Mr. Norris: I am grateful to the hon. Lady for pointing out that I am not old enough to have heard Stalin's granny verbatim. However, I have a vivid picture of what her morning breakfast lectures must have been like and I suspect that the hon. Lady must have taken them in as mother's milk. However, it is ungentlemanly to refer to an hon. Lady's age and I shall not do so.

Mrs. Dunwoody: Get on with it.

Mr. Norris: The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) has taken her accustomed ill-humoured corner in which to spread herself over a number of seats. One of the characteristics of the debate so far has been the extent to which body language is so obviously different. Opposition Members show that rictus of mild terror which suffuses any party which knows that it is about to lose the argument. There is also ill humour, as demonstrated by the hon. Member for Wrexham(Dr. Marek): I used to think that he chose to sit on his own, but I now know that Opposition Members, recognising the trait of the ancient mariner, have taken their own decisions. Perhaps that also accounts for the splendid isolation of the hon. Member for Crewe and Nantwich.

The hon. Member for Withington started well enough with a paeon of praise for the Government's policy. Sadly, his speech degenerated into an utterly laughable anecdote about unfortunate people who were badly served by British Rail's information system. Let us not pretend for a moment that that is either funny or acceptable, because it is not. However, my hon. Friend the Member for Bournemouth, West (Mr. Butterfill) was absolutely right to say that that kind of nonsense occurred every year when the railways were nationalised. It happens now, albeit rather less, and the train operating companies are making a genuine effort to try to improve the service. I fear that if we were to have a similar debate in 10 years' time we would probably be able to surf the Internet to find an example of a customer who had been badly served and given contradictory information. In a system as complex as the rail system by its nature must be, we should accept that such incidents occur--although we should never be complacent.

It is not good enough to rest opposition to the changes that the Government have made on an isolated anecdote. Nor is it acceptable--to my mind, this point is much more serious--to treat the privatisation of railways with the same mixture of ignorance and the politics of envy which constituted much of the speech by the hon. Member for Withington. He said a lot about the profits of Porterbrook's original directors. No doubt those profits are spectacular, and I wish the directors well. As I believe that my hon. Friend the Minister for Railways and Roads said in an intervention, however, those profits were made

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Mr. Butterfill: Might the profits also be due to the fact that at the time of privatisation the Labour party was committed to renationalisation of all those assets?

Mr. Norris: I will come to that point because the central point of our debate today is whether privatisation has worked and will work, or whether it has been the disastrous failure that the Opposition allege. It is important to note that the Opposition's Front-Bench spokesman devoted so much of his speech to the fact that one or two people in the railway industry have already done rather well. It is that politics of envy which runs through the whole of Labour policy and means that the Opposition are never even willing to look at the underlying structural improvements that the industry has undergone. For my part, I am not concerned whether the directors of Porterbrook or any of other leasing or train operating company do well or badly: I am concerned about how well the passengers who want to use the rail services are treated. It is patently obvious, as I shall go on to demonstrate in a moment, that the passengers are now infinitely better treated and have better prospects of improved services than was ever the case with the nationalised railway.

Dr. Marek: Will the hon. Gentleman give way?

Mr. Norris: For auld lang syne, I will give way.

Dr. Marek: The point surely is that the £300 million profits went to the private sector because the public sector--the Government--did not realise or did not choose to realise the true value of the assets that were sold under the bidding contract. We feel not envy but disappointment that £300 million of public money was forgone through the Government's ineptitude in not realising or in choosing not to realise the true value of the assets. The issue is not the money, but the fact that it should have been in public coffers and it is now in private coffers.

Mr. Norris: The invariable response of the Labour party, when a privatisation proves to be not only successful but rewarding, is to complain that any of the reward that is gained once the industry has been privatised is somehow an amount due to the public purse. What it overlooks, of course, is that one of the beneficial consequences of privatisation has been the receipt of£4.4 billion of capital value, which the taxpayer has now had back from an industry that in nationalised hands--the hands of the state--offered no prospect whatever of any return to the taxpayer at any point in the future. I am disappointed in the hon. Member for Wrexham, because the last position that any credible interlocutor should adopt in this debate is to complain that the second-generation profits in previously nationalised industries are somehow a loss to the taxpayer. It is clear that the taxpayer has benefited hugely from privatisation.

