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Maritime Safety
Mr. Eric Clarke accordingly presented a Bill to make further provision regarding maritime safety ; to regulate shipping flying flags of convenience ; and for connected purposes : And the same was read the First time ; and ordered to be read a Second time upon Friday 19 February, and to be printed. [Bill 124.]
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Orders of the Day
Railways Bill
Order for Second Reading read.
[Relevant documents : The First Report from the Transport Committee, The Future of the Railways in the Light of the Government's White Paper Proposals : Interim Report, HC (1992-93) 375, and the Minutes of Evidence taken before the Transport Committee, HC (1992-93) 246 i-xxi.]
Madam Speaker : Before I call the Secretary of State, I should tell the House that I have had to impose a 10-minute limit on speeches between the hours of 6 pm and 8 pm. I should be much obliged if those hon. Members who speak outside those times exercised voluntary restraint--as I appreciate they have in recent times--so that other hon. Members may be called.
4.10 pm
The Secretary of State for Transport (Mr. John MacGregor) : I beg to move, That the Bill be now read a Second time.
British Rail has improved considerably in recent years in many of its services. But most people agree that there is still much room for further improvement. The Bill will make possible an historic change for the better in Britain's railway system. In moving its Second Reading, I propose to reaffirm the objectives of our policy ; to announce further major decisions affecting the railways ; to explain how the Bill will enable the necessary changes to take place ; and to deal with some of the key issues that have been raised since we launched the White Paper last July.
We begin with a railways regime not fundamentally changed since nationalisation in 1948. It is not in the interests of customers--or of management and staff--to persist with that regime. As an organisation, BR combines the classic shortcomings of the traditional nationalised industry. It is an entrenched monopoly. That means too little responsiveness to customers' needs, whether passenger or freight ; no real competition ; and too little diversity and innovation. Inevitably, it also has the culture of a nationalised industry : a heavily bureaucratic structure ; an insufficiently sharp awareness on the part of employees that their success depends on satisfying the customer--indeed, on attracting more customers ; and an instinctive tendency to ask for more taxpayers' subsidy and to feel that public subsidy will always be there as a crutch whenever things look difficult. Inevitably public ownership also brings with it the constraints of public finance, not least given the many competing demands on the public purse.
Mr. Barry Jones (Alyn and Deeside) : Will the right hon. Gentleman give way?
Mr. MacGregor : I have hardly begun ; I shall give way in due course.
All this shows up in public dissatisfaction with the railways. As I said, there have been many improvements in BR in recent years. The organisational changes that the present chairman, Sir Bob Reid, and his board have been bringing in are major steps forward. Many employees do a splendid job within the confines of a monopolistic
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nationalised industry, showing much dedication and skill. A recent example was the way in which those in ScotRail kept the trains running during appalling weather in recent weeks. I should like to pay a particular tribute to Tommy Robertson who, in the foulest of weathers, and after already very long hours, discovered in the middle of the night that the bridge at Forteviot had been badly damaged. His vigilance and dedication deserve the highest praise.I repeat, however, that those who work in BR and the system have been constrained by the nationalised industry form of organisation, which has now been found wanting for all the other industries that we have privatised. The railways and their customers will benefit as much as other industries from a change in the culture and the system under which they have to operate.
We therefore aim to create a new regime for the railways. Our objective is to improve services for passengers and freight customers, while maintaining high safety standards and other necessary safeguards, including a commitment to the provision of subsidy to maintain loss-making but socially necessary passenger services, such as commuter lines and rural services.
I see at least three advantages in getting as much private-sector involvement, attitudes, objectives and management into our railway system as we possibly can. First, there is the big issue of the change of culture. I have been struck by the reaction I keep getting from those who worked in former nationalised industries and who now operate, in a range of industries, in the private sector. Time and again, it is the galvanising effect on their attitudes that they highlight--the transformation in work practices and approaches that occurs when they realise that their success depends on always putting customer requirements first.
This is a fundamentally important point, which is stressed by many people. Always putting customer requirements first is a change that we need in British Rail. I was struck by the fact that, just after we published the Bill, no fewer than five of the many newspaper editorials that support our proposals highlighted this aspect. Secondly, what we are doing will help to create more competition and choice. Thirdly, it will enable private-sector capital to supplement the existing sources of British Rail finance.
