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because no one knows whether it will be running trains in the future. I hope that the Minister, in his winding-up speech, will tell us that the £150 million for leasing that was announced in the autumn statement will be committed to rolling stock. The Minister nods--I thank him for the undertaking that that seems to imply. But we need a further undertaking.

If the leasing goes ahead, and British Rail subsequently loses the franchise for the services on which the rolling stock is to be used, will the Government either undertake to underwrite the leasing costs until such time as the carriages can be sold on the second-hand market--that is what the Minister believes will be created as a result of this Bill--or make it a condition of tenders from people bidding for the franchise that they must take over the rolling stock and the leasing costs? If that does not happen, the promise that leasing finance will be allowed will turn out to be a will -o -the wisp, and the benefits that the Government expect will not come through. During the rail debate in January on an Opposition motion, I referred to the United States Hours of Service Act, which stipulates maximum working hours for every grade of railway staff. I am told by senior managers and directors of Amtrack that, in a regime with a mix of public sector and private sector railroads, the statutory regulation of working hours is a vital safety requirement. In the case of a single provider which does not face competition, such as British Rail, it is fine, without statutory backing, to expect the railway management to impose safety limitations of this type. The report on the Clapham crash called for the abolition of excessive overtime, and British Rail has responded. But when British Rail is competing against others, however, will it be able to respond in this way? Will its competitors respond without legislation? The American experience suggests that they will not. I am not thinking just of drivers' hours. The Health and Safety Executive says that the Government will consult about a statutory limit in the case of drivers' hours, but it was the excessive overtime of an electrician which caused the fatal mistake at Clapham.

Rail privatisation will trigger a haemorrhage of jobs from railway towns like York, Crewe, Swindon, Manchester and Birmingham to private sector firms. It would devastate these towns. I hope that this Bill will not be given a Second Reading, but if it is, it will create a number of quangos, such as the track authority, the franchising authority and the regulator. London is already awash with quangos. Will the Government give a commitment that these new bodies will be based in established railway towns outside London? If they do not have faith in the transport system that the railways will provide, if they do not have faith that an office in Swindon or York or Crewe would be accessible to the centre, they do not have faith in these railway proposals.

8.17 pm

Mr. John Whittingdale (Colchester, South and Maldon) : I have listened carefully to everything that has been said in this debate so far. So that my hon. Friend the Member for Christchurch (Mr. Adley), who is no longer in his place, will not be disappointed, I should say that, as a new Member, I am a strong supporter of this Bill, for whose proposals the Secretary of State has made a powerful and persuasive case.

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The hon. Member for Kingston upon Hull, East (Mr. Prescott) and the other Opposition Members who have criticised the Government's proposals give the impression that British Rail is the jewel in the public sector crown, flawed only as a result of insufficient public money handed over by a willing taxpayer. Such a description bears no relation to the facts. As several of my hon. Friends have said, far from being starved of money in recent years, British Rail has seen record levels of investment. This year, the expenditure is some £1.4 billion--a figure that has not been reached since 1960, when we had a far more extensive network. In recent years, the service provided by British Rail has undoubtedly improved, but in many areas it is still extremely poor, with frequent and unpredictable cancellations, scruffy trains, poor service, persistent lateness and lack of recognition of, let alone responsiveness to, the needs of the consumer.

Those failings are the inevitable result of public sector ownership. They were mirrored in all the nationalised industries that the Conservatives inherited before those industries were banished as the result of privatisation. British Rail suffers from all the classic problems of monopoly public sector industry. Until recently, it has had too little investment, as it has lost out to other public sector demands in the annual spending round. Year after year, it has lost money, making little attempt to reduce those losses and relying on the taxpayer to bail it out. It has shown too little interest in improving its service to the customer, as it knows that the customer has nowhere else to go.

The passengers charter has been a valiant attempt to address those failings, and has led to some improvements. But it is the infusion not just of private sector capital but of the private sector ethos which is the remedy to those problems. In all, 46 businesses have been privatised in the last 14 years. Instead of costing the taxpayer £50 million a week, they are now profitable and contribute about£2 billion a year in tax.

More important, they are profitable because they are now giving their customers the service they require. They have an incentive to increase efficiency, to stay competitive and to improve the service they offer. That is the discipline which business men in the private sector take for granted but which has been sadly lacking in British Rail.

