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John McDonnell (Hayes and Harlington) (Lab): The history of Queen's Speeches over the past six or seven years in transport terms has been one of the Government trying to unpick the inheritance of the privatisation of British Rail. The two problems that the Government have sought to address are the lack of strategic co-ordination and the chronic underfunding of the system. I pay tribute the Government for the spectacular way in which they have addressed the underfunding. There is no doubt that additional funds have been found and that investment has increased significantly—most hon. Members have seen that—but the success in identifying the resources has not been replicated in the strategic co-ordination of the railway system.

The reforms proposed in the Railways Bill will continue to avoid the central problem of fragmentation and the resulting cash leakage, which we have heard about in the debate. In my view and that of many others, the Government need to take courage and adopt the option of bringing the railways back into public ownership, which is supported by more than two thirds of the electorate, the Labour party conference and many hon. Members.

We need to move away from the inane economic debate that has taken place about public ownership of the railways. It has been argued that it will cost—figures have been suggested in recent months—anything between £2 billion and £20 billion to bring the railways back into public ownership, but that can be done cost free: as the franchises of the train operating companies run out, we simply bring them back into public ownership, as we have done with South Eastern Trains.

We must stop using spurious arguments about the damage that public ownership would do, given the loss of the mythical £70 million a week investment that is claimed to be delivered by the private sector. Recent independent analysis by Modern Railways shows that almost all that amount is effectively Network Rail's borrowing, underwritten by the Government, and ROSCO investment, indirectly subsidised by the Government.
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My view, which is shared by many hon. Members—certainly by many members of the public and now by the Labour party—is that direct public ownership under a unified agency would offer clear accountability and better value for money for the taxpayer. I and many others accept that that cannot happen overnight, but there are clear stepping stones to public ownership, and we have taken one of them only recently. The evidence of the success, for example, of bringing rail maintenance back in-house tells us that doing the same with track renewal could have a huge impact on the efficiency and cost-effectiveness of the railways and be a major step in reversing the fragmentation wreaked by Conservative privatisation.

As we heard earlier today, and as we have heard in several transport debates in recent months, there is no justification for the franchising of train operators to private providers that are now operating successfully within the public sector. South Eastern Trains has shown us that the service can be provided just as well by the public sector without the extra costs and without disruption. It is beyond reason to expend money now on franchising and privatising South Eastern Trains when it is operating so effectively in the public sector.

Devolution of planning and control is important, and many of us have welcomed it to ensure that local transport systems meet social and economic need, but it should not be used as a device for letting private companies off the hook for the financial mayhem that they have caused. Nor should it be used to allow wrong choices to be made locally that will lead to cuts in rail services. We need an integrated transport network that complements rather than competes with itself.

Independent safety regulation should be maintained. The public will fail to understand why the Government are ignoring the recommendations that Lord Cullen made after the disasters on the railways. If fragmentation means that safety standards are expensive to meet, the response to fragmentation should not be to subordinate safety concerns to economic regulation, as many now suspect of the Railways Bill. In addressing the issue, the Government will be aware that, this year alone, eight track workers have been killed—a 13-year high. Incidentally, all those tragedies have occurred under the eye of private railway contractors.

In the context of rail safety, the Government will be aware of the huge disappointment of transport workers and the families killed in the tragic accidents on the railways that, years after corporate manslaughter legislation was first mooted following the Southall tragedy, it still appears a long way off in terms of being effectively legislated for and the culprits of corporate negligence being brought to book. We look forward to early implementation of legislation and to debate on the time scaling of that.

Public ownership is working, and it is working in our industry now. South Eastern Trains has operated successfully in the public sector for just over a year. Trains arrive punctually and passenger complaints are down by 1,000. The company has employed and trained hundreds of additional staff to improve the environment of its stations. Why cannot the Government simply accept that passenger services are now being run more efficiently and punctually than when the private
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operator Connex operated the service? In fact, for every quarter that it has been in the public sector, South Eastern Trains' punctuality figures have improved.

There is almost universal support for keeping South Eastern Trains in the public sector—not only from the TUC, the rail unions, the Labour party conference and the overwhelming majority of the public, but from the Transport Select Committee. More than 100 of my colleagues on the Labour Benches have signed early-day motion 254 tabled by my hon. Friend the Member for Eltham (Clive Efford), which called for South Eastern Trains to be maintained in the public sector.

The Government have said to us time and again that the issue is not whether a service is public or privately owned but whether it works. In the case of South Eastern Trains, the service clearly is working and, given the support for retaining passenger services in the public sector and the growing support for a wider role for the public sector in the rail network, I hope that the Government will accept, even at this late stage, that there are compelling reasons for maintaining this service, in particular, within the public sector. As has been said, it could be used in the future as a public service comparator by which one could test in the short term the operations of some of the train operating companies.

It is important that we recognise the role of our hard-working and dedicated railwaymen and women who keep the industry working seven days a week, 365 days a year. Little has been said about the work force in this   debate so far, and we need to pay them the compliment that they deserve for their commitment and dedication to their industry. We must recognise that their employment conditions were undermined by privatisation, and that they continue to be undermined by privatisation.

The open, transparent and accountable industry-wide collective bargaining of the public railways was shattered by privatisation, and industrial relations were worsened as a patchwork of competing interests among the railway companies opened up pay differentials between employees of the same grade working for different companies. In many cases, there was a difference of thousands of pounds between different grades of employees doing the same job. The Government should be aware that that has created disputes within the industry which could have been avoided.

The differentials have been compounded by the travel facilities offered to a two-tier work force. Those who were employed prior to privatisation receive full travel concessions, yet those who joined later do not. There are    also widespread differences in annual leave entitlement, pension contributions, London weighting and associated allowances. It is understandable that grievances within the industry give rise to disputes if men and women who work alongside one another are on such different rates of pay and work in different conditions, receiving different travel facilities and other concessions, while doing exactly the same job. Having given a commitment to address the two-tier work force within local government, health and public services generally, the Government should consider tackling the two-tier work force that arose as a result of the privatisation in this public service—the railways themselves.
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There is also a concern that the failures of rail privatisation are being experienced on the London underground. Network Rail stated that the decision to bring maintenance in-house on the mainline railway would ensure greater consistency of maintenance and improvement in standards, which would help to deliver efficiency savings far more quickly than would otherwise have been possible. The company explained that the move would mean that

with work carried out

In the light of those statements about maintenance arrangements, it is untenable that we have a fragmented privatised maintenance on the underground. We even allow the same companies that have been removed from maintenance contracts on the national railways to continue to make profits on the tube. The Government should reconsider the rationale of the public-private partnership on the London underground, with a view to introducing legislation that will allow the Mayor to create a flexible, unified, streamlined, publicly owned and accountable underground network. I look forward to amending legislation to enable that to happen.

The bus industry has been discussed. The warning signs were there for us all to see when the Conservative Government privatised our bus industry. Yet the radical action that is needed to bring the buses back into regulation has not been taken by this Government. Recent Government statistics reveal that the decline in use of deregulated bus services outside London has accelerated. Bus usage outside London declined by 2.5 per cent. in 2003–04, while usage of the regulated London buses increased by 10.4 per cent. overall. The decline is clearly caused by the fact that the passenger transport executives and local authorities outside London have fewer controls over fares, networks and service quality, and are unable to offer the integrated quality bus service that would stem the decline.

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