Mr. Barry Jones : Has the Secretary of State had representations from former employees of British Rail about concessionary travel? Can he give the House a commitment in respect of this matter?
Mr. MacGregor : We have often made it clear that concessionary travel arrangements will continue. Indeed, hundreds and hundreds of letters on that very point have been sent out. The same applies to pensions, with which I shall deal later.
Several hon. Members rose--
Mr. MacGregor : I have a great deal to say, so I must get on. We shall achieve our objectives by a structure with the following key elements. They were first set out in the White Paper, but it is worth restating them today.
First, British Rail's freight and parcels services will be sold to the private sector, and there will be open access for new operators. I have noticed that there has not been quite the same concentration on freight services as on passenger
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services. They are very important, so I want to deal with them. Freight services will be provided competitively, with no monopoly for any operator. I am in no doubt that this is what freight customers and potential operators want, and that breaking British Rail's monopoly is crucial if we are to succeed in getting more freight back on to the rails. We should be quite clear about the fact that this is a challenging target.However, I have talked to many existing and potential customers, as well as operators--for example, at a conference a few weeks ago attended by well over 300 people--and they all sing the same tune. They are saying, in print and, everywhere they go, verbally, that this is the right way to reverse the decline in rail freight, to attract more freight from the roads.
Mr. George Foulkes (Carrick, Cumnock and Doon Valley) : How can the Secretary of State say that he has not heard us talk about freight?
Madam Speaker : Order. The Secretary of State was giving way to the hon. Member for Carshalton and Wallington (Mr. Forman).
Mr. Nigel Forman (Carshalton and Wallington) : Many Conservative Members warmly support the broad arguments that my right hon. Friend is adducing in favour of the Bill, and wish him well in his long-term project, but I have to ask him whether he is aware that the majority of my rail- travelling constituents and, I suspect, many of those of my hon. Friends will apply three tests to this legislation. They will ask, first, whether it will make the trains more reliable ; secondly, whether it will improve the infrastructure of tracks, rolling stock and signals ; and thirdly, whether it will deal with the problem, which is very acute in the short- haul commuter services, of the non-availability, at critical times, of drivers and guards. If my right hon. Friend can satisfy us on those points, we shall be very pleased.
Mr. MacGregor : The answer to all three questions is yes-- [Interruption.] --and I pick up the final point, in view of some comments that have been made in the press. Because of previous practices in British Rail in the way in which people were eligible to become drivers, BR currently has a considerable proportion of drivers over the age of 55, so there is quite a long retirement queue coming up shortly. That is a problem because of previous employee relations practices, with BR not recruiting enough drivers. Our proposals, by encouraging franchisees to come on to line, will undoubtedly help with that problem.
Several hon. Members rose --
Mr. MacGregor : I must get on, because I have a great deal to say.
Mr. Foulkes : Will the right hon. Gentleman give way?
Mr. MacGregor : I keep hearing the hon. Gentleman from a sedentary position.
Several hon. Members rose --
Madam Speaker : Order. The Secretary of State is clearly not giving way, at any rate for the moment.
Mr. MacGregor : Secondly, existing passenger services will be franchised to the private sector. Franchising allows subsidy to be paid if subsidy is needed. So it solves the
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dilemma of how to introduce private sector management and private sector capital into loss-making services provided for social reasons. Franchising also allows the public interest in particular passenger services to be protected through contract conditions imposed by the franchising director.Several hon. Members rose --
Mr. MacGregor : I warn the House that, were I to give way to all hon. Members who wish to intervene, I would make an extremely long speech, and I am mindful of what Madam Speaker said. In any event, I must finish the passage which I have begun.
