|Previous Section||Index||Home Page|
Clive Efford (Eltham): My right hon. Friend the Secretary of State was entirely right to take the public finance trough from under the Railtrack snout. His decision could be described as an admission of failurefailure to tame Railtrack, a monopoly created at the time of privatisation which separated track from trains. Since it was first created as a public body and later privatised, it has consistently failed to control its costs. More important was its failure to deliver on its obligation to provide an efficient and reliable network. The train operating companies will be relieved to know that their needs no longer have to play second fiddle to Railtrack's shareholders.
Railtrack was created in April 1994, and questions about its finances have existed ever since. That continued after privatisation in May 1996, despite assurances given by the then Tory Government. In 1995, there was concern about Railtrack's ability to meet its financial investment targets. In September 1996, the Rail Regulator introduced the "Network Management Statement", intended to ensure that Railtrack fulfilled its investment commitments, especially in regard to maintenance. In November 1996, half-year figures showed that Railtrack was underspending on maintenance and renewals. The regulator stated that that was wholly unacceptable. He repeated that again in the following January at a meeting with the directors of Railtrack and, again, in a letter responding to Save Our Railways. He said in that letter:
There have been repeated reports of Railtrack's failures throughout its history. Numerous newspaper articles have warned everybody about the dangers of investing in Railtrack. As early as June 1996, The Economist discussed "The Railtrack Trap" and the arrangements to finance Railtrack that were set up by the Railways Act 1993. On 21 December 1996, The Daily Telegraph contained an article called "Watchdog in Attack on Railtrack Underspend." The Financial Times ran a series of articles early in 1997 with headlines such as "Railtrack Warned to Speed up Investment" and "Railtrack Investment Row Gets Up Steam". There is a catalogue of reports of Railtrack's failures.
We have had a constant stream of failures and attempts by the regulator and successive Governments to tame the Railtrack beast. However, all attempts failed because they tried to remould Railtrack into something that it was not set up to be. Public money was passed to private shareholders through a set up that was devised to do nothing but launder public money into private hands.
In April 2001, Railtrack received an extra £1.5 billion from the Government. Immediately, Railtrack used nearly £200 million of that to pay dividends to shareholders. The public's anger about privatisation is underlined by the Paddington and Hatfield crashes, which epitomise the effect of privatisation on our rail network. The public have no doubt where the blame lies. They know that profit was put before safety. That was epitomised when the former chairman of Railtrack sat with his colleagues in his office on the night of the Hatfield crash and emerged at 6 am to state that he was the only man to see Railtrack through the crisis. A few weeks later, he was handed £400,000 and he went out through the back door. It is clear that Railtrack was not set up to run an efficient railway, but was set up with only shareholders in mind.
Railtrack has given us constant excuses for its failures to deliver. The Railways Act 1993 paved the way for rail privatisation. The first mention of the possibility of Railtrack's privatisation was made only in October 1992. If Opposition Members do not believe me, I am referring to a House research document that states that the first reference that was ever made to Railtrack's privatisation occurred in that month. However, an Act that effectively privatised Railtrack had been passed by the end of November 1993.
Tom Winsor offered Railtrack an interim review, as he stated when he gave evidence to the Select Committee on Transport, Local Government and the Regions last week. From 15 January, it was open to Railtrack to go back to Tom Winsor to ask for an interim review of charges to access railways. It failed to accept that offer until the weekend of the meeting with the Secretary of State, when it asked for that interim review to be carried out in 24 hours over a weekend. Opposition Members' entire argument appears to hinge on that single fact, which is a thin thread on which to charge the Secretary of State with misleading shareholders and mishandling the affair.
My right hon. Friend the Secretary of State ended Railtrack's repeated failures. Public finances cannot continue to pour into the private sector at the expense of an efficient rail service. I support my right hon. Friend's actions, which I hope will lead to an efficient public rail service that the people of this country have the right to expect.
Miss Anne McIntosh (Vale of York): I repeat, for the record, my declaration of interest. I hold shares in Railtrack, FirstGroup and Eurotunnel, and my husband works for an American airline company. Therefore, I share the sentiments of other hon. Members following yesterday's tragic plane crash and loss of life in New York.
Today, we have seen a classic case of the manipulation of evidence. It is time that the record spoke for itself. I especially refer to paragraph 765 of the evidence given by the Rail Regulator to the Select Committee on Transport, Local Government and the Regions last week. He said: