§ The Minister of State, Department of Transport (Mr. David Mitchell)
I beg to move,That the draft British Railways Board (Increase of Compensation Limit) Order 1986, which was laid before this House on 21st October, be approved.As the House knows, the financial support arrangements for British Rail's passenger services were provided by Parliament in the Railways Act 1974. This Act made the Secretary of State responsible for deciding what level of passenger service the board should provide beyond what is commercially viable. The Act also made the Secretary of State responsible for paying the board grant to meet the costs of these non-commercial services which could not be covered from the railways' own income. This is known as the public service obligation, or PSO. grant.
The same Act applied a statutory limit to the cumulative amount of grant which the Secretary of State could pay to British Rail without seeking parliamentary approval. The limit was originally set, in 1974, at £900 million, extendable to a total of £1.5 billion by Order in Council, subject to the approval of the House. This total limit has twice been changed, by the Transport Act 19'78 and by the Transport (Finance) Act 1982. The present restriction limits payments of grant for periods after the end of 1978 to £6 billion, extendable by Order in Council to £10 billion, again subject to the approval of the House.
The position by the end of this month will be that, since the end of 1978, cumulative payments of public service obligation grant to British Rail will have reached £5.768 billion. To meet the Government's firm commitment to support British Rail's non-commercial railway services, payments will need, some time early in 1987, to exceed the limit of £6,000 million. My right hon. Friend the Secretary of State explained to my hon. Friend the Member for Kingswood (Mr. Hayward) on 11 July that the current estimate presented to the House last March makes provision for grant payments £100 million in excess of the present limit. There can be no question of grant expenditure in excess of the limit, and he said then that an order would be laid for the approval of the House to increase the statutory ceiling. This is the necessary order.
The order provides, as was done in previous orders in 1977 and 1981, for the full increase allowed by statute. It is sensible to provide sufficient finance to cover the lifetime of the new objectives set for the chairman by my right hon. Friend. Here is firm financial evidence of the Government's commitment to these socially necessary services. There is a clear message for British Rail and its customers. The message of this order and of the objectives which we set the board last week is that the support and commitment of the Government to the railway continues, that the excellent record of the board and its staff over the past three years will be built on and that our established policies for the railways are succeeding. The next three years will see further progress towards higher quality and greater cost-effectiveness.
§ Dr. Norman A. Godman (Greenock and Port Glasgow)
Is the Minister in a position to comment on recent press speculation, particularly in the Scottish newspapers, about the threatened diminution in the Euston to Glasgow central service and the expansion of the Waverley, Edinburgh to Kings Cross service? Can he assure the 277 House that the Euston to Glasgow service will not suffer the kind of diminution mentioned in some of the press reports?
§ Mr. Mitchell
Decisions on the matching of supply and demand with services on the alternate routes to Scotland is entirely a matter for British Rail's management and not for me. The hon. Gentleman will know, and I am sure will accept, that during the past three years one has seen, in Scotland, in the development of ScotRail's policies, considerable signs of improvement, with the rehabilitation and redecoration of the railway stations throughout the network, the opening of the Bathgate line to passenger transport, the first major renewal of a passenger service and a whole series of other improvements. Therefore, I hope he will feel that this is a good illustration of the success that has been achieved during the past three years and will recognise that the objectives that have been set by my right hon. Friend extrapolate those same objectives over the next three years.
§ Dr. Godman
I am grateful to the Minister. As always, he is very graceful in giving way. I accept what he says about the improvements brought about in, say, Waverley station, Edinburgh, Glasgow central station, and Queen street station, Glasgow. I may say, en passant, that the stations in my constituency leave a lot to be desired. But putting that to one side, I was not asking a question about alternate services. That was the phrase the Minister used. The Glasgow central to Euston service can in no way be seen as an alternate or an alternative service to the Waverley, Edinburgh to Kings Cross service. Both are important in their own right. All that I am seeking, as a west of Scotland Member of Parliament, is that there will be no diminution in the quality and quantity of the service between Euston and Glasgow central.
§ Mr. Mitchell
I recognise that the services up the east coast main line to Edinburgh serve a different market from that served by the west coast mainline services to Glasgow from Euston, but the decisions about the services to be provided by Inter-City are commercial decisions for the management of the Inter-City sector of BR.
Our objectives maintain the policy established by the previous Labour Government that Inter-City should operate as a commercial business. I do not suppose that the hon. Member for Greenock and Port Glasgow (Dr. Godman) would disagree with that. Indeed, the Labour Government's 1977 White Paper entitled "Transport Policy" said:The Government considers that within their general business, British Railways' Inter-City services should pay their way.That means that the decision on how best to cater for their passengers and to pay their way rests with them.
§ Mr. Robert Adley (Christchurch)
Will my hon. Friend briefly define what the Government mean by socially necessary services?
§ Mr. Mitchell
That does not really apply in this case. I was referring to the matching of supply and demand. Taking Inter-City out of grant, which was announced in 1984, is the natural realisation of the goal set by the Labour Government in their transport policy paper. We fully recognise the difficulties that this has presented. Our 278 recent objectives reflect the problems by allowing the Board greater commercial freedom within its objectives for the non-grant-aided railway.
We have set a single target for all the businesses concerned rather than individual targets. That target, at 2.7 per cent., is of course less demanding than the 5 per cent. target to which the Inter-City business was previously working. However, I stress that our objectives also reflect the remarkable achievement of the sector in turning round its finances and the further improvements already planned.
I am tired of having the railways knocked by the Opposition. Here again we have an achievement for which the board deserves considerable credit. The sums of money required to support the railways are large, and the statutory limits reflect that. The grant settlement for this year is £712 million. That is a massive commitment by any standards, and it is right that the Government should ensure that the services that the grant buys are as cost-effective and efficient as possible. The House would properly be critical if we did not do that.
In setting objectives for the railway over the next three years we have also taken account of the clear wishes of the travelling public, which we and the board share, to see quality standards improving on the railways. As my right hon. Friend the Secretary of State made clear to the House on 22 October, the grant savings that we are asking for on Network SouthEast and the provincial network are a modest 8 per cent. of their present grant of £605 million over three years. It takes account of the quality of service standards that we want the board to meet, and the board's estimate of expenditure necessary to meet those standards.
