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Mr. Prescott : Let me make it clear that I did not receive the document.
Sir Harold Walker (Doncaster, Central) : Further to the point of order, Madam Speaker, and with the greatest respect, I very much appreciate your ruling, but would it not have been better had the Secretary of State responded to it? As I understand it, we are having a debate during the course of which there may well be reference to a document that is available but copies of which have been denied to most hon. Members. That is an intolerable state of affairs.
Madam Speaker : I am grateful for the right hon. Gentleman's support.
Mr. MacGregor : Further to the point of order, Madam Speaker. I am trying to oblige the House. We accelerated the production of the report so that it would be available as quickly as possible. I wish to make it clear that the debate is not just about that report, although I intended to refer to it in my speech. If it would assist the House, I should be perfectly happy to allow the report to be made available immediately and will give instructions to that effect. I was simply trying to follow normal form. As you, Madam Speaker, know--from all my time as Leader of the House--I am always happy to try to oblige the House.
Madam Speaker : I am much obliged to the right hon. Gentleman. The report should now be made available to all hon. Members.
Mr. Prescott : For the record, let me make it clear to the Secretary of State that I telephoned his Department assuming that there might be a statement on the matter. When I inquired, at 1.10 pm, whether there would be a statement on the health and safety report, I was told that there would not. I then asked whether the right hon. Gentleman's officials could provide me with a copy and was told that copies would be made available, not at the normal time of 3 pm, but when the Secretary of State had finished speaking. I explained that that made it difficult for me to assess the report in time for the debate. I have to tell the Secretary of State that my copy never arrived. I do not have it, even though I continued to make inquiries until the last minute. I do not think that the House will appreciate the way in which the Secretary of State has handled this matter, even though I am glad that he now proposes to make copies available. I also note that the right hon. Gentleman waited until after he had given his evidence to the Select Committee that is considering the privatisation of railways. He could have been courteous enough to release the report so that the Select Committee could question him on that matter. I think that we all know what the Secretary of State is at : he does not want anybody to have access to a report that will enable him or her to make an assessment on the critical question of safety. That is the conclusion that the House is bound to draw.
Mr. Peter Bottomley : That is a slightly grudging response to the Secretary of State, who has met the wishes
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of the House. Most of the hon. Gentleman's speech has been a good sign that the "Clintonisation" of the Labour party should not spoil it.Mr. Prescott : I thought that we were debating the serious matter of what Britain will do with its railway industries. Conservative Members may think that it is a laughing matter, but it is not a laughing matter to the thousands of railway workers and passengers in the United Kingdom. The question of how politicians will play their part in improving our railway system is a serious matter. That is what people expect of us. I am seriously trying to say--not in an ideological way--how the railway system can be improved.
The 14 years of the Tory railway system has been a bad record, and it is there for people to see. The Tory Government started by thinking that they could control the whole railway system by a financial framework. Of course, that has meant that fewer resources were available to British railways. Railway systems abroad, which are of a higher quality, are paid subsidies which are two to three times the amount that our system receives.
We have gone through an obsessive amount of management changes to prepare for profit centres. The Hidden inquiry made it absolutely clear that managers were exhausted by reorganisation and should not be subjected to more. British Rail have made it clear that £1 billion is the minimum investment which is needed for the next ten years. To be honest, neither political Governments have provided enough investment in the railway system, and I have made that point constantly. We must develop a long-term plan for the railways with adequate financial investment.
The railways are not as safe as they were before, and the quality of service has deteriorated. I do not have time to quote from the report. However, I refer hon. Members to the statement that has been made by the passenger bodies today which makes it clear that there will be a serious cut back in railway services simply because inadequate financial investment is available.
I shall now look at the freight industry. In the past few years, the Government have made about £60 million available for section 8 grants to encourage freight to go from road to rail. As a result of the closure of freight by the Government, we now have a policy of forcing companies to move freight from rail to road. The latest statements from two cement manufacturers, West Country Drinks, Highland Light Oil Traffic and Privatised Steel say that the amount of traffic that is being forced on the road is the equivalent of half a million lorries. To take freight off the railways and put it on the road is not a good way to run the railway system. The requirement simply for a financial rate of return on rail freight characterises the whole nature of our railway system.
