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Disabled Persons (Services, Consultation and Representation) Implementation
Mr. Gordon McMaster accordingly presented a Bill to provide for the coming into force of the provisions of the Disabled Persons (Services, Consultation and Representation) Act 1986 relating to the appointment and rights of authorised representatives, the assessment by local authorities of the needs of disabled persons, and the procedures to be implemented when a person is discharged from hospital, and to make corresponding provision in respect of the Disabled Persons (Northern Ireland) Act 1989: And the same was read the First time; and ordered to be read a Second time upon Friday26 April and to be printed. [Bill 107.]
Railtrack
Madam Speaker: I have selected the amendment in the name of the Prime Minister.
3.51 pm
Ms Clare Short (Birmingham, Ladywood): I beg to move,
- That this House, noting both the public opposition to the privatisation of the railways throughout the United Kingdom and the undertaking given by Her Majesty's Government during the passage of the Railways Act 1993 that Railtrack would remain a publicly owned company for the foreseeable future and believing that the flotation of Railtrack will damage the national interest, lead to short term profits being put before long term investment and to lower safety standards, calls upon Her Majesty's Government to withdraw the present plans for the sale of Railtrack and to conduct a thorough review with the aim of securing for the nation higher levels of rail investment, improved services and the best possible return on taxpayers' money.
The motion points out that the overwhelming majority of the population of the United Kingdom--which of course includes Northern Ireland--are opposed to the privatisation of the railways. It also draws attention to the fact that the House of Commons has never given its consent to the sale of Railtrack, which owns the track, signalling, bridges and stations that lie at the heart of the railway network.
It is notable that, during the passage of the Railways Act 1993, the House was repeatedly assured that Railtrack would remain a publicly owned company for the foreseeable future. Many quotes are available to prove that point, but I will give the House only two today. The then Secretary of State, the right hon. Member for South Norfolk (Mr. MacGregor), speaking on Second Reading, said:
The then Minister of State, the right hon. Member for Kettering (Mr. Freeman), speaking in Committee, said:
That assurance was repeated time and time again during the passage of the Railways Act 1993.
I am sure that all hon. Members will agree that rail privatisation with the core of the system remaining publicly owned is very different from privatisation with Railtrack as a private company. It is fair to say, therefore, that Parliament was misled about the Government's intention when the Railways Act 1993 was passed.
It is because we believe that the privatisation of Railtrack is deeply damaging to the national interest that we have arranged today's debate. We are aware from the Save Our Railways poll taken some months ago that, when Tory Members of Parliament were asked anonymously whether they supported rail privatisation, 20 per cent. of them said that they were opposed to it. The challenge to them today is to vote for what they know to
be right, and to vote for the national interest. It will be very interesting indeed to see the strength of their consciences.
Northern Ireland is also threatened with rail privatisation, although it is on a slower track than that of the rest of the United Kingdom. Rail privatisation will obviously damage the transport system in Northern Ireland, and it will be very interesting to see how hon. Members representing constituencies in Northern Ireland vote today.
Before going any further, I should like to say a word about tax. The cost of privatising the railways amounts to an extra £106.38 for every taxpayer in the country. That is equal to an extra 1p on the basic rate of income tax. Those who are concerned to reduce taxes should therefore vote with us to halt the sale and save the taxpayer a lot of money.
Mr. Den Dover (Chorley)
rose--
Ms Short:
I shall not give way on that point.
The costs of privatisation to the taxpayer are shockingly large. It cost the taxpayer £1 billion to prepare British Rail for privatisation. That was one-off spending, but surely the money would have been better spent improving the west coast main line, which is my line and which is falling into ever greater disrepair and becoming more unsafe and unreliable. On top of that, it is costing the taxpayer an extra £850 million every year to run the privatised structure, which is less efficient and more costly than the old British Rail. In other words, the taxpayer is paying more for a lesser service.
Under the privatised structure, the taxpayer is expected to pour £2 billion every year into the top of the system. That trickles down, providing profits for all 100 companies that British Rail has now become, but there is no accountability to the public for the expenditure of that money and no return on taxpayers' investment. As the right hon. Member for South Norfolk said when he uttered the words that I cited earlier, that is a ridiculous set of arrangements.
If we consider specifically the cost of the sale of Railtrack, we come across other major problems. There has been a big fattening up and a creation of sweeteners to get the company sold at any price, no matter the cost to the taxpayer or the damage to our railways. Thus, a company whose modern equivalent value is £6.5 billion is to be sold for an estimated £1.5 billion, which is disgraceful in itself.
In order to get the company sold, £1.46 billion of debt--money owed to the taxpayer--has been written off. An unprecedented £69 million of profits earned while Railtrack was owned by the public is to be given to shareholders who have not yet even bought a share. Nevertheless, that money is being prepared for them. Big bonuses are on offer to the top six executives if they manage to maximise short-term profits. That is the opposite of what rail needs--rail requires long-term thinking and long-term investment.
