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If there is one example of Railtrack's failure as a company, it is the way in which it allowed costs to escalate on the west coast main line. The work was originally costed at just over £2 billion; the latest estimate is some £7 billion. That has been the real problem. It is a problem not of the Government's making, but of Railtrack's failures to control its own costs.
Lawrie Quinn (Scarborough and Whitby): As the other co-chairman of the all-party railways group, I want to say how much I liked the part in my right hon. Friend's statement about recognising the loyalty, talent and commitment of the Railtrack staff who have gone on working for a 21st century railway. Will he give a commitment about the future of freight on rail and say whether the proposals that Railtrack had developed will be followed through by the proposed new company?
Mr. Byers: Freight has often been the forgotten part of the railway network. I know from the discussions that my Department and ministerial team have had with representatives of freight companies that there has been real concern about the way in which the railway network has developed. I assure my hon. Friend that we want to ensure as part of the 10-year planin which we have a clear objective on the growth of freightthat we deliver on that commitment.
Mrs. Eleanor Laing (Epping Forest): Has the Secretary of State forgotten that his Government have been in power for the past four years? Surely he must recognise that what has happened to Railtrack is a direct result of the success of the policies of his right hon. Friend the Deputy Prime Minister, who set out deliberately to undermine Railtrack and the theory of privatisation by interfering, centralising and destroying a potentially successful company, undermining all future private sector involvement in public matters.
Mr. Byers: According to the Conservatives, Railtrack is not to blame. That is very interesting. I ask the hon. Lady to look at Railtrack's record, which says it all. She cannot blame an individual Member for Railtrack's position. When she reflects on her comments, she will realise that that is the reality. Railtrack is responsible for the fact that, by December this year, it would have had a deficit of £700 million and that, by March next year, it would have had a deficit of £1.7 billion. That is due to Railtrack's mismanagement, not this Government's policies.
Sir Robert Smith (West Aberdeenshire and Kincardine): Will the Secretary of State make it clear who in years to come will be responsible for delivery or failure to deliver? He has not yet answered the question about section 2 of the channel tunnel rail link. It is important to the economic regeneration of the area involved, and to ensure that the north and specifically Scotland have direct links to the channel tunnel.
Mr. Clive Betts (Sheffield, Attercliffe): My hon. Friend was absolutely right to refuse to write Railtrack another blank cheque, but will he explain in greater detail the funding arrangements he has in mind for the new company? In particular, will any of its future borrowing, debt, or lossesif it makes anybe underwritten or guaranteed in any way by the Government? How will those funding arrangements sit alongside the public sector borrowing requirement?
Mr. Byers: The proposed company to take over Railtrack's liabilities that we will put to the administrator will be a private company; therefore its borrowing and finance will not score against public borrowing, but will be in the private sector.
Mr. Andrew Lansley (South Cambridgeshire): The Secretary of State will recall that just over a year ago the Government announced an investment plan for the railways of £49 billion over 10 years, £34 billion of which was to be funded by the private sector. Will he explain now how such investment is to be funded in future? Does he stand by those figures? If the Government expect the source to be private sector funding not guaranteed by the public sector, will he explain to the travelling public for whom he has such regard what that will mean in terms of access charges and passenger fares in future?
Mr. Byers: In terms of financing, the 10-year plan that we announced last year will not be affected by our decision on Railtrack or in other ways. It is important to remember that the City regards Railtrack as a unique body and that it recognises the reasons why the Government had to take the action we took. As the details and exactly what it is that we want to take over from Railtrack are explained to the City, it is becoming interested in the opportunities that will result from our proposals. We are confident that the targets and objectives outlined in the 10-year plan can be met as a result of the demise of Railtrack.
Gillian Merron (Lincoln): In welcoming my right hon. Friend's public-spirited actionan action welcomed not only by Labour Members but by people throughout the countrymay I emphasise the important role that Railtrack has played in the search for a solution to the problem of increased rail traffic as it is experienced in Lincoln, where a track cuts the city in two? Will he confirm that the new organisation will have the scope to work in co-operation with regional, local and national partners so that we can get the regeneration and the rail services that Lincoln and the east midlands deserve?
Tony Baldry (Banbury): Does not the Secretary of State agree that the integrity of the London stock exchange is important to the commonwealth of the United Kingdom as a whole? Does he recognise that by creating a false market in Railtrack shares for a number of weeks, he has undermined the integrity of the London stock exchange and damaged investor confidence in London as a whole?
Mr. Byers: Let me answer that important point about creating a false market in Railtrack shares. As I outlined in my statement, I faced a choice on 5 October: either to guarantee further funding to Railtrackan option that I could have chosenor to apply to put the company into railway administration. No decision had been taken until that date. As one who follows such matters, the hon. Gentleman knows where the responsibility to inform shareholders lies if a company is in particular difficulties: he knows that it is not for the Secretary of State to do that. As soon as I took a decision, my responsibility was to make sure that the chairman of the company was informed immediately, and that is exactly what happened on 5 October.
Mr. Kelvin Hopkins (Luton, North): First, I add my congratulations to my right hon. Friend on his timely action. Had that action been taken during the first week of May 1997, we would have saved a vast amount of grief and public money.
Will my right hon. Friend institute an investigation into the problem of gauge corner cracking? I understand from newspaper reports that the problemit can cause broken rails and lead to accidentsis now worse than it was before Hatfield, and that, as a result of Railtrack's incompetence, it is now occurring in rails that are less than a year old.
Mr. Byers: My hon. Friend is right to stress the importance of gauge corner cracking, which was responsible for the accident at Hatfield a year ago this Wednesday. When we consider recommendationsespecially those of Cullenon network safety and we implement those recommendations, we can address precisely that sort of issue. Most importantly, the new company that we want to take over after administration will have a clear objective: it will deal with operations, renewals and maintenance. Above all, it will not face the terrible conflict that arises from the need to increase shareholder value. Its single, overriding priority will be to provide a safe, efficient and effective railway network. The issues my hon. Friend raises can be met by the new company that we intend to create.