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Mr. Freeman : I am glad to have the support of the hon. Member for Bradford, South (Mr. Cryer) on the business motion.The question whether British rail is allowed to borrow in the private market is not the central issue. It has that power today and borrows overdraft moneys from the private sector. It can borrow long term from the national loans fund because that is the cheapest form of gilt-edged borrowing. It is cheaper than borrowing in the market. I hope that the hon. Member for Kingston upon Hull, East can answer my question. If he cannot do so tonight, I shall write to him and seek his response in writing. The question is : if there was private sector borrowing of financing leases, which would be included in British Rail's balance sheet, would those be counted as public sector obligations and therefore controlled by the normal external financing limit rules?
Mr. Prescott : The Minister must be aware of the Commission's recommendations on this point. It has stated that railway companies must have a compatibility in their financial frameworks and technical competency. Like all other European railways, British Rail should be able to go to the private market for finance. The Minister is trying to change the structure of those public sector industries by adjusting the equity capital base so that he knows the true asset value. The Minister may have to make those changes, and that may involve joint venture projects. As the Minister knows, I have mentioned two or three different schemes in various speeches. More importantly, are the Government saying that they are not prepared to adopt or even to think about any of those alternative ways of raising money from the private sector? British Rail is prevented from raising that money at present because of Treasury rules with which no other European railway has to contend. Those are the constraints that I want to change. Are the Government not prepared to consider that possibility?
Mr. Freeman : The Government are anxious to promote--and do promote- -true joint venture projects with the private sector. There are many examples of that, ranging from the extension of the docklands light railway to the construction of toll bridges. The hon. Gentleman did not answer my question. I asked him specifically : if British Rail borrowed from the private sector and that debt was on its balance sheet, would the shadow Chief Secretary and shadow Chancellor count that as a public sector obligation? Yes or no? The hon. Gentleman cannot answer that question--
[Interruption.] The hon. Gentleman should answer the question--yes or no?
Mr. Prescott : It is not a matter of a strict yes or no-- [Hon. Members :-- "Answer the question."] Those who know anything about financing such matters know that it is a question of judging whether such expenditure is considered to be part of the borrowing requirements that the Treasury is obliged to finance. It is a question of interpretation. It is not necessary for some arrangements because if British Rail was privatised completely and wanted to borrow [Interruption.] Does the Minister want to listen, or is he content just to look around proudly? It is strange that an accountant should think that questions about the financing of British Rail can be answered with a straight yes or no, when the very body to which he has referred has produced 40-odd pages to explain it. That
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work has been carried out by the top 100 firms of accountants in this country. It is all there if the Minister wants to read the technical jargon. He could, of course, read what I stated in the document, "Moving into Europe", which deals with the financing of the channel tunnel link, and which his Department bought off me for £75.Mr. Freeman : I am afraid that the House is still not enlightened. Perhaps I can enlighten the hon. Gentleman. The report to which he has referred does not answer the question. That is why it is wrong--
Mr. Freeman : But the report does not seek to answer the question. That is why I am answering the question that the City and taxpayers will ask and which the hon. Gentleman cannot answer.
Let me make progress and answer some of the other points which have been made. My hon. Friend the Member for Christchurch asked for a clear statement on the role of the railways. I am glad to repeat on behalf of my right hon. and learned Friend the Secretary of State that we believe that rail has an important role to play in this decade, in not only relieving congestion on the roads but moving the freight of industry. It is a vital artery for the movement of our products abroad through the channel tunnel. We believe that rail has a most important part to play.
My hon. Friend raised the investment appraisal regime. Now is not the time to go into the detail of the pros and cons of the present system of appraising rail investment projects versus road investment. The Department will publish shortly an academic paper which will explain how the present procedure works and why it is not possible to compare road investment programmes directly with rail investment programmes. I hope that the paper will help my hon. Friend. If we appraised road investment on a cost-benefit basis and appraised rail investment on exactly the same basis, what would happen? We would substantially increase the amount of road building. That is not what my hon. Friend wants and, I suspect, not what the House wants. At the end of the day, the balance between road and rail investment is a matter of ministerial judgment. For the next three years, as my right hon. and learned Friend has already announced, the balance is clearly on the side of rail investment. In the next three years, it is possible that British Rail, London Underground and light rapid transit systems will invest more than the total investment in the trunk road programme in England for the first time in 25 years.
