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Mr. Ridley : I am grateful to my hon. Friend. I agree that the relief from hardship and loss is the most important aspect of today's announcement, and I hope that hon. Members will not try to make too many legalistic points that will detract from its significance.

Rev. Martin Smyth (Belfast, South) : We accept what the Secretary of State has said about the need for us not to make too many legalistic points, and I confirm, on behalf of many people in Northern Ireland, their thanks for this generous settlement. Does the right hon. Gentleman accept, however, that today's statement has not really maintained trust in financial institutions, particularly if greater responsibilities are not to be placed on the shoulders of regulators?

Mr. Ridley : I am grateful for what the hon. Gentleman said, but I believe that there is another side to the case. The risk involved in choosing where to put his money can never be entirely taken from the investor ; otherwise he would always choose the highest-risk--sorry, highest-return--investment that he could find. The return must clearly be tempered in relation to the risk.

Mr. Michael Jopling (Westmorland and Lonsdale) : Is my right hon. Friend aware that the compensation terms that he has announced today are warmly welcomed? However, will he reflect that a basic problem of the case was that many decent but often inexperienced people felt, rightly or wrongly, that the Government had endorsed the probity of the company? What has he done and what does he intend to do to ensure that such a false impression is not given again?

Mr. Ridley : I am grateful to my right hon. Friend for his comments. He will know that since then the House has passed the Financial Services Act 1986 which puts the responsibility for regulating such matters on the Securities and Investments Board, which has its own clearly delineated and contained compensation fund. In future, the SIB will be responsible for regulation. That is a much healthier state of affairs than the old one under which those events took place which, I am glad to say, no longer applies.

Mr. D. N. Campbell-Savours (Workington) : In so far as the ombudsman identified five grounds of significant maladministration by departmental officials and a great number of people have lost money on the licensed securities market, will the right hon. Gentleman now institute an inquiry within the Department on what happened to investors in Harvard Securities, Afcor Investments, Investors Discount Brokerage and Tudorbury Securities-- whose activities were repeatedly drawn to the attention of departmental officials, and which have left great numbers of people with worthless investments?

Mr. Ridley : I do not believe that I should follow the hon. Gentleman into discussing other cases that are not the subject of the statement.

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Mr. Kenneth Warren (Hastings and Rye) : When did my right hon. Friend first hear about the problems of Barlow Clowes, and was he informed earlier by any other Department of State?

Mr. Ridley : I heard of the problems of Barlow Clowes at the time of the collapse. Of course, I was not in the Department of Trade and Industry then. Since I have been in that Department, I have been all too well aware of the problems of Barlow Clowes and have heard little else since July.

Several Hon. Members rose--

Mr. Speaker : Order. The House knows that there is another statement after this one and a very important debate. I shall allow three more questions from either side and then I regret that we shall have to move on. However, there will be opportunities for right hon. and hon. Members to discuss the matter on the Adjournment motion tomorrow.

Mr. Peter Hardy (Wentworth) : In answer to my hon. Friend the Member for Workington (Mr. Campbell-Savours), the Secretary of State said that the Government are not at fault and do not have the responsibility for investors in Barlow Clowes. Yet the Government took exactly the same approach to those affected by the collapse of McDonald Wheeler, which purported to have the blessing of the Government. If the Government can pay generous compensation for those sadly hurt by the collapse of Barlow Clowes, how can they justify their refusal to pay compensation to those affected by the collapse of McDonald Wheeler?

Mr. Ridley : The hon. Gentleman is already trying to widen my announcement and to make a precedent in a way that the Government had not intended. I must slightly correct his introductory remarks. I said that the Goverment were not legally liable for the collapse of Barlow Clowes, but I did not say that the Government were not at fault. If the hon. Gentleman reads my statement and the observations on the report, he will realise that that was not an accurate shorthand for what I said. For three reasons, there were some blemishes in the Department's handling of the case. There was a legislative vacuum in the sense that the Financial Services Act was not in place, and there was the hardship caused to many poor investors. We responded as I believe the House would wish us to respond to the suggestion of the Parliamentary Commissioner for Administration that compensation should be paid. That is the important point. It is wrong for the House to try to open up other cases in which the circumstances are, no doubt, wholly different.

