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6.2 p.m.
The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen): My Lords, I begin by adding my voice to those of the noble Lords, Lord Cledwyn and Lord Clinton-Davis, about the passing of Lord Listowel. We have to thank very much the noble Lord, Lord Berkeley, for giving us the time to discuss transport issues in general and this report in particular. As always on transport matters, we have had an extremely wide-ranging debate with contributions ranging from those of the right reverend Prelate mourning the loss of the man with the red flag to the incisive transport diaries of the noble Lord, Lord Haskel, no doubt eagerly awaiting publication as we speak.
One point that has run through many of the contributions that we have heard from Members of the party opposite in dealing with rail matters--the debate has largely centred on rail, although there have been some very good contributions on bus deregulation as well, but the railways has been the central theme--has been the newly-discovered, rosy view of the grand old days of British Rail in the 1970s, which I do not believe the travelling public would recognise. What is clear from all contributions this evening is that innovative solutions are required.
I was particularly interested in what the noble Lord, Lord Ponsonby, said. He accused the Government of being rather timid and not sufficiently bold. I should have thought that the biggest structural change to the railways in decades was a major and bold initiative. I believe that we are seeing the same with our plans for the London Underground.
It is the Government's view that transport policy has to take place in the wider context of the need for sustainable development. That view was clearly spelt out in our Green Paper on transport policy entitled Transport, The Way Forward, which we published in April last year in response to the national transport debate initiated by my right honourable friend the then Secretary of State for Transport. I welcome the consideration which the Round Table on Sustainable Development has given to these issues. As the Green Paper makes clear, the Government share the desire of the Round Table to see an increase in the proportion of people using public transport and we have acted vigorously to achieve that.
This speech is not intended to be a formal response to the Round Table's report. The noble Baroness, Lady Thomas, asked me a number of detailed questions about our specific response to a number of the recommendations. We shall be making a formal, ordered response in due course when we have had time to give proper consideration to the detailed requirements which have been made by the Round Table. I do not believe that they deserve anything less than that.
This evening I would like to pick up some of the points which have emerged from the report and from the debate. One key area where I would like to draw a distinction with the Round Table's view is where the responsibility for action should lie in addressing a number of these issues. The Round Table has addressed many of its recommendations to
government. As I have said, we shall consider them carefully and seriously. My belief is that the Government's role is primarily to set a framework in which others can implement the necessary measures. At the end of the day the success of interchange initiatives is dependent on the actions and energy of transport operators and local authorities. I was drawn to the remarks of the noble Lord, Lord Addington. He described a number of areas where interchanges were working extremely well. I believe that he mentioned airports. If it was not the noble Lord, Lord Addington, it was another noble Lord who spoke.
Lord Addington: I spoke about Victoria station.
Viscount Goschen: My Lords, certainly one Member of your Lordships' House described what went on at airports. It is very much in the commercial interest of people operating transport services to co-operate with each other in terms of increasing their whole market by producing innovative ticketing arrangements and transport solutions which perhaps were not available before.
We have heard a great deal about integrated transport policies. I believe that is one of the more hackneyed phrases used in the transport field--
Lord Clinton-Davis: A hackney cab!
Viscount Goschen: My Lords, my words were carefully chosen. It means a different thing to different people. I do not believe that integrated transport should mean a centrally planned, inflexible system governed from the centre. That was certainly the thrust of a number of the contributions that we have heard this evening; namely, a desire to return to the man in Whitehall running all the transport services and unable to respond rapidly to local demand. I do not believe that too many of the travelling public wish to see a return to the cult of the bureaucrat running transport rather than the businessman who is so directly accountable that if people do not buy his system, then his salary is at stake. That would seem to be a clear incentive.
The Government's role is to provide the right environment for these needs to be met. I believe that that has been done. Through our privatisation and deregulation programmes we have put in place a framework in which transport operators are well placed and have every incentive to respond to the needs of customer demand and to grow their markets. That will include improvements to interchange facilities to ensure a more integrated transport service.
I listened with great interest to the contribution of the noble Lord, Lord Cledwyn, about a particular rail network in Wales which he uses. I certainly felt that he was not turning his back on the private sector, but was looking forward to co-operative partnerships and that is what privatisation is designed to bring. We have seen the very impressive plans for investment from Railtrack throughout the network. The £10 billion investment plan
is very exciting. It was not there before and we certainly look with great optimism to see how that will benefit passengers quickly.The view of the party opposite about the privatisation of the railways deserves considerable attention. I listened carefully to the noble Lord, Lord Clinton-Davis, to hear whether he would tell me which bit of the railway he sought to buy back. Although I know of his party's commitment to a publicly owned, publicly accountable railway, I did not hear that. There is certainly some confusion there. I took that to mean that the same thing will happen with this privatisation as has happened with previous privatisations which were opposed tooth and nail by the Opposition. One thinks of the privatisations of British Airways and of the British Airports Authority, to name just two, which Opposition spokesmen opposed tooth and nail only to find that after a while the privatisations were welcome. We read all sorts of suggestions in the press. Like the noble Lord, I do not believe everything that I read in the press, apart from articles such as that which appeared in The Times on 12th February 1997, entitled, "The Right Track", and subtitled,
- "Privatisation has made the trains run on time".
