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response from their Government is that if that investment is made, market forces will determine the level of fares. They can take nothing from the debate.

10.15 pm

Mr. Geoffrey Dickens (Littleborough and Saddleworth) rose --

Mr. Wilson : No, I shall not give way. The House is impatient for the debate to be concluded and I cannot imagine that anything that the hon. Gentleman could contribute would diminish that impatience. The Steer Davies Gleave report cannot be dismissed by the Government, because it was presented by the same consultants who advised them on bus privatisation. It is worth considering the three categories to which it referred. On InterCity, it stated that the projected 15 per cent. increase in costs meant that, whatever one did to fares, it would be impossible to make that service, once again, an unsubsidised one. The fares on InterCity journeys will increase, but even that money will not be enough to make that an unsubsidised service.

The report also states that, to cover the 15 per cent. increase in costs, it would be necessary to increase Network SouthEast fares by 37 per cent. on current levels. One can play with figures and mention 17 per cent., 27 per cent., 37 per cent. or above, but the message is clear : to generate the necessary returns, fares must increase greatly. The Bill provides no protection against that and hon. Members should not attempt to hide that fact from themselves.

Mr. Dickens : Will the hon. Gentleman give way?

Mr. Wilson : No, I shall not. The hon. Gentleman was not present for the debate and he cannot turn up now for a spoiling act. He cannot turn up for his sound bite, or, in his case, a large lunch.

Mr. Dickens : The hon. Gentleman is afraid to give way.

Mr. Wilson : Conservative Members do not like facts. They do not like to be told by the consultants' report and every other authoritative source--not by me--that the price of privatisation will be massive fare increases for all their constituents. They must learn to live with that if they pass the Bill.

The other category of services to which the Steer Davies Gleave report referred was regional railways. It stated that a 45 per cent. revenue increase was needed to offset the projected 15 per cent. increase in costs. Those are the facts.

If one passes legislation that will, inherently, increase the costs of running the railways--for reasons well understood by Conservative Members-- the only way to pay for them is through increased fares. On that basis, the Opposition would like to have the opportunity to vote for the amendment tabled by the hon. Member for North Devon (Mr. Harvey), but unfortunately it was not selected. In due course, we will vote for amendment No. 237, but, in the meantime, I ask hon. Members on both sides of the House to vote against new clause 4. Many Conservative Members have spoken a lot of sense about the issue, and if they voted against the new clause, they would record the feeling of the clear majority in the House and in our constituencies.

Mr. Freeman : The debate has lasted for about two and a half hours and it has concentrated, quite rightly, on fares

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and the report of Steer Davies Gleave. I hope that hon. Members will forgive me if, in the interests of time and my intention to be concise, Friend the Member for Southend, West (Mr. Channon) and my hon. Friend the Member for Southend, East (Sir T. Taylor) sought an assurance that consultations would be held between the franchising director, the public and rail user groups. I can give that assurance. It is important that the franchising director bears in mind what the public wants.

The hon. Member for West Bromwich, East (Mr. Snape) spoke about the report by Steer Davies Gleave. I categorically reject the conclusions in the report. The assumptions are flawed because the consultants assumed substantial increases in the cost of leasing existing rolling stock which did not occur. They also assumed that Railtrack's charges will disappear outwith the subsidisation of passenger services, which will not happen.

As to subsidies, I can tell the hon. Member for Cunninghame, North (Mr. Wilson) that we have not fixed the passenger service obligation grant for next year or the year after. That subsidy is fixed close to the beginning of the financial year and it is incorrect to assume that the Government intend to reduce the subsidies of Network SouthEast or any other part of the railway system.

Mr. Snape : Is it or is it not Government policy, already announced, to reduce the overall subsidy for British Rail by 50 per cent. in the next three years?

Mr. Freeman : No decisions have been taken on the subsidy level for the simple reason that the only figure that is put into the Government public expenditure survey is the external financing limit. The level of subsidy has not been determined. The hon. Gentleman will know that, for the past three years, the Government have had to go back in the middle of the year to increase the subsidy because of the consequences of the recession on fare income. We have responded positively and constructively to the subsidy needs of British Rail. Amendment No. 237 was tabled, and spoken to, by my right hon. Friend the Member for Tonbridge and Malling (Sir J. Stanley). The right hon. Member for Swansea, East (Mr. Williams) and my hon. Friends the Members for Ashford (Sir K. Speed), for Lewes (Mr. Rathbone) and for Gillingham (Mr. Couchman) also referred to it. The Government understand the concerns expressed about fare levels. In Standing Committee, a great deal of time was spent debating how the franchising director would control fare levels on monopoly services. I understand the concerns of my right hon. Friend the Member for Tonbridge and Malling on the matter. The amendment was selected relatively late. I assure him that, before we come to amendments Nos. 239 and 244, which relate to much the same issues, my right hon. Friend the Secretary of State and I will reflect on the debate. We look forward to answering the points and, I hope, satisfying my right hon. and hon. Friends tomorrow with appropriate assurances. The Government and my right hon. and hon. Friends share the same aims--to control fares on monopoly services and to demonstrate to our constituents, the electorate and passengers that we are serious and mean to control fare levels where it is appropriate.

