

The figures that I quoted are correct. If the hon. Gentleman checks, he will find that rail freight has dropped for the past two years.

Photo of Greg Knight Greg Knight Shadow Minister (Environment, Food and Rural Affairs)

That does not invalidate my point that there is currently a dip, which my hon. Friends and I find very worrying.

The clear leadership and direction that Labour promised that the SRA would provide has never remotely looked like happening. Therefore, as my hon. Friend the Member for South Suffolk said, we welcome its proposed abolition. The Secretary of State asked why we did not put that in our reasoned amendment. I should tell the Minister—perhaps he can pass it on to the Secretary of State—that when one tables a reasoned amendment, one has to set out reasons why a Bill should not receive a Second Reading; one cannot list parts of it with which one is content. That is why our amendment is silent on that particular issue.

Our view is that giving more power to politicians is not the way to improve our railways. Likewise, allowing the currently unaccountable Network Rail to have even more control will not improve services. Although we are delighted to see the demise of the SRA, giving more powers to the Department will not help operators to get on with the job of providing a decent and improved rail service. More powers should be given to the train operating companies, which provide the passenger interface, so that they can provide a greater range of services that better meet the needs of travellers. After the political interference that the railways have endured for the past seven years, private industry needs to be given the confidence to invest without further Government meddling.

I want to comment briefly on rail freight, about which the Bill is strangely silent. With the disappearance of the SRA, no organisation appears to have a statutory obligation to promote or facilitate the growth of rail freight. I ask the Minister whether that is correct. People outside have expressed concerns that, by excluding rail freight from much of the measure, the Government risk leaving freight strategy in a vacuum, with nobody taking responsibility for it.

The people who contacted me say that if the Bill is enacted in its current form, no official voice will represent freight and fight its corner when network capacity is allocated. Does the Minister accept that the allocation of available capacity to freight and passengers must be assessed fairly and according to value for money and national best interests? The incentive to maximise capacity must surely be equal for freight and passenger services. Their performance should be measured on the amount of freight and passengers they can manage efficiently on the network. No provision attempts to deal with that and I would welcome hearing the reason from the Minister.

Like the hon. Member for Crewe and Nantwich, I want to comment on rail stock. As hon. Members know, the National Audit Office published a report in February that suggested that new rail rolling stock was being delivered late. It warned that new carriages being introduced into service were less reliable than the old slam-door vehicles that they replaced. Trains not only arrive late at the stations but cannot even arrive from the factory on time. Why should passengers have to put up with old, uncomfortable and sometimes dirty rolling stock while manufacturers take up to two and a half years to deliver new trains? Clearly, people will not use the railways if they are uncomfortable while travelling and feel dirty on arrival at their destination.

I want briefly to mention access to rail services by disabled people. That point has not been raised in the debate. Although I accept that other legislation is primarily responsible for delivering results on that matter, I would like the Minister to comment on the proposed end date by which all rail vehicles have to be accessible to disabled people. Do the Government have anything new to say about the requirement for improving disability access when rail vehicles are refurbished? Does that happen in every case? The issue is important for many disabled people who would like to travel by rail but currently cannot do so in safety.

I want to ask the Minister several questions. Clauses 22 to 44—22 provisions—deal with closures. They do not refer to the relevant lines but to the passenger services on them. The Bill includes nothing about what happens to the lines after a service is terminated. If a line currently carries freight or might do so in future, surely it should be kept open, at least for a time, to ascertain whether others want to increase the services or other companies wish to take up and run passenger services. Does the Minister agree?

Schedule 4 covers the Secretary of State's power to determine the scope and size of the network. There is some concern about its wording, especially proposed new paragraph 1G. It has been suggested that the provision might allow the Secretary of State, in determining the scope and scale of the network, to override private sector contracts, contrary to his undertakings. I do not believe that that is possible or in the Minister's mind but I would welcome an answer to that point.

In opening the debate, the Secretary of State said that he intended to consult about safety. Will the Minister tell us when he expects the consultations to be concluded? The Secretary of State also referred to the desirable aim of getting track and train companies to work ever closer together but went on to say that the Bill does not provide for that. Will the Minister regularly update the House on progress, perhaps through a periodic written statement?