Every privatisation is different. British Rail is not a profitable enterprise which can simply be transferred as a whole from the public to the private sector. Some parts will never be profitable and will always require subsidy. On that I disagree with my hon. Friend the Member for Christchurch, for it does not mean they cannot be made attractive to the private sector. It just means that the Government will have to continue to provide a grant to the operator in recognition of the social need for such a service.

For some groups, there will be immediate interest and a number of bidders for the franchise. For others, there may be no interest initially, and we shall have to see how the first private sector pioneers get on. I welcome my right hon. Friend's announcement of the routes which he sees as the first that are likely to be franchised. I am disappointed that the great eastern division, which serves my constituency and his, is not among them. In recent years, the service in that division has improved, but there is still a long way to go. The recent reduction in the number of trains stopping at Colchester is an example of British Rail failing to listen

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to what its customers want, while at the other end of my constituency the line to Burnham and Southminster seems always to be the first from which services are withdrawn, so that British Rail frequently appears to be running a bus rather than a train service. I hope that my right hon. Friend will consider inviting bids for that franchise soon, as I am sure that it would be of great interest to the private sector.

My right hon. Friend has in general rightly resisted those calling for track and infrastructure on those routes to be franchised also and be transferred to the franchisee. While I understand why bidders might want it, to do so would make it more difficult to have fair competition on those routes, if the possibility should arise. Initially at least, it is essential that there should be a neutral umpire overseeing the signalling and prioritising of all trains on the network. I was therefore pleased to hear his announcement this afternoon that Railtrack will be an independent operator from the residual rump of British Rail.

I hope that my right hon. Friend will continue to consider ways by which the private sector culture which he described can also be introduced into Railtrack. Most of the problems that have occurred in the great eastern division, to which I referred--I suspect that they occur elsewhere throughout the network--have resulted from points failures, signalling problems, overhead power lines down and the ubiquitous leaves on the line. I assume that those will still be the responsibility of Railtrack, and I am sure that that body could benefit enormously from the disciplines of the private sector. A number of expressions of interest have already come from potential private sector franchisees, not least from within British Rail. That is an encouraging sign, and I hope that every assistance will be given to management teams from within BR who wish to come together to bid for a franchise. I also hope that private sector operators will eventually be attracted not just to bid for existing services but to introduce new ones.

I spoke of the great eastern lines which serve Colchester in the north and Burnham in the south of my constituency. In the days before Dr. Beeching, my constituents in Maldon also had the benefit of a rail line. That line was scrapped and despite the rapid growth in population in recent years, many of whom commute, the chairman of British Rail has told me that there are no plans to reintroduce a rail link and that the financial parameters within which BR is obliged to operate mean that the investment finance that would be involved is not available. That is a pity, as I believe that there would be demand for such a service, and I look forward to the day when a private sector operator may make it available.

There are many details of the Bill still to be worked out. For example, there will need to be complex agreements between the franchisees to allow ticketing, discount schemes and railcards. There may need to be some sort of clearing house operation, as operated by the clearing banks. There will need to be regulations governing the payment of compensation by one company to another in the event of breakdowns or delays to the train of one operator causing a failure and further delay to that of another.

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All those matters will be difficult to resolve. This privatisation will not be straightforward, simple or quick. In many ways, it will once again be breaking new ground. But I am convinced that it is the right way forward and that the overwhelming view of my hon. Friends is that it is the way we should be going. I give it my wholehearted support.

8.26 pm

Mrs. Gwyneth Dunwoody (Crewe and Nantwich) : The House will be relieved to hear that I have no intention of reading a central office policy studies pamphlet.

As we debate the Bill, we should make it clear at the outset that it is sadly lacking in any sense of where the transport policy of Britain should be going in the coming decade. Indeed, it is not clear from the measure where the policy is going in the next 10 months. That is a highly dangerous aspect of today's debate, not least because the Minister produced a large and complex Bill and proceeded to say that one of its basic tenets, the concept of Railtrack, could if necessary be overturned during the passage of the measure and supplemented by a totally different system.

Much has been said about the customers. Let us be clear that they care about the quality of service that they are given. I am proud to represent a railway constituency, and even prouder to be a member of a rail union. The Government constantly boast about the large sums of money that they are investing in the rail system. If we remove from that calculation the amount of money that is going into the channel tunnel, it becomes clear that British Rail is being squeezed tighter every year.

