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Lord Davies of Oldham: My Lords, I am grateful for the two Front-Bench contributions. It is a function of the Official Opposition, I suppose, to criticise and never at any stage either to admit mistakes of the past when it was in government or to advance a proposition that is remotely constructive in relation to our present problems. The noble Viscount, Lord Astor, fulfilled that role admirably. He referred to the issues with regard to Network Rail and its difficulties as though Hatfield had never happened. He must surely appreciate that the enormous problems which have engulfed Network Rail are a reflection of what the Hatfield accident threw up, and that the problems, therefore, of the railways were far greater than even the worst analysis had shown at the time of the botched privatisation.

The noble Viscount asked me one specific question. He asked what will be the single point of decision making. He will recognise that the Statement's purpose is to make clear to the industry and to all those with a contribution to make in improving our rail performance that in the summer we intend to reform the railways' organisation to have this crucial single point of decision taking. We are aware that the plethora of competing points of decision is causing enormous problems in the railways by failing to produce a structure to tackle these outstanding issues.

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Of course we are consulting on this issue. We expect the industry, and all those interested in it, to put forward ranges of proposals so that we can arrive at the right structure to stand the country in good stead for the decades ahead.

I am grateful to the noble Lord, Lord Bradshaw. He addressed some crucial areas where he thought there were points that we should take on board. In his comments regarding safety, I accept that we need to rethink the position. It is quite clear that that has been one of the railways' significant problems. We all put the highest priority on safety, but we cannot run the railways solely on the presumption that safety takes predominance over every other factor. Otherwise, no train would ever move at any speed at all. We are aware that we need to look at the safety side. I am grateful for the noble Lord's constructive point.

On combined ownership, the Statement indicated that we are looking at how we can devolve some areas of decision taking down to local passenger transport executives and local structures. The Scottish Parliament and Welsh Assembly can play their part on a rather more significant scale. The concept of seeking to devolve some aspects of decision taking to a more local level would fit in with the proposition that the noble Lord advanced. That needs to be considered further. I also accept that we cannot get this single point of decision right if we lack a clear definition of the responsibilities between such a body and the Department of Transport. That is absolutely critical to the effectiveness of the review.

I conclude on the obvious point. If we had come along with a cut-and-dried solution to a very difficult problem, no doubt we would have been challenged about giving insufficient signals for consultation on what should be done. We are allowing five months which will ensure that we hit our intended objectives for the railways.

4.32 p.m.

Lord Peyton of Yeovil: My Lords, the Front Bench speakers have had a long time. I am glad that Back-Benchers at last have their chance. Is the Minister aware that if he had gone further back into the past then his criticisms of privatisation would have been much more valid? The past is important in the railways. First, they were run into the ground by six years of war, very intensive use, and nothing was spent on them. After the war, the railways had the colossal misfortune—visited on them by the party opposite—of having the Treasury as a banker. That is an untold misfortune. I am sure the noble Lord, Lord Marsh, will be the first person to agree with that.

The Minister has to understand that words will not help. A major casualty is that the morale and pride of railwaymen has been lost. That is the first thing to restore and only then will there be a competent organisation. I am quite conscious of the fact that privatisation as an attempt to get the railways off the back of the Treasury was flawed in many respects. There cannot be that confusion of responsibility and one cannot have too many players in the game. The

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whole thing becomes too complex. It was a rather long Statement. I hope the Minister will lend himself not to words but to action.

Lord Davies of Oldham: My Lords, I assure the noble Lord that the Front Benches had the time they were allocated for questions. If anything, they were slightly economical. If we did run over-run—I did not notice that we had—then the blame rests with me in my answers and not my two inquisitors from the Opposition Front Benches.

On the more general issue of history, I bow to the greater knowledge of the noble Lord. He used to occupy a very significant position in transport and I have no doubt that he studied the history of the railways at that time. I agree with him that the present situation is too complex. There need to be clear points of decision and we need to get the relative rail responsibilities sorted out accurately. That is what we intend to do. I emphasised the other point that he will recognise; the future of the railways will not just be dependent on what the taxpayer contributes through the Treasury. There will also be additional investment from the private sector.

