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2 Mar 2009 : Column 497

House of Lords

Monday, 2 March 2009.

2.30 pm

Prayers—read by the Lord Bishop of Norwich.

Railways: Network Rail

Question

2.36 pm

Asked By Baroness Scott of Needham Market

The Minister of State, Department for Transport (Lord Adonis): My Lords, the Government do not provide such advice. This is an operational matter for Network Rail, overseen by the independent Office of Rail Regulation. As part of the Periodic Review 2008 final determinations accepted by Network Rail on 5 February, the Office of Rail Regulation has set targets and provided funding for Network Rail to reduce the impact of its engineering works on users of the railway.

Baroness Scott of Needham Market: My Lords, is the noble Lord aware that the weekend after next both the east coast and the west coast main lines will have severe delays due to engineering works and that it is not uncommon for two of the three routes into East Anglia also to be subject to delays? Who speaks on behalf of passengers when the overall network delays are simply unacceptable?

Lord Adonis: My Lords, I understand the noble Baroness’s point about inconvenience to passengers. It is precisely for that reason that the Office of Rail Regulation, which is the body responsible for ensuring that the voice of passengers is conveyed loud and clear to Network Rail, has agreed with Network Rail that over the next five years there will be a reduction of more than one-third in the disruption caused to passengers by engineering work. Of course, it is not possible to maintain the railway without engineering work, which will cause some disruption to passengers, but we expect that the target of a one-third reduction in that disruption will make a big difference to the experience of members of the travelling public.

Lord Hanningfield: My Lords, the Government should think again. The noble Lord referred to the Office of Rail Regulation. We have the Office of Rail Regulation, we have the operators, we have Network Rail and we have the passengers. There needs to be more connect between that lot. The passenger loses out all the time. Will the Government think more about how those four bodies can co-operate more fully?



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Lord Adonis: My Lords, I hesitate to point out who privatised the railways in the first place, which caused a lot of the disconnections to which the noble Lord referred. However, there is no absence of responsibility in this matter. The Office of Rail Regulation is clearly charged with ensuring that the passenger voice is heard loud and clear and it establishes the regime within which Network Rail works. As I say, it has set a target for a substantial reduction over the next five years in the disruption caused to passengers by engineering work.

Lord Tomlinson: My Lords, does my noble friend agree that the Network Rail report on corporate governance presented to Network Rail members last week was suppressed and not publicly published, to the detriment of taxpayers and railway travellers alike, and that that entirely justifies the criticisms made by the People’s Rail campaign?

Lord Adonis: My Lords, I do not believe that it has been suppressed; a decision has not yet been taken to publish it. However, my noble friend will be aware that there are more than 100 members of Network Rail. In my experience in this game, the prospects of keeping that document private for long are not great.

Lord Berkeley: My Lords, is my noble friend aware that last week there was a lot of publicity about Network Rail directors’ bonuses? I declare an interest as chairman of the Rail Freight Group and as one of the 100 members of Network Rail. Does he believe that the proposed level of bonus is satisfactory and do the Government agree with it, on the basis of either Network Rail’s performance or the current economic climate?

Lord Adonis: My Lords, the setting of bonuses is entirely a matter for Network Rail, not the Government. However, I am sure that that House would expect Network Rail’s remuneration committee to be mindful of the public mood on bonuses and not to award bonuses that the travelling public would consider unjustified by their own experience of Network Rail’s performance. This includes the hundreds of thousands of the travelling public on the west coast main line whose services were cancelled or massively disrupted in the new year by poor maintenance of the overhead wires.

Lord Bradshaw: My Lords, standard railway practice is that first you plan your engineering work and then you plan your timetable, with engineering work planned so that one strategic route between all points is kept open. How will the present shambles of an organisation that runs our railway system get back to the established practice?

Lord Adonis: My Lords, the performance of Network Rail has been improving substantially in recent years after, as the noble Lord put it, the shambles that it inherited from the privatised Railtrack. In addition to the near-30 per cent improvements in efficiency that Network Rail has achieved over the past five years, the Office of Rail Regulation is requiring Network Rail to make a further 25 per cent improvement in efficiency over the next five years. That will be achieved only if it plans its engineering work much more effectively.



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Baroness O'Cathain: My Lords, I hope that the Minister can at least confirm to me that he has overall responsibility for the railways, instead of having someone doing this, someone doing that and someone doing the other. Does he know of any attempt to find out what happens with engineering works in other countries that seem to run efficient railways? For example, is there any night working? Let me just explain this. We live on what is known as the misery line—Southern railway—which is usually closed for two weekends a month. That means that it will never increase passenger numbers at weekends because no one knows whether the trains are running or not.

