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Sir Michael Grylls (Surrey, North-West) : Does my right hon. Friend accept that most people in the country would recognise that he took exactly the right line at the European summit when he insisted on dealing with practical issues such as competitiveness rather than airy-fairy dreams for the next century? In that respect, would my right hon. Friend also agree that, since Britain and America have been far more successful in creating new jobs in recent years than continental Europe, he should continue to use his influence to press the other EC countries to lighten the burden on business--for example, by removing red tape, as he said earlier? That burden should be lifted particularly from small and medium-sized firms, because they will create the new jobs that we all want to see in Europe.
The Prime Minister : My hon. Friend is quite right. That is why we took the initiative to help small and medium-sized companies with extra resources from the European investment fund. It is a fact that, if the Community had been as successful in the past 14 years in creating jobs as other countries in the OECD have been, we might have 9 million fewer unemployed in the Community.
It is also the case that, in the past 20 years, the Community's relative share of world trade has reduced. Part of that reduction was entirely to be expected as countries in the Pacific basin in particular began to industrialise, but the loss in the share of world trade implies a significant lack of relative competitiveness. That is a problem that we need to address.
It is a striking statistic--one that I have used before, but it is worth repeating again--that, given the same growth in the past 20 years, the United States has created four jobs for every single job created throughout the European Community.
Mr. Dennis Canavan (Falkirk, West) : Would the Prime Minister remind supporters of internment that its reintroduction would almost certainly be counter-productive, because the last time it was tried, it turned out to be an effective recruiting sergeant for the paramilitaries, and the violence went from bad to worse?
Does the Prime Minister agree that the best way in which to proceed in the quest for peace would be to invite all the interested parties to a constitutional conference and to make it absolutely clear, right at the outset, that, if a party or parties boycotted those talks, they would nevertheless proceed, with a view to finding a just and peaceful solution to end the appalling bloodshed?
The Prime Minister : I set out my views on internment a few moments ago, and I have nothing to add. There are many lessons to be learned from experiences on previous occasions. Simply to call a constitutional conference with great hopes built up for it and then to see it fail may not be the most practical way forward. What is right, which is implicit in the hon. Gentleman's question, is that we should continue discussions to find the maximum amount of agreement that exists between the constitutional parties, and then focus on the areas of disagreement and see how we can eliminate them. That is the intention of the talks that are proceeding, whether one calls them an intergovernmental conference or a constitutional conference. What is sought from them is what the hon. Gentleman was seeking with his proposal.
Mr. Andrew Hunter (Baskingstoke) : Continuing with the question of Northern Ireland, does my right hon. Friend agree that constitutional uncertainty has been and remains a breeding ground for terrorism in Northern Ireland ? Does he further agree that Northern Ireland, de facto and de jure, is part of the United Kingdom because that is the democratically expressed wish of the people of Northern Ireland ; and that, important though the search is for a political formula, it is equally important to assure the peole of Northern Ireland and of Great Britain who has experienced terrorist outrage that the security response is commensurate with the increased threat of terrorism ?
The Prime Minister : We must certainly ensure that the security response is commensurate with the increase in terrorism, and we remain in close touch with the General Officer Commanding British forces and, of course, with the leaders of the Royal Ulster Constabulary. As chairman of the Back-Bench committee on Northern Ireland, my hon. Friend speaks with considerable authority of the difficulties that he sees in Northern Ireland. I confirm his observation that Northern Ireland is a part of the United Kingdom and that, under the constitutional guarantee, it will remain so until and unless a contrary view is taken by the people of Northern Ireland.
Mr. Jim Marshall (Leicester, South) : May I bring the Prime Minister back to the question of Northern Ireland and hope that I get an answer from him today ? In answer to one question, the Prime Minister said that he still favours a three-strand approach. Does he accept the position that was adopted by predecessor some time ago--that there can be no agreement on any especial strand until there is agreement on all three ?
Mr. Patrick Nicholls (Teignbridge) : Would my right hon. Friend agree that, if the Government of the Republic of Ireland are as committed to war against the IRA as Her Majesty's Government, that offers an opportunity for the IRA and Sinn Fein to be proscribed in both countries, so that a proper military offensive can be conducted against them? Would not that mean that there would be no hiding place at all for them on the island of Ireland, and that, although it maybe a rather sombre assessment, it is likely to be more realistic than the courageous efforts by the hon. Member for Foyle, which would require us to sit at a bargaining table with terrorists?
