House of Commons Hansard Debates for 7 Feb 1996 (pt 36)

6.29 pm

Mr. Brian Wilson (Cunninghame, North): I congratulate my hon. Friend the Member for Thurrock(Mr. Mackinlay) on that virtuoso performance. During his routine involving the lists of stations, I was afraid that he was going to burst into song. If I remember, the next two lines went:

"Never paid my fare, man had no worries nor cares, man".

Fortunately, I am sure that that was not the case with my hon. Friend.

My hon. Friend's speech was in marked contrast to that of the hon. Member for Worcester (Mr. Luff), whose speech gave us a fair indication of why the Tories are in such a disastrous position. Frankly, if he had made that arrogant and complacent speech in defence of rail privatisation at virtually any public gathering in the country, he would have been laughed at in derision. Only here could he be heard, in at least half the premises, with relative respect.

Listening to all the Tory Members with vested interests, I thought that it might not be a bad idea if we adopted some football terminology. In the same way as there is the Beazer Homes League, we had visits earlier from the Hill Samuel right hon. Member for Norfolk, South(Mr. MacGregor), the S. G. Warburg hon. Member for East Surrey (Mr. Atkinson) and, of course, the Lowe Bell hon. Member for Worcester. The idea that vested interests in the House lie among Members on this side of the Chamber, rather than the Tory side--[Interruption.]Of course there are Opposition Members with interests, but I can tell Members where the money is in terms of interests--it is on the Tory side of the Chamber. The Tories are up to their eyes in vested interests in the privatisation of the railways. Perhaps that is why there is such enthusiasm for privatisation among the tiny number of Conservative Members assembled here tonight.

When the Railways Bill was in Committee, I invented a hypothetical private railway company called Spivrail. Tory Members who had sat mute throughout the Committee's proceedings were moved at that point to voluble protest. "What an insult to the ranks of private enterprise," they cried. But in fact, that is exactly what has been put in place--a railway for spivs handed over to them by the Government of sleaze. One more fraud investigation and we may even rename it Sleazerail.

In reality, life has improved upon art. Not even I had anticipated such a series of humiliating fiascos for Ministers in the earliest days of rail privatisation. Let us look at the first three franchises offered. The preferred bidders for Great Western--Resurgence Railways--had to be dropped after we exposed the fact that the managing director had just run a double glazing firm into liquidation, leaving a trail of debt behind it.

The franchising director, who was very accurately portrayed by my hon. Friend the Member for Thurrock, employs hundreds of lawyers at £250 an hour and more to drive the measure through. Why did none of them uncover that minor difficulty in the background of

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Resurgence Railways? Personally, I thought it a reasonable idea to check with Companies House, and there was the information available for anyone who wanted to find it. But the Tories, of course, did not want to find it.

At that point, the South West franchise had to be juggled. Otherwise, Ministers would have ended up with three management buy-outs, which would not have said a lot about the level of private sector interest. So Stagecoach suddenly became the preferred bidder--the company with the worst record of anti-competitive practices in the United Kingdom. I can tell the House that the people of the south and south-west ain't seen nothing yet.In Southampton, for instance, Stagecoach is remembered as the company to which the Tories sold the bus company for less than the value of the local bus station, which the entrepreneurial Stagecoach promptly sold off for development. The result is that, to this day, Southampton does not have a bus station. Let us hope that there is some safeguard in the franchise agreement preventing Stagecoach from selling the railway station.

Then we move on to fiasco No. 3--the London-Tilbury-Southend line--and what a cracker that is. Spivrail does indeed live. I love the names that the companies come up with--Resurgence Rail, Enterprise Rail, Victory Rail, Thatcher Rail. How many more of these names will we have? It really is a case of the louder they talk of their honour, the faster we should count the trains as they disappear.

Let us be clear about what has happened with Spivrail--or rather, the London-Tilbury-Southend line,or Enterprise Rail. There has been an absolutely predictable development following the tearing apart of our national rail network into dozens of fragments, each of which owes loyalty only to itself and its prospective shareholders.

Dr. Spink: On a point of order, Madam Speaker. Is it in order for the hon. Gentleman to use the word "spiv"? He is tarring the employees and the management team of that railway line, and he is prejudicing the inquiry that is taking place. Shame on the hon. Gentleman--

Madam Speaker: Order. I have heard nothing that was out of order. I often say in this House that Members are responsible for their own comments.

Mr. Wilson: It was nice to hear from the prisoner's friend.

In the case of the LTS line, the alleged victim was London Underground, but when the Consumers Association recently checked up on the fares being offered where more than one operator was involved, it was clear that the victims were undoubtedly--there are no allegations here--the passengers. A fragmented railway is a bad deal for the taxpayer and for the passenger, and every day that passes confirms the basic lesson that we were preaching when the Railways Bill was introduced.

I wish to make a small inquiry about the LTS scandal. Will the Minister confirm that when the consultants who check travel patterns went to Upminster in December to carry out a routine check, they found that the relevant records had been removed to Southend? The consultants,

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by whose assessments the fare revenue is divided up between the operators, were then dependent on information provided by LTS management, rather than randomly selected information. Does that not suggest a degree of premeditation? Why was no action taken on that by the franchising director?

There is a massive vested interest and conflict of interest involved for management teams in the proposed buy-outs. They have all the time and incentive in the world to put schemes in place for the post-privatisation period at the same time as they are supposedly running a public sector railway. That is the problem with management buy-out teams.

I have two proposals to make today. First, in light of what we have learned over the past few days, the embarrassment that the Government have suffered and the clear evidence that this is not restricted to just one franchising operation or prospective operation, the franchising operation should be suspended in its entirety until the investigations are complete. I do not expect the Tories to yield to that, as they are into the scorched earth phase and are trying to push the measure through.

Secondly, as soon as a management buy-out team has notified its interest as a prospective bidder, it should cease to be the management team for that railway until the franchise has been awarded. If that is not done, conflicts of interest will continue to arise.

I have worked with people from all parties in the past three years who have a common concern for our railways. One of those was the late Robert Adley. Two nights before he died, I met Robert Adley in the Member's Lobby. He patted his inside pocket with immense satisfaction and said, "I have got them here--the amendments signed by six Tory Members." Using a code that most of us here will understand, I asked him, "Including the right to bid?" "Of course," he said, "That is the one that matters--that will kill the whole thing."

Two days later, Robert Adley was dead, and the tragedy of historic proportions was that there was no Tory Member to take his place. If there had been, the subsequent course of events would have been very different. The right of British Rail to bid for franchises was, as Robert Adley rightly identified, crucial. If it had had that right, it would have won the franchises--it is as simple as that. That was also recognised by Lords Peyton and Clinton-Davis, and others from all parties who pursued that amendment in the House of Lords.

Eventually, in what seemed at the time to be a success, the Government were forced to concede the principle--although, as always, the precise wording of the amendment was crucial. In the absence of an Adley to hold out for more, the amendment was written to the advantage of those whose aim was still to destroy British Rail and the national rail network. Nine franchises have now been offered, and in each and every case British Rail has been denied the right to bid. In other words, the will of Parliament was cynically and systematically negated to satisfy the obsession with privatisation at all costs.