The important point is how, in the past two or three years, the whole debate on railways has swung around by 180 degrees. I remember sitting where my hon. Friend the

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Mr. Bernard Jenkin: Unsaleable.

Mr. Norris: As my hon. Friend observes, the railways were alleged to be unsaleable. Some asked how we could possibly have one operator operating an inter-city train, another running a regional railway train, a third running a freight train and a fourth in charge of the signalling. They asked how we could possibly make that work in the private sector, and they were perhaps rather alarmed to discover that that was precisely how the railways had operated for the previous 20 years. First, Labour said that privatisation could not happen. Then we went through an extraordinary stage when Labour said that it would not happen. A party that purported to be a serious party of government--

Mr. Jenkin: New Labour.

Mr. Norris: As my hon. Friend says, it is now new Labour and we all know the jokes, which are now so old and tired that they are hardly worth repeating.[Hon. Members: "Go on."] No, I have no wish to intrude on private grief and the House does not have the time to listen to my rantings on that subject. I shall just make one point crystal clear: until the successful privatisation of Railtrack and the enormous interest in the train operating companies proved the point beyond all doubt, theright hon. Member for Kingston upon Hull, East(Mr. Prescott)--the unlikely, dare I say it, deputy leader of the new Labour party--asserted that the Labour party did not need to have a policy on the renationalisation of the railways, because privatisation would not happen.

The poisoned chalice was then handed to the poor, ill-fated hon. Member for Birmingham, Ladywood(Ms Short), who labours under the appalling burden of honesty that so afflicts Opposition Members--

Mr. Bradley: It does not seem to bother your lot.

Mr. Norris: It is an extraordinary burden that we all bear with fortitude, but some of us have learnt over the years to wear a cynical veneer that protects us from its worst excesses. Sadly, the hon. Member for Ladywood has yet to learn that lesson. She indulged in a critique of rail privatisation which implied that every private sector involvement in the railway was just an opportunity for a private sector company to rip off profits from passengers. She had not the slightest regard for the reality of the enormous improvement in passenger service that the new railway envisages.

If the first stage of Labour's argument was that privatisation could not happen and the second that it would not happen, the third stage was that it should not happen. The argument is that privatisation has simply resulted in profits for leasing companies and that the issue is about the private sector, as ever, filling its coffers at the expense of the hard-pressed taxpayer. The reality is, of course, that transport is--perhaps above all--the field of enterprise which proves beyond doubt that privatisation works. One has only to look at the record of British

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The British Airports Authority has converted London's and other airports from prisoner of war sheds to some of the most attractive airport facilities in the world. After privatisation of the bus industry, investment is at record levels, with some of the major companies ordering literally thousands of new buses and reducing the age of the national fleet considerably. For many years freight, too--or a substantial portion of it--was in nationalised hands. It was the Conservative Government who liberated freight from the dead hand of the state.

In all those sectors, privatisation has been an enormous success, essentially because it delivers three great benefits. The first--often referred to as the only benefit by the Labour party, which grudgingly admits this--is the least important: the capital receipt to the taxpayer. It has never been the essential advantage of privatisation simply to sell off the family silver, as the late great Earl of Stockton once asserted. That was never the purpose of privatisation. It is, however, an enormously useful incidental benefit that when we do sell off businesses which have been not just family silver sitting in the sideboard, unused month after month, but a burden and drain on the taxpayer, we receive a considerable capital receipt and we improve the public coffers in two ways. The capital receipt allows the Chancellor of the Exchequer not to burden the taxpayer for that amount and the industries go on to contribute corporation tax rather than consume national resources.

On one occasion, I read an analysis showing that in the seven years up to, I believe, 1990 the former nationalised industries, which in the previous seven years had consumed £2.5 billion of subsidy, produced more than £2 billion-worth of corporation tax receipts to the Treasury--from a net outflow to almost the same net inflow. That is a pure, simple financial picture and an attractive one, but it is not, as I have said, the essence of the argument, which has always lain in the two other principal benefits of privatisation.