The Prime Minister : We remain in close consultation with the security forces in the Republic of Ireland, and that will continue. It is improving all the time, and I expect it to continue to improve ; I would not wish to go further than that on this occasion.
Ms Kate Hoey (Vauxhall) : I welcome the Prime Minister's call for constitutional parties in Northern Ireland to get round the table as quickly as possible. Does he agree that there is a huge democratic deficit in how we govern Northern Ireland at present, and that, while it is part of the United Kingdom, we should surely treat it in the same way as we treat other parts of the United Kingdom? Some hon. Members greatly support the setting up of a Select Committee on Northern Ireland. Did he discuss that with the Taoiseach? Did he have any views and if he did, what was the Prime Minister's response to his views?
The Prime Minister : I agree with a great deal of what the hon. Lady has said. I did not discuss the setting up of a Select Committee of this House with the Head of Government of the Republic of Ireland. That is a matter for the House. I certainly did not discuss it. It is a matter to be considered by the Procedure Committee. I understand that the Committee is examining it, and in due course, we shall consider any report that it may produce.
The hon. Lady is entirely right about a democratic deficit in Northern Ireland ; there is a democratic deficit. It is precisely because we strongly share her views on that that we wish to make progress in the talks so that we can devolve a proper system of local government--an enhancement of democracy for local politicians in Northern Ireland.
Mr. Peter Bottomley (Eltham) : Does my right hon. Friend agree that the murderers need to be limited in their physical capability? It needs to be made clear to those on both sides that the violence and the killing will bring no advantage to them. It is important to go on working so that their supporters put pressure on them to reduce their capability. May I sum up by saying that each part of the community must protect the other just as much as it tries to protect itself? Is not that a welcome small silver lining in the ghastly cloud hanging over Northern Ireland?
The Prime Minister : It is. One of the horrific ironies of the murders in Greysteel the other day is that members of both the Protestant and Roman Catholic communities were murdered in the attack. My hon. Friend is entirely right about that.
On my hon. Friend's first point, I can give a categorical assurance that there is no way in which the continued murdering and killing by anyone, whether from the Protestant side or from the Catholic side, will affect the Government's policies and it will not gain anyone anything in terms of democratic advantage.
Mr. Skinner : Is not the Prime Minister aware that when he speaks to my right hon. Friend the Member for Chesterfield (Mr. Benn) about dealing with terrorists, the people outside Parliament understand only too well that the Government have dealt with terrorists over the decades? They are dealing now with the Chinese Government who were responsible for the massacre in Tiananmen square only a few years ago.
Will the Prime Minister understand that, if we are to follow the success of the Arafat-Rabin talks, we must have talks not in the Irish Republic or in Britain, but in a neutral
Column 35country? The way to get things off the ground is not to deal with the Conservative Government, who are in league with the Ulster Unionists who deliver them votes in the House of Commons, or with those in the Irish Republic, but to start the process in a neutral country. Such a policy resulted in success in the middle east, and that is the only way in which success can be achieved now.
The Prime Minister : As ever, the hon. Gentleman is very lucid, and as almost ever, he is entirely wrong. If the implication of his remarks is that we should sit down and talk with Mr. Adams and the Provisional IRA, I can say only that that would turn my stomach and those of most hon. Members ; we will not do it. If and when there is a total ending of violence, and if and when that ending of violence is established for a significant time, we shall talk to all the constitutional parties that have people elected in their names. I will not talk to people who murder indiscriminately.
Mr. David Faber (Westbury) : In the course of his discussions on Bosnia, was my right hon. Friend able to bring to the attention of his European counterparts the remarks last week of the senior British officer in Bosnia, Brigadier Angus Ramsay, who described Croat soldiers as "scum"? Given the appalling atrocities that continue to be carried out by regular Croat army troops in Bosnia, was my right hon. Friend able to make any progress towards the long overdue sanctions against Croatia?
The Prime Minister : The question of further sanctions anywhere in the former Yugoslavia did not come up in the discussions. It did not come up in the discussions between the Heads of Government. To the best of my knowledge--unless I am corrected by my right hon. Friend the Foreign Secretary--the question did not come up in the parallel discussions at Foreign Minister level.
