---

Mr. Snape : Like earlier speakers, I am concerned about new clause 21(2)(a).

First, there is the competition--if that is the right word between the west and east coast main lines. As the hon. Member for Orkney and Shetland (Mr. Wallace) reminded us, since the completion of the electrification of the west coast line in the mid-1970s there has been little investment in the route, if any : indeed, the service has slowed down by about 35 minutes since the stretch from Weaver junction northwards to Glasgow was electrified. As for the service in other north-western cities, the service between Manchester and Glasgow is no more punctual now than it was in the days of steam. Such a franchise would not prove particularly attractive--to say the least--to any private operator.

There is an investment problem on the west coast main line, and the sooner that problem is tackled, the better ; but many of us feel that it will not be tackled by the Bill, which--if anything--is likely to dissuade investors rather than attracting them.

---

Column 694

My hon. Friend the Member for Cunninghame, North (Mr. Wilson) mentioned towns that are currently served by both Regional Railways and InterCity. As he said, the Government propose the fragmentation of the InterCity network. Where that has already happened, InterCity is withdrawing, leaving Regional Railways to provide the only service between, for instance, Blackpool and Preston--where the InterCity service was recently withdrawn--and Wolverhampton and Shrewsbury, in the west midlands area.

It is an open secret that British Rail want to withdraw InterCity services completely, in the short term, from cities such as Hull : my hon. Friend the Member for Cunninghame, North referred to the recent whittling away of that service. But the Bill will not only affect the towns and cities currently served by both InterCity and Regional Railways. I ask the Minister to consider the service between, say, Birmingham and Stratford in the context of new clause 21(2)(a). At present, two services exist, both supported by the passenger transport executive : one runs via Solihull, the other via Shirley. Let us suppose that there are two separate franchisees, one of which decides not to renew the franchise or to withdraw the service. Would the franchise director be right in saying that, as another service exists--let us say that the service via Solihull remains-- "adequate alternative railway passenger services are available"? He might well point out that the distance by road between Solihull and Shirley was five or six miles and that there was a bus service connecting the two points. One rail service still exists ; is it adequate, in the terms of the new clause?

A couple of weeks ago, Birmingham Snowhill station--in the same part of the world--was reconnected with London for the first time in 30 years. The Network SouthEast Chiltern line turbo train service was extended to Birmingham Snowhill and there is now a two-hourly service via Solihull. It is difficult to imagine such a franchise being considered particularly attractive once the various sections of the railway network are up for grabs ; but let us suppose that someone bids for that franchise and decides after a while to cut the turbo service to Banbury, Bicester or another point on the Marylebone line. Passengers in Solihull who wish to travel by rail normally drive five or six miles up the M42 to Birmingham International station to catch the service running between Wolverhampton, Birmingham and Euston. Could not the franchising director decide that, as that service presumably still exists, it should be regarded as an adequate railway passenger service under the terms of the Bill?

Problems will arise not only in relation to cities that are currently served by two different segments of a nationalised railway system, but in relation to those services that I have just described and similar services in other parts of the country. Will the Minister give a straight answer? What will the franchise director regard as an adequate alternative passenger railway service? Will it be a service of the sort that I have described, or will there be even greater safeguards?

The Minister referred to the franchise director's duty to guarantee future rail services. During the previous debate the hon. Member for Keighley (Mr. Waller) asked how he or she was to fulfil that duty. In repeating that question I shall outline a scenario which is not beyond the realms of possibility under the terms of the legislation. A franchisee could go bust quickly--as people do--owing a great deal

---

Column 695

of money. That has happened to hundreds of thousands of businesses since the present Administration were elected. People to whom money is owed will seek to recover that money by the sale of the franchisee's assets, whatever they may be. How can the Minister say that, the day after a franchisee goes bust, British Rail or someone else will come to operate those services?

Trains are not like buses ; it is not practical to pluck a driver off the street, put him behind the controls of any train and say, "Drive from A to B." Drivers have to know every inch of the route, the signalling system, the bends and the speed restrictions. It is not possible to stop a train in the same way as a bus--it takes weeks, sometimes months, to train drivers on a specific route. How can the Minister say that in the event of a franchisee going bust it is the franchise director's duty to find an alternative operator? How could such a duty be discharged?