Lord Faulkner of Worcester: My Lords, I agree with every word said by the noble Lord, Lord Peyton, whose time as Transport Minister is still viewed by many people in the rail industry as perhaps the golden age in the post-war period. His comments about morale are ones that the Government must take very seriously.

I say to my noble friend that there is a huge amount in the Statement today that will be welcomed by the travelling public and by the industry. There are aspects of it which are long overdue and very sensible. I particularly welcome the full support that it gives to the Strategic Rail Authority and its chairman, Richard Bowker. I hope that, contrary to the mendacious reports appearing in the press over recent days, he will have a long-term role in the industry and play a part in the new structure that emerges from this process. My noble friend's comments about safety in the industry will be welcomed. It is grotesque that there is such an imbalance between the way in which road safety and rail safety are treated. If that leads to a more satisfactory consideration in the future, that will be very welcome indeed.

Finally, does my noble friend agree that while the review is underway the industry should not take its eye off the ball and lose sight of the need to continue with improvements and cut costs?

Lord Davies of Oldham: My Lords, I am grateful to my noble friend for reminding me that the noble Lord, Lord Peyton, introduced that very important concept of the morale of the workforce. There is no doubt that morale can lift with investment in the railways with people then driving and serving on vastly superior rail stock. One should bear in mind the speed with which the rail stock is being improved. However, as any railwayman will tell any passenger at any time, morale

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is only as high as the punctuality of that train. Passengers wish to travel on a comfortable train but, above all, they want that train to arrive on time. Those are the issues that we have to address if we wish to raise morale of the rail workers who have such an important role to play.

I would not go quite as far as my noble friend Lord Faulkner in suggesting that the press were mendacious over the weekend. I have too many friends in the media to accuse them in quite those trenchant terms—inaccurate, certainly, wide of the mark and speculative in the extreme. He asked whether we will ensure that there will be no loss of activity on improvements while decisions are taken on the new streamlined arrangements. We are talking only in terms of four to five months. There is no intention on anybody's part to let up the drive towards improving the railways.

Lord Marsh: My Lords, I apologise for losing a few minutes at the beginning of the Statement. The encouraging aspect is the speed at which a massively dangerous financial situation is now confronting whichever party is in power, not whether trains run five minutes late or 10 minutes late. In my view, the current organisation is financially totally out of control. Both parties have played a real role in that. Against advice from many people in the industry, the Conservative Party decided that not only would it seek to privatise the railway—despite people arguing that it was not like the electricity board or the water board—but also that it would separate the track from the operation of the organisation. That was a fundamental mistake. What has happened now is that there is such a multiplicity of management points that it is impossible to decide who is responsible for what.

At the previous general election I was encouraged when reading through the Labour manifesto. I came to the conclusion that 99 per cent of it should be disregarded. Then I fixed on a small part which said it was the intention of the Labour Party to bring the railway system back under public control. I have the greatest respect to the noble Lord, Lord Peyton, whom I regard—I have never made any secret of it—as the best of six Ministers I encountered, not least because the two of us, whenever we met, cursed his colleagues with equal enthusiasm. However, there is no way that a passenger railway system of this size can escape a position where the Government are the ultimate bankers. That dogs the whole thing.

This is a complex subject. I hope that nobody really believes that this problem will be solved in the next four or five months. There is a need to take what urgent action can be taken, but I think it would be perfectly sensible to have an outside commission go back to the drawing board and provide a number of options, because there is no simple solution to the problem.

I know of no major passenger railway system in the world which breaks even, let alone makes a profit. The cosmetics of railway accounting are wondrous, but the realities are that ultimately they require very large subsidies for a number of reasons, one of which is the most simple and powerful of all. The passengers never

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come in a nice neat flow—they come in peaks and troughs throughout 24 hours. That requires a massive infrastructure investment for the whole of the 24 hours which could never be met by passenger fares.

Many of these problems are fundamental and basic. I congratulate the Government on at least saying that they recognise that there is a serious problem. I think it will take longer; there is a need for a long-term look at the problem, because railways can be a very, very hungry beast.

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