Labour Conference: Bill will penalise rail firms

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A BILL to penalise privatised rail companies for poor services will be included in the next Queen's Speech, after the Deputy Prime Minister, John Prescott, won a rearguard battle to save it.

Holding consultation on the Bill could delay the implementation of the measure, but Mr Prescott will make clear to the transport unions at the Labour conference in Blackpool today that he is not retreating from the White Paper on transport.

There were reports that Mr Prescott had been forced to abandon his proposals amid fears that charging the motorist could prove unpopular with Middle England voters.

But his message was reinforced by the Prime Minister, Tony Blair, yesterday with his announcement that congestion charging on cars will start in London. The power to charge motorists for driving into the capital - possibly up to pounds 6 a day - will be included in a London Bill to set up the first directly elected mayor. Mr Blair told the conference the money will be used to invest in better public transport in the capital.

Mr Prescott will face fresh demands from the unions and the constituencies for more action on the rail services operated by franchise companies, including a call by Jimmy Knapp, leader of Mr Prescott's own transport union, the RMT, for renationalisation of the railways, which will be brushed aside.

But he will tell the conference he is determined to impose tough regulations on the franchise operators, including Virgin, whose service to the North- west from London has been heavily criticised by delegates for delays to the Blackpool conference. One train carrying Frank Dobson, the Secretary of State for Health, left Euston an hour late because there was no driver.

The unions and grassroots supporters underlined their concern about the poor service from private rail companies by choosing a transport debate as a priority to air their grievances in Blackpool. They tabled a resolution calling for the White Paper to be implemented.

Mr Prescott is keen to squeeze the "fat cats" who have made heavy profits from the privatised rail operation by the implementation of tougher regulations on services. "He will give the rail companies a good kicking," said one ministerial source.

There will be disappointment that the Bill will be published initially in draft form, with the threat of a prolonged delay before it is enacted, but Mr Prescott is planning to reassure Labour supporters there are many steps that can be taken without legislation to enforce better services by the privatised rail companies.

He is seeking a tougher replacement for John Swift, the regulator appointed under the Tories, who resigned this month, after signals that he would be sacked when his contract came up for renewal in November. The draft Bill will propose a strategic rail authority to enforce higher standards of service on the private rail companies, and Railtrack, the company that runs the network.

Mr Blair sought to lay that suspicion to rest, although he warned the delegates they would face criticism at the imposition of the charges on car use.

The railways legislation is seen by Mr Prescott and his team as a vital weapon to raise the level of service to passengers, which will prove popular in the run-up to the next election.