Politics-Railways Bill: Train firms face tougher penalties

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UNDER-PERFORMING rail service operators will face tougher penalties in an attempt to improve networks, John Prescott pledged yesterday.

The Deputy Prime Minister attacked the privatisation of the network as a "national disgrace", but said there were now "some positive signs of a revival of Britain's railways".

Opening the second reading debate on the Railways Bill, which will set up a Strategic Rail Authority, Mr Prescott said passenger and freight traffic was on the increase, and about 1,000 extra services were being run each day.

By creating a "new guardian of the public interest [the SRA] this Bill will reinforce these trends", he said.

The legislation is unlikely to clear all its parliamentary stages in the current session and will have to be re-introduced in the Queen's Speech in November.

Mr Prescott said future franchises for the train operating companies should be settled on their commitment to investment, quality of service and value for money to the taxpayer. He said he wanted to move away from the seven-year fixed terms currently governing most of the franchises, which all came up for renegotiation at the same time.

"What I want to see is the spreading out of these franchises and to take each one into account and negotiate what is best, not only for the passenger and investment into the rail system, but also good value to the taxpayer."

The SRA, which will be chaired by Sir Alastair Morton, will have powers to fine underperforming rail companies.

It will have to draw up a blueprint for expanding the railways as part of an integrated transport system. It can also act as an "operator of last resort" if there are no bids for a particular franchise.

But John Redwood, the Tory spokesman for the environment, transport and the regions, said the legislation had been "dogged with controversy and trouble.

"The Deputy Prime Minister said he must have his Bill, the Prime Minister said he couldn't have his Bill, and they hit upon this ridiculous compromise - a camel instead of a horse, with everybody getting the hump."