Hon. Members who have taken part in the proceedings of the Select Committee on Transport have witnessed that deteriorating position over the years. It was obvious when we discussed the line of the channel tunnel route, the need for electrification and the desperate need for new rolling stock. It was clear from the evidence of witnesses whom we have examined in relation to privatisation. Our interim report was a classic example of the best of a Select Committee inquiry. Despite the efforts of some Conservative Members, it did not seek to give a biased view. It took evidence from a wide section of people interested in privatising BR, and we soon discovered that there were some basic problems with the Bill. People do not know what the charging regime will be and they cannot calculate to what extent, if at all, there should be interest in privatisation, because they cannot be sure what is being said. Who will buy a service if they do not know what they are going to be charged or what they in turn will have to charge someone else? It is also clear that there has grown up in the Tory party such an obsession about what they call the culture of British Rail that they are not even capable of acknowledging the job that has been done by management whom they themselves appointed. British Rail has modernised over the past five years, has changed the way it operates, and has set up what it calls an organisation for quality. Those are precisely the problems that the Minister and his colleagues pretend that they are interested in.

That system has not even had a chance to work. It has been in place for less than 12 months and yet now, without any consultation with the people most concerned, a Bill has been introduced which will yet again throw the entire industry into chaos. The result is a loss of morale, a loss of

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commitment and a very deep unease about the future of the railways in general. That does not end just with the railway system. As soon as British Rail Engineering Ltd. was privatised, we were told that it was going to be able to provide rolling stock, to be much more efficient and was going to respond to the culture of private enterprise and bring forward much higher quality service to the customer.

What has happened is something different. The railway rolling stock industry, all privately-owned, all entrepreneurial, mostly with foreign entrepreneurial money because it was handed over not to British companies but to people from outside Britain, has given detailed evidence to this Government about its lack of orders and its lack of ability to get anyone to invest in new rolling stock or new orders beyond the end of the next year. It has done so in such detail that the Government have no conceivable excuse for ignoring the fact that, very soon, this entire industry, like the bus industry before it, will be unable to continue because it has no work on its books. Indeed, in my constituency a major company, which is now called ABB, is tendering for many jobs overseas, and has asked the Government for support in financing a supply of rolling stock for a scheme in Chile, only to be told that, while it is in competition with the French, who are offering soft loans and long commitments, the British industry will not get any assistance.

It is told, as a civil servant said to me yesterday on the phone, that, after all, one has only to look at the size of the deficit of the public sector in France to understand why they have a different scheme from ours. Of course they have, because the French know that, without a transport system that works and carries goods and people around the country, they cannot compete in their internal market, let alone in external markets.

That is a basic economic lesson which this Government seem totally unable to understand. The reality is that this Bill should be voted down, not by Labour Members but by Conservatives. The reason is simple. Within a short time, their constituents, who do not understand about investment in new rails, but understand that all the trains are getting slower, who do not understand why there is de-staffing of stations or why there have to be fewer and fewer people to provide a service, do understand that it is a direct result of what the Government are doing.

These people will soon have to have their say, and they will make their views known very directly to all MPs in the south-east, and to MPs in the commuter belt--not just in London, but in Manchester--and even, I suspect, to those rather royal personages from elsewhere outside the great conurbations who have been honouring us today with the extent of their knowledge of British Rail.

I think that the Government will then find themselves in a very uncomfortable and difficult position, and I look forward to the day when it is the Conservative Members who firmly and definitely and with no compunction vote this Bill into the oblivion that it deserves.

8.33 pm

Mr. Matthew Banks (Southport) : It is a pleasure to follow the hon. Member for Crewe and Nantwich (Mrs. Dunwoody). I concur wholeheartedly with what she said about the Select Committee's interim report. There is no doubt that there was a heated discussion within that Committee, but those of us who were involved--a number

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of vacancies had not been filled at that time on the Committee--in the writing of that report were happy to put their names to it. The hon. Lady is right to say that it was in the highest traditions of the Select Committee system. That report appeared ultimately in a more constructive tone and asked a number of questions. The answers to some of the questions have already been heard. One or two questions discussed by my hon. Friend the Member for Colchester, South and Maldon (Mr. Whittingdale) have not been discussed, and I look forward to hearing my hon. Friend the Minister for Public Transport commenting on them later.

