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Noble Lords: Hear, hear!

Lord Houghton of Sowerby: My Lords, it is a great pleasure to hear such a constructive contribution on a very difficult problem.

Let me say straightaway that, as a resident living near Redhill, I am dead against what he is trying to achieve for the development of Redhill Aerodrome. We have enough from Gatwick, we have enough from London Airport and we have had enough from the Redhill Air Club, which ran a fleet of Tiger Moths—all more than 50 years of age—and made a great clatter and rattle on a Sunday afternoon.

I occupy a privileged position in this debate, and I hope I am not going to spoil it. This is pie in the sky. The canvas painted before our eager eyes by my noble friend in opening this debate—on which I congratulate

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him very warmly indeed—was a comprehensive and knowledgeable sketch of a world problem, and was a rare treat indeed.

A great deal of this traffic and road transport infrastructure is on its way to India. There are other groups of countries besides Europe. Radical change is taking place in India. Road makers, technicians, communications experts and all those necessary for the development of a country from an agrarian way of life to an urban way of life are on their way to India. This is supported by American capital of such volume that it cannot all be absorbed in capital expenditure at the present time, with the result that they have about 20 per cent. inflation.

I am a bit of a cynic about transport because when I was a member of Harold Wilson's Cabinet he asked me to preside over a Cabinet committee into transport policies. Apparently we did not have any, and it was desirable that our views on transport should be made known. All I was given was the party formula, which was for an integrated system of transport. That is all I had to work on. By the time we had finished with the quarrel between the National Union of Railwaymen and the Transport and General Workers' Union over a supply line to a porthead in the south-east of England, we realised that there would not be an integrated system of transport.

That is history, but some of the problems remain. The canvas which my noble friend has drawn before our eyes this afternoon sought to show what may be achieved in the next century. I doubt it very much. I do not think that the world will develop along those lines because the resources will not be available for it. With the demands of so many people for a better standard of living—people want to reap the benefits of their higher skills and the signs of prosperity around them—how much can be devoted to this vast reconstruction of the world's communications in anything like a reasonable space of time? I wish that there was an encouraging message on the accomplishments that was anything like the complete picture which my noble friend has drawn. The noble Earl, Lord Caithness, by directing his attention to the number of items, schemes and needs, certainly brought some improvements within our grasp. But that is only part of the problem.

I shall conclude what I have to say because I am under a very strong emotion. I can think of the word "transport" at the present time only in terms of the brutality that we are imposing on millions of our animals as we transport them along the roads of Europe for slaughter at the other end. This is becoming a major political issue. What is the transport infrastructure for? What is it to carry: more and more animals around the world, more human cargo around the world? What is the outcome? How much happier are people going to be? The Government have to face the fact that transport at the moment means only one thing to a great many people: they do not like to see what is being done to our young animals when they are transported to Europe. Better roads to cart more of them there? Better slaughterhouses to kill them when they get there? This is becoming a national emotional issue. The Government will have to take notice of it.

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I cannot go on any longer without noble Lords realising that I am almost completely out of order. But I got up to give the House that message and I am going to take every opportunity I can of repeating it. That is all I have to say.

6.2 p.m.

Viscount Thurso: My Lords, what a difficult one to follow! When I listened to the noble Lord, Lord Ewing of Kirkford, I was filled with hope at this beautiful vista that he painted for us of a better Europe with better communications, more development, and industry getting about its business without let or hindrance. I would like to go back to thinking in those terms during this debate.

There is no doubt that an effective transport infrastructure is vital to any industry, indeed to any firm, or to the success of any individual manufacturing plant. It is vital to existing industries and existing industrial communities but it is, if possible, even more important to developing areas, developing industries and developing trade between countries. It is no good making a better mousetrap if the world cannot find a path to your door to buy it or if you cannot find a satisfactory and economic means of delivering it to would-be buyers.

It is obvious therefore that if industrial firms cannot find an existing transport infrastructure that suits their convenience they will seek to set up something which does. This usually means putting their own lorries, vans and cars on the road regardless of the effect it may have on the road system and the transport infrastructure enjoyed by other people. Your Lordships will, I hope, forgive me therefore if I examine this proposition in the light of what I know of my home area, the northern Highlands of Scotland.

In Caithness we are engaged in trying to carve out a future for ourselves in the aftermath of the shutdown of the fast reactor at Dounreay. Our search for industry wherewith to replace the employment lost by the closedown and to strengthen an economy weakened by the closedown is made much more difficult by a lack of effective transport infrastructure policy and the problems which arise as a result.