Our objective of continuing improvements in cost-effectiveness is consistent with our requirement of improved quality. Indeed, greater efficiency means more money for improvements in quality. Many parts of the railway network already enjoy excellent services. The recent sham indignation of Opposition Members conveniently ignored the improvements which are recognised by all who regularly travel round the country on the railways.
§ Mr. Mitchell
The railways have carried out nearly £3,000 million of investment since this Government came to power. This new investment has opened up higher standards of comfort and speed to large parts of the network which previously suffered from old, uncomfortable rolling stock which was also expensive to operate and unreliable.
In response to the sedentary intervention of the hon. Member for West Bromwich, East (Mr. Snape), I should say that 1 travel by train whenever that can be conveniently and properly done. Many rural branch lines and London commuter services now enjoy modern, clean and comfortable Sprinters, Pacers or electric multiple units. Stations are being refurbished, from London termini to small rural and commuter halts.
New passenger information systems are an increasingly visible sign of the hard work that the railways are putting into customer care. Much more is coming through new rolling stock for Waterloo to Bournemouth and Weymouth, a completely new service, with new stock, linking north and south London via Kings Cross, the 279 Snow Hill tunnel and Blackfriars. I hope to see a new service to Stansted. More new Sprinters and Pacers and the new east coast mainline service are in the pipeline. I hope that before long we shall see the certitude of the Channel tunnel. The new state of the art ticket issuing machines are another sign of continuing progress on station modernisation.
The list is long of all the things that are being achieved as a result of the massive increase in investment by British Rail which we have permitted and encouraged.
The message is clear. The Government are not only committed to revenue support for socially necessary services, but they support necessary investment for a modern, efficient railway.
Sometimes I think that the Opposition are so set on pessimism and gloom that they do not want to see, or to recognise, the tremendous achievement by Sir Robert Reid, his board and staff. They persist in running down the railways' achievements, as the hon. Member for West Bromwich, East (Mr. Snape) has done time after time from the Dispatch Box. He may laugh, but I ask him to look at his previous speeches and at the comments by his hon. Friends only last week.
The railways' financial turnround since 1983 has been remarkable. The improvement in cost-effectiveness has not driven away customers or closed services, as some of our prejudiced critics insist on claiming. More people are using the railways and the network is increasingly being modernised. A total of 22 more stations have been opened, fare increases have been relatively modest, offset for many by reduced fare offers and the value of Capitalcard.
The forecasts of massive fare increases and sweeping cuts in services were wrong when they were made in 1983. They have been shown to be wrong by results since then, and they are wrong now. The Opposition owe it to British Rail and the public to cease their unfounded and inaccurate campaign against the railways and their successes, because they are beginning to achieve the improvements that we all seek.
§ Mr. Peter Snape (West Bromwich, East)
If anything illustrates the weakness of delivering a prepared speech it is the Minister's contribution. He accused the Opposition of all sorts of things, yet he opened the debate. He realised the reasons for our mirth and claimed that he was referring to speeches in the past from the Opposition Front Bench about the state of British Rail.
I wish that the unreal world which the Minister described existed. I wish that I could congratulate Ministers on their efforts within British Rail. I fear that I should be straining credulity if I did that, because those of us who travel by train regularly know that when the service is on time it is probably as good as it is anywhere else in the world, but all too often it does not run to time because of factors which are not the responsibility of those who are charged with the day-to-day running of the system.
It is not just critics from the Opposition Benches who use strong words about the system's failings; those who have no political responsibility also use them. Organisations representing passengers, independent transport commentators and editorial writers feel strongly about the decline in our railway system and in its standards of service and comfort. Those who write to The London Standardare not my constituents or those of my right hon. and hon. Friends, but many of them are 280 constituents of the Secretary of State. Are they the carping Left-wing critics to which the Minister referred? In some instances they draw attention to daily failures in punctuality in the part of the railway system that is now called Network SouthEast. Are they Left-wingers who wish only to denigrate the Government's achievements? They are not. The collective voice of disgruntlement about the standards of punctuality and comfort has risen to a new strength over the past few years and would drown the fairly weak paean of praise that the Minister has delivered so carefully from his prepared speech.
§ Mr. David Mitchell
I have listened to the hon. Gentleman indulging in the knocking, in which he so often engages, of British Rail in its efforts to provide commuter services into London. The punctuality target set by British Rail is 90 per cent. in the Network SouthEast area within five minutes. In the first quarter of this year, the target was met. In the second quarter, it was beaten. I am anxious to encourage British Rail to continue with these improvements. Instead of knocking British Rail, I invite the hon. Gentleman to join me in encouraging it and its staff to continue these improvements.
§ Mr. Snape
I am delighted to congratulate British Rail if the figures are as the Minister said. I do not take too kindly, however, to his view that Opposition Members should never criticise British Rail or the Government who are responsible for providing the financial wherewithal to maintain and improve its services. I do not need any lectures from the hon. Gentleman about the efforts of British Rail's staff to cope with a system that all too often is more than difficult to operate. On many routes at many times of the day it is almost impossible to operate.
Let us examine the Government's record. The publicity that was given to the announcement of the Secretary of State on 29 October was centered largely on the cuts in the public service obligation and the consequences for passengers in the south-east of England. However, the directive that he issued to the chairman of British Rail goes much wider than that. The directive refers to reducing PSO to £550 million at 1986–87 prices from the current £732 million. That reduction is to be achieved by 1989–90, and that does not include the passenger transport executive element of between £60 million and £70 million. The directive refers to alower proportion of costs in Network SouthEast to come from grant and higher fares should be charged.The Secretary of State became as indignant as he ever allows himself to be in the Chamber when he was accused by my hon. Friends and by some Conservative Members of being the cause of increased fares within Network SouthEast. I do not recollect his exact words, but he refuted the charge somewhat indignantly and implied that the reductions in grant could be met by the cliche of the Conservative party, which is "greater efficiency".
It is interesting to turn to the letter which the Secretary of State sent to Sir Robert Reid, the chairman of the British Railways Board, in which he stated:It is the Board's responsibility to determine fares".That is the perpetual Government cop-out. In other words, he is saying, "We have reduced the amount of money that is available, but it is your 'responsibility to determine fares'." The right hon. Gentleman continued:but I want to see a lower proportion of the costs met by the taxpayer.281 Perhaps, in the anglicised gobbledegook so loved by the right hon. Gentleman, that has nothing to do with a fare increase. He added:You should increasingly seek to reflect in your fares structure the cost of provision and improvements in quality of service.While I did not attend the school at which the Minister was educated, I read those words as meaning that the board is expected to increase fares to meet the requirement to improve the quality of the service. It will have to increase fares anyway, because in the same announcement the right hon. Gentleman said that he would be reducing the amount of cash available.