Mr. Snape : On the Minister's last point, is he telling us that, if the notional value of the time saved by every public transport passenger was treated in exactly the same way as the notional value of the time saved by every car driver, we would still spend far more on roads than railways? Mr. Freeman : The straight answer is yes. When one evaluates road investment, one evaluates both user and non-user benefits. One seeks to ascribe to all motorists benefits in speedier journeys. The plain fact is that, if one appraised rail investment on exactly the same basis as we presently appraise roads and ignored the fare contribution by passengers, we would build more roads.
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Mr. Adley : Will my hon. Friend give way?
Mr. Freeman : If my hon. Friend will permit me, I will answer the points that he made in the debate before I give way. That will be the last time that I give way, because the House is anxious to make progress. [Hon. Members :-- "No."] At least the House is anxious to make progress so that I can deal with the other relevant points that were raised.
My hon. Friend the Member for Christchurch drew a distinction between the various sectors of British Rail and the different competitive forces that act on it. He was right to do so. The competitive pressures on InterCity are great. It faces competition not only from aircraft but from long- distance coaches and cars. Network SouthEast is virtually a monopoly and the competitive forces are different. If one seeks to create competitive pressures on British Rail, one must think about different solutions for different sectors. It may be difficult, if not impossible, to introduce competitive pressures on a mass transit railway such as Network SouthEast. Yet for InterCity, it is important to appreciate that there are healthy pressures on it as an operation.
My hon. Friend also asked me about the citizens charter and its relevance to rail transport. He will have to await the publication of the citizens charter in due course, but we and British Rail accept the importance of improving the quality of information available to passengers, the accountability of management, the reward for good performance by management, redress procedures and, indeed, compensation.
Mr. Adley : My hon. Friend's officials will have told him, as they have told all his predecessors, that it is not possible to establish an honest and fair comparison of the true costs of rail and road. Why do the German Government seem to have found no difficulty in doing that? The Government railway commission set up by Chancellor Kohl is specifically charged with bringing out all the facts of this matter, so that German politicians can make decisions based on honest and straightforward comparisons.
Mr. Freeman : I, too, have talked to officials and politicians in Germany about this. They are very worried about the parlous financial state of the German railways' excessive debt structure and about the sizeable subsidy, which is much larger than ours. Part of the remit of the commission is to determine whether it can emulate the experience of other countries, including our own.
The hon. Member for Coventry, North-East (Mr. Hughes) read a speech about the disabled, which I shall study and discuss with officials responsible for our disablement unit. Our public transportation leads Europe in what we do for the disabled. It is not good enough yet, but we have a good record. I shall write to the hon. Gentleman after I have studied his speech and taken advice on it.
I am grateful to my hon. Friend the Member for York (Mr. Gregory) for reminding the House of the investment record--£800 million in the year just ended, and about £1 billion for the year just begun. It is useful to remember that British Rail already compensates people in certain circumstances. Under its ex gratia scheme, £2.5 million a year in cash and vouchers for rail journeys is paid out, and £4 million a year is spent on extending season tickets.
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I apologise for missing the speech by the hon. Member for Berwick-upon-Tweed (Mr. Beith). He and the hon. Member for West Bromwich, East (Mr. Snape) asked me to deal with the public service obligation. We do not agree with the CTCC's argument that the PSO can be disaggregated into line-specific grants. It is a grant made in aggregate for a level of service provided by the supported sectors, Network SouthEast and the regional railways. We measure it using the best available yardstick, which is the number of train miles run. I accept that that means that British Rail can vary the level of service on some lines--it can reduce services if there is a lack of demand, but, as my right hon. and learned Friend said, it sometimes increases services too.My hon. Friend the Member for Dulwich (Mr. Bowden) advanced arguments for the Ove Arup route which I well understand. The Government will take decisions as soon as possible on the right route to recommend for further consideration. King's Cross is not a buffer station, and whichever route is chosen to come into King's Cross it is intended to run services beyond King's Cross to the north, up the east and west coast main lines.
