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Ms Clare Short (Birmingham, Ladywood): Will the Secretary of State confirm that his statement amounts to an admission that the early franchises prepared by the franchise director, who is a creature of the Secretary of State, did not guarantee services as good as those currently provided by British Rail? Does he further agree that the courts found that five of the seven early franchises were in breach of his guidelines and undertakings to Parliament?
Will the Secretary of State clarify his statement in plain language? Is he admitting that, because the early franchises were not in line with his own guidance, he now plans to rewrite the guidance and reduce the minimum standards required to "a core service level"--which is a new concept--and to take into account non-contractual promises? Will his revised guidelines permit the four franchises that were ruled illegal by the Court of Appeal to go ahead without revision?
Does the Secretary of State agree that the first three franchises should now be withdrawn? First, the franchise for the London-Tilbury-Southend line was held to be illegal by the Court of Appeal, although for technical legal reasons it was not stopped; in honour, it should be stopped. Secondly, it would be wrong to let early franchises on the basis of guidelines that are different from those that will apply to later franchises. Indeed, I think that it would lead to litigation.
Finally, does the Secretary of State accept that even those who initially supported rail privatisation now believe that the method chosen by the Government is a disaster and will produce less investment and worse services in return for more public subsidy? Will the right hon. Gentleman now agree to halt the privatisation process and review progress? Surely he will agree that it is wrong for him to proceed on the basis of party dogma. His duty is to protect the national interest--and that requires him to halt the process of rail privatisation.
Sir George Young:
I was pleased to see on Ceefax that the hon. Lady is reported to have welcomed Railtrack's current 10-year investment strategy. That strategy is possible at the higher level envisaged only because we are privatising Railtrack. At no point has the hon. Lady or the Labour party made a commitment to provide more resources for Railtrack, but more resources will be available as a result of privatisation.
The court specifically ruled that the franchising director should be allowed to go ahead with all three of the first franchises, as it would be detrimental to good
administration if he were prevented from doing so. I hope that he will proceed; I think that when he does, and when the franchise bids are in the public domain, people will realise that much of the concern that has been expressed is unfounded.
I hope that the hon. Lady noted from my statement that, to deal with some of the concern that has been expressed, I am giving guarantees over and above those that were necessary to comply with the court's judgment. It is important to understand that the minimum PSRs are not the same as the timetable. I genuinely believe that, as we make progress with franchising, and as people see the quality of the bids and the range of services provided by the private sector, much of the concern of the past few weeks will be shown to have been unfounded.
Sir Alan Haselhurst (Saffron Walden):
Do not the Government's critics seriously underestimate the level of service that will be provided under the franchises? Will not the timetables prove less of a mirage than some of those published by British Rail? At present, services can be removed with relative impunity--as, for example, on the London to Cambridge line, which goes through my constituency. No guarantees whatever are given.
Sir George Young:
My hon. Friend is absolutely right. Under the structure that we are introducing, passengers will be given guarantees that were not available to them before. First, key fares will be guaranteed and linked to the retail prices index or lower. Secondly, as my hon. Friend rightly pointed out, services specified in the contract will have to be provided for a minimum of seven years. That guarantee has never existed under a regime operated by British Rail.
I also agree with my hon. Friend's view that, now that we can make progress with the awarding of franchises, people will realise that a better service can be provided. We want to hear from the Opposition at some point whether they will confiscate franchises from the private sector even when they provide passengers with a better service at less cost to the taxpayer.
Mr. David Chidgey (Eastleigh):
The Secretary of State will know that, in our previous debate on this matter, it was made clear that the PSRs were based on the existing British Rail timetable. It appears from the right hon. Gentleman's statement that they will be based on something broadly similar to existing services. By what criteria will he be guided in future in ensuring that the PSRs are legal?
It seems that the right hon. Gentleman intends to proceed with the first tranche of three franchises with the current PSRs rather than with what would be preferred. If that is so, does he recognise that inconsistencies will be built in across the region between two levels of service? What action does he propose to overcome that inevitable disparity?
Sir George Young:
I said in my statement that I planned to change the guidance and instructions, and explained the general lines on which that would be done. I shall, of course, place the new guidance and instructions in the Library so that hon. Members may inspect them.
I genuinely believe that the franchising director is approaching the matter in the right way. The country has been divided into 25 regions. The franchising director is inviting people to bid for services; he will then choose the best bid. I believe that, when we make progress with the
policy, the hon. Gentleman will see that it is possible to run a railway that is better than that of the past 30 or 40 years, which has consistently declined. Our policy will unlock access to fresh investment that will not be constrained by being in the public sector, and will invite people outside British Rail to operate services. I think that it is possible to provide a better range of services, to market those services more efficiently, to introduce more creative fare structures and to reverse the historic decline in railway use--and I believe that our policy will do that.
Mr. Paul Channon (Southend, West):
The guidance that my right hon. Friend has announced will be widely welcomed both in the House and outside. It would be disastrous if the first three franchises were not awarded. Is my right hon. Friend aware that my constituents, who have lived with an inadequate British Rail service for half a century, are now looking forward to a better service, and look to him to ensure that the process goes ahead?
Sir George Young:
I am grateful to my right hon. Friend for his support. I can confirm that the franchising director has said that there have been good quality bids in response to the invitations to tender. I hope that, in the near future, it will be possible to proceed with the franchise for LTS Rail; my right hon. Friend's constituents will then be able to see the quality of the service being offered, and the debate will move from the theoretical to the actual. People will be able to see for themselves exactly what services are being provided, and I am happy for our policy to be judged on that basis.
Mrs. Gwyneth Dunwoody (Crewe and Nantwich):
Is it not demeaning for a Secretary of State to have to rewrite the rules to bring the bids into line? Will the right hon. Gentleman tell us precisely how much each taxpayer will have to pay if the Government write off billions of pounds of debt, throw away the assets of the railway system and, on top of that, make taxpayers provide a larger subsidy than they provide now?
Sir George Young:
The hon. Lady will not be surprised to learn that I do not agree with the thrust of her questions. All our experience has shown that, at the end of the day, the taxpayer does better when nationalised industries are privatised. We are familiar with the £50 million a week that the nationalised industries were costing us, and the £50 million a week that the privatised industries now bring in. I see no reason why our privatisation policy should not bring benefits not only to taxpayers but to passengers.
Sir Roger Moate (Faversham):
Does my right hon. Friend agree that, if the Opposition were truly interested in the travelling public and the railway industry, they would oppose any further delays and uncertainty? If we are to secure much-needed investment, the faster we get on with the franchising process the better. Will my right hon. Friend assure us that the next batch of franchises will be let very rapidly, particularly the franchise for the South Eastern Train Company?
Sir George Young:
I am grateful to my hon. Friend for his support. I hope that, now that we have clarified the legal position, the franchising director will be able to make good progress with the next round of franchises.
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