Sir Peter Hordern (Horsham) : My right hon. Friend has reached a most honourable settlement, which is entirely characteristic of him. My right hon. Friend mentioned earlier that the Financial Services Act 1986 and the Securities and Investments Board, whiich is now in place, should prevent further such frauds. However, will he reflect that in September 1985 the financial services division of his Department asked the solicitors office for advice? That advice took two months to come, even in an interim form, and three months to come in a definitive form, and it was six months before counsel's opinion was even invited. Does my right hon. Friend agree that

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lawyers, although not apt to be very speedy, have in this case excelled themselves in their tardiness and that the delay has proved to be very expensive?

Mr. Ridley : I am grateful for my hon. Friend's comments. However, I must riposte by saying that the Government have a collective responsibility for the decision that I have announced today, just as I share the collective responsibility for the decision that was taken at the time of the Le Quesne report that the Government were not liable and should not pay compensation. I must point out that the Parliamentary Commissioner did not find the particular event in the history of this unhappy matter to which my hon. Friend referred to be of great significance.

The event on which the ombudsman based the bulk of his claim that compensation should be paid was the fact that the officers of the Department failed to notice that the Jersey partnership had different partners from those of the United Kingdom partnership. It may or may not have been as a result of the failure to make that observation that further losses were suffered by investors. That is the point on which the claim of maladministration was mainly based and it will be for the House to decide whether it believes that that was the correct judgment.

Mr. George Foulkes (Carrick, Cumnock and Doon Valley) : Is the Secretary of State aware that I am still concerned about the timetable of payments to my many constituents who were affected? I also have constituents who are still waiting well beyond the deadline for money from the investors' compensation scheme from the Greenan collapse. Will the Secretary of State ensure that extra staff are taken on, if necessary, to ensure that timely applications are paid out by the end of February and will he give us an absolute guarantee on that?

In view of the crucial and harmful role in this disaster that was played by the Jersey partnership, will the Secretary of State and the Home Secretary now examine seriously the role of the offshore islands in this financial area?

Mr. Ridley : On the latter point, I advise the hon. Gentleman to read the document carefully. There was a complicated series of events, and there is no possibility of banning offshore islands. Islands are there and always will be, so the hon. Gentleman's suggestion is impractical. On timing, I must make it clear again that when investors or their estates receive the form, they should make a claim within 28 days of receiving that document. If, for some reason, they do not make that claim, there are arrangements for late payments to be made, but it will be for investors to make the application. I hope that all right hon. and hon. Members will encourage their constituents to send in the claim as early as possible so that they can receive the compensation as early as possible.

Mr. Peter Viggers (Gosport) : Does my right hon. Friend agree that there can be no question of the Government's being primarily responsible to the investors in this affair? Bearing in mind the fact that it would be difficult or even impossible for many investors to prove any Government liability, and bearing in mind the costs of any legal claim, does my right hon. Friend agree that the Government's offer should be seen as generous-- or even very generous--and should be welcomed accordingly?

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Mr. Ridley : Everything that my hon. Friend says is correct. This is a very generous offer, which follows what the Parliamentary Commissioner suggested, and the main reason why we are making it is that we have respect for the Parliamentary Commissioner's office.

Mr. Win Griffiths (Bridgend) : Although we recognise the generosity of the Government to all those who needlessly lost money in the Barlow Clowes affair, my constituents will be wondering why it has taken all this time for the Government finally to give compensation. Until the publication of the ombudsman's report, all the signs were that the Government were extremely loth to get involved. As a result, they have caused those who lost money needless suffering. In my constituency, one couple had to sell their home because it seemed to them that they had no prospect of being compensated, and the husband has since died because of the stress of the Barlow Clowes collapse. If the Government had acted immediately on information that was widely available, the damaging impact of the affair could have been avoided.

Mr. Ridley : The hon. Gentleman has heard what I said. We received the Parliamentary Commissioner's report only a short while ago. It has been considered by the Department and finalised by the Parliamentary Commissioner in almost record time, I believe, to get the news out as quickly as possible. I really do not think that we have dragged our feet. It took the PCA a considerable time to conduct his investigation but he must be responsible for that, not me. I must make it clear that we are paying compensation in the special circumstances of this case only because of the recommendation of the Parliamentary Commissioner.