Mr. John Home Robertson (East Lothian) : Everyone in Britain and in the island of Ireland desperately wants progress towards peace and a settlement in Northern Ireland. Is the Prime Minister aware that people find it difficult to understand why someone holding the office of Prime Minister in Britain is nit-picking about the proposals by my hon. Friend the Member for Foyle, which he apparently has not even seen yet? Can the right hon. Gentleman give an assurance that he will not allow his dependence on Ulster Unionist votes in the House to obstruct progress?
The Prime Minister : I would have thought that, even by the standards of the hon. Gentleman, that was rather cheap. Let me remind him that the position that I took on the initiative of the hon. Member for Foyle was taken also by the Taoiseach, who is not a Member of the House and is not dependent on the votes of any Member of the House. As I said earlier, there are no special agreements or deals with any other parties in the House. That has been stated by me and by others. The hon. Gentleman may smirk like a juvenile, but he falls well below the level of events with that sort of remark.
Column 36fact that the progress in the Europe of tomorrow will be on an intergovernmental basis and not just on a better defined set of Community institutions?
Will my right hon. Friend put maximum emphasis also on the workings of the European Monetary Institute? Even if this country does not want to be part of a single currency, it is vital that we encourage the convergence criteria within the European Community so that we can benefit from the stability that will emerge. It is vital also that we underline the importance of the single market, because if that were ever questioned, through currency instability, jobs in this country would be at threat.
The Prime Minister : My hon. Friend is entirely right. Co-operation by consensus, by universal agreement across the Community, is a sensible way of progressing whenever it is appropriate. That is what happens under the three-pillared approach that was agreed in the Maastricht treaty. It is not a question of compulsion ; it is a question of agreement. Where that agreement can be reached, we are stronger collectively and individually.
As far as the convergence criteria are concerned, they occasionally raise the hackles of some hon. Members, but the reality is that the convergence criteria are precisely the sort of sound economic policies that some of those who oppose them under the European label urge on me in other circumstances. The reality is that they are nothing more or nothing less than sound economic management. Several hon. Members rose--
Mr. Simon Hughes (Southwark and Bermondsey) : On a point of order, Madam Speaker. Next weekend but one, the country will stop in its business for about two minutes to pay tribute to those who have died in two world wars, and will try to ensure that we as a nation learn the lessons of that.
The past hour has demonstrated the concern that is felt across the House for the people of Northern Ireland--across party, religion and denomination. I seek your guidance so that we can reflect the anger and solidarity, not only of Members of the House but of our constituents, who feel with and for their brothers and sisters on the other side of the Irish sea, on how we might appropriately show that.
There have been 3,000 people killed as a result of what has gone on in Northern Ireland : 2,000 were civilians ; the remaining 1,000 were either in the police or armed forces. I do not think that there is a precedent, but I wonder whether you would permit, either between now and the end of today, or this week, the House to be adjourned or suspended for a moment or two to mark the universal disapproval of terrorism and of terrorists, and to reflect the cross-party resolve in the House, to try to see that no effort is spared to ensure that peace comes to Ireland as soon as possible?
There is undoubtedly complete disapproval in all sections of the House of what has taken place in Northern Ireland recently. Expressions of profound sympathy with the sufferings of Northern Ireland, and of concern for its future too, have been heard from every quarter of the House in recent days. As we have heard following the
Column 37statement today, those expressions have been reconfirmed by every Member whom I have called and who represents the varying points of view of the parties in the House.
ere be no doubt that I share those sentiments--as I am sure does every hon. Member--as Speaker of the House of Commons, although I do not speak on those matters. We have recorded the sentiments that we feel about the happenings in Northern Ireland in recent days. I thinthat one of the best tributes that we can pay to the families there and to the people who have suffered is that we let those sentiments be known, ley : On a point of order, Madam Speaker. On behalf of thepeople of Northern Ireland, I thank you for those remarks. They will be helpful to us all.
Lords amendments considered.
Lords amendment : No. 1, in page 4, line 46, at end insert-- ("( ) The Secretary of State shall also be under a duty, in exercising the functions assigned or transferred to him under or by virtue of this Part, to promote the award of franchise agreements to companies in which qualifying railway employees have a substantial interest, "qualifying railway employees" meaning for this purpose persons who are or have been employed in an undertaking which provides or provided the services to which the franchise agreement in question relates at a time before those services begin to be provided under that franchise agreement.")
