House of Commons Hansard Debates for 2 Mar 1993

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Friend the Member for Exeter (Sir. J. Hannam) for tabling his amendment and indeed to our colleagues for supporting him. He put a better way of achieving this to the House and to Ministers. The point that he made about these being charitable schools which depend almost exclusively for their fee funding on placements with the LEAs is an important one.

My hon. Friend the Minister said in Committee that he would ponder on that and, I think he said, come back another day. I do not know whether this is that other day, but perhaps we can be thinking in terms of finding a way of securing the future of these schools and, more important, securing the right education for the children about whom we are talking. I have had too many cases in which the LEA eventually agrees to the placing of a child in such a charitable school only after a great deal of effort, campaigning and pressure from me and others. We need to shift the balance a little towards parental choice, if we can.

I have the case of a child now going to the Department on appeal on the ground that the LEA believes that there is an adequate school for deaf children in the area maintained by the borough, but the parents believe that there is too much emphasis on signing in that school and feel very strongly that there should be an alternative school available. However, the only alternative is in the same category. I do not know whether we can put it into the Bill in the form that my hon. Friend the Member for Exeter is seeking by giving the parents the right to name a school and the LEA the right to decide whether that naming is reasonable. I look forward to my hon. Friend's response, and I ask him to go on pondering, as he promised he would, until we can ensure that such children have the education that we know they need.

Mr. Bowen Wells (Hertford and Stortford) : I do not wish to detain the House for long this evening, but if we are to achieve a limited number of statements and extra teaching for those with special educational needs within our schools, we will have to do at least two things.

One is to change the training within our teacher training establishments so that teachers are trained to recognise and diagnose special educational needs at a very early age. When that diagnosis has taken place, they must know what to do about it and how to teach those children. They must have the modest additional resources in terms of teacher time within each school to give that necessary extra attention and intensive teaching.

That will need additional money, but it could and should be encompassed within the budget for special educational needs. I fear that the worst cases--the statemented cases--will attract all the resources, and leave little to provide the extra teaching time for the 14 to 15 per cent. of the school population who will need it if they are to achieve their natural ambitions, and if their natural ability is to be realised.

A revolution will be required in our teacher training colleges, and a change in the way in which education authorities and the Department of Education use the money necessary for special educational needs. I hope that the Minister will indeed ponder those matters, and will ensure that our teachers know how to teach, and how to teach children to read, using phonetic and other methods, as that is what those children desperately need and have

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been denied by the avant garde experimental teaching methods so prevalent in our teacher training colleges and schools in recent years.

11.45 pm

Mr. Forth : In the time left to me, I shall endeavour to deal as fully as I can with the amendments that have been mentioned in the debate. I hope that I shall be able to cover most of the issues raised by hon. Members from both sides of the House.

The hon. Member for Bridgend (Mr. Griffiths) claimed amendments Nos. 73 and 74 were designed to strengthen the position of children with special educational needs who may not have a statement of their needs. In trying to persuade the House that the amendments are unnecessary, I remind hon. Members that we amended the Bill in Committee to benefit all pupils with special needs, but particularly those without statements. To do so, we introduced two new policies : a requirement on governors to publish and report to parents on their schools' policies for all their pupils with special educational needs, with or without statements ; and an explicit provision for local education authorities to continue to offer special educational needs support services to all children with SEN in maintained schools--whether grant-maintained or local education authority schools--who wished to use them. The amendments introducing those policies are now clauses 149(4) and 150 of the Bill.

An underlying principle of the Education Act 1981 was that the school should meet the great majority of the special needs of its pupils, with support as necessary from the authority. The introduction of local management of schools and self-governing, grant-maintained status means that schools are now increasingly autonomous. But increased autonomy means increased responsibility towards pupils with special needs and increased accountability towards their parents. The school has the direct influence, constant contact with, and the prime responsibility for all its pupils, and the school is directly accountable to parents.

I believe that we have strengthened the duties on governors in clause 149 to "use their best endeavours"--a phrase which has been repeated over and over again in the debate--to meet the needs of pupils with special educational needs. We want all school governors to think carefully about the provision that their schools make for pupils, and that is why we tabled an amendment to the clause. Our amendment--clause 149(4)--provides for a school's annual report to parents to include information about the school's policies for pupils with SEN. The Secretary of State may make regulations prescribing the information to be included. The annual reports are required of LEA governors, under section 30 of the Education Act 1986, and of grant- maintained school governors under paragraph 8 of schedule 6 to the Bill.