One piece of infrastructure which had been put into place to serve Dounreay is now of little further use and of no help in developing most of the industrial projects which we could hope to attract. I refer to the strengthened national grid power line. You cannot send boxes of fish or freezer cabinets down a power cable, yet these are two industries which are being successfully developed on an important scale. What therefore have these industries done to ship in their raw material and ship out their product?

The successful white fish industry is a direct result of infrastructure improvement. Scrabster Harbour Trust, on which I have the honour to serve as a management trustee, had the wisdom to foresee the possibilities of developing the port and the fish marketing arrangements. With the aid of loans from the Scottish Office, it constructed a new basin for fishing boats from ports all over Britain—Grimsby and Buckie to name but

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two—whose catches now constitute a multi-million pound trade both in fish sales and in consigned catches which go to other markets for ultimate sale. The harbour trust has provided the infrastructure to bring in the raw material of this trade but the story of how it is shipped out is not so happy.

At one time refrigerated fast fish trains left Thurso every night bound for Billingsgate, and a very satisfactory arrangement it was. But the Beeching axe put a stop to that. Now all this vastly increased fish trade has to go on refrigerated lorries. One haulier alone sends 10 38-tonne articulated lorry loads on average per day down the A.9; obviously, on average 10 articulated lorries return with or without a load.

The problem is that all this trade must use the A.9 as it is the only road out of Caithness going directly south down the east coast. As it leaves Caithness it takes the form of an extremely steep series of hairpin bends at Berriedale which are difficult enough to negotiate in a private car. To the driver of a 38-tonne articulated lorry who does not know the road it sometimes proves impossible. The other day a lorry load of pipes bound for Rockwaters oil pipeline manufacturing plant just north of Wick got stuck on the top of a hairpin like the plank of a seesaw. In the large queue of traffic trying to go south which quickly built up were a number of unfortunate people with Apex tickets from Inverness to London in their pockets. None of them made it to their flights except one enterprising person who walked to the other side of the blockage and did some sort of a deal whereby someone took him to Inverness. However, British Airways were merciful—I suppose they wanted to keep their trade—and did not penalise the rest of the ticket-holders. My noble kinsman Lord Caithness will therefore realise that if I can negotiate the bend at Berriedale I am not put off by trying to get through Newbury.

I mention all of this to illustrate the fragility of a transport infrastructure which is ill-thought-out and unco-ordinated. Why could the pipes not come up by rail or by sea? Why are the flights at Wick so inadequate? Why do more people and consignments not use the existing railway? Why is the railway not brought up to date?

In looking at these questions it must be noted that many consignors have deserted the railway because it has not been modernised at the same time as the roads have been greatly improved. One must ask the Government, who are responsible for both: is this in the public interest? The question is all the more pertinent in the light of widespread condemnation of pollution due to too many vehicles using the roads. There should be greater use of the railway. But how can one use the railway when it refuses to be used?

All the livestock markets in the north were originally set up beside the railway—but Dr. Beeching put an end to that by refusing to accept green field traffic. This was a source of great disappointment to farmers and stockmen who knew how much kinder and better it was to use the railway for the transport of stock than the road. So now, whether we like it or not, at sale times our roads are crowded with huge, four-deck stock lorries

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with four-deck stock trailers, adding to the refrigerated articulated lorries carrying a fish trade which has already been turned off the railway.

Post Office trade which used always to be carried by rail or air is now brought in one articulated lorry carrying parcels, three vans carrying letters and one special van carrying Data Post per day; a similar number are sent south. Add to that number the two or three articulated lorries per supermarket chain (the Co-op and Safeway) as well as the lorries of the wholesalers who supply the smaller shops and businesses and licensed premises, most of whom used to send their goods by rail until the railways unilaterally stopped carrying goods. You can see that there is not much room left on the roads for the tourists with their caravans about whom everybody complains during the summer season.

Now, anyone starting a manufacturing business in the north has to find a road haulier or else run his own transport on the roads. That is why our most successful manufacturer in Caithness, Norfrost, had to set up its own haulage business in order to ship out its product. It sends on average some 10 articulated lorries south daily with a like number returning.

