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Lord Brabazon of Tara: My Lords, the Government did not inherit the public expenditure programme from the previous government. This Government decided to commit themselves to it. That is not the same thing as inheriting it; they had no obligation to do so.

Baroness Hayman: My Lords, I thought I had made clear by what I said that we inherited a set of figures. We are committed to, and made clear our commitment to, those figures. As the noble Lord is well aware, the receipts from the disposal of British rail land are part of that expenditure programme. We and British rail are bound by legislation.

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The noble Lord, Lord Cadman, and my noble friend Lord Berkeley, cited the legislation by which BR could be directed in its management of property. However, that legislation was amended in part by the Railways Act 1993, which limited some of the actions we can take to those connected with railway privatisation, which is not an aim of this Government. Given that legislative position, BR has a duty to dispose of its assets at the best possible price. However, in relation to the site at Battersea, which I know is of concern to my noble friend, I understand that the company involved made an application for planning permission at an adjoining site. It may be that the interests of both rail freight and the dogs may be met within existing policies.

The other position we inherited--I am sure the noble Lord, Lord Brabazon of Tara, will accept this--is that few significant sites now remain within BR ownership. BR's programme for disposing of surplus land has been ongoing for many years. Furthermore, when the previous government created Railtrack in 1994, Railtrack took not only the operational line, stations and land, but also those closed sites and lines which were thought to have a realistic prospect of reopening. I am pleased to say that, of those, traffic has returned to 25 routes since April 1994 and Railtrack believes that there is further potential for 41 other routes at some time in the future.

The Government recognise that some of the sites which did not appear to the previous administration to have a future for transport, may now have more potential. That does not mean that a site which served a railway purpose many years ago, will necessarily serve the different demands of railways or other modes of transport in the future. But, where a site has real potential for future rail use, we have sought to ensure that appropriate procedures are in place to identify it. The noble Lord, Lord Methuen, asked us to look favourably on light rail use, for example, on urban track beds. We recognise that light rail can be an effective means of transport in certain circumstances, such as the Manchester example to which he referred. We will be considering what role light rail will have in the context of the White Paper on integrated transport.

To return to the procedures which are in place to identify railway sites, BR gives Railtrack, other railway businesses and local authorities advance warning of sales so that they can bid if they choose. RPL has drawn to the attention of Railtrack around 450 sites which adjoin or are close to operational railways. RPL welcomes Railtrack's sharing of that information with other rail industry interests and also welcomes inquiries from the rail industry about sites, either specifically or general. RPL send auction catalogues to Freightliner as well as to Railtrack and AWS. Railtrack is now in negotiation with Rail Property Limited with a view to buying a number of sites, including lines at Acton, Colnbrook, Dumfries, Limehouse, Menstrie and Nuneaton. Railtrack also bid for sites at auction and has been successful in a number of cases. It recently purchased a 13-acre site on the east coast main line.

To turn to the issue raised by the noble Lord, Lord Thomson of Monifieth, most former track beds are in private or local authority ownership. However, it is

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proposed to transfer a number of BR's remaining track beds--they have around 75 lengths mostly in short and isolated stretches--to Sustrans, the cycling charity. I can assure the noble Lord that we support those proposals. In that way, not only will provision be made for safe walking and cycling, but the integrity of the transport corridor will be maintained. As the noble Lord pointed out, it will be in safe hands. Though realistically we believe that few, if any, of the stretches of line going to Sustrans will have the potential to reopen as commercial railways, Sustrans will be under a covenant not to undertake work that would preclude the reinstatement of railway lines. It is therefore an extremely advantageous scheme and one that the Government are pleased to support.

The noble Lord, Lord Brabazon, raised the issue of planning guidance. Current guidance already makes it clear that local authorities should consider the potential of disused track beds and routes for future transport schemes. As I said the other day, we are looking closely, in the context of integrated transport policy, at whether planning guidance might be strengthened to protect suitable land for future rail use. A fully revised draft of PPG12, which governs the issues, will be issued for public consultation later this year.

The Government believe that the procedures now in place are the right way to proceed. We are not prepared to distort competition or offer additional subsidies to Railtrack or other privatised members of the rail industry in the form of cheap land sold at the taxpayers' expense at less than market value. Nor are we prepared to risk distorting the property market or depressing prices for other RPL sites. I might add that EWS told us that it accepts the principle that British Rail land and property should be offered on the open market. Halting sales would mean sterilising and blighting land--a point recognised by the noble Lord, Lord Mountevans--even though we understand the anxieties that we should not lose out. But there are potentially different high priority uses, a point referred to by the noble Lord, Lord Brabazon of Tara. Blight leads to misuse such as fly-tipping, which imposes costs on the public purse.

In tonight's debate, as has been expected, emphasis was given to freight. The Government wish--as does my noble friend Lord Berkeley, and the noble Lord, Lord Mountevans--to see rail freight back at the heart of Britain's rail industry. An increase in rail's share of the freight market will be a key part to integrated transport policy for all the reasons outlined tonight. The new freight companies are winning new traffic on to rail. English, Welsh and Scottish Railways aims to triple traffic in 10 years; Freightliner aims to increase the volume of container traffic by 50 per cent. in five years.

I am not sure whether the detailed data asked for by the noble Lord, Lord Methuen, in relation to comparisons between different modes are available. Perhaps I may make inquiries and write to him on that point.

Railtrack is keen to meet the needs of the expanding rail freight market and protect land that has a realistic possibility of future freight demand. Its code of practice for freight, published last year, states that it will discuss

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in advance with the rail freight industry, local authorities and other interested parties any proposed significant changes to its existing portfolio of land holdings that have realistic freight potential. Where that is the case, Railtrack will aim to preserve existing facilities or provide a suitable equivalent as well as considering new locations for investment to anticipate expected demand.

We already provide grants to industry towards the capital cost of rail freight equipment in cases where the traffic would otherwise be moved by road. We have taken measures to improve the freight facilities grant, not only in financial terms, but also by cutting the red tape associated with it. We have also secured commitments from the French Government and Eurotunnel to obtain a better deal for rail freight carried through the Channel Tunnel and beyond, not only by EWS, but also by potential new entrants to the market. In the context of the development of the integrated transport policy, we are considering what other measures might be introduced to encourage rail freight.

I noted the comments made by several noble Lords, including the noble Lord, Lord Methuen, in relation to the value of smaller freight sites. But it is worth pointing out that nowadays freight operators seeking rail-based terminals usually need substantial parcels of land. Bulk

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materials require space for loading, unloading and storage. In some circumstances processing plant must also be provided on site. In the intermodal sectors, space is needed for loading, unloading, lorry access and parking, and the provision of storage and warehouse facilities on site or nearby may be critical to the overall viability of the development. BR has few such sites. That is not to suggest that small sites are never of any interest, for instance, for single company terminals. But their potential for future rail freight depots is bound to be relatively constrained.

To sum up, we have taken action to boost the take-up of rail freight grants to transfer freight from road to rail, and we have beefed up next year's budget by £10 million to £40 million. We have ensured that BR routinely tells railway businesses of the sites coming up for auction and we are satisfied that in the context of the disposal of land Railtrack observes a strict code of practice.

I hope that what I have said tonight will reassure noble Lords that the Government are fully committed to the improvement of our freight and passenger railway services as part of our integrated transport strategy, and that the disposal of BR's surplus land does not jeopardise that policy, a policy that the Government fully intend to implement.

        House adjourned at nine o'clock.

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