Chris Grayling: I thank the hon. Lady for giving way to me a second time, and I look forward to interesting discussions with her and other members of the Transport Committee on our recommendations on regulation. Does she agree that the structure and nature of regulation of the rail industry was reshaped by the Labour Government; and that despite the praise she pours on to the regulation of other industries and the Government's approach to them, when the crunch came in the rail industry, the Secretary of State felt the need to threaten to bypass the regulator to get things done?
Mrs. Ellman: In terms of general regulation, I agree that rail industry regulation is not satisfactory. I intend to press for improvements, because the interests of the travelling public are not well served by the current structure. When looking to the future of Railtrack, Ministers should consider the functions and responsibilities of the Rail Regulator and the Strategic Rail Authority. The system has failed, as well as the management of Railtrack as an individual company.
I shall now speak about some of the issues mentioned by the hon. Member for Westmorland and Lonsdale (Mr. Collins) and to the reference in the motion to the conduct of my right hon. Friend the Secretary of State for Transport, Local Government and the Regions. I refer in particular to the contentious note and minutes of the 25 July meeting between the Secretary of State and his officials and John Robinson, chairman of Railtrack.
It is important to remember that the note and the minutes were made accessible to public view solely because the Transport Committee requested that they be made available. When answering the Committee's queries, the Secretary of State said that it was most unusual, if not unprecedented, for notes and minutes of that sort to be made available, but added that to assist the Committee, and if that was what the Committee wanted, he would make them public. That is another illustration of the Committee's importance and underlines the significance of having Select Committees that are open and determined and that want to act in the public interest.
The note and minutes of that important meeting fall into two parts. It is clear that the uncontested part of the note reinforces the indictment made against Railtrack's management by many sources. According to the note, Mr. Robinson said that
In the now published and undisputed part of the minutes, the indictment of Railtrack's management grows increasingly clear and severe, but what about the important part of the note, now a public document, which is disputed? It concerns what the Secretary of State says John Robinson, the chairman of Railtrack, said and what Mr. Robinson says he did not say. The only responsible conclusion to be drawn from the minutes is that it has not been proved that the Secretary of State is right. He says that the chairman of Railtrack stated that he needed a letter of comfort for his bank before he could obtain bank resources and needed extra funding from the Government; otherwise he would not be able to say that Railtrack was a going concern at the meeting at which he was to give an interim statement on 8 November. Those details were not recorded at the request of the chairman of Railtrack, but, according to the Secretary of State, that is what he said. The fact that the chairman of Railtrack said that he did not say those things cannot be proved or disproved.
The notes do not prove that the Secretary of State was right, nor do they prove that he was wrong. We must look at people's motives either for agreeing or trying to dispute what they said. Ministers and Secretaries of State are accountable to the House of Commons, so we can ask those questions of the Secretary of State for Transport, Local Government and the Regions and it is right that we should do so, but Mr. Robinson is the chairman of a private company, so we cannot ask him directly what he said. He is responsible to his private board and shareholders, who are supposed to call him to account, but have Railtrack's minutes been disclosed? Do we know what its chairman reported to his board or shareholders following his meeting with the Secretary of State or, perhaps even more critically, following further discussions with the Secretary of State and his officials? We do not know that, so we cannot challenge or question it.
We are dealing with two separate things: a Secretary of State is responsible to the public and the House, but a chairman of a privatised company, responsible for a public service, answers not to elected Members of Parliament but to a private board that does not have to disclose its minutes and is not subject to public questioning in a place such as the House of Commons.
Mrs. Ellman: My point concerns disclosure and responsibility on the part of the chairman of a private company that is running a public service. I am not aware of the chairman of Railtrack making publicly available the minutes of his board meeting on 25 July or, even more significantly, about what happened following 25 July.
It is not clear whether the chairman of Railtrack met his fiduciary duties in relation to his shareholders and his board, in terms of his understanding of the possible critical financial situation of Railtrack as a going concern? We do not have that information. I am not certain that the public are entitled to have such information. We are dealing with a private company, and we see the conflict when a private company is running a major public service, yet is not responsible to the public.
Mrs. Ellman: Railtrack has featured large in the debate, because it represents the failure of privatisation and the problems of public accountability for a public service when it is run by a privatised company. The Government have done much to restore confidence in the public services.
All of us should take note of two things, the first of which is the importance of public services being run by publicly accountable bodies. Until we have that, it will not be possible for the House or the public at large to know that services are being run properly or to have the answers that they require and, indeed, deserve. Secondly, the House must register the importance of Select Committees. The work of the Transport Committee in particular is proving increasingly important in the matter of Railtrack. If it were not for the questions asked by the Committee, the notes would not have been requested and would not have been made available.
It is incumbent on all elected Members to recognise the importance of Select Committees in accessing and making available public information in the public interest. I hope that no Government, including the present Government, will be tempted to curtail the activities of Select Committees. Their powers should be extended, as it is the Select Committees above all that represent the people of this country and allow democratic accountability to be far more stringently applied than is possible on the Floor of the House.
The Government treat public information as though it were private property, and are grasping in the way that they hold it to them and will not release it. They are rather like Scrooge with public information, before he
Trying to get to the bottom of what has happened, what is going on and the Government's estimate of what will happen next, I have discovered a series of roadblocks and railblocks placed in my way, which I shall share with the House as we are debating how impossible it is to get information out of this miserable Government, while they pretend to be very much in favour of openness and full disclosure. In their amendment to the motion, they have the brazen cheek to refer to
I then started to ask a few more difficult questions about what the Government were doing and why they were digging a huge hole for the railways by forcing them into administration. I asked the Secretary of State for Transport, Local Government and the Regions when bids would close for the assets and liabilities of Railtrack plc in administration. I have read in the newspapers that the Government have an estimatepresumably, this information comes from good sources that are close to themof when Railtrack will come out of administration.
