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The Earl of Courtown: My Lords, I apologise for interrupting the noble Baroness, but she is now on the 15th minute, and it is a debate in which speakers are time limited to 13 minutes.

Baroness Castle of Blackburn: If you had not protracted it, I was about to come to a passionate climax, as is my wont. I must, therefore, just set the scene a little again. It is not my fault if that takes another minute.

The reply that I received was of powerful significance. The reason for agreeing to sell the three companies together, when the Government had said that the whole aim of privatisation was to break them up and achieve some competition, was the market's strong preference for the combined sale. They are the believers that the market uber alles must rule; and the market always prefers a private monopoly. We are seeing that in electricity, water, and all over the place.

I suppose it is too late to hope that the Government will change their minds. I hope that the public will see through their manoeuvres; and we on this side of the House will help them to do so.

6.7 p.m.

Lord Harding of Petherton: My Lords, I am very grateful to the noble Lord, Lord Clinton-Davis, for initiating this debate. It enables me as a regular passenger on Great Western Trains to praise the improved performance of this privatised line. I am afraid that I do not recognise from both the noble Lord, Lord Clinton-Davis, and the noble Lord, Lord Methuen, any relation to my experience in practice. I am always amused by and lost in admiration for the noble Baroness, Lady Castle of Blackburn. I wish that I could speak as well as she did. However, to be quite honest, I believe that she went into the realms of fantasy in her speech.

I travel daily from Taunton to Paddington and back and have seen the benefits of privatisation on Great Western trains. It was one of the first lines to be privatised. I have been travelling on this line for the past five years. During the first three-and-a-half years the service was disrupted by frequent delays and my train was often late. During the past 18 months, in the run-up to the selling of the franchise on 5th February of this year, punctuality has improved tremendously. In the short time that Great Western trains has taken over from British Rail, the quality of the conductors has changed dramatically for the better. Although there were some who were always good, there were those who were not; and the latter have obviously been moved to other jobs.

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Punctuality has also improved even more since the privatisation date. Great Western has given me its own figures to back up my own personal experience. Punctuality for the four week period from 1st April to 28th April this year was the best recorded performance since the launch of the Passenger's Charter in 1992. The figure of 95.4 per cent. of all trains arrived on time or within 10 minutes; and 99.8 per cent. of its 3,500 trains in the timetable were operated. Great Western charter targets are 90 per cent. and 99.2 per cent. respectively.

My wife travels to London occasionally on the Sherborne to Waterloo line run by South West Trains. That is the other line which was privatised first; there were two on 1st February. The introduction of new trains--they are called 159s--three years ago under British Rail management made a great difference to the comfort of the journey. However, the punctuality was not at all good until 18 months ago when it started to improve, as it did in my experience on Great Western Trains. That was obviously due to the impending sale of the franchise. Since 5th February she has travelled three or four times to Waterloo, London, from Sherborne for the day. She tells me that her trains were punctual to the minute. Not only that, but the attitude of the staff has improved tremendously. The air conditioning on the new trains has given much trouble. Last summer my wife was nearly boiled alive on one journey. South West Trains tell me that the company will spend a considerable sum to solve the problem. Before privatisation, the investment was not available to do anything about it.

As a bus operator, Stagecoach, which owns South West Trains, is committed to a number of dedicated bus links to selected South West Trains stations. I see no fear of abuse of monopolistic power in those arrangements. That has been one of the sound bites which the Opposition party have used against a bus company owning a rail franchise. Surely that is what is meant by a co-ordinated transport system.

Indeed, I hope that Great Western Trains in future years will be able to improve the transport arrangements in my part of the world. At the moment I take half an hour to go by car from Langport, where I live, to Taunton station. I then take about 10 minutes travelling back the same distance on the train, passing 500 yards from my house. If there were a station at Langport--as there used to be before Dr. Beeching did away with it--the pollution caused by my car would be removed. That must be the case for several other people. Lord Beeching went a bit too far in shutting stations. Maybe it made sense in those days, with the monolithic, inefficient, union-dominated organisation which British Rail had become. Somerton, a few miles to the east, also had a station before Beeching. I should have thought that it would pay to resurrect the stations and run shunter trains to Taunton in the west and Castle Cary in the east, to connect with the mainline trains. Little shunter trains operate in other parts of the country, stopping at small places. I have travelled on one in East Anglia.