Mrs. Elizabeth Peacock (Batley and Spen) : Although I thank my right hon. Friend for his statement, may I ask him to accept that many investors in my constituency--some of them elderly and some who were first-time investors--took advice from professionals? Will he try to ensure that such a tragedy does not occur again because such people are very vulnerable to the information and advice that they are given?

Mr. Ridley : I shall certainly draw my hon. Friend's point to the attention of the Securities and Investment Board, whose job it is to ensure that intermediaries behave in an entirely responsible way towards innocent investors who do not quite know the risks.

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British Rail (Objectives)

4.32 pm

The Secretary of State for Transport (Mr. Cecil Parkinson) : With permission, Mr. Speaker, I should like to make a statement about British Rail's objectives for the period 1990 to 1993.

I have today written to the chairman of British Rail, Sir Robert Reid, setting out the objectives that I have agreed with him. Copies are available in the Vote Office and will be published in Hansard. Since British Rail was first set three-year objectives in 1983, the management has had a clear framework for planning its business. It has achieved undoubted success in working to the objectives that my predecessors set in 1983 and 1986. Railway investment has risen sharply. BR is now investing twice as much as in 1983, and the result is that investment in 1989-90 is the highest for some 25 years. It is to go up by a further 75 per cent. over the next three years. At the same time, British Rail's need for subsidy has been falling steadily, as BR has improved efficiency and has attracted many more passengers. Over the next three years I want to see substantial further progress on safety, quality and financial performance.

Providing a very high standard of safety must remain the railways board's top priority. We allowed for £125 million for specific new safety expenditure over the next three years in the recent public expenditure round. BR is acting positively and quickly on the report published in November on the Clapham junction accident. I repeat the assurance that I gave at that time that finance will not stand in the way of implementing the report's recommendations. I shall look at what further measures may be required once the board's assessment is available in the new year. We are committed to ensuring that BR will continue to have the necessary funds for safety. I give the House the assurance that there will be no economising on safety. British Rail has also begun work in consultation with the Health and Safety Executive and the railway inspectorate on a comprehensive safety plan. I have asked the board to submit this to me by October, and to update it annually thereafter.

British Rail's three commercial businesses--InterCity, freight and parcels- -have made good progress towards the financial objectives set in 1986. InterCity has achieved a major turn-round into profitability. The objectives I am setting call for further progress towards earning a proper commercial return on their assets. Intercity's objective for 1992-93 will be a current cost profit of £95 million at today's prices.

The overall objective for rail freight will be a profit of £50 million, and the board will be preparing plans for bulk freight to earn at least an overall 8 per cent. return on its assets by 1994-95. I also want to see improvements in the financial performance of the rest of the freight business, with still greater involvement of the private sector, so that it is ready to seize the new opportunities presented by the Channel tunnel.

On British Rail's parcels business, I have endorsed the £9 million profit target which the board has set.

On the two remaining businesses--Network SouthEast and the Provincial sector--I am very conscious of the need to strike a balance. I want to see continuing but carefully phased reductions in subsidy, which should be possible without excessive fares increases.

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I hope that, by the mid-1990s, Network SouthEast will start earning a commercial return on its assets, and I am asking the board to produce plans for that. Meanwhile, I am endorsing the board's own objective of reducing the grant requirement to zero in 1992-93. I am satisfied that by then Network SouthEast should not need a revenue subsidy. It is carrying so many more passengers now, and the high and growing level of investment is improving quality and reducing running costs. Increased revenue from a higher number of passengers, and lower running costs from more modern equipment, reduce the needs for subsidy from the taxpayer.

On the Provincial sector, I am again endorsing the board's objective, which is to reduce the grant from about £400 million this year to £345 million by 1992-93. It is clear that large subsidies will be needed for Provincial for the foreseeable future, although there should be scope for some further savings and I am asking the board to examine ways of achieving further improvement of the order of £20 million by that year.

Neither reductions in subsidy nor the huge increases in investment will lead to large fare increases. These objectives are based on BR's own forecasts included in its corporate plan, which it will be publishing today. The plan assumes only modest real fare increases. I shall be looking to the board to continue to improve productivity to minimise the direct pressure of costs on fares.