The hon. Member for Pontypridd (Dr. Howells) talked about running buses to supplement rail services--an interesting and constructive point on which I shall reflect. If it is impossible for legal reasons for British Rail to offer such bus services, I shall pursue the matter further.
My hon. Friend the Member for Harrow, East (Mr. Dykes), who is not in his place, mentioned the length of time taken to reach a decision on the channel tunnel rail link. But the hon. Member for Kingston upon Hull, East is arguing the case for another six months in a new Parliament to reach a final decision on the link. The Government, taking the matter more seriously, will try to reach a decision as quickly as possible, and we shall certainly not defer it for as long as the hon. Gentleman implied.
The hon. Member for Denton and Reddish (Mr. Bennett) referred to the Guide Bridge terminal. I shall repeat the assurance that I have already given him. I understand the significance for British Rail of making a decision between Stafford Park and Guide Bridge, and I repeat what my right hon. and learned Friend said--the decision will be taken by BR by the summer. I shall be visiting Manchester later in the summer, and I am sure that a decision will have been taken by then. I was not aware of the sleeper train problem, but I shall look into the matter and perhaps even use the service myself. I shall examine the problems raised by the hon. Member on behalf of himself and his colleagues and write to him.
The hon. Member for Torfaen (Mr. Murphy) implied that the reorganisation of British Rail into business sectors was aimed at fattening up British Rail for privatisation. He is wrong. The process was begun by the first Bob Reid in the early 1980s, and it has been continued logically by the present chairman. The reorganisation of British Rail is inconsistent with some of the forms of privatisation suggested for British Rail. The Government have not yet reached a decision on the timing or the form of privatisation but the reorganisation is not tied up with privatisation.
The hon. Member for Bradford, South raised a number of points, and I shall deal briefly with the most important, Bradford
electrification. We provided £26 million resource cover for the infrastructure on the assumption that the
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West Yorkshire passenger transport authority would be happy to proceed with leasing. For understandable reasons, it chose not to run the risk that, when the stock was bought, the lease would be classified as debt. Because there was a slight risk of that, it preferred, although there would be a delay, to seek the credit approval route. I understand that there may be an increase in the cost of the rolling stock, and I shall take that into account. I hope that there will not be. I hope that the tender price will be extended to October. I am prepared to consider the balance between trading and non-trading credit approval for the balance of the rolling stock, which I hope that the West Yorkshire PTA will be able to proceed with.Mr. Cryer : When will the Minister tell the West Yorkshire PTA when he will make a decision about the rolling stock? As he knows, with the question mark over leasing, it is important for the PTA to know when it can go ahead. It has already incurred almost £200,000-worth of design expenditure for the electrification scheme, and it always seems to be hanging in the balance. It wants certainty pretty soon. Furthermore, the sooner that it can get cracking, the sooner the scheme can be completed and put into operation.
Mr. Freeman : I have already told the West Yorkshire PTA that I cannot give it any assurances until the public expenditure survey round is completed, and that comes to fruition at the time of the autumn statement in the first week in November. I can do nothing about that timetable.
The hon. Member for West Bromwich, East asked about the public service obligation grant. This was increased to £600 million in 1990-91. It was up to £100 million in the year. This year, it will be at least £775 million. If the hon. Gentleman had read the summer supplementary estimate, he would have seen provision for an increase in the PSO. It may be higher. The balance of the division of the increase in the external financing limit between the PSO and debt has not been decided. It depends on agreement between BR and the Government. We are prepared to increase the PSO where that is justified. As we have made clear over the past six months, Network SouthEast's PSO is a target. It will be extremely difficult to achieve break-even by March 1993. Therefore, my right hon. and learned Friend, in the context of this year's autumn statement and as settlement of the internal finance round for the next three years with British Rail, will discuss with British Rail what is a realistic target. If changes have to be made, they will be made.
Mr. Prescott : There is no point in saying that we must wait for the public expenditure round, because the Secretary of State changed that a few weeks ago by going for the extra money.