We envisage that the franchising director will begin his specification of services from the basis of the present timetable-- [Interruption.] I am making some important points, which I am anxious to get over. He will also be able in appropriate circumstances to impose conditions on fares and services as part of the franchise contract. Such safeguards are made possible by, and are one of the major advantages of, the system that we are proposing. The third key element of the new structure is that responsibility for track will generally be split from responsibility for operating trains. A new public sector organisation called Railtrack will be responsible for track. That split has a number of advantages, on which I will expand later. Railtrack will be required to contract out as many of its services as it reasonably can. That, too, is a vital point and is laid down in the Bill. It will be vital in improving its efficiency and thus keeping its prices down.
The fourth element in our proposals is new arrangements to allow access to the track for passenger and freight operators. That will be supervised by the independent rail regulator, who has among his responsibilities that of promoting competition and ensuring fair play, and of promoting the interests of consumers and ensuring that network benefits are maintained. I have announced that, subject to Parliament approving the enabling legislation, I intend to appoint John Swift QC as the regulator.
Mr. David Harris (St. Ives) : I am grateful to my right hon. Friend for the assurances that he has given me in writing about safeguarding existing passenger services, and obviously I have a particular interest in the line from Plymouth to Penzance and the maintenance of through services. Will my right hon. Friend make it clear that he as Secretary of State and his successors will have a power of direction over the director of franchising to consider in certain circumstances putting out the whole of an existing service for franchising, rather than allowing people to pick off just the bits of a service that they want to franchise?
Mr. MacGregor : I have made that clear to my hon. Friend and, as I said, we expect the franchises--indeed, it will be the case--to be on the basis of the present timetable. I hope that gives my hon. Friend the assurance for the future that he seeks.
So the fundamentals of the policy are exactly as set out in the White Paper of last July. We believe that that is the best way to get as full private sector involvement and approaches as possible. A conventional flotation, with the railways as a whole in the public sector one day and in the private sector the next, is not possible. [H on.-- M embers-- :
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"Why?"] I will explain why. Outright privatisation of all the railway is not on the agenda for the foreseeable future, not least because subsidy from the taxpayer is needed, and we have made it clear that we shall continue to provide that. So the principles and main structure of the Bill are entirely consistent--Several hon. Members rose--
Mr. MacGregor : I must make more progress.
The principles and main structure of the Bill are entirely consistent with the White Paper, because we believe it to have struck the right balance. Nothing I have seen in the comments since it was published has convinced me otherwise, but on the detailed development of the policy we have been consulting carefully and taking seriously the representations we have received.
We have issued a range of important consultation and other documents, as we have developed the details of the proposals. Documents on franchising, on safety, on pensions, on rolling stock procurement, on the British Transport police, and on consumer representations have all been published.
I shall shortly be issuing a detailed technical document on the access and charging regime, and today I will annouce the general principles on which it will be based. I aim to issue by the end of March a document on the restructuring of the freight business for privatisation. There will also be a number of detailed documents put before the Standing Committee to deal with the various issues in the Bill. We shall continue to take account of the representations which we receive on these detailed elements of the policy.
Mr. Robert Hughes (Aberdeen, North) : I have almost forgotten my point, but the Secretary of State began by extolling the virtues of the change of climate in which the railways will become private. If that is so, why will the change of culture affect only those who are franchisees and not those who still run track?
Mr. MacGregor : I am inclined to think that the hon. Member could not have thought it was a very good point, since he seems to have forgotten what it was. It was not a particularly good point. The change in culture will come about, not only by private sector companies coming in, not only from the fact that a considerable number of British Rail managers are keen to engage in management buy-outs and are well aware of the change in culture that that could bring about, but also through the proposals we have for RailTrack. The main design and objective is to achieve that, in the interests of passengers.
Several hon. Members rose--
Mr. MacGregor : I will give way once more.
Mr. David Howell (Guildford) : I am wholly in favour of my right hon. Friend's aims to change the culture and to harness private enterprise, with all its vigour, to public purposes. He must be right in the way forward he is going, but when it comes to the commuter services--I think particularly of Network SouthEast--he must recognise that we are looking not merely for improved services but for an entirely new and modernised infrastructure for the 21st century to provide a wholly new, enhanced and dedicated transport service for the area. This will require vast investment funds. Will my right hon. Friend assure us
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that his new plans will open the way for mobilising those funds on a far bigger scale than anything we have been able to achieve under the present regime?Mr. MacGregor : I was intending to come on to that later, but I am grateful to my right hon. Friend for his support and his understanding of what we are doing. We have record levels of investment going into British Rail at present, certainly the highest-- [Interruption.] I am replying to my right hon. Friend--levels are the highest since 30 years ago. I believe, and I shall be elaborating this later if I have time, that our proposals also offer, in addition to present methods of Government support and the possibilities of investment through revenue, more private capital to come in and supplement the revenue coming in for the first time. Although inevitably it will take some time, I believe that, over the period, we shall see a considerable increase in the investment going into the railway system.
