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Member for Oldham, West (Mr. Meacher) who says in his article in Rail magazine that leaked documents are welcome? Does that mean that it is now official Labour party policy to encourage civil servants to breach the Official Secrets Act 1911?Mr. McLeish: That intervention suggests that I should not give way much more during the rest of my speech.
The Government want to deflect attention from what they are doing, so we are constantly asked what Labour would do. The real issue is: what are the Government doing to the rail network now? That is the subject that I want to address.
Mr. Tyler: Will the hon. Gentleman give way?
Mr. McLeish: I shall give way in a few minutes when I have made some progress.
We are looking at a set of Ministers--aided and abetted by Sir Robert Horton of Railtrack--who are guilty on a number of counts. The first is grotesque misuse of taxpayers' money. By any objective analysis, something like £1 billion has been spent on the privatisation process at a time when the industry is suffering from chronic under-investment. That simply cannot be right.
Secondly, we are witnessing the mindless destruction of the rail network. The rail network works, but it is quite clear from the bureaucratic mess that has been created that it simply will not work next year. It may work the year after because, by then, we shall have a Government committed to the railways rather than to the ideology of privatising them.
Thirdly, the Government are unique in generating an unparalleled hostility to any privatisation issue. The City is negative, sentiment is weak, passengers are angry, the public is dismayed and even among Conservative supporters every opinion poll suggests that they share our view. It is simply a daft idea.
One would have thought that, faced with that, there might be some remorse at the damage being done--not at all. This evening, we witnessed the typical view that privatisation will work again because--it is alleged--it has worked in the past. That is the triumph of hope over reality.
The most punishing charge that could be levelled at the Government is that they are driving passengers towards the edge of a nightmare. In the early days of rail privatisation, the Government said that there would be network benefits. How can there be network benefits when they propose to dismember an organisation into 94 pieces and then suggest that it will all mysteriously hang together? They said that through ticketing was fine and that passengers would have the same services as before--that ScotRail would compete with South West Trains. That is a wonderful illustration of a ludicrous system. At the end of the day, the Government will not accept the premise that only passengers will suffer.
Every day, our great rail industry is subjected, in both quality and tabloid press, to ridicule through no fault of its own but through the sheer stupidity and stubbornness of Ministers.
Mr. Tyler: I am grateful to the shadow Minister for giving way and I note his formidable argument for retaining a national rail network. He said that he believes that the public have a right to know, and I agree with that too. Will he give the House an explicit assurance that if
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the Labour party is in a position to do so and if Railtrack is sold before the general election, a Labour Government or Labour minority Government will immediately take steps to bring Railtrack under public control and public ownership again under a 51 per cent.-plus majority shareholding? The House is entitled to know the answer.Mr. McLeish: I am delighted to repeat that Labour wants a publicly owned, publicly accountable and publicly controlled railway. We heard earlier all about the debacle with children and passengers overloading on coaches, but I am informed--sadly, this is another leak which may upset the Government, but the next part will cheer them up--that Devon county council was informed in October 1994 of what was to happen. It was given the new pricing structure and told the problems, but--surprisingly--did nothing about it.
The issue tonight, however, is the railways. There is now a crisis at the heart of our national rail network; the tragedy is that it need not have happened. We need investment, and a new way forward. Other European countries have a sensible approach that seeks to attract private capital, but also seeks a genuine partnership rather than espousing the ideological claptrap that we hear from the Government.
Let us recap briefly. I am sure that Conservative Members will enjoy being reminded of the summer of discontent that they have created on the railways. We have heard a great deal about safety. It is massively complacent to suggest that safety standards cannot be improved. I accept that rail is one of the safest methods of travel, but that does not mean that there are no risks. When a network is dismembered, there is every opportunity for mistakes to be made--and Railtrack, although charged with ensuring safety, is more interested in its flotation. I challenge Sir Robert Horton to state the real priorities of his chairmanship.
Then there is the timetable debacle. The original timetable contained more than 2,000 pages, but that was not enough: a supplement was needed, then another, and I gather that there is to be a fourth. Indeed, I believe that the timetable is so bad that it may be reprinted, as was suggested by my hon. Friend the Member for Oldham, West (Mr. Meacher). Must the public pay again? Will the debacle for which Railtrack is responsible necessitate another contribution from the taxpayer?
A further debacle involving the west coast main line would be funny, if people, industries and routes were not being harmed by the Government's incompetence. The line is desperate for finance. The Secretary of State announced today that £7 million had been gathered in from Europe. What is it for? It is simply to finance more feasibility studies. It seems that a £1 billion project is lying in tatters. [Interruption.] Ministers are saying, from a sedentary position, that that is not the case. I challenge them to tell me when work on the line will start--not the resignalling work, but the full reconstruction of the west coast main line.