The Secretary of State will be able to prescribe the areas that governors' policy statements should cover, and I envisage that the statements will be very comprehensive. The Secretary of State will use existing powers, under section 8 of the 1980 Act and clause 137(1) of the Bill, to require school governors to publish information about their policies for pupils with SEN.

We shall consult on the issues that schools' policies should address, but I should like to give the House some

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idea of what we have in mind. A school's policy might cover basic information that parents might want, such as the name of any SEN co-ordinator--that was mentioned during the debate--the number of pupils with special needs in the school, admissions arrangements and any SEN specialism for which the school caters.

The hon. Member for Warrington, South (Mr. Hall) should note that the admissions arrangements and other matters, including the policies I have outlined, would cover special units that were part of a school, as well as the school itself. For that purpose, units would be regarded as an integral part of the school.

A school's policy might cover equipment and building adaptations, physical access for the disabled, teachers with specialist SEN qualifications and staff training provision. The policy might then set out the school's objectives for its pupils with special needs, including its arrangements for identification of such pupils. The policy statement might set out the school's recording and evaluation procedures, and the indicators which it uses to monitor the implementation of its policy. It might then specify how it meets those objectives through its arrangements for access to the national curriculum for special needs pupils, use made of support teachers, differentiated teaching practices, policy on short or part-time withdrawal, information on individual curriculum programmes and pupil groupings.

Finally, it might be sensible if the policy set out arrangements with bodies and agencies outside the school. The policy might state what arrangements the school had with other special or ordinary schools and with the local health and social services. It might also set out its policy for obtaining SEN support services, either from the LEA or other sources.

The degree of detail and comprehensiveness that I have outlined might reassure many of those who have spoken in the debate. It might go some way to providing a reply to the points raised by my hon. Friend the Member for Stratford-on-Avon (Mr. Howarth), because a school's policy might identify the role of that school, as defined by it, and the way in which it would be required to work with LEAs. On amendment No. 50, I have already stressed the Government's commitment to meeting the needs of all children with special needs. We recognise, however, that a proportion of them will require formal assessment of their educational needs and, therefore, a statutory statement of SEN. In addressing their needs in the Bill, one of our major priorities has, again, been to involve their parents as active partners in the whole process of determining their children's education. We are doing that by creating extended rights for parents, setting up an independent appeals mechanism and establishing a code of practice, which was referred to frequently in Committee and mentioned again tonight. That code of practice will govern LEAs' exercise of their functions under clause 155.

My hon. Friend the Member for Exeter (Sir J. Hannam) tabled amendment No. 50 and said that he wanted to make LEAs justify, on a child's statement, their decision to specify a special school. The LEAs would not be similarly required to justify naming an ordinary school and I believe that the amendment is unnecessary, because the Government believe that LEAs should always discuss with parents all aspects of a statement. Those discussions

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should include the name of the appropriate school, be it special school or ordinary. We are confident that the Bill makes full provision to that effect.

The naming of a school is the final stage in writing a statement, and I believe that that is right. Surely there is little point in assessing needs and considering provision if the school has already been decided. The logical flow of the statement leads to naming the appropriate school, so the specification of needs and provision should justify that very naming.

Of course, the LEA must explain its decisions to parents. Indeed, parents should have been closely involved throughout the process of assessing the child and drafting the statement. We have already issued clear advice to this effect. Our circular 22/89 states : "The relations between professional advisers and parents during the process of assessment are of crucial importance. Parents should be encouraged to feel that they are partners in this process". I hope that the House is assured that the further guidance that we shall issue under the Bill will underline the importance of that partnership. Beyond that, the Bill gives parents an important new right--to state a preference for their child's school. The statement will go to parents in draft form. They will have explicit rights to make representations to the LEA and to hold meetings with it. I believe that, therefore, there will be ample opportunity for parents and the authority to discuss the name of the school which should appear on the statement. When parents state a preference, LEAs will be bound to abide by that preference, so long as certain reasonable conditions are met. In that respect, the Bill makes fully adequate provision for parents to express their views and for authorities to explain their thinking. At the end of that process, it is for the LEA to decide which school should be named and to arrange the provision. But the LEA cannot, in fulfilling its duties, ignore--even if it does not always meet--the wishes of parents. Moreover, authorities know that they cannot act arbitrarily in naming a school. Their actions will be subject to scrutiny by the new SEN tribunal set up under the Bill. They must, under the Bill, tell parents of their rights of appeal to that tribunal. If a case goes to appeal, the LEA will have to justify itself before the tribunal, which will have the power to overturn an LEA's decision and to instruct that LEA to name the school of the parent's choice.