Some stations have reappeared. Templecombe, which is only a large village on the south-west line, a few miles east of Sherborne, had a new station some years ago. That was due to the initiative and energy of some locals. After a determined campaign, they persuaded British

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Rail to rebuild the station. I believe that they raised significant finance to help. The initiative was hard to achieve with British Rail. It should be much easier to persuade a privatised commercial operator to do that kind of thing.

Almost everyone, or everyone if they are honest, finds a car convenient. It gives freedom and flexibility. There is a limit to the amount which railways can contribute to the slowing of the ever-increasing number of cars on our roads and in our cities. However, they can contribute much more than they have done up till now. I believe that with the impending privatisation of Railtrack and the franchising of train operations, we shall have a far more efficient, passenger-friendly and responsive rail network than we have ever had in British Rail. By efficient commercial management, better marketing and making railways a better way to travel, the privatisation of British Rail can do much to ameliorate the bad side effects of the car.

6.13 p.m.

Lord Haskel: My Lords, I congratulate my noble friend Lord Clinton-Davis who quite rightly calls for attention to be drawn to the damage inflicted by railway privatisation. Before considering that in detail, it is important to understand why the process of privatisation is damaging. The reason is quite simple. The process is designed to break up the system and smooth the path of entrepreneurs to run the fragments. The proof of that is the shameless way in which the Government reneged on the right of British Rail to bid for franchises, as my noble friend Lord Clinton-Davis pointed out.

The Government's criterion of success is not an efficient and effective railway system which the country needs, but whether profitable private businesses can be created from the franchises. In addition, it is not clear how the isolated decision-making of the various franchisees can work towards a national policy objective. Each franchisee is quite rightly concerned with its own sectional objectives. Perhaps my noble friend Lady Castle is right: the final objective is to stick it all together again and have a private monopoly.

Perhaps the Minister can tell us how the railways can be given an overall strategic direction when the system of railway privatisation chosen by the Government takes us away from an overall transport policy. Surely the aim must be to have a seamless public transport network which meets social and environmental, as well as economic objectives. That could have been possible with Railtrack in the public sector, but it is very different with Railtrack as a private company.

Remember, the main competition to rail is transport by bus, car, truck and aircraft--not other railway systems. Privatisation of Railtrack puts the railways at a considerable disadvantage in competition with the car. As my noble friend Lord Clinton-Davis told us, under the privatised structure it costs £170,000 in track access charges to put an extra passenger coach on the railway lines. He told us that to put an extra coach on to the roads costs between £300 and £400 in vehicle excise duty. Does that mean that the taxpayer is subsidising

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road vehicles? Yet we never hear of the taxpayer's subsidy to road vehicles, all we hear about is the taxpayer's subsidy to railways.

Freight by rail is at a similar disadvantage. Access charges paid to Railtrack are up to 60 per cent. of the revenue paid by the customer, whereas access to the road system costs about 20 per cent. of the revenue.

So how will that affect the passengers? First, the way the railway system has been split up bears little relation to the way passengers use the railway. I agree with the noble Lord, Lord Methuen, that most users want to buy a national, seamless network. However, since the national campaign has been run down, InterCity sales have begun to stagnate. The noble Lords, Lord Harding and Lord Astor, are mistaken in speaking of early signs of improvement. The figures reported last week are that punctuality in all but seven of the 25 different service groups had fallen. Also, trains are now more likely to be cancelled. Even East Coast mainline--the showpiece--has had to report more late trains. If passengers are to be attracted back to the railways, punctuality is surely one of the most important elements.

The noble Lord, Lord Astor, spoke of how the telephones will be answered more quickly. That has been overtaken by new technology. Contrast it with the way information technology has revolutionised the commercial aspects of airline operation and its timetabling. The French are making systematic attempts to build an IT rail information system which they are selling world-wide. We hope that we will benefit from it.

As other noble Lords have said, the future success of the railways will depend on investment. Can the Minister explain to us what are the obligations of the franchisees to invest in new trains and what are the penalties if they do not do so?

In the debate that took place in another place on 17th April, the Secretary of State for Transport spoke of lavish plans for new investment in rolling stock, but said little about actual commitments. At cols. 730 and 731 of Hansard, he said:

    "Great Western plans to introduce more trains".

