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Mr. Hammond: Will the hon. Gentleman give way?

Mr. Hill: Very briefly.

Mr. Hammond: The Minister's right hon. and hon. Friends have said in the past that they cannot pass comment on the Central Railway scheme because of the possibility of having to judge it in a quasi-judicial role if it were the subject of a TWA application. The company has made it clear that there will be no TWA application and that it is seeking the Government's political support for the scheme. When and how will the Government make their view known to the House of Commons and to the wider public?

Mr. Hill: I was coming to that. We have asked the SRA to review the Central Railway proposals, and it goes without saying that, until we have seen that, it would be both inappropriate and impossible for the Government to take a view.

I am aware that Central Railway maintains that its project is to be an entirely privately funded scheme and that it is economically viable, but my hon. Friend the Member for Luton, North will appreciate that it is vital that all the technical and commercial aspects are examined carefully for a proposal of this scale and complexity. That is why the SRA is initiating a review of Central Railway's proposals.

My hon. Friend is aware that the scheme has, albeit in a different form, been put to the House before, when it was overwhelmingly rejected. If the Government are to consider supporting a Bill, it is right that the SRA should seek to learn more about the proposals before taking a view. I have outlined the basis of the Government's commitment to rail freight and the SRA's role in helping to achieve the industry's objectives. Any review that the SRA undertakes should be carried out in the context of our 10-year plan and the authority's own strategy for freight. I shall follow the SRA's review of Central Railway's proposals with interest.

New facilities require land and the support of the local community. That is why we published guidance last March for local transport plans, which looks to local authorities to take account of opportunities for a greater use of rail freight in their areas. In their land use planning, we will expect authorities to protect sites and routes that could be important in the development of new infrastructure, to promote opportunities for rail connections through industrial sites and to ensure that disused transport routes with the potential for reuse are not unnecessarily severed.

In December, we announced details of the local transport capital settlement in response to the transport plans submitted by local authorities in July. We are

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allocating £8.4 billion of public investment over the next five years to be spent locally on projects identified at local level. A good proportion of that funding will be spent on public and integrated transport and smaller schemes, which may include developing facilities for rail freight.

I am encouraged by the enthusiasm that local authorities have shown in considering the role of rail freight in their local transport plans. Underpinning all that is the 10-year plan. We are planning for private and public expenditure of £60 billion on the railway over the 10-year period. During that time, we envisage a further 50 per cent. growth in passenger journeys by rail, an 80 per cent. increase in freight volumes and a further significant increase in rail's share of the freight market to around 10 per cent.

The £60 billion includes capital investments of £38 billion for renewal and expansion of passenger infrastructure, £7 billion for the replacement and expansion of the passenger rolling stock fleet--around 6,000 new vehicles--and £4 billion for investment in additional freight capacity. I seriously question my hon. Friend's claim that our rail freight targets are modest. The Government are committing huge sums of investment to that development.

Mr. Grieve: Does the Minister agree that any successful freight scheme must be compatible with the expansion of passenger use, which the Government are greatly promoting? For instance, if the Central Railway scheme resulted in an inability to use the Chiltern line in my constituency for passenger commuter services, which have expanded and doubled over the past few years, that would be a strange environmental benefit as it would put thousands of people into their cars and on to the roads who currently use the train.

Mr. Hill: As I am wont to say, I have some hinterland on this matter. If the hon. Gentleman took the trouble to consult Hansard for the debates on Central Railway in 1995--the previous Parliament--he would find evidence of that. Under the TWA proposal or the hybrid Bill proposal now being considered by the SRA, it is incumbent on the Government to adopt an entirely neutral stance at this stage.

Nearly half the £60 billion that I mentioned will be Government funding. We would have provided some of that money in any case: for example, £5 billion for the channel tunnel rail link; between £5 billion and £10 billion for continuing franchise support; and £1 billion for expenditure on such items as the residuary liabilities of the British Railways Board and contributions to railway industry pensions.

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However, a great deal of the Government funding is new money--to halt the decline in passenger operating subsidies and to promote the biggest rail expansion programme for more than a century. We launched the new £7 billion rail modernisation fund, which will lever in substantial amounts of private capital and will provide support for both passenger and freight enhancements.

The new fund will allow the SRA and the industry together to formulate a long-term investment programme for rail--we estimate nearly £50 billion over 10 years--encompassing a range of funding mechanisms, including capital grant and debt finance. The passenger-freight split will depend on franchise replacement and on the conclusions of the SRA's rail freight strategy.

More generally, the 10-year plan provides much greater certainty as a basis for long-term investment. The stop-go attitude to investment followed by previous Administrations created a climate of uncertainty in the supply industry. Time scales for supply and payback are long, both for rolling stock and infrastructure; that stop-go approach clearly discouraged many suppliers from investing as they otherwise might have done. Clearly, that has to change.

Of course, Hatfield dented the progress that the industry had been making. Although there are lessons to be learned from the disruption over recent months, it is vital that everyone involved in the industry continues to act together to ensure that the interests of all customers are paramount. My right hon. and noble Friend the Minister for Transport is leading the rail recovery action group to maintain regular contact with the industry and to ensure that it is wholly focused on getting the railroad running normally as soon as possible. The group includes a freight representative and is scrutinising carefully the impact of the recovery plan on freight services.

I want to reassure my hon. Friend the Member for Luton, North that whatever their immediate impact, the recent difficulties on the railways will not deflect us from our long-term goal. The Government have confidence in rail freight and high expectations of it. So far, the rail freight industry has returned that confidence with investment on a scale not seen for decades--in vehicles, terminals, staff and new business, with real growth in freight volume, and with the arrival of new operators who are giving the established players a run for their money. They, too, can see that rail freight has a real future.

Question put and agreed to.

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