Tony Blair, the Labour leader, yesterday said that rail privatisation would cost £1.25bn and had resulted so far only in the sale of a quarry in Devon.
Launching Labour's campaign against "The Great Train Robbery", Mr Blair said he was confident his party would stop the privatisation process even though legislation went through Parliament in 1993.
Pointing out that Labour had halted Post Office privatisation and the second rise of VAT on gas and electricity, he said this was "a campaign in which Labour will speak up for the mainstream majority in Britain who oppose this absurd plan and want rail privatisation stopped in its tracks". Attempts to sell freight companies and the Red Star service had failed, he said, leaving a ballast quarry as the only successful sale.
Mr Blair appeared to contradict his transport spokesman, Michael Meacher, who last week said that Labour would not necessarily be bound by the terms of any contracts given to companies taking over train services. He said: "We will stick to the terms of contracts", but reiterated that Labour would stop the privatisation.
Mr Blair's claims on the costs of privatisation elicited a furious response when he repeated the figures at Prime Minister's Question Time. John Major called Mr Blair's calculations "fantasy figures" and said the real cost would be much lower. "It is a fraction of the costs of the industry and a very small price to pay for a modern railway serving the nation in the way we wish to see it served," he said.
Labour bases its calculation of the costs of privatisation on answers to a series of parliamentary questions. The main elements are the costs of reorganisation, redundancies and extra grant to the six passenger transport executives and Strathclyde for the increased costs of access charges. Labour's estimates include amounts for the next two financial years and yesterday ministers challenged the figures, saying that only £245m has so far been spent.
The reorganisation costs, says Labour, are £181m so far and a further £100m over the next two years but the Department of Transport says the latter figure is only an estimate. The department accepts its costs, including consultancies, will be £64m by 1996/7 but says that so far only £35m has been spent.
On redundancies, which have been costed at £377m for 19,200 staff, ministers argue that these would have happened anyway.
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