I know that the 10-minute rule no longer applies, but I notice that a number of hon. Members wish to speak, so I shall follow your advice, Mr. Deputy Speaker, and be brief.

I welcome the variety of the franchises announced today by my right hon. Friend. They represent a cross-section of the railways in Britain at present--what my hon. Friend the Member for Norfolk, North West (Mr. Bellingham) described as InterCity routes, and also those in urban conurbations in the south-east in particular.

Now that the Bill has been published and the Government have made it clear that they intend to press ahead with these proposals to introduce new opportunities, the public are rightly asking mundane but nevertheless important questions about whether networking benefits will be continued, about whether the price of tickets will remain the same or go up or down, whether investment will continue and increase and whether the proposals will ultimately lead to a better railway.

Those are questions which the public rightly ask--and which we also ask. If the railways were working well, there would be no need to change, but unfortunately, as some of my hon. Friends have said already, they are not working as well as they might be. That is why I believe that the sensible, gradual approach by the Government, starting with this Bill, with a step-by -step introduction of new opportunities and new operators, not to mention the opportunities for rail freight, is an approach with which the Government should press ahead quickly and with vigour.

I should like to pick up two points mentioned in the debate so far. I am delighted that Railtrack will be independent. When I spoke in the supply day debate some time ago, I urged the Minister to look at this, and I know that it is something that my hon. Friend the Member for Harwich (Mr. Sproat) feels is very important. I see that he is in his place, and I join him in welcoming an independent Railtrack. I hope that privatisation will lead to greater efficiency and to greater transparency of the cost of running the railways. Therein lies a problem, but it is one that we can overcome. I hope that the Minister will once again take the opportunity to make it clear in his reply that there will be continued and sustained investment by the Government in the infrastructure of the railways in future. That is vital if the proposals are to succeed.

I have no doubt that there will be some broad smiles in the private rail freight industries tonight. I was particularly delighted to hear my right hon. Friend the Secretary of State refer to the freight facilities grant scheme. I am particularly pleased that he has also announced that, in many instances, 100 per cent. grants will be available for freight charges, because, if we are to encourage freight off

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the roads and on to the railways and to encourage the freight that is already on rail to stay there, it is vital to address these issues, and I warmly welcome what the Minister has announced in this debate.

I cannot hide my personal concern at the fact that British Rail in one case has increased by 180 per cent. the charges levied on some rail freight users. However, I balance that comment by welcoming the fact that Trainload Freight has taken on an extra 2 million tonnes of freight. That shows that, although some freight is leaving the railways, it is being replaced by new business.

The Government and the regulator must take action to promote the rights and priorities of rail operators. Private operators are very much behind the Government and want privatisation to succeed, particularly in rail freight. When the Government do set up regulatory and consultative bodies, those who are involved in running rail freight in the private sector must have the opportunity to have their views represented on those bodies.

I cannot emphasise enough the importance which I--and, I know, hon. Members on both sides of the House--attach to achieving a more competitive pricing regime with road haulage. I agree with my hon. Friend the Member for Hampshire, North-West (Sir D. Mitchell)--I know that it is something dear to his heart--that we need open competition in rail freight as soon as possible.

Mention has been made of investment. I ask my hon. Friend the Minister once again to make it clear that, in the next two or three financial years, substantial investment will be made available for the track, signalling and infrastructure schemes which are pending. My hon. Friend knows my particular concern about the west coast main line, but it is important not only to my constituents but to those of other hon. Members on both sides of the House representing constituencies on routes to the north-west, the west midlands, north Wales and, of course, Scotland.

I am concerned that there has been some distortion of the investment figures in the debtate. In the evidence that he gave to the Transport Select Committee, my right hon. Friend the Secretary of State mentioned that some £1 billion would be spent in each of the next three financial years. One or two hon. Members have sought to suggest that the investment in infrastructure--I am not talking about the other £1 billion to be spent on running the railways--is already committed.