Gatwick Express plans similar improvements. Each new franchisee plans new investment in the network. National Express plans to have completely new rolling stock by 1999. The franchisee on the InterCity East Coast line plans to spend more than £17 million. The only obligation to invest is for the South Eastern franchisee with a 15-year franchise. With seven-year franchises I can understand the operating companies being reluctant to make a firm commitment to supply new equipment--equipment that should last 15 to 20 years--unless, of course, there are sweeteners in the form of subsidies or property, about which the noble Lord, Lord Clinton-Davis, told us. Unless these investments are made, the major impact of railway privatisation will be to squeeze the maximum amount of life out of the existing equipment--with all the implications that has for safety and punctuality.

The sad thing is that, if there should be orders for new trains, our train manufacturing industry has virtually disappeared. It is geared up to deliver only

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small orders and cannot deliver trains quickly, as a seven-year franchisee would require. The noble Lord, Lord Methuen, is right. The Government's muddle over privatisation has destroyed our railway rolling stock industry. Shall we see in railways a repetition of the occurrence in the bus industry following privatisation, where very little is being invested in new buses and the nation's bus fleet is dwindling and ageing?

The adequacy of money for investment in Railtrack is equally uncertain. To use Railtrack's own words, it needs £800 million a year to maintain the track in its present state. Renewals require £570 million a year, making a total of £1,370 million. From reading the prospectus, it seems that £1 billion a year could be available for investment. Is that why the word "electrification" does not appear in Railtrack's 10-year investment plan?

As my noble friend Lord Clinton-Davis said, the biggest loser in all this is the taxpayer. The massive costs of fragmenting the system, write-offs, and preparing it for privatisation--nearly £2 billion--is greater than the £1.75 billion the taxpayer should receive for Railtrack. Added to that, sweeteners in the form of taxpayers' property being handed over with Railtrack are enormous. Already land around King's Cross and elsewhere, handed over to the private sector with Union Railways for the channel rail link, has been valued at well over £1 billion.

In March 1995, Railtrack's property was valued at £1.4 billion. The importance of the property element in Railtrack is demonstrated by the fact that it employs 1,100 staff preparing development strategies for 14 of its largest stations. The Government are deliberately ignoring that and using it as a sweetener, in exactly the same way as they ignored the retail potential of airports when the British Airports Authority was sold off in 1987. Retail space now brings in £350 million a year to the airport authority.

Certainly the Government have introduced a property claw-back mechanism; but it is entirely inadequate. Railtrack will be able to keep 100 per cent. of its property income up to £1 billion over the next six years and the regulator will then be able to claim 25 per cent. of the excess. That will be passed on to the privatised train operating companies and not to the taxpayer. Surely the right thing to do here is to plough all property profits back into the railways.

Of course there is investor interest in the flotation of Railtrack. Everybody can recognise a bargain. You can always sell something if you reduce the price enough. That has been the history of previous privatisations. Electricity was sold for £15 billion and is now worth nearly £35 billion. The price of Railtrack has been cut and extra dividends added to the point where the effective yield will be about 25 per cent. in the first year and 7 per cent. in year two. "Priced to go", as the brokers say. I asked a broker about Railtrack being a long-term investment. His response was: "Would you invest in a regulated property business?"--confirming the view of my noble friend Lord Clinton-Davis. It is a very attractive deal to the short-term speculator.

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That is to be the basis of future investment in our rail infrastructure system. Once again we are going to have shareholders benefiting at the expense of taxpayers, due to the dogma and incompetence of the Government.

6.25 p.m.

Lord Cadman: My Lords, I add my thanks to the noble Lord opposite for tabling this Motion. It gives us an opportunity to discuss an extremely topical subject. From my point of view it is especially welcome, as railways have always been a subject dear to my heart. After some initial misgivings, I have to say that I welcome their transfer to the private sector.

The trouble with public ownership is that such an enterprise has only to fulfil a function. It is not really necessary, or indeed desirable, to make large profits other than those needed to finance improvements or renewals. Decisions about almost anything have to be justified within the available finance, which is all too often restricted by government policy, political interference or lack of funds due to competition from other government departments. Railways do not pay, so Treasury officials and politicians, who probably do not like travelling by train anyway, are loath to throw good money after bad. The railways are full of people who have to live under that sort of regime. That must go a long way to explain why there have been so many incidents recently that have enabled the media, and especially the specialist media, to be so critical of the privatisation process.