He went on to deal withbus substitution to be considered for provincial services when reinvestment in new rolling stock or equipment is required.That was a clarion call of support for the railways and those who provide equipment for them. He added, I thought remarkably;:railways should not compete unfairly with buses in the provincial sector.I am not sure what he meant by that. I do not know whether his Department has briefed him properly, but he should know that, because of the strange way in which we calculate vehicle excise duty, buses are classed as hackney carriages, which means, for example, that a 52-seat coach pays about £15 a year less than a mini for a road fund licence. On the Department's figures, the bus and coach industry fails to meet its true track costs by about £150 million a year. So the Minister should examine carefully who is subsidising whom when he compares buses with trains.
The right hon. Gentleman continued:Freight, Freightliner, parcels, Travellers Fare and Inter-City services will be expected to earn a rate of return of 2.7 per cent. as a current cost operating profit on net assets when the businesses arc taken together.I defy anybody to describe that as a businesslike way of approaching the problems of running a national transport system. It means, taken literally, that if Travellers Fare puts up the cost of pork pies—while I congratulate the Minister on the abolition of the railway pork pie, I confess that, while I may be in the minority, I always enjoyed railway pork pies — to such an extent that Travellers Fare makes an enormous profit, then lumping the businesses together, Inter-City can make a whacking great loss because the two taken together will have met the Government's target.
It was significant that when my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) raised the question of the future of the inter-city service on the west coast, he did not receive an assurance from the Minister following a report in The Guardian recently about inter-city services on the west coast main line terminating at Preston. In view of the Minister's lukewarm response to my hon. Friend, that report could be based on fact.
Given the arbitrary and somewhat artificial way in which inter-city services are categorised, it would make economic sense, given the daft way we do our sums, for trains travelling north of Preston and stopping at various intermediate stations to be placed in the "other provincial services" category. In that case, they would be eligible for PSO grant, while the existing inter-city services running on exactly the same lines would be expected to make a profit. 282 If one were trying to devise a crazy way to run the railways, that is the system one would not only introduce but seek to defend by criticising hon. Members who criticise it.
§ Dr. Godman
The route between Euston and Glasgow central is much more than a socially necessary route. It is popular with people in the west of Scotland and is capable of expansion in terms of the volume of passengers carried.
§ Mr. Snape
I am grateful to my hon. Friend for making that point, and perhaps I should make it plain that my reason for making the comment is that the other provincial services are regarded as socially necessary. Not so the inter-city network, which is expected to make a profit from the arbitrary transference of one service to another. It makes no sense that trains between cities such as Liverpool and Hull should be regarded not as inter-city trains but as other provincial services, while trains between cities such as Manchester and London are regarded as inter-city. The difference between the two escapes me, other than that the former normally have the filthiest and most ancient and clapped-out rolling stock and locomotives that could be provided. The two do, in fact, connect English cities. Yet, by a quite arbitrary line—normally that of profit—one is classed a provincial service and the other is classed as part of an inter-city network.
Although the Minister might bluff and bluster about railway prospects, punctuality, comfort, and so on, the fact is that, taken together, his right hon. Friend's directives represent a further reduction in standards of service throughout the railway industry. What is interesting about the announcement on 21 October about London and south-east services, known as Network SouthEast, is that the portion of public service obligation was scheduled to increase marginally between 1986–87 and 1987–88. Perhaps the right hon. Gentleman's predecessor had one eye on a general election being held in one of those years. It was scheduled to increase from £222 million to £224 million — a marginal increase, but an increase nevertheless. The planned reduction in PSO in the Network SouthEast sector was 12 per cent. over three years. Existing levels of PSO are insufficient to allow BR to meet its quality of service objectives. If BR cannot meet the quality of service objectives now, how is it to do so when faced with a further reduction in grant?
Ministers have made much of the fact that British Rail has accommodated a cut of 25 per cent. in PSO over the past three years—that is, between 1983 and the end of the current financial year. However, they fail to point out the impact of the cut on both the quality of service for the rail user and salaries and working conditions of those for whom the Minister of State occasionally sheds crocodile tears—the railway staff.
I shall refer to the 1986 report of the Central Transport Consultative Committee. I hope that the Minister will not blacken the committee with the description "Left-wing critics" or "prejudiced critics"— the sort of description that he normally applies to Opposition Members.
§ Mr. Snape
I am grateful to the Parliamentary Under-Secretary. I thought that he was the Minister responsible for roads. I shall in due course turn to his contributions to the nation's transport efforts.
283 Taken at random, some of the Central Transport Consultative Committee's comments do not quite fit the rosy picture of an efficient and comfortable railway system that the Minister likes to portray. The committee said:it is the CTCC's view that any overall fares increase next year above the rate of inflation cannot be justified when related to the present quality of service standards.It continued:in some areas overcrowding has reached such intolerable proportions that additional resources should be made available.It concluded its section on standards by saying:Passengers are not yet satisfied with the service provided.I ask the Minister of State whether he accepts that criticism by the Central Transport Consultative Committee, or is it another plot hatched in Moscow or wherever to denigrate devoted Ministers presiding over Europe's best and most efficient railway system? Has the CTCC been nobbled by the wicked Left wingers, or does it have a point? British Rail obviously believes that it has a point, because, far from showing its agreement with transport users consultative committees up and down the country and raising standards in the way those committees have suggested, it has taken umbrage and has denied to those committees many of the statistics that they need to compile the facts on the decline in both standards of service and punctuality. It is sadly typical of the public sector under the Government that, no matter how bad things are, all one needs to do is to beef up the PR budget and chuck a few buckets of red paint about, to try to convince everybody who uses the railway system that the decline in the standard of service is in fact an increase.
How has British Rail managed to live with the reductions in PSO over the past three years? There have been redundancies in the industry, a reduction in standards, more overcrowding and less frequent trains on some lines, but most of the survival plan over the past few years has come about as a result of BR selling off its own assets. Since 1979, BR has sold almost £300 million of assets in an attempt to stay solvent. I know that the Government believe in the economics of the madhouse: if it makes money, one sells it, and if it loses money, one keeps it in the public sector and blames inefficient nationalised industries. But there is a limit to the amount of assets that are available to sell off to the highest bidder to keep the railway system turning over.
