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Railtrack
6. Mr. Gregory Barker (Bexhill and Battle): What the estimated cost to date is of Railtrack being in administration. [36649]
The Minister for Transport (Mr. John Spellar): We estimate that the total amount so far drawn down from the commercial loan facility—
Mr. Speaker: Order. The House must come to order.
Mr. Spellar: All I can say about that outburst is that it was one that they prepared earlier.
We estimate that the total amount so far drawn down from the commercial loan facility, which is used for running the railway, together with the administrators' fees, is some £1.8 billion. That is an interim arrangement, and the administrator will shortly start the process of raising banking facilities to refinance the loan from the commercial sector. When that takes place, there will no longer be a direct call on taxpayers' money.
Mr. Barker: I listened carefully to the Minister's answer, but is not the real economic cost far higher?
Taken together, more expensive financing, higher performance targets and tens of millions in lost efficiency savings will mean that the real cost of Railtrack administration will be £400 million this year, and more like £1.75 billion cumulatively to 2006. Given the Secretary of State's record for factual inaccuracy, would the Minister care to revisit his answer and tell the poor old British travelling public what the real cost of the Labour Railtrack fiasco will be?
Mr. Spellar: I can tell the hon. Gentleman what the cost of Railtrack is. It is a failed privatisation. It did not have a clue about its own assets. It could not run its programmes. It went from £2.3 billion estimated expenditure on the west coast main line to between £6 billion and £7 billion and rising, and it was not able to organise its contractors. If the hon. Gentleman actually talked to the operators in the industry, he would know that they found Railtrack to be out of touch and incompetent. They have already seen considerable progress under John Armitt, who is a respected figure from the construction industry. There has been a change of attitude and a change of practice. Travellers will welcome that, because it is delivering the rail service that they want. By his question, the hon. Gentleman shows yet again how out of touch the Conservative party is on this issue.
Mr. George Stevenson (Stoke-on-Trent, South): Does my right hon. Friend recognise that the process that led to the administration of Railtrack—both the ending of that debacle and the role played by the Secretary of State—has been warmly welcomed, especially by Labour Members? Is he also aware of the concern that creating yet another company—even one limited by guarantee—is bound to lead to more damaging fragmentation of the industry?
Given that all the resources for our rail infrastructure are either dispensed directly or are guaranteed by the public purse, will my right hon. Friend give urgent consideration to the suggestion from the Select Committee on Transport, Local Government and the Regions that all the infrastructure should be incorporated in the Strategic Rail Authority?
Mr. Spellar: My hon. Friend is absolutely right about the fragmentation of the industry. I am sure that he is pleased about the measures that the Strategic Rail Authority is taking to consolidate the operator side of the industry.
Bids are currently being prepared for the infrastructure. One proposal is for a company limited by guarantee, which would provide an effective way of focusing Railtrack's successor on the operation and management of the infrastructure. Under Railtrack as it was, there was an absolute focus on short-term shareholder value, to the detriment of the travelling public and the rail infrastructure.
Mr. Peter Lilley (Hitchin and Harpenden): Is the Minister aware that the cost being suffered by my constituents is a one-third increase in delays since the effective renationalisation of Railtrack? They want a Secretary of State who will focus on making the trains arrive as rapidly as his information officers depart. They are not interested in those people; but how can they trust
a Secretary of State who has seen resign—or has sacked, or disowned—the chairman of the Strategic Rail Authority, the chairman of Railtrack, the franchising director, and that other fellow, Winsor? All those people were appointed by the Secretary of State, or by his Government. How can my constituents trust him if he cannot retain the trust of those whom he appointed?
Mr. Spellar: As well as giving an unmitigated endorsement to the old Railtrack, the right hon. Gentleman seems to favour the whole of the failed structure. I would expect the great majority of those in the industry to consider the new chairmen of the Strategic Rail Authority and Railtrack a considerable improvement, and indeed we are already seeing progress.
That is not in any way to underestimate the difficulty of recovering from the considerable problems created by the structure introduced by the last Government. First there was the privatisation of the train operators, and the way in which it was handled; then there was the rushed and botched privatisation of the infrastructure of Railtrack, a company which, as we have seen, was wrongly focused on short-term shareholder value rather than the running of the system. We are considering how to improve the structural position, and we have already made considerable changes in personnel, to the good of the industry.
Mr. Dennis Skinner (Bolsover): Is the Minister aware that the British people were fed up to the back teeth with handing over billions of pounds to a few people in Railtrack? At some point, it had to stop. Let me suggest a precursor to the company going into public ownership—I hope that is the idea—and point out that, shortly, one or two other companies might be going for a song. Let me say this, to the fury of the Tories and the press: snap them up. It might result in a few top civil servants effing and blinding and all the rest, but we should not worry about that. The British people out there want to get rid of the way in which the railway companies were assembled by the Tories—lining the pockets of their friends—and make sure that travelling by rail benefits all the British people.
Mr. Spellar: What I am sure the British public want, and what freight operators want, is a rail system that works efficiently and effectively. We will introduce the mechanism that will best ensure that. The key is that we do not start with any ideological predisposition towards one course or another—unlike the bunch on the Opposition Benches, who could see only one way. That is why they made such a mess of things.
Tom Brake (Carshalton and Wallington): The Secretary of State was right to put Railtrack into administration, even though he waited too long and the process was badly executed. However, private consortiums will be running London underground for the next 30 years. Will the Minister explain why, if they fail to perform adequately, the next Secretary of State will not be able to terminate their contracts, or put them into administration?
