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Mr. Tam Dalyell (Linlithgow): The Secretary of State will know that the Health and Safety Executive has published a report on the Forth rail bridge, the south end of which is in my constituency. Paragraph 100 of its report says:
- "While the general condition of the bridge does not give rise to immediate concern in respect of its carrying capacity, some members have suffered a loss of section due to corrosion to an extent which makes repair or replacement necessary as part of a planned maintenance strategy."
Apart from the fact that the bridge is the greatest monument to 19th-century civil engineering anywhere in Europe, the entire question of the railway system north of the Forth should be addressed. Will the Minister who winds up give a considered answer about how the Government view the financing of the work that the Health and Safety Executive thinks is of great importance?
Sir George Young:
I shall certainly see that my hon. Friend the Minister gives the hon. Gentleman the considered reply for which he has asked. As I am sure the hon. Gentleman knows, the HSE report confirmed that the bridge is safe. Railtrack fully accepts that the bridge requires a thorough maintenance regime and it is fully committed to the HSE recommendations.
We were also told that Labour would stop privatisation. It said that it would stop us in the Division after Christmas; it has said that it will stop us today, and it will be wrong again.
Then we were told that nobody would want to buy shares in Railtrack. On Monday, we published the pathfinder prospectus, announcing the sale of substantially all the Government's shares in the company and giving details of the first instalment--
Mr. Brian Wilson (Cunninghame, North)
rose--
Sir George Young:
I should like to finish this paragraph before giving way to the hon. Gentleman, and then I must make some progress. We also gave details of the timetable. Further pieces of the jigsaw will be put in place over the next two weeks, culminating in the publication of a price-ranged prospectus on 1 May. The public will then have another two weeks to apply. We expect the start of dealings on 20 May. One million prospective shareholders are now registered with share shops. They are ordinary investors like all those who have followed and supported the Government's programme of privatisations since we took office, which is why there are almost 10 million shareholders compared with fewer than 3 million in 1979.
The Daily Telegraph reported yesterday:
So much for the Labour party's claims that the public are not interested in the privatisation.
Mr. Wilson:
My hon. Friend the Member for Birmingham, Ladywood (Ms Short) referred to the letter that the chairman of British Rail sent to the permanent secretary at the right hon. Gentleman's Department on2 April, which stated categorically that the prospectus was deficient and misleading in many highly significant and influential respects. Since then, no alteration has been made to the prospectus. As the chairman of British Rail and the prospectus cannot both be telling the truth, does the Secretary of State agree that a stock exchange inquiry is required to find out the truth?
Sir George Young:
Certainly not. Mr. Welsby was responding to a request from my Department as part of
Rail staff will also benefit from share ownership. Railtrack's staff will be offered special share offers, such as free shares, up to £500, plus more for each year of service, and discounts of 20 per cent. Great Western last month offered more than half the shares in the company that won the franchise to all its staff. Those on offer were priced at 50p with a minimum stake of £100, and the company is so keen to encourage its staff that it is matching the first 200 shares purchased. That is what Conservative Members call real stakeholding.
I am sure that many trade union members, who sponsor so many Opposition Members, will take up those offers. As The Guardian put it yesterday,
Mr. Keith Hill (Streatham):
Will the Secretary of State give way?
Sir George Young:
I shall give way one more time, and then I propose to make progress.
Mr. Hill:
I presume that the Secretary of State is an enthusiastic fan of the £69 million flotation sweetener out of the so-called "profits" of Railtrack. Can he inform the House where those profits have arisen from? Is he aware that, last year, Railtrack salted away £150 million out of its maintenance programme? That money, which should have been spent on maintenance, is now being distributed to potential shareholders. Will not the motto of Railtrack in future be, "Putting profits before passengers"?
Sir George Young:
The hon. Gentleman knows that Railtrack is heavily regulated, and has been told by the regulator to reduce the access charges that it charges the train-operating companies. The companies will be operating within a tough regulatory regime. No money is "salted away", to use his expression--that money is needed to invest in, modernise and improve the nation's railways. The existence of the dividend will impact on the value of the shares when they are floated, so that the interests of the taxpayer will be fully safeguarded.
Sir Michael Grylls (North-West Surrey):
Will my right hon. Friend be gentle with the Opposition, as this is
Sir George Young:
Even sadder is the fact that Labour cannot give a commitment to buy it back, and I shall say a word about that in a moment.
