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Mr. Stringer: I have been following the hon. Gentleman's argument very carefully but am not quite sure whether he is against regulation completely. Is he in favour of a completely unregulated privatised system--which, effectively, would be a monopoly? Is he also making the case that when public subsidy is being provided to the railway--he has been generous enough to acknowledge that the subsidy is now twice what it was before privatisation--the public should not have a say in how it is used? He has acknowledged that the privatised system is not working perfectly, but is not the legislation intended to make it work better?
Sir Teddy Taylor: Subsidy has fallen--not increased--from £2 billion, to £1.3 billion this year. Although those reported figures may or may not be accurate, my advice is that subsidy has decreased and, eventually, will fade away.
Mr. Stringer: I was making the point that, on privatisation, subsidy doubled, and that--since then, not only in the past 12 months--it has been higher.
Sir Teddy Taylor: The hon. Gentleman should appreciate that we have no concept of what might have happened to the subsidy in the absence of privatisation. I have been an hon. Member for a long time. During that time subsidies have consistently been increased and, as the companies were getting into such a financial mess, hon. Members have consistently asked for more.
The plain fact is that, since 1996, subsidy per passenger mile has fallen by 41 per cent. Again, the percentage may or may not be accurate, but subsidy has decreased substantially.
I accept that we must have some type of public control in public services. However, we are building up a series of quangos with horrific power and run by those who think that they are terribly important.
I think that hon. Members who have worked in the industry will realise that it is not easy to run a railway which has, for example, to be run at unusual hours. Staff, who may have their own problems, are required to cover those services at unusual hours. Railways also have to deal with the public who, as we well know, are not perfect in how they deal with public property. If the proposed and rather grotesque organisation uses all its powers to the full--as it probably will, given the type of people who, we hear, are likely to run it--railways will be even more difficult to run.
Dr. Whitehead:
Does the hon. Gentleman accept that he has perhaps not painted a full picture of the provisions of clause 17? The clause states that a facility may be provided, improved or developed if the regulator is satisfied that
Sir Teddy Taylor:
How will the regulator, who is not running a business, know whether a venture will be profitable? If I am running a railway company, shop or factory, and I put my own money in it, I shall have to make judgments on whether investments will be profitable. Now, this guy--who will be called a regulator and will probably be on a very high salary but not answerable to anyone--will be able to tell me, "I think that that will be profitable."
Mr. Quinn:
I thank the hon. Gentleman for his great generosity in giving way. However, on expertise in running a railway, would he like to comment on the fact that the vast majority of those who are now running privatised railway companies had little or no prior experience in the railway industry? Would he also like to give the House his reaction--or perhaps that of his constituents--to the recent Public Accounts Committee report on the Railtrack valuation and sell-off, and on whether that sell-off ensured value for money for his constituents and the country?
Sir Teddy Taylor:
Although I have already spoken for far too long, I shall deal with the specific points that the hon. Gentleman has made. He will know that political complications made it difficult to value and sell Railtrack. My impression of the sale is that the previous Government obtained the maximum possible market price. As it turns out, Railtrack was worth more than that, so the investment was very profitable for those who made one. However, that was not the previous Government's responsibility.
The fact is that Railtrack has been run very sensibly, so it has been able to obtain otherwise unobtainable resources. Does the hon. Gentleman think that, if he were a merchant banker, it would have been possible--this is
the real test--to obtain a lot more for Railtrack? I believe that the answer to that question is no, and that the Railtrack privatisation has been a success story.
It is not the job of a regulator--or of someone who has run that ridiculous venture, the channel tunnel rail link, which was going to be so profitable--to say whether he or she thinks that an investment will be profitable. Surely such decisions must be made by those who are running the industry. If they think that something will be profitable, they should go ahead with it.
I accept that there must be some regulation to ensure that the public are protected. However, for goodness sake, let us not establish a series of crazy and expensive organisations that will cost a fortune, tell the rail companies exactly what they have to do, how they have to do it and for what they will be fined.