Mr. John Heppell (Nottingham, East) : On a point of order, Madam Speaker. I seek your guidance. During the passage of the Bill in Committee, 713 amendments and 32 new clauses were tabled. On report, we debated 252 amendments and 28 new clauses. We are now faced with another 470 Lords amendments and new clauses. Is there a parliamentary procedure to prevent the Government from tabling new amendments at this late stage and effectively changing their earlier promises?
Dr. John Marek (Wrexham) : Further to that point of order, Madam Speaker. I am concerned about the matter. You must have seen the myriad amendments and new clauses that have been tabled. It makes me think that my service on the Standing Committee was a complete waste of time because we have a new Bill before us. Is there no way to send this botched job back to the Government draftsmen so that they can come up with something new that we can consider in detail, and in enough time? Effectively, we have a new Bill before us and only two days in which to consider it. It is a travesty of the rules of Parliament.
Mr. Freeman : I hope that the House will find several of the groups of amendments that we shall be considering today and tomorrow relatively uncontroversial, although I recognise that some are controversial. My noble Friend the Minister for Aviation and Shipping gave detailed explanations of many of the amendments and I hope that the House will have had the chance, to the extent necessary and prudent, to study his remarks.
Mrs. Gwyneth Dunwoody (Crewe and Nantwich) : On a point of order, Mr. Deputy Speaker. I seek your guidance. I do not believe what my ears are hearing. Is it customary for hon. Members to recommend that other hon. Members take as read speeches made in the other place? Is it not normal parliamentary procedure for Ministers to take responsibility for their own speeches, to move their own amendments and to do the House the elementary courtesy of at least trying to explain what they have in mind?
Mr. Freeman : I am just coming on to do that. I was trying, in a courteous manner, to refer to the proceedings in another place. I am only too delighted, as I had planned to do, to explain the purpose of the amendments.
Lords amendment No. 1 lays a duty on the Secretary of State in relation to part I. The hon. Member for Crewe and Nantwich (Mrs. Dunwoody), who participated in the Standing Committee, will remember that there were already provisions in the Bill, which we debated in Committee, dealing with the promotion of management-employee buy-out bids. The Bill was defective in not including such reference in part I. The amendment rectifies that. It does not introduce a new principle or policy. It makes the Bill clearer.
The amendment lays on the Secretary of State a duty clearly to promote the award of franchise to management-employee bids, and that is defined in the amendment. It refers to companies
"in which qualifying railway employees have a substantial interest, qualifying railway employees' meaning for this purpose persons who are or have been employed in an undertaking which provides or provided the services to which the franchise agreement in question relates at a time before those services began to be provided under that franchise agreement."
There is no clear definition--essentially, it will be a matter for the courts--of "a substantial interest". I shall not attempt to define that. The courts may wish to adjudicate upon the matter if a case comes before them.
The purpose of putting "a substantial interest" on the face of the Bill is to show that we wish to support British Rail management and employees who come together to take an interest--it does not have to be a 100 per cent. interest--in a company that bids for a franchise. Although the interest does not have to be 100 per cent., clearly, "a substantial interest" does not refer to a 5 per cent. interest. It is for the courts to determine, in the circumstances of a case, what is "substantial".
Mrs. Dunwoody : I am beginning to find this even more "Alice in Wonderland" than I had expected. Will the Minister accept that it is the responsibility of the House of Commons to frame legislation in such a way that it is clear and that House votes on it on the basis of its meaning ? I have always had the rather old-fashioned view that Parliament is here to examine clear English, to understand what it means and to take decisions based on that. Will the Minister explain why he is seriously suggesting that the House should accept wording that is so unclear that he automatically expects it to be challenged in a court ?
Mr. Freeman : The Government prefer this more general language. One has to decide, in the particular circumstances of the case, what "a substantial interest" means. In part, it will depend on the capitalisation of the company. It is not possible to legislate precisely in all circumstances. It depends in part on the debt burden. As those on the Opposition Front Bench will appreciate, in past bus privatisations, the amount of debt incurred by the management and employees varied considerably. The substantiaal debt burden incurred by some is still being repaid from the profits of the operation. It is not possible to be precise in every circumstance.