Lord Clinton-Davis: South West Trains?
Viscount Goschen: We have seen a confused policy from the party opposite with regard to what it would do about the railways. The Government have produced an innovative plan which has broken the mould of the railways and their long-standing decline. All 25 franchises are running, or will run, at least the same level of service as British Railways.
In his interesting speech, my noble friend Lord Cadman gave considerable balance to many of the contributions that had sought to attack what has happened since privatisation. The majority of franchisees intend to increase service levels. At the same time, while encouraging competition and diversity, network benefits such as through ticketing have been safeguarded. Ticket retailing arrangements at all 1,300 manned railway stations have been protected. Passengers can buy tickets to the same destinations as those previously offered by BR, even if their trip involves changing train or train operator. These through ticketing arrangements are legally binding on licensed train operators.
Over the next 15 years, the 25 franchises will deliver a saving to the taxpayer of well over £6 billion. In seven years' time their grant requirement will be about 40 per cent. of what BR claimed for running the same services last year. That means that we are getting a better railway for less cost to the taxpayer. Dogmatic differences aside, there would seem little reason for opposing a privatisation that delivers a success story on that scale.
Railtrack recently published its network management statement setting out its plans to spend some £10 billion on the maintenance, renewal and development of the rail
network between 1995 and 2001, more than £4 million a day. Looking forward, Railtrack's spending on the rail network--excluding day-to-day maintenance--is expected to average some £1 billion a year over the next 10 years. This includes more than £1.5 billion on renewing and upgrading the West Coast Main Line, allowing the introduction of high speed, tilting trains and £600 million on Thameslink 2000. In addition to all this, passenger train operating companies are committed to substantial rolling stock investment, estimated to amount to at least £1.5 billion over the lifetime of the current franchises.I could relate many more examples. Virgin Rail is to spend an estimated £500 million on high speed, tilting trains for the West Coast Main Line and to replace CrossCountry's rolling stock at an estimated cost of £250 million. Whatever one's view about the rights and wrongs of the private sector running the railway network, those figures are impressive and represent an investment that was not there before.
Privatisation is delivering not just increased investment but also better services, in line with the aims of the Round Table. We are seeing new bus-rail links established on services across the country--Great Eastern's intermodal through-ticketing scheme in Chelmsford and Colchester, for example, or Midland Main Line's coach-bus link in Corby and Kettering.
The noble Lord, Lord Haskel, challenged me on the point that because operators were in competition with each other, that automatically meant that they could not work together to produce mutual benefits. As I was sitting here on the red leather Benches, my mind was drawn to what happens in your Lordships' House. The Opposition and the Government seek to compete with each other and to attract voters to their way of thinking, but it is only through the use of the usual channels and the ways in which we work together that we can both seek to achieve our aims.
Much has been said about better information for rail passengers. I recognise that the noble Lord, Lord Berkeley, welcomes the developments that have taken place. The train operators have developed ambitious plans to improve telephone inquiry bureaux performance. They are spending £15 million more this financial year than the last on these enhancements, and in October 1996 they introduced a new national "0345" inquiry number, which is already reducing waiting times and allowing callers to get through to an inquiry point at the first time of calling. These improvements demonstrate the private sector's readiness and ability to deal with exactly the sorts of issues that were properly raised by the Round Table's report.
In addition, the franchisees are investing considerable sums in station improvements, including enhancements to passenger security, waiting accommodation and disabled facilities. I listened with great interest to the comments made by the noble Baroness, Lady Symons. Indeed, I agreed with the vast majority of what she said. Personal security issues, particularly for women and particularly when they are travelling at night and during the hours of darkness, are major factors affecting decisions on whether or not to travel. That is why
I welcome the investments that have been made in terms of closed circuit television and the other measures that make stations safer. There is nothing between us on that. Perhaps I may cite the example of Connex South Eastern's plans to spend £25 million on extra passenger security measures, improved ticketing and car parking.The House would be surprised if I did not say a word or two about the privatisation of London Underground given that I have extolled the benefits of the privatisation of the heavy rail network. We feel that such benefits could be brought to London Underground. We have consistently demonstrated our support for the Tube, not least through consistently high levels of funding. Nevertheless, we recognise that there is a substantial investment backlog in the London Underground and that innovative solutions are required. It is beyond the ability of governments to finance all the extra investment that is needed, which is why we believe that privatisation is the answer.
We have had a very good discussion on the issues surrounding bus deregulation. My noble friend Lord Teviot gave a fair description of what has happened since deregulation. I want to emphasise that the deregulation and privatisation of the bus industry has been a success story both for passengers and for the taxpayer as well as in terms of helping to achieve our wider transport policy. The key facts in the deregulation success story are very much worth repeating: bus route mileage has risen by over a quarter since 1986 as operators have developed new services in response to passenger demand; improved efficiency has reduced operating costs per vehicle mile by nearly half; the burden on the taxpayer of subsidy has been more than halved; investment in new vehicles has increased each year for the past four years; and there are clear signs that the long-run trend of declining patronage has begun to stabilise and level off.
