Minister warns of 'disaster' facing rail privatisation

A SENIOR transport minister has warned that rail privatisation will be 'a disaster' unless private operators are able to increase the numbers of passengers.

Speaking at the standing committee examining the Railways Bill, Roger Freeman, the Minister for Public Transport, said: 'The private sector will want to make a higher profit. The private sector can earn higher profits only if it can increase revenue and/or reduce costs. Increasing revenue requires better marketing and if that fails, the scheme will be a disaster.'

That admission and the unfortunate choice of language deals a further setback to the Government's controversial rail privatisation plans. The number of passengers using the railways is highly dependent on the state of the economy and on ticket prices, which are likely to rise after privatisation because of extra costs and the need for private operators to make a profit.

Mr Freeman accepted that private rail companies are likely to need better rates of return than BR. 'The private sector will certainly seek a higher rate of return but will achieve it through improvements in revenue, that is, through better marketing.'

Brian Wilson, Labour's transport spokesman, said: 'It is an astonishing admission that the whole thing depends on the untested theory that private operators can bring droves of extra passengers on to the network. Certainly, as far as InterCity and commuter services are concerned, this is pure fantasy. Yet the whole future of the railways seems to hang on this blind belief.'

There was further criticism of the Government's transport policy yesterday from London Underground. Its managing director, Dennis Tunnicliffe, warned that the 'old, sprawling, overcrowded and neglected' Tube network needs more than pounds 8bn worth of investment over the next 10 years just for modernisation.

Another pounds 6.5bn would be needed over the same period for the three biggest new schemes being proposed, the Jubilee Line extension, approval for which awaits agreement of the bankers for Canary Wharf to contribute pounds 180m to its cost, Crossrail, which links east and west London, and the Chelsea to Hackney line.

Speaking to transport experts, Mr Tunnicliffe said failure to invest would push the vision of a 'decently modern metro' 20 years or so down the line.

The system was 'old' having been built by the early part of the century, 'sprawling' because it spread to outer London making it difficult to manage, and overcrowded as an increase in passengers during the mid-1980s had led to many central London stations 'groaning at the seams during the peaks'.

London Underground has already sharply criticised the Government for the cut announced in the Autumn Statement in the amount earmarked for investment for 1993-94 from pounds 866m to pounds 562m.

It said this was a return to the old 'stop-go' investment policies which it had been promised had ended. As a result several schemes, including the Northern Line modernisation programme and the East London line extension, had been deferred.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Joe Cocker performing on the Stravinski hall stage during the Montreux Jazz Festival, in Montreux, Switzerland in 2002
musicHe 'turned my song into an anthem', says former Beatle
News
Clarke Carlisle
sport
Sport
footballStoke City vs Chelsea match report
Arts and Entertainment
theatreThe US stars who've taken to UK panto, from Hasselhoff to Hall
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Life and Style
Approaching sale shopping in a smart way means that you’ll get the most out of your money
life + styleSales shopping tips and tricks from the experts
News
newsIt was due to be auctioned off for charity
News
Coca-Cola has become one of the largest companies in the world to push staff towards switching off their voicemails, in a move intended to streamline operations and boost productivity
peopleCoca-Cola staff urged to switch it off to boost productivity
Environment
Sir David Attenborough
environment... as well as a plant and a spider
Voices
'That's the legal bit done. Now on to the ceremony!'
voicesThe fight for marriage equality isn't over yet, says Siobhan Fenton
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Austen Lloyd: Regulatory / Compliance / Exeter

Excellent Salary: Austen Lloyd: Exeter - An excellent opportunity for a Solici...

Ashdown Group: IT Support Technician - 12 Month Fixed Term - Shrewsbury

£17000 - £20000 per annum: Ashdown Group: IT Helpdesk Support Technician - 12 ...

The Jenrick Group: Maintenance Planner

£28000 - £32000 per annum + pension + holidays: The Jenrick Group: Maintenance...

The Jenrick Group: World Wide PLC Service Engineer

£30000 - £38000 per annum + pesion + holidays: The Jenrick Group: World Wide S...

Day In a Page

Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there