Today, the length of an individual route is often controlled by a signal box--to use more modern parlance, a signalling centre. In the event of a franchisee going bust, who negotiates the signalling of that route with the new franchisee, assuming that such an alternative franchisee exists?

The reasoning behind the new clause and others in the group is flawed because it has been drafted on behalf of politicians who believe only in ideology and have failed to look in depth at the problems that will arise if the scenario--which is by no means unlikely--occurs. The Minister will have to come up with better arguments to persuade most Opposition Members that the group of amendments is feasible. I hope that some of the more thoughtful Conservative Members will express the reservations that my hon. Friends and I have expressed.

11.15 pm

Mr. Dickens : The new clause is a safety valve which is central to the Bill. In the unlikely event of a franchisee dropping out, the franchising director can step in to ensure that all our constituents enjoy a proper rail service while a new franchise arrangement is created. That seems to be common sense.

Earlier, many hon. Members talked about profit being a dirty word and higher fares being the only way to create profit. They could not be more wrong. If there is a sensible level of fares, clean comfortable trains running on time with good facilities on them and a package of concessions to make it attractive, people will start to move off the overcrowded roads. We are doing that with freight to Europe and we should do it with passengers all over the country. We should get cars off the roads and people on to trains. However, people will get on trains only is if there is a sensible level of fares and sensible arrangements.

That is the essence of creating a profit. The profit is then ploughed back in. We have ploughed the profits back into many other privatised industries and they have improved to the point at which they are the wonderful industries that we have today. In the old days, we shovelled millions of pounds into a bottomless pit--into nationalised industries--and we never got anything for it except misery all the time.

The Bill is important. New clause 14 is a safety valve to ensure that we keep trains running to our constituencies in the unlikely event of a franchisee dropping out. It is sheer

---

Column 696

common sense. I cannot understand why any hon. Member would want to vote against something that is a safeguard.

Mr. Gunnell : I shall resist the temptation to respond to the speech of the hon. Member for Littleborough and Saddleworth (Mr. Dickens). He shows even more faith than the Conservative Members on the Standing Committee that considered the Bill.

I shall simply ask the Minister two questions. On clause 21, many of the services that will be franchised will be those on which the passenger transport authority and the passenger transport executive have been involved in discussions. If clause 21 becomes operative and there is a failure to provide a sequential franchise, what will be the involvement of the PTA and the PTE at that point? That is not spelt out, but the passenger transport authorities need to be clear about it.

On new clause 14, is it anticipated that, perhaps in securing railway investment, the frachising director will form a finance company to finance, for example, the purchase of rolling stock? If so, and given the powers provided in new clause 18, will it be in order for the franchising director to form a company jointly with perhaps several passenger transport authorities to secure investment in rolling stock?

Mr. Denham : I almost hesitated to raise an example of another route that might be hit by new clause 21? It struck me that, when new clause 21 was being drafted, there must have been a moment at which either the Minister turned to his civil servants and said, "Why don't we put this in new clause 21" and the civil servant said, "What do you have in mind, Minister? What about so and so?", or the civil servants came to the Minister and said, "We think you should put this in new clause 21" and he said, "What do you have in mind? What about such and such a route?"

We have heard speculation about whether the franchising director will say that the east coast route is a satisfactory substitute for the west coast route or vice versa. I have a specific constituency interest to which I referred several times during the Standing Committee deliberations. There is an InterCity route that normally runs from Poole to the north-west--to Manchester--or the north-east. I understand that it is one of the loss- making parts of InterCity. Therefore, it will lose the cross-subsidy from the east coast line when that is privatised.

Most, though perhaps not all, of the stations on the InterCity route from Poole through my constituency can be reached by alternative routes via London. It is usually quicker to go via London, but more expensive under current arrangements. There is a fair degree of passenger choice because people can decide whether to break the journey by travelling via London, spending more and taking less time, or have a longer more roundabout journey.

