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Mr. Bradley: I am grateful for the Minister's intervention, as he confirms our claim that the assets were undervalued and that the taxpayer has lost out because of the sell-off. Despite the Minister's intervention, it is clear that the Government sold assets short to make some quick money. Is that good value for money for the taxpayer?
Mr. Bernard Jenkin: Would it not assist the privatisation of assets in this country if the leading
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Opposition party were to hype the value of those businesses instead of undermining them? The £55 billion that the British taxpayer has invested in British Rail hardly represents value for money. The money that is being spent to move those businesses into the private sector--where they can generate profits and people will realise their true value--might provide an opportunity for the Labour party to call for a windfall tax when they prove successful.
Mr. Bradley: The hon. Gentleman often attends debates on a Friday and he usually makes thoughtful and important contributions. Sadly, his offering today is utterly bogus and adds nothing to the debate.
One of the four directors walked off with £39 million in shares as a result of the Porterbrook deal. The chairman is reported to have received £4 million for shares that he bought for £25,000 only eight months before. In the interim, it is believed that he worked for Porterbrook for only eight days--that is an average of £500,000 each day. It is hard to believe that the directors' contributions had such a dramatic and rapid impact on the company's performance as to warrant those excessive profits. Is that good value for money for the British public?
The Tories claim--as they did today--that rail privatisation will save £2 billion in public subsidies. That estimate is based on the declining rate of public subsidy on the 13 franchises awarded to date and it does not take account of the efficiency savings that British Rail proved it was capable of making. There is much evidence to support that contention. The Government are clearly not comparing like with like.
Furthermore, the Tory claim does not take into account the Government's high liability offer to take back any franchise if a private operator runs into financial problems. A recent study reported in The Sunday Times of 27 October revealed that only five of the 13 franchises already in private hands were likely to make a profit by the end of the franchise period. That suggests a potentially high financial liability for the public purse.
Mr. Churchill:
Is the hon. Gentleman seriously harking back to the bad old days when politicians and bureaucrats played trains and ran other commercial organisations? Does new Labour believe that the state can operate commercial organisations better than the entrepreneur?
Mr. Bradley:
If the hon. Gentleman will allow me, I shall come to that point later in my speech. If he is not happy with my comments then, I shall gladly give way again.
The Secretary of State's second claim--the Minister reinforced it this morning--concerned more investment. Investment in rolling stock and infrastructure has continued to decline in real terms and in relation to our European and international competitors. There have been no new trains on the track since privatisation. Furthermore, Railtrack is under no legal obligation to invest in the network and the Rail Regulator is not obliged to force it to invest any proportion of the notoriously high track access charges in the network.
One of the worst travesties of privatisation is the lack of an enforceable obligation on Railtrack to invest any proportion of its proceeds from land and property
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A press release issued this morning refers to Railtrack's obligations and its relationship with the regulator. It is interesting to note the comments of Robert Horton, the chairman of Railtrack, who states:
Mr. Watts:
Railtrack has no option but to have a close relationship with the regulator because the nature of his functions necessitates close contact. Presumably the hon. Gentleman is aware that the regulator has decided to impose a single-till approach to Railtrack's revenue, whereby any returns from the property side of the business are taken into account when setting the track access charges that the regulator permits Railtrack to levy on the train operating companies. If the regulator is not satisfied that Railtrack is fulfilling its investment obligations, he has the power to reduce the track access charges and remove that stream of revenue.
Mr. Bradley:
But does that apply to 100 per cent. of the proceeds or just the 25 per cent. that flows through in that way?
Mr. Watts:
The arrangements are fairly complicated. Above a certain level of gain on land transactions, there is also a clawback of the super-profits, but I will happily write to the hon. Gentleman and set out the full position.
Mr. Bradley:
I am grateful that the Minister will write to me to clarify that, because it seems clear from his response this morning that it does not apply to all the proceeds, and it reinforces our point that the regulator should have control over 100 per cent. of the proceeds.
Mr. Bernard Jenkin:
Will the hon. Gentleman give way?
Mrs. Dunwoody:
Will my hon. Friend give way?
Mr. Bradley:
I give way to my hon. Friend.