Some of what has been said today is to be welcomed and shows a serious approach to the problem. However, can I press the Minister on an issue that is important to both sides of the House? He said that the Opposition had claimed that the review of the channel tunnel plans would lead to a delay. That is a bit cheeky, because, when we advocated that all the routes should be looked at before a decision was reached, the previous Secretary of State said that that would cause a delay, so he would not do it. However, now there is to be a review. It is important that the reports on the review are made available so that we
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understand the judgments. We reserve the right to look at the judgments, because there has been a great deal of controversy about the cost structures involved.Will the Secretary of State make a statement before the House rises for the summer recess on the channel tunnel investment? Am I correct in believing that at the Association of Metropolitan Authorities conference, which the Minister and I attended, the hon. Gentleman said that the environmental assessment of the route would take the best part of two or three years, and that the Government would not have to make a decision before then? If that is so, a six-month review within that period is not such a big deal, especially if we get the decision right.
Mr. Freeman : The hon. Gentleman did not listen to what I said at the conference. I cannot give him the assurance that my right hon. and learned Friend will make a statement before the end of July. It is important to get the decision right. I said at the conference that the environmental impact assessment of the western portion of the route would take about a year. An environmental impact assessment can be written only when we know which route we are assessing. The hon. Gentleman withdrew the earlier Labour party support that the newspapers thought it was giving for the route through Stratford. The hon. Gentleman reserved his position on all the preferred routes, which is to be welcomed, as it shows that he has an open mind.
Sir Philip Goodhart : On the question of rail freight and the channel tunnel, I know that my hon. Friend is aware of the problems that face my constituents ; indeed, he has taken a great deal of trouble in considering them. The impact for my constituents will come as soon as the channel tunnel is opened. Under current arrangements, much of the rail freight is due to rumble over the already congested lines through my constituency. Has British Rail carried out a proper survey of the length of line between Tonbridge and Reading, which would provide an alternative route for a great deal of the freight?
Mr. Freeman : British Rail is well aware of the Tonbridge-Reading route for freight. When a decision is taken on which preferred route to recommend for further study, including planning permission, the transportation of freight will be an important consideration that my right hon. and learned Friend and his colleagues will take into account.
I commend the Bill to the House. The Conservative party has the right policies for railways. We have clearly declared our policy for transferring more freight from road to rail, and we have confirmed the emphasis that we are placing on combined transport. We have said that we want to end BR's monopoly over both passenger and freight services. We have policies for the privatisation of British Rail, and they are supported by even more of the electorate than was evident six or 12 months ago. We welcome that support.
We have a massive investment programme, which I have outlined tonight. Some £500 million per year was spent by the Labour party when it was in government in the 1970s, but expenditure is now running at £1 billion per year--a substantial increase.
Mr. Cryer : The Minister said that the Government want to transfer freight from road to rail whenever
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possible. What does he think about British Rail's policy on Speedlink, and is it not ironic that the demise of Speedlink comes just as we are having this debate?Mr. Freeman : The hon. Gentleman's point is a fitting one on which to end, because the attitude to Speedlink separates the parties. Speedlink, with a revenue of £45 million this year, would have lost £40 million-- [Interruption.] It was £30 million last year, and it would have been £40 million this year. Speedlink was a service intended to take single wagons from terminals through marshalling yards to other destinations. It was a service more appropriate to the 1950s than to the 1990s--similar to the ideology of some Labour Members. British Rail must now convert that freight into train load freight, which is much more competitive than road freight. I am glad to tell the hon. Gentleman that 70 per cent. of the Speedlink services have been converted into train load
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profitable freight. That reflects not only British Rail's positive attitude, but the Government's positive attitude towards rail. I commend the Bill to the House.Question put and agreed to.
Bill accordingly read a Second time.
Bill committed to a Committee of the whole House.-- [Mr. Wood.] Further proceedings postponed pursuant to Order[5 July]
BRITISH RAILWAYS BOARD (FINANCE) BILL [MONEY] Queen's Recommendation having been signified--
Resolved,
That, for the purposes of any Act resulting from British Railways Board (Finance) Bill, it is expedient to authorise any increase in the sums payable under any other enactment out of or into the National Loans Fund or the Consolidated Fund, being an increase attributable to any provision of the Act increasing the limit in section 42(6) of the Transport Act 1968 to £3,000 million or such greater sum not exceeding £5,000 million as the Secretary of State may by order specify.-- [Mr. Wood.]
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British Railways Board (Finance) BillPostponed proceedings resumed.
Bill immediately considered in Committee pursuant to Order this day.