Our manufacturing industry is in collapse because we have not invested sufficiently in it. The manufacturing industry made it clear that 30,000 jobs are at stake. That is precisely the figure that we are talking about in the mining industry. We should get equally angry about the consequences for our manufacturing industry of job losses. If hon. Members say that there is not an efficient railway system, I refer them to the Financial Times analysis of all the European railway systems. That report confirmed a study done ten years ago which showed that British rail has a level of efficiency--the amount of
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manpower as against the productivity of the service--which is as high as the two or three most efficient railways systems in Europe. That shows that British Rail has a good level of efficiency, whatever the argument.The trouble is that we do not have enough resources to maintain the quality of the system. The British rail system has one of the highest levels of efficiency in Europe. So the argument cannot be about labour or efficiency. I hope that no one will make that argument, because, clearly, the evidence is against it. The Labour party's argument is that we need an alternative railway system.
We believe that the railway system should be publicly owned for very good reasons. First, every good, successful railway system in Europe is publicly owned. I do not see any reason why we should not be able to emulate that system. Secondly, it is necessary to maintain social services, as is recognised in Europe. The profitable services can maintain the less profitable services. It is called cross-subsidisation, and is an essential principle in transport. During the early stages of privatisation, I remember that many Conservative Members said that cross-subsidisation was nonsense. However, cross-subsidisation is an essential part of any bus, rail, or air transport system if a network service is to be maintained. A publicly owned system is better for the environment as it is in the interests of the environment to subsidise the transfer of freight from road to rail. That is what the section 8 grants were about. The scale of investment is considerable. The investment figure for the west coast line is more than £1 billion. No private entrepreneur will be able to provide that kind of money. The channel tunnel rail link amounts to £3 billion or £4 billion. There could be a combination of public and private money. However, the private sector will not participate without some guarantee from the public sector. That is the reality of financing that kind of investment. Safety is improved by through ticketing. The Hidden report said that there should be a strong, central chain of command for a good, safe system. If many operators are responsible for different safety aspects, that is not the way to introduce a good, safe system. Through ticketing was one of the first things to go to the wall when the bus companies were privatised.
We should also bear in mind that private companies will not want to maintain railcard provision for pensioners. Private companies will simply want to maximise revenue. They will not be interested in the bureaucratic complications of maintaining railcard systems that occur naturally in a publicly owned system.
If the Secretary of State is arguing for private involvement, he should bear in mind that there has been a history of private involvement in a publicly owned railway system in respect of consultation and joint public and private deals. Management have brought in people from the private sector.
It seems that certain routes might be the standard bearers for privatisation. If the Secretary of State wants to experiment on the Chiltern or Southend lines, I hope that he will give the public sector management a chance to compete and to show how good they are. He should at least give the public sector management a level playing field and the same finance rights and access to the market so that they can show that they can perform as well as private sector management. If, as seems to be the case, the
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Secretary of State wants to experiment, he should at least be fair and not condemn the public sector. We would resent that unfair ideological view.I believe that I have established the case that public and private financing could be possible, particularly in leasing agreements in respect of parts of Network SouthEast and the bond arrangements for financing the channel tunnel link. As the Secretary of State knows, I spelt that out in my document "Moving Britain into Europe". The Department of Transport bought three copies of it at £25 a time, and I am most grateful for that. Perhaps the Secretary of State learnt from that document how to use private capital. I hope that he has sent a copy to the Treasury.
The Opposition believe that there is a need for private capital because all the money cannot come from the taxpayer. Private capital will help to produce a modern railway system. It will help with investment, and it will help our manufacturing industry. Large publicly owned companies are an important element in the manufacturing sector. The manufacturing sector may not mean much to Conservative Members, but it is crucial for growth and creating wealth. It is also crucial if we want to reduce the balance of payments deficit and to stop importing manufactured goods and instead make them here.
Ownership is not the critical issue, although we would clearly prefer public ownership. The issue is to provide adequate financial support for the railway system. There should be a long-term investment plan for the railway system and a clear identification of social service payments and the objectives for the industry. We must create confidence in the railway industry for the future. The issue is the modernisation of our railway system, not privatisation. Privatisation will inevitably mean the doubling of fares and less investment in rolling stock and track. It will also mean a less safe railway system and more subsidy and support. It will mean greater bureaucracy, fewer rural services and a system which will not be accountable for the quality of services.
