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Mr. Quinn: I am sure that the hon. Gentleman understands that he would have needed to talk not only to Railtrack, but to the train operating companies. At least three services run in that area, not to mention the freight companies. Surely, the key point is that we need that strategic overview to act as the cement to bring the constituent parts of the railway together, and to give that important voice to passengers and to community groups to ensure that not only national taxation but the local
taxation that subsidises key services for the economic viability of that part of west Yorkshire provide value for money. That is what the legislation is about. Those are the principles behind the Strategic Rail Authority. Does he agree?
Mr. Pickles: The hon. Gentleman has given me an opportunity to recoil from my embarrassment at his kind words. He seems to think that I am suggesting that a Strategic Rail Authority will be wholly bad; I am not doing that. I am dealing in shades of grey.
Mr. Pickles: With respect to my hon. Friend, no pun was intended. The more strategic the rail authority is, the better it will be. My concern is that it will suddenly get itself sucked into operational matters. In her excellent speech, the hon. Member for Crewe and Nantwich gave a clear example of exactly the type of detail that she would like the Strategic Rail Authority to be involved in. The detail that she suggests is not strategic, but wholly commercial and dangerous to the rail authority.
It is nice to see the hon. Member for Truro and St. Austell (Mr. Taylor) back in his place. He was complaining about the possibility of timetables being all wrong and having to try to integrate timetables. The position of the Liberal Democrats has changed somewhat, because last time we debated the matter, the hon. Member for Carshalton and Wallington (Mr. Brake), said:
Mr. Matthew Taylor:
The suggestion of a double-O system is very tempting, but the point that I was trying to get across did not involve detailed timetabling across the system--that would not be practical or helpful. I did suggest, however, that the authority needed to look at issues such as the non-integration of timetabling, where services by one provider did not link to another provider, so a through service was not provided. There is a role for a co-ordinating body there.
Mr. Pickles:
I accept what the hon. Gentleman says, but I think that, on close examination of Hansard tomorrow, he will find that he has backed himself against the buffers.
Mr. Gerald Howarth:
I do not wish to prolong my hon. Friend's speech, but may I ask him a question? Does he agree that it is in the interests of train operators to dovetail their services? The idea that they have a vested interest in preventing passengers from travelling around the country is wholly at variance with what is, in fact, their economic interest.
Mr. Pickles:
I note that my hon. Friend the Member for Rochford and Southend, East is still diligently occupying the Chair. He will recall a meeting with LTS--
I believe that if the authority is hands on and is second-guessing commercial decisions, it will fail. If it seeks an overview--if it seeks to take some powers away from the Department of the Environment, Transport and the Regions--it may have a chance of success. Its principal role must be to ensure a balance between passengers and freight, and to achieve that it must--in the words of the Select Committee--
We have already engaged in discussion about clause 8. How far-reaching the clause will prove seems still to be a matter of conjecture. Subsection (1) states that the authority may make grants, make loans or give guarantees
It is no good saying that all this was in the original privatisation Act, the Railways Act 1993. The provisions in that Act related specifically to matters concerned with peripheral grants. Clause 8 has the potential to undermine the relationship between Railtrack and train operators. Direct funding on a wide scale would make it difficult for Railtrack to run any schemes at all, if it involved the overseeing of its entire investment process; and it would reduce train operators' leverage on Railtrack. It would undermine a sensible programme of capital replacement. It would also undermine the replacement of trains, and the refurbishment of stations.
Mr. John Cryer:
As the hon. Gentleman will know, Railtrack claimed to be investing £27 billion over the next 10 years. When the figure is broken down, as it is in the Select Committee report on integrated transport, it becomes clear that the only new investment in new schemes amounts to £1.4 billion over 10 years. Does the hon. Gentleman consider that adequate?
Mr. Pickles:
If the Strategic Rail Authority is to achieve anything, it must, as the report suggests, create a climate for the encouragement of investment. The hon. Gentleman must ask himself whether clause 8 makes it more or less likely that private investment will be attracted to the railways. I contend that it makes it less likely. That may suit the hon. Gentleman's intentions, because he looks forward to the day when the railways can be renationalised; but if the idea is to secure private investment, clause 8 stands firmly in the way of it.
Mr. Quinn:
The hon. Gentleman has made an important point about future investment in rail schemes. As he knows, City venture capitalists are looking for a return on their investment in any transport infrastructure project. Does he agree with the chairman of the shadow Strategic Rail Authority, Sir Alastair Morton, who rightly
Mr. Pickles:
I am beginning to warm to the hon. Gentleman: I think he has the potential to become a free-thinking capitalist. He must understand, however, that clause 8 works against the very objective that he seeks to achieve. Let us consider what will be involved if the clause is taken to its logical conclusion. I am not talking about specific schemes or grants to encourage specific activities; but if the powers in the clause are used in regard to the general capital schemes that exist, they will act as a considerable disincentive in relation to the methods of capital-raising to which the hon. Gentleman referred.
Under clause 17, the regulator, at the request of the authority, may direct Railtrack to provide a new facility, or to improve or develop an existing facility. That undermines commercial freedom: essentially, it is second-guessing what Railtrack is doing. By its very nature, the Strategic Rail Authority is unlikely to have the detailed knowledge that would enable it to judge individual schemes against each other. A strategic authority should set itself broader objectives. If it becomes involved in supporting one form of investment against another, improvement of one station against improvement of another and one type of train against another, commercial decisions will be undermined.
As far as I could understand from what the Secretary of State said, that is not the Government's intention. He seemed to be saying, "I intend to use these provisions as a substitute for social provision with regard to particular lines, to ensure that a line or a service continues to exist for reasons of public necessity. I will not use them to set investment scheme against investment scheme." If that is the case, the Government should give an undertaking that they will restrict clause 17 to such considerations.
Dr. Whitehead:
Is the hon. Gentleman saying that regulation whose aim is to restrict the market's ability to decide on a price or an investment is illegitimate in principle? If so, he is surely suggesting that the water and electricity regulators are wrong, and that the independent Radio Authority is wrong. All those regulators are trying to impose some sort of standard on investment and performance.
"The Strategic Rail Authority should be about strategy and broad objectives; it should not be about timetabling of the 7.23 am Connex South Central services from Carshalton Beeches to Victoria."--[Official Report, 25 March 1998; Vol. 309, c. 444.]
I agree, but the hon. Member for Truro and St. Austell is succumbing to temptation. He just wants to get his hands on a grown-up Hornby double-O train set, so that he can signal things exactly right. He should have stuck with the line from Carshalton.
"foster a climate that encourages private investment in railways".
I am not entirely convinced that the Bill tries to achieve that. Its intention appears to be to give the authority a hands-on role.
"for any purpose relating to any railway or railway services."
It goes on to refer to the nature of guarantees.
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