[Miss Betty Boothroyd
in the Chair ]
Clause 1
Increased borrowing limit forBritish Railways Board
Question proposed, That the clause stand part of the Bill. 10.26 pm
Mr. Nigel Spearing (Newham, South) : In the past few hours the House has enjoyed a wide-ranging debate on part of our national heritage--our railways. I am pleased to see the Secretary of State and even more pleased to see the Minister for Public Transport who has been present for nearly all the proceedings and who,
characteristically, always gives a good parliamentary reply. Britain's railways are owned by the public and, in the end, accountability for their operation and investment in their infrastructure and equipment finishes here. In that cause, we are being asked considerably to increase British Rail's borrowing limits. It is no secret that the Bill has come as something of a surprise to the Government and to the public.
There has been much controversy about British Rail's funding and the extent to which it has so far relied on the sale of real estate. I understand that the crisis has come about not because of a reduction in traffic or in estimated revenue from the rail business, but as a result of a turn down in the income from real estate, something which it shares, alas, with the health service. We can hardly oppose the investment which will arise from the clause--at least I cannot--but there are many questions to be asked about the quality of management and, in particular, the structure that the Government place around the management.
I am sorry to see the Secretary of State leaving, because I particularly want to refer to his recent speech. But if he is not able to be present perhaps we can pursue the matter in
correspondence.
It is essential that the House has confidence in the investment. We are now authorising money as if we were shareholders of a firm. I want to put before the House some reasons why we should not invest that money without asking some severe questions.
Some of those questions relate to management and some to the Government. I must confess that it is sometimes difficult to establish where the boundary between them lies. Even the Minister may not know, because such decisions have taken place over several years, long before he took up his present office.
The first matter that I wish to raise--this is why the Secretary of State's departure is unfortunate--is the claim that the Government are now changing direction and emphasising and looking to freight. I did not get that message from the Secretary of State's speech today. I understood the Secretary of State's speech to be about the British Rail monopoly, as he called it, and the means of breaking a monopoly, which I do not believe exists. Nowhere, except in London for commuters and for
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specialised traffic such as post--that is not a monopoly--does British Rail have a monopoly. The Secretary of State talked, as far as I understood it, about permitting different types of operator to operate trains or services over British Rail track in a way not carried out before. I see the Minister nodding. Has he not heard of Foster Yeoman? Its operation is well known and may be controversial. I see no distinction between what Foster Yeoman is doing and what the Secretary of State purported to want.10.30 pm
My hon. Friend the Member for Bradford, South (Mr. Cryer) asked the Secretary of State about the fate of Speedlink. The Minister of State said, using British Rail statistics which may be right--let us hope that they are better than British Rail's timekeeping--that 70 per cent. of Speedlink is retained. He said that the system had been changed to whole trains. Axing Speedlink, which was as easy to remember as a label as InterCity, sends out the wrong signal. At the very time at which the Secretary of State says, "Let us transfer freight to the railways", Speedlink is axed.
If 70 per cent. of Speedlink is being retained--I hope that it is--surely there should be an announcement that from now on, Speedlink will be confined to full trainloads, which may come under a different business division, but which will keep the same brand names although wagons will no longer be collected from private sidings. There would have been relatively little fuss. Either the Government or the management have kicked themselves in the teeth.
Mr. Cryer : The Minister talked about 70 per cent. of Speedlink being retained in full trainloads. He did not say what was happening in rural areas, such as Cornwall or in Scotland. He did not say how many extra wagonloads will be put on to the roads in the areas in which trainloads are most likely to be rare--that is, in the very rural areas in which the roads are too narrow and restricted adequately to carry any increase in lorryloads.
Mr. Spearing : I am grateful to my hon. Friend. The estimated cost of collecting wagons and taking them into marshalling yards or into full trains may not be the real cost. The Minister is an accountant and he knows that one can do all sorts of things with figures and produce all sorts of results which are difficult to challenge, but not difficult to create.
