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Jeremy Corbyn: The hon. Gentleman's point about ROSCOs is well made and well put. Does he therefore agree that it would be ideal for the national rail network to own the ROSCOs and therefore the rolling stock? Clearly, it is an extraordinarily profitable area with minimal risk involved.

John Thurso: The hon. Gentleman makes an interesting point. I have not studied the matter in sufficient detail to know whether that is the right answer. Other answers might work. For example, if we consider ferries, particularly in Scotland, the franchise is relatively short, but the Scottish Executive guarantee that, where an investment in a new ship has been made, at the end of the franchise, if the franchise company loses that franchise, the asset is transferred. The Scottish Executive therefore act as a kind of banker. The point is that no third party takes a cut on the way, which, as he would agree, is the evil that needs to be addressed.

The third function is regulation. My hon. Friends and I have long argued for a model of rail regulation more akin to that of the Civil Aviation Authority. The Bill moves in that direction and we are therefore happy to support it. We want a regulator that deals not only with financial aspects of regulation but with safety and, we would add, environmental matters.

The Bill puts both safety and consumer representation into the remit of the Office of Rail Regulation. I agree with the inclusion of both those, but as I have just mentioned, I would like responsibility for the environmental aspects of rail also to be given to the Office of Rail Regulation. Interestingly, in France, locomotives have generally become more fuel-efficient, but that is not the case in this country. That is because
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neither the size of the engine, nor the amount of fuel consumed, nor the amount of fuel per passenger is taken into account in the specification of the rolling stock. A whole list of aspects come in front of those and, if we are to ensure that rail is among the transport solutions that deliver in terms of using fewer carbon fossil fuels, we must include the environmental consequences in the mix. The best way to do that would be through the Office of Rail Regulation.

We therefore support those principles and the main thrust of the Bill, but there are considerable areas of concern in relation to the details. We look forward to working constructively with the Government in Committee in the hope that they might take on board some of those concerns.

My first concern relates to some of the consequences of the abolition, of which I approve, of the Strategic Rail Authority with regard to the powers that go to the Secretary of State and how he will accountable for them. An allied concern relates to the powers that will go to the devolved legislatures, to London and to the passenger transport executives. It seems to me that the objective is twofold. The first aspect, as I have said, is to have a clear strategy for the railways. It therefore seems extraordinary that the Bill does not lay a specific duty on the Secretary of State to publish that strategy, and neither does it do so on the national bodies. There is a clause in the Bill saying that the national bodies, the Scottish Parliament and the Welsh Assembly, may, if they so choose, publish a strategy, but not that they must do it. It seems to me that if the objective is to have a strategy, there should be a clear duty on both the Secretary of State and the devolved Administrations to publish that strategy.

The second objective is a clear line of accountability. The SRA failed largely because no matter what strategy it came up with, it had no way of putting it into operation; ultimately, it is the Government who have the power to do that. The Bill therefore puts strategy into the Government's hands—I hope that the strategy will be published—but there is no requirement for the Secretary of State to report to Parliament on what has happened during the year. I want him to have a duty to make an annual report, in which he comments on what he has done in the past year, on the bodies for which he is responsible and on updating the strategy. I genuinely hope that the Government will be receptive to that suggestion. It would make them more accountable for their actions and reinforce such actions, rather than diminish them.

I certainly agree with the principle of devolving power. I have always believed that the devolution principle should be, "What can be devolved should be devolved," so it is right that the existing powers of the Scottish Parliament and of the other devolved bodies be reinforced. However, I have two specific concerns, the first of which relates to the representation of passengers. The Bill foreshadows the Rail Passengers Council moving to the Office of Rail Regulation—absolutely right, as that is the correct place for it—but it also envisages the RPC becoming one body for the entire United Kingdom. There is much in that proposal that is good and the current RPC system is fairly unwieldy, to say the least, but while the Bill devolves power to Scotland and Wales so far as responsibility for delivery to passengers is concerned, at the same time it centralises
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passengers' ability to make representations. That is both illogical and perverse. At the very least, the Bill needs to state how the bodies responsible for delivery—the Scottish Executive and the Welsh Assembly—will relate to passengers.

My second concern, on which the Secretary of State briefly touched in response to an intervention, is how much money will be given to the devolved bodies. Nothing in the Bill sets out how the funding will be apportioned or how the investment will be made. I assume that the Government do not intend to cease funding the devolved bodies completely and say that everything for the rail network must come out of the existing block grants. I assume that there will be some finance, but there should be greater clarity as to what it will be.

The money required splits into two areas: maintenance and investment. Maintenance is not a problem as it can be dealt with on a straight per mile basis, but investment is more difficult. For example, how much money will go to Scotland for new investment? One could decide to use the Barnett formula, but that clearly would not work. It is based on a per capita calculation and works out at about 7.3 per cent.; at the very least, any ratio should be based on mileage. Scotland has some 13.3 per cent. of the national railway mileage, so that factor could be taken into account.

Alternatively, one could use a ratio based on current spend, but there is a danger in that method. The investments made in the past few years have largely centred on major English projects, particularly the west coast main line. Such a method of funding would therefore freeze in a future bias against Scotland. We need a formula that is reasonably flexible and that permits the Scottish Executive and the Welsh Assembly to know what funding they will have to introduce the improvements that they want to make. We want the Bill to ensure that improvements in the service from Edinburgh to Aberdeen or to Inverness are more likely, rather than less.

The Secretary of State's proposal concerning the ORR makes a great deal of sense, but we want to ensure that the safety duties are properly carried out and not conflated with the functional side. Part 3 sets out the modification to the Rail Passengers Council. As I have pointed out, the general principle is fine, with the proviso that we need to consider the important issue of how to deal with the devolved Administrations.

Perhaps my greatest worry relates to part 4, which appears to have only one purpose: to make closures and reduced services easier to implement. Why do the Government want to do that? In the light of that and of last week's announcement on community rail, there is serious concern that this could be another back-door Beeching. Beeching made some serious errors in his approach to the railways, not least in his appreciation of cost. One problem is that branch lines' costs are apportioned to them by Network Rail on an average cost basis—in the days of Beeching, they were apportioned by British Rail—but the true cost could be much less. In averaging out those costs, all the high-class, high-speed lines are included with the lower-class, lower-speed ones. It is the branch lines that tend to be the much slower, lower specification lines, and we need
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to ensure that a true costing of them is made, so that they are not closed in error. Beeching failed to take into account that closing branch lines removes passengers from main lines, because those who need to travel to a connecting line end up going by car, rather than taking the train.

The role of the railways in moving freight is also important and needs to be encouraged. I was sorry to discover that, in the more recent rail targets, the previous ones have been dropped. It is important that freight move from road to rail, so I hope that when the Secretary of State's long-term vision is published, it will not only make room for freight but clearly indicate that the Government regard rail freight as a way to help combat road congestion.

Mr. Hopkins: Does the hon. Gentleman agree that there is a real need for new lines, particularly dedicated freight lines? Such lines might ease the pressure on passenger lines and allow them to run trains at much higher speeds; indeed, they might enable the creation of dedicated passenger lines.

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