I want to talk about amendment No. 51, because I know of the interest in the subject, which was so eloquently raised by my hon. Friends the Members for Exeter and for Dartford (Mr. Dunn). The amendment refers to the parents' rights, under the Bill, to influence an authority's decision on which school to name on the child's statement of special educational needs.

I am not persuaded of the need for the amendment, and I shall explain why. The Government fully recognise the high quality of specialised provision offered by many non-maintained special schools and other institutions outside the maintained sector. I am confident that the Bill does not jeopardise their future--many people have expressed a fear that it will--as long as they continue to provide the best education at the most reasonable cost, as I believe that they do. We expect LEAs to take into account the quality and cost effectiveness of such schools when considering the placement of a child.

Our intention in paragraph 3(1) of schedule 9 is to extend to parents of children with statements of special

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educational needs the same right that the Education Act 1980 gave to other parents. That is the right to express a preference for the maintained school that their child should attend. If hon. Members consider the nature of non-maintained special schools, they will see why it might not be appropriate to include them in the provision. A non-maintained special school is a school not maintained by a local education authority, but which is approved by the Secretary of State as a special school--currently under section 9(5) of the Education Act 1944. There are at present 81 such schools, many of them run by major charities, such as the Royal National Institute for the Blind, Barnardos and other such organisations.

Those schools are clearly distinct from those in the maintained sector. They are not subject to closure or alteration by local education authorities ; nor will the Funding Agency for Schools have any jurisdiction over them. They exist in a market, and will continue to do so by offering what that market wants. They have no need to be propped up by specific legislative provision of the sort envisaged by the amendment. Moreover, if non-maintained special schools were brought within the scope of the provision, there would be a serious question about where to draw the line.

Independent schools might take the view that they, too, should be included. Some hon. Members mentioned that possibility. In law, there is no such thing as an independent special school, but there are independent schools that may be approved to cater for children with special educational needs. There are more than 100 of those, and yet more that take in individual statemented children on the basis of specific approvals obtained by LEAs from the Secretary of State. Such schools do not even have to be "special" in character. They may be ordinary independent schools that happen to be able to offer provision for a particular disability. It would be hard to justify excluding any independent schools that had the appropriate approvals from an extension of the "parental preference" provision which took in the non-maintained sector. If all independent schools were given an incentive to try and get on the bandwagon, there would be a real danger of matters getting out of hand.

However, we recognise that some parents may feel strongly that their child should be placed outside the maintained sector in, for example, a non- maintained special school. Let me spell out what the Bill provides for such parents. Instead of expressing a preference under paragraph 3 of schedule 9, the parents will make

representations under paragraph 4(1)(a). In response to the issue raised by my hon. Friend the Member for Exeter, may I say that parents will do so at the draft statement stage--at the same stage of the proceeding at which they would be able to exercise their rights under paragraph 3 of schedule 9. Paragraph 4(1)(a) provides for parents to make representations to the LEA about the content of their child's statement--including making a case for placement in a non-maintained special school, independent school or any other institution that they may consider appropriate for their child. The LEA will then be under a duty, as in paragraph 5(1) of schedule 9, to consider all such representations before finalising the statement. It will have to do so against the background of its statutory duties to determine and arrange appropriate special educational

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provision for the child. The LEA will be fully aware that if it cannot justify its decision not to name the non- maintained special school, the parent may, under clause 157, challenge the LEA's decision and appeal to the independent tribunal, which would then have the power to direct the LEA to place the child in a school outside the maintained sector.

