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5.32 pm
Dr. John Marek (Wrexham): The speech of the hon. Member for Colne Valley (Mr. Riddick) consisted of two parts: an apology for privatisation, and special pleading for charter trains. His discourse on privatisation was composed of some pretty selective statements. For example, he said that the price of electricity had fallen by 19 per cent. since privatisation--in real terms, presumably; but it probably rose by the same amount just before privatisation. He forgot to mention that British Airways' debts were written off. He also tried to make us believe that the privatisation of British Gas had been a success, notwithstanding all the fuss about Mr. Cedric Brown.
Opposition Members are not convinced that the hon. Gentleman is right. I admit that British Telecom has done well, but that might also have something to do with technology. The hon. Gentleman did not mention that. We would have listened to him more attentively if he had tried to be a little more serious, rather than peddle the usual political points. People are not stupid; they realise that there is more to success, or the lack of it, than privatisation.
British Rail is in an entirely different position from other privatised companies, because it does not have a monopoly. There are other means of travel, such as cars, aeroplanes and coaches. More important, it has no obvious means of making a profit. In this country and elsewhere in Europe, because of the way in which cars and petrol are taxed, subsidies must generally be paid for the running of a public transport system. That, too, places British Rail in a completely new category. I do not accept the argument that, because previous privatisations have succeeded--some have; others have not--this privatisation will succeed as well.
The motion mentions the allegation that tickets were taken from a machine at Fenchurch Street station and sold at Upminster, and the Secretary of State referred to another ticket fraud at Walthamstow. I do not believe that such fraud would take place if we had an integrated railways network. It is true that London Underground is run slightly differently from British Rail, but if there were a single system there would be no reason for one part of it to try to cheat the other.
Much more will now have to be spent on auditing. It is not just a question of catching a clerk who has succumbed to temptation. That is bound to happen sometimes--none of us is perfect, and an audit system is always necessary--but audit provision will now have to be increased simply because, owing to commercial considerations, one half of the organisation will be encouraged to engage in sharp practice at the expense of the other half. On occasion, commercial enterprise will become corruption and fraud.
If it is proved that tickets were purchased at Fenchurch Street and sold at Upminster, that will be fraud in anyone's book. I shall not prejudge the issue or blame anyone at this stage, but it is clear that something underhand has gone on. I shall await the findings of the inquiry. I noted on Monday, when the Secretary of State replied to a private notice question, that he is to return to the House to explain the reasons for what happened and to tell us what he proposes to do.
The speech of the hon. Member for Colne Valley revealed that privatisation has much to do with dogma and ideology. My hon. Friend the Member for Birmingham, Ladywood (Ms Short) used almost the same words, and I am happy to echo them. No real concern is felt for the industry, the travelling public or the country; the Tory party simply wants to divest government of as many functions as possible. That is the real motive for inflicting rail privatisation on the public.
Mr. Devlin:
I beg to disagree. Will the hon. Gentleman consider this point--not a dogmatic point, but a practical point relating to the way in which our public services are funded?
At the end of her speech, the hon. Member for Birmingham, Ladywood (Ms Short) described all the great things that a future Labour Government would do to improve health, social services, hospitals and a variety of other things. The hon. Gentleman must accept that--in the words of the hon. Member for Ladywood--that will necessitate a good many hard decisions. There is no doubt that the railways will be at the back of the queue, because they are not as politically emotive as hospitals. Consequently, when the public pie has to be divided, the railways will get the scraps. The benefit of privatisation is not that it is a dogma, but that it enables the infrastructure to receive resources from elsewhere--
Mr. Deputy Speaker:
Order. I did not call the hon. Gentleman to make a speech. Many hon. Members still wish to speak in this short debate and long interventions do not help.
Dr. Marek:
I appreciate the point made by the hon. Member for Stockton, South (Mr. Devlin), but privatisation will increase, not decrease, the subsidy.The additional net subsidy has been calculated to be£850 million a year. There has been some argument about the subsidy for South West Trains. The franchisees will be able to cut the subsidy if they succeed in getting more people to travel and in getting extra revenue, but they can also do it by cutting staffing.