Successful though our road haulage firms are, they are inhibited from achieving maximum efficiency by restrictions which are imposed upon them. If they invest in a trailer capable of carrying the full legal EEC permitted load of 48 tonnes, why are they then restricted to a mere 38 tonnes? This means that as soon as they have gone through the Channel Tunnel they are carrying some 10 tonnes less than their French competitors. In that context one must remember that they have to give up a tonne or so of payload to safety equipment which has recently been made mandatory.

If in a little and sparsely populated place like Caithness, our transport structure is in such desperate need of modernisation and co-ordination, how much greater must the need be in larger and more populous areas of the country which are grappling, like us, with the loss of traditional industries and which need all the help which the Government can give them to replace the lost jobs and develop new industries and new trade. I am grateful to the noble Lord, Lord Ewing of Kirkford, for giving us this chance to debate this matter in your Lordships' House, and I support him in his call.

6.12 p.m.

Lord Elibank: My Lords, I propose to confine my remarks tonight to rail and road transport, not because marine and air transport are not important, but the crisis in our transport system is largely one of the roads. That applies to industry and industrial transport as much as to private transport. Indeed, industry is subjected to the same dilemma which confronts all of us—the clash between freedom to move goods where we want and how we want, and at the same time preserving an unpolluted environment and a quality of life acceptable to our citizens.

My other general point is that we are going to retain our present infrastructure for quite some time. In my view the road building programme has been quite rightly curtailed. We can hope for developments on rail and

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certainly we hope to see the Channel Tunnel link built, which would be a notable advance. Apart from one or two items like that, the infrastructure which we have today is very largely the infrastructure which we shall have in certainly 10 years time and probably 20 years time. So the problem is not developing the infrastructure so much as making better use of that which we have.

The almost knee-jerk reaction when one talks about moving goods is to say, "Move them from the roads to the railways". The Royal Commission on the Environment took a look at that and, despite the declining percentage of goods moved by rail in recent years, the commission felt that, with the right management policies, a decline to 6 per cent. could, over a 20 year period, be boosted to something like a 20 per cent. improvement. That would be a very significant advance in rail freight, but it would still leave 80 per cent. to be transported largely by road, although air and merchant shipping would play their part.

When one looks at the possibilities for further rail transport, there are limiting factors. I believe that we are all familiar with them. Goods carried on short journeys simply cannot be justified by rail, except in the case of very specialised loads such as coal. So one needs a journey, usually of hundreds of miles, to justify moving freight by rail. That has been almost impossible in this country because rail journeys are not more than 200 to 300 miles at the very most. But with the advent of the Channel Tunnel there is every hope that that distance can be extended to a 1,000 or more miles. Then rail freight will become a real competitor with the roads.

I congratulate the Government on making sure that the rail link passes to the north of London and comes into St. Pancras where there is a very real prospect of making proper rail connections to the Midlands, the north and Scotland. I hope that we shall make good use of the Channel Tunnel, and develop our rail freight trade as best we can.

The Government have taken a number of measures to try to encourage the movement of goods by rail. They have introduced two types of grant—the freight facilities grant and the track access grant, which are specifically designed with this kind of movement in mind. Unfortunately, the amounts involved are small and, perhaps even more sadly, the take-up—at least when I was last informed of the amounts involved—is also rather small. It seems unlikely that these two grants will make a particularly strong impression on freight traffic.

The really key factor to rail freight is the combined terminals. These have to be efficient, manned 24 hours a day and cheap. I believe that in the past British Rail has looked on freight transport as an unfortunate competitor. It has not gone out of its way to attract road freight onto the railways, using the various ways in which that can be done. This has to be a partnership between rail and road if it is to work as well as possible. One can only hope that the new privatised organisations will take this on board with rather more enthusiasm than British Rail seems to have done in the past.

I would now like to deal with one particular aspect of road transport which has come to my notice fairly recently, but with which some of your Lordships may be fully familiar. I refer to natural gas vehicles. They

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are a fairly old development. Some of your Lordships will remember seeing vans running around after the war with large balloons on the roof. Then natural gas faded from the transport scene and, although I am sure development carried on, I, as a casual observer, only noticed it again some 18 months ago.