On the provisions relating to London, and to giving powers to the current Mayor, I should like to reiterate something that my hon. Friend the Member for South Suffolk said earlier; we do not support these provisions. Two thirds of all train journeys arrive in or pass through London, leaving millions of passengers from outside the capital facing possible interference by the Mayor in their train services. For example, in an election year, it might suit the Mayor of London—whoever he is—to require a fast, non-stop train to halt at the edge of London to pick up mayoral voters. Passengers might also find their fares being increased to pay for increased expenditure on other services authorised by the Mayor. These are not fanciful concerns. The Bill says:

"A reference to a London railway passenger service is a reference to . . . a service for the carriage of passengers by railway between places in Greater London and places outside Greater London."

In our view, that drafting is far too vague. Will the Minister consent to look at it again in Committee, with a view to tightening it up?

We have heard about only part of the Government's transport policy in this debate. The Secretary of State likes to put himself forward as a benign, friendly, white- haired gentleman—[Hon. Members: "He's Santa!"] I would not call him Santa, although that is certainly a gentleman we think of at this time of year. The House should remember, however, what Dr. Howells said earlier this year. I notice that, following his remarks, that particular Minister has now been shunted off into the sidings in another Department. He said that the only way to end Britain's love affair with the car and to get people to use public transport was to

"tax people out of their cars in the same way as the authorities have tried to tax people off cigarettes."

That is the real Labour transport policy. The Government want to use taxation as a weapon to make one form of transport unaffordable, so that people have no choice but to take the train. We believe that it is far better to improve rail services, so that those who can complete their journey by rail actually want to do so. Labour's high-tax transport policy is a kick in the teeth for poor rural families and pensioners, for whom there are no rail services for their essential journeys.

Overall, this is a bad Bill, but it is not completely without merit. We support the abolition of the SRA and the streamlining of health and safety issues. However, in supporting those proposals, we do not have to accept the vehicle of this Bill. That is why we commend the reasoned amendment to the House.

Photo of Tony McNulty Tony McNulty Minister of State, Department for Transport 9:32 pm, 6th December 2004

This long and interesting debate on the future of rail is long overdue. Mr. Knight summed up the Opposition's position when he condemned the Bill as being a bad Bill, but not completely without merit. That is roughly where the Conservatives came in, with similar views being expressed by Mr. Yeo.

I thought that the right hon. Member for East Yorkshire was going to pre-empt me when he said that the Secretary of State had revealed only part of our strategy. That much he got right, but he then went on to give his little rhetorical political rant, which did him no service at all. He was right to say that the Bill does not, and cannot, incorporate all the elements in the White Paper published in July. Many of those elements do not need legislation, and the Bill needs to be considered in that broader context. So I half accept the point that he half made.

Of course we should more readily apprise people of the fact that we are introducing the Bill in the context of a whole range of things happening in each area, many of which are already in the public domain. Subsequently, as with so much legislation these days, a whole raft of guidance and regulations will flow from the Bill, and I am happy to undertake—as I did last year with the Traffic Management Bill—to ensure that, if we can, we will make available at least the headlines and drafts of those instruments that explain further what is in the Bill, albeit in the wider non-legislative context, to Committee members at the earliest opportunity.

It is important to understand—some Members may not have understood it entirely, not that I blame them—where the Bill and each part of it sit in a wider domain. Let me establish the policy backdrop. It is easy to characterise the rail network as all doom and gloom, and to suggest that everything is as terrible as it was 20 or 30 years ago because the system has been starved of investment. I do not deny that there are problems—if there were not, there would be no need for a Bill—but we are starting from a fairly robust position. I agree with those who have said that we can have a degree of confidence about the future of rail.

When I took over the rail portfolio barely a couple of weeks ago, I said that this was an exciting and interesting time at which to be a rail Minister, and I meant it. Had I said that five or 10 years ago, the white coats of the former right hon. Member for Huntingdon would have come flapping over the horizon, or I would have been quietly taken out of the back door and shot; but it is an interesting time, and it is incumbent on us all to recognise that that is our starting point. Over the past 10 years, our rail network has experienced more significant growth than any other European network, and I would venture to say that once the Bill is implemented, Britain's railways will be in a far better shape than any of their European counterparts.

I do not say that lightly. I know that Members may jump up and tell me how wonderful the French TGV network is, but let them try to travel from one French coast to the other without it. It may be the jewel in the crown, but we should look behind it at the rest of the network. Those who talk of the paucity of the rural network here should go to parts of Germany, France and Spain.

We have concluded that the SRA has had its day, but not on the basis that for four years it was a complete and utter waste of time and achieved nothing, and the sooner it goes the better. That would traduce the contribution of many who have worked in the SRA, and will continue to work in the rail industry in some capacity. It is nonsense to suggest that because 400 or 500 employees are part of a monster called the SRA they are not making a professional contribution in the same way as workers in the wider industry. It could be said, to an extent, that we are only able to improve our public policy contribution to the railways because of the SRA's good work. If that constituted a bridge from the immediate aftermath of the botched privatisation, what we are now building is a bridge to where the system is all the more efficient—a point at which we can drive costs down all the more readily.