I share the board's determination that quality of service should improve. Demanding quality standards for provincial services were set last July. The board has now agreed to a tougher Network SouthEast punctuality standard. These are tough targets, but the benefits of the investment already authorised will be building up over the next three years and will enable BR to give passengers a better service. Demand for Network SouthEast and Provincial services is expected to continue to grow and BR will need to decide how best to accommodate it. Where, exceptionally, new capacity cannot pay for itself, a cost benefit evaluation will be carried out to enable me to decide whether capital grants would be justified on wider social and economic grounds.

The achievements of the past six years are a tribute to the hard work of the BR board and all railway staff under the leadership of Sir Robert Reid. With the opening of the Channel tunnel, the next decade will bring new opportunities. The Government are committed to securing a safe, efficient and high-quality modern railway network. The new objectives set out a clear framework for further progress towards these goals. I commend them to the House.

Mr. John Prescott (Kingston upon Hull, East) : Does not the Secretary of State understand that today's announcement continues the disastrous penny-pinching approach that the Government have adopted towards British Rail since they came to office? Is it not the case that in the 10 years from 1983 to 1993 the Treasury will have denied British Rail £3.5 billion in financial support by reducing the 1983 levels of support? Would it not have made sense to spend that money on ensuring that Britain could play its full part in the railway revolution that is now sweeping through Europe? Is it not the case that, instead, safety, quality and reliability have suffered, fares have rocketed and we are missing out on the major opportunities offered by the Channel tunnel?

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When will the right hon. Gentleman realise that there is no point setting tougher targets for quality of service unless the resources are there to implement them? Why has he ignored the views of the passenger body, the Central Transport Consultative Committee, which only two weeks ago told him that there was a direct link between the cuts in Government grant over the past decade and the poorer quality of service?

The right hon. Gentleman's grasp of detail does not always match his considerable public relations skills, but he will now have to answer the question about fares that he ducked last week in the House. I ask the right hon. Gentleman again : does he now accept that today's announcement that Network SouthEast must have a commercial rate of return by 1995 means fare increases of at least 4 per cent. above the rate of inflation every year for the next 10 years? Is not that the exact figure in the assumption, used by the Department of Transport in assessing the options in the road assessment studies, on which he reported to the House last week? He seemed to be somewhat confused about the matter last week and promised to write to us. We are still awaiting his letter.

Does not the right hon. Gentleman understand that today's target will be greeted with outrage throughout Britain, especially in London and the south -east? Does he not realise that passengers are fed up with paying the highest fares in Europe for a dirty, overcrowded, unreliable service, and that the latest cuts will mean higher fares and even poorer quality service?

The right hon. Gentleman talks about passengers' willingness to pay more for a better quality service, yet fares are already twice as expensive in Britain as in Belgium, and one third more costly than in Germany, France and the Netherlands. How much more should passengers pay for a seat on a train which is on time and to guarantee a safe and reliable journey?

The right hon. Gentleman constantly claims that we can have either higher investment levels or higher levels of Government financial support, but that we cannot have both. Why not? They do in France, in West Germany, in Spain, in Italy and in Belgium. What is so unique about Britain?

Does the right hon. Gentleman accept that Britain is at the bottom of the European league of Government financial support for railways? We are still bottom of the league for investment. Why is it only on fares that we are at the top of the table?

Will the right hon. Gentleman confirm that not one penny of the investment claims that he makes comes from the Treasury and that all of it comes from higher fares, chronic overcrowding, property and land sales, redundancies and low pay? Will he explain that some 90 per cent. of the investment over the next three years will be for the routine replacement of trains, signalling and rail and structures and will not necessarily help to expand capacity in the system? Passenger bodies are complaining to the right hon. Gentleman and to many hon. Members about the chronic overcrowding. Is the right hon. Gentleman aware that Network SouthEast passengers will be outraged that BR is already saying in its corporate plan that it will not be able to meet the target that he has set for reducing overcrowding in the system, despite the increase in fares that will flow from his statement this afternoon? Is it not

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true that, according to the passenger bodies, train cancellations have doubled on the provincial services and have increased by 50 per cent. on Network SouthEast?

Why are there no environmental objectives in the statement? Does the right hon. Gentleman agree that the increasing bulk freight's rate of return on assets from 2.5 to 8 per cent. will reduce even further rail's share of the freight market, especially in view of the CBI's calculation that the cost of road congestion is £15 billion a year? How can it make sense to drive even more freight on to the roads? Has the right hon. Gentleman discussed that with the Secretary of State for the Environment?

