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main line, picking up protesters. They all said exactly the same. People in Scotland have complained about the collapse of morale in ScotRail, caused by the threat of privatisation and management buy-outs. The Government dismissed that complaint. Mr. Donnie Shannon, a chargehand at Queen Street station in Glasgow, said :"Privatisation isn't an answer. The railways require investment. Privatisation will threaten rural services and staff are particularly worried about their conditions under private ownership."
The protesters are not the only people to think like that. Tayside regional council is the transport authority for my constituency in Dundee and it has a strategy to try to persuade commuters to move from private to public transport. A key component is to encourage the use of our railways. A series of stations just outside
Dundee--Broughty Ferry, Monifeith, Carnoustie and Arbroath--desperately need investment to upgrade the buildings, improve rolling stock and keep the fares down so that the service can compete with the cost of taking a private car into Dundee.
There is no hope of fulfilling that aim if the Secretary of State and the Government go ahead with their privatisation plans. There will not be sufficient investment, because the money will be directed elsewhere, to ensure the profitability of the franchises, whether they are management sector buy-outs or private sector bidders. The same is true of the east coast main line. I said in Committee time and again that that line consists of two complementary services--an electrified core service, which runs between London and Edinburgh, and a non-electric, non-core service from London to Dundee, Aberdeen and Inverness. I am worried about what will happen to the non-core services if the line is taken over by the private sector. I wrote to InterCity to explain my fears. Mr. Brian Burdsall, the director of the east coast main line, wrote back and assured me that, as long as InterCity remained in the public sector, it intended to maintain the present level of services to Aberdeen and Inverness, and that it regarded the non-core services as an integral part of the line. He went on :
"Whether private sector bidders will comply with this particular train plan and whether this timetable will endure for the length of the Franchise it is impossible to say at this point in time. This will partly depend on profitability and the level of Track Access charges which the Government has not yet determined."
While the line remains in the public sector and has Government support, services to Dundee and Aberdeen can be guaranteed, but once it is taken over by the private sector--whoever wins the franchise--there will be no guarantee. If the service cannot be run at a profit, it will not be run at all. It is as simple as that.
Mr. John Home Robertson (East Lothain) : Where is the hon. Member for Aberdeen, South (Mr. Robertson)?
Mr. McAllion : Where are the Conservative Members who represent Scotland? I see that the Under-Secretary of State for Scotland has slipped into the Chamber. It is nice to see that at least one Scottish Tory Member has taken an interest in the debate, even if he has to because he is the Minister with that responsibility. Recently, Mr. Douglas Smart, the secretary of the Railway Development Society in Scotland, wrote to Scottish Members to tell them of his concerns about the
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implications of rail privatisation in Scotland. He received a reply from the hon. and learned Member for Perth and Kinross (Sir N. Fairbairn), who said :"I regard the complications of privatisation of British Rail as insurmountable and I am inclined to vote against the matter or abstain."
I do not know whether the hon. and learned Gentleman had hoped that that answer would be kept anonymous--he is not in favour of allowing anonymity for certain other people in society.
However, the letter was published, and at least that hon. and learned Gentleman replied to Mr. Smart, whereas other Tory Members representing Scottish constituencies did not--and we do not know their intentions tonight.
If privatisation goes ahead and lines are taken out of the public sector to be run by management buy-out teams or whoever, only one factor will determine their survival--whether or not those lines can be run at a profit. There will be no consideration of service to the people of the east coast of Scotland. In those circumstances, I know how I shall vote on the amendments and on the Bill tonight. I shall vote against them. The people of Scotland will be watching to see how Government Members who represent Scottish constituences vote. 6 pm
Mr. Home Robertson : I am happy to follow my hon. Friend the Member for Dundee, East (Mr. McAllion), because I also represent an east Scotland constituency that depends on services provided by ScotRail and the east coast main line.
