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Mr. Darling: If the hon. Gentleman can co-operate with his noble Friends in another place that will be very welcome—it does not always happen. I agree with much of what he said. To his credit, the Liberal Democrats actually have a transport policy, which is more than can be said for the official Opposition.

In response to the hon. Gentleman's questions, Network Rail will be proposing changes in its governance over the next few days. Obviously, that is a matter for the company.

On budgets and the transfer of resources, I want to move to a situation where PTEs actually know how much they are spending on the railways. There is a revealing table in the White Paper, which shows exactly some of the costs for heavy rail in the regions. PTEs will be able to make sensible choices as to whether to invest in heavy rail, light rail, buses and so on.

The hon. Gentleman asked about franchises and mentioned three that work well. I want to reduce the number of franchises because it is important that they are more closely aligned with the track organisation. I attach particular importance to that, but the exact shape and size is something that we shall need to look at.

I welcome the hon. Gentleman's comments on safety. There may be parallels with the CAA, if only to show that safety and economic regulation can sit in one regulator. What is important is to achieve the railway focus to which I referred.

I am grateful to the hon. Gentleman, and look forward to seeing how the Liberals maintain that steady course over the next year or so.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich) (Lab): Is the Secretary of State aware that every traveller who is fed up with the constant muddle in which the rail industry has had to exist for the past 10 years will welcome his clarity? Will he ensure that the system whereby one company blames another is not continued in the future and that we have clear lines of responsibility, so that we—the Government and the taxpayers, who are paying for the system with greater sums than ever before—are not only given value for money but can see who wastes the cash and makes impossible the service to which every passenger is entitled?
 
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Mr. Darling: I very much agree with my hon. Friend. We need clarity as to who is responsible for what. The Government accept responsibility for funding and the electorate are entitled to hold them to account on that. If a new Government came along who wanted to slash spending on transport, they would have to be held to account for that. We need similar clarity on operations, so that we can see who is responsible for trains running on time and, critically, as my hon. Friend pointed out, for spending money. As ever, I am grateful for what my hon. Friend says.

Mr. John Horam (Orpington) (Con): Is the Secretary of State aware that about 50 per cent. of all passenger rail journeys are made by Londoners, yet last year London received only £73 million in revenue subsidy while the rest of the country got £1.9 billion? Now that the right hon. Gentleman has taken new powers to himself, which I welcome, will he address that matter urgently?

Mr. Darling: The hon. Gentleman is right: the London commuter network is the most heavily used part of the system. Obviously, subsidy is directed to the network as a whole, but as we move towards more transparent budgets and can see where the money is being spent, sensible decisions can be taken. However, before the hon. Gentleman calls for more subsidy, he might want to have a word with his hon. Friend the Member for South Suffolk (Mr. Yeo) who is advocating a £1.8 billion cut in transport spending.

Mr. Paul Truswell (Pudsey) (Lab): My right hon. Friend will be aware that rail congestion in west Yorkshire is greater than in most parts of the country, including the south-east. That is certainly true of the three lines that serve my constituency—Wharfedale, Harrogate and Leeds to Bradford. Can he assure me and my constituents who use those services that the new structures will be able to identify and deliver the renewal of rolling stock and the increase in capacity that is desperately needed to meet not only existing demand but the demand we hope to generate with the opening of new stations?

Mr. Darling: Yes, I can. Part of my proposals for west Yorkshire would give the passenger transport authority greater power to decide what is required. Obviously, the Government can take an overall strategic view as to the size and shape of the railways nationally, but decisions about what happens locally and how transport is provided—whether by heavy rail or other modes—are best taken locally. We want to move towards a situation where there is greater transparency about what happens so that there can be far better decision making than there is at the moment.

Sir George Young (North-West Hampshire) (Con): Members on both sides of the House will welcome the increased investment in the railways since privatisation, but the Secretary of State knows that many worthwhile projects are no longer in the plan. Will he have another look at the length of franchises? With a two-year rolling franchise, there is little incentive for a train operator to invest in improved stations or car parks. Will he consider increasing the franchise lengths so that such incentives can be restored?
 
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As the SRA no longer stands behind Network Rail, can the Secretary of State confirm that Network Rail's borrowing will appear on the Government's balance sheet? So far it has not done so. Finally, will he not lose sight of the role of rail in a sustainable and coherent transport strategy? Rail fares are rising ahead of inflation—way ahead of motoring costs—and he has abandoned the growth targets for use of the railway, so in the statement that he has just made is he not running the risk of not capturing the full potential of rail?

Mr. Darling: I certainly am not. As I said in my statement, it is worth bearing in mind that last year Britain's railways carried more passengers than at any time since the early 1960s. That is a measure of their success. Despite all the difficulties railways are doing well. Although punctuality is not nearly as good as it should be, it is improving.

Mr. Christopher Chope (Christchurch) (Con): That is the success of privatisation.

Mr. Darling: No, it is not. I think the hon. Gentleman will find that it has something to do with the phenomenal growth in our economy over the past seven years, as well as the not insubstantial sums of public money that are going into the railways. However, because someone will no doubt ask about it at some stage, I will give him this: several train operating companies have brought some flair into getting passengers to use them. I have always said that.

On the last point raised by the right hon. Member for North-West Hampshire (Sir George Young), he need have no fear. I gently point to the right hon. Gentleman, however, that he and his hon. Friend the Member for South Suffolk (Mr. Yeo) may well ask why we have not built this line, that line or the next one, and we may say, "Yes, we will do as much as we can", but if they cut £1.8 billion from transport spending, they will not be able to build any of those lines.

In relation to the franchise length, I agree with the right hon. Gentleman that we need to award franchises that are of sufficient length to give companies an incentive. As I have said, we need to take into account not just costs and performance, but how a company behaves in the first part of its franchise. However, I am wary of moving to something like a 25-year franchise—indeed, I would not agree to that—which was suggested about 10 years ago. For example, the figures included in the Virgin franchises in 1995–96 have proved wildly optimistic. That does no one any good at all.

In relation to the financial obligations, I said in the statement and the White Paper says that they will transfer to the office of the Secretary of State.

Mr. Eric Martlew (Carlisle) (Lab): My right hon. Friend referred in his statement to the valuable role of community railways. I wonder whether he could expand on that, especially with regard to branch lines in rural areas, such as the west Cumbrian line and the Oxenholme to Windermere line. How will the White Paper affect them? What more local control will we have over the railways?
 
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Mr. Darling: The White Paper deals with local community railways and refers to the recent SRA consultation. The idea is that certain railway lines, which may not be viable under the present system, could be operated much better. It does not include specific suggestions, but sets out a framework for decision making in the future. I have been impressed by the fact that a number of working community railway lines would almost certainly have been shut if they had not been transferred to the control of local people. That is something that I want to encourage.

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