That is why we propose that a publicly owned railway system, modernised in the way that we suggest, would serve the interests of passengers better, would serve our national interests, and be better for the environment. I urge my hon. Friends to support the motion. 4.23 pm
The Secretary of State for Transport (Mr. John MacGregor) : I beg to move, to leave out from House' to the end of the Question and to add instead thereof :
recognises that progress has recently been made in improving British Rail's services ; believes that further necessary improvements for rail users can best be achieved by creating the opportunity for introducing into the railways private sector ownership, management skills and capital ; and therefore supports the Government's proposals as set out in the White Paper, "New Opportunities for the Railways".'.
We have just heard the hon. Member for Kingston upon Hull, East (Mr. Prescott) make one of his typical speeches. He has plenty to say, but he totally lacks consistency. For a start, he accuses us of doing a U-turn on policy and then bases most of his speech on criticising the policies in the original White Paper. I will return to that later.
Of course, I must commend the hon. Member for Kingston upon Hull, East in one respect : he is honest to a
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fault. However, it is a very big fault, especially for an Opposition Front-Bench spokesman these days. Uniquely among his colleagues, at least the hon. Member for Kingston upon Hull, East is honest enough to admit that he is still a socialist. His colleagues are all moving on. They call it "Clintonisation" and my hon. Friend the hon. Member for Eltham (Mr. Bottomley) has also just called it that. In reality, that means abandoning all the policies that they have always stood for in order to buy votes wherever they fall. The hon. Gentleman talked about negotiating on the Jubilee line. He negotiates his position in the Labour party and he negotiates policy in the Labour party in public, on television, all the time. But at least he has made it clear that he does not approve of this process of Clintonisation.I wondered why we were having this debate on rail privatisation at all today given that we are about to have another full debate on the Bill. Could it be that his presence here gives him a cast-iron alibi for his absence from a meeting with the Clinton camp on which his shadow Cabinet colleagues are so keen?
It is, of course, the same old story : everyone is out of step except the hon. Member for Kingston upon Hull, East ; a horde of Clinton clones marching in one direction and Andy Capp stubbornly marching in the other. I thought that the hon. Gentleman protested too much about his ideology today.
Mr. Michael Connarty (Falkirk, East) : I thought that the debate was supposed to be about privatisation, Madam Speaker.
Madam Speaker : That is not a matter for the Chair at this point.
Mr. MacGregor : The hon. Gentleman is extremely sensitive. I have only been speaking for about 50 seconds or one minute. I will tell him very soon what the relevance of this is.
The hon. Member for Kingston upon Hull, East protested a great deal about his ideology. As my hon. Friend the Member for Eltham suggested in his intervention, the reason is that the hon. Gentleman will not let go of his prejudices, just as he clings to clause four. He cannot begin to understand that our practical and pragmatic approach to improving our railways is the right way to get better services for the passenger, the freight customer and the taxpayer. That is because he believes that everything must be done according to the letter of the original socialist textbook-- [Interruption.] Just let me finish. There is clearly great sensitivity on this point on the other side of the House. The hon. Gentleman refuses to see the evidence that has been before us now for more than a decade ; he sticks by the letter of the socialist textbook. That evidence is that the market, whatever form it may take, produces better services for our citizens. In a great many of our industries we have demonstrated in the last decade that it produces better services, greater innovation and more competition, and at lower cost.
Mr. Snape : Will the Secretary of State accept from me that, coming from a member of the Cabinet that gave us the ERM and the poll tax, we need no reassurances about the pragmatism of his party?
Mr. MacGregor : We have a council tax which I think will prove to be an excellent form of local government finance. It has all the benefits and has taken account of
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most of the lessons of the old rating system as well as the community charge. I believe that our policies are very soundly based in our principles and in our approach to the private sector and privatisation. As I shall be demonstrating, we will be introducing them gradually over a period and, I believe, in a pragmatic and practical way.Mr. Ronnie Campbell (Blyth Valley) rose--
Mr. MacGregor : No, I will not give way ; I have already given way twice.