I was amazed by the speech of the hon. Member for Surrey, North-West (Sir M. Grylls), who presented the view of a true believer in rail privatisation. He said, rightly, that we should be predominantly concerned about the interests of our constituents, particularly those who rely on railway services. I hope that the hon. Gentleman's constituents will follow what happens to railway services in their part of the world. I fear greatly for the prospects of rail services in my part of Scotland. There is little doubt that the Bill will lead to poorer services and higher fares across the board. Lords amendment No. 1 states that the Secretary of State shall have a duty to
"promote the award of franchise agreements to companies in which qualifying railway employees have a substantial interest". Those who study the Register of Members' Interests will know that I am sponsored by the Transport Salaried Staffs Association. Its members, who are British Rail managers, must be the kind of people to whom the Minister was referring when he expressed the hope that there would be massive participation in management buyout by rail staff. I am grateful to the TSSA for informing me of the views expressed by those of its members who are senior British rail managers in the survey to which my hon. Friend the Member for Cunninghame, North (Mr. Wilson) referred. Ninety-two per cent. of senior managers replying were not in favour of rail privatisation as outlined in the Bill ; 77 per cent. were in favour of British Rail retaining the ability to bid for franchises ; 71 per cent. were not in favour of management buy-outs ; and 85 per cent. felt that there was a conflict between management buy-outs and British Rail bids--and I believe that the majority of people want British Rail to bid for franchises.
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British Rail's senior managers want no part of privatisation. They are more concerned about the future of the service.Mr. Gary Waller (Keighley) : Does not the hon. Gentleman think that it is significant that one of British Rail's most senior managers, Chris Green, managing director of InterCity, is prepared to put his career at stake by moving to ScotRail? That displays a very different attitude among managers than that claimed by the hon. Gentleman. Mr. Green said :
"The biggest difference in the end will be that we're going to have to be more inventive, attracting more customers through marketing initiatives against a backdrop of Treasury squeezes over the years." At least Mr. Green recognises that, in the past, it was not Government handouts that were the key factor, but the dead hand of the Government and the Treasury, which prevented the
railways--particularly in Scotland--from attracting more customers. He acknowledges that there is a different way of approaching the problem in future, and is prepared to move to Scotland to prove it.
Mr. Home Robertson : Chris Green moved to InterCity from ScotRail in the first place, and I am not surprised that he is baling out of InterCity when the Government are in the process of dismantling it. The hon. Member for Surrey, North-West conjured up the wonderful spectacle of competition leading to processions of private operators laying on more and more services for the benefit of our constituents, but he gave it all away when, replying to an intervention by one of my hon. Friends, he acknowledged that all services would depend on subsidies for ever more. They will be big subsidies, as we know from leaks over the weekend.
The House may be interested to hear some of the responses by British Rail senior managers in the TSSA survey. Sadly, they must remain anonymous. One commented :
"Rail privatisation is essentially unsafe, requiring people unskilled in railway businesses to have access to systems and equipment for which they have inadequate training."
Another said :
"Political dogma is blind to practical reality."
One manager stated :
"I totally oppose BR privatisation in any form and I, like most other BR managers, believe it will fail to provide any kind of service."
There were many more comments, but perhaps the most significant of the comments that were passed to me was :
"Every success in your fight. We have been muzzled."
That is what the Government have done to the people who know about managing rail services. Right hon. and hon. Members are not supposed to be muzzled but are meant to protect the interests of their constituents--both those who work in the railway system and those who depend on rail services. Where are all those right hon. and hon. Members? Where is the hon. and learned Member for Perth and Kinross?
Mr. Matthew Banks : The hon. Gentleman quoted on the subject of safety someone whose identity and place of work is unknown to me. Does he accept that, throughout the whole process, the Government accepted each and every recommendation of the Health and Safety Executive?
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Mr. Home Robertson : I am not persuaded that privatisation will ensure the retention of proper safety standards, and I do not believe any of the Government's assurances.
Mr. Hugh Bayley (York) : My hon. Friend knows that Opposition Members tabled an amendment in Committee that sought to write into the Bill guarantees on each of the Health and Safety Executive's 37 recommendations to the Government. Is he aware that the Minister urged Conservative Members to defeat that amendment, so that it would not form part of the Bill?