The consequences of the Government's attitude, particularly for Network SouthEast, are significant. Network SouthEast's call on PSO this year was about £210 million. As we understand it, BR intends raising fares in Network SouthEast by around 6 per cent. in the new year. That is almost 3 per cent. above the rate of inflation. That suggests a cut in PSO in the Network SouthEast sector of about 10 per cent. None of us who travels by train in the south of England needs reminding that other than the efforts by Mr. Chris Green and his staff—I willingly pay tribute to their efforts, and I am sure that my hon. Friends from north of the border regret Mr. Green's transfer to Network SouthEast because of his efforts in Scotland—the fact is that staffing, station maintenance, quality of service, overcrowding and timekeeping on many lines in that sector are not good enough and regularly are the subject of a barrage of criticism from regular users.
During the most recent Monopolies and Mergers Commission study into London commuter services in 1980, the MMC found that BR had identified five areas 284 where there were opportunities for real pricing—that is, fare increases above the retail price index. The most important was keeping in step with real income improvements. That is exactly what the Government are arguing now, and exactly the message implicit in the Secretary of State's statement on 21 October, that commuters in the south-east can afford to pay more, arid should do so. That message might be morally right. It would help the debate if at least the Government, for once, had the courage and honesty to say that that is what they are doing, but they try to conceal their real intentions behind a smokescreen of greater efficiency, so-called productivity and further reductions in both service and staff.
Despite the Government's reaction to the MMC report, fares in the Network SouthEast sector have increased by more than 20 per cent. in real terms since 1979. Again, I hope that the Secretary of State, when he canvasses his commuters on one of Croydon's stations at the next general election, will have the courage to tell them that under his Government fares have increased by that percentage in real terms. Part of the reason is that BR has increased fares significantly above the rate of inflation on lines where substantial investments have taken place— for example, the Bedford-St. Pancras route.
To encompass a cut in PSO of 25 per cent., fares in the south-east sector would have to rise by about 10 per cent. in real terms. In reality, passenger revenue will not be sufficient to meet the shortfall as traffic switches again to the roads, adding to the enormous problems already encountered by commuters who attempt to enter and leave London by road every day. If British Rail cannot make good the cut in PSO through the improved efficiency demanded by the Government — and none of us seriously believes that it can — asset sales or fare increases are the only alternative to line closures.
§ Mr. David Mitchell
The hon. Gentleman has some familiarity with the railways. Can he say what sort of percentage improvement in efficiency he would like to see? An organisation of that sort is bound to be able to make some improvement in efficiency. What sort of improvement is it reasonable to expect?
§ Mr. Snape
As the hon. Gentleman says. I have some acquaintance with the railways. I was still working for the railways on the day in 1974 when the right hon. Member for Old Bexley and Sidcup (Mr. Heath) decided to have a general election. I must confess that there have been times since when I thought I might have to work for the railways again. Efficiency, punctuality, standards of service or anything else cannot be improved by continually reducing the amount of money available. The Secretary of State was slightly lampooned in the newspapers for saying that I would throw money at every problem. As the House heard in an exchange last week, that view does not apply to agriculture.
I hope that the next Labour Government will ensure that Britain's railway system is properly funded. I want to see funds made available to bring about the improvements that the hon. Gentleman's constituents demand in Hampshire. Certainly, the constituents of the right hon. Member for Croydon, Central (Mr Moore) continually complain about the service. Unless we have the sort of improvements that I have demanded, the flight of commuters from the railways will continue. 11 one looks 285 at a graph covering the period from the 1960s during which we had Governments of both parties, one sees that the number of people commuting by rail into London has dropped dramatically. A further flight from the rail network on to London's roads and the roads in the south of England would be disastrous for the environment and for the future of the rail services that at least the Opposition are seeking to defend.
Freightliner, parcels, Travellers' Fare and Inter-City have been grouped together and given a group financial target. The message is that Inter-City remains in desperate trouble and is £100 million in the red. I understand that negotiations are taking place about standards, but in the past the standards set have proved unreachable. Setting such standards is no way in which to get Inter-City out of its desperate trouble, because unattainable standards are demoralising for management and staff.
British Rail set up a special unit to examine ways of meeting the Government's target to eliminate the need for PSO support by 1987–88 and to achieve a 5 per cent. return on assets by 1988–89. I make a plea and hope that it will be received by the Minister in the right spirit. If standards are unrealistic, not only is the Government's overall view damaged, but it is extremely dangerous for morale in the industry. We are continually accused, as the Minister accused us when he opened the debate, of knocking the railway industry.
I defy the Minister of State to deny that since this Government have been in office there have been cuts in the network, reductions in services, an increase in the number of overcrowded trains, a rejection, for financial reasons, by British Rail of profitable freight traffic and a dramatic reduction in the work force. Those remaining in the industry have been forced to work longer hours. One only has to compare the hours worked in the mid-1980s by railwaymen with those that they worked in the mid-1970s. It gives me no pleasure to say that our forecasts and predictions have, regrettably, come true.
Unless there is a dramatic change of heart by the Government, the decline in standards will continue. Such a decline is not in the best interests of the industry. It is certainly not in the best interests of the Government, who will soon have to fight a general election on their transport policies as well as on their other policies. Most important of all, it is not in the best interests of those who depend on the railway industry either to transport their freight or to carry them to and from work every day.
§ Mr. Robert Adley (Christchurch)
I am grateful to have this opportunity to participate in the debate. The hon. Member for West Bromwich, East (Mr. Snape) and I often travel together on railway journeys, and on many occasions we agree on all matters. However, there is some justification in my hon. Friend the Minister's criticism that he and some of his hon. Friends overdo their criticism of everything and anything that this Government do in connection with the railways. As that criticism so often reflects upon British Rail, he does his constituents, his party and the railways no good by failing from time to time to give credit where credit is due. My hon. Friend the Minister may be slightly surprised to hear me say that. He 286 probably regards me as one of the more severe critics of the Government's railways policy. But that is because, among friends, one can always pick up points of criticism.