The hon. Member for Kingston upon Hull, East believes that public utilities always are and have to be the best, because for his purposes they are the best. He has made that clear again today. He talked at one point of maximising services rather than revenue. What he meant was keeping the service running whether or not there were customers for it and absolutely independent of the cost to the taxpayer of so doing. There is a reason for that. He wants as many people as possible--
Mr. George Foulkes (Carrick, Cumnock and Doon Valley) : The Secretary of State is reading this.
Mr. MacGregor : If that is the case, I must be a mind reader. I know that I claim to have mind reading as one of my hobbies and I must have been a mind reader to know that the hon. Gentleman would be talking about maximising services rather than maximising revenue, and that is exactly what I have just been referring to.
The reason is that the hon. Gentleman wants as many people as possible working in publicly owned industries, irrespective of whether such a work force is needed. He wants public employees to have security in their jobs whether or not they do them well. He wants state-owned businesses to be run in the interests of their employees, but--this is a crucial point and it underlines much of what the hon. Gentleman said--he has no regard whatever for the cost to the taxpayer who foots the bill.
The hon. Gentleman mentioned two European countries. One was Germany. He should know that there is the same anxiety to produce better services and the same concern about the monolithic nationalised industry and its cost in Germany as we have been demonstrating. That is why the German Government propose to privatise German railways--
Mrs. Gwyneth Dunwoody (Crewe and Nantwich) : It will take about 12 years.
Mr. MacGregor : I went over that point in the Select Committee last night : our time scale to complete the whole privatisation process will be about the same. I made it quite clear all the way through that we are building it up over a period, and it makes absolute sense.
The hon. Member for Kingston upon Hull, East made great play of France. He may not realise that 20 per cent. of the total cost of running the French railways comes from meeting the interest payments on their debt. Frequently --or on several occasions, at least--the French Government have written off the debt because the burden was becoming so great, so the cost to the taxpayer is very high. Because of the many improvements in British Rail, to which I shall come later in my speech, the interest payment for British Rail is very much lower. I would not wish to come to the House to defend a situation in which
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20 per cent. of the cost of a nationalised industry is sheer interest payment. That is something that we would certainly wish to avoid.Mr. Robert Adley (Christchurch) : I am sure that my right hon. Friend would not wish to mislead the House in any way. Just for the record- -and it is no use my hon. Friend's Parliamentary Private Secretary, the hon. Member for Colne Valley (Mr. Riddick), grumbling at me ; my intervention may be regarded as unhelpful, and I am sorry if it is, but I merely want to put the record straight--will my right hon. Friend confirm, before he compares what is happening in Germany with what is happening here, that Helmut Kohl set up a Government railway commission which had a brief to study the relationship between the railway and the state, that it took 18 months to consider its proposals, that there was thereafter a lengthy debate in the Bundestag as to whether they should proceed and which proposals should be chosen and that the 10 years thereafter, to which my right hon. Friend has rightly referred, do not in any way include proposals that bear any relationship to the specific proposals in his White Paper?
Mr. MacGregor : There are quite a number of similarities. I am not sure whether my hon. Friend the Member for Christchurch (Mr. Adley) has had the opportunity to do so, but I have had several discussions on rail privatisation with my opposite number, the German Minister for Transport. We have been discussing it since last July and he announced his proposals in the same week as I announced our White Paper.
As my hon. Friend the Member for Christchurch knows--and the hon. Member for Kingston upon Hull, East criticised us for this--we have discussed and debated the form of privatisation of British Rail for some considerable time. We have then produced a White Paper and we have had thorough discussions on the White Paper. We are carrying out a substantial consultation process on a large number of policy aspects and we will have a thorough scrutiny of all aspects of the Bill as it goes through both Houses. I believe, therefore, that there will be thorough scrutiny of the matter in the House. I repeat that there are many similarities.
Mrs. Dunwoody rose --
Mr. MacGregor : No, I must get on.
I can condense much of the approach of the hon. Member for Kingston upon Hull, East along the following lines : that it would be a great business if it were not for the customers. All the way through his speech he hardly referred to the customers. He talked about public service, about obligations and about money coming from the taxpayers ; I hardly heard the word "customer" on his lips. It is fortunate for the customers that the hon. Gentleman is not running the railway. In sharp contrast, our policies are all about getting a better deal for the customer, for the passenger and for the taxpayer, as we have done with all earlier privatisations.