Mr. Home Robertson : Nothing surprises me about the Government's cynical approach to this type of legislation. We know from bitter experience that they are prepared to sacrifice all manner of important principles in their drive for privatisation for the hell of it--and we see that today.
The presence in the Chamber of so few Government Members speaks volumes. I suspect that the vast majority of Conservative Members are thoroughly embarrassed by the Bill. Many of them led their constituents to believe that they would oppose the Bill. Where are those right hon. and hon. Members now ? I hark back to the poll tax. Conservative Members failed to stop that lousy legislation reaching the statute book, and they ended up with a botched job that did them great damage. There is a serious danger that the same will happen again with the Bill.
The country is looking to Parliament to protect the interests of our constituents. It is our duty to do that, but I fear that the Tory majority in the House will let down the people of Britain again.
Mr. Snape : Listening to the Minister was like getting into a lift-- or into an elevator, if one prefers the American name--that has muzak playing in the background. For the first three or four floors, it is relatively pleasant but as the lift c‡ontinues to ascend, one realises that the guts of the music has been taken out and one is left listening to plink plonk. By the time that the lift gets anywhere near the top floor, one wants to rip out the speaker and jump on it. Putting violence aside in respect of the Minister, listening to him felt much the same. His voice was mellifluous enough but his speech was sadly lacking any any content. I do not believe that the Minister, in his heart of hearts, has any more faith in the Bill than any other right hon. or hon. Member. Indeed, although the few Conservative Back Benchers who are present profess to be in favour of it, I suspect that, in their heart of hearts, they do not believe in it either.
I listened with interest to the contribution of the hon. Member for Surrey, North-West (Sir M. Grylls). He said that he had not spoken on this subject for 14 years. One forbore to say that, by the time he sat down, one could well understand why ; but his speech did not--let us say--hit the heights in comparison with other speeches that we have heard in this Chamber.
Anyone who believes that fragmenting the railway system in the way proposed by the Government--in particular, in two of the three amendments that we are discussing--will be good for safety and cohesion in the industry betrays his or her ignorance. It is a pitty that the hon. Member for Surrey, North-West left the Chamber after making his speech. We need go back only 70 years or so--a comparatively short time in railway history--to see what happened to the system when small private operators competed with each other : gradually, they all went under
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financially, and in 1923 the railways were combined into groups of larger, still privately owned, geographicall based regional companies.I have no wish to cause Conservative Members further distress ; I fear that, in due course, the electroate will do that anyway. However, let us consider what happened to those large, geographically based, privately owned companies throughout the 1930s and the second world war, until nationalisation. It is clear that they were exceedingly unprofitable. Let me choose one at random : the London and North-Eastern railway paid no dividends to its shareholders between 1935 and 1940. After that, of course, the taxpayer took care of the outgoings because of the second world war.
The fragmentation of the industry that the Government propose--whether or not management buy-outs are involved--is likely to prove disastrous on safety grounds as well, as has already been mentioned. It is difficult to find any senior BR managers who are in favour of the proposals, whether or not they can be persuaded to lead management buy-outs.
Predictably, the hon. Member for Keighley (Mr. Waller) referred to an article in this morning's Daily Telegraph, in which Chris Green was presented as a leading supporter of the principle. Although I cannot speak for him, I would not have thought that to be the case. I know that he is widely respected by railway workers for the way in which he has performed successive difficult jobs, but those jobs have been done within a unified railway system, in which some senior managers are themselves responsible for safety matters.
What concerns many Opposition Members about the proposed management buy- outs is the fact that they will be commercially driven and commercially led. Senior managers responsible for signalling safety, for example, will have neither the inclination nor the resources to be caught up in MBOs-- which may well be led by people who understand how to turn over a quick profit, especially with the subsidies that we are discussing, rather than by senior managers directly concerned with safety.