As the Minister says, we are investing in freight. The history of cross- channel freight is extraordinary. We have known that there will be a channel link, whatever its merits, for the five or six years since the direct decision was taken in Canterbury. Even today, as was instanced by the exchange between my hon. Friend the Member for Bradford, South and the Minister, British Rail has not designated the locations of its freight depots or villages, although it may have suggested broadly the areas in which the depots will be. My information is that British Rail is conducting a Dutch auction. It is trying to get various public and private bodies to put up money for the investment required. As usual, British Rail wants to carry out the work with the lowest amount possible from the public purse, which has meant a delay in the timetable.
Boardrooms are deciding now what to do about transport. Every hon. Member has received a glossy publication advocating the great cross-channel freightway.
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British Rail has not said where the freight collection centres will be. I do not know whether that is the responsibility of the Government or of the management. However, it must be a combination of both, or one or the other. Is that the sort of management in which we can have confidence? I suggest that a big question mark lies over both intranational and international freight.Only today, I heard a report that a plant supplying BR with some 700 tonnes of liquid a week in seven bogey wagons--I will not name the plant, because I must check the facts--can no longer send it by rail. BR says that that the cost of sending the locomotive to take the train out of the depot, no doubt paid by the public, is too great, and that the cargo must be sent by road in future. As I have said, I will not name the plant, but I shall talk to the Minister about it. The circumstances are not even the same as those applying to Speedlink. Although seven wagons may not sound very many, 700 tonnes of liquid is about double the weight carried by a typical InterCity passenger train. If the report is true, the management must give some reason for the decision. It may be said that this is an extraordinary development, given that Government policy is moving in the opposite direction, but I have enough experience of British Rail management to know that such extraordinary things do happen.
I am not a wholehearted admirer of traditional British Rail management ; there is always room for improvement. Management has not been adventurous enough in certain respects, and has been illogical in others. That does not mean, however, that the current changes are necessarily right.
Last week, Sir Bob Reid--as distinct from Sir Robert Reid--was examined by the Select Committee on Transport. He admitted that the day trains north of London would not be ready in time for the opening of the channel tunnel. Let me give a cricket commentator's welcome to the arrival of the Secretary of State, who has just returned to the Chamber. That admission needs some explanation : it is down to either the Government or BR's management, and at some stage the Committee will need to know the details. The time flow-- as it is called in business--for creating the tunnel is far longer than that for creating rolling stock.
What is even worse is that Sir Bob had to admit--I was sitting at the back, but I believe that I heard him correctly--that the sleeper trains north of London, and those operating from London, would not be ready in time either. He also said--an extraordinary statement, coming from a railwayman--that the bulk of the sleeper traffic would come from north of London anyway. I find that hard to credit : London and the south-east have a huge market for sleeper trains to Rome, the alps and the French riviera, not to mention Brussels. I should have thought that the London area would provide a very good ready market for sleeper trains travelling all over the Continent. That, too, does not fill me with confidence in the management.
The Minister mentioned Heathrow. Anyone who has attended railway debates here will be astonished at the amount of time devoted to the Heathrow Express Railway (No. 2) Bill. What was the objection ? There was not enough railway. Proper junctions with Southern and Western region, enabling InterCity to run trains from all
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parts of Britain--or allowing a fast inter- urban Network SouthEast service to operate--are not being provided. The line is being installed not as a proper railway to serve Heathrow, but as a rail shuttle for central London. This is not a railway plan in the classical sense of the term. Mr Hudson, or whatever his name was, would have done better in York 150 years ago : he had more vision then than the Government have today. The Government do not appear to have much vision in that respect.The Minister referred to crossrail, which we all welcome. However, it only duplicates what the Metropolitan railway did over 100 years ago. A little- known fact is that Liverpool Street was linked to the Metropolitan. The services stopped around 1890. The traffic went all the way through to Paddington, so it is not a new concept. So far, the plan is not to use the continental gauge, despite the great open spaces of Brunel's Great Western Railway main line that could be linked to it, were it to be built to that gauge.
I turn to our Adjournment debate on 7 June last, concerning reorganisation. The investment of money in stock and people depends on the efficiency of British Rail's organisation. I shall not rehearse that debate in full. The courteous Minister said that the Opposition are wedded to the idea that what is good for British Rail is good for everybody but that the Government believe in reorganising British Rail to serve the needs of the traveller. On the face of it, that appears to have merit. I am not convinced, however, that traditionally, British Rail's management has served the needs of the traveller.