The second great benefit is the liberation of an industry from the constraints of the Treasury. Incidentally, that does not instantly make the people who work in the private sector more superhuman or better managers than those in the public sector. That would be insulting to the many good people who work well in the public sector, but they work within an extraordinarily artificial constraint. When over many years British Rail went to the Secretary of State for Transport and said, "Here is a case beyond argument for investment"--investment which in some cases could have been returned in full within two years--Labour and Conservative Chancellors were obliged to say, "Sorry, but there are simply too many other demands on the public purse to allow you that investment. The demands of hospitals, schools, social

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Rail, therefore--as much as any of the other nationalised industries--suffered from the one classic mistake that the people who nationalised those industries in the 1940s innocently made. I make this point not in a simple, party political sense, but in all seriousness. Those who nationalised the industries in the late 1940s believed conscientiously that, when the industries were under the state's control, they would always have the investment that they needed because the state, a generous benefactor, would provide. Tragically, precisely the reverse happened. Those were the very industries that were starved of investment because successive Chancellors of all parties found themselves unable to satisfy the investment demand, consistent with the pressure on the public sector borrowing requirement.

The second greatest liberation to British Rail, therefore, is that independent private sector businesses, whether train operating companies, Railtrack or the leasing companies, can make an investment case, take it to the City or the banks--these days, the banks are worldwide--and say, "Here is an investment plan which justifies your giving us the resources to put in the investment and upgrade the service." With that investment comes operating efficiency, reduced cost, the ability to rationalise manpower and the ability, above all, to deliver a better service to passengers.

It is perhaps a sad indictment of the way in which Britain organises its national resource allocation--the process of Treasury control of expenditure--that it is unable to duplicate that regime in the public sector, but the system has failed Chancellors on both sides of the House, in every Government, since the war and there is no prospect of that regime changing either. It will be in the private sector that industries can invest, according to the sort of projects that they are able to bring to their investment bankers.

The third great improvement will deliver most benefit most immediately to the railway. Through privatisation, management is given a genuine incentive to manage a business and to develop a focus which, for generations, has been consistently absent from the railways, as even the anecdote of the hon. Member for Withington illustrated. It was often said that British Rail's motto was, "This would be a terrific business if it were not for the passengers." That illustrates the extraordinary sense of the railways having been, over the generations, just a system that was there, a marvellous job protection scheme, a business that we did in that way because we had always done it in that way. If passengers did not understand the complexity of the rail system, that was simply because they were ignorant and should have learnt.

Such inwardness is not unusual in a nationalised industry, whether in Britain or elsewhere, but it is enormously damaging to a business which should be trying to deliver what the customer wants. That is what the private sector lives or dies by. Either it delivers what its customers want or it does not survive. No business survives by telling the customers what they will want and trying to force that product on them.

How has the improvement occurred already in the privatised railway? I will give one example--the most telling that I can currently identify, bearing in mind my

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I said to those who expressed concern, "You will find that the train operating companies in the private sector will have to worry about getting more people on to the railway. They are likely to identify precisely this area of concern as one in which they will have to effect change. They will see the need to do so. I can assure you that the operating companies will respond in that way." Whatever my persuasive skills, I do not believe that people were necessarily convinced before the event. I am sure that when they left me they were thinking, "That sounded like yet another politician talking--the reality is that operators will remove staff for the sake of it."

Prism, the operator on the London-Tilbury-Southend line, recognised immediately that security was uppermost in the minds of passengers. What did it do? It embarked immediately on a £14 million programme--it is now known as "Operation Safeguard"--which put new security staff on trains and platforms. The effect of that has been to reduce what the company describes as "disturbance-related incidents". I am sure that we can all imagine what that means. Such incidents on the LTS line have already been reduced by 70 per cent. and I understand that Prism is now considering putting more staff back on stations and trains.

