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Lord Methuen: My Lords, I was informed by Derby station personnel that there is no connection between Regional Railways and Midland Main Line and that there is no interest in maintaining the connections. Would the Minister care to comment on that?

Viscount Goschen: My Lords, I am interested to look at any specific details which the noble Lord wishes to bring to my attention. I shall take up the point which he raises. But the senior people from all the franchising companies involved in the process realise fully the real benefits available. It is like asking what on earth would be the commercial advantage of making sure that someone misses his next bus or cannot buy a ticket. Those benefits are to be found on all other transport modes and the idea that it will not happen in relation to the railways is frankly absurd.

The critics were wrong to suppose that franchising would mean less investment. Franchisers have come forward with impressive plans for investing in new rolling stock. In particular, the users of the services in Kent run by South Eastern Trains have been clamouring for investment. There is now the prospect of new rolling stock. National Express, the winners of the Gatwick and Midland Main Line franchises, is committed to replacing the Gatwick Express stock and investing in additional trains for the Midland Main Line to provide significantly improved services between London and the Midlands. Even those franchisees who do not need new rolling stock are in many cases planning to refurbish and improve existing trains.

Franchisers are committed to improving services for passengers. Certainly the voice of the consumer, the passenger, has been heard. My noble friend Lord Harding described the improvements to the services in the West Country under privatisation and indeed in the lead-up to privatisation. I welcome that up-to-date information.

In the South-West, Stagecoach has introduced co-ordinated bus links to railway stations with feeder services from Romsey to Winchester and Bordon to Liphook. It is investing £3 million in station

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improvements, including better security, lighting and information. Great Western Holdings is doubling the amount of compensation available to passengers when trains are delayed and is looking at introducing motorail services to the West Country.

For the inter-city East Coast services, Sea Containers is investing £17 million in service enhancement, including improvements to the rolling stock and stations. I could go on, but in the interests of time I believe that those few examples will suffice.

All franchisees are committed to improving passengers' charters, some with significantly higher punctuality and reliability targets than were set by the old BR services.

The next important issue is fares. I was extremely surprised to hear the somewhat half-empty glass of whisky argument put forward by the noble Lord, Lord Carmichael, on the issue of safeguarding fares. For the first time ever, those key fares have been safeguarded; that is, key fares for commuters and also key leisure fares. I was interested to hear the noble Lord, Lord Carmichael, safeguarding in his own thoughts the interests of the first-class passenger. We are concerned to give maximum commercial freedom while at the same time protecting those key fares. That is what has been done. That announcement has been welcomed widely throughout the country.

Lord Carmichael of Kelvingrove: My Lords, I wonder what will happen if the names of the services are changed. Will the regulator need to intervene? There is a feeling that there are so many exceptions that the privatised rail companies will be able to do as they like.

Viscount Goschen: My Lords, they certainly cannot do as they like. The main key fares have been capped and have been linked to an RPI formula. There is no getting away from that. Nationalisation has given rise to steadily increasing fares. Privatisation is giving the consumer, the passenger, a better and more reliable service with capped fares.

I turn now to the interests of the taxpayer. A cheaper and better railway will benefit the taxpayer as much as it will benefit the travelling public, although in so many cases, it is one and the same. BR required financial support of £326 million in 1995-96 to run the six franchises awarded so far. The new private sector franchisees will require support of only £269 million to run the same services this year. In seven years' time, they will need less than £100 million per year. By any standards, there can be no argument with those figures. Franchising means a better deal for the taxpayer.

The noble Lord, Lord Berkeley, and my noble friend Lord Mountevans referred to the issue of safety. I assure the House that safety has been of paramount importance in the privatisation process. That has always been so in relation to the railway and always will be. The HSE's independent advice on the new safety regime was implemented fully by the Government. The HSE has confirmed that there is no evidence of any overall decline in health and safety standards. Indeed, there is

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no complacency. The HSE will continue in its independent monitoring and enforcement to ensure that standards are maintained and commitments are met.

