Railways Bill

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Standing Committee A

Thursday 16 December 2004

[Mr. Win Griffiths in the Chair]

Railways Bill

9.25 am

The Chairman: I call the Minister to move the motion to amend the Committee's order of Tuesday 14 December. Copies of the motion are available in the Room.

The Minister of State, Department for Transport (Mr. Tony McNulty): I beg to move,

That the Order of the Committee of 14th December be amended by the substitution of the following for paragraph (l)(b)—

''(b) at 9.25 am on Thursday 16 December; and

(c) at 9.25 am and 2.30 pm on Tuesday 11th January, Thursday 13th January and Tuesday 18th January;''

This is an historic occasion: it is the first time that this provision has been invoked since it was duly modernised. By agreement and to assist the Liberal Democrats with their difficulties this afternoon, I have, with due humility given the historic occasion, moved an amendment to the Programming Sub-Committee resolution in order to delete this afternoon's sitting.

The Chairman: The question is that the Committee's order of Tuesday 14 December be amended as set out in accordance with the provisions of Standing Order 83B(10).

Mr. Greg Knight (East Yorkshire) (Con): I am delighted that at least in one respect the Minister will be in the history books. Unusually, perhaps, for such a motion, we have no objection to its terms. We do not disagree with the Bill in toto, and although the time available to us to consider what is left to be considered in Committee is barely adequate, it is adequate. For those reasons and to assist one of the minority parties, we shall not seek to divide the Committee on the motion.

Dr. John Pugh (Southport) (LD): May I express my undoubted gratitude to other members of the Committee, to the Minister in particular and to the official Opposition on this historic occasion? The motion will save me from having to be in two places at one time this afternoon, because I shall be dealing with the School Transport Bill, as people will be able to verify by looking at the annunciators from time to time. The motion will save me from the burden of having to try for bilocation. I think that bilocation used to be considered one criterion by which people were canonised.

Mr. David Wilshire (Spelthorne) (Con): I am surprised that the Liberals cannot be in two places at once. They have can two policies on the same subject at once, so why can they not be in two places? In relation to the usual channels, if I heard the Minister correctly, he now claims to be new, new Labour. We claim to be new Conservatives and this is a new Committee doing something for the first time. It is rare for me to be in the advance guard of radical change—[Interruption.] I am glad that my opposite number agrees. I am sure that the Committee will understand
 
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that the only thing that I want to place on the record is that although I support what is happening and I was involved in the negotiations, that does not mean that we agree that we need less time or that we approve of the programme motions. We are simply trying, willingly and in the spirit of Christmas, to help a party that cannot sort out its own arrangements.

Question put and agreed to.

Clause 3

General duties under s. 4 of the 1993 Act

Amendment proposed [14 December]: No. 1, in page 3, line 34, at end insert—

'(7A) After subsection (4) insert—

''(4A) The Secretary of State shall also be under a duty, in exercising the functions assigned or transferred to him under or by virtue of this Part, to promote the renewal of franchise agreements to incumbent companies which have met the terms of their previous franchise agreement.''.'.—[John Thurso.]

Question again proposed, That the amendment be made.

The Chairman: I believe that the debate had been concluded.

Dr. Pugh: My hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso) has given me authority to seek leave to withdraw the amendment.

The Chairman: Unfortunately, that cannot be done. That is why I must put the question to the Committee.

Question put and negatived.

Dr. Pugh: I beg to move amendment No. 3, in page 3, line 34, at end insert

'(7A) After subsection (4) insert—

''(4A) The Secretary of State shall also be under a duty, in exercising the functions assigned or transferred to him under or by virtue of this Part, to continue to operate any franchises currently under the management of the SRA.''.'.