I echo my hon. Friend the Minister's point that, during the last few years, this Government's investment in British Rail has been significant. What is being done now has been talked about for years. The east coast main line electrification project is the largest single project for 25 years. Twenty-five years ago we had a Conservative Government. I do not know what Labour Governments have done between that time and this. We had a debate earlier this evening about Manchester. Joining the railway systems to the north and south of Manchester has been dreamed of, talked of and written about for well over 100 years. But that is happening now; the finance has been approved and the project is under construction.
Money is not always the answer to a problem. Can one honestly say that the savings in operating costs on British Airways in the last few years have resulted in the airline being less efficient than it was a few years ago?
As for the south-eastern network and "socially necessary services", this country badly needs more investment. It is amazing that we have had to fight so hard for Manchester airport. I am delighted that at last the scheme is to go ahead. In terms of the national interest, it is scandalous that we even contemplated building an airport, with a railway line to it, yet again in the prosperous south-east when we have had to fight so hard to obtain a railway link for Manchester airport.
As for the Heathrow link, may I ask my hon. Friend the Minister to look seriously at the link from the Great Western railway line at Iver to the South Western railway line at Feltham? Almost all of it would be in tunnel. That link is absolutely essential if we are to maximise railway traffic to and from the airport and to alleviate the appalling traffic jams that are a feature of everyday life now on the M4 motorway. What is more, it will get out of control if terminal 5 is built. When assessing the balance sheet of a rail link to Heathrow, we must take account of the enormous costs of the constant congestion of airport-bound traffic on the motorway, because there is no adequate rail link, which will increase.
I want to concentrate on what I describe as a fair appreciation of the railway in society. We have only to imagine what British cities would be like without a railway system to realise that their absence is a proposition that we cannot contemplate. My critical comments, if they be so, of the Government's latest proposals and the letter that my right hon. Friend the Secretary of State sent to Sir Robert Reid, will be concentrated on commuter services.
Commuter services are essentially unprofitable. Running a rail service for one hour at each end of the day and empty trains for the rest of the day on tracks that have to be maintained and signalled will self-evidently not lend itself to profitable operation. They are truly the socially essential services. It is not always recognised that, if we insisted that BR ran only its profitable services, it would abolish the commuter services tomorrow. It provides those services because they are essential for our environment.
The more that BR succeeds in bringing people onto the trains for commuter services to London, the more money it will lose. What is the logic, therefore, of applying commercial criteria to reach an objective that we all want when that objective will add to, rather than reduce, the losses involved?
287 I wish that, when we talk of Network SouthEast and commuter services to London and other cities, we remembered that they will never be profitable and that success could end up costing us more money rather than saving it. Applying commercial criteria to commuter services is unreasonable and unsound.
As for what differentiates between road and rail travel, I shall not weary the House by reading what Sir Robert Reid said in his annual report about safety, but the safety record of our railways is one of which we can be proud. We in Parliament, have for 150 years laid down stringent safety requirements on the railways. Perhaps that is why we expect so much of them. On the roads, however, "only" 5,200 people were killed last year. We were told that that was a good year.
Why do we have headlines and a demand for a private notice question whenever there is a rail accident? There is slaughter on the roads each day, but nobody says anything about it. If passenger-carrying traffic on the roads was forced to abide by the same safety standards that successive Governments have laid down for the railways, British Rail would be turned into one of the world's most profitable organisations overnight.
I do not know why we demand of the railways a signalling system and a given distance between all trains, but impose no similar rules for roads. Why do we accept an almost non-existent level of safety on the roads as compared with the railways? Such demands are exceedingly expensive.
The hire and reward rules for the road passenger transport industry are virtually non-existent when it comes to safety as compared with the rules we lay down for the railways.
Why do we do nothing to prevent coaches on motorways travelling on the outside lane, bullying and shoving people off the road, yet we will not allow a lorryload of bananas to go in that same lane? Are we more concerned about the welfare of bananas than we are about human beings? That is one of the many anomalies which is part of the farce of the history of the comparison between rail and road transport in Britain.
British Rail has to pay for all its track costs. Yet, as the hon. Member for West Bromwich, East rightly said, the passenger transport and freight industry on the roads do no such thing. The bills for road transport are automatically picked by the taxpayer. I could go on indefinitely.
A few weeks ago I tabled a written question about level crossings. Every year, the railway industry has to pay millions of pounds for allowing roads the privilege of crossing its railway tracks. What is the sense of that? Why should the railways always pay these costs? If there is an accident at an automatic level crossing, we do not talk about the idiotic driver who tried to dash across when the red light was flashing and caused an accident; we immediately demand an inquiry to decide whether the equipment is working properly. It is assumed that mechanical failures are automatic on the railways, whereas human failures are non-existent on the roads.
British Rail must pay for all its own police—£30 million a year. When there are accidents or traffic jams on the roads, the police are called and the taxpayer pays.
Tomorrow, the final section of what will be the largest car park in Britain will be opened—the M25. When Sir Robert Reid and I were discussing comparisons between road and rail he asked, partially in jest, what people would 288 say if he said that he did not want to go on paying for the stations—all the rents and rates—and had decided that, as from next week, all trains would be parked at Piccadilly Circus. To say such a thing illustrates that the costs of stations, signalling, track, and the police are all borne by British Rail out of its operating finances yet the taxpayer funds the roads.
The BR annual report for 1985–86. shows that track costs were £456 million, yet all the equivalent track costs on the roads are borne by the taxpayer. Signalling cost £119 million yet we can be sure that the Bus and Coach Council does not pay anything towards traffic lights. Stations cost £239 million and the police cost £30 million. Those four items alone cost British Rail £844 million in the financial year 1985–86. To those costs must be added 40 ancient monuments for which British Rail is responsible, 700 listed buildings, 80 sites of special scientific interest and 600 conservation areas. These are all costs which the railway is called upon to pay. Who can say that such things as ancient monuments are part of running a railway and should be subject to commercial criteria?
No, at the moment, if there is not a fare deal for the customers because there is not a fair deal for the railway.
I pay tribute to the Ministers for sitting here and listening to this as I am sure it is wearying to listen to what I have said so often. The Department of Transport should have a thorough review of the true social comparison to the taxpayer and to the nation of road versus rail. There should be a true and fair comparison between passenger transport for hire and reward on the roads and passenger transport for hire and reward on the railways.