Natural gas has many and considerable advantages as a fuel. I have some figures and I shall only bore your Lordships with three or four of them which I have obtained through the courtesy of my noble friend Lord Brabazon of Tara as the president of the relevant institution. Natural gas vehicles reduce emissions of carbon monoxide by 76 per cent., nitrogen oxide by 83 per cent., and non-methane hydrocarbons by 88 per cent. compared with petrol vehicles. They give extremely low particulate emissions compared to diesel vehicles. Carbon dioxide emissions per vehicle kilometre are reduced by 25 per cent. compared to petrol vehicles. That is a tremendous reduction in pollution. In addition, the fuel can be piped along normal gas pipelines, thus eliminating the need for vast fleets of tankers and lorries.

However, there are disadvantages. The obvious disadvantage is that at present most natural gas vehicles can run for only 200 miles on pure natural gas or for approximately double that distance if the engine is designed to take both natural gas and petrol or diesel. That means that the vehicle must return to a refuelling point, usually by evening. The fuel is therefore extremely suitable for large fleets of lorries and coaches which often do just that: after a day's run, they return to a common terminal. There is no problem setting up a fuelling depot in a vehicle terminal.

Such vehicles are being developed as motor cars for private citizens, but it is a chicken-and-egg situation. Until there are enough such vehicles, it is not worth having refuelling depots, but until there are enough refuelling depots, it is not worth people buying such cars. For the immediate future, therefore, the use of natural gas will be confined to heavy vehicles, buses and coaches. I should like to congratulate the Government on the fact that in the last serious increase in fuel duties in the recent Budget, although duties on petrol and diesel were sharply increased, no extra duty was imposed on natural gas.

Finally, by way of a general comment on the use of our existing infrastructure, perhaps I should point out that anybody who considers our transport network must be struck by its under-utilisation at night. One of the reasons for that—perhaps the main reason—is the multiplicity of rules preventing heavy vehicles entering urban areas. One can well understand the reason for that, but that area of use should be investigated. The obvious route seems to be to compel manufacturers to make quieter engines. If they are given enough time and, if necessary, some financial incentive, it seems possible that the noise level of heavy vehicles could be reduced to approximately that of the motor car. If that happened, heavy vehicles could use urban areas at night and the distribution of retail and industrial products could be speeded up; better use could be made of our roads and our citizens would find driving on them much more pleasant and convenient.

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As I have said, one or two things need to be done. The danger is that most of the steps that are required in relation to industrial transport will cost money. The challenge to freighters is to try to avoid passing on those additional costs to the customer.

6.23 p.m.

Lord Dean of Beswick: My Lords, I join in thanking my noble friend and colleague Lord Ewing of Kirkford, and in congratulating him on his wide-ranging speech. He has given us plenty to think about. I imagine that most noble Lords will have received the CBI report, Missing Links—Setting National Transport Priorities. It is a discussion document of nearly 50 pages of information and points of view. It provides answers to some of our questions.

However, in order to get another view, I contacted the Institution of Highways and Transportation, which has made one or two comments—not criticisms, but suggestions—about where it feels that the CBI's report requires further consideration. The institution stated:

    "The report should be welcomed since it highlights the historic under-investment in United Kingdom transport infrastructure".

The institution continued:

    "plans like Roads to Prosperity have no status (other than policy)".

That means that there is no commitment to ensuring that such plans are achieved.

The institution continued:

    "The Secretary of State wishes our road network to 'sweat' before new construction—i.e: increase the through-put. This will lead to greater congestion and road wear.

    The UK has a particular weakness in lack of maintenance of our existing transport infrastructure.

    The Private Finance Initiative is not making progress in raising funds for investment—for a variety of reasons".

The institution stated that it was,

    "unsure about the CBI suggestion that a national transport strategy be developed. How would this work within a privatised framework? The aims of the private sector may not match those of the government".

I recall that only a few weeks ago the Prime Minister said in another place that he would give the public a railway system that would be the envy of Europe. I do not believe anybody who tells me that the private sector will suddenly come up with bucketfuls of money to build a super railway system which is in advance of that in France. I do not think that such an offer is on the table. I do not think that there is any possibility of it happening.

I took particular note of what my noble friend Lord Ewing said about airports. Being a Mancunian, I have always been deeply interested in the development of Manchester Airport and, indeed, played some part in that some years ago. A couple of weeks ago there was a presentation in the Cholmondeley Room about why Manchester Airport requires a second runway. The presentation sought to explain how the airport authority is trying to allay the fears of those who are currently expressing opposition to a second runway. An excellent case was made. There is no question but that if the north-west is to make progress and to be able to compete equally with other parts of Europe, Manchester requires

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a second runway. We are not talking only about transport within the United Kingdom, but about Manchester's ability to expand its worldwide capabilities. When this country's trade starts to revive, the north-west will be one of the busiest areas of the country yet it is at present under-provided with transport links.