Mr. John Prescott (Kingston upon Hull, East) : Is the Minister telling the House that if British Rail employees--managers or workers--want to combine in a joint bid with both private and public sectors, a judgment will have to be made about the size of the interest? Is he leaving the courts--rather than the House--to decide whether that will be 5, 10, 15, 20 or 50 per cent.? Taking into account the Government's other view--that British Rail will be allowed to make a bid for a franchise and could do so at a cheaper price than that being offered by the private sector will that not encourage the private sector to get into bed with one or two employees so as to offer a cheaper price and make its bid seem like a British Rail bid?
Mr. Freeman : It might help if I explain that the Government have not reached any conclusions, or made any announcements, about any price reference to management-employee buy-out bids for franchises. The hon. Gentleman will recall that in Standing Committee I made it plain that our policy in relation to the outright sale of freight, whether train load or container business, was that it was appropriate for a small premium to be afforded to the management-employee bids, consistent with the preferences given in the sale of bus companies. That is normally expressed in terms of a discount.
Mr. Freeman : Yes, but we are not applying that principle to the bidding for franchises. As I made clear in the Standing Committee, there is a distinction between franchises and bids for discrete businesses of British Rail which it will sell.
Mr. John McAllion (Dundee, East) : If the Minister looks at the wording of the amendment, he will see that a duty is imposed on the Secretary of State to promote the award of franchises to bids which involve former employees of British Rail. If the Government are to promote in that way, that must mean that some competitive advantage will be given to such a bid.
If the Government are doing that, why is it necessary for franchise bids only to have "a substantial interest"? It will be possible for a bid with only a minority interest of former BR employees to be given a competitive advantage. The Minister is not addressing that point. Has not the Minister recommended to the private sector that a bid representing the interest of 20 or 25 per cent. of former employees of British Rail will have a competitive advantage over every other bid for franchises?
Column 41of amendments in due course. We are talking about a general duty that is placed on the Secretary of State to promote management and employee buy-outs--
Mr. Freeman : Perhaps I could explain. I have dealt with the price preference, but there is another way in which management and employee bids can be assisted. That is in terms of the financial assistance which is to be provided by British Rail, and which is limited to a sum of £100,000 in each particular management and employee bidding group, in preparing for bidding for franchises. That is a clear example, and I am not talking about the price preference in the context of the 5 per cent. discount that has been applied in the past for bids for bus companies.
I wish to raise a point similar to that raised by my hon. Friend the Member for Dundee, East (Mr. McAllion). Surely at such an early stage of the proceedings it would be helpful to know what criteria--financial or otherwise--railway managers are expected to follow before they mortgage their homes. Is not this the right place and time to debate that subject?
Mr. Freeman : I hope that the hon. Gentleman will raise that matter during his speech, at which time I will seek to answer it. I know that the hon. Gentleman has experience of the process because he has been associated with a distinguished management and employee bid in the bus industry. I congratulate West Midlands Travel and appreciate the supporting role that the hon. Gentleman has been playing since the company entered the private sector. I do not wish to score party political points here, but the company is owned by its management and employees. It is successful, and I am pleased that the former employees of the company own shares in it. The hon. Gentleman and I visited the company recently and I am glad to applaud the company, its management and its employees.
There is no question of the management and employees of British Rail having to enter into second, third or fourth mortgages to raise money to bid for franchises. That is wholly out of the question. We are talking about the management and staff of British Rail joining to bid for franchises, either by themselves or in conjunction with other private sector companies. Those companies might be financial institutions or operating companies.
We want that to happen, and there is real evidence of interest among the 25 potential franchise companies. I have spoken to a number of managers and I can confirm that senior management responsible for running train services within British Rail are interested in proceeding. We shall see how many of them offer bids when we come to the franchising process, but the Secretary of State will have a duty under the amendment to promote that interest. I have given a clear example of the way in which my right hon. Friend intends to do so.
There is a great difference between those buy-outs and what the Minister is dealing with in this case. In the cases of the bus companies, the buy-outs involved existing and functioning companies, the value of which could be ascertained ; finance could then be put together on the basis of management who were motivated to move in that direction before it received any suggestions from outside. The buy-outs came from the innate motivation of the managers, who believed that that was way to ensure an integrated network in West Yorkshire.