In 1993-94, some £450 million of that £1 billion will be required for the channel tunnel ; in 1994-95, some £270 million will be required and, in 1995-96, as the channel tunnel nears completion, some £80 million at 1992 prices will be required for it, including deferred interest and payments in advance. While I accept that, in 1995-96, we may have constraints on public sector spending equally as difficult as those we have now--no doubt it will be the same in years to come--I look to my hon. Friend the Minister to make it quite clear that, when we take away the amount required for the channel tunnel, which will decrease over the next three years, some of the investment that my right hon. Friend described to the Transport Select Committee will be spent on the schemes for improving the track and infrastructure of Britain's railways, and particularly the west coast line.

I believe that the answer will be affirmative, but I hope that my hon. Friend will make it quite clear that, although

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he intends to press ahead with these proposals for new opportunities, he will always recognise the requirement for important Government investment in the infrastructure of our railways. My hon. Friend knows that I wholeheartedly support the Government's proposals for bringing in new pilot shadow franchises, and I am pleased that they have announced extra money for British Rail to ensure that they run smoothly. It is vital that we press ahead as soon as possible and do not allow the grass to grow under our feet. With one or two honourable exceptions, there is widespread support for the Bill among Conservative Members. No matter what the difficulties--there are always difficulties involved in

privatisation--they will be overcome. It is a gradual, step-by-step approach, and I urge my hon. Friend to see the proposals through for the benefit of the consumer, and to do so quickly and with the utmost vigour.

8.45 pm

Mr. Ieuan Wyn Jones (Ynys Mo n) : I am pleased to have the opportunity to participate in the debate. As with so many other hon. Members, there is a great rail interest in my constituency, particularly in Holyhead, which has a great tradition on the Irish traffic route and an historical involvement with the Irish mail. I should like to make two points about the Secretary of State's speech. It would have been useful if hon. Members could have had copies of the plans for the proposed franchises. It was difficult for many of us to understand what he was saying, and I have never before heard policy made on points of order.

Perhaps, in his reply to the debate, the Minister could clarify the exact position regarding the proposed franchise for Scotland. Will it go to Inverness? Will it be an InterCity service? Where will the service go in south Wales? Will it stop at Cardiff, or will it go through to Fishguard? We have a right to know whether those services will be InterCity services and whether the franchisees will have an obligation to offer those services.

Mr. Freeman : The House will wish to know that, in the Vote Office, there are maps which clearly show the precise geographical limitations of the first franchises. The answer is that it will go to Inverness and that it will go to Fishguard as an InterCity service.

Mr. Jones : I am obliged to the Minister for clarifying that. I am sure that he will also have heard the representations made by the right hon. Member for Strangford (Mr. Taylor) about the European fast train network. I am sure that it will come as no surprise to the Minister that I disagree with those representations, because I agree with the first draft prepared by the European Commission, stating that the proper route for Irish traffic is along the central corridor between Holyhead and Dublin bay.

I urge the Minister to support the European Commission in that view. We have many advantages, particularly in terms of geography, as 50 per cent. of all freight in the Irish Republic comes within a 50-mile radius of Dublin. Therefore, it is clearly more convenient and practical for the freight to go along the central corridor.

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We will be waiting to hear from the Minister about the improvements to be made to the north Wales coast main line as a result of that European network.

In the Europe of the 21st century, if the single market is to mean anything and if we are to give the business community and the leisure traveller more travel opportunities, people must be able to travel quickly, efficiently and easily. In the 21st century, we are also forced to consider the environmental impact of greater travelling opportunities. It is little wonder that, in the Netherlands, Germany, France and other European countries, investment in railways is seen as a way of transferring traffic from road to rail for environmental and social reasons.

In the Netherlands, there is a clear policy to reverse the spending balance, which is currently in favour of road building, to rail. As a result, rail travel in the Netherlands has increased by 25 per cent., and the equivalent of £1.5 billion in strategic mainline spending is under way. That would be equivalent to investing about £300 million in Wales.

We know about the considerable investment that the French are making in their rail services. In no European country with which we trade is there any talk of privatisation or fragmentation of railway services. Indeed, it is the opposite. All our major competitors think that it is vital to have a coherent transport policy and that rail services should be properly planned and resourced. In the drive to ensure a properly integrated European high- speed train network, pan-European planning and co-ordination is essential. Failure to take part in that exercise will have disastrous consequences for our economy.

