British Rail Privatisation White Paper: Reaction: Investment is 'vital' to attract franchise bids

John MacGregor's failure to guarantee that there would be no line closures or reductions in the level of service dominated reaction to the White Paper inside and outside Parliament.

Several Tory MPs voiced scepticism in the Commons about the protection for rural lines, small stations, safety and the continuation of the national timetable.

There were also doubts that franchisees would be attracted. Tim Renton, the former Tory chief whip, warned that unless public investment was increased, the infrastructure would not be good enough to attract private investment.

The Freight Transport Association described the White Paper as a 'damp squib'. Jack Welsh, its distribution and international services director, said: 'What is not clear is how the privatised rail freight system will be attractive to private interest when it is evidently a high-cost operation that continues to lose traffic.'

But potential operators welcomed the White Paper. A spokesman for Richard Branson's company, Virgin, which wants to run non-stop trains between London and Edinburgh, Glasgow and Newcastle, said passengers would be lured from airlines. He said: 'It's not cherry-picking, because we would bring people back to travelling by train on a service that British Rail says is not possible.'

Stephen Joseph, the director of the campaign group Transport 2000, said: 'The White Paper leaves many questions unanswered. What happens if a franchisee goes bust? How does franchising fit in with open access? Will charges for track access reflect wider social and environmental benefits from getting cars and lorries off the roads?

'The White Paper lays out a bureaucratic jungle in which private operators will need to reach agreements with four or five separate authorities, as well as a train- leasing company and other operators, before they can even start running trains.'

Jimmy Knapp, leader of the Rail, Maritime and Transport union, said the rail issue would become 'the poll tax' of this Parliament.

Murray Hughes, editor of Railway Gazette International, said: 'The Government approach is dogma-driven. It is in very stark contrast to what is happening in the rest of Europe. This will not solve one of the most fundamental questions that the railway is facing - is the railway there to provide a service or is it there to make money for the shareholders of private companies?'

The British Institute of Management was 'ambivalent' about the White Paper. Some members feared privatisation would lead to further fragmentation of the country's transport infrastructure. Roger Young, its director-general, said: 'Without a national transport strategy, the transport system will simply grind to a halt.'

The Confederation of British Industry, however, welcomed the move towards privatisation, particularly in the rail freight market, but said it was important that improvements to the network were not abandoned. Howard Davies, its director-general, said: 'It is absolutely essential that privatisation is not used as an alibi for cutbacks on much-needed investment in the rail system.'

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