We have achieved a balance between recognising the special independent nature of such schools and their special privileges, which I briefly described, while allowing the full mechanisms available in the Bill, including those that I outlined, which I believe will give full rights to parents and full protection to non-maintained special schools. For those reasons, I am not persuaded that we should accept the amendment in the names of my hon. Friends. I hope that on reflection--

It being Twelve o'clock, Madam Deputy Speaker-- pursuant to Order [15 December] and Resolution [12 March] put the Question already proposed from the Chair.

Amendment negatived.

Madam Deputy Speaker-- then put the Question on all remaining amendments up to the end of clause 195 moved by a member of the Government.

Clause 150

Provision of SEN assistance

Amendment made : No. 126, in page 90, line 35, at end insert-- ( ) The terms on which goods or services are supplied by local education authorities to the governing bodies of grant-maintained schools or grant- maintained special schools under this section may, in such circumstances as may be prescribed, include such terms as to payment as may be prescribed'.- - [Mr. Forth.]

Schedule 9

Making and maintenance of statements under section 155

Amendment made : No. 139, in page 182, line 35, leave out from after' to end of line 40 and insert--

(i) a request under this paragraph,

(ii) the service of a copy of the statement under paragraph 6 above,

(iii) if the statement has been amended, the date when notice of the amendment is given under paragraph 10(3)(b) below, or (iv) if the parent has appealed to the Tribunal under section 157 of this Act or this paragraph, the date when the appeal is concluded,

whichever is the later'.-- [Mr. Forth.]

Schedule 10

Government and Conduct of Grant-maintained Special Schools

Amendment made : No. 140, in page 187, leave out lines 35 to 41 and insert--

( ) there is a report of an inspection of the school in which the person who made it expressed the opinion that special measures were required to be taken in relation to the school,

( ) either that person was a member of the Inspectorate or the report stated that the Chief Inspector agreed with his opinion, ( ) if any registered inspector or member of the Inspectorate has made a later report of an inspection of the school under Chapter I of Part V of this Act, he

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did not express the opinion in the report that special measures were not required to be taken in relation to the school, and ( ) the Secretary of State has received a statement prepared under section 193 of this Act or the period allowed by subsection (2) of that section for the preparation of such a statement has expired ; and expressions used in this sub-paragraph and in that Part have the same meaning as in that Part'.-- [Mr. Forth.]

Clause 171

Maintained Special School becoming Grant-maintained Special School

Amendment made : No. 137, in page 102, line 21, leave out such date as may be specified in the proposals' and insert the date of approval'.-- [Mr. Forth.]

Clause 178

Specification of schools in noticesunder section

177(2) Amendments made : No. 131, in page 107, line 29, leave out paragraph (b) and insert--

(b) if another local education authority are responsible for determining the arrangements for the admission of pupils to the school, that authority.'.

No. 132, in page 107, line 36, leave out paragraph (b) and insert-- (b) if another local education authority are responsible for determining the arrangements for the admission of pupils to the school, that authority.'.-- [Mr. Forth.]

Further consideration of the Bill stood adjourned.

Bill, as amended (in the Standing Committee), to be further considered this day.

BROADCASTING

Ordered,

That Mr. Gordon McMaster be discharged from the Select Committee on Broadcasting and Mr. John Gunnell be added to the Committee.-- [Mr. Andrew Mitchell.]

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British Rail Maintenance Ltd. (Eastleigh)

Motion made, and Question proposed, That this House do now adjourn.-- [Mr. Andrew Mitchell.]

12.1 am

Mr. Stephen Milligan (Eastleigh) : I am extremely grateful for this opportunity to raise an issue of fundamental concern to my constituency. I thank my hon. Friend the Minister for agreeing to reply to the debate, because I know that he has spent a very arduous day in the Committee considering the Railways Bill.

I ask my hon. Friend the Minister to pass on to my hon. Friend the Minister for Public Transport my thanks for the visit that he paid to the railway maintenance yard at Eastleigh last September. I know that he is very aware of the problems that the works faces, and I am appreciative of the help that my hon. Friend has already given. John Arlott, the well-known cricket commentator and Hampshire personality, was asked 30 years ago to comment on Eastleigh. His reply was a bit double-edged, but I will repeat it :

"Anyone who admires Eastleigh seems to me like the character evoked by a modern poet--

As fond as a plain woman's lovers

Of charms that the world does not see.'