If we do not fund the railways and maintain an efficient railway system, and if we fail to attract customers to it, all that we shall do in the long run is increase pollution, congestion and stagnation. I am sure that no hon. Member wants that.
§ Mr. Stephen Ross (Isle of Wight)
I am delighted to follow the hon. Member for Christchurch (Mr. Adley), whose knowledge of and support for the railways I greatly admire. As a boy—I am a hit older than him—I went into Paddington station in 1938, and I remember seeing the banner across the entrance which said, "A square deal for the railways." That was before nationalisation, when the railways were feeling hard done by because of what the Government were doing to them in those days. I still believe that the railways deserve a square deal.
It is late, and I shall not harangue the Government too much about the railways, although I hope that in the new Session they will give us time to debate public transport generally. This is rather a luxury for me, because I am a member of the Select Committee on Transport and only this evening we were questioning representatives of the British Railways Board on the present position of the railways and on their reaction to the Secretary of State's announcement that the public service obligation would be reduced by about £150 million. Sir Robert Reid seems to believe that he can live with it, but I wonder whether that is so.
I hope that the Minister will not accuse me of knocking the railways. I accept that there have been significant improvements in recent years, especially north of London. For that, we should congratulate the management and work force of British Rail. They have done a great job. The staff of the railways are now down to 140,000 and an entire 289 tier of management has disappeared. Indeed, there is a shortage of about 10,000 people. It is difficult to recruit some of the staff needed, especially guards in the London area. Presumably that is due to unsocial hours—at least that was the answer given to us this evening—
§ Mr. Ross
I accept entirely that low wages are a factor. But stations are more pleasant places to visit, as anyone who goes to Waterloo and Victoria can see, or to be stranded in. It is even more pleasant at Portsmouth harbour station. Trains are slowly becoming cleaner. Station managers turn out to be human beings. I have been trying to find the station manager at Portsmouth for 12 years, but now there is a poster at the station, with his photograph, telling us who he is. He is doing jolly well. They show their faces and they have open days. The public are coming in. Catering has improved dramatically, and some private catering has been introduced. Patronage of the railways is up by 3 per cent.
I agree with the Minister that there is a good story to tell, but I have some fears for the future. There is a risk that the Government will force the railways into overpricing the fares, which will have the effect of killing the golden goose—the commuters. There is a point at which they will take no more. I can give an illustration of that. There are not many wealthy people on the Isle of Wight—I am certainly not—
§ Mr. Ross
The hon. Gentleman should see my bank manager. However, I knew some people who travelled first class to London—I dare say that the Under-Secretary of State will know some of them—but when British Rail withdrew the first-class day return—incidentally, it was not withdrawn on the western region — those people refused to pay £30 for the full first-class return to London, so they travelled second class. I understand that Sir Robert Reid has attracted most of those people back, but if British Rail hikes up the fares yet again, they will not return a second time, but the railways will be forced to do that.
The fares structure on Network SouthEast, especially south of London, will cause many people to ask themselves, "Can we afford to go on paying this?" With the big bang there is a great deal of money around in the City, but when life gets a little more difficult for some of those people, the first thing that they will lose is their first-class travel. Then they will look to coaches, which will be competitive, although they will take a long time to come in because of the congestion in London. They may get up that half hour earlier in the morning and come in by car. That cannot make any sense.
Secondly, the rolling stock south of London leaves much to be desired. The Minister said that there would be new rolling stock on the Southampton-Weymouth line, and it is about time. The other day I travelled from Southampton on an eight-coach train, and that is the first time that I have seen that. That is presumably due to lack of rolling stock, and it is leading to overcrowding. We are constantly getting that on the Portsmouth line, and we are not getting any new stock on that line. I wrote to Chris Green the other day, saying that it was unfair to expect 290 people to pay such high fares and travel strap-hanging all the way from Havant to London, which happens all the time.
Moreover, if one travels from some of the London stations, such as Charing Cross or Cannon Street, one still has to use the old-type coaches with no corridor. Women in particular do not feel easy travelling in such coaches, and I do not blame them. Often, they run late at night. The cuts will mean a delay in replacing some of that rolling stock, and that point must be put to the Minister.
Some excellent schemes, such as Capitalcard, have been introduced, and I understand that there will now he a network card, which have helped to increase the number of travelling public. I hope that such schemes are here to stay and there will not be too much of a hike-up in the cost of them. It is made clear in the Secretary of State's letter to Sir Robert Reid that the cuts may lead to the closure of some branch lines, when we should be considering reopening some freight lines. I am thinking in particular of the Oxford to Bletchley line, on which there have been one or two trial trains. I am sure that that would work out. One could name others.
Sir Robert Reid told us in evidence that he cannot make Inter-City profitable by 1989 and that he will have to borrow to make up the shortage. That is too exacting a restriction to put on BR at this time.
Because of the lengthy procedure of closure BR sometimes thinks again, as in the case of Marylebone, which it realised it could not shut. The plans to close it were withdrawn because the numbers of passengers were increasing, and the Underground could not take them. I hope that we shall see Marylebone develop so that there will be more and better services, particularly to the Wembley area.
We cannot press the Minister for a decision on the Settle to Carlisle line, but we hope that he will make the right decision, particularly with a general election coming up, and the fact that quite a number of Tory seats are in that part of the world. I travelled on the line in early October and the train was crowded, because at long last BR has had the sense to promote and develop the line, with the permission of local authorities, so that small stations can be opened. It is making a profit, but BR still wants to shut it. I find that unbelievably stupid.
This is an overcrowded country, where the traffic on our roads continues to increase dramatically and a vast and expensive ring road is quickly choked. I have in mind the M25, to which the hon. Member for Christchurch (Mr. Adley) referred. Traffic congestion is a fact of life in almost every town of any size, including Newport, Isle of Wight, where there are four or five-mile queues in the summer to get into the town along its one or two approach roads. Any restriction on investment in the railways makes no sense.
§ Mr. David Mitchell
Where is the hon. Gentleman getting the idea from that there are any restrictions on investment in the railways? I have made it clear on a number of occasions that I welcome proposals from BR for viable and good investment. The hon. Gentleman is misleading himself if he believes that we are proposing cuts in investment.