Lord Adonis: My Lords, the Office of Rail Regulation has looked at the practice of other countries, some of which, as the noble Baroness rightly says, are more efficient in the way in which they conduct their engineering works than is Network Rail, to see what lessons can be learnt. Partly as a result of that benchmarking exercise, new targets have been set for Network Rail’s overall efficiency and for the reduction expected in the disruption caused to passengers by engineering work.

Lord Smith of Clifton: My Lords—

Lord Stoddart of Swindon: My Lords, the Minister rightly criticised the Conservatives for privatising the railways, but he must be aware that the present Government have had 12 years to renationalise the railways, as some of us suggested and demanded in the early years of the Government. There is, of course, still time between now and next June for a nationalisation Bill to come forward.

Lord Adonis: My Lords, we created Network Rail in order to improve on the performance of the privatised Railtrack. Performance has been substantially improving and I do not believe that it is in the public interest that there should be further big changes to the organisation of the railway industry at present. It is important that those who are responsible get on with the job and do it properly. Network Rail’s performance has been improving substantially in recent years, but it needs to continue improving.

Manufacturing: Job Losses

Question

2.44 pm

Asked By Lord Sheldon

The Secretary of State for Business, Enterprise and Regulatory Reform (Lord Mandelson): My Lords, data on employment in small and medium-sized manufacturing companies in the first quarter of 2009 are not yet available. However, the Government are acutely aware of the impact that the global economic downturn is

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having on manufacturers. That is why we have acted to stabilise the banking system and preserve the flow of credit in the economy. Where jobs have been lost, we are providing targeted support, together with regional agencies and Jobcentre Plus.

Lord Sheldon: My Lords, I thank my noble friend for that reply. We have been among the largest employers in manufacturing, but the situation has now changed quite considerably and the problem is in maintaining skills at a time of rising unemployment, particularly in the engineering and motor car industries, which are particularly prominent here. There is of course the question of the depreciation of sterling. That should have been a considerable advantage to us but we do not seem to have seen it so far. We shall need to watch that carefully. What action should we now take to retain our skilled employees over the difficult time that lies ahead?

Lord Mandelson: My Lords, my noble friend makes an extremely good point about skills. It is very important that we do all that we can as a Government to support manufacturing companies through this recession so that they do not, as a result of a temporary loss of demand, cut out capacity capability, be it a plant or skilled employees, as that would leave them at a disadvantage when the upturn comes. That is why we are providing the support for skills that is essential for UK manufacturing both to compete globally and, in particular, to get through the recession. This includes a significant expansion of the Train to Gain service, which will provide more than £1 billion of funding for employer-focused skills during the coming years, and other customised packages, which the Department for Innovation, Universities and Skills is discussing with the key manufacturing employers, most recently Corus and Nissan.

Lord Forsyth of Drumlean: My Lords, instead of spending £12.5 billion cutting VAT, would the Government not have been better advised to cut national insurance—a tax on jobs—which they have increased? Is it any surprise that people are being laid off from work when the Government have made the costs of employment higher?

Lord Mandelson: My Lords, I do not agree with the noble Lord on his original point. The aim of cutting VAT was to get as substantial and quick a stimulus as possible for demand into the economy. I do not believe that alternative measures, notably changes in tax, would have had the same effect and certainly not as quick an effect as the reduction in VAT, which kicked in a week later.

Lord Razzall: My Lords, does the Minister accept that I am second to none in my admiration for his efforts to get the banks lending again, let alone in my admiration for the Prime Minister in, as he would put it, saving the world? However, does he not accept that what SMEs now require is not exhortation and policy from this Government but results?



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Lord Mandelson: My Lords, I agree with the noble Lord, which is why I am pleased to say that the enterprise finance guarantee, which is a 75 per cent guarantee provided by the Government for lending made to small and medium-sized enterprises by banks operating the scheme, has shown considerable success since it went live on 14 January. More than 400 loans have been offered under the scheme, amounting to in the region of £40 million. At that rate, there will be no shortage of applications or offers for the £1 billion scheme as a whole.

Lord Brookman: My Lords, as someone who has, as have others on these Benches, worked in manufacturing in the steel industry, I can tell my noble friend, who mentioned Corus, that there is great concern among trade union representatives in that company because the redundancy figures are increasing week on week. From the 2,500 originally mentioned, as I understand it, the figure has risen by a further 1,500. I remind my noble friend that there was a time when many in this country thought that there was no future for manufacturing. Indeed, some argued that we were in a post-industrial society. I am sure that he does not agree with that.

Lord Mandelson: My Lords, my noble friend is absolutely right: I do not agree with that sentiment one jot. Indeed, I say in every speech I make that, far from being a post-industrial economy, as some people like to describe our country, we are nothing short of being still the sixth largest manufacturing economy in the world.

