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Dr. John Pugh (Southport) (LD): I seem to have temporarily become a Front-Bench spokesman—but I appeal to you, Madam Deputy Speaker, not to be taken in by that.
It is some years since I was on the Select Committee on Transport, or the Transport Sub-Committee of the Select Committee on Transport, Local Government and Regions as it was then known, under the benign and kindly chairmanship of the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), but I hope to be on the Standing Committee and I will venture a few modest observations at this stage.
Under the stewardship of the right hon. Member for Tyneside, North (Mr. Byers), railways were right up the political agenda and debate was febrile and heated. Under the current Secretary of State, however, the atmosphere is calm, even at times positively soporific. We have the illusion that all is going well under his steady control, but that is not quite the case. Were he the captain of the Titanic, no one would be unduly alarmed and all would be calmed by his generally mellifluous tones. However, the essential problems of the railways still exist and, as many hon. Members have said, have been there since privatisation.
Fragmentation was the buzz word when I was on the Select Committee. It is still manifestly present, several times over and writ large, in recent reports. The Transport Committee says precisely that in "The Future of the Railway", its most recent report. It comments that fragmentation is not only still in evidence, but in some ways more in evidence than ever before.
The Bill appears to get rid of one fragment—the SRA—by taking powers upwards to the Department for Transport and devolving some powers downwards to the PTEs. That is the central thrust, as I understand it.
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The rest of the Bill is largely concerned with strategies for what is called "network modification", which is ministerial talk for closure and contraction. As has been explained, that is what most of the clauses do. We are in a new phase. Gone is the bold new dawn of the 10-year transport plan. In theory I cannot, and my party certainly cannot, object to one fragment less. However, as many hon. Members have stressed, that falls short of linking track and train, which others have asked for and see on the horizon. It leaves all the old excuses for failure in place, with each side claiming that the other side is at fault.
I come from an area in which the railway service is performing relatively proficiently, as the hon. Member for Knowsley, North and Sefton, East (Mr. Howarth) said. We come from the same area, and I can testify to the fact that the Merseyside passenger transport authority is go-ahead and positive in its general effect. However, every local authority—even the most positive and compliant—should always fear a Government bearing gifts and devolving powers, because it often means little more than transferring the responsibilities for subsidies, or transferring only part of the subsidy. The sub-plot is for central bodies to subsidise less and local bodies to subsidise more. That leads to the prospect of underfunded lines being closed by underfunded PTEs, and the Government not taking the rap for it.
If that is what results—and it need not necessarily be the case—it is hard to see that as a complete answer to fragmentation. However, I venture to say, possibly in compensation and perhaps to excuse the Government, that there cannot be a worse and less efficient public subsidy system than the one that we had before. I defy human ingenuity to come up with something less competent.
In my area—if I can put in a plug for it—a pittance spent on restoring one mile of rail track—the Burscough curves—could turn the whole Mersey railway system from a radial shape to an efficient loop, increasing massively the utility of disconnected railway lines, such as the Ormskirk to Preston line, currently vulnerable and seemingly under threat. That would provide enormous customer and economic benefits. We could do that with the small change, or even the tea money, from projects like the west coast main line or Crossrail. In many ways, PTEs can achieve far better effects.
My local PTE would not fall for the suggestion that the Southport to Manchester airport line was vulnerable or uneconomic, which it was listed as a few days ago. That is an SRA view. The real reason for saying that is that it might delay for a few seconds the west coast Glasgow to London main line, on which so much money has been spent—expenditure that the Government must try hard to justify. It is as though those few seconds matter more to passengers, whose main gripe on that line is overcrowding on trains that are half empty because half the carriages are first class, and a first-class ticket costs the same as a week in the Algarve.
If the Bill passes power to the PTEs, I genuinely do not think that they can do a worse job unless—perish the thought—they do not get properly resourced. The Bill can be read—although this is perhaps a cynical reading—as providing what the accountants used to call
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a special purpose vehicle. They used to say that when they were closing down Railtrack. Its special purpose could be to please the Treasury and contract the network, which has hitherto been so hopelessly mismanaged. I would go into Committee with an open mind to discover what the Government said about their legislation, but their approach could give the signal, which it should not, that they have given up on railways, and perhaps also on public transport as a whole.