I say to the Government seriously that when we have a success story--there have been failures, but by and large the railways have been successes in that passenger numbers and freight mileage have increased, and they are operating well--we should single out the companies that have done well and encourage them to try to improve the image of the industry so as to attract others to it.
Mr. John Cryer (Hornchurch):
First, I should declare an interest. Although I have never gone a bundle on share owning, I own three shares in the Keighley and Worth Valley light railway. It is the railway on which my father drove steam engines for many years. I am probably the only Member of this place who has shovelled coal on the "Evening Star", which was the last steam engine built in this country before steam engines were finished.
Broadly, I welcome the Bill, like my hon. Friend the Member for Islington, North (Mr. Corbyn). We are both on-message this afternoon, which is unusual. I shall try not to spoil the situation, but I probably will because I usually do.
The key to transport policy and the running of a future transport system is the integration of transport and the moving of freight and people from roads on to railways and other forms of public transport. I can speak from bitter personal experience. Like the hon. Member for Rochford and Southend, East (Sir T. Taylor), I travel from the east London-Essex area into central London every day. I use the tube and the overground railway. I see overcrowding and trains in a bad state of repair. I see also the consequences of underinvestment, sometimes in the form of delays. This is on both the overground railway and the tube.
On the rare occasions when I drive into central London along the A13, the journey is not exactly a bundle of laughs. The A13 is frequently congested, often with heavy and lighter good vehicles. I occasionally drive a 1958 Armstrong Siddeley with, among other things, packed-up wipers along this route, and it is not a laugh a minute.
The key to getting people and freight off the roads and on to railways and other forms of public transport are public intervention and public investment. The Bill will
take us some way in that direction and some way to solving the massive problems that we have had in the railway system.
History demonstrates that the railways work best as a publicly owned and controlled monopoly. That is why in 1924 the Baldwin Government, at a time when the free market was virtually an icon, forced the regrouping of the hundreds of railway companies that then existed. That Government realised that the railway system was crumbling and falling apart. There was underinvestment and rolling stock was in a chronic state in many instances. Regrouping took place and there were four large railway companies.
It became clear by 1948 that regrouping had not worked properly. There was still massive underinvestment in the railway system, and in many areas there was virtual anarchy in the way in which the system was run, especially in rural areas. Hence we had nationalisation in 1948. It was introduced to meet exactly the sort of problems that we face now, namely, massive underinvestment and a crumbling infrastructure.
I am not saying 120 per cent. that the private sector should have no involvement in public transport. For example, throughout the era of public ownership of London Buses there was always a contract between the public and private sectors to maintain and supply tyres. That contract came up for renewal every year, and I suppose Dunlop, Goodyear and other companies would submit a plan for the next year that set out how they would maintain the tyres of London Buses. That contract was continued within a specific and particular framework and was tightly controlled and administered. That is a far cry from the present position on the railways, where we have billions of pounds going into privately owned railways. At the same time, there is a still a threat to many rural railways as well as other lines.
Back in January 1996, one of the most revealing articles about rail privatisation appeared in the City pages of the Daily Mail, that great organ of the Tory party. Mr. Michael Walters wrote:
"the person will be adequately rewarded for providing, improving or developing the facility".
Does that not seem to deal with the points that the hon. Gentleman is making?
"Beneath the financial filigree, Railtrack is a conduit for distributing State monies to private investors. All being well, the train operating companies collect subsidies and pass them to Railtrack to pay as dividends to shareholders."
That situation is very different from the one outlined by the hon. Member for Rochford and Southend, East. Michael Walters's comments spelt out the reality of Conservative plans for the rail system. The Conservatives saw their proposals as enabling the handing over of assets to the private sector, whether in the City or anywhere else. Of course, the private sector and the City financed Conservative party election campaigns, which was a convenient relationship. That was part of most of the privatisations of the 1980s and 1990s.
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