I have not been informed of the figures that my noble friend refers to in relation to Corus. I know that the management of Corus decided to make changes both to secure the company's position when the upturn comes and to bring about necessary restructuring, which would have had to have taken place regardless of the recession. However, I will make inquiries because I am concerned that a greater number of redundancies may be made than those of which I was originally informed.

Lord De Mauley: My Lords, the Secretary of State says that the Government are doing all they can to get help to businesses as quickly as possible, yet, despite his department having said in January that the business lending guarantee scheme, which is so urgently needed by so many small and medium-sized enterprises, would be operational by 1 March, it is not. The department now cannot even give a date by which it will be. Indeed, the Government are only now starting discussions with lenders over guaranteed pricing. Given that performance, how can small businesses have any confidence in anything that the Government say?

Lord Mandelson: My Lords, they would have more confidence if the noble Lord were to get his facts slightly straighter than he did in his question. I think that he must be referring not to the business lending guarantee, but to the working capital scheme, which is not a scheme for making direct loans under government guarantee to individual businesses. None the less, we

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are expecting, as I announced in January, to reach agreement with banks to boost business lending through the scheme. We are currently working with three major banks on their potential loan portfolios. We are awaiting state aid clearance by the European Commission, and I expect that to be forthcoming in the next couple of weeks or so. That is not much beyond what I originally said in January.

Media: Ownership

Question

2.52 pm

Asked By Baroness Rawlings

The Secretary of State for Business, Enterprise and Regulatory Reform (Lord Mandelson): My Lords, as Secretary of State I have the power to intervene in any media or newspaper merger which I believe gives rise to specific public interest issues, such as concerns about accurate presentation of news or free expression of opinion in newspapers. Where such an intervention is made, Ofcom must provide a report on the impact of the merger. This provision exists alongside other statutory rules governing ownership of media enterprises and on accurate reporting and impartiality in broadcasting.

Baroness Rawlings: My Lords, I thank the Minister for his detailed Answer. Have the Government received any information from Ofcom or any other sources that would lead them to give credence to the recent rumours that Al-Jazeera is interested in purchasing ITV or Channel 4? Furthermore, can the Minister tell us whether the Government are concerned about the possibility of those major media outlets and others in the print media disappearing further and further from British hands?

Lord Mandelson: My Lords, I have not heard any information about such an exotic proposal as Al-Jazeera taking over ITV, and I will be keeping my ears open. I assure the noble Baroness that I will be eternally vigilant in pursuit of the powers that I have, but they are necessarily limited powers. They do not extend to any member of the Government being able to act on personal whim or prejudice. We have to have a clear public interest case made to us as the basis for any intervention, but of course I would be open to receiving such concerns in the public interest, should they arise.

Lord Razzall: My Lords, will the Minister allow me to slightly widen the Question from the noble Baroness away from the return of Sir David Frost to our television screens to the wider question of the structure of broadcasting generally? Will he accept that we cannot open any Sunday paper without reading speculation about the future of ITV, Channel 4, or what the

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Government are going to do about preserving public service broadcasting outside the BBC? I had not actually seen the Al-Jazeera story. When does he feel that the Government can give a clear statement of their policy in this area?

Lord Mandelson: My Lords, the Government offered an initial and provisional outline of their views when my noble friend Lord Carter published the Digital Britain report. That is an interim report: the Government will give further consideration after consultation to what conclusions we eventually reach. In the mean time, all options relating to the future ownership of the media outside the BBC remain on the table, but I assure noble Lords that at the heart of the Government’s consideration of those matters will be our determination to maintain a strong sense and basis of public service at the heart of our broadcasting, whatever future ownership structure emerges.

Lord McNally: My Lords, the situation is rarely as serene as the Minister implies. Does he recall that when the Times and satellite broadcasting were under threat, the Administration of the day waived the protection in legislation at the time to allow those deals to go through? If one of our major broadcasters or newspapers were in similar crisis, he would be under similar pressure simply to save the broadcaster or newspaper under threat.

Lord Mandelson: My Lords, I can imagine the pressure that would be brought to bear on the Secretary of State in such circumstances, but the noble Lord can be assured that I would be neither serene nor complacent.

Lord Campbell-Savours: My Lords, before alarm bells ring in the ear of my noble friend on the prospect of Al-Jazeera having an interest in taking over ITV, will he bear it in mind that Al-Jazeera was the only thoroughly objective news-gathering service during the course of the recent dispute in Gaza?

Lord Mandelson: My Lords, I described the possibility as exotic, not objectionable. I hear what my noble friend says and will take that into account should any eventuality arise concerning that broadcasting organisation in the future.

Lord Roberts of Conwy: My Lords, were the Government consulted about the recent takeover of the Evening Standard by the Russian?

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