The Minister for Railways and Roads (Mr. John Watts): In 1996.
Mr. McLeish: I do not know whether the work will be done early or late in 1996; nevertheless, progress has been made, and I will not challenge the Minister further.
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The simple fact is that Ministers will not say how much money they have. They must say where the money is coming from. From what we have heard, it seems that not one penny-- [Interruption.] If the hon. Member for Hayes and Harlington (Mr. Dicks) would sit quietly for a while, he would probably add to his knowledge.Not one penny is coming from the private sector. Track access charges will support part of the project. The Government are trying to get £200 million from Europe; the trans-European networks money does not stretch to that. We shall wait with interest following the Minister's commitment to a 1996 start to the project.
The Secretary of State should be embarrassed about two other issues--or, rather, not necessarily the current Secretary of State, but his predecessor. Although 250 applications were received for a job on the Rail Users Consultative Committee, the Minister for Railways and Roads apparently suggested that none of the applicants was suitable. The Government then went on a spree to find a "placeperson". Will the Minister tell us whether the search has been successful? Are we to have a "yes- person" in the post? Obviously, the Government will be happy to see the departure of the present incumbent, who is retiring; but I sincerely hope that this will not be a manipulated quango job. If it is, it is another subject that the Nolan committee should investigate at an early stage.
The Secretary of State will probably know that his predecessor started a project called "the informed traveller". The essential aim was to retain network benefits in the crazy system of the privatised rail network. Are the Government still committed to that project? If they are, when benefits are likely to accrue--at least in directions from the Secretary of State?
The Government's key defence, advanced from both the Front and the Back Benches, is, "Do not worry about this privatisation; it is just like what happened with British Airways." That myth should be buried once and for all. Let us imagine that British Airways had been privatised in the same way as British Rail. We have 25 train operating companies with British Rail, so we should have had 25 aeroplane operating companies. Let us take the Manchester to London route, and franchise it separately; let us do the same with the Glasgow to London route. The Ministers smile, but that gives the lie to claims that this privatisation is anything like that of British Airways.
We have ROSCOs--rolling stock leasing companies--in the rail network; would we have had PLESCOs, or plane leasing companies, in British Airways, under Lord King? Would 737s, 757s, 767s and 777s be owned by separate companies and leased out? Of course not.
British Airways has one of the best maintenance services in the country. Throughout the country, it employs key people to provide services. In the scenario that I have described, it would not own anything. It sub- contracts, but that is not the same as a system of individual owners.
The key issue, however, is this: if British Airways had been offered a £2 billion subsidy in perpetuity, that would be similar to what the railways are getting. How can a service be privatised when there is a £2 billion subsidy committing Governments in 2010, 2020 or 2030? That is ridiculous. As if the financial position were not bad enough, to add insult to taxpayers' injury, that £2 billion is to be topped up with an extra £600 million once the railways are in the private sector.
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I am a Scot; I am canny with money; I am a moderate; and I have a lot of common sense. But I must tell people at the next election that the privatised railway will cost them £2.6 billion for ever. When is a privatisation not a privatisation? I suggest that this is one privatisation too many. It does not stand up to any critical analysis or objective criteria.The Government know that the privatisation is not working. We hoped that the new Secretary of State would have had his honeymoon, bedded into the job and then realised that his predecessors had whipped up some support for a crazy idea. I sincerely hope that the right hon. Gentleman will now wish to back off from an idea that is causing immense damage to the fabric of industry and destroying morale. It is not likely to generate a penny of the extra private investment that we hear about, and, ultimately, will probably deprive the industry of any network benefits.
If the Government do not listen, they must suffer the consequences at the next election. I can tell Conservative Members with hard-pressed commuter seats where train dependency is high that we will campaign in those seats, and the smiles will be taken off their faces if the shambles that we envisage comes to pass. If they do not build the railways for the future, Labour will put them back together when we take power--as quickly as possible.
6.48 pm
The Minister for Railways and Roads (Mr. John Watts): If the debate has proved nothing else, it has at least proved that King Canute is alive and kicking in Oldham, West. The hon. Member for Oldham, West (Mr. Meacher) has convinced himself that if he repeats the claims that rail privatisation will not happen, his empty words can stop it happening. He is oblivious to the water that is already lapping around his feet--presumably as a result of the leaks that he welcomes so openly. He cannot recognise the irresistible tide that is engulfing him.
