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Network Rail

Part of Opposition Day — [5th allotted day] – in the House of Commons at 3:44 pm on 8th January 2008.

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Photo of Theresa Villiers Theresa Villiers Shadow Secretary of State for Transport 3:44 pm, 8th January 2008

My hon. Friend is absolutely right, as ever. Network Rail needs to get a grip and seriously raise its game. Its performance is not acceptable.

Another key error committed by Network Rail was its failure to tackle the situation effectively when things started to go wrong. The problems did not come out of the blue. Possessions are planned 18 months in advance. As early as 6 December there were clear warning signs that serious problems were occurring at Rugby when there was surely still time to remedy the situation. One question that the Secretary of State has to answer today has to do with when she was first warned about the potential overrun, and when she started to take action to sort the problem out.

As my hon. Friend Sir Nicholas Winterton noted earlier, merely imposing fines on Network Rail would not be an adequate response, as the taxpayer would pick up the bill for them anyway. As former rail regulator Tom Winsor has pointed out, the Government have removed

"the most potent instrument of...accountability—the ability of the regulator to inflict financial pain if the company's management commits serious sins".

While taxpayers and passengers pay the price of failure at Network Rail, its managers still receive their high salaries and bonuses. It was confirmed in November that the £286,000 in bonuses suspended after the Grayrigg accident had been paid out to Network Rail's four senior managers, despite the serious failures that the accident revealed. Network Rail's annual report disclosed a further £362,000 of longer-term performance incentives. Last year, the pay of Network Rail's non-executive directors rose by 18 per cent. It looks as though the pay restraint that the Prime Minister has been grandstanding about does not apply to some of Labour's friends at Network Rail.

It was, of course, a matter of huge irony that, on the very day that Virgin took out advertisements in the national press to warn passengers about the expected disruption, those same national newspapers carried news of the knighthood that the Government had awarded to the chairman of Network Rail for his services to transport.

The fundamental problem that the House must address is that Network Rail's management is not accountable to anyone. We believe that that must change. The people who in theory are supposed to hold Network Rail to account are its members, but the Network Rail board decides who most of them are. It is therefore no wonder that that check has been derided as toothless and ineffectual.

Reform is needed to put in place a more effective way to penalise failure by Network Rail's management, and to ensure that they are forced to listen to the regulator and their customers. Getting that right is of critical importance if we are to have the high-quality rail network that our economy needs. There are many reasons for that, but I shall outline just three.

First, the Grayrigg accident shows that failures at Network Rail can have tragic consequences. The report into the crash revealed a catalogue of errors.

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