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7.2 pm
Dr. Alan Whitehead (Southampton, Test): The speech of the hon. Member for Brentwood and Ongar (Mr. Pickles) was interesting because he appeared almost to suggest that the Strategic Rail Authority was a good idea. However, the Opposition motion suggests that they have no policy--all that they wanted before the debate was to suggest that it was not a good thing to have the Second Reading right now. There was nothing on the substance of whether the authority was a good thing or not. The opening speeches by Opposition Members amply confirmed that opinion.
Even if we took the Opposition argument seriously, the fact that we are debating the Bill tonight and allowing a range of views to be aired is a good thing for the forthcoming legislation. The whole House--not a pre-legislative scrutiny Committee--has an opportunity to discuss in detail what a strategic authority would look like and how it could be introduced.
The Opposition have declined to tell us anything about the authority. The explanation is that, if they engaged with the real issue before us today, they would have to admit
that their arrangements at the time of rail privatisation for regulation were appalling, completely inadequate and not up to the task of regulating the consequences of privatisation.
The privatisation process was about as dignified and long-sighted as a distressed family shoving the furniture out the back door and selling it to a bloke with a barrow while the bailiffs were battering on the front door. It was a distress sale, and an attempt to try to remove everything possible from any sort of public scrutiny and accountability before the election, when a new Government might come in and provide some accountability for that service.
It is no wonder that the dreadfully bad value reported by the Public Accounts Committee was achieved from the flotation of Railtrack. A distress sale results in distressed prices. The problem with the original regulation proposed by the previous Government was that it went along with the notion of a distressed sale--it was a botched attempt to try to make some sense of a privatisation which, in its structure, made no sense at all.
The limitations of the regulation struck me following an event that occurred close to my constituency. I use a station, Southampton Parkway, to travel up to London. One might say that the station is a superb example of investment in the railways. South West Trains was enjoined to invest in the station, along with Railtrack, and some money came in from Hampshire county council. A splendid new Parkway station was built. The station has a ticket office, a small cafeteria, access for wheelchairs into the ticket area and level access without kerbs from the car park into the station. It is a great improvement.
The only problem is that, between the platform used by those going to London and the platform used by those arriving from London, there is a bridge. The bridge is very old with steep steps, and there is no possibility of any disabled person--particularly a wheelchair user--getting over the bridge to the other side. On the other side of the new ticket office, cafeteria and so on is Southampton airport. If a disabled person gets off the train at Southampton Parkway, having come from the south, there is no way that he or she could get to Southampton airport.
My colleague, the Minister of State, Department of Health, the hon. Member for Southampton, Itchen (Mr. Denham), and I raised this matter with South West Trains. My hon. Friend received a revealing letter from the managing director, which said:
The obvious solution was to build a bridge that could take people from one side to the other as part of the strategic investment in the station. We were pleased that a taxi would be available to go from one side of the station to the other--that was good news for taxi drivers--but, we asked, what about the idea of a bridge? The managing director said that the problem with investing in such a bridge was that the company did not think that investing in a bridge as well as in the station was justified because
of the length of the franchise. To build such a bridge would add considerably to the costs, so the company was not prepared to invest in it--unless, of course, the franchise were extended.
We asked Railtrack, the company's partner, why it was not investing strategically in the bridge. It said that South West Trains might lose its franchise, and the new franchisees might not honour the agreement on the station in the same way. Consequently, Railtrack was not prepared to invest strategically in the bridge either, because it did not know what would happen to the franchise.
That vignette seems to me to sum up the absurdities and limitations of the regulation system. We have a short-sighted system that concerns itself with punctuality, journey times and other such immediate performance criteria but completely fails to consider strategically what the rail service needs for the future.
There is another absurdity in my area, and I am sure that there are many throughout the country. A small train runs from Brockenhurst to Lymington and the main train from London also stops at Brockenhurst, but of course it is sometimes late. On Planet Brockenhurst-to-Lymington, the train has to leave on time to avoid penalties, so off it goes, even if there is no one on board, stranding those who wanted to change from the London train. There is no co-ordination or strategy in the regulation system introduced by the Conservative Government. We need a strategic regulation system. I suspect that that is what the hon. Member for Brentwood and Ongar was struggling towards.
A further important reason why we need a strategic authority concerns larger-scale investment for the future that anticipates events rather than simply following them. The hon. Member for Brentwood and Ongar said that the market must decide, but a weakness in the current system is that investment judgments are based entirely on what is happening now.
That is partly because the companies that took over on privatisation did so on the assumption that railway services would continue to decline. Their operating plans were based on how to make a profit by managing decline. That is true of both train operating companies and ROSCOs. Incidentally, I am sure that the Conservative Government did not predict that ROSCOs would be monopolistically integrated into the system by being bought by train operating companies, thus undermining the separation of ROSCOs, train operating companies and Railtrack.
Investment was designed to patch up a declining system while making a healthy profit for the companies and for Railtrack. The idea that the railways would boom and that we needed to design the system for a future in which more people and freight would travel by rail, in which traffic would move off the roads and in which new track might be needed to accommodate the changes, was wholly absent at the time of privatisation.
That was reflected in the strange way in which public money was put in. Far more subsidy was given to the privatised companies than had been given before privatisation. An appendix on page 25 of the Public Accounts Committee report sets out the relationship between total public support for train operating companies--adding passenger transport authority payments--and passenger access charges paid by the companies to Railtrack.
Hon. Members will not be surprised to know that, for each of the past three years, the figures almost exactly coincide. Railtrack makes investment only on the basis of the money that it receives from the train operating companies in the first instance, so the money from the public purse cannot predicate any strategic investment. The possibility of strategic investment has been designed out.
That is why clauses 8 and 17 are so important. They allow strategic investment at last to play a proper role in the railway world. The Strategic Rail Authority will be able to jump out of the circle of money from access charges predicating investment on the basis of whether those payments will continue rather than of whether a strategic change is needed in how the railway works.
The lack of strategic vision is clear in the freight sector. The Government's response to the Select Committee's report on the proposed strategic authority, published in July 1998, said:
"You are correct to identify the footbridge as a problem. This was not part of the scheme but we will do what we can to reduce the problems that it will cause. We are providing a passenger-operated call point on the platform nearest the airport to alert staff that assistance is required. For disabled passengers who simply cannot manage the steps, we will provide a taxi, at our cost, to transport them from one side of the station to the other."
That was the solution proposed by South West Trains.
"There is no focus within the privatised industry for long term strategic planning. Before privatisation, the British Railways Board was charged with monitoring passenger and freight demand and developing a strategy to provide the capacity to cater for it. Now, there is no equivalent planning body at work in the industry."
It went on to say:
"The Franchising Director's remit is too narrowly focused on the passenger railway. As things stand, he has no powers in respect of freight on the railways and is heavily constrained in what he can do to support integrated transport initiatives."
If we are to move freight from road to rail--I accept the caution of the hon. Member for Brentwood and Ongar about how much that will affect the overall position of road and rail--that will be part of an integrated transport strategy, not a panacea. It is a good thing to take freight from road to rail not only because, for example, it eases congestion, but because it is about seven times as energy efficient and seven times less polluting with greenhouse gases. Transporting freight by sea, on which I am also keen, is about 20 times less polluting, but that is another subject.
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