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Will the Leader of the House be very kind and tell the House what was the cost of the recall of Parliament for the September term? What extra costs were involved when all the on-site contractors had to stop operations?
It was important that we sat in September and it worked well. Nobody demanded the by now ritual recall of Parliament in August or late July, which occurred year after year after year, because we had an opportunity to come back in September. What happened during that time? We had two opportunities to question the Prime Minister; there were oral questions to Ministers from 10 Departments; there were five oral statements covering important subjects, including Iraq; there were three Second Readings and considerations of Lords amendments and there were three Opposition day debates. After the Hutton inquiry and the developments in Iraqall big issueswe had the opportunity to hold the Government to account. That was done effectively in September and I think that the public were pleased that we came back.
The Secretary of State for Scotland (Mr. Alistair Darling): With permission, Mr. Speaker, I should like to make a short statement about the changes to the way in which railway maintenance is carried out, following Network Rail's announcement last Friday. This is the first available opportunity to keep the House informed of those developments.
The Government are investing very considerable amounts of money to renew Britain's railway, making up for decades of under-investment. Indeed, we are doubling investment over four years. However, as I have said before, for every £1 spent we must ensure that there is £1-worth of benefit to the railway and to its passengers. Controlling cost and improving performance, as well as ensuring a safer railway, are therefore essential.
Following the collapse of Railtrack, Network Rail was set up last October to maintain, renew and operate the rail infrastructure in the best interests of the travelling public. It was set up to bring robust management to the problems inherited from Railtrack.
Network Rail has reviewed its business and identified two key issues that need to be addressed: cost and performance. To help to achieve both, Network Rail is convinced that it needs to establish clear lines of responsibility and accountability for maintenance work, including repairs and upkeep of the track, signals and other infrastructure. It was also concerned to establish consistent high standards of rail maintenance across the rail network, alongside continued improvement in trackside safety standards.
The company has carried out a thorough review of the rail maintenance arrangements set up when Railtrack was privatised. It concluded that the maintenance contract structure created unnecessary cost. Contractors carrying out routine maintenance operate on what is known as a cost-plus basis, which gives them little incentive to cut costs or to respond to problems quickly.
The system has also resulted in enormous variation between different contract areas. Network Rail found that there was a substantial difference between unit costs for maintenance work carried out by different companies in the same part of the country. Different ways of doing things between contractors made it hard to standardise processes and achieve much-needed efficiencies. Current contracts also provide little incentive to respond to incidents quickly and get the network back up and running.
Throughout, Network Rail found considerable management duplication, and complex reporting lines and inspection procedures. In the light of its analysis, Network Rail decided last week to take direct control of all core maintenance.
By next summer, Network Rail expects to have complete control of all maintenance. It will be able to assess its assets and determine what work is carried out and when it is carried outand it can focus on achieving high standards and cost control, as well as having clear lines of accountability. Maintenance will be carried out by a permanent work force, with more than 18,000 staff transferring to Network Rail over the next year.
Network Rail will continue to use contractors to carry out renewals, upgrading lines or, for example, installing a new signalling systemareas where there is a competitive supply market. That work is typically carried out on a project basis, making use of a specialist work force. As with major roads projects such as motorway construction, it is suited to competitive tendering.
The issue is not about private companies working on the railway; rather, the issue was the nature of the contracts set up by the then Government at the time of privatisation. Network Rail is determined to control costs, to improve performance and to ensure that the very large sums invested in the railways are used to the best possible effectsomething that Railtrack conspicuously failed to do.
Those changes by Network Rail to take rail maintenance in-house, coupled with the new franchise arrangements for train operating companies that the Strategic Rail Authority is putting in place, establish a strong basis for the rail industry to control costs and improve performance. The challenge now is for Network Rail, the SRA and the whole rail industry to work together, with the structures that are now in place, to deliver the improvements that passengers rightly demand.
The House will also want me to say a brief word about the problems in relation to renewal work on the west coast main line last week, carried out by Jarvis plc. Network Rail informs me that Jarvis had been carrying out work on new track in the Cheadle Hulme area when it became concerned that the work had not been carried out fully. That is a very serious matter. Network Rail is getting the work redone, and it has launched an investigation into what happened. It has said that, when it has the full facts, it will decide what further action needs to be taken.
We paid a heavy price in every sense for a botched privatisation. We are putting that right. The Government, through the SRA, are providing strategic direction. Network Rail is getting a grip on the problems that it inherited. The Government are spending substantial sums to tackle the legacy of under-investment in the railway. The steps announced by Network Rail last week are designed to bear down on cost and to ensure that money is properly and effectively spent, as well as to improve performance.
The Opposition are also hugely concerned for the long-suffering UK taxpayer, who has been paying so much for so little across the board since 1997. So if the announcements really amount to a much better bargain for the taxpayer, no one will be more pleased than us, but simply asserting that those changes will save money is not good enough. Will the Secretary of State confirm that the Government's record is that every single act of
The Secretary of State says today that those changes will save £300 million a year, but we have heard all this before. When his predecessor announced the creation of Network Rail in the first place, he said that his creation would produce
A few months ago, as the Secretary of State will recall, the Opposition did not criticise Network Rail when it chose to take a few of the rail maintenance contracts in-house. It said then that it wanted to be able to compare private and in-house capabilities. We agreed that that was sensible. So why, just months later, are there to be no private sector comparators at all? Why has it broken its word, given categorically in private and public, that it absolutely would not take all contracts in-house? Why, for the second time in two years, has a Secretary of State come to this House to announce an act of expropriation, planned at dead of night, acted on without consultation and forced through without regard for previous arrangements and understandings? Why, once again, are shareholders seeing their assets confiscated, their business destroyed and their investments sharply reduced in value, all without much, if any, compensation? Last time round, the Secretary of State at the time was forced by City pressure to provide compensation in the end to Railtrack shareholders at a cost of hundreds of millions of pounds to the taxpayer. Will the taxpayer end up paying extra compensation to the shareholders of the rail maintenance companies this time? Given that his predecessor was proven categorically wrong when he repeatedly ruled out compensation, why should anyone believe any assurances that the present Secretary of State makes on that point today?
Is not the truth that in 1997 our rail system was very far from perfect, but it was self-financing? It had the largest amount of new rolling stock on order for a generation; it was expanding rapidly; and it ran many more trains on time then than now. Under this Government, the rail industry is set to consume over £5 billion a year of taxpayer's money; has the smallest number of forward rolling stock orders in more than 20