§ Mr. Ross
I am the first to congratulate the Government on the improvement in the capital programmes which they have initiated in the past couple of years on, for example, the east coast main line, the 291 Hastings line and the Bournemouth-Weymouth line, but the board has to pay the interest. At the end of the day, does it not come back to the total amount that British Rail has to spend? I assume that it does. The board surely has to look at its finances before it sets up schemes. It must know what the improvements will cost.
I very much welcome what has happened. I am not knocking it, but surely any restriction must be detrimental to the movement of people. I agree with the Government that we want an efficient, value-for-money rail network, but if it is to succeed it must be able to price its services within the means of the average person. I say to the Government, "Please beware. Do not press your demands too far. In recent years the railways have responded nobly, but they need a carrot or two to help them to maintain that momentum."
§ 12.5 am
§ Mr. Roger Sims (Chislehurst)
I listened carefully to my hon. Friend the Minister of State and to last week's statement by my right hon. Friend the Secretary of State. I listened with particular interest to the references to Network SouthEast and the likelihood of fare increases as a result of my right hon. Friend's announcement. For reasons which I understand, neither Minister was prepared to be specific, but clearly some of the comments about 25 per cent. increases were gross exaggerations. There is no question of there being such increases. However, I am suspicious about possible fare increases in Network SouthEast above the rate of inflation. Any such increases would be less than popular in my commuter constituency. I put it no higher than that. I cannot quarrel, however, with the aim of reducing the substantial taxpayers' subsidy of these services.
Any increase would be easier to bear if it were matched by a better service. I was pleased to see several references to that in the letter sent by my right hon. Friend the Secretary of State to the chairman of British Rail. The letter stated:You and your Board need to offer your customers an efficient railway providing good value for money.Well said. My right hon. Friend referred to the needto improve the service to the customer",and toimprovements in quality of service".He said:I particularly welcome the new efforts to ensure that the London commuter services are reliable, attractive and punctual."—[Official Report, 21 October 1986; Vol. 102, c. 772–3.]Frankly, my right hon. Friend and, especially, the chairman of British Rail have some way to go in each respect.
As for attractiveness, the new and refurbished rolling stock and the new livery are attractive, but, alas, they seem to make the older stock appear even dirtier. Some carriages are filthy, externally and internally. Of course, the internal mess is caused not by British Rail but by the customers. I appreciate BR's difficulties in cleaning carriages when there is a quick turn-round at the terminals. Nevertheless, if there are to be higher fares, passengers should not have to try several carriages before finding one free from rubbish and graffiti.
In recent years, there has been an improvement in punctuality, but there are still far too many delays. My hon. Friend the Minister cited 90 per cent. as a reasonable target but if 90 per cent. of services are on time, that is an 292 admission that 10 per cent. of services are more than five minutes late; and that is on some runs of only 30 or 40 minutes. That is not good enough.
§ Mr. Sims
Time is very limited and other hon. Members wish to speak. I hope that my hon. Friend does not mind if I do not give way.
The commuter services in my area simply are not good enough. There are far too many cancellations inside arid outside the rush hours. In a constituency such as mine —a commuter area—business and social life are based upon the railway. People catch the 8.45 to he in the office by 9.30. If they find it cancelled and have 15 minutes to wait, it is, to put it no higher, very frustrating. Will they have to catch an earlier train the next day in case the train that they rely on does not run? That is a most unsatisfactory state of affairs.
If trains are cancelled outside the rush hour, that can mean a wait of half an hour or more and people will be late for their appoinments. I am speaking not from hearsay but from my own experience. It is many years now since my hon. Friend the Minister of State and I commuted together on the same train. A lot of water has flowed under the bridge since then. But I still commute daily, except, perhaps I should add, on days when my right hon. Friend the Leader of the House seeks to put on business of this character at this hour. However, I must avoid the temptation of dealing with some of the work being done by the Select Committee on Procedure on such issues.
Why must we have such cancellations on commuter services? The timetables have been carefully worked out. Those who organise things know exactly what services and staff are required. After all these years, the excuse of staff shortages is beginning to wear rather thin.
The letter to which I referred talked about the London commuter services being reliable, attractive and punctual, but if Network SouthEast is to put up fares over and above the rate of inflation, my constituents and I will expect those words to be translated into deeds.
§ Mr. Richard Caborn (Sheffield, Central)
It has been interesting to hear the Minister's exposition on expenditure this evening, but I notice that he has not mentioned the Midland line, which runs from St. Pancras to Sheffield. I hope that that will be given some consideration in any BR expenditure.
My main reason for intervening this evening is to ask the Minister whether serious consideration is now being given to the rail network, in particular for freight, with regard to the Channel tunnel. In the north of England we were concerned about the development of the Channel tunnel, but we are now viewing it positively.
We are hoping that the Government will look favourably on some type of inland customs clearance. I am talking, in particular, of Sheffield. Within the rail infrastructure we now have a fairly dormant three-and-ahalf mile stretch alongside the MI called the Tinsley area which is a major freight terminal, probably one of the most modern in the 1960s, but which, unfortunately, never realised its potential.
If BR looks positively to the future, that freight yard now has potential. The local authority, along with the chamber of commerce, the trade unions and other 293 interested parties, have commissioned a survey to look at the feasibility of developing an inland customs clearance, not just because of that freight terminal, but because of all the infrastructure, both road and rail, which lead to and from that area.
I hope that during the next three years, when BR is being developed, the Minister will prevail on it to look at the difference between the north and south in terms of economic development. I go further and say that, unless that type of development takes place with the advent of the Channel tunnel, many industrialists say that they will not be able to afford to invest in the south-east because it is so expensive and therefore their port of call may be northern France. Therefore, it is now important to have the type of rail infrastructure that many of the areas in the north are talking about which can be brought into play.
We must involve not just BR but the Department of Transport and Her Majesty's customs as well. They must be co-ordinated and the idea treated sympathetically. If that is done, I am fairly convinced that there can be some regeneration of the industrial north by effectively bringing the Channel tunnel entrance into the centre of south Yorkshire in the way that I have described. I hope that the Minister's reply will be favourable. I am asking not for a definitive answer, but for at least some words of encouragement this evening.
§ Dr. Norman A. Godman (Greenock and Port Glasgow)
The Minister spoke of prejudiced critics. I hope that he will forgive my lack of modesty if I say that I like to see myself as a fair and dispassionate critic. I am also a keen supporter of the railway system both north and south of the border.