Many stations in the United Kingdom could have no staff at night. That is important, because many women simply will not go on to a station at night which may be all but deserted if it is not staffed and there is no security. The private franchise operators may employ staff if they can obtain extra revenue, but I suspect that the number of staff employed late at night, when few people travel, will be cut and that there will be fewer, not more, services as a result of privatisation.
Mr. Donald Anderson (Swansea, East):
Is not another reason why the franchise process is bad for the public that the current timetable is politically rather than economically driven, with the result that the sums that are likely to be obtained will be reduced accordingly because the potential purchasers know that the Government are desperately trying to get this operation finished by the next election?
Dr. Marek:
My hon. Friend is right. Railtrack was initially valued at about £6.5 billion, but now the Government are talking of getting about £1.5 billion or £2 billion for the sale of that massive estate that is owned by the public. The hon. Member for Colne Valley talked about the £50 reduction in people's electricity bills.We all got £50 off, but we sold the grid, and for ever more, succeeding generations will pay shareholders' profits for that once and for all cut.
Mr. Tony Banks:
It is rather like a burglar coming back and offering someone five quid.
Dr. Marek:
My hon. Friend is right.
Conservative Members are fond of asking whether the next Labour Government will be able to provide the investment that has hitherto taken place in British Rail.I think that we will. Investment between 1974 and 1979 under the previous Labour Government at constant 1995 prices was just under £1 billion. It was less under the right hon. Member for Old Bexley and Sidcup (Sir E. Heath), when it was perhaps £700 million. Unfortunately, between 1980 and 1984, investment went down, and reached the £600 million mark one year. It is true that, between 1989 and 1993, the figure has been more than £1 billion, but in 1993-94 it went down to £663 million--a catastrophic decline for which the Conservative party is entirely responsible.
Average investment has been about £1 billion. That£1 billion should not all come from the public sector. I agree with the hon. Member for Eastleigh (Mr. Chidgey) that there must be a partnership between the private and
public sectors. Preferably, the public sector borrowing requirement rules should be redrawn, especially where there is a clear case of a resulting return on capital investment. If such a return was reasonably certain, whether it was public or private would not matter. I am keen that that should happen.
Like my hon. Friend the Member for Hampstead and Highgate (Ms Jackson) I have an interest to declare.I am not sponsored by ASLEF, but I am sponsored by the National Union of Rail, Maritime and Transport Workers--roughly, according to what the hon. Member for Dartford (Mr. Dunn) said, under the same conditions. I certainly speak for the union members because they want a decent railway system, high motivation and to serve the public. I also speak for my constituency, for my constituents in Wrexham and, in this case, for nearly everyone in the United Kingdom.
Dr. Spink:
Is the hon. Gentleman aware that the last time the Labour party applied those novel management methods to the PSBR, inflation reached27 per cent., Britain was bankrupt and my constituents were impoverished?
Dr. Marek:
I would not use the word asinine, but I hope that the hon. Gentleman will think about what he has said a little more carefully. One can borrow for items on which there is no return and no hope of any return, and for others on which there is a good return--almost a guaranteed return--over the life of the investment, which may be anything from 20 to 40 years. We must be a little more intelligent about this and stop only those investments for which there is no guaranteed return.
I do not believe that, under privatisation, there is any real prospect of a lot of rolling stock. There is certainly no prospect of an early upgrade of the west coast main line. I do not think that trains will run from Euston to Manchester in less than two hours. The regulator will not help. He is not there just for the travelling public; he is also there to enable the franchisees to make profits. Nor will there be cuts in subsidies.
What can be done? The only answer is that Railtrack must be in public ownership. The system can be regulated more toughly, but it cannot be integrated without a publicly owned Railtrack in the major part of the network. That is the crucial part. We can do what we like by way of regulation, but franchisees will still compete against each other and revenue will have to be raised by obtaining more passengers or by being commercially enterprising.
I agree with my hon. Friend the Member for Ladywood that it is premature to say exactly what we will do.We should wait for the prospectus to be issued for the flotation of Railtrack. I agree with what is probably most City opinion, and certainly that of the hon. Member for Eastleigh. I am sure that the Labour party will say that it will take Railtrack back into public ownership, whether by taking the voting shares from the company, by demanding equity for subsidy, or simply by taking back the shares--the Government cannot spend the money that quickly if Railtrack is sold in the autumn--but without paying for any of the dealing costs or other associated expenses associated with the share distribution.
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