A strategic European railway network must be based on through ticketing and integrated services. The present plans for services from the United Kingdom to European destinations have required detailed linking of train operations in Britain, France, Germany, Belgium and the Netherlands on a through- service or direct-connection basis. Any attempt to operate international services on any other basis is fundamentally flawed.

The high-speed rail link on mainland Europe will transform the economies of the European core area, and those of us on the periphery will effectively be cut off from participating in that

transformation. That means that countries such as Wales, which is already fragmented within British Rail's operational structure and outside most of its current core service areas, will be at a double disadvantage.

The high-speed rail network proposed by the Commission, which includes services to north and south Wales, will be jeopardised by the Bill. In the European context, the philosophy behind it shows that the Government are tackling yesterday's agenda and jettisoning today's requirements. The policy agenda of privatisation is misplaced, misconceived and will harm our long-term economic interests. Within British Rail's current operational structure, Wales suffers from fragmentation and the lack of a coherent framework. Under the profit centre approach to franchise allocations, Wales --a small country of 3 million people--will have five operators. The section from Paddington to Cardiff on the Great Western line is regarded as a core service, while all destinations west of Cardiff are regarded as peripheral.

On the west coast main line, all services west of Crewe are regarded as peripheral. In terms of Regional Railways,

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services west of Cardiff, Wolverhampton and Chester are regarded as peripheral. It is little wonder that we feel under threat as a result of the policies.

We are told that Railtrack is expected to act in a commercial manner and that it will not be subsidised. It must make an adequate return on assets, but will it be able to secure adequate funding for long-term investment-- for example, in the upgrading and

electrification of the west coast main line and the Great Western? I understand that the Minister has been speaking to local authorities in north Wales and the north-east about the possibility of electrification. I wonder whether he can tell the House the latest state of play on that application.

Will Railtrack be able to secure adequate funding for long-term investment? Will it be expected to produce a reasonable return on investment? Because Railtrack will have to operate on commercial lines, there will have to be subsidies for the franchisees and other operators. We must be told to what extent and for how long those subsidies will operate.

Apart from the franchise that the Secretary of State announced, what interest has there been in securing franchise services for the routes in Wales? Will there be any attempt to secure a coherent strategy for the development of the rail network in Wales, or will we for ever remain on the periphery of the United Kingdom rail network, which in turn will be on the periphery of a high speed network on mainland Europe?

The Government's obsession with privatisation, which is mirrored in the Bill, will have a catastrophic effect on rail services. It will produce fragmentation when what we need is coherence. I fear that, in many parts of the United Kingdom, it will lead to reduced investment when more is urgently needed. It will drive us into a European backwater, while our major competitors are forging ahead with a modern European transport system. For those and many other reasons, I and my colleagues will be in the No Lobby tonight.

8.53 pm

Mr. Raymond S. Robertson (Aberdeen, South) : I intend to take a few minutes of the House's time to put the record straight on how rail privatisation will affect Aberdeen. I make no apologies for being so parochial. Given Aberdeen's geographical position, I am sure that the House will realise how vital our communications network is. On the last occasion that the House debated this subject, on 12 January, the hon. Member for Cunninghame, North (Mr. Wilson) showed his usual dislike of the truth and displayed his uncanny knack of ignoring the facts if they do not quite fit his argument. He said : "the expectation and reality must be the substantial closure of railway lines throughout the country and in particular rural lines which exist for a social as well as a communications purpose. Nobody need be in any doubt about this One has only to read about what Grampian Transport wants to do. It wants to concrete over the rails and create busways."-- [Official Report, 12 January 1993 ; Vol. 216, c. 853.]

I shall focus on the last part of that quote. If, as the hon. Gentleman said, Grampian Transport is interested in rail privatisation because it wants to concrete over the rails, that would be serious and would cast doubts over public transport in Aberdeen. However, it is simply untrue. It

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does not. Its interest is legitimate and genuine. Unlike Opposition Members, its interest in rail privatisation is quite visionary. Grampian Transport is a private bus company which has taken advantage of the Government's earlier privatisation policy, and it is a success story. It has a legitimate interest in rail privatisation in two key areas. First, the company wants to involve Aberdeen city to create a partnership between bus and rail services. The hon. Member for Cunninghame, North seems to be blind to the fact that the two are not mutually exclusive, but can be complementary with foresight and planning. The company has already commissioned a feasibility study into providing a rail system from one of Aberdeen's growing suburbs in Dyce--a growth area--to get commuters into the city centre speedily. ScotRail refused to do such a study.