Arguably, it is unfair to compare the hon. Gentleman to King Canute--unfair to King Canute, that is. As I recall, it was the foolish courtiers surrounding the king who believed that his words had magical powers. The king commanded the waves to show them their folly. But in the context of rail privatisation, we are dealing with a foolish would-be king. His policy can be described in the words of his hon. Friend the Member for Nottingham, East (Mr. Heppell) as a "cobweb of confusion".
My right hon. Friend the Secretary of State and the hon. Member for North Cornwall (Mr. Tyler) have both tried unsuccessfully to prise out of the hon. Members for Oldham, West and for Fife, Central (Mr. McLeish) precisely what the policy enunciated at their conference really means. Why have both of them refused to clarify the old Labour commitment to nationalisation which new Labour has made? That commitment is to renationalise the railways. Have they realised, for instance, that a commitment to renationalise makes their claim that they can stop the privatisation happening look rather more ludicrous than it does in any event? Or has the shadow Chancellor calculated that the cost of implementing the policy cannot be funded out of "endogenous growth"? Or
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have they recognised that there is at least a slight inconsistency between this new policy and Labour's much vaunted abandonment of clause IV about a year ago?The hon. Member for Oldham, West sought to cross swords with my right hon. Friend the Secretary of State over the comparison that my right hon. Friend drew between British Airways and British Rail. Not knowing when he was beaten, the hon. Member for Fife, Central returned later to the attack. Both of them are misleading themselves.
A proper comparison between British Rail and the British airline industry would not look at British Airways on its own and ask how it would be if it had been broken up into 90 separate parts. The starting point with rail is an industry which has, in all its aspects, been owned by the public sector since the folly of nationalisation by the post-war Labour Government. The comparison would have to be with one publicly owned corporation owning British Airways, Virgin, British Midland, Air UK and all the other operators, plus all the airports and probably control of air traffic control services as well. That would be a true comparison.
The hon. Member for Fife, Central seems to have been labouring under the misapprehension that British Airways owns all its aircraft. If he checks, he will find that a large part of British Airways' fleet is leased, just as happens throughout the industry internationally. It is a fact, as my right hon. Friend tried to explain to Opposition Front Benchers, that with the airlines--here I draw comparisons, as I have before, with road passenger transport and road haulage--the ownership of the infrastructure over which services are run is not the same as ownership of those who operate services on the structure or who provide for maintaining it.
Mr. McLeish: Why, then, was British Airways not broken up into 25 internal United Kingdom sections? [Hon. Members:-- "You have just heard why."] I am not talking about the British airline industry. There is a big difference between the Minister's point and what some Conservative Back Benchers were saying earlier.
Mr. Watts: No, there is no difference. With the airline industry we did not start from as bad a position as with the railways, where every aspect of service operation and infrastructure was contained in one monolithic structure. In the airline industry there was already separate ownership of the infrastructure and of operations. I therefore invite the hon. Gentleman to reflect on the seminar that I have just given him.
The hon. Member for Oldham, West also revealed once again his complete misunderstanding of the funding of the railways, pre-privatisation and post -privatisation. If he and his hon. Friend will look at the figures, they will see that, in the period before we started on the restructuring and privatisation of rail, Government support for the industry was broadly £1.5 billion a year; and they will see, in the same Transport Select Committee report from which they plucked out the £700 million additional cost figure, that Committee's judgment that in 1997, when privatisation will be complete, the amount of taxpayers' support needed will be broadly £1.5 billion a year.
They are confused about the intervening years because, this year and next, the figures that appear in the public expenditure statements include a line that deals with privatisation effects: a broad estimate and a composite
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estimate of the receipts from the sales of the businesses which, as my right hon. Friend the Secretary of State has explained, are now gathering pace.The hon. Member for Oldham, West also confused himself about the value of assets at replacement prices in Railtrack and the stock market valuation of the company. Of course there will be no relationship between the stock market valuation of the company when it is floated next spring and the way in which track access charges are calculated and approved by the rail regulator.
Mr. Dalyell: What evidence does the Minister have for saying that sales are gathering pace?
Mr. Watts: My right hon. Friend said earlier that businesses with a turnover of about £4 billion are now on the market, some of them sold- - [Interruption.] The hon. Member for Oldham, West has an inaccurate list of what has been sold. He mentioned heavy maintenance depots, but omitted the recent sale of On Board Services.
Mr. Watts: The hon. Gentleman sneers, but the business ranks third in this country's catering industry in terms of the number of pre-prepared meals that it serves every day--so it is not chickenfeed--[ Laughter .] In fact, it is good Minister feed, as the photographs in the Evening Standard of that day showed. However, I understand why the hon. Gentleman wants to deflect attention from his misunderstanding of track access charges.
