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Mr. Peter Atkinson (Hexham) (Con): The hon. Gentleman is living in an unreal world. Any passenger who travelled regularly from the north-east of England to London in the days of British Rail, and who now travels under the auspices of the Great North Eastern Railway company, would say that the service is 10 times better than it was under British Rail. The idea that the service was better under British Rail is a complete fiction. It was awful.

Mr. Hopkins: I am not saying that the railways are worse than they were, given the billions poured into them—they receive much more money than they did—and the fact that they are now more essential because more people travel by rail. The situation was, however, one of under-investment; when the amount of money that they received is taken into account, they performed brilliantly. I could quote examples at length to demonstrate that, and I refer Opposition Members to the report by Catalyst, which demonstrates it clearly.

Mrs. Dunwoody : Does my hon. Friend remember that the line that GNER took over was not only modernised just before then, but had the best rolling stock and facilities? Indeed, it was a good cheap buy.

Mr. Hopkins: I thank my hon. Friend for that helpful intervention.
 
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As I said, I travel by train every day. I may be a bit of a trainspotter, but I listen for wheel flats—that is when the wheels make a banging noise on the track because they have not been reground. The ROSCOs—rolling stock companies—are not concerned, because it only damages the track, and they charge the cost to the public purse or the travelling passenger. Almost every train has at least one wheel flat and some have six or seven. That damages the track and the trains—but who cares, because someone else is paying?

My final point relates to public ownership. Ministers have said that that would cost a lot of money. The reality is that have we paid out such vast sums in the past 10 years that any cost of bringing the railways back into public ownership would be miniscule by comparison. The track is effectively in public ownership already. The franchises can be handed over to a public sector organisation as and when they mature. The rolling stock is the only thing that the public would have to buy back—but they do not even have to do that, because they could negotiate a better deal with the ROSCOs and pay less, at least for the foreseeable future. So there is no problem of cost.

The real argument is, unfortunately, political. When my right hon. Friend the Member for Tyneside, North (Mr. Byers) did the necessary and important job of getting rid of Railtrack and bringing activities into Network Rail as a stage towards public ownership, I publicly congratulated him on that. He was applauded by Labour Members, although he got great deal of flak from Conservative Members, no doubt representing the shareholding interest.

We now know that my right hon. Friend was told by the Prime Minister that whatever he did, he was not to nationalise the railways. Unfortunately, that put on the brake. The Prime Minister is the leader of the Government and he had his say. However, I refer hon. Members to the recent report by the Transport Committee, chaired by my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody), which says:

"the Government needs to keep an open mind on the provision of these services directly by the public sector."

I ask my right hon. and hon. Friends to take note of that, and to keep an open mind on public ownership in the future. That is the way forward. Privatisation has been a disastrous failure.

5.48 pm

John Thurso (Caithness, Sutherland and Easter Ross) (LD): The Bill sets out the legislation required to enact the changes to the railways and railway management consequent on the rail review in the White Paper. As the Secretary of State said, however, much can be delivered without legislation. The critical requirement is for a long-term strategy that has a clear vision of where the railways are going and how that will be delivered. In my view, that can be delivered only by Government. Consequently, the Bill's main principles are right. They are to establish clear responsibility for strategy, operation and regulation.

Clarity is required to ensure that those responsible for delivery in the three categories have a full understanding of what is required of them and what they are
 
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responsible for, as well as to ensure value for money, both for the taxpayer and for passengers, and clear accountability from each segment. We will, therefore, support the Bill on Second Reading.

Railways are and should be a vital part of our transport infrastructure. They can and should, however, be able to contribute more than they do. Many parts of the network are at capacity, which constrains growth and will continue to do so, yet we will look to the railways to contribute solutions to road congestion, both through carrying more passengers and more freight. Rail is therefore a national asset that deserves support and investment.

As the Secretary of State has often stated, and reiterated this afternoon, we have reached this point because of historic circumstances: decades of under-investment by Governments of all shades over many years and a privatisation that clearly failed to live up to its prospectus. It is important to understand the past, if for no other reason than to know where we are going in future. Passengers, however, are not particularly interested in the past and apportioning blame does not improve the network. What passengers want is an efficient network, which delivers a safe, reliable and affordable rail system and allows them to get where they want to go punctually. They want a clear strategy for achieving that, and a Department for Transport that is committed to supporting the railways and producing the railway that they want. I was interested by the comment made by the hon. Member for Luton, North (Mr. Hopkins) that the Department for Transport has a reputation of not always delivering that support. I hope that, under its current leadership, it will dedicate itself to ensuring that the railways operate well and efficiently.

Let me therefore begin with general principles. As I have said, there are three separate functions, and the first is strategy. There is a clear need for a strategy so that the public will know what is happening, when it is happening, and who is accountable for it. No one can pretend that waving a magic wand will cure all the troubles of the railways in an instant. That is simply not possible. It will be a long road to putting in the investment necessary for a modern infrastructure and delivering all the services as they should be delivered. Most passengers understand that. What they want is a strategy that sets out a route map for delivering that with clear milestones to be achieved. They want to see who is responsible for delivery in terms of operation. They want that clear strategic framework so that the operators can see what they are doing.

It is clear to me that strategy must be the responsibility of the Government because the Government specify policy and are responsible for public expenditure. The railways will receive public support for some years to come—of that I am sure—so it is absolutely right that the Government shoulder that responsibility clearly and unambiguously.

The second function is delivery. It seems logical that the delivery of the infrastructure should be the role of Network Rail and that it must deliver the operating plans to deliver the strategy. It is for the train operating companies to deliver the services. The way in which franchises can be developed has a role in this regard. I agree with the Secretary of State that there should be fewer franchises, which makes a great deal of sense, and
 
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I would argue that franchises should be much longer to encourage operating companies to commit to the line that they are running and invest in rolling stock.

One of the worst aspects of privatisation was the creation of ROSCOs. The fact that they are all now owned by banks merely indicates that they must have huge money-making potential, because banks do not buy things that do not make money. I believe that that money can be better spent elsewhere in the railways. Were there longer franchises, we could put together a system that would enable those who take on the franchise to invest in rolling stock, which would be a tremendous benefit.

Mr. A. J. Beith (Berwick-upon-Tweed) (LD): Does my hon. Friend agree that success should be rewarded in the franchise process and that, if Great North Eastern Railway's bid to renew its successful east coast franchise were to be rejected by the Strategic Railway Authority so that it could get a bigger premium from an operator offering a lower level of service, that would destroy the logic of the franchising system?

John Thurso: My right hon. Friend makes a point that I would have made later: success should be rewarded and, where a franchise operator is clearly delivering a good service to the public, within the parameters that have been set for it, there should be a degree of presumption that such an operator will have that counting in its favour at the time of renewal.

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