But Eastleigh has a heart, a huge fiery, steam-pulsed, hammer-beating heart."

The heart of Eastleigh is its railway maintenance works, which is the subject of this debate.

Since 1891, when the London and South-Western railway--an efficient and wisely managed private company--decided to bring its wagon and carriage works from south London to Eastleigh, the works has been the heart of the town. That is particularly so since 1909, when the company decided to move the locomotive building works there also. Today, 1,400 of my constituents are employed at the Eastleigh works, and hundreds more elsewhere on the railways. The works is still the biggest employer in the town. Hundreds more--employees' families, shopkeepers and businesses--depend on the works for their livelihood or welfare. It is vital to my constituency that British Rail Maintenance Ltd. continues as a prosperous and successful employer. BRML is not some antiquated nationalised industry but a well-run and efficient nationalised industry. It has a first-class record. Every year for the past five years the works has been able, because of its efficiency, to reduce its charges to the railway by 2.5 per cent. It is flexible, and because its work force has a wide range of skills, the works can adapt in times of crisis. Perhaps the most striking example of that happened two years ago, when thousands of passengers were delayed by the famous wrong type of snow. That situation was dealt with : they got the right kind of maintenance at Eastleigh. The work force worked 24 hours a day, seven days a week, and managed to repair all the electric motors that had been damaged ; very soon, trains were back in service. Had it not been for the large, flexible and skilled work force at Eastleigh, that might not have been possible. The work is done with increasing rapidity. Work on the light-maintenance trains can be turned around within three days. Eastleigh is also remarkable for the good relations between management and work force. I am glad to say that representatives of both are here tonight to listen to the debate.

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Despite that record of achievement, jobs-- alas--are at risk in the rail maintenance yards. There are two reasons for that. First, the recession has meant a reduction in the use of trains on the network, and therefore a reduced need for maintenance ; secondly-- rather ironically--the Government's investment programme means that new rolling stock is coming on stream which requires less maintenance. For example, the new trains with sliding doors need much less maintenance than the old slam-door trains. There is a serious risk that many BRML workers will lose their jobs in the years ahead, whatever happens as a result of privatisation.

I sought the opportunity to speak tonight, before the Government have made any decisions about privatisation as it affects the maintenance sector, to ensure that they are aware of the concern that is felt. It is precisely because jobs are at risk and the welfare of my constituency is threatened that I hope the Government will consider very seriously, before making any decisions on privatisation, the effect on the work force and my constituents.

The company recently announced that it had asked the management consultants McKinsey and Co. to establish the best solutions and the best way forward. I welcome that decision : McKinsey is a first-rate company, and I think that its advice could be most helpful. I note from its remit, however, that it has been asked to consider not only the best form of maintenance and what is best for the railways, but what is best for the employees. I hope that the Minister will be able to tell us tonight that McKinsey will consider the employees' concerns, and will be prepared to meet the trade unions before making its recommendations.

I am principally concerned about the possible effects of the general privatisation of the network on railway maintenance. If the new franchisees are simply given terms of five, six or seven years to run the railways, they will naturally be tempted to cut corners--not to carry out proper maintenance, and to allow longer periods to elapse between maintenance sessions. That would not only be bad for the railways and for passengers ; clearly, it would be extremely disadvantageous for my constituents who work for BRML.

I was very encouraged by a letter that my hon. Friend the Minister of State wrote to me last week in which he said that one option being considered by the Government was a special relationship between BRML and the new company set up to own the rolling stock--a company that would obviously have an interest in maintaining the quality of rolling stock, and would not be tempted to cut corners. I hope that the Government will explore that option further, with the aim of ensuring that corners are not cut in maintenance, and that the interests of BRML's employees in Eastleigh are taken fully into account.

I want to raise a number of points that are concerning my constituents and those who work at BRML ; I hope that my hon. Friend the Minister can answer them. The first relates to the time scale. For three or four years, those who work at BRML have been in suspense : they have not known what their future is. They have been worried about job losses ; they do not know whether BRML will remain a separate company, or whether it will be privatised. Can my hon. Friend give us some idea when a decision will be made so that those workers will know their future?

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Secondly, will my hon. Friend confirm that BRML in Eastleigh will probably continue to be the main centre for the long -term maintenance of Southern region trains, whoever owns or runs them?

