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Mr. Clifton-Brown: I intervened on the Secretary of State on exactly the same point. My hon. Friend will have heard the Secretary of State's complacent reply that the measure will not increase bureaucracy and council tax for the people of London and that it will not lead to inflation-busting fare increases. Given the record of Transport for London, of which the Mayor is in charge, on running the tube, on which fares have increased hugely, and the fact that the council tax for London has increased by more than 50 per cent. since the Mayor took over, does my hon. Friend think that the Secretary of State has any credibility on that matter?

Mr. Yeo: My hon. Friend has made a powerful point succinctly, and he is right. The Secretary of State has tried to deny the contents of his own Bill, the effects of which will be exactly as my hon. Friend has described. I shall enlarge on those effects, because if the Secretary of State has not read the Bill, it is even less likely that he has read the regulatory impact assessment, to which I should like to draw hon. Members' attention.
 
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The RIA makes it clear where the Bill is heading. According to it, clause 16 has been worded to ensure that there is

"flexibility built into the legislation that allows the Secretary of State to potentially extend the mayor's responsibilities for London rail services"—

remember that the Bill defines those as any train that begins or ends in London, regardless of how far outside the Greater London area it travels—

"in line with policy development."

The RIA admits that

"potential costs include the risk of greater interference in the rail industry imposing delay and higher costs on train companies. There is also a risk that projected passenger benefits do not materialise . . . as previously noted, the incremental costs associated with policy implementation are not yet known."

The RIA blows the gaff.

I wonder what persuaded the Secretary of State, of all people, to give Ken Livingstone those powers. Was it the cost-effectiveness of the congestion charge, which, as hon. Members know, costs £97 million to administer and raises £68 million after expenses? Was it, as my hon. Friend the Member for Cotswold (Mr. Clifton-Brown) has suggested, the rigorous way in which Transport for London has negotiated holiday entitlements for tube workers? Does the Secretary of State think that giving Ken Livingstone more power will make it easier to attract investment into the rail industry, and are the train operators clamouring for such a change?

One group of people who I am sure do not seek such a change are commuters who travel into central London from outside Greater London. They may find that instead of services being developed that make it easier for them to travel in from stations such as Colchester and Manningtree, which many of my constituents use, the congested tracks on which those trains travel may be occupied by services designed to suit the needs of Ken Livingstone's voters in the Greater London area.

Mr. Tom Harris (Glasgow, Cathcart) (Lab): I wonder whether the hon. Gentleman is making too personalised an attack on the Mayor of London. He has already mentioned the name Ken Livingstone six or seven times. The hon. Gentleman is, in effect, speaking against the principle of consulting locally elected politicians about rail services. If he is opposed to that power going to the Mayor of London, is he also opposed to provisions in the Bill that allow Scottish Executive Ministers to make exactly the same decisions about journeys that begin or end in Scotland?

Mr. Yeo: No, because the situation as between Ken Livingstone and Scotland is wholly different. I mention Ken Livingstone because, as he happens to be Mayor of London, he is the person to whom these powers are to be transferred. Members of the Government might wish it otherwise; they might think, for example, that Steve Norris would have made a better Mayor. I mention Ken Livingstone also because his record of running almost any kind of service is one of appalling waste and extravagance. I can scarcely think of a single politician less suited to being given the responsibility that the Bill bestows upon him. The situation in Scotland is wholly
 
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different. Only a tiny fraction of the services for which the devolved Executive is responsible go outside Scotland, whereas a vast number—in fact, the majority—of services for which Ken Livingstone will be responsible begin or end outside London.

Let us move on from Ken Livingstone. Another big gainer of power is Network Rail. Having sought and obtained control over train timetables, its new responsibilities include devising route utilisation strategies, directing network operations, driving up operational performance, and delivering infrastructure maintenance and renewal. That sounds pretty impressive, but to whom exactly is Network Rail accountable? Certainly not to its shareholders, because it does not have any; certainly not to passengers, because it is not burdened with the inconvenience of coming into direct contact with them; and scarcely even to its members, one of whom wrote to me a few days ago, rather plaintively pointing out:

"We are appointed via a mystery process . . . We have no sanctions over the board . . . Unless Network Rail call the meetings we cannot claim expenses."