Mr. Spellar: Quite simply, if the consortiums fail, there will be provision for taking over their work. There must always be a default position. I hope that the hon. Gentleman and his friends on the Greater London
Assembly will use what influence they have in Transport for London to urge all concerned to get on with the contracts and to start to deliver benefits for the people of London. The bodies involved should start getting in the investment that the infrastructure so desperately needs. The system will have to cater for a considerable number of extra travellers as a result of the million extra jobs created in the economy since the Government took office.Regional Governance
7. Mr. David Lidington (Aylesbury): What role regional assemblies will have in the determination of planning decisions and housing and transport policy. [36650]
The Parliamentary Under-Secretary of State for Transport, Local Government and the Regions (Dr. Alan Whitehead): The forthcoming regional governance White Paper will set out our proposals for the functions of elected regional assemblies.
Mr. Lidington: In what ways will abolishing a county council in Aylesbury so that powers can be transferred to a regional assembly in Guildford or Reading bring government closer to local people?
Dr. Whitehead: The hon. Gentleman seems to be under the misapprehension that the purpose of regional government is to suck powers up from local government. I cannot guarantee that regional assemblies will draw no functions from local government, but any such cases will be very much the exception. Local government will remain the community champion and chief service deliverer, whereas regional government will lead in the development of the strategic vision for the region. Our programme of reform is about ensuring that local government deals with local services, that regional government deals with regional priorities, and that Westminster deals with issues of national importance.
Helen Jackson (Sheffield, Hillsborough): Is my hon. Friend aware that regional bodies on both sides of the Pennines wholly support the proposal by Central Trains to reopen a tunnel for rail freight under the Pennines? That matter was commented on by the House a short time ago. Does my hon. Friend accept that, on strategic transport policies of that sort, it is crucial to take note of the wishes of regional bodies? Does he agree that they will play an extremely important role when they are fully established?
Dr. Whitehead: My hon. Friend makes an important point. It is essential that accountable regional bodies take careful note of the benefits that can accrue to regions as a result of collaboration—both between regions, and with regard to projects within regions. My hon. Friend will have noted that the Green Paper entitled "Planning: Delivering a Fundamental Change" envisages that elected regional assemblies will take over strategic regional planning functions, among other things.
Sir Patrick Cormack (South Staffordshire): Why did the Minister evade the question asked by my hon. Friend the Member for Aylesbury (Mr. Lidington), who
suggested that the creation of these absurd regional bodies would lead to the demise of county councils? Will the Minister confirm that that is what would happen?
Dr. Whitehead: The hon. Gentleman seems to have had something of a memory lapse. He should recall that the previous Conservative Government introduced a series of unelected regional bodies. They sucked power up into the regions, but they were not accountable. One of the purposes behind developing elected regional assemblies is to ensure that power is accountable, and is exercised at the appropriate level. Regional activities will be accountable at regional government level, and local activities will be accountable at local government level.
Mr. Derek Foster (Bishop Auckland): Whatever powers are eventually devolved to regional assemblies, there is a growing feeling in the north-east—among sporting personalities and people in entertainment, as well as among politicians—that the area needs a strong regional voice. Will my hon. Friend say when we can expect the White Paper on the matter? Will he confirm that the timetable to which the Government are working would allow a referendum in the north-east before the end of this Parliament?
Dr. Whitehead: My right hon. Friend makes the important point that in the north-east keen interest has been expressed from a variety of sources in the idea of an elected regional assembly. He can expect the forthcoming regional government White Paper to appear shortly. Among others things, it will set out the timetable for early referendums when the creation of regional assemblies on an elected basis is regarded as desirable.
Mr. Jeffrey M. Donaldson (Lagan Valley): Whatever the future role of regional assemblies, what steps are the Minister and his Department taking to ensure co-operation with the Northern Ireland Assembly, the Scottish Parliament and the Welsh Assembly to bring about a strategic, co-ordinated transport policy for the whole United Kingdom?
Dr. Whitehead: The hon. Gentleman should know that the Government, my Department and the devolved governments of the regions and nations of Great Britain undertake regular discussions on issues of mutual strategic importance. Those discussions are proving useful in terms of the sort of issues that he has raised.
Mr. Malcolm Moss (North-East Cambridgeshire): Does the Minister agree with the headline in a recent edition of the Local Government Chronicle, suggesting that the Prime Minister is selling the counties out? Will the Minister tell the House whether the Government intend to sell the counties out?
Dr. Whitehead: Not only do we not intend to sell the counties out, but we intend to ensure that elected regional assemblies will be created only when people in the region concerned want those assemblies to be created on an elected basis. Therefore, the idea that there is a plan for the extinction of county councils, regardless of the popular feeling in the regions, is completely untenable.
Joyce Quin (Gateshead, East and Washington, West): I welcome my hon. Friend's determination and that of the
Secretary of State to honour the manifesto commitment on the introduction of regional assemblies. I agree that it is not so much about creating an extra tier of government as about democratising an existing tier, and giving that tier back to the regions where it belongs. May I also press my hon. Friend on timing? Will he confirm that the publication of the White Paper will be accompanied by a proper period of consultation, and that legislation this autumn to pave the way for referendums will not be ruled out?
Dr. Whitehead: I confirm that the White Paper will be published shortly, will contain substantial proposals about the functions and working of elected regional assemblies and will set out a timetable according to which discussions will take place. An opportunity will be provided for full consultation on the way forward set out in the White Paper.
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