One extremely senior manager to speak out against the proposals was Mr. Peter Rayner, formerly regional movements officer of the former London midland region. He was responsible for all train movements in the region. After the Clapham disaster, he denounced the fragmentation of the railway industry on the grounds of its likely impact on railway safety. Soon afterwards, he was transferred from his post and given a job that had been specially created ; he described it to me as involving something called psychometric testing. I do not envy Hansard the task of transcribing that ! It was clear that--as he put it himself--Mr. Rayner was a square peg in a round hole. Before long, he took early redundancy and left the railway industry. So much for railway managers' being allowed to speak freely about the damage that they expect to be done to their industry.
The hon. Member for Southport (Mr. Banks) said that the Government had given various assurances about safety. What assurances from the present Government can we believe or trust? They have given many assurances about other matters that we shall debate today and tomorrow, but those assurances do not appear to have satisfied many people.
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6.15 pmAs my hon. Friend the Member for Streatham (Mr. Hill) suggested, financial matters lie at the heart of the amendments. I never thought that he and I would be in the Chamber bemoaning the fact that railway subsidies were to rise. For many years, we have pursued successive Ministers--successive Governments, indeed--on the subject of expenditure in the industry. The fact is that, as my hon. Friend points out, the increased subsidy will not provide a single extra service, a single refurbished railway station or a single extra member of staff at a country station. The money will be used-- purely in the short term--to bribe people to become involved in purchasing a franchise to operate a railway service.
Will anyone seriously wish to put up a considerable sum, whether it is their own money or the Government's--the Minister cannot tell us how much will be involved, because he does not know--to operate a railway service on track owned by another, in the short term, publicly owned company-- Railtrack, which itself must achieve an 8 per cent. return? Would any Conservative Member do so?
I note that the hon. Member for Worcester (Mr. Luff) has returned to the Chamber. A few weeks ago, he and I engaged in a short television debate ; the last question I asked him was how much of his money he would put up to purchase the railway that runs through his constituency. After all, it is a hundred years or so since the Oxford, Wolverhampton and Worcester railway-- known, for some reason, as the Old Worse and Worse, which does not augur particularly well for the future--disappeared into the maw of the Great Western railway. Unfortunately, the programme ended before I could get a straight answer from the hon. Gentleman ; however, I should like to know how much of his own money he is willing to put in--as a great supporter of this damned piece of legislation--if there is a management buy-out of the former Old Worse and Worse. Alas, answer came there none ; but let me presuppose that the hon. Gentleman will not bankrupt himself, although he may well expect railway managers to bankrupt themselves. My hon. Friend the Member for Dundee, East (Mr. McAllion) spoke of morale in the railway industry. I have been connected with the industry, in various junior capacities, since the mid-1950s--or, rather, the late 1950s ; I should not make myself sound older than I am. I have never known morale to be as low as it is now, from the very top to the very bottom. The Government must accept some responsibility. If they think that managers whose morale has been virtually crushed by their attitude will now rush into MBOs at the behest of the Bill, they have another think coming.
It is nearly 15 long years since the Conservatives came to office. During that time, every member of the British Railways Board has been appointed by a Conservative Secretary of State--or, in some cases, reappointed.
Mr. Deputy Speaker (Mr. Michael Morris) : Order. I have allowed a fairly broad debate, but this goes far beyond the general duties of the Secretary of State or, indeed, the regulator.
Mr. Snape : I beg your pardon, Mr. Deputy Speaker, but if the general duties of managers in the industry are to mean anything, we must consider how the industry has
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been managed under various Conservative Administrations. However, at your behest, Mr. Deputy Speaker, I shall move on from that argument.If Railtrack is expected to make the return envisaged under the Bill, railway management will not rush to participate in management buy-outs. The budgetary constraints to which my hon. Friend the Member for Streatham referred are likely to come sooner rather than later. Like him, I appeal to the Minister for Public Transport to assure us that moneys pledged for management buy-outs and for the investment envisaged in the railway industry--which will be privatised if the Government's majority is brought to bear tonight--will not be cut in the Budget later this month. Will he also assure us that that money and investment will not be subjected to the invariable trimming that takes place every time that it is deemed necessary for the axe to fall on public expenditure projects?