Our railway system being what it is, what British Rail calls its "West coast mainline"—that running from Manchester to Euston—is grossly under-resourced if it is to be able to deal with the traffic that is expected to come through the Channel Tunnel from Europe. I am not making a party political point. I believe that that is the general view of those of all political parties in the north-west. That railway line needs radical improvement if it is to be able to cope with foreseeable developments.

Manchester has gone out of its way and has bent over backwards to meet the anxieties of those in the area who are worried about the development of a second runway. Manchester has gone as far as anybody could expect in that regard. If that proposal is accepted, I believe that construction could start within a matter of months rather than years. That is what the area needs. When that proposal lands on the Secretary of State's desk, as it will, I hope that he will expedite it quickly and let Manchester and the north-west have that second runway. There is no other international airport to match Manchester. There is nothing else between London and Manchester.

I was concerned by my noble friend's reference to the merchant navy. It is a strange fact that until 30 years ago —immediately after the last war, between the wars, and before the First World War—we were the world's leading maritime nation. If this country had no aeroplanes, we would be in effect a landlocked nation because we now have so few ships. We do not have a merchant navy. We have gone from the top of the league 30, 40 or 50 years ago to the bottom. All that we keep being told is "the market determines it". I suspect—and I do not think I shall be alone in saying this—that if the situation ever arose where this country was threatened again and needed goods brought to this island in defence of the realm, we would not have the ships to deal with that situation. That needs to be looked at very quickly.

People ask whether the present road system is adequate. If I may speak on a personal note, I live on the border of Stockport and Denton, which is just on the outskirts of Manchester. I live on a main road which has a rather restricted part, where there is a small stone bridge. Traffic has to go over the bridge, and about three weeks ago there was a crash which caused damage to the bridge. The bridge has been closed for three weeks. That added one hour and a half on my journey from home to your Lordships' House. Therefore, instead of travelling direct to your Lordships' House, I had to go all the way round Manchester. Juggernauts from the Continent are also having to be turned back because of the problem. This has happened in this day and age, and it is not for the first time. It does not inconvenience me, but what must it be costing industry? In the Stockport section alone there is a huge industrial estate which is developing and thriving. So what must the cost be to the

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manufacturers who are moving goods in and out of that estate? One could go on giving more and more examples of such cases.

However, I am also concerned about the railway link to and from the Channel Tunnel. It has had a sad start, because it has not covered itself in glory. One hopes that things will improve because if the venture fails, a lot of finance will be lost and it will do a lot of damage to the proposed infrastructure of this country. So it is up to the people involved to get it right as quickly as they can.

Last but not least—although it might be a little removed from the subject of this debate—now and again in your Lordships' House, we have had questions about roll-on, roll-off ferries. I think the noble Lord who is going to reply answered a Question only a few weeks ago about the safety of these ferries, and he spoke as if everything was all right.

However, it was only a few weeks ago that a totally independent group of people compared the safety factor of ferries with that of normal liners and the survival chances of passengers when ships were in distress. They said that a ship which was on fire in the Indian Ocean had 100 per cent. of people saved because there was time to abandon ship, whereas once roll-on, roll-off ferries are in difficulty, everything happens very quickly. People who have no axe to grind say that the system is flawed and needs to be altered.

I close by saying that while this is not particularly relevant to this debate tonight, it is something which ought to be looked at as a matter of urgency because—God forbid!—it could happen again. It is certain that something will happen again at some time because there have been two recent accidents—the one in the Baltic and at Zeebrugge—and these things do happen. Irrespective of the expense that is involved, I believe that the operators of such ferries will have to look again at what can be done. Once again, I want to thank the noble Lord, Lord Ewing, for his opening remarks, which were very enlightening and opened the door to discussion on many points of view.

6.34 p.m.

Lord Mountevans: My Lords, I too am very grateful to the noble Lord, Lord Ewing, for giving us this opportunity to debate transport and infrastructure at home and abroad. I agreed with quite a lot of what he said, save perhaps in the Dutch context where, no matter however much one plans ahead, politicians can interfere. For example, in the last general election in Holland a major party did well by promising a massive increase in road fuel taxes to pay for railway investment. Alas, that fell by the wayside as a consequence of the political problems of proportional representation. Similarly, when the noble Lord prayed in aid the Greens, I am sure he will be aware that the press this weekend has reminded us that the Greens have a heavy burden to carry in terms of the flooding problems that hit Holland last weekend.