The right hon. Gentleman assured the House that finance would not stand in the way of the implementation of the Hidden report following the Clapham disaster, but what does that mean in practice? Will the right hon. Gentleman expand on the statement to give an assurance that safety--[ Hon. Members-- : "Too long."] I hope that the House will always listen to points about safety. We have not listened in the past and we have now paid a terrible price for that. Will the right hon. Gentleman assure the House that the safety deficiencies identified by Sir Anthony Hidden will be paid for by grant aid either in the form of PSO funding or a direct safety grant and will not have to be paid for by passengers in even higher fares?

Finally, does the Secretary of State endorse the view of the chairman Sir Bob Reid when he said last week :

"Our duty is not to run a service that is desirable ; it is to run a service that will be profitable"?

If he does, let me offer the right hon. Gentleman some advice. He should take some time off from his tour of the nation's auction rooms peddling valuable old number plates to study the transport systems of other European countries and, yes, perhaps even use them. He may then realise that there are some things that may not be considered profitable in the narrow and petty-minded terms of the Government but which are desirable for a vital and modern nation. They include a concern for safety, for the environment, for quality of life, for economic regeneration and for the whole of Britain, and they are all sadly lacking from the statement.

Mr. Parkinson : When I listen to the hon. Gentleman, the thought that strikes me is that he is never happier than when he is attacking the work of the 131,000 people who work in British Rail and bad-mouthing their efforts.

Let me quote a passage from a White Paper produced by a Labour spokesman a little wiser than the hon. Gentleman. It says : "To use subsidies to disguise from people the cost of the services they are paying for is pointless, and to subsidise richer people at the expense of poorer is perverse."

There is no sense--I have made this point over and over again--in the people of Hull subsidising the service in London and the south-east which is used by people who are earning much more than they are and for which there is already an excessive demand. To subsidise a service for which there is excessive demand is an absurd waste of money and it is a silly way of reallocating the national income. One would never believe it from listening to the hon. Gentleman, but BR has more passengers in every aspect of its business in Network SouthEast and Provincial and is investing more than ever before in Network SouthEast and

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Provincial. Two years from now, more than 80 per cent. of the rolling stock on Provincial will be less than five years old and will effectively have been renewed.

The hon. Gentleman's picture of a declining railway suffering from lack of investment simply does not accord with the facts. The only point that he can make--it was the only point that he made in the course of his remarks-- is that the subsidy is lower than it used to be. We have explained that we plan gradually to phase out the subsidy for Network SouthEast, to reduce it by £55 million from £400 million in the next three years on the Provincial network, and that that reduction, coupled with the growth in business, should not give rise to any substantial increases in fares. It is absolutely-- [Interruption.] There is one simple point between the hon. Member for Kingston upon Hull, East (Mr. Prescott) and myself. He believes that the Government's commitment to the railways or to any other service is the extent of the subsidy that they provide. We believe that it is a matter of improving the service and of increasing investment.

Mr. Peter Snape (West Bromwich, East) : Why do the Government not prove that?

Mr. Parkinson : The hon. Gentleman and his right hon. and hon. Friends are very enthusiastic about bad-mouthing Britain's railways and Underground systems. The right hon. Member for Islwyn (Mr. Kinnock) on a visit to Paris, praised the French for modernising five Metro stations a year and investing money. We are modernising 10 stations and investing twice as much--but all that we hear from the hon. Member for Kingston upon Hull, East is criticism. We are investing more money per route mile than the French. It is bad news for the hon. Gentleman that we are making progress and improving the system. We intend to carry on doing so, and to ensure that the fares do not increase excessively. We intend to ensure also that Britain has a modern railway system.

Mr. Edward Heath (Old Bexley and Sidcup) : We naturally want to give careful thought to the announcement made by my right hon. Friend this afternoon. I hope he will realise that it is difficult for many right hon. and hon. Members to attach much weight to any forecast or undertaking given by British Rail at the moment. That is particularly so in the light of British Rail's treatment of the fast link from the Channel tunnel. British Rail had four plans to consider, and after long debate and many public meetings, it reached the conclusion only six months later to cancel everything that had been discussed, arranged or agreed--and announced that it was taking an entirely fresh look at the problem.