Mrs. Dunwoody:
Under Railtrack, unlike under British Rail, responsibility for more than 1,000 bridges has been handed to local authorities, many of which will find it extremely difficult to carry out the necessary rebuilding work. The Government do not accept the burden that that places on local authorities.
Mr. Bradley:
My hon. Friend makes a very important point about transferring liabilities from Railtrack to ensure that it boosts its profits, to the benefit of shareholders, rather than making essential investment.
Mr. Jenkin:
Will the hon. Gentleman allow me?
Mr. Bradley:
No, I must get on with my speech. I have given way to the hon. Gentleman once and he made a less than effective intervention. We should not waste the time of the House any more this morning.
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I ask again whether all of this is good value for money for the British taxpayer. Railtrack's excessive charges have prevented some local authorities and major companies from opening new stations and funding new services. For example, in 1992 British Rail put in an estimate of £353,000 to open a new station at Ashchurch in Gloucestershire, yet in 1995 Railtrack wanted more than £1 million to do exactly the same job.
Mr. Robathan:
Will the hon. Gentleman give way?
Mr. Bradley:
I shall give way once more and then I must make progress.
Mr. Robathan:
I am surprised that the hon. Gentleman should mention British Rail reopening stations, because he may recall that the history of British Rail is one of closure, particularly in the 1960s. I will, if I may, take him to his own patch of Manchester, which I do not know well but which he will know much better than me. Does he remember that, when we were young, it was possible to travel from Didsbury to Chorlton cum Hardy, which I think is in his constituency, and from Warrington to Stockport and Manchester, but British Rail--this marvellous paragon of virtue to which he harks back--closed those lines, so it is not possible to travel there any more? We now have to go on the M56 and through spaghetti junction to the south of his constituency.
Mr. Bradley:
I am extremely pleased that the hon. Gentleman mentioned the Didsbury to Chorlton line, because there is a proposal for a light rapid transport link to it from the new Manchester Metrolink, which will be a much better use of that route. I hope that the hon. Gentleman will make representations to Ministers to fund that line, to the benefit of my constituents in Withington.
I shall move quickly to the next claim--
Mr. Robathan:
I am not surprised.
Mr. Bradley:
I shall move rather more quickly than the investment proposals for the Manchester Metrolink are moving as a result of the Government stalling on backing and underwriting them.
The Secretary of State's next claim was that the future of freight is bright. The Tory record on getting more freight on to rail is quite shameful. Rail accounts for only 6 per cent. of freight traffic in the United Kingdom--down from 11 per cent. in 1978. Railtrack levies notoriously high track access charges for freight, despite recent changes, which does nothing to encourage more freight on to rail. Railtrack charges 30 per cent. of English, Welsh and Scottish revenues in track access charges--twice as much as it costs in America. In some cases, track access charges are up to 60 per cent. of revenues. English, Welsh and Scottish pays Railtrack £120 million a year in track access charges. A National Audit Office report on the freight facilities grant shows that the Department of Transport had given only£32 million of the budgeted £70 million of grant between
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Private freight operators have slammed Railtrack's excessive track access charges and the bureaucratic hurdles that stand in the way of getting more freight on to rail. We heard the Minister say this morning how confident English, Welsh and Scottish is, but its chairman, Ed Burkhardt, whose company accounts for 80 per cent. of UK freight, complained of
Mr. Mann was quoted in The Observer of 8 September 1996 as saying that such treatment from Railtrack would
At a time when the public are crying out for action to alleviate the dreadful congestion on our roads, does this example give any hope that the privatised rail network will help to solve the problem?
The fare structure and through-ticketing arrangements seem at best to be confusing. For example, a number of railcards and discount fares are not protected, so train operators can pull out of national fare schemes. Anglia has pulled out of the Network card and the Supersaver scheme. Other unprotected fares are free travel for under-fives, the forces railcard, cheap day return and Apex tickets for InterCity services. Only between 21 per cent. and 25 per cent. of fares are capped. Do the Government have any view on the way in which such fares are operating, or are they happy to let the confusion in the public's mind continue?