Tonight the Minister for Public Transport said that the separation of the business into separate businesses has been under consideration for about 10 years and that Sir Robert Reid, mark 1, began to introduce it. If the so- called organisation for quality programme had been known in 1981 or 1982, I do not think that it would have got very far. It contains very good elements, but it ought not to be taken too far. If one travels from King's Cross to Doncaster or from St. Pancras to Kettering, one wants certain facilities to be provided. InterCity Ltd., as it used to be, from Cardiff to Paddington, was taken over and became a brand image--rather like Pulman. People knew what they were getting. If a train is on time and properly rostered, there is nothing wrong with that. It is a good marketing technique. But to take a much bigger step is something which I question.
I hope that Sir Bob Reid will find my oil industry example to be appropriate in this context. Oil business money comes mainly from bulk users of fuel in factories, garages and industry. That does not mean, however, that one puts skilled marketing men in charge of an oil refinery. Petrochemical engineers are the people who have to work it. One has to blend the experience of the technicians who run the refinery with the marketing skills of those who have to sell the fuel. Up to a point, that is what InterCity and the suburban railways did.
For Sir Bob Reid to tell the Select Committee last week that British Rail intended to have seven distinct businesses that would make a nonsense of the old geographical distribution of the railway network and that it would create within those seven businesses 30 profit centres is going far too far and is creating tensions and difficulties that otherwise would not exist. That was all aired in the debate on 7 June and was put to Sir Bob mark II in the hearing before the Select Committee last week. "Ah" said Sir Bob, "Now we will have single responsibility instead of
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the matrix." That matrix is the double layer of management that has caused some difficulty. It has caused difficulty because it has been taken too far. Now, it is being taken to extraordinary lengths. Again, I dealt with that in the debate on 7 June and I shall not enlarge upon it now.10.45 pm
The railway is now having its coherent operation disrupted. A railway consists of the skills of civil engineers, telecom and signal men, the design and supply of mechanical engineering stock, the maintenance of that stock and the running of the stock by crews. It is a complex operation, usually spread over many hundreds of miles and running 24 hours a day among a shifting group of people. To smash up the historic organisation of our mainlines and pretend that one can share King's Cross between two different businesses--or, as I explained in the Adjournment debate, in the case of Stratford, two railway divisions and six profit centres--is asking for trouble. We have trouble. Experienced railway men who will not be brow beaten by the dangling of promotion prospects--we all know how important promotion prospects are in public life--have created internal problems in the management of British Rail. Those problems have been well ventilated in the Sunday press and were covered in an article in The Independent on Sunday last week.
I ask myself what analogues there are in the world for the investment that we are about to approve and for such a novel means of railway operation. I have scanned all the railway literature from Mr. Welsby and Sir Robert Reid and I find no voluntary announcement of any analogue to this remarkable managerial revolution. The only one that I can think of, in a semi-amateur way, is the United States. In the United States railway investment is in the hands of private enterprise, but it is co-ordinated by the inter-state commerce commission. That has always been the case because the federal Government believe that proper investment in the railways and federal supervision are necessary for the nation's economy.
There are many different railways and different users hiring trains or using railways over enormous distances. They probably run a train a day or perhaps two a week. I suppose that Amtrak is something like InterCity, perhaps running one or two trains a day or two trains a week over different tracks. That is a distinct business, although it is heavily subsidised by the federal Government.
If that is the only example that anyone can dredge up, it is not an analogue at all because of the intense operation of British Rail over a small area relative to the United States. We do not know whether the Government will proceed to privatisation, because it depends on the outcome of the next general election. However, if they do and if the new reorganisation in which we are putting money tonight is in place and is not working well--let us hope that my fears are wrong--we will have scrambled the eggs. It will be difficult to alter the proposals that will result in changes in the coming months. It is no use the Minister thinking that that can be stopped, because it has been prepacked, people are in place, equipment has been bought and offices and posts have been offered and accepted.
I have grave doubts about the receptacles into which we are pouring investment. We all want that investment, but the Government's track record on the railways does not inspire confidence. BR's management structure, as approved by the Government and defended by Sir Bob
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and his friends, is market oriented. Markets are important, but should they overcome the technical and logical necessities of a complex operation such as a railway? I would say not. The optimum combination of both is important, but alas, we do not have that.Mr. Gregory : In speaking to this crucial clause, I should like to comment on how property will be affected.
