Rising Cost of Transport

Debate between Mark Lazarowicz and Andrew Turner

Wednesday 9th January 2013 Commons Chamber

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

The starting point for this debate has to be the fact that Great Britain has some of the highest rail fares in Europe. I recognise, of course, that to pay for investment in the rail network the passenger—the fare box—will have to make an important contribution to the funds required. However, the passenger should not be asked to pay an unfair burden, and one way in which we can ensure that passengers are not forced to pay more than they need to is by ensuring that the revenue earned from the network is actually used for the benefit of the network—for the benefit of passengers—and is not siphoned off out of the system.

The evidence from the decades of the privatisation regime, instituted by a previous Conservative Government, is overwhelmingly clear. That approach has meant that billions of pounds has passed out of the system, away from passengers and away from possible benefits of infrastructure investment. Instead, the benefits have been in the form of big profits for many of the companies involved, not just train operating companies but those with ancillary roles in the system, including some of the providers of rolling stock, to mention just one example. This has not just been about money flowing out through large profits; it has also been about operating inefficiencies being brought into the system. Again, those have been to the detriment of passengers and, in their own way, have led to fare increases.

[Mr Andrew Turner]

Can the hon. Gentleman explain why such inefficient companies win these contracts?

[Mark Lazarowicz]

Let us leave aside the fact that there are not many operators in the field to bid. I am not saying that an individual operator is necessarily inefficient, but that the system as a whole leads to inefficiencies as well as to profits being paid out to private companies when they could be invested in the system.

I said that not all companies are inefficient. One example that showed the difficulties and negative effects of privatisation at their highest was the disaster of Railtrack, which was linked not just to private ownership and that company’s motivation in its operations but to the fragmentation of the operators and Railtrack’s distance from the train operating companies. That example also shows how some of the damage caused by privatisation began to be turned around. It is not a perfect organisation, but the publicly owned Network Rail has managed to repair some of the damage caused by fragmentation of the system and we have seen a safer railway network and better value for the taxpayer, for passengers and for other users of the rail network in the costs of maintaining the system.