I am afraid that the damage of Railtrack privatisation goes even further. To get the company sold, track access charges have been set very high. Thus, it costs £170,000 a year in track access charges alone to put one passenger coach on the railways. That compares with £300 to £450 in vehicle excise duty for a coach on the roads. To get
Railtrack sold, the costs of using rail have been set so high that there will be no expansion of rail use under the privatised structure. Given the current projections of congestion on our roads, we must get more passengers and freight on to the railways to keep the country moving and breathing in the future. Under the arrangements in place, that cannot be done.
Although the Government babble about increased investment under privatisation, the reality is that the prospectus makes it clear that there is no expectation of growth in the use of rail under the proposals. Page 29 of the prospectus states:
Page 30 of the pathfinder prospectus states:
There we have it; they are the real intentions.
Mr. Dover:
I am sure that every hon. Member will join the hon. Lady in wanting more passenger and freight movement on the railways, but, after 20 or 30 years of falling passenger and freight rail movements under the nationalised system, what formula has she for increasing them?
Ms Short:
We will increase the amount of freight and the number of passengers on the rail network by ensuring that there are higher levels of investment and better quality, more reliable and faster services--the opposite of what is occurring under the privatisation process.
The Secretary of State for Transport (Sir George Young):
I am interested to hear the hon. Lady's commitment to higher levels of investment: where will it come from?
Ms Short:
We have made it clear to the Secretary of State and to others for a long time that we are interested in mobilising public-private partnerships. My right hon. Friend the Member for Kingston upon Hull, East(Mr. Prescott) made that recommendation as shadow transport spokesman in order to secure more investment in the rail network. That is occurring in other countries, and it should happen here also.
In addition to the terribly high track access charges that will prevent expansion in rail use, another major worry with the sale of Railtrack is that it controls much valuable land: stations are situated on valuable commercial land at the centre of every town and city in this country. There is a real danger that a Railtrack interested in maximising short-term profits will seek to misuse land that is needed for rail development in order to make a quick profit. That would constitute a major breach of the national interest.
I turn now to the reports in today's press about the serious leak yesterday of the letter from the chairman and chief executive of British Rail, Mr. Welsby--a Tory appointee. He wrote to the permanent secretary of the Department of Transport complaining that the prospectus is significantly misleading. That is a very serious allegation. The issue involves the penalties that Railtrack is required to pay if it fails to keep its agreements with other railway operators.
Page 41 of the prospectus explains:
It goes on to say that Railtrack will have to make those penalty payments to train operators for things that are outside its control, such as severe weather, as well as for things within its control, such as industrial action. The prospectus states that Railtrack has been allowed an additional £75 million per year in access charges in order to cover what it might have to pay out in those circumstances.
Page 41 of the prospectus explains that the company directors, having assessed what improvements they can make to Railtrack's performance, still
the amounts allowed for penalty payments in the Government's figures. That is a very serious point when considering the company's viability.
At the top of page 42--hon. Members may wish to check it--the prospectus says that, under the arrangements, a single day's cessation of train services will cost Railtrack about £12 million. According to my rudimentary calculations--the sum is not difficult: even Conservative Members could do it--Railtrack has enough money put by in the £75 million allowance for fewer than seven days' loss of services. In summer 1994, services were lost for 18 days.
After the first seven days, every additional day's lost service will cost Railtrack £12 million out of its profits. The big question is: how long could Railtrack last in those circumstances? Are Mr. Horton's management skills considered so great that he can do now what he signally--if I may use that word--failed to do in 1994?
Railtrack's profit last year, as stated on page 63 of the prospectus, was £189 million before tax. If one adds to that the whole £75 million additional penalty allowance, I calculate that Railtrack's annual profit would be wiped out in 22 days.
But the position is far worse than that. Page 66 of the prospectus shows that last year, with no days of complete cessation of train services, Railtrack still paid £80 million in penalties--that is £5 million more than the £75 million that is allowed for. If one assumes that the allowance is used up by ordinary disruption--as it was last year--Railtrack's profit would be extinguished altogether after fewer than another 16 days' lost train services. That is a very serious matter.
When the chairman of the British Railways Board--I remind the House that he is a Tory appointee--writes to the permanent secretary to the Department of Transport complaining that "material information for investors" on a desperately important subject has been left out of the prospectus, the country can see for itself that the Government, who have been consistently tainted by sleaze and underhand dealings, are prepared to sell Railtrack on a false prospectus.
"Outright privatisation of all the railway is not on the agenda for the foreseeable future, not least because subsidy from the taxpayer is needed, and we have made it clear that we shall continue to provide that."--[Official Report, 2 February 1993; Vol. 218, c. 160.]
"Railtrack will be in the public sector for the foreseeable future".--[Official Report, Standing Committee B, 23 February 1993; c. 400.]
"Railtrack's passenger access income is unlikely to benefit materially from any increase in passenger use".
"The opportunities for expanding rail freight operations are limited."
"at present performance levels, Railtrack will be making significant net payments to the train operators".
"do not believe these improvements will be sufficient to match"
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