It does not sound as though the management of Network Rail has much to fear from anyone. I worry about the effect of that on services. Network Rail's first responsibility, as the Library paper helpfully points out, is to the track. It has no incentive to attract extra passengers on to the railways; indeed, it will be able to cut services if they interfere with its duty to maintain the track. It sounds suspiciously like the worst periods under British Rail, when, having complained about the poor service offered to my commuter constituencies in South Suffolk, I was often left with the impression that it would be able to run the trains much better if it did not have so many passengers to bother about.

What is more, how can we be certain that Network Rail, with its monopoly position in the industry, far-from-transparent operations, unconventional structure and curious lack of accountability, is operating efficiently? Are the cost and speed with which the railway infrastructure is maintained and improved in Britain comparable with the performance achieved in other countries?

Mr. Darling: Again purely as a matter of interest, can the hon. Gentleman tell us what his proposals for Network Rail are? Would he keep it, or privatise it, or nationalise it?

Mr. Yeo: It is pretty clear that there is no possibility of Network Rail's being privatised, given the way in which the Government treated its predecessor body, Railtrack. That matter is still being pursued through the courts. If there had been any wish on the part of the Government to try to boost private sector investment into Network Rail, that wish was greatly obstructed by the way in which Railtrack's assets were seized by the Government and those associated with them.

Mr. Darling: I must press the hon. Gentleman for an answer. What are his proposals for Network Rail?

Mr. Yeo: It is impossible to privatise Network Rail, because of what this Government did previously. No one is going to put money into assets that the Government seized from a predecessor body, so we have
 
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ruled that one out, at least for the foreseeable future. What is needed is a review of the structure of Network Rail to give it a clear line of accountability to passengers; to its customers, the rail operators; and, if necessary, to Parliament. However, it is clear that it suits the Government to be able to hide behind Network Rail. They will say that the industry is not nationalised or part of the Department but part of a separate body, which nobody quite knows how to call to account. I daresay my hon. Friends have had the same experience as me. It is difficult, even for those of us on the Front Bench, to get information about exactly what Network Rail is doing.

What incentive is there for Network Rail to speed up the exploitation of its huge property assets? For more and more rail passengers, getting on a train at a provincial station is the same today as it was 100 years ago. The contrast between airports, which are firmly in the 21st century, and most stations, which remain in the 19th century, is painful. Massive amounts of capital can be drawn in from private investors for the benefit of the rail industry, without taxpayers or passengers having to fork out a single penny, simply by unlocking the huge potential of brownfield development opportunities in and around stations. Unfortunately, the Bill will make that process harder rather than easier.

The train operating companies are among the losers from the Bill. Their response has been muted so far, but it is hardly surprising when one realises that another change in the Bill would give the Secretary of State and his civil servants direct control over the allocation of franchises. Woe betide any train operator who dares to point out that the Bill does nothing to help passengers but merely cushions the lives of Ministers and bureaucrats. What chance would such a company have of getting a new franchise even if it was delivering a high quality service for its passengers? The nature of the changes in the Bill will silence opposition from potentially well informed sources, such as train operators, who are much closer to rail users than Ministers, civil servants or Network Rail will ever be.

There is no longer any pretence that the process of franchise allocation is independent of political interference. However, we know that passengers rank pretty low in the Government's priorities. That is clear from the changes to the way in which lines can be closed in future. Would it not be great to have a Bill that dealt with making it easier to open railway lines where demand existed? There is not much chance of that from a Secretary of State who has kicked almost every project for expanding railway capacity into the long grass.Unfortunately, the Bill is not about making it easier to open railway lines but to close them. To be more precise, the measure makes it easier to close lines and ensure that someone other than the Secretary of State gets the blame.