Mr. Wilson : The hon. Gentleman has been reasonably offensive, but I shall not reciprocate. Is he telling me that Grampian Transport has not proposed to convert existing rail lines into dedicated busways? If he is not telling me that, I think that he should withdraw his opening remarks.

Mr. Robertson : If the hon. Gentleman listens to me, he will understand exactly what Grampian Transport is trying to do. In addition to that feasibility study, it commissioned another study, to use the Oban guided bus system between Aberdeen airport and the city centre. That combines the flexibility of the bus system with rails to produce the maximum utility of the track.

Those two projects have an exciting potential and are long overdue. They could soon be a reality. By getting the private sector involved, Aberdeen-- Europe's oil capital--could get a genuinely first-class commuter service. Those of us who are campaigning to get the Petroleum Engineering Directorate relocated in Aberdeen will welcome the fact that we will be able to tell the seemingly reluctant civil service that people will be able to get from the airport to their offices in the centre of Aberdeen very quickly if the scheme goes ahead.

Why does the hon. Member for Cunninghame, North seek to prevent that? Why does the hon. Gentleman seek to deny the people of Aberdeen an integrated public transport system which could be the envy of Europe? I will gladly give way to him if he will tell me.

Mr. Wilson : I do not want to take up the time of hon. Members on either side of the House--I have the opportunity to make a speech--but I will gladly debate with the hon. Member for Aberdeen, South (Mr. Robertson) the public transport needs of Aberdeen, and I will also explain to him how the transport policies of the Government that he so ardently supports have failed them for many years. However, on this specific matter, he seems to reinforce my point rather than contradict it. He might have investigated the brief before he read it.

Mr. Robertson : So the hon. Gentleman is not willing to explain to the people of Aberdeen why he will deny them this.

It is not just in Aberdeen that Grampian Transport has an interest. It is now preparing plans for Aberdeen's links with Elgin and with Inverness, with combined rail and bus

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services, through ticketing arrangements and one timetable. Passengers will be able to go from city centre to town centre with one ticket, on one timetable--bus, train, then bus again. If that is a success, the company is interested in extending the service from the centre of Aberdeen to the centre of Glasgow, to the centre of Edinburgh and even to other areas in the central belt.

I will end by quoting Moir Lockhead, chairman and managing director of the company :

"Lines which in the 1960s were unviable economically may have become potentially attractive to the private sector, due to the increase in congestion on the roads, pedestrianisation schemes and parking difficulties and a growing awareness of environmental issues as well as the reduction in costs from advanced technology and greater efficiency. Our approach will underpin the rail system, not undermine it."

That does not sound to me like a man who wants to concrete over the rails and pull up the tracks.

In Aberdeen, the private sector is up and ready to go. It wants the green light from this House. What has happened in Aberdeen can happen elsewhere. Tonight, the House must defeat the Luddite tendency of the Labour party.

8.59 pm

Mr. John Gunnell (Morley and Leeds, South) : In 1981-86, as leader of West Yorkshire county council, I had some political responsibility for the development of a local rail network. During that period, we were responsible for the start of the turning round of the rail network in the area, so we have something to tell the House--a story of success on the railways, something that needs to be taken into account when one is looking at the present proposals. I would judge that success by two factors. The policies that we followed and developed have been practised since, and are still in operation in West Yorkshire. In the 10 years from 1981-82 to 1991- 92, we increased the passenger numbers from 6.6 million to 15.3 million--an increase of 130 per cent. At the same time, and as a result of the increase in passengers, there has been an increase in the recovery ratio--that is to say, less subsidy is now required per passenger.

At the time that I became leader of the county council, many lines produced less than 20 per cent. of their income through fares, with an average in the mid-20s. Now the average is 38 per cent., and that is a reduction from figures in the low 40s before the recession hit our area. But we have no individual line which is less than 30 per cent., and although the actual cash level of subsidy is only a little reduced, it is supporting a far larger rail network and more than twice the number of passengers. It is therefore important to ask what factors have led to those changes, because they are factors which can lead to success in the rail network.