I also found myself greatly in agreement with my noble friend Lord Caithness on how we must bring the private sector in through the PFI. My own particular concern about getting it wrong is that it seems to me

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tragic that the Bill that will enable the high speed link to the Channel to be built, and will define it, will go through long after we have asked the consortia who wish to get involved in the project to put their bids on the table. That really seems to me to be a matter of the cart before the horse.

As ever, I am concerned about the railways, in which I declare an interest, and also, to a lesser extent, aviation. Though rarely a road user, I would very much like to see more freight transferred to rail. Infrastructure usage costs for current and potential freight users have increased as a result of the restructuring of the railways, and these increases can be justified only if they are used largely to pay for the maintenance or renewal of the system. The PFI, hopefully, will take care of new investment.

I fear that these increases may actually restrain transfer of freight from road to rail because the charges are quite steep. They can be offset, however, by grants made under Sections 137 and 139 of the 1993 Act. The first section broadly restated the old Section 8 rules about grants towards the capital costs of sidings, wagons, cranes and other capital investment in infrastructure.

Section 139 facilitates grants towards the payment of Railtrack access charges, and is a most welcome development since it extends considerably the old Section 8, provided, as my noble friend Lord Elibank says, that we have enough money available. However, in evaluating the case for a grant a value is assigned to the lorry miles that would be saved if the traffic switches to rail. For local or single carriageway roads, this value is between £1 and £1.50 per lorry mile. However, for dual carriageways and motorways the value is only 5 pence per lorry mile.

Rail's strength lies in the trunk haul and the majority of flows which might switch are, I suspect, largely routed over the major roads. This poses road investment problems, and also problems in regard to the environment of congestion and noise. The grant differential makes the switch to rail much less attractive, and I wonder whether the Government would consider a more generous value—say, £1 per lorry mile for main road miles avoided rather than 5 pence. I feel that this, allied to the Channel Tunnel, could make an appreciable difference in persuading people to transfer freight from road to rail, not least those who so concern the noble Viscount, Lord Thurso.

My second point builds upon experience with other utility privatisations and the tendency for increased charges to go to finance dividend streams at the expense of new projects or the renewal of the infrastructure. Wearing my tourism hat, the case of the Cornwall beaches and sewage springs to mind. Elsewhere, many US railways have run into trouble by diversifying away from the core businesses and by putting excess emphasis on deferred maintenance to enable them to invest outside.

As regards new projects such as the Channel Tunnel rail link and CrossRail, I believe that if the Treasury can get the ground rules right the PFI has a part to play, if it ever gets off the ground. My real concern is regular maintenance and renewal—a matter for Railtrack, and

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one to be funded by the higher access charges I have already mentioned, together with a contribution which I believe should come from government in recognition of congestion and environmental benefits.

The train operators need to be assured that the money generated by higher charges is spent on renewal and replacement of track and signalling, and is not used for diversification or ever-growing dividend streams once Railtrack is in the private sector. The regulator has a part to play in that, as have the Government, but how will the latter ensure that the necessary maintenance and renewal continue at the level paid for at access charges? Will it be through licence conditions, contractually, or by direction? Will Railtrack's rail industry plans include renewal proposals?

I turn now to aviation and, in particular, navigation and air traffic control in Europe. European charges are universally agreed to be far higher than those in America or Asia. That applies to all levels of fares. It gives the airlines higher cost bases, inevitably passed on to passengers in the form of higher fares. They are fares which do not stand comparison with those available in other parts of the world. European costs are higher because we have individual national systems. In a way, our air traffic and navigation control systems are reminiscent of where the railways were 70 years ago when a train was passed from one signal box to another and then to another, whereas nowadays it can be cleared for, perhaps, 100 miles under a modern signal centre.

That leads to inefficiency over flight routings, in the use of radar and data co-ordination, particularly across national frontiers. Those technical problems are sometimes compounded by industrial unrest and low productivity. The former—industrial unrest—will have had a bad effect on many of your Lordships' journeys in Europe. We need a Europe-wide approach to the technical and managerial problems. Will my noble friend the Minister tell us what steps Britain is taking to secure such an approach?