I said several times in Committee that the cross-country route from Poole is likely to be threatened by the new franchising regime. That is because it will require a subsidy and BR and the Central Transport Consultative Committee have told us in briefings in the past 24 to 48 hours that there is still great uncertainty about whether there will be enough money in the system to subsidise those routes. Any future francisee running that cross- country

---

Column 697

route runs a high chance of failing to provide a service or he may decide to withdraw afteable substitutes for the current InterCity route from Poole through Southampton to the north-west and the north-east? It is reasonable to ask the Minister that question because every hon. Member knows that when the framework is in place and the system is operating, complaints about decisions of the franchising director will be met by the Minister or his successor saying, "It has nothing to do with us, guv. It is the responsibility of the franchising director. That is the way Parliament set up the system." This is our only opportunity to ask the Minister what he had in mind with new clause 21.

It is reasonable for hon. Members to name specific routes and ask the Minister whether he decided that they would be acceptable alternatives. The Minister must know the acceptable alternatives, or he would not have used the term in the legislation. Which routes had he in mind when he agreed with his advisers to put that in the Bill?

Mr. Freeman : Six issues have been raised and I shall try to deal with them succinctly. The hon. Member for Cunninghame, North (Mr. Wilson) spoke about InterCity. I confirm that we want the brand name to continue because there is no reason why it should be inconsistent with the separate management of the individual routes. There will be further discussions with Mr. Christopher Green, who is responsible for running InterCity. I pay tribute to Mr. Green and his managers for what they have achieved. InterCity has been a success story over the past 10 years and it can do better. It needs more investment in rolling stock, especially on the west coast main line, the Great Western line and the midland main line when it is eventually electrified.

The franchising of InterCity services will be based on the whole timetable, including services to Penzance, Inverness and Aberdeen, immediately before the franchise is let. That will apply to all the services and stations served by that InterCity line. The amendments are not about chopping InterCity branches. We want InterCity to thrive.

I agree with the hon. Member for West Bromwich, East (Mr. Snape) that considerable investment is required on the west coast main line ; perhaps up to £500 million on the infrastructure and £300 million on rolling stock. If the £150 million worth of new leasing facilities is used on the west coast main line, that would be a start. If not, I assure the hon. Gentleman, as I have already assured the House, that as soon as British Rail makes its mind up on the use of that £150 million facility, we will work with it on the route where that money is not used to devise a proper operating lease which meets the Treasury guidelines. If a satisfactory lease is drawn up, even more investment can be made. We want the west and east coast main lines to be thriving, because we want choice and competition. There is no hidden agenda to end services north of Preston on the west coast main line.

The hon. Member for West Bromwich, East also asked what would happen should a franchisee go bust. We amended the Bill in Committee to provide for railway administrative orders. They are unique because they enable the franchising director, with the assistance of the courts, to step in to ensure the continued provision of railway services. That is quite unlike the arrangements for

---

Column 698

any other form of transportation or any other company. It will not happen that a franchisee will be in financial difficulties on a Sunday and the trains will not run on Monday. We spent considerable time developing the new concept of railway administration orders to deal specifically with that problem.

The hon. Member for Morley and Leeds, South (Mr. Gunnell) asked whether the passenger transport executive would have a continuing role should the franchising director not renew a franchise. The answer is yes. If the hon. Gentleman studies clause 29, he will discover that it offers provision on that score. If he is not satisfied, perhaps he would write to me. The hon. Gentleman also raised the interesting idea of a joint company being formed between the franchising director and the passenger transport executive to own rolling stock. I shall certainly consider that suggestion, which is consistent with our desire that the franchising director, the PTE, the franchisee and the lessor should be tied together, by legal agreement, for the provision of new rolling stock.

The hon. Member for Southampton, Itchen (Mr. Denham) asked about cross- country services. We want to franchise all railways that are run--that is our intention. When we come to franchise the InterCity cross-country services, the same principle will apply. We will take the entire service offered and franchise it. We have not yet been specific about cross-country services, or the central division of Regional Railways, because, as the hon. Gentleman is aware, Regional Railways, and, to some extent, cross- country services, are run on artificial boundaries. We want to ensure that we provide the right geographic description or boundary of specific services. There is no hidden agenda for the cessation of cross-country services. They are part of the present pattern of railway services and we intend to franchise those lines.

