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Mr. Martlew: I was in the chair at yesterday's meeting, which meant that I had the advantage of being able to put the first question to my right hon. Friend the Minister for Transport. That was the question that I asked, and his reply was that the matter would be decided by the SRA before the end of February. I believe that in some areas of the country it will be relatively cheap to allow trains to run at 140 mph, but that it will be very expensive in other areas.

A decision therefore has to be made, but there is no doubt that the original costings that caused Sir Richard Branson and Virgin to buy trains that could travel at 140 mph were sadly flawed. Those costings put the total amount of money involved at around £2 billion or £3 billion, not £10 billion. I believe that the train companies using the west coast main line will come to a sensible agreement on the matter.

Finally, I turn to that part of the SRA report that deals with the need for a National Rail Academy. I am pleased that it has finally been accepted that there is a massive skills shortage on the railways. I asked my right hon. Friend the Deputy Prime Minister and First Secretary of State about that two years ago, and he replied that serious problems existed. The SRA clearly accepts that.

Earlier in 2000, I had discussions with the then Minister for Lifelong Learning, my hon. Friend the Member for Croydon, North (Malcolm Wicks). He came to Carlisle and we gave him a good demonstration of how the National Rail Academy could work. We showed how it could be funded, where it should be based and how quickly we could get the project off the ground.

My right hon. Friend the Minister for Transport will not be surprised when I tell him that all the available data pointed to the fact that the academy should be based in my constituency. However, if the SRA is serious about reducing the skills shortage quickly, a quick decision on the National Rail Academy is needed. Carlisle is one of the options for its location. If we do not get the skills,

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we will not complete the 10-year plan. It is simple as that, and it will not matter how much money is spent or whether it comes from the private or the public sector—if we have not got the skills, the plan will not work.

In conclusion, the Secretary of State has my full confidence. He has taken some hard decisions and a lot of criticism—he seems to be able to take a lot of criticism, and I applaud that as well—but he has to change the Government's policy on the railways and Railtrack, and the decision that he has taken will bear fruit in the future.

5.20 pm

Sir George Young (North-West Hampshire): Whatever disagreement the hon. Member for Carlisle (Mr. Martlew) may have had with the last Conservative Government, we did at least have his support on one issue—the fact that there was a separate Department of Transport for the whole period from 1979 to 1997, whereas Labour put transport back into a much larger Department. I clutch at that straw from his speech as a sign of support of the Conservative party's transport policy.

When I saw the Liberal Democrat motion on the Order Paper, my first feeling was one of sympathy for my successor but one at the Department of Transport—it is a difficult portfolio and a subject on which every citizen has a view and the press can be pretty merciless—but when I saw the Government amendment that feeling of sympathy soon passed.

In the weeks since Railtrack's collapse, the Government have sought to defend what they did by saying that privatising the railways was wrong, that it was a privatisation too far, that the structure was too fragmented and unsustainable and that there was therefore something of the inevitability of a Greek tragedy about what has happened in recent months. As one of those who was directly involved, I should like to put the opposite case, not just to explain why we did what we did, but, more important, because we will get the wrong solution if the wrong analysis is made of the current crisis. Simply parroting the words "botched privatisation" or "fatally flawed" gets everyone nowhere.

There was one overpowering argument for privatising the railways: privatisation would unlock the capital needed to modernise the rolling stock, the permanent way, the signalling and the stations and to build new links such as Thameslink 2000. Decades of underinvestment had to be confronted. That investment was, in turn, the key to a balanced and sustainable transport policy, reducing dependence on the car and the lorry by developing attractive alternatives and seeking to contain the never-ending demand for more roads. But there were other reasons as well.

Geraint Davies: Will the right hon. Gentleman give way?

Sir George Young: This speech will not stop at many stations, but I shall give way to the hon. Gentleman in a moment.

British Rail was inefficient, monolithic and hidebound by tradition. The skeleton of the advanced passenger train at Crewe is a monument to the problems that the public sector had in introducing new technology. British Rail's culture stifled the good management potential that was locked inside.

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Privatisation was going to transform an industry that looked inwards to the Department of Transport for support into one that looked outwards to its market for custom. It was going to bring into a rather introspective and protected industry successful operators of other transport modes. It was going to reduce the subsidy for running trains, by removing some of the cosy practices that had grown up unchallenged for decades and freeing up the money for other public services. So the policy was not some mad ideological transfer—John Major was a pragmatist with a deep suspicion of ideology. We both wanted a better railway, and privatisation of transport was part of an approach to improving public services that had worked successfully elsewhere.

That starting point was underlined by my experience of getting money for transport when the railways were in the public sector. I would appear before EDX, or whatever Cabinet Sub-Committee was adjudicating on public expenditure, usually chaired by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke). My colleagues would declare their pleasure at seeing me, saying how imaginative my view on the future of the railways was and how well presented was the associated bid for funds, but they would say, "But, George, you have to understand that our priorities are health, education and law and order. Colleagues in other spending departments have put forward equally interesting proposals, more central to our manifesto. We are sure you will understand if your bid is cut back, and your presentational skills will enable you to defend the settlement."

Although much has changed since 1997, that feature has not. In Labour's first term, only one section of the transport industry was starved of the capital that it needed—the only section still in the public sector: London Underground. Passengers faced fare rises higher than those on the railways, and the backlog of investment got worse.

As the Secretary of State said on Monday, passengers do not mind where the money comes from, and when the industry was moved from the public sector to the private sector, which is where I believe it should be, the dead hand of the Treasury was lifted. The constraint on expenditure was no longer how much I could get out of the Chancellor, but how fast the train operators, the train manufacturers and Railtrack could sensibly invest.

People might accept the strategic decision on privatisation, but have doubts about the structure—the so-called fragmentation. That is a highly complex issue on which I wish to make two brief points. The first point is simply that industry today is more disaggregated than it was 40 years ago. People make less themselves and buy more in from others. There is more specialisation, more subcontracting and greater flexibility in the market. Car manufacturing is a good example, with the manufacturers basically assembling bits made by other people. That specialisation and subcontracting is not just a feature of industry; it happens in medicine, education, the sciences and services. So the British Rail monolith was no longer the best model.

There is a second, more specific, point, however: the safest and most successful transport industry in this country is the most fragmented—civil aviation. That industry is subdivided into far more component parts than the railways. The stations—the airports—are in multiple ownership. Some of them are owned by the British Airports Authority, some by local authorities and others

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by bus companies. Signalling—air traffic control—is totally separate from the airports and the airlines. There are tens of different train operators—the airlines—and if a new airline puts on a new service from Luton to Glasgow, we do not say that it is an unwelcome fragmentation of the industry; we welcome the new service. The airlines do not own the aircraft; they lease them, and they are maintained and serviced by others. Someone else does the baggage handling and other companies do the catering. Civil aviation is a disaggregated, specialised industry, linked by contracts. Critics might call it fragmented, but it is safe, successful and popular.

Mr. Edward Davey (Kingston and Surbiton): Will the right hon. Gentleman give way?

Sir George Young: I will briefly stop at Surbiton—an important suburban station.

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