Labour Conference: Prescott stands firm on privatised rail network

John Prescott had the task of heading off a conference vote in favour of nationalising Railtrack. Colin Brown, Chief Political Correspondent, saw the Deputy Prime Minister in vintage form.

John Prescott warned the two rail unions pushing for nationalisation that it would cost pounds 4.5bn of taxpayers' money that would be better spent on rail services and hospitals.

"I can't in all honesty go to the Cabinet and ask them to treat this purchase as a priority next year, over hospitals, or even railway safety," he said.

He also tore up the Tories' franchising rules in a dramatic gesture on the platform, and announced he was introducing new rules, which could allow public operators to run railway services for the first time since privatisation.

The change in the rules could allow the British Rail Board for the first time to bid for the franchises when they end after seven years, or if they are surrendered by private companies running into financial difficulty as the pounds 2bn-a-year subsidies are phased out.

But Mr Prescott's main task was to head off the alliance of Jimmy Knapp's RMT union and Aslef, led by Lew Adams, to commit the Labour Government to returning Railtrack into public ownership "early within its first term of office".

There was warm applause for speakers who supported the move, but Mr Prescott persuaded the unions to remit the motion, with a promise that he would return to next year's conference with plans for returning the railways to public control by a variety of routes, which are expected to fall short of direct ownership.

Mr Prescott said taking Railtrack into public ownership would put half a million pounds in the pockets of the company's directors, including its chairman, Sir Robert Horton, and other board members who included Archie Norman, the Asda chief, now a Tory MP and vice-chairman of the Conservative Party.

"I don't believe you really want me to use public money next year to make fat cats even fatter," he said.

The Secretary of State for Environment, Transport and the Regions also assured the conference that he had rejected wholesale privatisation of London Underground, but in a clear signal the Government may go for partial privatisation, he said he wanted to bring in some private capital to modernise the Tube system. "pounds 7bn of investment to modernise our London Underground will involve some hard decisions," he added.

The debate also heard appeals for tougher action on countering pollution. Michael Meacher, the environment minister, said a new worldwide understanding was needed on global warming. Welcoming his remarks, Friends of the Earth said he had failed to explain whether the action promised by Britain, to reduce CO2 emissions by 20 per cent by 2010 was conditional on action by other countries.