There are three female Labour Members in the Chamber, and they will perhaps accept that for women generally the issue of security is vital. Women were failed by British Rail. Within British Rail's accounting system, one group focused on revenue generation while another group concentrated on costs. The two groups never spoke. When considering cost reduction, it was said that the only approach was to take staff out of the system. That happened year after year. I do not believe that I am making any error when I say that British Rail even failed to live up to its own code of guidance on station staffing. Instead, it removed staff. Privatisation has ensured that staff have returned to where they belong--on stations and trains--has made the environment safer for those who travel and has led to new passengers using the railway.

Privatisation has led to a second advantage. During my four and a half years at the Department of Transport, I was keen to promote cycling. It is something that we do not do enough of in Britain. It is something that we have institutionally neglected. Governments of all persuasions have treated cycling almost with derision. Until recently cycling has not been accepted seriously as a part of the transport environment, which it so desperately needs to be.

The House knows that the history of British Rail in dealing with cycles is rather unattractive. British Rail has regarded the bicycle and the cyclist as irritants and has

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What has happened in the privatised railway system? Within weeks of taking on the franchise, Great Western Holdings has announced that it intends to make specific additional provision for cyclists. I will leave it to my hon. Friend the Member for Blaby (Mr. Robathan), the chairman of the all-party cycling group, to elaborate on that if he is lucky enough to be called. I think that he will agree with me that those of us who believe that we should be promoting cycling are enormously gratified that one of the immediate responses of a new train operating company is to do something that has been overdue for decades.

Commercial opportunities are offered on the London to Gatwick British Rail services. There are three ways of getting from London to Gatwick by rail--the Gatwick Express, the Thameslink service and the old Network SouthEast and SouthCentral services. Since the Gatwick Express was used as the first pilot in the privatisation process--a great deal of attention was devoted to it--the service has attracted a considerable number of extra passengers. Some might say, "That is not surprising." It is perhaps less well known that it has also put additional passengers on both the other routes. The positive process of marketing rail as the way to travel to Gatwick airport--London's second largest airport and in many ways one of the most important tourism and holiday airports in the world--is succeeding, and everyone is benefiting.

The operators of the Gatwick Express are offering on-board check-in services to airport customers while they are on the train. That is exactly what those passengers want. They want a seamless and easy journey. The opportunity has been available for as long as the Gatwick Express has been running. Was it taken under the old regime? No, we could not do something like that: "That's airport stuff. It's not our territory. We run a railway, not a transport service." We now have a transport service.

The examples are legion. They are not confined to security, cycling or better ticketing. Freight is a good example. I remember talking to representatives of one of the companies now involved in the private freight industry on rail. They spoke to me and to my right hon. and hon. Friends about the freight industry. They said, "So long as you have a rail freight industry which says to customers, 'So long as you bring your goods to us in a 44-tonne container on Wednesdays before 3 o'clock and you don't mind too much whether they are delivered tomorrow, next week or the week after, we shall be happy to take your business,' you may not be entirely surprised when we say that that is not an attractive transport environment for most modern companies."

The companies' representatives then said, "What you have to do, if you want to make rail freight work, is to ask the market, as a rail freight operator, what it wants. There are acres of railway sidings that are now derelict. They are useless. They are not being used for anything. You can build all the railhead facilities that you want in those areas, including all the distribution depots and the general infrastructure. The logistics are there and you can offer what modern transport companies have to offer, which is a service from the production line to the customer's shop. You have to offer an integrated service."

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We know that rail can be part of an integrated service, as it is in other parts of the world, especially in the United States. It is in the area of rail freight, even more than that of passenger services, where we shall see spectacular improvements in the volume of freight carried by rail. That is entirely consistent with the all-party conclusion that we definitely need to see a shift from road to rail and to public transport generally, whether we are talking about passengers or about freight.

In this debate the Government can claim beyond peradventure, as on so many other major issues that have faced us in the past 17 years, that we as Conservatives are right. We have been attacked ferociously, if somewhat inexpertly, by the Opposition, but we have been proved right. We have been proved right on rail, and we shall be proved right on so many other issues when we win the next general election.