If the Minister is serious about encouraging managers to become involved in the future of their industry, the Government will have to perform differently from the way in which they have performed in recent years. If we are made to stagger through the effects of another round of public expenditure cuts, which will fall on the railway industry in particular, morale among managers will collapse even further. That is not good for those who work in the industry ; nor, from the Conservative party's point of view, is it good for those who use railway services. I hope that the Minister will give those assurances : those on financing are essential not only from a political point of view but from the point of view of the future of the railway industry.
Mr. Heppell : It is disappointing that, at this late stage of the Bill's passage, hon. Members are in so much of a muddle about the Bill. That muddle was not foreseen when the Bill was introduced or during its Committee stage. The amendments have now been tabled because the Government got the Bill wrong in the first place. Sometimes people look for complicated arguments to explain the reasons of the Bill. The truth is that there are two reasons for it. The first is Government dogma that privatisation is good and the public sector is bad. The Secretary of State, knowing that being appointed Secretary of State for Transport was likely to be a stepping stone to spending more time with his family, wanted to flex his muscles and show the backwoodsmen on the Government Back Benches that he was made of stern stuff and that he would tackle privatisation. That is the main reason why we are here today. The second reason is simple : the Government have recognised that there are massive amounts of money in British Rail's pension funds and have been trying to get hold of those funds. Those are the reasons why we are here.
The Government had no idea how privatisation should take place, which explains the muddle. If we start from the basis of not knowing where we are going, we may end up where we do not expect to be, which is why the Government are still tabling amendments. In Committee, we seldom had a chance to discuss a clause, because before we could do so the Government amended it. We seldom had a chance to discuss amendments, because before we could do so the Government amended them. I am sure that
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the House of Lords has been through a similar process, with amendment after amendment being tabled. In effect, no one has discussed the original proposals.There are two specific reasons for Lords amendment No. 1. The first is to cloud and disguise the Government's feelings about BR being able to bid. An amendment was tabled in the other place to allow BR to bid for franchises. Rather than impose conditions that make it impossible for BR to bid, why will not the Government come clean and admit that they oppose the amendment that was passed in the House of Lords and admit that they are doing all they can to frustrate it? The second reason is Ministers' fears that privatisation will be a failure because insufficient people are prepared to bid. We were told that people in the private sector were queuing up to participate in this great enterprise, but they have not materialised. However, the Government now seem to welcome the thought of a few management buy-outs.
Let us face facts. The private sector will not be attracted without sufficient bribes, which will be given at the expense of the taxpayer. There will be no more management buy-outs without sufficient bribes. Who has heard of such nonsense? The Government talk about a level playing field and about competition, yet they say, "We shall issue a tender under which everyone is equal, but we shall pay for adverts placed by those who tender to help them to bid." The original purpose of the Bill was to ensure competition. The hon. Member for Surrey, North-West (Sir M. Grylls) spouted about how marvellous it will be when we have competition. Competition has long since been abandoned. It went many months ago when the Government abandoned the idea of open access. After that, they abandoned the idea of anyone competing against the franchisee, effectively ensuring that, when a franchisee won a bid it would have a monopoly on the service. Here is the clearest demonstration that there is no competition. The purpose of the amendment is to allow anyone to bid except BR.
British Rail's management have been encouraged to bid. They have been allowed up to £100,000 of taxpayers' money to prepare their bids. They have been allowed 85 per cent. of the cost of the first £10,000 in preparing their bids and 75 per cent. of the cost of the remainder, with a £100,000 cap on preparation. Is that a sufficient bribe? If it is, it still has not worked. As my hon. Friend the Member for Cunninghame, North (Mr. Wilson) explained, of the 25 directors in charge of existing profit centres that can become TOCs--train operating companies--only five are in the process of becoming such companies. It is interesting that there are so many new words to learn, and TOCs may be one of them. "TOCing" may go into the dictionary. That is not to be mistaken for "TWOCing"--taking without the owner's consent. "TOCing" may have the same definition in the dictionary, but it may or may not mean having consulted the Secretary of State or Minister first.