I recognise that halting, and reversing, this long-run decline in bus patronage is important, though difficult to achieve, given the firmly entrenched growth in car ownership and use. The issues of car ownership and the growth in car usage were well summed up by the noble Baroness, Lady Turner, who described herself as a "reluctant motorist". Almost everyone who talks about transport these days prefaces their remarks by saying they are "reluctant motorists" and that they would rather travel by public transport all the time. It seems, however, that only the noble Lords, Lord Haskel and Lord Desai, have mastered the art of travelling solely by public transport.
I hope that the House will recognise that the increased innovation and investment by bus companies, and the growth in route mileage which I have just described, are all necessary and valuable in helping to bring about the required growth in bus use. Deregulation has ensured that decisions on which bus services should be run are made by those best able to make them, that is, by commercial operators, responding to customer choice and competition, rather than by public sector planners.
We believe that to erect a new legal framework for the delivery of bus services, as the Round Table appear to suggest, will in all probability mean more
bureaucracy with the higher cost that that implies and the stifling of initiative. We know that new services have been mounted by the new deregulated bus operators, often with the use of small buses such as midibuses which were not used to the same extent beforehand. In order to raise passenger numbers they have had to work hard to give the customer the service that he is looking for. One has only to look back to the pre-1995 days of a declining and predominately public sector industry, with all of the bureaucracy and inflexibility that that implied, and a regulatory system which stifled competition and innovation in meeting customer needs, to realise that as with rail those who look back to pre-deregulation or pre-privatisation days as a model to which we should nostalgically return do not give the full picture.The noble Lord, Lord Clinton-Davis, in his very amusing peroration this afternoon accused me of living in a dream world where privatisation was the answer to all ills. I believe that it is important to look at the facts. A one-third drop in complaints following rail privatisation is the kind of fact that we want to hear.
There are many other issues touching on bus ownership that can be spoken to but, given the clock, I turn to freight which we believe is so important. Many similar issues arise here. The objective of seeing more freight taken off the roads and put on to the railways and waterways is one that the Government entirely share. But I believe that the Government's role is primarily to provide the right circumstances in which transport regulators can achieve this. The way in which the Channel Tunnel freight terminal network was devised by a public sector BR is a clear reminder that the public sector cannot simply second-guess the needs of the private sector. The result was a network which with hindsight was too dense and bore little or no relationship to the harsh realities of rail freight economics.
The prospects for intermodal freight and rail freight generally depend upon rail's ability to compete with road in terms of pricing, reliability and the convenience of the service that is offered. We have already seen the successful transfer to the private sector of all the domestic rail services. In Britain we have already had a taste of what can be achieved by the railways when they improve their services. We believe that freight will similarly benefit from that. Further, we believe that where the Government can make a contribution to making up the difference between a commercial case and one that is not, in terms of rail infrastructure our freight facilities grant has a role to play. That is another clear example of the remaining role of Government policy in this issue. That relates just as much to the inland waterways network as to rail. The freight facilities grant is also available to waterways.
I welcome the enhanced attention which the Round Table's report has drawn to interchange issues, and I recognise the Government's responsibility to put in place an environment in which transport operators have both the incentives and the opportunities to facilitate transfers in and between modes.
The noble Lord, Lord Clinton-Davis, wagged his finger at me about South West Trains. South West Trains is already liable for penalty payments under the contractually binding performance regime. The company may also face formal action for breaching its contract. The Franchising Director will need to assess the scale of any breach before deciding what action to take. There is no question of letting off South West Trains in the event of a breach.
I believe that over the past decade and a half we have put in place an environment in which transport operators have both the incentives and opportunities to facilitate transfers in and between modes. I welcome the progress that has been made.
6.25 p.m.
Lord Berkeley: My Lords, we can probably go on debating this all night, but noble Lords will be pleased to hear that I do not intend to do so. I am grateful to all noble Lords who have taken part in this fascinating debate. It has been a thoughtful and wide-ranging discussion of an important but much neglected part of the transport chain. I very much welcome the speeches from all sides in support of the recommendations in the report. Some noble Lords did not believe that they were strong enough. I am not sure whether the Government support the report. Maybe we will hear about it after due consideration, if that due consideration takes place before May 1st. If that does not happen, they can forget it, can they not? I am not aware of any noble Lord on these Benches who used the expression "central planning". To me, an integrated transport policy means operating within a framework. The Government have failed because this document has exposed the weaknesses of connections. I say no more than that. I believe that that is where the failure arises.
To conclude, I believe that all speakers welcome this report; I believe that privately, in his heart of hearts, the Minister also welcomes it. It is up to a future Labour Government to pursue these recommendations and the many good suggestions that have been made today. I conclude by thanking noble Lords who have taken part in the debate. I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.
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