The hon. Member for Kingston upon Hull, East referred to the fact that nowhere else in the world had the kind of policy that we propose for British Rail been implemented in practice and in full. This criticism has been made of our privatisation proposals over the past decade.
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It is interesting that all round the world many Governments now follow the policies that we have successfully pursued. I believe it will be the same with the railways.Mr. Ronnie Campbell : Surely the Minister is not saying that fares are not going to rise. In electricity, gas and British Telecom we have seen enormous increases in bills to customers and we are going to see the same in British Rail as well.
Mr. MacGregor : The hon. Gentleman knows that fares have risen under British Rail as a nationalised industry. There are a number of reasons for that, one of which is that if one is undertaking a substantial capital investment programme, as British Rail is, the cost has to be shared by the user and the taxpayer. It has been occurring in recent years in British Rail as well for the reasons that I have just given.
Mr. Connarty rose --
Mr. MacGregor : I want to get on. The hon. Member for Kingston upon Hull, East did not give way a great deal and I have already given way a lot in my first 10 minutes. When we get to Second Reading I shall again give a comprehensive description of our proposals and show how they fit into the Bill. Today, I would like to make two important announcements about two aspects of our policy.
First, I wish to restate our objectives. We have seen considerable improvements in British Rail in many parts of our country in recent years and again I pay tribute to the work of the chairman, the board, management and employees. The recent changes called "Organising for Quality" have taken British Rail further in the direction of commercialisation and have improved the efficiency of the organisation a good deal. There are currently record levels of investment in British Rail, higher than in the last three decades, and in the autumn statement we added another £239 million to the external financing limit of British Rail on top of the leasing proposals. The key difference and the key point about the leasing proposals is that it is possible to do them in anticipation of privatisation because the risk of the leases will be transferred to the private sector. Therefore, it does not break normal public sector conventions
I have to say to the hon. Member for Kingston upon Hull, East that, had the country had the misfortune to have a Labour Government and had the hon. Gentleman tried to carry through his leasing proposals, which were based on keeping them entirely in the public sector, they would have counted against the public sector guarantee whereas ours do not. That is a fundamental difference and he has failed to understand it so far. That is why we have not been following his approach.
Mr. Foulkes : The Secretary of State is talking about investment. He will be aware that there is great concern about investment in track and rolling stock for the west coast line from Glasgow to London. Such investment is absolutely necessary. I use the line regularly and I know how increasingly inadequate it is becoming. When would the right hon. Gentleman expect British Rail to be able to make the necessary investment in that line?
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Mr. MacGregor : It has started. I make two comments immediately. First, we have record levels of investment at present and it is for British Rail to decide priorities. There must be a limit to the amount of money from the taxpayer which can be put into British Rail. The hon. Member for Kingston upon Hull, East seeks to imply that he would not have a limit and would pour in unlimited sums or much larger sums than we are investing. Secondly, the prospects of faster investment will be enhanced if we can secure privatisation, or when we secure Royal Assent, because it will be possible then to seek private finance as well.
Although there are currently record levels of investment, no one could argue that the present services are perfect, that the culture--which remains that of a monopoly nationalised industry--cannot and should not be improved and that we could not get better value for the substantial taxpayers' money going into the system.
I do not find, as I go round the country or as I listen to colleagues in the House, that people are satisfied with British Rail. They clearly are not. The public also know that monolithic, old-fashioned nationalised industries are not the best way of providing services efficiently and responsibly.
Our proposals are designed to deal with these criticisms, to get that improvement in service which the customers are still demanding and to get the better value for money by breaking down the monolothic structure of the industry. Our proposals start from the belief that the private sector, spurred on by competition, is far more likely to be responsive to customers and to change the culture. The private sector can provide better and more efficient services. We have applied the philosophy successfully across the economy to many privatised industries. It is as relevant to transport as to any other part of the economy : on the roads, in the air, in our airports and in our seaports.
Mr. Dalyell rose--
Mr. MacGregor : I think I had better move on. I have already given way a great deal.