I turn, finally, to the problem of runway capacity in the south-east. While it is adequate at present, we cannot put off that issue indefinitely. Lead times are long, not just for the statutory procedures but for construction. They are long for terminal capacity and access. I seem to remember that when the Heathrow Express Railway Bill went through the House it was planned that it would be opened by now. Instead of which, we are now talking about 1997 or 1998.

Access is especially important not just for airport users but for the residents of the area around the airport, particularly Heathrow, and those who have non-airport related employment in the vicinity. I hope that the proposed Terminal 5 will be built. I am not asking my noble friend to abuse the statutory powers of his honourable friend, but we should consider both mainline and London Underground access. In more general terms, as the noble Lord, Lord Ewing, said, we should be considering a westbound access from Heathrow towards Reading as that would take a great deal of pressure off the M.4. That comes into an infrastructure policy, localised though it may be. Such a link would, I believe, cost some £325 million and fit neatly into the CrossRail

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electrification to Reading, if that ever gets off the ground. The present Heathrow Express route is not built to deal with diesel traction.

By happy coincidence, £325 million is the sum expected to be raised by Her Majesty's Government in a year by the airport departure tax. Would not the use of the one to pay for the other be an excellent and effective example of transport infrastructure policy?

6.45 p.m.

Lord Haskel: My Lords, perhaps I may welcome the usual robust contribution to our debate of my long-standing and long-lasting noble friend Lord Houghton. After his contribution, and the contribution of other noble Lords, I do not need to rehearse again the needs of industry. It is sufficient to say that we do not have factories where iron ore goes in one end and cars come out at the other. To be competitive, European industry is highly decentralised. Transport is crucial to that and to the growing trend towards long-term relationships between customers and suppliers, which result in cost reductions. That is central to the ability of European industry to be competitive. The other crucial aspect of European industry's competitiveness is service. Of course transport plays an important role in that.

Over the past few decades it has become clear that in the UK the development of the motorway network has led to a great improvement in industry's productivity. However, rising congestion and growing environmental concerns probably mean that our road development has gone as far is is possible. Of course, there are some common-sense additions to the inter-urban network and completion of some missing links, but nothing major. The major future development must be on the railways, and it is here that I should like to concentrate

The eminent transportation economist David Aschauer has stated that spending on the public rail network has twice the potential to increase productivity as spending on roads. That is a message which seems to have been heard loud and clear on the Continent. The conclusion comes from figures complied for the World Economic forum's 1994 competitiveness report. It gives a mixed picture, as my noble friend lord Ewing reminded us. We rank in the bottom half of the European Union on the quality of road and rail infrastructure, but in the upper half on air infrastructure and access to ports. In the attitude survey there was particular dissatisfaction with the rail infrastructure, which is not surprising. Britain's rail system is not in a happy state. Privatisation will not solve the problem. The study showed that the cost of running our railways compares well with other European countries. What is lacking is investment to stop the infrastructure crumbling away. So where is the logic in a privatisation plan which guarantees subsidy for investment in the infrastructure for only two years ahead but guarantees the subsidy to the train operators for up to seven years ahead? Surely the Government have got this the wrong way round. Nor is it apparent to anyone how the fragmentation of the system will help investment.

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The creation of 25 passenger train operating companies, some running as little as one line, with all the problems of co-ordination of timetables, tickets and travel to distant destinations will make the system more complex. Also, the number of people involved in shaping the new railway system is hardly conducive to investment. We have Mr. Salmon selling passenger franchises; Mr. Swift regulating the new railway companies; Mr. Horton running the track; and Sir Bob Reid working out his notice and looking after those parts of the railway yet to be privatised. Somewhere in this comes the Transport Secretary. Obviously, he has found it difficult to understand the new arrangement. Although he keeps repeating the promise of through ticketing, apparently he no longer has the power to enforce it. He can only provide "guidance".

All this fuels fears that the purpose of privatisation is merely a way of reducing state spending on railways. Investment has been predicated by the Secretary of State to continue at about £1 billion, but £850 million a year is required to keep the network in a steady state. In the present state of decline and uncertainty it is difficult to see even how that figure can be even remotely approached.

Gearing up for a serious programme of investment requires a long and continuous process of project preparation and tendering. In fact the early stages of the procurement process are almost non-existent. There is virtually no tendering for new rolling stock, and that is essential if the age profile of the existing fleet is even going to be maintained. Manufacturers fear that there will be no new orders placed before 1997.

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