Sir John Stanley, Tory MP for Tonbridge and Malling, said that he had been informed by Sir Bob Reid, chairman of BR, that fares would rise by 190 per cent in Network SouthEast if subsidies were ended and the government-set rate of return maintained.
Introducing the Railways Bill, John MacGregor, Secretary of State for Transport, told the Commons that subsidies would continue for socially necessary services, but, as Sir John and other MPs pointed out, he did not say at what level or for how long. The subsidy will go to franchisees of otherwise loss-making services to meet the charges of Railtrack, which will be separated from BR and made a government-owned company in April next year.
The Bill was given a Second Reading by 302 votes to 269 and will now be subject to detailed examination in committee. Robert Adley, Conservative chairman of the Transport select committee, and Sir John said that they could not vote for the measure.
Mr Adley condemned the Bill as a 'recipe for muddle, indecision and conflict' that was opposed by millions of rail-users and by those who managed the network and worked on it. The flaw was the proposed separation of responsibility for track and signalling from the operation of trains. 'We are breaking up a national railway system and replacing it with a vacuum,' he said.
Mr MacGregor was jeered by Opposition MPs when he detailed subsidies for private rail freight operators to try to switch traffic from road to rail. John Prescott, Labour's transport spokesman, said that he did not have to wait for completion of the legislation before bringing in the freight grants but had power to act immediately - a plea reinforced by Mr Adley and Sir David Mitchell, a former Tory rail minister.
Mr Prescott described the Bill as 'a cherry-pickers' charter'. It would make the railways less safe. There would be less investment, branch lines could close and more traffic would switch to road. 'What we want is modernisation, not privatisation.'
Mr MacGregor said that in return for subsidies to run unprofitable services, franchisees would sign legally-binding contracts specifying the quality and frequency of services. 'I see no reason why fares should increase faster under the new system than they do under the present nationalised industry structure, and, in many cases, I believe that in fact they will be more flexible and will be reduced.
'There will be controls on railway operators' freedom to increase fares where they might otherwise be able to take advantage of significant market power to exploit passengers, for example on London commuter services.'
Pressed by Brian Wilson, a Labour transport spokesman, to guarantee the continuation of national network railcards for the elderly and for young people, Mr MacGregor said that there was no statutory obligation on BR to provide them but he believed it would be 'in the interests of franchisees to offer facilities of that sort'.
David Howell, MP for Guildford and a former Cabinet minister, questioned where the investment was going to come from to provide Network SouthEast commuters with a new and modernised infrastructure for the 21st century.
Mr MacGregor cited price benefit to consumers following privatisation of British Telecom, gas and electricity, but Sir John Stanley said that whenever the public sector body had suffered from under- investment, as was the case with the water industry and BR, 'the implication for fares have invariably been upwards'.
George Walden, Tory MP for Buckingham and a former minister, warned: 'Anyone can run a line; what we need is someone to run a railway.'