| Previous Section | Back to Table of Contents | Lords Hansard Home Page |
Lord Falconer of Thoroton: My Lords, the right reverend Prelate has asked three specific questions. Perhaps I may write to him on all three of them.
Baroness Scott of Needham Market: My Lords, I should like to refer to the issue of the single franchise into mainline stations in London. In doing so, perhaps I may declare an informal interest as a very regular user of Liverpool Street station. I should also declare a formal interest as a member of the Commission for Integrated Transport.
I very much agree with the sentiments expressed by my noble friend Lord Bradshaw; namely, that there are clear benefits to be enjoyed from single franchises into Liverpool Street station, in terms of rationalising services and dealing with some of the capacity problems involved. However, there has also been some benefit from the competition that has existed until now in terms of frequencies and keeping down the level of fares, as well as in station upgrades.
I should like an assurance from the Minister that future franchising arrangements will not throw out the baby with the bath water, and that we shall be able to hold on to some of the very real benefits that have accrued. East Anglian passengers will regard with concern lines such as London to Manchester where, since 1995, there has been an increase in fares of 80 per cent. They will also be looking at other lines where the availability of off-peak fares has been squeezed to very narrow and often almost unusable windows of opportunity; and, indeed, where plethoras of special offers have been developed very much at the expense of reasonable and affordable walk-on fares.
Lord Falconer of Thoroton: My Lords, I am not sure whether I detect a slight difference in the Liberal Democrat Front Bench in relation to the issue of competition and franchising. As is well known, the view that the number of franchisees should decrease is quite widely held through the industry. I do not detect that the noble Baroness is effectively disputing that fact. However, in so far as she is saying that there are benefits associated with the franchising system, I can say, yes; that is clear. In adopting the smaller number of franchises, one has to be clear that one is not losing the kinds of benefits referred to by the noble Baroness.
Lord Lea of Crondall: My Lords, perhaps I may return to the point raised by the noble Lord, Lord Marlesford, as it is possible to reach a somewhat different inference. It is true that there is a difference between the degree of commitment which, by its nature, can be indicated in a document such as that put out today by the Government on the one hand and by the private sector—the City—on the other. But should
we not draw the inference that some kind of forum is necessary to examine how a commitment of £35 billion or £40 billion will come forward from the private sector; and that we should not merely rely on project finance, case by case, to produce that sum? Is it not the case that in France, Holland, Belgium and many other European countries there are national infrastructure banks or financial intermediaries which can bring together a public/private relationship? Is it possible to keep the door open at this stage for further consideration to be given, if any studies come forward, on the new financial intermediaries that may be needed to square the circle?
Lord Falconer of Thoroton: My Lords, it is an interesting idea and one to which my noble friend has referred previously. There is, as it were, separately from the railways merit in looking at that. The fundamental question raised by the noble Lord, Lord Marlesford, and others is: ultimately, will the providers of the finance be prepared to come forward and make it available? The view of Sir Richard Bowker and the Strategic Rail Authority is that they will.
Lord Burnham: My Lords, the Statement says that previous activities as regards the railways have been strong on rhetoric and weak on action. The noble and learned Lord has certainly been strong on rhetoric. I hope that his words do not come back to haunt him. The Statement does not refer to the most recent troubles of the railways; namely, with regard to the activities of the unions. This is remarkably familiar to those of us who were involved in the newspaper industry in the 1970s and 1980s. Then, the problem was solved—largely with the assistance of the union leader, now the noble Baroness, Lady Dean of Thornton-le-Fylde—by making the unions redundant so that they no longer had a place in the newspaper industry. There is nothing in the railway industry which makes the rail unions a vital part. What steps are the Government taking to ensure that there is no interference by the unions with the operation and activities of the railways? In asking that, perhaps I may say what an excellent service, in terms both of time and of dealing with the unions, is provided by Chiltern Railways.
Lord Falconer of Thoroton: My Lords, the third paragraph of the Statement referred to the issue of the unions. As my right honourable friend said in another place, we believe that, in this day and age, disputes of this nature should be settled by negotiation and not by strike action, which harms the travelling public and in the longer term has the potential to damage the railway industry itself. My right honourable friend reminded the other place that rail passengers must come first, as the Prime Minister had said on Wednesday. He urged that disputes should be sent to arbitration with an immediate end to the strike action. The issue of the present industrial relations problems was specifically addressed by my right honourable friend in his Statement and his remarks seem to offer the right way forward.
Lord Clinton-Davis: My Lords, if my noble and learned friend and Mr. Richard Bowker are right—namely, that there will be investment from the private sector—there is nothing wrong with that. But what happens if they are both wrong, or partly wrong? What happens if the private sector is not willing to "pay up", partly or wholly? My submission—I hope that my noble and learned friend will support it, although I doubt it—is that the Government ought to make it clear now that, in the case that it does not, the Government will have no hesitation in ensuring that the necessary investment will come from them, rather than have a hiatus where nothing happens at all.
Lord Falconer of Thoroton: My Lords, the Statement relates to the Strategic Rail Authority's plan for the future in relation to the railways. That plan posits an expanded rail service. It can be a bigger and better rail service the more money can be levered in from the private sector. Sir Richard Bowker and the other members of the authority have put forward in the plan what they believe to be the right priorities, based on reasonable assumptions. If their assumptions are wrong—and they are the people who have the expertise in this area—then it is a sensible plan. One of the vital elements that will make it work is government support. The Government have made it absolutely clear that they support the vision and the plan.
The Earl of Caithness: My Lords, the noble and learned Lord was quick to condemn Railtrack again, and in particular the rising costs of the West Coast Main Line. I am sure that I do not need to remind the noble and learned Lord that any government capital project has equal costs in over-runs. I could draw attention to the Scottish Parliament and, closer to home, the Dome as areas where government should not have got involved.
As regards private finance, will the noble and learned Lord confirm that in their figures the Government make no provision for a risk insurance premium, which might be charged by the private sector for its co-operation given the fact that Railtrack has been renationalised without compensation? Any future private sector involvement will have a risk premium attached to it. Even if that is as small as half a per cent, the Government will have to add in excess of £1 billion to their figures. Will the noble and learned Lord confirm that those costs are not presently included in the government figures? Will he also answer the specific question of my noble friend Lord Marlesford? If the private sector does not perform, will the Government fill the breach?
Lord Falconer of Thoroton: My Lords, as to a risk assurance premium, I am not sure whether the noble Earl is suggesting that the premium itself would be £1 billion. With the greatest respect, that seems totally over the top. As to the precise provision made, I shall have to reply in writing.
In regard to the question by the noble Lord, Lord Marlesford, we are talking about a plan which, if one manages to lever in private money, means that one will be able to have more funding for the railways. The plan sets out what the Strategic Rail Authority believes is the way to lever in the kinds of money to which I have referred and what should be done once that money is obtained, coupled with public sector financing. What one has, therefore, is a plan for the future, with government support. That is what the Strategic Rail Authority was charged with producing. It is not right to say, "What happens if this does not work? What will the new plan be?". This is the view of the Strategic Rail Authority about how the railways can be developed over the next 10 years, making reasonable assumptions about what the financing would be. It is a plan which has the support of the Government. The Strategic Rail Authority and the Government together believe that it will produce a better railway system.
Next Section
Back to Table of Contents
Lords Hansard Home Page