Leaving that matter on one side, my right hon. Friend made the important comment at the end of his statement that particular problems will go to him for examination and a decision. I ask him to acknowledge that there is a difference between a subsidy--even though I may not accept everything that my right hon. Friend said about subsidies--and expenditure that is required for environmental considerations. The Government have pledged themselves to expenditure to protect the environment. It is not possible to have a railway that is profitable and which, at the same time, takes account of environment requirements. No railway in Europe does so.

Mr. Parkinson indicated dissent.

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Mr. Heath : My right hon. Friend shakes his head in disagreement. If a railway is to follow its own profitable inclinations, its track will run straight through a town. Everything will be pulled down, compensation will be paid, and that will be the end of the matter. If a railroad is to take account of all environmental considerations, as we would like it to do, it must have a source of revenue other than its normal ticket taking.

The Channel tunnel fast link is also a matter of national concern because it will continue on to the north of England and to Scotland, when further environmental considerations will have to be taken into account. I hope that my right hon. Friend's concluding comment means that he is prepared to do now that which his predecessors did not do--accept that expenditure on the environment and on tunnelling is a necessary form of expenditure by Government, and that the question of a railroad's profitability does not arise.

Mr. Parkinson : As my right hon. Friend knows, the estimated costs of the fast link escalated enormously. No one really knew what the final costs would be. The figure of £3.5 billion was really a guesstimate. Because of the uncertainty surrounding the nature of the ground, no one could be sure what would be the true cost of tunnelling. It could have been billions more than the £3.5 billion originally estimated. That is why British Rail and its partners reached the conclusion that, although they could confirm the line to Swanley, they should look for other less expensive ways of connecting from there to Waterloo and then on to King's Cross. They are now doing so. Although I agree with my right hon. Friend that the environment must be taken into consideration, I cannot agree that the cross-Channel link should be tunnelled under London regardless of cost.

Coming nearer to home, the north Kent lines, which are also important to my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath), are the subject of an announcement of specific orders for £257 million of new rolling stock in the modernisation of that whole network. While I cannot satisfy my right hon Friend on the fast link, I promise his constituents that their local lines are in the course of being substantially improved.

Mr. Ronnie Fearn (Southport) : I welcome the fact that British Rail is achieving its objectives, and also that it is attracting many more passengers--because that is what the statement says. However, is the Secretary of State aware that practically all its passengers travel in discomfort because of overcrowding? What steps will be taken immediately to introduce new rolling stock--and I mean immediately, rather than over the next three years that the right hon. Gentleman mentioned?

The statement also promises that there will be no large increases in fares but that there will be "modest" increases. Can the right hon. Gentleman elucidate on the meaning in that context of the word "modest"? Most of the travelling public would like to know. Also, is the Secretary of State aware that the northern regions need to know urgently what connections there will be between them and the Channel tunnel? When might we expect an announcement on that aspect?

Mr. Parkinson : The investment plans of £3.7 billion over the next three years include orders for a whole range of rolling stock. If the hon. Gentleman reads the press, as I know that he does, he will have learnt this morning of the

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announcement of another order valued at £350 million. In September, I announced a £257 million order for rolling stock. Our plans are being translated into action. As I mentioned earlier, we aim at modernising the rolling stock on the whole of the provincial network, and a substantial start has been made. The hon. Gentleman will see that for himself, if he looks around various provincial stations, as I do, and notices the new Sprinter trains on track.

British Rail has predicated its five-year plan on fare increases around and slightly above the rate of inflation. There are no plans for substantial increases above the rate of inflation. In some cases there are no plans for increases. In others, there are plans for substantial increases. The second year of the plan provides for substantial increases in the fares of long- distance commuters. We have made that announcement and there is no secret about that fact. The long-distance commuter is paying on average only a tiny proportion of the standard fare, yet travels at peak times. The long- term season ticket is too good a bargain, and that is why there will be increases in various sections-- [Interruption.] When I travelled to Brighton the other day, I shared a compartment with a passenger using a season ticket, and whereas I paid a return fare of £24.40, the season ticket holder was paying only £9.50--and agreed that he was enjoying a substantial bargain.