The position is different if one has to encourage and prod people into undertaking management bids. Does the Minister agree that the motivation of managers and their drive to make a company successful will determine in part whether people will finance that company? I am concerned that
Mr. Freeman : It is a fundamental tenet of Conservative party policy that we wish to encourage the management and staff of any enterprise to take an equity interest in the running of that enterprise. That has worked well with the National Freight Corporation, with British Airways and with the bus industry. It is a fundamental tenet, and that is why we are putting it in the Bill. It may be helpful if I briefly explain the financial structure of the franchises. I am not talking about a company that is bidding for a franchise with or without its management and employees having to bid sufficient sums to acquire or maintain the infrastructure. That is the responsibility of Railtrack.
I am not talking about the necessity to acquire rolling stock. We recognise that rolling stock--either second-hand or new--will have to be leased from the rolling stock leasing companies which we propose to establish. Franchising companies will need sufficient resources to meet the working capital requirement. In many cases, that will be a negative working capital requirement because of the prepayments of season tickets by commuters. There may be no need to raise capital simply for the working capital requirements of the business. It may be necessary to have lines of credit or financial resources which may have to be drawn upon if the business encounters either a fall in its revenues or an unforeseen increase in costs. Those are risks with which the private sector has experience of dealing. Therefore, although I do not anticipate that the management and employees will have to put up significant sums, they will be involved in the venture. They will need lines of credit or financial support from the City and elsewhere to bid for franchises.
Amendment No. 2 deals with the relationship between my right hon. Friend the Secretary of State--and future Secretaries of State--and the regulator. The amendment deals with a change in a provision in the original text of the Bill, where the regulator had to have regard to the financial position of Railtrack. The change which was proposed in
Column 43the Lords and which we are commending to the House deals with the regulator acting in a manner which will not render it unduly difficult to finance any activities.
The amendment strengthens the position of Railtrack vis a vis the regulator in a perfectly sensible fashion. It allows Railtrack to prosper, and ultimately we wish to see Railtrack move into the private sector, although we cannot forecast when that will happen. We want Railtrack to be able to manage its affairs in a sensible fashion and in accordance with the financial regime that has been laid down by the Secretary of State while it is subject to the regulator. The way in which the regulator controls the activities of Railtrack is essentially through the access agreements, with which the regulator has to agree. The Government think that the amendment is sensible and that it provides sufficient air for Railtrack to breathe to ensure that it succeeds and prospers.
Those are the reasons behind the two amendments which I have addressed. Amendment No. 3 does not represent a change in policy and is technical. I commend the amendments to the House.
Mr. Brian Wilson (Cunninghame, North) : First, I must place on record our deep objection to the way in which the Bill has been handled right up to the eleventh hour. In two days we are supposed to deal with 109 pages and 470 Lords amendments. The Bill has been rewritten. Fundamental changes were made at the eleventh hour and fifty-ninth minute. Many of the assurances given by Ministers in Committee have been thrown overboard at the last moment in an effort to make the whole thing workable--a task in which Ministers have signally failed.
Seldom can a piece of legislation have been so thoroughly discredited before even reaching the statute book. Yesterday the final depths of farce were plumbed. We learned that the Department of Transport working party on restructuring British Rail had told Ministers that a £2 billion public service obligation grant will be required for next year. That is £1.15 billion more than for the current year, and it is just the first instalment in the cost of privatisation.
At a time when everything worth while in our society is under threat and when the nation's economic plight is so dire that value added tax is to be added to the cost of domestic fuel, the Government are considering spending an extra £1.15 billion not on improving the railways but on financing the privatisation of the railways. As a result of that extra £1.15 billion, not one extra train will run, not one extra passenger will be carried and not one extra tonne of freight will be transferred from our roads. The phenomenal increase in the taxpayers' subsidy will not go towards developing our railways. It will go towards paying for the gargantuan additional costs inherent in rail fragmentation and privatisation.
The proposed level of grant referred to in the working party's document is far in excess of the grant that British Rail has ever been given. If British Rail were given an annual grant of £2 billion, no one would be talking about privatising the railways. We would be boasting, like our continental neighbours, about how good our state railway company is. But having cut the grant to British Rail by