It is important to consider the purpose of the new clause. Today, my right hon. Friend has announced 26 fairly large franchises. If a franchise comes to an end, it does not mean that the franchising director must look at alternatives. That is not possible when one considers the east coast main line, the London-Tilbury-Southend line or lines to Wales and the south- west. We are discussing large franchises.

Where open-access services are developed in the coming years, they may provide a satisfactory, unsubsidised, unfranchised service. The franchising director might consider that those routes--perhaps they would operate in those parts of the country to which reference has already been made-- provide a satisfactory service. It might then be considered unnecessary to franchise that part of a much larger franchise.

Mr. Wallace : I welcome the fact that the Minister said that he wanted the west coast main line, as well as that on the east coast, to be successful. How is that likely to happen, given that the line will be starved of investment? The £150 million that the Minister mentioned represents about one third of the tender price for new rolling stock on the west coast main line, a tender which British Rail had to allow to lapse last year. How does he expect that line to be successful if it does not have the investment to allow that to happen?

Mr. Freeman : The hon. Gentleman will appreciate that British Rail, Railtrack and the successor franchisees cannot do everything at once. The east coast main line has

---

Column 699

benefited from a successful investment project worth up to £450 million. Network SouthEast has benefited from upwards of £700 million of investment on the Kent link. Attention must now be turned to the west coast main line. We have announced that the private sector has put forward propositions to improve the infrastructure. The private sector, working with the public sector, can help to advance the date of completion of works. Already, British Rail plans to start soon on resignalling the west coast main line, and I welcome that. I am determined that new, modern rolling stock should come on to that line, which is the premier line in Britain's railway infrastructure, as soon as possible.

11.30 pm

Mr. Prescott : That is a sound bite.

Mr. Freeman : It is not a sound bite, it is the truth. The west coast main line is our most important rail artery. Its services will continue to run to Glasgow and north of Glasgow. Investment is coming to the line and privatisation will advance that. I commend the new clause to the House.

Mr. Wilson : That is a good saying : "It is not a sound bite, it is the truth." That may be the first confession by a politician that the two are incompatible.

Two of the Minister's statements cannot be allowed to go unchecked. He said that InterCity was a success. In that case, why not leave it alone and let it develop? He then said that he could confirm that the Government want the brand name to continue. InterCity is not a shell. It is not livery and a brand name. It is not a marketing concept alone. It is about people who have worked hard to make it what it is--a profitable railway company. Why cannot it be left to do that job, dependent as it is on internal cross- subsidy?

The Minister did not give us one rational reason for separating from InterCity the profitable elements so as to create, overnight, a whole new railway that will have to be subsidised if it is to survive in anything like its present form. Where is the virtue in that? I cannot see where that comes from in my philosophy and I find it odd that it is part of Tory philosophy to create new businesses that are dependent on public subsidy instead of profitable ones that stand on their own feet.

The Minister told us that the new clause was based on a hypothesis of future open access. I doubt whether anyone believes that we shall ever see the open access proposals come to fruition, but if this is to do with open access, such a provision could be written into existing clauses. The new clause is far too convenient for the Government, because they are getting a device by which InterCity routes can be pruned, to be replaced by feeder services. It distresses and disappoints me that not one Tory Member representing the areas that will be threatened by the clause has got to his feet to lodge concerns which, at the very least, are justified by inclusion of the clause in the Bill.

Question put, That the clause be read a Secondtime :--

The House divided : Ayes 214, Noes 109.

---

Column 700

Division No. 280] [11.33 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)

Atkinson, David (Bour'mouth E)

Atkinson, Peter (Hexham)

Baker, Nicholas (Dorset North)

Baldry, Tony

Banks, Matthew (Southport)

Banks, Robert (Harrogate)

Bates, Michael

Bellingham, Henry

Beresford, Sir Paul

Biffen, Rt Hon John

Blackburn, Dr John G.