If we have been bribing management to prepare bids by giving them up to £100,000 to bid against the publicly owned company that we are financing, who is running the railways in the meantime? If the management are not needed to run the railways, one has to ask whether that is the type of management that we want in the first place.
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6.30 pmThe truth is that there are no companies ready to bid. Only two companies-- British Bus and Stagecoach--participated in a recent seminar held, I think, in August, by the Health and Safety Executive. Not one other company turned up to find out what the safety procedures would be on franchised railways. That tells me one of two things : no other companies are interested in bidding for the franchises or only two companies were sufficiently interested in safety to attend the seminar.
I have no time for the Minister's reassurances about safety. As I said in Committee, if the Minister believed that the recommendations in the Health and Safety Executive's report needed to be implemented, he would have included them in the Bill so that they had to be implemented. Similarly, we had hoped that many pension arrangements would have been included in the Bill. If they had been, tens of thousands of pensioners would not now believe that they have been ratted on by the Secretary of State, who, in effect, gave guarantees to the House which have now been broken in Government admendments.
Mr. Elfyn Llwyd (Meirionnydd Nant Conwy) : You referred to competition. Even if it were still covered in the Bill, do you agree that it is a complete waste of time
Madam Deputy Speaker (Dame Janet Fookes) : Order. I remind the hon. Gentleman that he should be addressing me.
Mr. Llwyd : I am sorry, Madam Deputy Speaker. The hon. Member for Nottingham, East (Mr. Heppell) said that competition was a dead letter in the Bill. My rural constituency contains one west coast railway and one in the north ; what possible use is discussion about competition in such an area? I am sure that the socially necessary services are of great concern to us all. My understanding is that the Treasury rules would not allow a guaranteed subsidy for more than three years. I discussed that issue with the Minister earlier this year and I await a reasoned response even now.
The hon. Member for Nottingham, East also mentioned "TOCing", he might be interested to know that the word "tocio" in Welsh means "to cut back".
Mr. Heppell : I thank the hon. Gentleman for that helpful intervention. I agree that the very idea of competition has completely disappeared from the Bill. It is no longer relevant. It is certain that the Government will not allow proper and free competition, including the participation of British Rail. One has only to consider the drafting of the franchising director's powers. When considering bids for services, the criteria will not be who is making the cheapest bid, who is the most efficient or effective or who will provide the best service to passengers or customers. Not one of those criteria will be relevant when BR makes a bid.
Government amendment (a) in lieu of Lords amendment No. 31 states that the franchising director will not have to consider the inclusion of a bid by BR unless it is desirable
"(a) for the purpose of promoting competition for franchises ; (
(b) for the purpose of promoting the award of franchise agreements to companies in which qualifying railway employees have a substantial interest ;
(c) for the purpose of encouraging new entry to the passenger railway industry ;
or
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(d) for the purpose of preventing or reducing the dominance of any person or person in the market for the provision in Great Britain, or in any part of Great Britain, of services for the carriage of passengers by railway."Each paragraph means that BR will be left out of the equation. If the Minister and the Secretary of State are not saying that BR is being told that it cannot bid, will the Minister tell the House in what circumstances will it be allowed to bid?
Mr. Bayley : Clause 4, to which the amendments relate, deals with the Secretary of State's powers, and I am pleased to see him back in the Chamber. I should like him to deal with a point raised in paragraph (a) in Lords amendment No. 2, which instructs the regulator to take note of the Secretary of State's guidance. Precisely what guidance will the Secretary of State give the regulator about the need to promote freight on the railways? With reference to paragraph (b), what action will the regulator take to promote the use of rail freight?
Paragraph 46 of the White Paper claims that privatisation "offers the best prospect of attracting new freight to rail with the environmental benefit that this will bring."
The Minister of State made a similar point in Committee. He said : "It is extremely important to protect the interests of all users of the railway network--passengers and freight--and to promote the use of the railway network."
Later that day, he said :
"We want Railfreight to develop all sensible business that can be handled by rail."--[ Official Report, Standing Committee B, 16 February 1993 ; c. 136-65.]
