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4.17 pm
The Secretary of State for Transport (Sir George Young): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
- "congratulates the Government on the progress that it is making with privatisation, particularly with the start of private passenger services on the South West and Great Western lines, offering the prospects of better services and higher investment at less cost to the taxpayer; recognises that this demonstrates that the Opposition's attempt to halt privatisation has failed; and looks forward to the flotation of Railtrack in May as an opportunity for the railways to access private finance for investment.".
I welcome this opportunity to set out our plans for a better railway, to report on the progress that we have made towards achieving that and to contrast it with the policy vacuum offered by the hon. Member for Birmingham, Ladywood (Ms Short). Anyone listening to
her speech and hoping for some glimmer of intelligence on how the Labour party conference resolution on a publicly owned railway would be achieved would have been disappointed. It was an excuse of a speech, offering no clarity from a party that hopes to be elected. It is,I think, the first time in my life that I have been called a right-wing ideologue, a zealot and a thug. I hardly recognise her description.
Mr. Brian Wilson (Cunninghame, North):
Will the right hon. Gentleman give way?
Sir George Young:
No. I should like to exit the terminus and gather up a bit of speed before the first signal turns red.
Our White Paper, published in July 1992, set out a clear coherent programme for revitalising the railways by transferring them to the private sector. The policy has been pursued steadily over the past few years and is now coming to fruition, much to the frustration of the Labour party, which has been running to catch up. The speech by the hon. Member for Ladywood was evidence that Labour has now run out of steam.
I shall set out the progress that we have made towards achieving that better railway, but first let me deal with what the hon. Lady said about the LTS franchise, comment about which forms the main component of the motion before the House.
I reported to the House on Monday that, pending investigation of ticket irregularities, the franchising director had decided not to proceed with the transfer of the LTS franchise to Enterprise Rail. Since then, British Rail has sent audit teams to all the stations where the allocation of revenue between London Underground Ltd. and the train operating company could be manipulated to the advantage of the train operating company.
The checks picked up only one irregularity, involving about 30 tickets and a sum of £250, at Walthamstow Central, where the chief clerk has been suspended from duty. Checks of the newly franchised companies have revealed no irregularities at their stations.
The House should be in no doubt that we take the allegations seriously. As I said on Monday, financial irregularities, in the public or the private sector, have no place in a modern railway. The incidents are being fully investigated by British Rail and the Rail Regulator, and the franchising director has assured me that until he, the Rail Regulator and British Rail are completely satisfied that the allegations have been fully investigated, there can be no question of the transfer of the LTS franchise going ahead. The franchising director will not take any decision about the future of that franchise until he has had the chance to consider the outcome of the investigations.
The hon. Member for Ladywood alleged--
Ms Glenda Jackson (Hampstead and Highgate):
Will the Secretary of State give way?
Sir George Young:
I shall finish the next paragraph in my speech and then give way.
The hon. Member for Ladywood alleged that the irregularities would not have been uncovered had the LTS franchise already been transferred to the private sector.
There is no basis for that assertion. The irregularities were picked up as a result of new audit arrangements put in place for privatisation through the Association of Train Operating Companies.
After privatisation, ATOC will continue to carry out regular audits of ticketing transactions involving British Rail and the franchise operators. The audit arrangements have worked well and quickly; the irregularities were picked up within weeks. Nevertheless, the Rail Regulator will examine the robustness of the audit and check systems to find out whether any changes are required to improve the detection of fraud and other irregularities.
Ms Jackson:
I am grateful to the Secretary of State--[Interruption.]--and to quell any anxiety on the Conservative Benches, I of course declare an interest,as I am sponsored by the train drivers' union, ASLEF. It is my understanding that the franchise for LTS was awarded on 19 and 20 December. How could that happen if the franchising director had gone through the five stages necessary before a franchise is offered? Had he made the relevant inquiries into the managerial and economic competence of the franchisee, and had he really exercised his powers of diligent examination of the background of the would-be franchisees?
Sir George Young:
Yes, clearly he had, because the franchise was awarded to LTS. The crucial factor is that the audit picked up the irregularities almost at once.I hope that the hon. Lady will await the outcome of the investigations undertaken by ATOC, the Rail Regulator and the Office of Passenger Rail Franchising before coming to any premature conclusions.
Sir George Young:
I shall give way once more, and then I shall make progress.
Mr. Wilson:
For the benefit of the House and of potential investors in any of the companies, will the right hon. Gentleman confirm that if the incident had occurred after privatisation, it would have been exactly the kind of offence and breach of contractual conditions that would have justified the removal of the franchise there and then?
Sir George Young:
It is, indeed, true that the regulator and OPRAF have a wide range of powers at their disposal, including, in the case of the former, the power to revoke the licence. The point that I want to make at this stage, however, is that the prompt response to the incident by ATOC, British Rail and the Rail Regulator sound a clear warning to everyone in the industry that sharp practices will not be tolerated, but will be uncovered and dealt with.
I hope that the House will join me in expressing the hope that other public bodies, especially local authorities confronted by worse problems than those that I have mentioned, would respond as promptly.
Mr. Peter Luff (Worcester):
Does my right hon. Friend agree that what he has just said shows which party is tough on fraud and tough on the causes of fraud?
Sir George Young:
I am grateful to my hon. Friend. Indeed, earlier today I read the Appleby report into Lambeth council, which said:
Dr. Spink:
Does my right hon. Friend agree that it ill behoves the House to prejudice and prejudge matters that
Ms Short:
On a point of order, Mr. Deputy Speaker. The hon. Member for Castle Point (Dr. Spink) raised that matter on a point of order yesterday, and it was dealt with fully by Madam Speaker. The hon. Member for Gravesham (Mr. Arnold) misquoted Hansard. It is out of order to raise the point again in such a misleading way. [Interruption.]
Mr. Deputy Speaker (Sir Geoffrey Lofthouse):
Order. Hon. Members must settle down and get on with the debate.
Sir Teddy Taylor:
Will my right hon. Friend give way?
Sir George Young:
I will give way in a moment after I have got slightly further down the track.
Of course I regret that, as a result of what I have just referred to, users of the London-Tilbury-Southend line, including the constituents of my hon. Friend the Member for Southend, East (Sir T. Taylor), will have to wait a little longer before enjoying the benefits of privatisation, which are already starting to emerge for passengers on the Great Western and South West Trains' lines, as my hon. Friend the Member for Surbiton (Mr. Tracey) mentioned a moment ago.
We have combined robust safeguards to protect the benefits that passengers want from the railway with opportunities for franchisees to introduce better services and deals for their passengers. It has always been my view--I suspect that it has been shared by most hon. Members--that people will judge policies not on rhetoric but on performance: on what happens on the railways under the new regime.
I should like to outline some of the safeguards. For the first time, key fares are to be pegged to inflation for three years and at 1 per cent. below inflation for four years thereafter. In simple terms, I can guarantee that for every journey to every station in the country, there will be at least one regulated fare--a safeguard that passengers have never had before, laying the foundation for a revival in rail travel. Secondly, for the first time, service levels are guaranteed by contractually binding passenger service requirements--a guarantee not provided by British Rail. National through-ticketing schemes and discounts for disabled, elderly and young people are all protected.
"In 1993, it seemed there could have been as many as 400 to 500 council officers receiving fraudulent benefits. I could see no justification for Lambeth's failure to take strong action in this matter."
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