The hon. Member for Kingston upon Hull, East has a well-known tendency to say the first thing that comes into his head without pausing to reflect whether it might be remotely right or not. He has been doing it again today and he has done it twice in the recent past. I see that he is saying that our rail proposals are dead and buried and that the Prime Minister's reference to semi-privatisation means the first U-turn of the year. The hon. Gentleman is totally wrong on both counts and I will deal with both?
Mr. MacGregor : It is a strange corpse that will be emerging in a week or two in substantial living form. I refer to the privatisation Bill. We have had inevitable delays while the paving measure has been going through Parliament. As soon as we get Royal Assent to that Bill, which I hope will be very soon, we shall publish the main Bill, which will be long and full. As it passes through both Houses, it will provide many opportunities to make clear our proposals in more detail than I have time for now.
At the same time, we shall be publishing a series of documents about particular aspects of the policy, as we have done in recent months. We have already had a consultation document on the franchising of passenger
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services. We have had an extremely useful response and I hope to announce a list of pilot franchises in the near future. I call them pilot franchises because they are not, of course, real franchises ; we cannot have real franchises operated by the public sector until we have Royal Assent and the authority to set them up. That will involve the franchising authority, the tendering process and so on. That is for 1994. But it is useful, on the basis of the responses to the consultation document on the franchising of passenger services, to structure British Rail and to set up pilot franchises so that they are ready and from which we can gain experience.In connection with the franchising of passenger services--this bears on the remarks of the hon. Member for Kingston upon Hull, East about the existing staff of British Rail--I hope that the staff will bid for the franchises. We are positively encouraging management buy-outs and will assist them in the process. There is a clear indication that we shall have quite a number. [Interruption.] We shall be encouraging managers who are currently with British Rail, in the public sector, to play a full part in the franchising by bidding for the franchises. I cannot make the position clearer than that.
We have issued proposals on the British Transport police and we are considering the many responses that we have had. We have issued a paper on the rail users consultative committees, which have been broadly welcomed. We shall soon be producing important documents on charges for access to track and on the management and ownership of rolling stock in the newly shaped industry. We have been proparing, and will continue to prepare, our plans in close co-operation with the chairman of British Rail and his staff.
So it seems to be an extraordinary corpse that is "dead and buried". The movement is very much alive. We cannot implement our proposals until the legislation is passed. We shall begin in 1994 and there will be a planned programme of franchises and sales from then on.
Mr. Dalyell : What about the new health and safety regulations that are said to be necessary in relation to the transport of hazardous substances? What regulations will have to be introduced for the transportation of nuclear materials? The report says :
"In view of the potential loss of British Rail's existing tight control, it is considered necessary to introduce new health and safety regulations along the lines of those already in force for the transport of such materials by road."
Does the right hon. Gentleman agree that that will involve a number of instruments coming before the House?
Mr. MacGregor : I shall deal with that document at the appropriate point in my speech because there is much more to be said about the document in general than the point raised by the hon. Gentleman. As for the accusation of a U-turn, or even a semi U-turn, the policy remains as set out in our proposals following the publication of the White Paper. I have made it clear from the beginning that it is not possible to privatise British Rail in the classic sense of a once-and-for-all flotation through the stock exchange. For a start, much of British Rail makes losses and substantial subsidies are, and will continue to be, required. Where possible, we are selling to the private sector, and we are injecting private sector skills, management and capital, where in the foreseeable future that is not a realistic
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possibility. There is nothing different about that compared with what we said in the White Paper. Indeed, I said in my foreword to that document in July :"Privatisation is one of the great success stories of this Government. It has taken different forms in different industries, but common to all privatisations has been the harnessing of the management skills, flair and entrepreneurial spirit of the private sector to provide better services to the public. The time has come to extend these benefits to the railways. This calls for a new approach. British Rail makes large losses. It cannot, therefore, be sold as a complete concern in the same way as other industries which we have privatised."
So it is absolutely clear that we are following through our original proposals. They do not represent privatisation completely, in the sense that many privatisations have been understood up to now. The passenger services are not being sold, but are being franchised and that is why it is right to refer to it as a semi-privatisation. It means essentially that we shall be injecting the private sector into the railways. Hence, exactly as outlined in the White Paper, we shall sell what can be sold--principally the freight businesses and stations--while the passenger services will be progressively franchised. In other words, there will be contracts, won in competition with the private sector, to run services in return for subsidising where it is required, or for a fee where it is not. BR's monopoly will end.