Thirdly, will he deal with an issue that troubles many of my constituents-- the future of their pensions? That concerns both those who work on the railways now and the thousands who have retired. Last Saturday, I held a meeting in my constituency to discuss the issue : it was attended by 300 or 400 pensioners, who were extremely concerned about some of the misleading newspaper reports that they had read, implying that the Government might do a Maxwell and filch the pension fund. I should like an assurance not only that the value of pensions will be maintained but that pensioners, especially BRML pensioners, will in no way be disadvantaged by privatisation. They have paid their contributions and are entitled to the full pensions which they have earned during their working lives.

If the Government decide to privatise BRML, I should like to put a number of points on the record. Will the Government make it their objective to ensure that there is a level playing field? There has been considerable concern in recent months because some of the electric traction motors which are overhauled at Eastleigh have been put out to tender without BRML having a chance to put in a bid. There should be a level playing field, but there is concern that some work might go to other depots. My constituents accept that the railway demands the best price, service and conditions, but they want to be reassured that they will have the benefit of competing on equal terms with other companies and depots which may want to do the work. If privatisation occurs, will the Minister make every effort to ensure that any new company is well managed and that some of the lessons of what went wrong at British Rail Engineering Ltd. are learnt before new arrangements are made for BRML?

Privatisation will clearly bring benefits to the railway--as my hon. Friend the Minister knows, I support privatisation--but there will also be costs. I am concerned to ensure that those costs do not fall disproportionately on my constituents. In that respect, I should like those who work at BRML to gain some clear benefits if it is privatised. Would it be possible to have a shareholding scheme so that if the company prospers those who work there reap the benefit instead of it going to an outside organisation which merely bought it?

I have in mind the favourable experience of another company in my constituency, the shipbuilders Vosper Thornycroft, which was successfully privatised 10 years ago. It has doubled its productivity and has the largest order book in its history. It is one of the few defence firms in the south of England which is recruiting workers. It has been able to offer its employees shares in the company--about half have accepted--so they have drawn a direct benefit from the company's success. With the same thought in mind, would it be possible to expand the work for which BRML can bid? At the moment it is limited to trains on the Southern region. Could it bid for work elsewhere on the railway network or possibly for work in other sectors? The Minister may know that during the war the Eastleigh works produced bomb trolleys and worked on assault craft and a variety of other wartime needs. It is flexible and could do work for other industries.

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Will the Minister offer some words of encouragement and assurance to my constituents? They are extremely worried about what will happen to their jobs. Unemployment in Eastleigh has traditionally been very low, but it has almost tripled in the past two years. The town of Eastleigh is very dependent on the railways. There is an air of uncertainty. We should be most grateful if the Minister could offer assurances that will enable my constituents and those who work at BRML to believe that they have a sound future.

I support the Government's privatisation programme because I believe that it will lead to greater use of the railways, which is what my constituents want. If any change to BRML can be managed in such a way that it benefits not only the railways but the employees, it will help the constituents of the railway town that I am proud to represent.

12.12 am

Mr. John Denham (Southampton, Itchen) : I am grateful to the hon. Member for Eastleigh (Mr. Milligan) and to the Minister for allowing me to make a brief contribution to this important debate. Many of my constituents work at British Rail Maintenance Ltd. and will also be listening carefully to the answers that the Minister will give. I shall be brief because I am as keen as anyone to hear the answers to the specific questions that have been asked.

I emphasise two points of particular importance. First, BRML is a public asset. Whether the Government intend to keep it in the public sector or move it to the private sector, it is in the public interest to ensure that it has a sound future. It is therefore in the public interest to ensure that no short-term actions are taken, or are allowed to be taken, which undermine BRML's ability to meet the heavy engineering needs of the railway network in the south-east and nationally.

How British Rail is privatised, if the Government persist in their intention to privatise it, and the links between the way it is privatised and the maintenance operations are critical to BRML's future.

I am one of those who believe that BRML's future will not be bright if it is left as an isolated unit, not integrated into the rest of the rail network, and I hope that the Minister will be able to give an assurance that BRML will not be left on its own to sink but will be linked in a positive way to the franchise operators--and ideally to those who will be operating services in the south-east--or to Railtrack, or to the leasing company that was referred to earlier. I also hope that the Minister can give an assurance that BRML's core long-term viability will not be undermined by allowing light maintenance depots to asset-strip work which may be short term and profitable but which could end up by putting BRML out of business and denying the railway network the skills and expertise that exist at that important depot.