Perhaps it explains why Railtrack has introduced a regime of approving and certifying equipment to be used on its tracks--a process not unlike the type approval of a motor vehicle under the construction and use regulations. That regime has resulted in an embarrassing impasse, with new equipment languishing out of use simply because the technology of today's trains is too far advanced for yesterday's railways. Decades of public ownership seem to have failed the railways. Only 30 or so years ago, the West Coast main line out of Euston system was electrified and upgraded to allow 100 mph running. It is now worn out and in need of total refurbishment.

So what benefits can we expect from privatisation? For a start, proper commercial decisions can be made without seeking political approval. Of course, any management decision has to be commercially viable, but there are many more ways to skin a cat than that which went on before.

The new train operating companies, six of which are now up and running with three others imminent, will be consumer-driven. Their profitability depends on their ability to win customers, the travelling public. It is significant that management buy-out teams seem to be in the minority, which will result in new people with new ideas and probably a different approach. It also justifies the franchising director's decision that it would be inappropriate to allow British Rail to bid for the franchises.

Freight has been the most neglected area of railway business. The independence of being able to transport goods by road in trucks to wherever is necessary is very powerful competition. However, it seems to have gone

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too far and our roads are becoming over-subscribed. The railway system is capable of much more in that regard. The Piggyback Consortium, along with others, is actively exploring the carriage of road trailers by rail. The sale of the greater part of the freight business to the Wisconsin Central Transportation Corporation is to be welcomed. It is a very enthusiastic and practical operator and, as such, has been very successful in turning round ailing railways in many parts of the world. There is no reason to suppose that it will not be successful here. There is the potential to win freight business back to the railways and the arrival of that company bodes well for the future.

My only reservation with regard to the success of privatisation is Railtrack. Railtrack's behaviour recently has been very strange and seems to have been extremely negative. Perhaps that is because it has been labouring under a sort of public ownership yoke. Once in the private sector, perhaps it will throw off that yoke and positively embrace the enormous task that lies ahead.

Worryingly and uniquely among privatisations so far, Railtrack will not be consumer driven as, in the main, its customers will be the train operating companies, many of whom show considerable signs of improving the services. That will depend on Railtrack's co-operation. Thus, it is vital that Railtrack realises that its success depends on its ability to deliver a modern, up-to-date system of infrastructure fit for the 21st century.

We are now connected to Europe via the Channel Tunnel. Travellers have access to the railway systems of other countries where, somehow, considerable strides seem to have been made in modernisation and improvement. We now have a new international station at Ashford which, having been opened under British Rail's stewardship, has now been handed over to the private sector. It is well accessed locally but lacks services from further afield. There is a service from Brighton, but the equipment is well past its sell-by date. I wonder which of the train operating companies will be brave enough to connect Ashford with the rest of the country via, let us say, Reading. Eventually, under privatisation, such a service should not be difficult to introduce and could be very successful given good marketing and a fast, comfortable transit time.

My other hope is that the train operating companies will pay particular attention to parking cars at stations. I feel that the convenience of the motor car is the main competition from which the companies will suffer. Any means that can be devised to encourage motorists onto the trains must be cost effective. The co-operation of Railtrack and local authorities is vital, as land will need to be made available at suitable locations. Car parking has been well addressed in some areas in the past but there is considerable scope for improvement, which should result in increased ridership. Let us hope that such innovations and improvements become commonplace in due course and that the privatisation of the railways will be of great benefit to the nation.

6.31 p.m.

Lord Berkeley: My Lords, I congratulate my noble friend Lord Clinton-Davis for introducing the debate at

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a very important time in the development--or not, I suppose--of our railways. I also congratulate my noble friend Lady Castle, who referred to the famous Green Paper which was published last week. I hope that the Government will be able to find time to debate it before the Summer Recess. It is a very important document, even if it does not say very much. I declare an interest in Eurotunnel and ADtranz and in the piggy-back consortium to which some noble Lords have referred.