8.25 pm
John McDonnell (Hayes and Harlington) (Lab): We heard the Secretary of State present the Bill with his usual efficient good nature. We heard a range of views from the Conservative party, its Front-Bench spokesman and others, in defence of privatisation. We also heard the views of the Liberal Democrats from the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) and, more recently, the views of new Labour.
I thought that I would speak on behalf of the Labour party and address the Bill on the basis of Labour party policy, which was fairly straightforward at the conference in October this year. It does not seem to be contained in the Bill, but not to worry, because I shall draft a new clause, which I am sure will be acceptable to the Front Bench as it will reflect the partnership in power policy-making process that the Prime Minister introduced into the Labour party to enable people to introduce a minority report on a particular decision and policy. That is then brought to the Labour party conference, and delegates at the conference, which is the supreme policy-making body of the party, vote on it. In this case there was an overwhelming vote in favour of what can only be described as a policy to introduce legislation for an integrated, publicly owned and public accountable railway system. That is what I shall suggest the Bill be amended to reflect.
Mr. Tom Harris: I do not want to pre-empt my hon. Friend's comments, but I assume that he is about to mention that 78 per cent. of constituency delegates voted against that policy.
John McDonnell: What is interesting about that statement is that I did not support the partnership in power process that the Prime Minister introduced into the Labour party—but it is supposed to have an impact on the Government's policies as part of democratic accountability. However, there is a break in the chain of the accountability of the Prime Minister to the Government to party. Overwhelmingly, the Labour party conference—
Madam Deputy Speaker (Sylvia Heal): Order. This is a Second Reading debate, and I request the hon. Gentleman to confine his remarks to the Bill.
The overwhelming decision at the Labour party conference was for the Government to introduce legislation to bring rail back into public ownership. The Bill does not do that. It does not do what the Labour party decided, but this is the view of the Government. I thought that someone in the Chamber should at least
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represent the Labour party in the debate, and that is what I am trying to do. In addition, the Bill also does not implement London Labour party conference decisions made on Saturday—I think unanimously—to ensure that South East Trains is kept in public ownership and control, so that it continues to be publicly run. Again, I thought that someone should stand up and represent the London Labour party as well.
The gap in the Bill is that there is now no clause to bring forward public ownership and public accountability. I agree with my hon. Friend the Member for Luton, North (Mr. Hopkins) that this is one in a transitional series of Bills that overcome the problems of privatisation introduced by the previous Government. Slowly but surely we are reintroducing a publicly owned and publicly accountable railway system. The first Bill that the Government introduced tried to overcome some of the problems of privatisation by trying to establish at least some form of rational structure for strategic policy making, and established the Strategic Railway Authority, which was neither strategic nor much of an authority on railways. The Government are seeking to address that through legislation that will bring many of its powers back under their control. I welcome that as the next staging post to a fully publicly owned and publicly accountable system.
Why are the Government moving towards the reinstatement of a mechanism that is like British Rail? The reason is clear. In every opinion poll, two thirds of the British public say clearly that they want a move back to public ownership and public control. Why are they introducing this legislation today? It is a reaction to privatisation over the last decade and a half.
It was clear from the comments of some Opposition Members who have tried to justify privatisation that lessons have not been learned. As a country, we poured £10 billion in subsidy into private companies, which took the profits from the privatisation, £1 billion of which went directly into the pockets of shareholders. Each time, the argument is that if legislation is enacted to end privatisation, we will lose the supposed £70 million a day subsidy from the private sector. At some stage in the debate, we must go past GCSE economics—"failed". Where does the £70 million from the private sector come from? It comes from the public subsidies that we pour into the private companies, making their profits, or from the fares that we impose on passengers. It is recycled public money, for which we are supposed to be grateful. In the days of British Rail, it came as a direct subsidy. We have heard a lot of criticisms of British Rail today, but if we read the Catalyst report that was prepared, we see that pound for pound, in terms of investment and return, British Rail, despite being starved of resources for a long period, was the most efficient and productive railway system in Europe.