12.15 am

The Parliamentary Under-Secretary of State for Transport (Mr. Steve Norris) : I start by congratulating my hon. Friend the Member for Eastleigh (Mr. Milligan) on securing the debate. I am grateful to him for conveying his good wishes to my hon. Friend the Minister for Public Transport, who, sadly, cannot be with us. I know that one

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of the things that my hon. Friend the Minister would have wanted to say is that we and our colleagues in the Department have been impressed by the consistent way in which my hon. Friend the Member for Eastleigh has maintained his interest in the railworks in Eastleigh and has assiduously and constantly pressed us for the sort of assurance that he hopes to obtain from me this evening. The evidence for that is his consistent efforts to secure this Adjournment debate.

I am happy to join my hon. Friend's name with that of the hon. Member for Southampton, Itchen (Mr. Denham), who asked to intervene on behalf of his constituents. I see that my hon. Friend the Member for City of Chester (Mr. Brandreth), who I know is also keenly interested in the future of the railways in Great Britain, and the hon. Member for Cunninghame, North (Mr. Wilson), who leads for the Opposition on these matters, are also here.

As my hon. Friend the Member for Eastleigh said, Eastleigh has a proud railway tradition. The locomotive works there was opened on the present site, as my hon. Friend doubtless knows, in 1910, for construction and repair of London and South-Western Railway locomotives. Today the works handles repairs and modifications to BR's fleet of multiple units and locomotives, especially the Network SouthEast stock. The aim of BRML is to achieve rapid turn-round times and get vehicles back into service quickly.

When my hon. Friend the Member for Public Transport visited Eastleigh with my hon. Friend the Member for Eastleigh last September, he was impressed by the skills and adaptability of the BRML work force and, as my hon. Friend noted, the willingness of the work force to work constructively with management in producing a first-class product.

Eastleigh works has recently gained its British Standard quality certificate of which it can be justifiably proud. Over the years the Eastleigh work force has proved that it is capable of tackling any task that comes its way, displaying craftsmanship and achieving customer satisfaction of a very high order. I am sure that its good record will serve it well in the future. My hon. Friend is entirely right to want to clarify the future of all four of the BRML works as soon as possible.

My hon. Friend will know that, following the sale of BREL, the Eastleigh, Glasgow, Doncaster and Wolverton works became part of a new BR subsidiary-- which is known as British Rail Maintenance Limited, and is responsible for heavy maintenance work for British Rail. That followed the board's decision that the design and supply of new traction and rolling stock should be competitively sourced from private manufacturers, with maintenance being undertaken in BR workshops on the basis of a component exchange system. That maintenance work is not, at present, put out to competitive tender, although components removed in BR workshops are overhauled externally following competitive tendering.

The Government's policy is that BR should widen private sector involvement in maintenance. We are still considering the options for BRML depots, but have made it clear that we see benefits in involving the private sector in the heavy repair work currently carried out by BRML. Private contractors do, of course, already carry out some heavier repair and refurbishment work for BR.

A number of options for the future of BRML are under consideration. One option would be to sell off BRML, either as a whole or by major individual depots, through

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trade sales or through management-led employee buy-outs. BR and other rail operators would then contract for heavy maintenance. Although the outright sale of BRML has attractions, it might pose serious competition problems. Where major overhauls and repairs are concerned, the monopoly power of an individual depot would be less, provided that the individual works were distributed among different owners so that an effective monopoly was not established. But even if the elements were sold separately, it might be difficult or too expensive for a railway operator to use other than the nearest depot, particularly in the case of the electric third rail network. A second option might be to transfer individual depots to that part of the railway which is their major customer. That might make sense in the case of the BRML Glasgow works and the ScotRail franchisee. But it might be less appropriate in the case of Eastleigh, given its wide role in servicing Network SouthEast stock south of the Thames, and the fact that more than one franchisee would be involved. Many franchisees may, of course, want to lease their rolling stock. My hon. Friend made that point, and I shall return to it in a moment. Some may wish to do so through a simple finance lease so that the franchisee does his own maintenance. Others may wish to concentrate their efforts purely on marketing. For them, rolling stock lessors might offer rolling stock on a fully maintained basis, recovering their costs through rolling stock leasing charges. The lessor in turn could either contract out maintenance or supply it from in-house resources. Either route could make use of the valuable expertise and experience which currently resides in BRML. Some combination of those three options may prove appropriate, depending on the circumstances. Above all, we must retain flexibility to meet the emerging requirements of future operators.