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I hope that, given those assurances, the House will support new clause 4.

Question put, That the clause be read a Second time :

The House divided : Ayes, 308, Noes 275.

Division No. 279] [10.24 pm

AYES

Ainsworth, Peter (East Surrey)

Aitken, Jonathan

Alexander, Richard

Alison, Rt Hon Michael (Selby)

Amess, David

Ancram, Michael

Arbuthnot, James

Arnold, Jacques (Gravesham)

Arnold, Sir Thomas (Hazel Grv)

Ashby, David

Aspinwall, Jack

Atkinson, David (Bour'mouth E)

Atkinson, Peter (Hexham)

Baker, Nicholas (Dorset North)

Baldry, Tony

Banks, Matthew (Southport)

Banks, Robert (Harrogate)

Bates, Michael

Batiste, Spencer

Bellingham, Henry

Bendall, Vivian

Beresford, Sir Paul

Biffen, Rt Hon John

Blackburn, Dr John G.

Body, Sir Richard

Booth, Hartley

Boswell, Tim

Bottomley, Peter (Eltham)

Bottomley, Rt Hon Virginia

Bowden, Andrew

Bowis, John

Boyson, Rt Hon Sir Rhodes

Brandreth, Gyles

Brazier, Julian

Bright, Graham

Brooke, Rt Hon Peter

Brown, M. (Brigg & Cl'thorpes)

Browning, Mrs. Angela

Bruce, Ian (S Dorset)

Budgen, Nicholas

Burns, Simon

Burt, Alistair

Butcher, John

Butler, Peter

Butterfill, John

Carlisle, John (Luton North)

Carlisle, Kenneth (Lincoln)

Carrington, Matthew

Carttiss, Michael

Cash, William

Channon, Rt Hon Paul

Churchill, Mr

Clappison, James

Clark, Dr Michael (Rochford)

Clarke, Rt Hon Kenneth (Ruclif)

Clifton-Brown, Geoffrey

Coe, Sebastian

Congdon, David

Conway, Derek

Coombs, Anthony (Wyre For'st)

Coombs, Simon (Swindon)

Cope, Rt Hon Sir John

Cormack, Patrick

Couchman, James

Cran, James

Currie, Mrs Edwina (S D'by'ire)

Davies, Quentin (Stamford)

Davis, David (Boothferry)

Day, Stephen

Deva, Nirj Joseph

Devlin, Tim

Dickens, Geoffrey

Dicks, Terry

Dorrell, Stephen

Douglas-Hamilton, Lord James

Dover, Den

Duncan, Alan

Duncan-Smith, Iain

Dunn, Bob

Dykes, Hugh

Eggar, Tim

Elletson, Harold

Emery, Rt Hon Sir Peter

Evans, David (Welwyn Hatfield)

Evans, Jonathan (Brecon)

Evans, Roger (Monmouth)

Evennett, David

Faber, David

Fabricant, Michael

Fenner, Dame Peggy

Field, Barry (Isle of Wight)

Fishburn, Dudley

Forman, Nigel

Forsyth, Michael (Stirling)

Fowler, Rt Hon Sir Norman

Fox, Dr Liam (Woodspring)

Fox, Sir Marcus (Shipley)

Freeman, Roger

French, Douglas

Fry, Peter

Gale, Roger

Gallie, Phil

Gardiner, Sir George

Garnier, Edward

Gill, Christopher

Gillan, Cheryl

Goodson-Wickes, Dr Charles

Gorman, Mrs Teresa

Gorst, John

Grant, Sir Anthony (Cambs SW)

Greenway, Harry (Ealing N)

Greenway, John (Ryedale)

Griffiths, Peter (Portsmouth, N)

Grylls, Sir Michael

Hague, William

Hamilton, Rt Hon Archie (Epsom)

Hamilton, Neil (Tatton)

Hampson, Dr Keith

Hannam, Sir John

Hargreaves, Andrew

Harris, David

Haselhurst, Alan

Hawkins, Nick

Hawksley, Warren

Hayes, Jerry

Heald, Oliver

Heath, Rt Hon Sir Edward

Heathcoat-Amory, David

Hendry, Charles

Heseltine, Rt Hon Michael

Hicks, Robert

Higgins, Rt Hon Sir Terence L.

Hill, James (Southampton Test)

Hogg, Rt Hon Douglas (G'tham)

Horam, John

Hordern, Rt Hon Sir Peter

Howard, Rt Hon Michael

Howarth, Alan (Strat'rd-on-A)

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