The pressure to sell off the railway family silver before the election is reaching almost panic proportions, as my noble friend Lady Castle said, with franchises for passenger trains, possibly Railfreight Distribution, Railtrack and many smaller parts of the former British Rail--I suppose they are still part of British Rail. I visualise the privatisers not, in the terms of the noble Lord, Lord Cadman, as cats to be skinned but as a herd of friendly, committed, Gadarene swine hurtling faster and faster over the cliff, in the absolute conviction that they will land unharmed beside a welcoming trough of food while the rest of the world looks on in disbelief. The trouble is that there is less of a trough for the railways and more for the legal, insurance, financial and other services, and--as my noble friend Lord Haskel said--development teams as well. There are also tons and tons of paperwork.

The railways will survive because the people who work in them are committed. New ideas are coming in, certainly on the freight side, as many noble Lords have mentioned. Long may they continue! I believe that some good will come out of all this. In the meantime, the industry is struggling under increasing mounds of paperwork and bureaucracy as a consequence of the new structure of the industry which the Government set up.

What do we find under all that paperwork? Sadly, we find more paperwork, called safety cases. Safety on the railways is paramount. It always has been and, I hope, always will be. The whole industry is committed to safety. But effective safety is being hampered by a burgeoning bureaucracy. Over £400 million worth of rolling stock--that is not my figure; it comes from observers and members of the industry--lies idle in the sidings, sometimes for up to four years.

Perhaps I may give a few examples. The Class 92 locomotives are supposed to haul Channel Tunnel freight. It does not matter what kind of trains haul the freight. They can be diesels or electric locomotives. They are working perfectly well through the Channel Tunnel but they are a wasted national asset. They have been produced now for over two years but they cannot run except in the tunnel. They cannot run from London to Folkestone and they cannot run up the country because there is £33 million worth of work on track circuits around Redhill that has not been completed. That is nothing new. It has been known about for years. The problem is: who pays?

I have had sight of a letter from John Watts, the Minister for railways and roads. I think it was the first letter he ever wrote to British Rail. That was a year or two ago. The letter said that the Government would pay the £33 million cost. Perhaps the Minister can confirm

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that that is still the case. If it is, why have the Government not paid Railtrack? If it is not the case, what has changed the Government's mind in the meantime? While that is going on, the locomotives sit rusting.

Post Office trains represent another exciting topic in the press at the moment. The Royal Mail is trying to put much of its mail on the railways, which is a very laudable project. It gave the go-ahead for £150 million worth of work in 1993 on terminals and trains with a hub near Willesden. The new trains are very similar to the Thameslink trains which have been around for the past eight years travelling between Bedford and Gatwick Airport. They still do not have their safety case. They are only freight trains and do not take passengers but they still need a safety case. After 15 months of attempting to satisfy Railtrack's safety assessment panel and getting nowhere, the frustration of John Roberts, the chief executive of Royal Mail, has finally boiled over. He has written to Railtrack and the Secretary of State for Transport--the President of the Board of Trade is also involved--saying that enough is enough.

Suddenly, the government penny has dropped. They have realised that the Railtrack privatisation may be in jeopardy if the Post Office trains do not get approval and provide revenue to Railtrack, which they will do if they run but not if they do not run. Do we see commercial considerations coming into play at last? There is a further threat that the Post Office could use; namely, "If you do not give us our safety case soon, we will dump the whole lot and use road and air." That is quite possible too.

Railtrack has proudly responded--this week, I believe--that driver training has started on one four-coach train on one route. Twelve-coach trains are supposed to go all over the country. So the likelihood of having them up and running by October is nil.

There has been mention of the West Anglia-Great Northern trains, which are also miles away from approval and have similar problems. But the Government or Railtrack have also twigged that if those trains could get approval, the trains from West Anglia could be cascaded to London, Tilbury and Southend and make that line more saleable. Are these commercial considerations again? I do not know.

So how does one get a successful safety case? While Railtrack is in the public sector, presumably one obtains it by complaining loudly to government Ministers, preferably at a time to give maximum embarrassment during the flotation of Railtrack. I ask the Minister whether the Government will give an assurance to all other operators waiting for safety cases--rail freight distribution, Class 365 freight wagons and much other new rolling stock--that they will make Railtrack speed up all applications to weeks rather than years. Or is the Post Office just a special embarrassment and therefore a special case? If so, why?