As so many people wish to speak, I think I should now get on, as I have some important announcements to make and I have given way a great deal. Some of the points that have been raised I am dealing with.
We have very deliberately proceeded in this way. First, we set out the main policy in the White Paper six months ago, subsequently filling out the detail as we went along. That will continue. It would have been wrong to inflexibly pin down every element in advance of parliamentary scrutiny of the Bill and in advance of implementation by BR, the franchising director and the independent regulator, who need and will have important elements of discretion.
I turn now to a number of announcements that I wish to make today. First, on Railtrack, in the White Paper, we said :
" The Government believes that track and train operations should be separated at an early stage and that a new track
authority--Railtrack--should be established initially within BR with responsibility only for track and associated infrastructure". The separation of track from operations is a key element in our policy. Since the White Paper, we have been reflecting on this further, taking into account a wide range of comments--I am mindful, for example, of the speech of my hon. Friend the Member for Harwich (Mr. Sproat) in the debate on the White Paper in October. We have now decided that BR ownership of Railtrack is no longer necessary or desirable.
It is important for all passenger franchisees and freight operators to know from the outset that Railtrack will be a truly independent, commercially driven body, and that there will not be any possibility of a conflict of interest involved in its remaining in the ownership of a body which also operates trains. That means that it must be fully independent of BR. I intend therefore that Railtrack will be separated from BR and made a Government-owned company in April 1994, and that preparations should begin now.
The chairman-designate of Railtrack will be Mr. Robert Horton, whom I recently appointed as vice chairman of the British Railways Board. Mr. Horton will have principal responsibility for taking forward the creation of Railtrack as a Government-owned company. He will work closely with the chairman and board of BR. BR will retain full operational responsibility until April 1994.
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Mr. Foulkes : On a point of order, Mr. Deputy Speaker. The Secretary of State said that preparations are beginning now. He and his Department are undertaking actions now in anticipation of the Bill being enacted. We are debating the Bill on Second Reading. It is important that you make it clear to the House exactly what the position is in relation to the Secretary of State and his Department taking actions which anticipate the Bill.
We have far too much of that from this arrogant Government. It is about time that they had some respect for Parliament and waited until Parliament had scrutinised the Bill and until it became an Act of Parliament before carrying it out. Will you give a ruling that the Secretary of State must not undertake the expenditure of money or take action until the Bill becomes law?
Mr. Deputy Speaker (Mr. Michael Morris) : The hon. Gentleman has made his point forcefully, but it is a matter for the Government, and the Government know the rules.
Mr. MacGregor : The hon. Gentleman made his point at great length, and I shall reply to him very briefly. Of course I have respect for Parliament, which is precisely why I did not introduce the Railways Bill until the paving Bill had achieved Royal Assent from both Houses. The hon. Gentleman is asleep. That Bill enables British Rail to spend money in preparation for privatisation. We waited until we had parliamentary authority before we did it.
I wish to announce the first groups of services which I am asking British Rail to reorganise and prepare for transfer to private sector operators under our franchising proposals, and I could not do that without the paving Bill. My right hon. Friends the Secretaries of State for Scotland and for Wales have been consulted throughout. The groups of services will be : the InterCity east coast main line ; the InterCity Great Western main line to south Wales and the south-west ; ScotRail ; the London, Tilbury and Southend line ; the south-west division of Network SouthEast ; the Victoria -Gatwick express ; and the Isle of Wight line.
Mr. Barry Sheerman (Huddersfield) : The Isle of Wight!
Mr. MacGregor : That is exactly the kind of sedentary intervention I like to hear.