In order to come out of administration, however, the administrator must first invite bids. Of course, the Government must know when the bidding process will take place. They will have to supply an enormous amount of information for the sale memorandum. We have read in the papers and have heard in a statement made in the House that they are interested in proposing a particular model company that they want to bid. Presumably, therefore, they take an interest in when bidding might open and close. However, this was the answer that I received:
If the Government are serious about getting on with the task of getting Railtrack out of administration and back to work properly, they need to tell potential bidders when the bidding will take place and what they are bidding for. Why cannot the Government come clean with the travelling public and the taxpayer and tell us what is on offer, when the bids will open and when they will close? I and my constituents are impatient to see the railway back on the road to recovery. We know that that means getting it out of administration as quickly as possible and getting it back into private hands, which is the Government's policy.
How disappointed Labour Back Benchers will be when they realise the full horror of what the Government have done in collapsing the railway into administration and learn that they are spending a fortune and will be force feeding a large number of advisers large fees for the hard work that they will definitely have to do with the muddle that has been created, after which they will re-privatise the railway. The Minister shakes his head, but he will not spring up and say that that is not his policy, as he knows full well that he has no authority from the Prime Minister or the Chancellorof course, they have different views on most subjects these days, but they agree on this oneto say that the Government will renationalise the railways.
The Government have no wish to stand behind the safety and track problems and the huge cash drain that the railway would be if it were returned to nationalised control. They should be more honest and open with their Back Benchers, who will be bitterly disappointed when they discover that what is happening is a recipe not for nationalisation but for a very expensive re-privatisation,
I asked the Secretary of State what action he had taken on the plan to cuts costs at Railtrack plc that the board drew up before the company was put into administration. I had heard a rumour, perhaps in the press, that the Government had been keen to abort the decision of Railtrack's board before it went into receivership to cut costs by reducing staff. I could understand the Labour party wanting to make such a decision. However, the answer stated:
I should still like to know what happened to the outgoing board's plans to reduce costs. Why did the Government decide that there was no need to reduce cost? The rail industry is experiencing a horrendous loss of cash in the hands of the administrator, and is propped up by a reluctant Government, if we are to believe what we read about the Treasury's attitudes.
Before a policy was agreed in government in my day, we held bilateral meetings with the Treasury, which always argued about our estimates of the cost. A compromise was struck or, in some cases, the policy was vetoed if the Treasury decided that it was too dear. Yet it seems that it is not possible to tell us how much money the taxpayer will spend on administrationgreater openness never seen before.
In the pre-Budget statement, the Chancellor claimed enormous credit from Labour Back Benchers for announcing £1,000 million extra for the national health service. That is not a large sum, given the size of its budget. He did not mention the more than £2,000 million extra that, according to the Government's figures, will be needed for Railtrack in administration until March 2001, let alone the sum that may be needed in 200102. Money will be required to continue paying for losses, start paying for investment, which cannot be delayed for ever, and to get the company out of administration. It will also be needed to pay all the fees, and, if the Government have their way, the huge sum needed to capitalise the not-for-profit company that they believe the private sector will finance in the future. That is breathtaking.
However, the House of Commons made its reputation and built its strength on making the Executive answerable for the amount of money that they spend and how such spending is financed. How, then, can a company as huge as Railtrack be in administration, losing hundreds of millions of pounds as the months go byon the Government's forecast, possibly losing or absorbing £3.5 billion in the year to March 2001when we believe that the Government budgeted only £900 million for Railtrack if it had stayed a fully fledged, private sector, public limited company? That represents a massive change in the Government's figures. Greater openness, never seen before.
I then asked the Secretary of State what money was available for the successor company to Railtrack in 2001-02, 2002-03 and 2003-04 from Government sources and from Strategic Rail Authority sources. I knew that I had to specify both sources, otherwise the Government would play tricks with the answer. The Minister replied:
My question to the Secretary of State was not a scholarship question. It was more a GCSE question, by public expenditure standards. I was simply asking how much money was available for a very big chunk of our rail industry in the next three years. We know that the Government budget in three-year dollops, and we know that the Chancellor has just produced a pre-Budget statement, so presumably he has put all these figures to bed. Why, therefore, is this a state secret? Why cannot we prise these figures from the Government? Why cannot we know how much money is going to be spent?
Labour Members might welcome such information and say that it is great that so much money is to be poured into the railways. Or they might be critical and say that it is not quite enough for the west coast main line, or whatever is their preferred tipple in railway investment terms. My Conservative colleagues might share my view that the figure might be rather too big, and that there might be better ways of running the company and spending the money. To receive absolutely no reply on the matter is a disgrace.
This is also a matter of great public interest. I am not making a party political point here; I am interested in this because if we are going to get the company out of administration quickly, any bona fide bidder is going to want this information. It must have been agreed with the Treasury in the run-up to the pre-Budget statement. Should not it be published now so that people can consider, on the basis of the money available for the next three years, whether they think that they have a chance of putting in a sensible bid for the railway, or whether they think that the money is too little and that there is no point in bidding?
Would not it also help Labour Memberswho still favour that extraordinary animal, the company limited by guarantee that neither makes profits nor pays dividendsif they knew how much this company was going to get in the form of public subsidy, when they were deciding whether to go on the board, and going to the City to raise the billions that the company will need? That information could be crucial to getting the company going.