What could this Bill do? First, it could introduce a new clause bringing rail back into public ownership and making it publicly accountable. I will draft that clause for the Minister later. Secondly, it would be easy to amend clause 12 so that South East Trains is not forced out into another franchise. I agree with my hon. Friend the Member for Glasgow, Cathcart (Mr. Harris)—if it ain't broke, don't fix it. At the moment, South East Trains is proving to be an effective and efficient railway service within the public sector. And what are the
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Government doing? They are privatising it again. Bizarrely, it is likely that South East Trains will probably still be state owned—but it will be owned by the Danish state railway company, which will bid for it in future.
The Bill therefore has the potential, first, to hold back further privatisations, and secondly, to include a simple clause to enable the Government to take back into public ownership individual franchises as they run out over the coming years. In that way, without any cost—although we have heard from the Secretary of State previously that the cost of bringing rail back into public ownership would vary from £3 billion to £20 billion, to which it increased at the Labour party conference—rail could be brought back into public ownership, as the public demand.
I do not think that the Government have the guts to go along that path. In due course, however, they will, and new legislation will be introduced. This Bill is just a staging post. In the meantime, let us at least use it to address some of the anomalies within the industry.
First, I want the Government to address the anomaly of a two-tier work force in the rail industry, particularly with regard to travel facilities. I have drafted an amendment—it will be available to Ministers in Committee—which will end the two-tier work force, whereby staff employed prior to privatisation enjoy safeguarded travel facilities, whereas those employed following privatisation do not have such a guarantee. Before the privatisation of the rail industry, all British Rail staff received nationally negotiated travel facilities, which were subject to the same universal rules and principles.
In a written parliamentary answer in 1993, the then Minister confirmed that about 500,000 people enjoyed such concessionary rail travel, and that the cost was negligible and largely administrative. More recently, the National Union of Rail, Maritime and Transport Workers secured with one infrastructure company a 75 per cent. reduction on standard fares for staff when travelling on services provided by three train operating companies. The scheme costs £1,000, which covers basic administration costs for 475 workers. The cost is fixed, and would not increase if more workers used it. As a result, the company has provided travel facilities for its staff at a cost of just over £2 per worker. It would be easy to amend the Bill to establish a universal scheme, thereby ending the two-tier rail work force.
Another anomaly under the current system is that the SRA can intervene in industrial disputes. It can subsidise companies engaged in disputes with their work force simply by guaranteeing, through the grant regime, that companies affected by industrial action will not disbenefit financially in any way by failing to meet their targets. There is thus no incentive for such companies to settle disputes. That power, which currently pertains to the SRA, is being transferred to the Secretary of State. I did not think that it was the Secretary of State's role to intervene in industrial disputes in any industry. In fact, in dispute after dispute the Government have consistently made it clear that it is not their role to intervene between management and workers. Yet if this provision is retained in the Bill, that power will be transferred to the Secretary of State. Again, a simple amendment to clause 1, which deals with the transfer of
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functions, would enable the Secretary of State to have clean hands and not become part of the rail industry's industrial relations machinery.
There are some other worries that we need to express today. I reiterate the concerns expressed about the transferring in clause 2 of the Health and Safety Executive's rail safety functions to the Office of Rail Regulation. My simple amendment would do away with that proposed transfer, and would enable an independent safety regime to be maintained. The problem with transferring safety to the ORR is that it is not guaranteed to be independent of economic pressure. The Government's proposal subordinates rail safety to economic regulation and brings the two elements within the same organisation. That flies in the face of Lord Cullen's recommendations following the Ladbroke Grove train crash.