The noble Lord, Lord Berkeley, raised the issue of the responsibility for demonstrating safe operation. That rests with the vehicle manufacturer and owner. However, Railtrack recognises that the present processes for accepting new trains need improving. I certainly welcome the remarks made by the noble Lord, Lord Berkeley, at the end of his speech when he said that he might be interpreted to be over-critical of Railtrack. For me, that was a good argument in favour of the private sector. But we all put a different interpretation on the words which fall from noble Lords' lips.

I should like to mention briefly the Channel Tunnel Rail Link. That is a major project which will bring substantial benefits. We welcome that. We welcome the consideration of the Bill in this House and I look forward to the contributions which noble Lords will make.

Those are the hard facts of privatisation so far. A sea change in the culture of the railway industry is under way. So far, I have dealt mainly with aspects of the passenger railway, but I believe that they are true also in relation to freight. It is no secret that the railway's share of the freight has been in decline for several decades. While 42 per cent. of goods in Britain were moved by rail in 1952, that figure is now barely 6 per cent. That is a trend which can be seen throughout Europe in the face of the flexibility and cost advantages offered by road haulage.

Noble Lords will be aware that many of BR's operations in that sector have already been transferred to private ownership. Its parcels carrier, Red Star, became Omega in September and mail train operator Rail Express Systems was sold to North and South Railways in December. The three bulk-freight Trainload Freight Companies were also sold to North and South Railways in February. In addition, final bids have been received for the domestic and deep-sea container business, Freightliner, and BR and the Government are examining the options for privatising Railfreight Distribution, principally concerned with international services through the Channel Tunnel.

We certainly wish to see a revival of domestic freight haulage by rail in Britain. We have taken the necessary steps to create the environment in which that can happen. Free from the restrictions of state ownership, freight-operating companies will be better placed to replace the long-term loss of traffic to road haulage and to pursue innovative, customer-oriented strategies. I believe that a clear example is North and South Railways, a consortium led by the US railroad operator Wisconsin Central Transportation. That has a wealth of experience from its operations around the world which it will bring to bear.

As I said at the beginning of my response, I welcome the opportunity to set the record straight on rail privatisation. I certainly welcome the opportunity to discuss the very important issue of freight on the railways. Indeed, there is a great deal more that could

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be said, but we are slightly constrained by time. Suffice it to say that we have moved the rail freight businesses into the private sector. We believe that that is where they can flourish. All our policies are dedicated to ensuring that rail is given the best chance possible to win its proper share of the freight market.

As I said, I have welcomed the opportunity to demonstrate once again that our policies are delivering a better deal for passengers and for taxpayers. As each week goes by and we see more businesses pass into the private sector and more advantages coming from those actual operations, I believe that that fact will come very clearly across to the travelling public and, indeed, perhaps to noble Lords opposite.

Today's debate has been about what passengers want. They want good levels of service, and they have been provided with that. They want affordable fares, and now the key fares are capped. But, above all, I would say that they want a better quality of service; and, of course, that has also been provided. The privatisation initiative has already changed attitudes which have moved away from the old producer-led way of running a railway towards putting the consumer first. I really believe that there is a strong contrast between this and the old railway.

To sum up the position, we have had a wide-ranging attack from noble Lords opposite. I hope, therefore, that those noble Lords will not consider it an insult if I say that we have heard some very good old Labour speeches. We have heard attacks on the principle of privatisation expressed with the feeling that public operators provide a better service. However, my mind slips back to a quote from a Member of the Labour Front Bench in the other place who described British Airways as being the "pantomime horse" of privatisation. I hope that that sort of remark will be consigned to the museum of old Labour, along with a number of the speeches that we have heard this evening.

Finally--and I know that I have spoken for some considerable time--I should say that I shall read the Hansard report tomorrow morning extremely carefully in order to check the remarks made by the noble Lord, Lord Ewing of Kirkford--an official spokesman of the Official Opposition in your Lordships' House--regarding the importance which he attaches to the principles of private ownership. Having said that, I hope that I have been able to answer all of the points that have been made this evening.


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