As to Channel tunnel links to the north of England, Sir Robert Reid's remarks have been much misunderstood. He said that, as announced, a service will be run from the regions to the Channel tunnel. However, at this stage we cannot forecast what the demand for it will be. The service will be increased if necessary, but if excessive provision is made it will be reduced. We are determined to give the regions proper access to the tunnel. The initial proposals represent a best guesstimate. If they need to be expanded, they will be expanded, but if they prove excessive, they will be reduced.

Mr. Terence L. Higgins (Worthing) : Does my right hon. Friend agree that the Government and British Rail should be congratulated on doubling the rate of investment in real terms since 1983 and on planning for a further 75 per cent. increase over the next three years? Will my right hon. Friend ensure that much of that investment is concentrated on rolling stock in the south-east, which is long overdue for renewal? Following the Clapham junction disaster, will my right hon. Friend give an assurance that finance will be made available for the rapid introduction of in-cab radio telephones, as there is some concern that that will not be done?

Mr. Parkinson : Yes, there are substantial programmes to increase expenditure on rolling stock in the south-east. I have made quite clear the Government's position on Hidden. The Government do not know, because British Rail is in the process of working it out, what the cost of implementing Hidden's recommendations will be. When British Rail has done that, it will discuss it with us. We made some provision in the public expenditure plans and we shall discuss further financing with BR. I have made it clear to the House, and repeated it categorically today, that safety will not in any way be compromised by a shortage of funds. The necessary funds will be available.

Mr. David Marshall (Glasgow, Shettleston) : Will the Secretary of State ensure that the necessary funds for safety are made available to ensure that all junctions with single-track lines are reconverted to dual- track lines so

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that accidents such as the one at Bellgrove in Glasgow never happen again? Will he instruct British Rail accordingly?

Mr. Parkinson : I cannot give the hon. Gentleman that assurance. Many pieces of single track up and down the country work successfully. The cost of changing them would be enormous, but if the hon. Gentleman has specific areas where he believes that there is a specific threat to safety, I should be happy to hear from him. In the main, single-track working works well.

Mr. Robert Adley (Christchurch) : May I apologise to you, Mr. Speaker, and to the House for having to leave immediately after asking my question to go to a Select Committee upstairs?

I welcome what my right hon. Friend said about the cost-benefit analysis. Does he accept that there is any relationship between the increase in complaints and the reduction in the public service obligation grant? Does he accept that the pursuit of efficiency must not be carried to the point where it undermines an essential public service? Does he ever think why efficient, prosperous and free-market West Germany spends three times as much taxpayers' money on its railways as we do?

Mr. Parkinson : I invite my hon. Friend to consider whether overcrowding has something to do with the fact that 25 per cent. more people are catching trains. I should have thought that their presence is the direct cause of overcrowding. That does not seem to suggest, as the Opposition attempt to suggest over and over again, that people are being priced off the line. Half the time the Opposition complain about people being priced off, but for the other half they complain about overcrowding.

My reply to my hon. Friend is no : the increase in the public service obligation grant has coincided with a substantial increase in other revenues. I hope that my hon. Friend is not suggesting that British Rail is not capable of cost saving or improving its efficiency, because that certainly is not the view of its management, who negotiated and accepted the objectives that I declared today. They are happy that they can meet them.

Mr. Tam Dalyell (Linlithgow) : What price tag is attached to the phrase, "no economising with safety"?

Mr. Parkinson : I have already explained to the House that we are unaware of the cost of implementing the recommendations of the Hidden report because costings are still being done. I gave British Rail the objective of reporting within three months, one month of which has passed. It will come back to me after that time. When we are aware of the size of the bill, we shall discuss how it is to be paid.

Sir Hector Monro (Dumfries) : I welcome my right hon. Friend's statement on investment, but does he accept that I am entirely unconvinced by British Rail's statement on the Channel tunnel link with the west coast of Scotland? Does he accept that we must have the facilities in place when the tunnel is opened or trade will never develop?

Mr. Parkinson : The problem with the west coast line is a passenger one. British Rail is not convinced that there will be sufficient passenger demand to travel from Glasgow to the continent by rail, simply because of the time

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involved. There will be many quicker ways of getting there. Proper provision will be made for freight to serve the west coast, because I realise that industry, especially round Glasgow, is extremely important. It appears that there will be not as much demand from passengers because of the time that it will take to complete the journey.