On 9 March the Minister told the Committee that new Government grants would be introduced which
"will broaden the benefit given to the rail operator"--
vis-a-vis the road operator--
"by taking account of the environmental damage caused by heavy goods vehicles on trunk roads and motorways".--[ Official Report, Standing Committee B, 9 March 1993 ; c. 675.]
The rhetoric is fine but, sadly, privatisation will have exactly the reverse effect : it will drive freight business off the railway on to the roads.
Let us take the case of Trainload Freight. In 1992-93, it made a profit of £103 million. I have today seen a memorandum from Graham Smith, Trainload Freight's corporate planning manager. It was dated 13 September 1993 and was sent to all members of the Trainload executive, the board of this British Rail subsidiary. It shows that the company's profits will fall. In 1994-95, profits are expected to be down to £53 million. The following year, it is anticipated that they will be down to £9 million, rising slightly the following year to £17 million and to £27 million the year after.
However, if one takes account of the large number of redundancies expected in the freight sector, which we discussed in Committee, the cash contribution that the company will manage after having met the redundancy payments will fall from more than £100 million last year to £46 million next year, to £4 million the year after and to zero--no profit whatsoever--the following year. That is hardly the rate of return that a private owner would expect on a £400 million business. It does not give much confidence for the future or in the prediction that privatisation will, in the words of the White Paper, move freight from road to rail for environmental reasons.
Senior British Rail managers are telling Ministers that the privatisation of the freight business is a one-way ticket
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to liquidation. No wonder there is so much in the Bill about administration orders, winding-up procedures and insolvency : that is what privatisation will do to the freight business.I have a verbatim record of a meeting between British Rail's chief executive, John Welsby, Trainload Freight managers with the Minister for Public Transport on 11 October 1993. Mr. Welsby said : "I'm just about to appoint three managing directors and I don't want to send them off on bum prospects".
Those managing directors have now been appointed. They are Kim Jordan for the south-eastern division of Trainload Freight, Ian Braybrook for the north-eastern division and Julian Worth for the western division. Is the Secretary of State sending them off on bum prospects? Everyone in Trainload Freight is complaining that the fragmentation--the three-way split of their company--will mean that the operation will lose economies of scale.
At the same meeting, Welsby told the Minister :
"You are in a hole and still digging. I don't see how there will be anything still to sell, certainly not the cake, just the cherries." John Welsby is clearly picking up language used by my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), who was the first to talk about cherry picking as the likely consequence of privatisation. The Minister replied to Mr. Welsby :
"Thank you for your clear and forthright presentation. The message is not surprising. I've understood the message for some time." I can imagine the Minister saying precisely that, because he said similar things in Committee. Later at the same meeting, the chief executive of British Rail said :
"All you'll be left with is a car boot sale. I'm not joking. We are playing a zero sum game with a totally inelastic market. Every plus is a minus to another rail player. I've got an instruction to start releasing surplus assets. You've even asked for a telephone number." The Minister replied :
"I wouldn't quite put it like that."
With some menace, John Welsby said :
"You'll have to sort this one out."
Will the Secretary of State sort it out ; more to the point, how will he sort it out at this late stage? When will the Government abandon their poisonous love affair with the juggernaut? When will they stop driving traffic from the railways on to the roads? When will they stop building roads through areas of outstanding natural beauty? When will they stop poisoning people with car fumes and move the traffic from the roads to the railways, as they promised--because they certainly will not achieve that through privatisation?
Mr. Gunnell : I want to comment briefly on clause 4, and in particular on the proposed encouragement of management buy-outs. I believe that, even against the background of the Government's own wishes and intentions, this has not been set about in the right way. We spent 16 hours discussing the clause in Committee. We recognise that the Secretary of State and the regulator have wide-ranging responsibilities under that clause. Price, quality, safety and, as my hon. Friend the Member for York (Mr. Bayley) pointed out, the effect on the environment are all the responsibility of the Secretary of State and the regulator, who must make the best possible regulations and arrangements to fulfil these responsibilities. It is thus understandable that the Government should take the view
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