The Bill raises the ceiling of the borrowing ability of the British Railways Board. It is interesting to explore whether the Bill's provisions on property sales are necessary. Last year, property sales and lettings amounted to £223 million, which, sadly, was down from £412 million. Revenue from property sales and development premiums fell a staggering 60 per cent. to £121 million.
I find it strange that only one new office project--in St. Albans--was started last year. One wonders what British Rail's property board was up to and whether it was gainfully employed. Station trading, which it organised, rose only 6 per cent. to £31.1 million, which was pretty pathetic compared with the good results of other parts of the high street network. If the Committee agrees to increase the board's borrowing ability, will station trading, improve?
I am pleased that traders invested £3.5 million in modernising station retail and catering outlets last year. That is the right approach--a joint partnership. I should have liked the clause to provide for greater participation, but, as no amendment was tabled, it would be inappropriate to suggest such a change. It is unfortunate that we have not had such an opportunity. It is right to mention that and I hope that my hon. Friend the Minister will respond to it. More property developments and joint participation will lead to an improvement in British Rail because it will become more customer-oriented and because there will be less pressure on the public purse.
Mr. Malcolm Bruce (Gordon) : We are being asked to sanction a significant increase in expenditure on British Rail, but will extra investment be made in areas that have not received it in recent years or in areas where it has been inadequate?
I make no apology for the fact that I shall plead for Scotland and especially for the north of Scotland where we are extremely worried about whether the rail network will survive at all in view of the way in which it has been treated by British Rail in the past few years. I have listened to many debates on railways and I have heard some hon. Members bleat and complain about the poverty of their service, but they do not know how lucky they are. In terms of quality, speed and efficiency the service to the north of Scotland was substantially better 120 years ago than it is today. The same could be said for the volume of the service, although the reason for that is more understandable. However, that is not proof of a commitment to quality or investment.
One relevant factor that I have tried to persuade Sir Bob Reid that he should be more apprised of than most people is the fact that it has traditionally been accepted from the day the line was laid that the east coast main line ran from London to Aberdeen. It no longer does so ; it effectively terminates at Edinburgh where the electrification of the line finishes. I have had some extraordinary exchanges with British Rail about the implications of that fact. I have been told, for example, that the electrification
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of the line between Edinburgh and Aberdeen would make no noticeable difference to the service. If that were true, why have we spent so much money on electrifying the line between London and Edinburgh? It is a preposterous proposition. It is true that the speed of the journey was significantly less a hundred years ago than it is today and that electrification will add to the journey time from Aberdeen to London.There is now one sleeper from Aberdeen to London and, in my view, it starts in the middle of the afternoon. How many people want to take a sleeper at 9.20 pm? The last sleeper to the north leaves at 10.5 pm. I cannot believe that it is impossible to provide a sleeper that meets the public's needs. The timing is, of course, deliberate. It is timed to leave when no one wants to use it ; British Rail say that there is no demand and so it is cancelled.
We are told that it is a matter for British Rail--if it can establish a scheme that brings a return of 8 per cent. on investment, all to the good. That is a matter of opinion. Independent, non-railway people have shown a better rate of return than British Rail, but the question is whether we provide a service to main centres. If the returns had been the only criteria, one wonders whether the lines to the north of Scotland would have been built. People had more vision in earlier times than they do today. Such investment as has been made in Scotland has been a considerable embarrassment to British Rail. It has introduced super new sprinter trains and express trains. They are wonderful when the doors stay shut and when the carriages stay coupled, but it is a lottery to drive such a train, because one is never sure what will go wrong. We were told that the great thing about the new sprinter trains was that they had a compartment for two bicycles. Unfortunately, the European Community introduced hygiene regulations which meant that it was no longer possible to serve sandwiches in the existing conditions. British Rail decided that the way to solve the problem was to prohibit bicycles and to install extra refrigeration facilities for sandwiches. I am pleased to say that a sustained campaign by the cycling community in Scotland has forced British Rail to reverse that policy, although, presumably, there will now be no sandwiches. It would be hilarious if it were not a serious indictment of the quality of service that is supposed to be provided.
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