During the consultation process, I urged the Government to listen to the organisations that deliver the service. During the rail review, the Health and Safety Commission, the HSE, the TUC and the rail unions all made strong representations to the Government opposing the transfer of Her Majesty's rail inspectorate from the HSE to the ORR. The TUC fact sheet, which was distributed to many Members, said:
"If safety regulation formed part of any body that made decisions about funding and/or economic regulation, there would be a real risk that safety would be compromised when economic decisions are made that have safety dimensions."
At one point the Secretary of State made clear the priority that he gave to safety. He said that it should be "in with the bricks" of any organisation. But many of us believe that the transfer of responsibility is motivated by a desire to placate elements of the private sector that hold the mistaken view that railway safety regulation is gold-plated—an expression that has been used in the Chamber today. Those on one side of the industry are seeking to push down costs, some of which the management themselves are responsible for. However, saving costs on safety measures is a false saving. Anyone with a constituency involvement in Southall, Paddington or any other place in which a recent rail disaster has taken place will understand the implications of putting cost savings before safety.
The other concern that many of us feel—it has been expressed today—is about clause 39, which links in with clauses 40 and 41. Those provisions relate to the powers that will now be given to end certain services, and sometimes to replace them with bus services. The concept of "bustitution", as it is now called within the industry, has opened up a vista, which some hon. Members have described today as a vista of a new Beeching, and the end of small community lines, which we thought were being protected over the year.
Launching the rail review in January 2004, the Secretary of State said that decisions on the provision of local transport were often best taken by the people who provide and pay for the service. Devolved decision making would enable sensible and informed decisions to be taken between bus, light rail and heavy rail. "The Future of Rail" White Paper of July 2004 made it clear what the Secretary of State meant when he spoke about "sensible and informed decisions" back in January. It said that the document promised to put in place
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arrangements making it easier for bus quality contracts to be introduced as part of a strategy that included reductions in rail services.
The Bill confirms that position. Clause 39 gives passenger transport authorities the power to make a quality contract scheme "if they are satisfied" that it is
"an appropriate way of securing that the transport needs of the potential users of a relevant railway service that has been or is to be reduced or discontinued are met".
That opens the door for what many fear will be large-scale reductions in rail services.
Clause 40 allows the Scottish Executive and the Welsh Assembly to provide a substitute road service route where
"need not correspond precisely to . . . the discontinued service if . . . it is not practicable . . . to do so; or . . . the substitute service broadly corresponds to the discontinued service in terms of the localities served."
The danger is in the wording "broadly corresponds", which could lead to existing communities currently served by rail not being so served in future, but being offered replacement road services. Experience of the Beeching cuts shows that the patronage of bus services introduced to replace rail is fairly low, leading eventually to the bus services themselves being removed, leaving whole areas without public transport.
The threat of bustitution is compounded by other proposals in the Bill, which will make it easier for funding authorities to close railway lines. Clause 42 will weaken the safeguards against line closures. Previously, the criterion was whether closure would increase passenger hardship, but the new guidelines provided by the Secretary of State also cover economic, financial, environmental and social factors. The assessment will no longer be made by regional rail passengers committees, but by the funding authorities themselves—those who are making the proposals for closure in the first place.
My final, more general point was made early in the debate, but glossed over in ministerial responses. The failure to transfer to the shoulders of the Secretary of State the current duty of the Strategic Rail Authority to promote rail is a real concern. Previously, clause 205 of the Transport Act 2000 set out clearly that the SRA had the responsibility
"to promote the use of the rail network for the carriage of passengers and goods . . . to secure the development of the rail network, and . . . to contribute to the development of an integrated system of transport of passengers and goods."
All that now goes, and all we are left with is a general commitment by the Government to improving the overall transport system—not specifically rail. That is a real worry. There is now no voice for the rail industry overall. That is why this legislation should transfer the previous powers, responsibilities and duties of the SRA at the very least to the Secretary of State, if not to a new agency.
I make one final prediction. We shall return to debating this subject within five years, and new legislative proposals will be before us. They will probably scrap most of the proposals in the Bill, and
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may well attempt to set up some form of public railways agency that will bring the railways back into public ownership, making them publicly accountable, publicly funded and generally popular with the British public.
8.44 pm
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