The relevance of replacement values to calculating track access charges is that the regulator has set charges at a level that will ensure that Railtrack has the funds of about £600 million a year which it needs to spend to maintain and improve the system. But the stock market valuation has no relevance whatever to the level of track access charges. Because of the increased efficiency that will come from the private sector operation of Railtrack, track access charges are falling, by 8 per cent. in real terms immediately, and thereafter by 2 per cent. below the retail prices index for the next five years.
My hon. Friend the Member for Blackpool, South (Mr. Hawkins) reminded the House that the passenger service requirement introduces a guarantee of service levels for the first time ever. The publicly owned and accountable railway to which Opposition Front Benchers are so attracted has never given such guarantees. In fact, the publicly owned and accountable railway has the power, which it sometimes exercises, to reduce services to the point at which any further cut in services would mean that they disappeared altogether. So that is the sort of guarantee that passengers have with the structure that Opposition Members find so attractive.
I must tell the hon. Member for North Cornwall, moreover, that, in the publicly owned and accountable railway, management have the power to increase fares by as much as 56 per cent. What is the benefit of public ownership and accountability when that is what passengers may have to face? By contrast, the fares regime announced by the franchising director provides greater protection for passengers than they have ever enjoyed in the past.
My hon. Friend the Member for Worcester (Mr. Luff) referred correctly to the stultifying effect of nationalisation. Privatisation of the railways will be the trigger for the renaissance of the railway industry, to
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which Opposition Members pay lip service but which they are not prepared to deliver. My hon. Friend rightly castigated the hon. Member for Oldham, West and others for their irresponsible and mischievous scaremongering over safety. The reality is that the safety regime that is introduced with the restructuring and privatisation of the railways is much more rigorous than the blanket safety authorisation covering the whole of British Rail, under which the nationalised railway has operated.Under the new regime, every individual company and unit operating within the railway industry must satisfy, first, Railtrack and, ultimately, the Health and Safety Executive that it is competent to manage safety on the railway. That is a much higher requirement than has ever existed before, and it is also an open regime which involves people broadly across the railway industry, including the trade unions, which, of course, have valuable expertise and views to express on safety measures. It is part of that open regime that information about the causes of accidents and the way in which they might be avoided in the future must be disseminated widely if we are to ensure the highest possible standards.
I am conscious of the time, as no doubt you are, Madam Speaker; therefore I do not have time, sadly, to respond to all the other interesting and valuable points made by my right hon. and hon. Friends or to continue rebutting all the fallacies on which the arguments of Opposition Members were based. It must be clear, even to King Canute sitting opposite, that there is now an irresistible momentum to privatisation. If the hon. Member for Oldham, West does not recognise that, he will be swept away as the tide continues to come in.
Question put, That the original words stand part of the Question: --
The House divided: Ayes 259, Noes 288.
Division No. 217] [7.01 pm
AYES
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Abbott, Ms DianeAdams, Mrs Irene
Ainger, Nick
Ainsworth, Robert (Cov'try NE)
Allen, Graham
Alton, David
Anderson, Donald (Swansea E)
Anderson, Ms Janet (Ros'dale)
Armstrong, Hilary
Ashdown, Rt Hon Paddy
Ashton, Joe
Austin-Walker, John
Banks, Tony (Newham NW)
Barnes, Harry
Barron, Kevin
Battle, John
Bayley, Hugh
Beckett, Rt Hon Margaret
Beith, Rt Hon A J
Bell, Stuart
Benn, Rt Hon Tony
Bennett, Andrew F
Bermingham, Gerald
Berry, Roger
Betts, Clive
Blair, Rt Hon Tony
Boateng, Paul
Bradley, Keith
Bray, Dr Jeremy
Brown, Gordon (Dunfermline E)
Brown, N (N'c'tle upon Tyne E)
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Bruce, Malcolm (Gordon)Byers, Stephen
Caborn, Richard
Callaghan, Jim
Campbell, Mrs Anne (C'bridge)
Campbell, Menzies (Fife NE)
Campbell, Ronnie (Blyth V)
Campbell-Savours, D N
Cann, Jamie
Carlile, Alexander (Montgomery)
Chisholm, Malcolm
Church, Judith
Clapham, Michael
Clark, Dr David (South Shields)
Clarke, Eric (Midlothian)
Clarke, Tom (Monklands W)
Clelland, David
Clwyd, Mrs Ann
Coffey, Ann
Cohen, Harry
Cook, Robin (Livingston)
Corbett, Robin
Corbyn, Jeremy
Corston, Jean
Cousins, Jim
Cox, Tom
Cunliffe, Lawrence
Cunningham, Jim (Covy SE)
Cunningham, Rt Hon Dr John
Dafis, Cynog
Dalyell, Tam
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