The rail network has remained roughly constant in size since one third of it was chopped in the Beeching cuts of the 1960s. It is widely assumed that the Government's latest wheeze, dressed up in the cuddly title of "the community rail development strategy" is little more than a smokescreen behind which Ministers will try to conceal a new round of Beeching-style cuts. It is a pity that the Secretary of State has not had the courage to come clean about that. After all, it is possible to make a logical case for saying that railways should
 
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concentrate on commuters, inter-city journeys and freight. If the Government thought strategically, they might want to do that. However, their transport strategy, like their strategy in almost every other policy area, is simply about spin and massaging public opinion.

The community rail development strategy transfers more responsibility for financing rail services to passenger transport executives—although, significantly, it does not transfer any extra money to them—while simultaneously taking away from those executives their role in determining the local rail franchises that should be awarded. To provide extra local services, a PTE must get approval from Network Rail. Since Network Rail cannot tell us, with three weeks to go, who can run services over Christmas, one can imagine the difficulty a PTE might meet if it had the cheek to say that it wanted to run a new service.

No such problem arises, however, if the local PTE wants to cut a service. In that case, it is free to switch the spending to "other transport modes" as the White Paper delicately puts it. That means a bus. Although Network Rail is there to block the provision of new train services if some of its engineers want to do that, there is no comparable hurdle to starting a new bus service, however congested the roads that the service may have to use.

An interesting insight into where the Government's sympathies really lie is provided by the fact that when new rail services are considered, the extra infrastructure costs and compensation to other operators must be calculated in advance and paid by the local passenger transport executive. In the case of new road services, however, such considerations apparently do not apply. In the White Paper, this is all hilariously described as "streamlining". What it really means is that the Government want to shift traffic from trains to buses, but do not want to say so, and—most of all—do not want to take the blame for the rail closures that they are planning.

I am not against facilitating decisions about new forms of transport service—light rail, guided buses and so on might well have a bigger role to play in the future—but I am utterly against a policy of closure by stealth, which has been designed to ensure that when closures are carried out, the local passenger transport executive will be blamed, although the Government are actually responsible. Furthermore, I share the concerns of the PTEs about the way in which the Secretary of State is removing some of their powers. Kieran Preston, the chairman of the Passenger Transport Executives Group, has said:

"it makes no sense to hand over the planning and management of regional rail networks to unaccountable civil servants in Whitehall who lack the local knowledge and expertise".

I turn now to an important relationship that the Bill will change: the relationship between the Secretary of State and the Office of Rail Regulation. Again, the change that the Bill will introduce increases the power of the Secretary of State and cuts that of the independent regulator. The effect of the change will be a return to the days when capital spending on the railways was subject to constant Treasury cuts, the consequence of which was the largely clapped-out rail infrastructure that resulted from half a century of state control.
 
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At present, for all its flaws, the Office of Rail Regulation can act as a driver for new investment. Through the way in which it sets access charges, it can help to ensure that sufficient money is attracted to renewing and improving the network. The Treasury has now taken fright, however, at the way in which that process breaches its own power to exercise absolute control over public spending. I understand why the Treasury has taken that view, but the consequences are significant and potentially damaging. The terms of schedule 4 of the Bill make it clear that in future, whatever the Office of Rail Regulation decides in relation to access charges can be overruled by the Secretary of State. In the absence of assurances from the Secretary of State about funding levels, we have to assume that the Department for Transport will be under constant pressure to make such cuts.

The change will have another serious consequence. Until now, the Office of Rail Regulation has had the power to set access charges and a duty, in doing so, to apply an important list of statutory criteria, such as the promotion of efficiency and economy in the industry, the interests of freight and passenger users of the railway, and the growth and development of the industry. It is not allowed to apply political criteria, as it is recognised that the application of short-term political considerations is harmful to private sector confidence and to the medium and long-term needs of the railway industry. The establishment of independent economic regulation, free of political controls, is essential to private sector confidence and investment. That duty has no doubt provided comfort to private investors in the railways, but if they are putting money into new rolling stock and improved services, there must be at least a reasonable prospect that the infrastructure will be provided for the results of their investment to function.

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