In short, if a delay in getting a safety case will embarrass the privatisation, there is a good chance that the safety assessment panel snail will accelerate. If not, there is a risk of being relegated to the Birmingham extra-slow snail, which is the Class 323 train. Those

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trains trundle around Birmingham. They are very nice, but not that special. Indeed, they are quite ordinary. It has taken four years at a cost of £10 million in paperwork to get their safety case.

What will happen when Railtrack is in the private sector? Will commercial pressures speed up the process or will the insurance industry put so much fear into those who have to sign the magical safety certificate that it will get worse? It is a gamble which few will wish to take.

The franchising director recently announced that the South Eastern trains franchise would be let on the basis of new trains--as my noble friend Lord Haskel mentioned--if those were available within three years from the start date. We can forget that. It may take three or four years to build a new train, but if the 323 process is anything to go by, it will take another four years to obtain a safety case. It will be more than half-way through the 15-year franchise before our friends in north Kent ever see a new train at a cost probably of an extra £10 million just to reach to that point.

Railtrack says that since the Class 323 train received a limited area safety case, the system has been shown to be satisfactory. But what manufacturer, franchisee or operator will commit to new rolling stock if it takes four years and costs over £10 million to obtain approval? It is interesting to reflect on what would happen if a private sector rail company--passenger or freight--had £400 million worth of assets sitting around for four years due to some unspecified bureaucratic snarl-up with a government agency. I can imagine what Ed Burkhart--the chairman of Wisconsin Central which bought up most of the freight business in this country--would have to say about that. But since most of the equipment is, or was until recently, owned by us, the taxpayers, it is surely a matter for the Public Accounts Committee in another place to look into. It is a waste of a national asset. I am a beginner in this field, but it is certainly something I believe should be looked at.

It is not all Railtrack's fault by any means. All the parties--manufacturers, operators, franchisees and the rolling stock owners--have a responsibility and must accept some blame for what has been going on. But they are all trying hard to work under a system set up by the Government--who have a responsibility to make it work--to sort out the problems and knock heads together rather than pass the buck. I hope that that will happen.

What is the problem with safety? Under the 1993 Railways Act, Railtrack is responsible for the overall safety of the railways and is required to receive and approve safety cases for all new rolling stock. It set up a safety and standards directorate to set the standards and police the implementation, assisted by an independent safety assessment panel. But in many cases that independence is illusory since many of those on the panel are consultants who also advise operators on how to obtain safety approval. In my experience the one thing that consultants do is advise people to give them more work.

The problem is the way Railtrack approached the situation. It may set the standards, although in my opinion it has been slow to take over those used for

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many years by British Rail. It seems to be unable to provide instructions about what information should be included in submissions, possibly through fear of incurring liability.

Alongside making life impossible for operators of new trains, Railtrack is also not very good at managing its own safety activities. Noble Lords have spoken of the Euston problems and the speed restrictions on the West Coast main line. Last week a north London line was closed for a long-term upgrade and all the trains were diverted through Primrose Hill. But the track failed and a freight train was stuck there for two days. Wine in one of the containers spilled all over the track; it was like a West African pillage. The track was just too old or over-used. Surely it would have been possible for Railtrack to ensure that the Primrose Hill route was satisfactory before closing the other one. It seems simple to me.

While all that is going on, the railways inspectorate, which has been responsible for the safety of our railways for years, must be looking on in bemused irritation and concern. What is the solution? If some of my remarks about Railtrack are thought to be unreasonable, they are not meant to be. I have the greatest respect for the staff, from Bob Horton downwards, who have been required by the Government to set themselves up from scratch as a company; to take over assets from British Rail which has been starved of investment for years by successive governments; and to take responsibility for overall safety and privatise themselves. I know what a strain it puts on people--perhaps that is why Roger Salmon prefers spending time in a monastery to working for the Secretary of State. That is an interesting idea.