I am a regular passenger on the Glasgow central to Euston service, which has approximately eight trains a day. I am happy to say that I much prefer that mode of transport to the Glasgow to Heathrow shuttle. It is much more civilised to travel down from Scotland by train, and it gives me a chance to read as well. However, there are problems with the service north and south of the border. When will the Sprinters and Pacers that the Minister mentioned come to ScotRail, and in particular, to the west of Scotland? In the west of Scotland it is feared that passengers may have to travel to London by way of the fair city of Edinburgh. That is not a complaint against Edinburgh, but the Glasgow-to-Euston service is very important to people.
The Minister's reply to my earlier intervention was, to say the least, unsatisfactory. It was staggering that he should refer to alternative routes. Glasgow is important in its own right, as are the towns that surround it. The Minister also referred to the improvements made to the decor of, and services in, our railway stations. But stations in my constituency leave much to be desired. For example, it is difficult for the elderly, blind, and disabled, or for young mothers with children to get into the Port Glasgow station. The provision of lavatories and waiting rooms in the stations in my constituency is a disgrace, particularly at Greenock central station.
I feel deeply sorry for passengers and staff on ScotRail, who travel to and from stations in my constituency.
As the Minister rightly emphasised, passenger safety is an important issue. Recently, I had to protest to the 294 general manager of ScotRail about near-accidents involving young mothers with children in prams or baby carriages, who have been trapped between automatically closing doors. That has happened several times in my constituency, and there is a danger that there will be a serious accident. One of the factors involved is the absence of guards on those trains.
I have great faith in Mr. Cornell, the general manager of ScotRail, and his employees. I also had great faith in his predecessor, Mr. Green, who is now, I believe, in this part of the world. Despite all the problems that bedevil those people, they attempt to provide a first-class service with very limited resources. North of the border the rolling-stock is, with the exception of the two Inter-City services, dilapidated. That is a disgrace and it harms our tourist industry. Foreigners travelling to Inverness, Aberdeen or Perth have to travel on pretty shabby rolling stock. Both domestic and foreign passengers deserve a much better service. The same is true of the staff of Scot Rail, who are unfailingly courteous and helpful to their passengers. I am sorry that they do not receive the service that they deserve from the Government. British Rail and ScotRail are underfunded compared with railways in many other European countries. I regret that deeply.
I bring the Minister back to the important question of the Glasgow-Euston service. The passengers who use that service deserve a straightforward answer about the press speculation surrounding its continuance.
§ Mr. David Mitchell
We have had an interesting debate. The hon. Member for West Bromwich, East (Mr. Snape) said that if British Rail cannot meet the quality objectives now, how can it be expected to do so with a reduction in the PSO. He was referring to Network SouthEast. The PSO reduction for Network SouthEast and provincial is based on a reduction of 4 per cent. over three years. There is hardly a business in the land which cannot improve its efficiency by 4 per cent. over three years. The chairman of British Rail has accepted it as a financial target consistent with achieving the quality targets.
The hon. Gentleman referred to criticism about overcrowding. On some routes the peak capacity does not allow for sufficient numbers of trains to be squeezed in to enable people to be carried without overcrowding. On certain routes the numbers of people who want to be carried are greater than can be provided with seats because we cannot squeeze in extra trains in the peak hours. It is possible at other times, but not at peak hours. For that reason there will be some standing in excess of British Rail's target.
The hon. Gentleman asserted that British Rail had rejected profitable freight traffic. That is not true. If he has an example of that 1 hope that he will write to me about it, because I should like to take it up with the board. He then asserted that there was a flight of passengers from commuter trains. That is a flight of the hon. Gentleman's imagination, because passenger demand has been increasing on the commuter network.
My hon. Friend the Member for Christchurch (Mr. Adley) referred rightly to British Rail's substantial progress and to the effects of investment approval by the Government for the east coast main line—the biggest investment project for 25 years—and for the Windsor 295 link, a 100-year-old dream coming true. I am grateful to my hon. Friend for recognising these massive investment trends.
My hon. Friend asked me about the Heathrow links. We are appraising the various alternatives and we shall return to that subject. I am grateful to my hon. Friend for referring to the British Transport police, who are rarely referred to in the House. Quietly, efficiently and competently, they do a tremendous job on behalf of the travelling public. My hon. Friend suggested that rail users paid for their track costs, whereas road users do not. In taxation and fuel duty, road users do pay for their track costs.
The hon. Member for Isle of Wight (Mr. Ross) constructively asked a number of questions and suggested that fares were likely to go up so much that people would stop using the trains. Our expectation is that the pattern of fare increases in the next three years will not be very different from that over the past three years, and the pattern has not had the effect that the hon. Gentleman fears.
My hon. Friend the Member for Chiselhurst (Mr. Sims) talked about train washing, cleanliness within trains and train cancellations. On Network SouthEast the target is that each train is washed every 24 hours. That target has not been achieved, but so far this year there has been an increase from 70 per cent. of trains being washed every day to 88 per cent. That is progress in the right direction, and that should be recognised. Four-weekly interior cleaning has increased from 71 to 77 per cent. Improvements are clearly discernible for those who are regular users.
I agree with my hon. Friend that train cancellations are one of the most exasperating events that can befall a commuter, and we must ensure that we do everything that we can to help British Rail improve on that score. Its target for Network SouthEast is 98.5 per cent. of all trains running. The latest figures that I have tell me that 98.3 per cent"as been achieved. That is below the figure that should apply, but British Rail is seeking to improve on that.
One of the difficulties lies with guards. Where there are driver-only operations, there is a far greater standard of reliability. Instead of waiting for two people to turn up a service can be provided with only the driver. Progress has been made, but I accept that a great deal more has to be done.
The hon. Member for Sheffield, Central (Mr. Caborn) talked about the St. Pancras-Sheffield service. Inter-city trains have been introduced and the service has been made substantially faster. I hope that the hon. Gentleman will give credit to British Rail for what has been achieved. I agree with him about the desirability of a network of inland clearance depots that are linked to the Channel tunnel. That is a way in which British Rail can secure for the north of England substantial advantages in being able to compete successfully for exporters delivering their exports to the continental markets and—
§ It being one and a half hours after the commencement of proceedings on the motion. MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 3 (Exempted Business).
§ Question agreed to.
That the draft British Railways Board (Increase of Compensation Limit) Order 1986, which was laid before this House on 21st October, be approved.