The track and signalling will remain in public ownership, although in the long term privatisation of that is not ruled out. Railtrack will obtain its services in the private sector to the maximum possible extent through contracting out. There will be contracts between the providers of services and the operator of the track. That is the scheme that we set out in the White Paper, the scheme on which we have been working and the scheme that we shall be putting before the House. We believe it to be the most practicable way of getting private sector disciplines and competition into the railway industry.
I have explained our proposals and I hope that Opposition Members will agree that there is not a shred of a policy that is dead and buried. Nor is there a shred of a U-turn in what we are doing. As I said, I shall be setting out again our proposals in full on Second Reading, but today I shall deal with some of the criticisms of the hon. Member for Kingston upon Hull, East and some of the concerns that have been expressed in recent weeks.
Mr. Stephen Day (Cheadle) : In referring to franchising, my right hon. Friend has not dealt with an aspect that is of particular importance to my constituents. One section of the railway which, by common consent, will never attract any franchise interest is local commuter services, which are vital to my area. Ministerial statements have been made about the protection of subsidies going to those services. Will my right hon. Friend explain what mechanism will be provided to assure me and others like me that that subsidy and those services will continue?
Mr. MacGregor : I can make two points to reassure my hon. Friend. The first is that it will be eligible for franchising--not for sale--and I believe that many commuter lines will benefit from franchised services. The second is that, as we have made clear throughout, for socially necessary lines, which include a large number of commuter lines, subsidy will continue. An element of the competition is that franchisees will be able to bid for the subsidy and in that way we shall ensure that we get the best
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competitive element into the subsidy. But the subsidy will continue and the franchisees will have to guarantee to provide certain services in the contract with the franchising authority. My hon. Friend can reassure his constituents entirely on that score. Mr. Brian Wilson (Cunninghame, North) rose--Mr. MacGregor : I am anxious to make progress and I must insist on the hon. Gentleman being the last to intervene.
Mr. Wilson : It will interest the people of Cheadle and elsewhere to know whether the right hon. Gentleman is giving an assurance that the track of 11,000 miles will be maintained. Such an assurance from him will relieve many worries among hon. Members in all parts of the House.
Mr. MacGregor : I had intended to deal with that issue later, but I will deal with it now. We have made clear throughout--there is no change-- that we expect most, or a very high proportion, of the national network to continue-- [Interruption.] Let me be absolutely clear about it. One cannot give a guarantee for all time. Indeed, the hon. Gentleman would not wish to give such a guarantee. Were he to give a guarantee for all time, he would not be taking account of economic and commercial realities.
There may be cases where the economic demand has changed, where there is little demand for a service and where proposals can be put forward for the closure of that service. That has happened in the past 10 years, when demand has fallen away, and it could happen in the next 10. If it does, we shall follow very closely the existing system and the statutory procedures for dealing with closures. They must be followed closely. There must be some adjustments to deal with the new system.
However, when the Bill comes out it will be seen that it is very much on all fours with what has existed in the past. The existing procedures will continue. There is absolutely nothing wrong or hidden. We expect the vast majority of services to continue for a long period-- [Interruption.] I am being very precise about this. There may be occasions on which, as in the past 10 years, there is agreement that there is no longer a demand for a service. In those circumstances, there may be proposals for closure. If so, the statutory procedure will apply in the usual way. The socially necessary lines to which I have referred include commuter and rural services. In those cases the subsidies will continue, as we have made absolutely clear.
I turn now to the question of safety.
Mr. Wilson : Will the Secretary of State give way?
Mr. MacGregor : I really must move on. In any case, I could not have been more explicit. I have made it absolutely clear that, in all cases of social necessity, subsidies will continue.
On the question of safety, it will probably be for the convenience of the House if I refer to the report that I am publishing this afternoon. It was my intention to publish it later in the week, but the process has been accelerated. Publication of the report and of the Government's response has been a very fast process. Far from trying to conceal the report, I am only too delighted to have this opportunity to say something about it.
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