We are talking about our national transport asset. The Government cannot be allowed to let it wither away. The safety structure was created and must be sorted out. The strong feeling in the industry, supported by David Gillan, director of the Railway Industry Association, is that the safety and standards directorate must be separate from Railtrack and must be seen to be separate. I support that view. Now that Railtrack is going into the private sector it is unacceptable for it to have any overall responsibility for safety on behalf of the industry. That would produce a conflict of interests. The separation would provide a quick and effective way of getting £400 million of rolling stock to work and is an essential part of rebuilding the confidence of the industry. I strongly urge the Government to consider seriously the separation of Railtrack and the overall responsibility for safety before it is too late.

6.46 p.m.

Lord Teviot: My Lords, like all noble Lords I am grateful to the noble Lord, Lord Clinton-Davis, for bringing this matter before your Lordships today; though I believe it is a trifle soon. We are not yet in a position to criticise privatisation either fairly or unfairly. I strongly support the Government's endeavours and do not follow some speakers in believing that we are in a doom and gloom situation. The main objective is to get as many people travelling on the railways and as much freight carried as soon as possible. The figures showing the decline speak for themselves.

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As other noble Lords mentioned, since 1948 £54 billion has been invested in the railways but the share of journeys has fallen from 17 per cent. in 1953 to a mere 5 per cent. today. Again, we must have confidence in the Act and the Government's power to operate it. The only point on which I am qualified to speak in this debate is that I was heavily involved in the 1985 Transport Act, which dealt with the deregulation of buses. At that time I was totally against deregulation, feeling that the regulations that were mainly put in place in 1930 were adequate, and that it was unwise for the industry to suffer the upheaval that followed. In fact, the noble Lord, Lord Carmichael of Kelvingrove, referred to me and the late Lord De La Warr as the "militant" tendency.

Apart from the Government, few people were pro the Bill. In fact, 95 per cent. of operators, whether in the public or private sector, were against it. But 10 years on I must confess that I was wrong. I was closely involved in the industry, and perhaps too closely involved. By and large the Act has been a success. More mileage is now covered; the number of passengers carried is fewer but is beginning to increase. And the financial situation, the buoyancy of the industry, has greatly improved. The structure now exists for the industry to expand.

For example, the National Bus Company was a large and not unsuccessful institution with excellent trade and very well run under the noble Lord, Lord Shepherd. It may have been too large and perhaps a little inflexible. Competition was stifled and competition is all important. The profit margins were low and one was of the opinion at that time that nobody with any sense would invest in bus services, whose sole reason for running was the public benefit and nothing more.

However, again one was wrong. There are now some very successful companies and a few have become railway operators, and good luck to them. Again, one accepted that cross-subsidy was permissible and acceptable. For example, there is a bus company in the Home Counties which made huge losses every year, but that was all right because it was counteracted and cross-subsidised by the northern companies which did very nicely. That company has been turned round. There has been sound investment in new vehicles and it is doing very well. Surely, that is a good thing.

We must have faith. As a result of the new Act fares are now being pegged. At last the rot is stopping because there had been a 22 per cent. rise in costs ahead of inflation. Surely, that will get a few people back on the trains. That is a tremendous improvement. The safeguards and the commitments which the Government have made about passenger regulation requirements all seem to be perfectly in order and successful. Through tickets and railcards remain and nothing horrible has happened.

My noble friend Lord Cadman and others mentioned the awful business of traffic congestion on motorways. Recently I had to drive from my home in Sussex to Matlock in Derbyshire. Time did not allow me to travel there by train. It is quite fast to Derby, but then there is the branch line to Matlock. I left at 5.30 a.m. and the

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M.25. was still about possible, but when I turned onto the M.1. there was a massive tailback at 6.30 in the morning, which I gather is the norm. It was not Monday morning, but Tuesday morning and people had been working on the Monday. Whether or not one has sympathy for these people, every endeavour should be made to woo them back either onto the trains or, if possible, onto some other form of public transport or into shared cars. I cannot imagine what their performance at work is like and what their lives must be like. It must be totally intolerable because presumably they go home again in a massive tailback.

British Rail has done its best in the past, but new ideas must prevail. There must be more competition and a new approach. Over the years British Rail has become more caring and has more concern for its passengers. Let us hope that the franchise holders will continue with that and not just concentrate on the smart InterCity trains about which people have very little to complain, and consider the wretched commuter trains on which so many people have suffered. I do not know where the noble Lord, Lord Berkeley, has been, but he spoke of no new trains on the North Kent line. It is now alive with new trains including the Thames turbos.

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