I can list four : timetabling, pricing, marketing and investment. We have timetables which are designed to suit public use and not simply the convenience of rail operators. We introduced in 1981 a freeze on fares, and that freeze lasted until 1986. Since then, the increases have been modest. The freeze on fares was accompanied by ticketing of an imaginative kind, designed to attract more passengers to the network. The ticketing systems were accompanied by aggressive marketing, using television and posters.

But as well as that, there was investment in rail. We have invested over the years in new stations. Eighteen new stations have been opened, increasing the number from 47

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to 65, a rise of 38 per cent. New rolling stock has been purchased, and more new rolling stock would be under way at the moment if the money were released for it. Instead, in the present uncertain climate, as I mentioned to the Minister in earlier debates, those orders are held up and the company in Hunslet in my constituency is unable to proceed with their manufacture. The Minister said that he would meet the chairman of the passenger transport authority to discuss the subject. I know that he has met the chairman, but I do not think that he has yet given him or the company involved a guarantee that part of that £150 million will be used on those trains that are currently held up in west Yorkshire.

Those mechanisms, which have been used elsewhere, have been successfully used to turn around a rail network. I think that the Settle-Carlisle line is an example of a line that the former Minister of State for Transport reprieved after joint action by local authorities and British Rail. Positive marketing of that line significantly increased the number of passengers on it.

Changes can be made that will improve the rail network. We have all agreed today that we want the rail network in this country to develop, but the proposals in the Bill are the politics of the asylum. If we are to have a successful privatisation, it must be based on potential profit.

When the Government have been privatising, they have generally taken industries that have clearly been capable of delivering a profit--often monopoly industries, which have been certain to deliver a profit. However, the rail network makes little, practically no, profit on most lines. It is significant that, in order to start work on the system, the Government are having to take selected lines and pull them out of the network to create an artificial profit. Through the lines selected and a grant system, the market is being rigged to generate profit. I am not opposed to the grant system as such, but under the system, profit is falsely generated. The rail network is a public sevice and should remain so. The changes will not work unless that remains the case.

9.2 pm

Mr. Keith Mans (Wyre) : I am grateful to be allowed to make a short speech before the wind-up speeches.

My hon. Friend the Member for Norfolk, North-West (Mr. Bellingham) made an eloquent speech, but it contained an error. He suggested that the Government and the Conservative party had been considering rail privatisation only for the past two and half years. It has been a subject of much debate for much longer than that.

Some four and a half years ago in the Chamber, we had a debate on rail privatisation under the Consolidated Fund. In that debate, a number of my hon. Friends and I advocated a track authority, a franchising operation, the splitting up of tracks and trains, and privatisation generally. Since then, the debate has virtually completed a circle. We have considered regional monopolies and various other ways of achieving the movement of British Rail into the private sector.

Therefore, I am delighted to welcome the Bill whole-heartedly, as it follows on so closely from that debate of four and a half years ago. During that debate, I drew an analogy between what I considered to be the success story of the airways among the airlines and what

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was proposed for British Rail. At that time, the recently privatised British Airways was going from strength to strength. It is worth acknowledging the position in Europe, whereby virtually all the railways are in the public sector and are making a loss, and the vast majority of larger airlines in Europe are still in the public sector and are making a loss. However, British Airways, in the private sector, is making a profit, even during the recession, when virtually every other transport company--in both the public and private sectors--is making a loss.

If it shows nothing else, that illustration shows that, if one gets it right and produces an organisation that is customer not producer- orientated, one can attract passengers and freight, and make a success of encouraging further investment. That is a shining example of what can be done with British Rail when it moves into the private sector.

Some may consider that certain routes are cherry picked, but we can improve upon even British Rail's good routes, ensuring that they give an even better service to the public, attracting passengers away from other forms of transport and back to the rail network. Therefore, there is nothing wrong with the idea of moving even the profitable routes in the public sector into the private sector.

The Opposition are always of the view that, for a service to be improved, it must have more money poured into it. It is important to measure not the inputs, but the outputs. The success of this legislation will be judged not by the doom-laden prophets of the Opposition but by the British public, in the choice that we shall give them and in the improved rail service that they will get. I am convinced that they will choose by travelling on British Rail, by allowing more investment and by allowing the service to expand during the years ahead in the private sector.

9.10 pm

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