Booth, Hartley

Bottomley, Peter (Eltham)

Bottomley, Rt Hon Virginia

Bowden, Andrew

Bowis, John

Brandreth, Gyles

Brazier, Julian

Bright, Graham

Brooke, Rt Hon Peter

Brown, M. (Brigg & Cl'thorpes)

Browning, Mrs. Angela

Budgen, Nicholas

Burns, Simon

Burt, Alistair

Butterfill, John

Carlisle, Kenneth (Lincoln)

Carrington, Matthew

Carttiss, Michael

Cash, William

Channon, Rt Hon Paul

Chapman, Sydney

Clappison, James

Clark, Dr Michael (Rochford)

Clarke, Rt Hon Kenneth (Ruclif)

Clifton-Brown, Geoffrey

Coe, Sebastian

Congdon, David

Coombs, Anthony (Wyre For'st)

Coombs, Simon (Swindon)

Cope, Rt Hon Sir John

Couchman, James

Cran, James

Davies, Quentin (Stamford)

Davis, David (Boothferry)

Day, Stephen

Dickens, Geoffrey

Dorrell, Stephen

Douglas-Hamilton, Lord James

Dover, Den

Duncan, Alan

Duncan-Smith, Iain

Dykes, Hugh

Elletson, Harold

Emery, Rt Hon Sir Peter

Evans, Jonathan (Brecon)

Evans, Roger (Monmouth)

Faber, David

Fabricant, Michael

Fenner, Dame Peggy

Fishburn, Dudley

Forman, Nigel

Forsyth, Michael (Stirling)

Fowler, Rt Hon Sir Norman

Fox, Dr Liam (Woodspring)

Freeman, Roger

French, Douglas

Gale, Roger

Gallie, Phil

Gill, Christopher

Gillan, Cheryl

Goodson-Wickes, Dr Charles

Gorman, Mrs Teresa

Greenway, John (Ryedale)

Griffiths, Peter (Portsmouth, N)

Hague, William

Hamilton, Rt Hon Archie (Epsom)

Hamilton, Neil (Tatton)

Hannam, Sir John

Hargreaves, Andrew

Harris, David

Haselhurst, Alan

Hawksley, Warren

Heald, Oliver

Heathcoat-Amory, David

Hendry, Charles

Hill, James (Southampton Test)

Horam, John

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

Howell, Rt Hon David (G'dford)

Hughes Robert G. (Harrow W)

Hunt, Rt Hon David (Wirral W)

Hunt, Sir John (Ravensbourne)

Jack, Michael

Jenkin, Bernard

Jessel, Toby

Jones, Gwilym (Cardiff N)

Jones, Robert B. (W Hertfdshr)

Kellett-Bowman, Dame Elaine

Kilfedder, Sir James

King, Rt Hon Tom

Kirkhope, Timothy

Knapman, Roger

Knight, Greg (Derby N)

Knox, David

Kynoch, George (Kincardine)

Lait, Mrs Jacqui

Lang, Rt Hon Ian

Lawrence, Sir Ivan

Legg, Barry

Lester, Jim (Broxtowe)

Lidington, David

Lightbown, David

Lilley, Rt Hon Peter

Lloyd, Peter (Fareham)

Lord, Michael

Luff, Peter

Lyell, Rt Hon Sir Nicholas

MacGregor, Rt Hon John

Maclean, David

McLoughlin, Patrick

Maitland, Lady Olga

Malone, Gerald

Mans, Keith

Marlow, Tony

Martin, David (Portsmouth S)

Mawhinney, Dr Brian

Merchant, Piers

Milligan, Stephen

Mills, Iain

Mitchell, Sir David (Hants NW)

Moate, Sir Roger

Monro, Sir Hector

Montgomery, Sir Fergus

Moss, Malcolm

Needham, Richard

Neubert, Sir Michael

Nicholls, Patrick

Nicholson, David (Taunton)

Nicholson, Emma (Devon West)

Norris, Steve

Oppenheim, Phillip

Paice, James

Patnick, Irvine

Pattie, Rt Hon Sir Geoffrey

---