Every key part of the Bill relates to non-legislative elements that should be understood and put in context. The early clauses relate to the SRA's demise, and at the time of First Reading we put in the public domain what we sought to do and what the DFT rail unit would look like. It is a travesty, and not terribly intelligent, to use the generic term "civil servants" as a term of abuse. Many people working in the DFT have been there for at least 30 years, and have served the rail industry in various ways for a long time. I do not think it very clever to reduce every civil servant to an interfering bureaucrat.

As we have made clear, the new DFT rail unit will consist of people from the current rail unit and people from the SRA. Whatever Members think of the relevant clause, they should understand that developments are taking place that are not included in the Bill.

It is important, too, to understand that a range of working parties and transitional bodies are taking forward work on safety regulation and on economic regulation, necessarily taking account of the elements in the Bill. However, many other aspects are not in the Bill. For example, in terms of safety regulation, we are working through how all the staff involved in rail safety at the Health and Safety Executive will transfer to ORR. There are still some general concerns under the Health and Safety at Work etc. Act 1974 that HSE will be obliged to continue. There will be a need for a memorandum of understanding between HSE and ORR in that regard. Where there are memorandums of understanding and other elements that link the non-legislative and the legislative processes, it is important that we try to put those in the public domain.

There has been extensive talk in Scotland, Wales, the PTEs and London about how to take all those aspects forward. As my right hon. Friend the Secretary of State suggested, in some areas, many of the elements are in place now. Transfer can take place far more readily in the Scottish example than in the Welsh, London or PTE examples.

Photo of George Howarth George Howarth Labour, Knowsley North and Sefton East

The Minister was present when I discussed some of the developments that have been achieved on Merseyside by the PTE there, which is known as Merseytravel. Perhaps he can comment on those points and on what successes it has had.

Photo of Tony McNulty Tony McNulty Minister of State, Department for Transport

I will certainly try to return to Merseytravel in a moment. I want to pick up on many of the points that hon. Members have made. [Interruption.] It is called an introduction.

There has been discussion with the RPCs, much of it at their instigation, about what the passenger voice will be like after this Bill. Those elements do not necessarily or absolutely have to be part of the Bill, but the demise of the RPCs clearly has to be.

In terms of network modifications, many of the extensive clauses—I accept that there are 22 clauses on this—are about the system post the Railways Bill. There are so many because the SRA and the RPC were central to the entire closure process up to now. We must put that in the context of devolution and ensure that everyone who needs a voice has a voice. The same is true in terms of bus franchising. I stress that any number of elements in the rail review White Paper are not part of the Bill and do not require legislation. It all needs to be seen in that context.

For example, to sum it up, the right hon. Member for East Yorkshire said that no one is doing rail freight. The Department will do the rail freight strategy. There is no need for a statutory duty in order for us to perform the function. The ORR already has a duty under the Railways Act 1993 to promote use of the network by freight. The Freight Transport Association broadly welcomed the White Paper proposals, not simply the Bill. We are working with that organisation and others that have a stake in freight to get to a stage where there is certainty on freight and its use of the network. Further expansion of freight on the network is far more guaranteed than it has been.

My hon. Friend Jeremy Corbyn talked about bustitution of rural lines. There may be some residual notional bustitution of rural lines, but the bustitution—it is a horrible word—clause refers specifically to PTEs. PTEs are overwhelmingly urban. However, I accept that West Yorkshire and South Yorkshire will have rural lines and not just urban lines. The quality contract legislation certainly applies to the PTE areas.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

Can the Minister assure me and the House that the community rail idea is about the retention, development and increased use of branch lines and not a Trojan horse for their closure à la Beeching?

Photo of Tony McNulty Tony McNulty Minister of State, Department for Transport

I can give my hon. Friend that assurance. It is slightly different from bus substitution, but the community rail partnership strategy that we launched with the SRA just the other week could not be further from a Trojan horse or "Dr. Beeching 2". There are plenty examples of lines opening in a voluntary capacity. They have stayed open and become more viable, transforming themselves from branch lines to feeder lines to the rest of the network.