We cannot establish the real franchises--
Mr. Alex Salmond (Banff and Buchan) : On a point of order, Mr. Deputy Speaker. There is a lot of noise in the Chamber. I thought that I heard the Secretary of State say that the east coast main line has been franchised, but I did not hear him clarify whether that franchise extends to Aberdeen or stops at Edinburgh. Can you, through your good offices, ask him to repeat that?
Mr. Deputy Speaker : No doubt so that the hon. Gentleman can intervene, and if the Secretary of State gives way, all well and good.
Mr. MacGregor : That is a cunning way of asking a question, but I shall answer it briefly. Of course it extends to Aberdeen. We cannot establish the real franchises until we have the parliamentary authority and have set up the franchising director, who will be responsible for negotiating the contracts. The precise nature of those will be dependent on the response to the tenders-- [Interruption.] The hon. Member for Banff and Buchan
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(Mr. Salmond) complained about noise, but he is making more noise in the Chamber than anyone else. I should be grateful if he would allow my hon. Friends to hear me.It is important to organise potential franchises in an operational form now so that we can gain experience of the restructuring, management and accountancy issues and have the broad structure of some franchises ready for an early start.
It is the intention that all British Rail's passenger services will be franchised in time.
Several hon. Members rose--
Mr. MacGregor : The time for hon. Members to raise matters is during their speeches. My hon. Friend the Minister will reply in his winding-up speech.
Selecting the franchises and determining the pace of franchising must--
Mr. George Walden (Buckingham) : Will my right hon. Friend give way?
Mr. MacGregor : I shall give way one more time.
Mr. Walden : I am grateful to my right hon. Friend. Is he aware that people who are not normally opposed to privatisation are sceptical about this privatisation? They are saying that anyone can run a line, but that what we need is someone to run the railway.
Mr. MacGregor : Yes, and I envisage that, by having a number of people operating the railways and getting the private sector in, the railways will be better run. I notice that more and more people are saying the same thing. Indeed, the vast majority of editorials that have commented on the Bill have said precisely the same thing. Selecting the franchises and determining the pace of franchising must take account of the further views of the private sector. That is important, because we want to ensure that there will be competition for the franchise units to achieve value for money. We shall also continue to take account of users' representations and the views of others, including Members of this House.
In the light of those views, I shall publish a complete map of franchises within the next few months, although even then it will be desirable to preserve flexibility for the franchising director, when he undertakes the real process of negotiating franchise applications in response to tenders after Royal Assent.
Mr. John Home Robertson (East Lothian) rose --
Mr. MacGregor : I have made it clear that I shall not give way, as I have already done so a great deal for Opposition Members and I have made my position clear.
Mrs. Margaret Ewing (Moray) : On a point of order, Mr. Deputy Speaker. The Secretary of State has said that he expects Members to mention detailed matters in their speeches, but given that our speeches will be set against the background of his announcements, we seek clarification. For example, it would be helpful if the Secretary of State, when referring to the east coast line, could say whether he includes Inverness in that line.
Mr. Deputy Speaker : The Secretary of State will have heard the hon. Lady.
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Mr. MacGregor : There will be many months in which to go through the further details of all the issues in my announcement today before they become operational. There must be limits to what I give way on this speech- -[Hon. Members : "Answer the question."] The answer to the hon. Lady's question is yes.
In the light of those views, I shall publish a complete map of franchises within the next few months.
Mr. Home Robertson : On a point of order, Mr. Deputy Speaker--as that seems to be the only way to be heard.
Mr. Deputy Speaker : Order. That is not a point of order.
Mr. MacGregor : It is perfectly clear what the hon. Member for East Lothian (Mr. Home Robertson) was up to. I certainly would not wish to answer his point of order.
Several hon. Members : On a point of order, Mr. Deputy Speaker.
Mr. Deputy Speaker : Order. It is no good hon. Members saying that they have points of order when they are not genuine points for me. The rules of debate are clear.
Mr. Foulkes : On a point of order, Mr. Deputy Speaker.
Mr. Deputy Speaker : Order. I hope that it is a genuine point of order.
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