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Mr. St. Aubyn: Does the hon. Gentleman agree that the figures depend partly on the engines being used and that road fuel gas, for example, which is being promoted for heavy goods vehicles, would substantially change those that he has cited?
Dr. Whitehead: That is a valid point. The emergence of new fuels presents us with a moving target. The hon. Gentleman referred to compressed natural gas, and there are other fuels that would change the equation a bit. However, the same argument, in connection with low-sulphur diesel, also applies to rail. Efficiency can work both ways, but my general point is that, in a ratio of about 7:1, it is environmentally friendlier--because it is much cleaner and more energy efficient--to carry goods by rail than by road. That much is indisputable.
Mr. Gray: The purpose of the diesel escalator is to change behaviour and get freight off the roads and on to rail. Does the hon. Gentleman agree that, even by the Treasury's measure, the strategy is failing, as the Red Book shows that the net revenue from diesel is to go up, year on year, for three years?
Dr. Whitehead: I was not making a direct relationship between the fuel escalator and rail transport. I said that,
in the longer term, one argument in favour of encouraging the transport of freight by rail is that it is energy efficient and environmentally friendly. In any event, I remind the hon. Gentleman that the Budget gave a financial incentive for the use of low-sulphur diesel in all forms of transport, on the roads and elsewhere. That incentive has been very successful.
There is a third important element in the argument about freight. The hon. Member for Brentwood and Ongar was right to say that, if more than, say, 20 per cent. of freight were carried by rail, we should have to worry about the type of freight involved, and that considerations of time would also have to be taken into account. Although I do not agree with the hon. Gentleman's suggestion of 20 per cent., he was right to say that most of the increase in rail freight involves goods whose delivery is not time specific--bulk deliveries, aggregates, oil and so on. As long as those materials are delivered to the right place, the precise date of delivery, to within a couple of days, does not matter too much.
However, the development of such a just-in-time system for rail freight depends more on the reliability of a service to a given destination than on its speed. A freight service can be fairly slow, as long as users know that another element of the service is following close behind. That is what a just-in-time service is, and reliable capacity in freight services means that continuous shuttles such as I have described can be maintained.
Two problems remain. First, the present just-in-time system for freight is predicated overwhelmingly on road transport. As congestion increases, so it will become more likely that road transport will lose its just-in-time status--that is, it will be increasingly difficult to deliver goods by road just in time. That will affect more important matters than getting sugar snap peas to supermarkets in time;we have to ensure that components are deliveredto manufacturers, because the country depends on manufactured goods. That is a vital consideration for the future.
Secondly, as increasing congestion makes it more difficult to achieve just-in-time delivery of freight by road, the ability of drivers to deliver within their legal driving hours will decrease. Drivers will be forced to break their hours of work, or companies will be required to use a second driver to fulfil contracts. I understand that at least some road hauliers already run a modern version of the old stagecoach operation, with drivers waiting in motorway service areas to take over vehicles and complete journeys begun by others.
My general point is that it is wrong to think that we can rely on a just-in-time road transport system and that rail freight is the poor relation. We must achieve a better balance between the two modes of freight transport.
Mr. Geraint Davies:
The National Audit Office report into the sale of Railfreight franchises shows that there was an enormous escalation in rail freight between 1994 and 1997, for the reasons outlined by my hon. Friend. Is it not a disgrace that the franchises were sold off at a cost to the Government of £242 million? They were given away, with extra money, even though it was known at the time that future Governments would cut road building and that more freight would go by rail. Does my hon. Friend agree
Dr. Whitehead:
My hon. Friend makes a sound point, which adds considerably to what I have always described as a distress sale. A vendor who wants to get buyers as quickly as possible is not going to be too worried about the long-term value of what is being sold.
Mr. Redwood:
The hon. Gentleman has identified two powers that he wants the SRA to have. The first seems to be that, if a train is running late, other trains should be delayed--and therefore made to run late too--so that people on the first train can make their connection. That, of course, would cascade delays throughout the system. His second wish is that subsidies and Railtrack profits should be cut, although that would appear to lead to difficulties with the investment programme. Will he confirm that those are the two magic ingredients that he would like to be added to the strategic authority?
Dr. Whitehead:
The right hon. Gentleman obviously has been thinking about those points for a long time, as I mentioned them much earlier in my speech. It is possible that the passage of time has lessened the accuracy of his recall.
I did not say that all trains should be held up to accommodate all connections. I made specific reference to one local service whose only purpose is to carry passengers to meet the main train from Lymington to London. In such circumstances, it makes sense to integrate services so that they work together. Of course, I take the point that a similar approach for every service would cascade delays through the system, but a strategic authority must be able to study the overall operation. It must not be rigidly confined to implementing certain performance criteria, regardless of whether they benefit passengers.
The right hon. Member for Wokingham (Mr. Redwood) also claimed that I wanted to reduce the subsidy, but I did not say that either. I said that, at present, subsidies are an under-performing merry-go-round. Subsidies from the public purse go to the train operating company, which then pays a rail access charge to Railtrack. As the right hon. Gentleman knows, those charges make up about 85 per cent. of Railtrack's income. Therefore, it is clear that the vast majority of the money available to Railtrack for day-to-day investment purposes comes from the access charges levied on the train operating companies. Logically, therefore, Railtrack's investment decisions are likely to relate to existing circumstances. Railtrack's investments are justified by ensuring that it continues to secure the rail access charges: they have little to do with factors that might make the railways better.
Mr. Quinn:
I have listened carefully to my hon. Friend's remarks, and I understood that he was talking about the freight sector, for which the state provides no subsidy. He was talking about reliability, which the freight companies have improved through investment in locomotives and wagons. Was not that the main point that he was making, before he was interrupted?
Dr. Whitehead:
Operating and franchising conditions for freight are different from those for passengers, but the
The Select Committee on the Environment, Transport and Regional Affairs recently visited Holland, where the rail authorities plan a dedicated line from Rotterdam to Germany to take freight away from passenger lines. It is inconceivable that we could do the same in the UK under the present investment and regulation system.
Mr. Bennett:
What about Central Trains?
Dr. Whitehead:
My hon. Friend is correct to say that proposals exist, but the likelihood of our arranging a Dutch-style freight-only track is some distance off.
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