Dr. Dafydd Elis Thomas (Merionnydd Nant Conwy) : Will the Secretary of State clarify what he said in his letter to Sir Robert Reid about investment in local regional services, particularly where the level of return does not immediately meet the 80 per cent. increase in the asset base? He said that a cost-benefit analysis will be undertaken on social grounds and grounds beyond the straight economic criteria. Will he tell the House precisely what those grounds are and what he will be taking into consideration?

Mr. Parkinson : I recognised in my statement that subsidy will be a continuing feature of the existence of local Provincial services. We accept that, which is why the reduction in subsidy over the next three years is relatively modest. We expect that to be a continuing feature of the Provincial network. We recognise that there are wider social and economic reasons, especially in the provinces, for considering investment in services. Against that wider background, we shall therefore be prepared to consider the case for investment in the provinces.

Mr. Conal Gregory (York) : My right hon. Friend is to be congratulated by not only the users of British Rail but its many employees. As there are some 5,500 British Rail employees in my constituency of York, will he say why so far one significant omission from the objectives has been his plans for denationalisation? As they look forward to Santa's Christmas stocking, they should like to learn of the plans for that.

Furthermore, will my right hon. Friend say something about performance- related pay and the fact that British Rail has shifted the goal posts? Most hon. Members are conscious of the clock and are aware that "on time" means on time. British Rail has now fudged being on time from five minutes to 10 minutes late and related higher management pay to that. When can we return to accuracy and honesty with British Rail timetables?

Mr. Parkinson : As my predecessor made clear, the Government are considering whether and how denationalisation should take place. I must admit that that has not been a high priority for me since I arrived in my new job. It was made clear by my predecessor that it could not take place before the next Parliament and that that would be in at least three or four years' time. I have had rather more immediate problems to deal with, but the question is still on the agenda. I shall consider it and report to the House in due course. The new performance targets represent a tightening up and meet a request made by the Select Committee on Transport, which said that off-peak and peak periods should be distinguished. We have agreed an overall target for performance and a subsidiary target for peak-time performance. In the past, peak-time performance was obscured by the overall performance figures. The figures are more open than they have been before, and it will be possible more easily to monitor performance.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich) : How long does the Secretary of State imagine that the travelling

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public will take seriously someone who tells the Transport Select Committee that the roads are not capable of carrying a sufficient number of passengers and that, therefore, we must have an integrated service with railways and who talks about the need for environmental concern, but who increases fares and puts such squeezes on the finances of British Rail that it will find it exceedingly difficult to do any of the things that he has promised his electors?

Mr. Parkinson : I do not wish to take up the time of the House repeating myself, but last year we invested more money in British Rail than for 25 years. In the next three years, that will increase by 75 per cent. I know that that is very disappointing for the hon. Lady-- [Interruption.] A Labour Government invented the concept of the external financing limit. It may be new to the hon. Lady, but it is not new to us ; it was invented by her Government. Investment in British Rail is at an all-time high. The sooner she stops bad-mouthing it, the better will be the prospects for her constituents.

Mr. Keith Speed (Ashford) : Does my right hon. Friend accept that the commendable objectives that he has outlined today can be achieved only with a better trained, better motivated and better paid work force?

Mr. Parkinson : I thank my hon. Friend for the brevity of his question. It came as a pleasant surprise after listening to Opposition Members. I agree that that is at the heart of the matter. It is encouraging that management and unions are now discussing greater flexibility so that they can attract the quality of people that they need to man the system.

Mr. Nigel Spearing (Newham, South) : Is the Secretary of State aware that in the past four months a Minister of State at the Department of the Environment and the Minister for Public Transport have visited the north London link line for Stratford to Silvertown in north Woolwich in my constituency and that ever since then the quality of the service has taken a severe dive? Why does he insist on a percentage return on so-called book assets? Clearly that must prejudice the maintenance of property, facilities and equipment which would provide flexibility and reliability, and therefore increase the reliability of the service? Would not the removal of those facilities encourage deterioration and attack the morale of the staff who are the railways' biggest asset?

Mr. Parkinson : My hon. Friend the Minister is aware of the deterioration in the service on that line and has called for a special report on it. I must make it clear that he is convinced that his visit was not the start of the decline. Maintenance and investment in safety are not taken into account in seeking the rate of return. Safety is specifically excluded from any consideration of the rate of return on the assets.

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