Similar comments can be made on passenger services. All passenger service requirements, which set minimum standards for service, are lower than when British Rail ran them. Again, there are clear examples. The draft west coast main line and north London railway PSR would allow a private operator to axe all inter-city services to Watford junction and Milton Keynes and cut weekday services to Watford on the Northampton line from five trains per hour to three.
I shall ask the Minister specific questions about the west coast main line proposals, because Railtrack's press release today--this must be a misprint, but in the current situation we could believe anything--states:
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Will the Minister also confirm that that investment will enable the bridge and other infrastructure work to be undertaken so as to allow piggyback freight operations throughout the length of the line, and onward through to the tunnel? It is essential that the west coast main line, through the midlands to Manchester and onwards through other parts of the north-west to Scotland, is not only modernised but fully and comprehensively upgraded; otherwise, the introduction of tilting trains will not have the desired effect.
Will the proposals for the Birmingham-Northampton line to be linked to the west coast main line include similar enhancements? Unless there is consistency of upgrading of the trains that are to join the west coast main line, tilting trains will not be able to run to maximum effect.
Sally Keeble, the Labour candidate in Northampton, wrote to the Secretary of State regarding the consultation process on the Northampton line. It is clear that bids are being requested before completion of that process. They may be only indicative bids, but if the public are to be able to rely on and have confidence in the consultation process, it is essential that their voices about passenger service requirements on that line are heard.
The Government may claim that confusion about fares, through ticketing and services will be overcome by the introduction of the national train inquiry line. Again, it is difficult to argue that the public are getting value for money. There is mounting evidence of problems with the service. It is clear that the quality of information given at different train inquiry bureaux differs hugely. It is impossible to attribute blame to any location or individual when customers are misinformed.
I shall briefly cite one example of the problems that the public are experiencing. On Sunday 10 November 1996, Mr. and Mrs. Ward were booking to fly home from Stansted airport to Prestwick. They telephoned the national inquiry line for train times from north London to Stansted. At 9.30 am, Mr. Ward made an inquiry--which it is believed was answered in Newcastle--about train times after 12 o'clock from Tottenham Hale to Stansted airport. The answer given was:
"We will continue to give a high priority to maintaining our close relationship with the Rail Regulator".
Railtrack is under no obligation to comply with the Rail Regulator's rulings--it will merely try to continue a close relationship. That is not good enough.
"delays and excessive pricing levels"
for allowing freight trains access to railway lines. He continued:
"We have lost customers since we bought the freight business here . . . The major thing that has stood in the way has been Railtrack being very slow to give a quote and then wanting to charge a new high."
Similarly, David Mann, property manager of PowerGen, tried to build a freight terminal, but was almost prevented from doing so by Railtrack's "intransigent" treatment, demanding large sums for a bridge to cross the line.
"stop future rail terminals being constructed"
and make it "more and more difficult" for projects to get under way.
"People will revert to road,"
he warned.
"In October 1996 Railtrack announced a £150 passenger upgrade investment".
I hope that that is £150 million, or is £150 what Railtrack proposes to invest in the line? More important, will the Minister confirm that the total of £150 million plus the £157
"Trains to Stansted not running today due to Engineering works. Trains will start therefore at Seven Sisters, with bus connections from Liverpool Street and Tottenham Hale, and will run half hourly."
At 9.50 am, Mrs. Ward, unbeknown to Mr. Ward, made another inquiry--this time it was answered in London. She asked about train times after 12 o'clock from London Liverpool Street to Stansted airport. The answer given was:
"Trains to Stansted today subject to engineering works, will leave Liverpool Street 10 minutes earlier than usual at 20 and 50 minutes past the hour and will be subject to delay."
At 10.30 am, Mr. Ward made another inquiry, believed to have been answered in Birmingham. He asked for train times from London Liverpool Street and Tottenham Hale to Stansted after 12 o'clock. The answer given was:
"Trains will leave London Liverpool Street on the hour and half hour to Stansted calling at Tottenham Hale at 10 and 40 minutes past the hour."
15 Nov 1996 : Column 613Mr. Ward further asked what effect engineering work would have on services. The answer was:
"None. There are no engineering works on this line."
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