Having disposed of some of the myths, let us look at the reality. Nearly half the rail industry--some£4 billion-worth by aggregate turnover--has been transferred to the private sector. That is made up of 51 businesses, including the five franchises that we have awarded so far. We have sold the three rolling stock companies, as the press has reported, for £1.8 billion. We have made good progress with the sale of BR's freight businesses. Rail Express Systems and the trainload freight companies have been bought by North and South Railways, a consortium led by Wisconsin Central Transportation. Wisconsin has a wealth of railway experience from around the world and will bring new ideas and successes to rail freight in Britain. It has plans to invest heavily in new locomotives. In the private sector, those businesses will have commercial incentives to win freight traffic from the roads.
The public want an improved railway service, and the key to that will be the sustained programme of expenditure on the infrastructure that Railtrack intends to undertake. That expenditure amounts to some £9 billion at current prices over the next five years--a significantly higher level of expenditure than Railtrack has managed under the public ownership and public accountability so beloved of Opposition Members. In practice, that expenditure could not be achieved without substantial private sector finance. I believe that Railtrack's privatisation will unlock the barriers to that private investment in our railway infrastructure. Those are the facts.
Mr. Gordon Prentice (Pendle):
Will the Secretary of State give way?
Sir George Young:
No. I said that I had given way for the last time, and I meant it. I have given way fairly generously in the course of my remarks.
Let me return finally to the alternative--to the policy vacuum on the Labour Benches. Last winter, we were treated to the unedifying sight of the Labour party in search of a policy for rail. It was like a tank engine, going backwards and forwards in a goods yard. That culminated in the speech in Swindon last month by the hon. Member for Ladywood, purporting to explain Labour's ideas. That speech was an insult to a great railway town. If her doom-laden analysis of the railways is right, her solution is wholly inadequate. If it is wrong, her solution is irrelevant. Either way, her speech in Swindon was incoherent intellectually and financially.
The rhetoric of old Labour, with its party conference call for public ownership, sits uneasily with the so-called reality of new Labour and the avoidance of commitments. Its policy statement said much about the tensions in the Labour party, but very little about the needs of a modern railway. First, Labour Members talk of an integrated railway system. What do they mean by that? Under this
Government, we have increased the integration of the railways into other transport systems. We have opened new lines such as the Robin Hood line in Nottinghamshire. We have opened more than 200 stations, whereas under Labour more than 600 were closed. Thanks to the private train operator, South West Trains, we now have new bus services in Hampshire linking towns to those with train stations. That is what any sensible person would call an integrated transport system. And, of course, we are extending the rail network, and knitting it closer together, with Thameslink 2000 and the channel tunnel rail link, taken forward by a private sector company under our private finance initiative.
Then the hon. Member for Ladywood talks of a "reconstituted British Rail". There will not be much, if anything, left of British Rail to reconstitute by the time of the next general election. Much of what was British Rail Labour has agreed not to buy back. We have already got about £5 billion-worth of the old BR either sold or on the market, with the remainder following on apace.
Let us recall Labour's views on all this. It has already said that it will not break any contracts. That means that, even if Labour was in office, it could not renationalise the franchises, which could remain privately run, for the life of the next Parliament. It has also said that it would not buy back the rolling stock, the freight or the maintenance units. It is now in the absurd position of claiming to be opposed to the flotation of Railtrack, while at the same time refusing to say whether it would buy it back. Under a Conservative Government, it says that Railtrack must be publicly owned. But, if there were a Labour Government, it could remain privately owned. Where is the sense or logic in that?
Then the hon. Member for Ladywood promised tougher regulation. I wonder whether she has seen the article in The Independent on 15 April. Under the headline, "Labour to woo British Gas by scrapping regulator", we see a different line from the hon. Member for Leeds, West (Mr. Battle). The article says:
"One of the largest stockbrokers in the country, Sharelink, said the number of people registering for the sale next month was already twice its expectation".
"For those prepared, however, to put the moral outrage to one side and consider Railtrack's possibilities in the private sector, the prospects could be quite alluring. It is a classic utility business with possibilities for ratcheting down costs through new technologies such as modern signalling systems; ending Spanish practices in the labour force and outsourcing some services. Who knows, Railtrack, like another transport firm British Airways, could well prosper in the private sector."
"He is keen to stress that those in his party who have what he terms 'a 1940s to 1960s mindset' will have their hopes of possible renationalisation dashed, and that it is crucial that the regulatory framework is simplified to make the companies' lives easier."
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