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Mr. Robathan: As we are discussing transport, does my hon. Friend think that that applies in Newbury, where the Liberal Democrats seem to support the Newbury bypass? Many people, especially around Newbury, are concerned about that. I thought that the Liberal Democrats wanted to get people on to trains and off the roads, and did not want to build new roads.

Mr. Hawkins: My hon. Friend makes a good point. I mentioned the improved services between Newbury and Paddington. I wonder whether the hon. Member for Newbury (Mr. Rendel) will welcome that benefit of privatisation. The important point about the double standards of the Liberal Democrats is that the right hon. Member for Yeovil (Mr. Ashdown) said:

"Liberal Democrats will buy back 51 per cent. of the shares in Railtrack"--

and this is rather puzzling--

"at the issue price or the market price, whichever is less."

That is an odd understanding of the way in which the market works, and I wonder whether it is not a case of Ashdown but mark down. Despite the Liberal Democrats'

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promise to renationalise the railways, the Liberal Democrat-controlled council on the Isle of Wight has suddenly welcomed the fact that its rail service was among the first to benefit from franchising. How is that for the kind of Liberal Democrat hypocrisy that we are so used to seeing in the House and across the country?

As my hon. Friend the Member for Epping Forest rightly said, so many people said at first that rail privatisation could not work, and then that it should not work. Customers are now saying that it is working, and it is a great and signal success.

12.4 pm

Mr. David Chidgey (Eastleigh): I am pleased to have the opportunity to follow the hon. Member for Blackpool, South (Mr. Hawkins) as it enables me to deal with some of the nonsense with which he rather spoiled the closing moments of his speech.

We have made it clear as a party that we can see potential advantages in a public-private sector partnership investing in and running the railways, particularly as far as the train operating companies are concerned. That has been our position for some years. We have made it equally clear that we do not believe that the freehold for the rail infrastructure should be entirely in private hands. We believe that major investment decisions on our strategic transport corridors--be they road or rail--should not be in the hands of a private owner, whose prime objective must be to maximise profit to shareholders rather than to serve the transport interests of this country. I hope that that is clear to the hon. Member for Blackpool, South and that he is now satisfied.

Mr. Norris rose--

Mr. Chidgey: I shall give way to the recently retired Minister, who may now have been promoted to parliamentary private secretary.

Mr. Norris: I thank the hon. Gentleman, who shows his customary courtesy, but I ask him to reflect on the point that he has just made. If the freeholds had been transferred to Railtrack in a way that allowed it to dispose of them without the slightest consideration of the needs of the railway, that would indeed have been--to say the least--irresponsible and, others might say, downright dangerous, but under the statutory regime the regulator ensures that Railtrack cannot dispose of freehold property, or any other property, in a way that would adversely impact on the railways. Surely that is quite different.

Mr. Chidgey: The hon. Gentleman made two points, which I shall try to answer. First, he referred to regulation of Railtrack's property assets. I am concerned about the amount of profit from property development that can be passed to shareholders. I would welcome Railtrack developing its excess property, but I am concerned that the regulations are insufficient to ensure that much of the profit is redirected into rail investment. Under the present regulations, I doubt that that will be possible, but it must be addressed.

I can answer the hon. Gentleman's second point directly by saying that great concern has been expressed about the way in which Railtrack is dealing with the interests of major freight hauliers and access to the rail

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network. It is clear that Railtrack is not motivated to encourage extra freight on the railways, where it foresees better profits from passenger services. It is not in the interests of the nation's transport system that those decisions be made on the basis of immediate profit, and that is why we are adamant that there must be some public control over the development of the rail network.

There is no dispute among hon. Members that an efficient, attractive and expanding railway is essential to sustainable passenger transport. It is agreed that the Government's programme of rail privatisation is a key factor in determining whether we rise to the challenges of initiating fundamental change in travel patterns, maximising rail travel and reducing congestion and pollution on the roads.

That is the issue. Let me set the scene by recalling the main objectives that the Government set the franchising director when the Railways Act 1993 was passed: to secure an overall improvement in the quality of rail passenger and station services, encourage efficiency and economy in the provision of railway services and promote the use and cost-effective development of the railway network. Most important, the 1993 Act placed a duty on the franchising director to secure value for money in achieving those objectives.

Have the objectives been achieved? Has there been an overall improvement in quality, the development of the network and the level of service? Has Opraf secured value for money in the award of franchises and has it controlled the cost of advisers?

According to the central rail users consultative committee, punctuality deteriorated last year on 33 routes out of 59. On the InterCity west coast main line, one in five trains was late by 10 minutes or more.

When Parliament considered the Railways Bill, the Government promised that existing services would be protected. On 11 February 1993, the then Minister for Public Transport, the right hon. Member for Kettering (Mr. Freeman), said that the franchises would be based on the 1994 timetable, that the franchising director would not be given discretion to pick and choose and that he would have to start with the existing timetable.