Penistone is a key example of that. I was there on a cold and windy day, and it does get very cold and windy up there. That line has gone from what was disparagingly described as a community, fluffy, beards-and-anoraks line—with all due regard to my hon. Friend the Member for Islington, North—to feeding 500,000-plus passengers a year into the trans-Pennine express network.

Photo of Tony McNulty Tony McNulty Minister of State, Department for Transport

I apologise for the anorak element of my comment.

That arrangement works so well because all the key interested parties are involved. Local authorities, community groups and others took the view that they wanted the line to stay open.

My hon. Friend also spoke about the east London line extension and those elements that the Mayor will take forward. Again, before I deal with the point about devolution of power, much of what the Mayor can do within London is because of the almost £3 billion line of credit that he has been given through prudential borrowing. That is outwith the Bill and has nothing to do with it. However, it gives mid-term, if not longer-term, certainty to many of the schemes within London and will, finally, give Hackney a tube station.

My hon. Friend mentioned the east-west rail line. Again, the Office of the Deputy Prime Minister and the Department for Transport are talking to local authorities and private sector companies to see how they can push that link on. We have made it clear that there is not a substantive economic case in terms of its being additional to our plans for the network. It is perfectly in order, however, for us, the ODPM and others to consider how that part of the loop can be fixed by working with the private sector, but those who most directly benefit from it should contribute to it. It is terribly short-sighted of the hon. Member for South Suffolk to say that because the Bill relates to Ken Livingstone, he does not want it. All the Bill does is to extend to London areas of influence and policy that the PTEs already have.

To the extent that it says anything, the reasoned amendment says that the Bill

"increases the extent to which politicians and civil servants interfere in the running of the railways".

We like to call that public accountability, when politicians have a role to play. It is the public's money and there should be public accountability here.

I could not for the life of me understand what the hon. Gentleman was going to do. Having agreed the demise of the SRA, who was going to make decisions on franchising? It seemed that he was going to get the transport operating companies that want to run the franchises to do the analysis and let the franchises. All he said was: more power to the TOCs. Perhaps we should cut out everyone else, give them the money and let them do whatever they want, but that would do nothing for public accountability.

The reasoned amendment is also against giving

"the Mayor of London power over train services which begin or end beyond boundaries of the Greater London Authority."

It does not say why. There was not much illumination of that in the hon. Gentleman's contribution. Given that so much of intra-London travel is on the heavy rail network, it must be right that we move down the road initially of looking at the discrete services in London and at a role for TFL within that process. I do not understand how anyone could object to that in any way, shape or form.

Photo of Tony McNulty Tony McNulty Minister of State, Department for Transport

With the greatest will in the world, the hon. Gentleman has only just popped in, for which I am grateful. However, he was not here for the debate, so I shall not bother to trouble him for a contribution.

If we go further with London powers, it is appropriate that someone from the surrounding regions sits on TFL's board, but that is again way outside the Bill's remit and we are a long way from that process. As has been suggested, the Silverlink metro lines will be considered first in that regard, and all but about three miles of track to the north of my constituency are within the Greater London Authority area. It must therefore be right to start to examine those configurations, not only in that context but in the passenger transport executives.

Many of the points made by the hon. Member for South Suffolk simply do not stack up. Apparently, we are seeking to perpetuate instability in the rail industry with regard to franchising. As to why, he was not forthcoming, and neither were any of his colleagues, apart from giving us the hoary old chestnut that there should be longer franchises. How long should they be? There was no suggestion. Should it be 20, 30 or 50 years? Perhaps we could go into Nicholas Ridley fantasy land, have the House of Commons meeting merely once a decade, give up all the contracts and franchises, and all go down the pub. That did not work terribly well for local government, it will not work well for central Government, and it is completely devoid of substantive consultation and public accountability, which must be the order of the day. Some serious points were raised which were specific to the Bill, some of which will be explored further in Committee. I stress that some of the answers lie outside the scope of the Bill, and I will undertake to keep Committee members, and if it is wanted, the House, fully involved.

John Thurso referred to whether there should be a duty on the Office of Rail Regulation in relation to environmental matters. I am happy to tell him that that is already exercised in its functions. Under the Railways Act 1993, it must have regard to the effect on the environment of activities connected with the provision of railway services.

The hon. Member for South Suffolk spoke about the relationship between the Office of Rail Regulation and the Secretary of State. That is an important point—the Bill does not simply reach into contours and leave everything much as it was. Every relationship in the Railways Bill changes. The relationship between the ORR and the Secretary of State will therefore change. The new relationship will maintain the independence of the ORR.