My hon. Friend is right to identify the sort of relationship that might exist in future between BRML and a publicly owned company established for the purpose of leasing railway stock. Certainly that would avoid the risk, if their were to be a risk, of short cutting by any individual franchisee on long-term maintenance, the effect of which might be beyond the immediate terms of the initial franchise. As my hon. Friend says, British Rail has appointed McKinsey as consultants to advise on the future of BRML and the Level 5 group of depots. I understand that the trades unions have been advised by BR of the terms of reference for the work. The remit is to consider what options exist in the light of the Government's emerging plans for BR privatisation and to report to BR in the spring. I confirm to my hon. Friend that the terms of reference for the McKinsey study specifically require the study to have regard to the interests of employees of BRML and of the Level 5 group of depots. We look forward to receiving the board's proposals for the future of its heavy maintenance depots. In that context, I must add that it would be inconceivable, to my mind, if in the course of its investigation and the preparation of the report McKinsey were not formally to meet the trade unions as part of that process.

I recognise that uncertainty about the future is causing anxiety among BRML workers. We will make an announcement as quickly as we can. Meanwhile, we are

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giving further consideration to the relationship between rolling stock, franchising and access to maintenance facilities. The need to secure adequate maintenance facilities will be an important factor for franchisees, and could be a barrier to entry for new operators. My hon. Friend the Member for Eastleigh and the hon. Member for Southampton, Itchen asked several other specific questions which I shall attempt to answer in the time available. My hon. Friend asked that if privatisation took place there should be clear benefits for employees--such as, employee shareholding schemes and the opportunity to bid for a wider range of work. We shall certainly encourage employees to take a direct stake in the future of a franchised or privatised business in which they work. My hon. Friend will know that the BREL sale, for example, included an employee shareholding scheme. I am also pleased to confirm that a privatised BRML would have the opportunity to bid for a wider range of work. It would compete in the private sector on a level playing field.

BREL's experience demonstrates the greater repair opportunities that will be available following privatisation. For example, although British Rail and London Underground Ltd. remain the major customers, BREL--which is now ABB Transportation--has won significant contracts from various industrial sectors, including defence, utilities, the construction industry and transport operators. That sort of widening of the customer base must be beneficial to a company and its employees.

I should like to say a few words about the level playing field to which my hon. Friend the Member for Eastleigh referred. I understand that the BREL sale agreement contains legal limitations on what BR repairers can bid for. Certainly, that is an issue which would need to be addressed by BR before any sale of BRML. If Eastleigh were transferred to the private sector, the intention would be that it would compete fairly on a level playing field with other companies in the private sector. It will be important to ensure that franchisees and any rolling stock leasing companies have access to the full range of maintenance facilities.

My hon. Friend wanted an assurance that a privatised BRML would have top- quality management in order to take it forward. I am sure that he will agree with me that one of the benefits of privatisation is that railway management will be more free to get on with what it considers are priorities.

Obviously, the terms and conditions of the sale will be a matter for British Rail. The Secretary of State's role in that context is to give formal consent to the sale. The terms on which the sale will be offered make it clear that there would certainly be top-quality management available to BRML in a privatised form.

I shall spend a moment on the important matter of pensions which my hon. Friend raised. I regret that an emotive issue of such crucial importance has affected many thousands of people who are getting on in years and who are, understandably, worried, especially in the wake of the absolutely scandalous treatment of the employees belonging to pension funds in the control of the late Mr. Maxwell. It is quite reprehensible that pensioners in that circumstance should be worried by the sort of stories which have been going around suggesting that the Government might employ the technique ascribed to the late Mr. Maxwell when dealing with pensioners.

Let me make one thing clear. We accepted the rail unions' suggestion that a joint industry pension scheme

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