When the passenger service requirements were published, however, it was found that they gave massive scope for cuts in service. That was successfully challenged by some groups in the courts, but rather than accepting that they may have been wrong the Government responded by quickly changing the instructions to Opraf--in effect, moving the goalposts.

Across the country, the PSRs now allow operators to make significant cuts, should they choose to do so. For example, under the cross-country passenger service requirement, they are entitled to scrap services to Didcot, Kensington, Manchester airport, Poole, Weymouth and Blackpool. On the west coast main line they can axe InterCity services to Watford and Milton Keynes. We are not convinced that the objectives on the quality of service are being achieved.

The much-vaunted fare cap fails to protect a wide range of railcards and discount fares. Only one quarter of InterCity tickets, one quarter of Great Western tickets and

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less than half of South West Trains tickets are protected by a fares cap. More and more passengers are suffering from the fragmentation of the network.

Mr. Norris: I very much appreciate the hon. Gentleman's contribution; it is always considered and worth listening to. With reference to the so-called protection of discount fares, is it the case that the only one of the discount fare offers that was a net cost to British Rail was the disabled persons railcard? It cost British Rail about £3.6 million a year. A private operator might not take on an obligation that was just a cost, so that was specifically protected in the 1993 Act. An operator must provide that discount. All the other discount offer cards--the Supersavers, the pensioners' offers, the student offers--were profitable marketing enterprises. There was no need to protect a normal marketing enterprise that was making money for the railways. That is precisely what we should let the private sector get on with.

Mr. Chidgey: I followed the Minister's--I am sorry, the habit dies hard; I should say the hon. Gentleman's--intervention carefully, but it is difficult to follow his argument. The discount fares offered on the British Rail network were intended to fill available capacity throughout the working day or evening. We are concerned that the availability of rail services will be undermined by a failure to protect discount facilities. I am not aware of any evidence showing that all the discount fares offered previously under the British Rail regime and by regional companies were profitable--although that may be so.

More and more passengers are suffering as a result of fragmentation of the rail network. It is estimated that a third of all inter-city journeys involve a change of train--that is a sad reflection on what we hoped to achieve. A Railtrack South West employee, writing to a customer regarding inter-city train journeys and changes of train, said:

"Different train companies do not generally operate a connections policy for passengers using other companies' trains".

It is hardly surprising that passenger complaints increased by 14.5 per cent. last year to their highest level ever.

Let us consider some track maintenance and safety issues. The Rail Regulator gave evidence before a recent meeting of the Transport Select Committee and reported that expenditure in 1994-95 on the renewal of assets covered by Railtrack's asset maintenance plan--that point was mentioned earlier--was £150 million below the level required in the medium term to maintain the performance of the network. The regulator said that he had made it clear to Railtrack that he would want to be satisfied that the company had plans in place to achieve the increase in expenditure needed to maintain current performance, yet Railtrack underspent again in the following year by £127 million, making a total underspend of £277 million--more than 25 per cent. of the asset maintenance plan's budget.

That can only compromise safety and maintenance standards. I am concerned about a recent report issued by Railtrack senior engineering and operating managers. They kept a dossier of potentially dangerous incidents of which they became aware during the current year--such was their concern about the way in which maintenance

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standards were slipping. They revealed that, in the first seven months of the year

"90 potentially dangerous incidents . . . could have resulted in catastrophic accidents across the network of Britain's railways."

Those senior engineering managers have no axe to grind: they are simply concerned about ensuring an efficient, modern and safe rail network. They believe that those incidents are

"only the tip of the iceberg".

In his evidence to the Transport Select Committee, the Rail Regulator said that, two years on from the Railways Act 1993, he believed that there were no excuses. There are no excuses for falling standards of maintenance and safety on our railways.

Conservative Members have made great play this morning of what has been achieved by introducing private sector investment into our rail operations and services. As I have said before, I welcome such private and public sector involvement, which has many potential benefits, but the picture is not as rosy as Conservative Members claim.

We must remember that the ROSCOs were sold for £1.8 billion, with a guaranteed yearly return of£800 million for seven years--that is a pretty good deal by anyone's standards. I am concerned that no obligation was placed on those companies to do any more than maintain the stock that they had bought in its present condition. They are under no obligation to invest in new stock. The sale of the Porterbrook ROSCO to Stagecoach is a case in point. I resent Conservative Members assuming that no Opposition Member has run a business or hired staff. They should know better--perhaps they could pass an eye over "Dod's Parliamentary Companion" occasionally. I do not mind if somebody makes a profit out of a good operation that provides a reasonable service, is cost-effective and gives good value to the customer, but I object when the people who are supposed to be the guardians of our national resources show incompetence and allow our assets to be flogged off at knockdown prices, and other people come along and make a huge killing within months of the sale. That is incompetence and no business would employ any person who made such mistakes, so let us get that into perspective before we go any further.

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