We are essentially talking about the South East Trains franchise, which, when it was in private hands, was a disaster. The franchise was subsequently taken back by the Strategic Rail Authority, which has been running it. There has been an improved quality of service for passengers, who seem very happy with the current arrangements. The franchise is in effect being run in the public sector. People need to recognise that and the fact that a franchise can be run well in that way. It has been interesting to compare its performance with that of the private sector and use it as a comparator. We have argued, and continue to do so, that given the success of the venture, it is appropriate to maintain the arrangement or to put measures in place that allow the Government to maintain the arrangement in the medium term. That would give us a comparator with the private sector and so inform debate on whether the railways can be run adequately as a public service.

Without the amendment, nothing will require the Secretary of State to continue the arrangement, which we believe would be a good idea, as it is clearly
 
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working to the advantage of the public. As evidence of that, the Select Committee's conclusion states:

''We were surprised at the evident unwillingness and timidity of the Government and the SRA to contemplate the SRA running train services directly, even if the SRA's experience of managing South East Trains demonstrated clearly that this could be done by the SRA at the best price and highest efficiency.''

The Committee then says what I say:

''It seems common sense that where benchmarking identifies the most cost effective solution to running a franchise . . . that solution should be adopted. The public are rightly concerned with excellent service and value for money. The record of the private sector . . . overall is poor. To adhere to the policy of restricting such operations on ideological grounds''—

although I would not accuse new Labour of being ideological—

''does not appear sensible. In fairness, this evidence was given before the Government's recent announcement of its rail review.''

With the Select Committee and the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) behind me, I do not see how the Government can refuse the amendment; that must surely guarantee a sympathetic response.

Mr. McNulty: As the hon. Gentleman says, SET services are currently run by the SRA in lieu of taking the franchise away from Connex. That was taken away, it should be said in passing, because of financial mismanagement and a lack of confidence in the franchise's financial future and not because of anything that Connex had done in running the service, although I know that the change was greeted warmly by commuters and other passengers.

In future, there will be no SET franchise to preserve in the public sector. It was made clear some time ago that we were in the process of redrawing the franchise map for the entire country. We are well along the process for the integrated Kent franchise, of which the SET franchise will form a part, to the extent where four bidders have already been shortlisted. An initial invitation to tender has been issued, and a final invitation will be made shortly. Even if I had been persuaded by the eloquence of the hon. Member for Southport (Dr. Pugh) to preserve SET as a public sector comparator, we are too far along the broader process in integrating the assorted Kent franchises—

Mr. Wilshire: Too far down the tracks.

Mr. McNulty: Yes, we are too far down the tracks—I thank the hon. Gentleman—to reverse the process now.

We are doing that for entirely pragmatic reasons. By the by, there has been significant improvement in all three southern franchises. This month's figures are only just out today, but I cheerfully admit that last month SET's improvement was better than southern and south-west's by 0.2 per cent. We have to say that the SET improvement has been marginally better, and I congratulate the SRA management team that has gone in to run it post-Connex. However, it is wrong to suggest—not that the hon. Member for Southport did, but others have—that there has been a miraculous transformation of SET compared with South West and Southern all because of some magic pixie dust from the public sector. That is not the case. The SRA management team has done well to match and be
 
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slightly ahead of the overall improvements in the three southern franchises, much of which is down to Network Rail, to its credit, sorting out some of the infrastructure problems across London and the south-east.

The remapping process is important to us and central to much of what we do. It is down to whoever wins the new integrated Kent franchise to take things forward in Kent. It is right to retain private sector expertise in delivering the IKF's service. Running the franchise as a partnership between public and private sectors will benefit passengers and build on improvements, and we will introduce strong incentives to improve reliability and quality.

The points made about a public service comparator are not entirely well grounded, but we are well down the tracks, as the hon. Gentleman said, in the new franchising process for IKF. I shudder to think what it would cost to unpick that process now that we are so far down the line. Overall, the template that we are using, with all the restructuring included in the Bill, is the right way forward for our railways, and I urge colleagues to resist the amendment.

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Prepared 16 December 2004