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Transport

I am grateful to my noble friend, but perhaps he had better wait to hear what I have to say. Infrastructure management and privatisation became Railtrack’s responsibility and most noble Lords would, I think, agree that that was a disaster. In management and engineering terms, it was a good way of siphoning perhaps £4 billion of public money straight from the Government to shareholders, but it did not last very long. The new Network Rail is, I believe, much better than Railtrack in the sense that the network is in a much better condition. It is reliable and there has been a lot of investment in it. However, as the noble Lord, Lord Dykes, and others have said, the costs are getting very high. The Office of Rail Regulation has required Network Rail to halve its costs over 10 years, and we are about half way through that, but it still has a long way to go. As regards the value-for-money study chaired by Sir Roy McNulty, the document referred to by the noble Lord, Lord Dykes, is very significant. He was given a number of options and was told, first, to cut services; secondly, to grow services with increased costs, which is clearly unacceptable; and, thirdly, to do it cheaper—and if you do not do it cheaper, you have to close things. We need to work out ways of getting Network Rail and to some extent the train operators to do it cheaper. But we must be careful not to throw the baby out with the bath-water. Noble Lords and people outside have come up with many ideas about what to do with Network Rail, which could range from a new management team to deliver cultural change, to breaking the company up into regional businesses, and, of course, the usual story of vertical integration—nationalised or in the private sector. However, we must be careful about the problem that we are trying to solve. It is easy to refer to benchmarking and great savings, but one must look at the detail and I suggest that the devil is in the detail. I am against breaking Network Rail up. I certainly support Merseyrail’s idea of having a separate network there, probably extending to Wrexham, and to do a little bit of benchmarking. Of course, Transport Scotland is promoting a new line to the Borders, which will be designed, built and operated entirely without Network Rail. Therefore, that will produce some benchmarking. However, I calculate that if, for example, Scotland was separated off into its own infrastructure, there would be five passenger operators there and as many freight companies. The bureaucracy of the extra agreements between all these people in different areas would make it more complicated rather than less. The problem with Network Rail is that, although it is far from perfect, the extra costs are in what we might call the sticky bits—the laws, the processes, the standards and the procedures that seem to govern every action. The other day, I was on a train going down a freight branch line when we were stuck on the main line for about half an hour. I asked the Network Rail person on the train, "What’s the problem?". He said, "Well, they’re unpadlocking the points. In my day, 20 years ago, it took one person five minutes and now it takes three people 20 minutes". It is the same job, so why does it take that long? Yesterday, I received an e-mail from some people stating that it was time that the railway did some research into dogs and their owners walking perhaps on a footpath beside continuously welded track. They said that the dog might get excited or worried by the whine of a train approaching and pull the owner on the lead towards the train and hurt the owner. I thought: why do we want to bother with things like that? If people cannot control their dogs and have the lead wrapped around their hand several times, why does the industry need to talk about research? Those are two stupid examples, but unless we start at the bottom and ask, "Do we need those standards at all?" and all that goes with them, we will not get anywhere. Some suggest that Network Rail should be sold off, but we tried that with Railtrack, did we not? I think that we should improve what is there and define what kind of company it should be. It has decided on its own that it should emulate a public limited company and get efficient going forward with maximum achievements and, of course, maximum bonuses. That is its decision. No one has asked it to do that; the Government have never asked it to. It justifies that on the basis that it is like a plc. It is nothing like a plc, because it cannot go bust. We all know that no one would allow it to go bust, and, anyway, there are no shareholders. I am one of the 100 members, and our liability is limited to £1, which I suppose is comforting. Should it not have some public interest duty to influence its activities? I do not think that the membership structure has worked. Network Rail effectively still appoints most of the members. We do not hold the company to account; that will not change. There are various alternatives which I hope that the Minister will consider. One of them has been mentioned before: a two-tier board, with the higher one to ensure that the public interest in the railways is maintained. Alternatively, members could all hand over their membership to the Secretary of State. When I put that to a Minister he said, "That’s fine. What happens if the members don’t want to hand over their membership?". The answer is simple: turn off the finance. That might focus their thoughts. The third alternative is a mutual, with a small number of members elected by all interested stakeholders. That would give members legitimacy and a smaller number. The real issue is that the board and the management need to reflect Network Rail’s public interest role, as well as driving efficiencies. It must drive them much more strongly from within. Ian Couch has done well up to now, but we now need someone else. It needs a new team dedicated to creating the most cost-effective, cost-efficient and least bureaucratic infrastructure manager in the world. I suggest that the figure of two to three times the best cost, which we have heard in this debate and from the regulator before, comparing Network Rail with other infrastructure managers, is mainly due to bureaucracy. It is the bureaucracy that must be cut through with a sword, because I do not want bits of the network to be lopped off because we cannot do it cheaper, we cannot run Parry People Movers or anything else. As someone else said in this debate, we do not need high-speed lines for Parry People Movers. I hope that the Government, in considering what to do with Network Rail, will not throw the baby out with the bath-water but will make strong intentions clear that it must change. Whether that should be done from without or within, I do not know, but I will certainly support such change.