HC Deb 02 July 1975 vol 894 cc1463-5
23. Mr. Michael Roberts

asked the Secretary of State for the Environment what proportion of the subsidies provided under the Railways Act 1974 will be devoted to wages and to investment, respectively.

Mr. Crosland

Grant under Section 3 of the Act is paid in respect of the total net losses on revenue account of the passenger system and is thus not specifically related or devoted either to investment or to wages.

Mr. Roberts

Will the right hon. Gentleman assure the House that wage increases will be met by increased fares and improved efficiency and not at the expense of investment?

Mr. Crosland

Wage increases this year will have to be met, first, by increased fares, which we shall probably have in September. Secondly, we have made clear to the Railways Board that the increases will have to be met by increased efficiency, whether in terms of manpower or services. Thirdly, it is the Government's intention, as I said on Monday, to set a ceiling for railway expenditure as a whole which British Rail will be asked not to exceed. We shall set a ceiling for next year in terms of the passenger grant and subsequently for the whole of railway expenditure.

Mr. Bagier

Does my right hon. Friend agree that there has been a high degree of co-operation by British Railways staff in bringing about productivity deals and so on? Does he also agree that when considering the funds which are made available for railway services it is important to ensure that the railway staff are not underpaid in comparison with other sections of the work force of the country?

Mr. Crosland

I certainly accept that, but the unalterable fact is that the Government subsidy to the railways is running at a much higher level than it was previously when the House passed the Railways Act 1974 and at a level which in current circumstances the Government cannot afford to continue.

Mr. Raison

While the Opposition believe that his statement on Monday was more or less on the right lines, has not the right hon. Gentleman been appallingly complacent about this problem to which we drew attention in a debate in April? Will he tell the House how he expects to get manpower costs down to a reasonable level and what he expects the board to do about the enormous freight deficit?

Mr. Crosland

If the hon. Gentleman has read my statement on Monday he will have seen that I made perfectly clear to the board that a deficit on freight was not envisaged under the Railways Act 1974 and that the Government were not prepared to subsidise a continuing deficit.

Mr. Leslie Huckfield

Is my right hon. Friend aware that the reply he gave to questions on Monday has far-reaching repercussions? Is it not desirable that future statements on railway policy should be made only within the framework of a transport policy for all kinds of transport?

Mr. Crosland

Yes, Sir, I agree with my hon. Friend. As I have said in a Written Answer to a previous Question—which was not asked orally because the questioner was not here—I propose before the end of the year, whether by way of a White Paper or otherwise, to make a comprehensive statement on transport policy as a whole.