In relation to the point that existing contracts will be overridden, that is simply not the case. The ORR is obliged to review its position at times, but that is not about having a blanket power to override all existing franchises and contracts. It cannot be retrospective in that regard.

My hon. Friend Mrs. Dunwoody, who chairs the Select Committee, made good points about ROSCOs and rolling stock. The issue should not simply be considered in the context of the existing skills base in this country, but I remind her that more than 75 per cent. of new rolling stock is British-made, and it is incumbent on all rolling stock companies, particularly British ones, to ensure that they can react to the pressure down on costs that we are seeking to get into the system. She and other Members raised the conundrum whereby a load of new rolling stock is on a railway line, and there is at least some hiatus while it is run in before getting back to the performance levels promised in the first place, which needs to be considered. Outside the Bill, we are reviewing the whole position of ROSCOs, and we are considering efficacy and efficiency on a company-by-company basis. I take the point, however, about losing job expertise in relation to rolling stock, and about ROSCOs' relationship with people more generally.

My hon. Friend the Member for Crewe and Nantwich also made a point about safety, and I reassure her that safety will not be compromised by cost considerations in relation to the change to the Office of Rail Regulation. Safety remains paramount, and all the expertise moving through the ORR, which is embedded in and an integral part of all the other considerations, including economic and broader policy, must still have safety at its core. That is an absolute imperative, given all the lessons that we have learned.

Mr. Knight said that it is a shame that Network Rail is being given timetabling powers. I am afraid that Network Rail already has such powers; indeed, it is the lead body in consulting with the rest of the industry. Other Members made a number of points, some of which were slightly confused, about the passenger transport executives. Some Members were responding to the White Paper rather than to the Bill's substance; these issues will doubtless be explored further in Committee. It is clear that PTEs must, and will, have an expansive role not just in rail, but in all other transport provision in their areas. I agree with my hon. Friend Mr. Howarth that in many cases PTEs have been very strong advertisements for public transport networks, ensuring that all regions get the networks that they deserve. That said, by contrast with the situation in past years, we must ensure that we make optimal use of our railways throughout the system, and at a realistic cost.

On the consultation process, which was mentioned by a number of Members, it is entirely appropriate to look at how the Gatwick Express works with the Brighton commuter line, although we should not determine such matters at this stage. It cannot be right that the Gatwick Express is at best 50 per cent. full at peak times, when the corresponding commuter service is 130 per cent. full. I am not pre-judging the outcome of such consultation, but it is at least worth looking at how those two different services interact with each other.

What did we get from the hon. Member for South Suffolk? The answer is, not a lot. His greatest scheme at the minute seems to be flogging off as much Network Rail land as possible. He said on the radio this morning—thereby spoiling my breakfast—that going down that route would unlock hundreds of millions of pounds. In essence, he has missed the boat—if I may mix transport metaphors—in that much of the non-operational land previously owned by British Rail went not to Network Rail but to BRB (Residuary) Ltd. Much of what Network Rail has, in operational terms, it needs.

I will go half way towards the hon. Gentleman. I have explored this issue over the past couple of months and there are developments—such as major termini in London and elsewhere—that Network Rail could take on far more readily. We are already exploring such ideas and we are grateful for the hon. Gentleman's support. However, 794 of the 800-odd sites of British Railways Board land are worth less than £50,000, so quite how the hon. Gentleman is going to construct a major, integrated Tory transport policy on the back of sites worth less than £50,000 I simply do not know.

I hope that the real issues that I have not had time to deal with will be explored in some detail in Committee. The relationship between the Bill's four or five key areas, devolution, economic and safety regulation and the demise of the SRA are matters worth exploring, and I hope that we will do so, should Second Reading be secured tonight. But what we cannot have is this empty vacuum from the Opposition.

Photo of Peter Luff Peter Luff Opposition Whip (Commons)

As opposed to a full vacuum?

Photo of Tony McNulty Tony McNulty Minister of State, Department for Transport

We cannot have this vacuum from the Opposition, which offers nothing to the people of this country. Our rail network now carries more than 1 billion passengers and is the most efficient that it has been, in terms of passenger miles covered, since the early 1960s. Our task is to make it all the more efficient, and that is what the Bill will do. I commend it to the House.

Question put, That the amendment be made:—

The House divided: Ayes 124, Noes 321.

Division number 5 Orders of the Day — Railways Bill

Aye: 124 MPs

No: 321 MPs

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Question accordingly negatived.

Main Question put forthwith, pursuant to Standing Order No. 62 (Amendment on Second or Third Reading), and agreed to.

Bill accordingly read a Second Time.