British Railways (Hansard, 23 December 1981)

§ 5. Mr. Bagier
asked the Secretary of State for Transport if he will make a statement on the new external financing limit announced for British Railways.

§ Mr. David Howell
In respect of the 1981–82 EFL, I refer the hon. Member to my answer on 2 December to my hon. Friend the Member for Watford (Mr. Garel-Jones).—[Vol. 14, c. 153.] The 1982–83 EFL of £950 million is about the same in real terms as the £867 million originally set for 1981–82.

§ Mr. Bagier
What representations has the Secretary of State had from British Rail about the need for massive investment in new rolling stock and track maintenance to provide a safe and reliable service? Has British Rail expressed its satisfaction with the amount that the right hon. Gentleman has just announced?

§ Mr. Howell
Naturally, British Rail and the Government are anxious to maintain an efficient, safe and modernised system. I discussed with British Rail its investment plans and hopes for the future. They are my hopes, too. As the hon. Gentleman knows, last night I announced my approval of the electrification of rail services between Colchester, Norwich and Harwich. I think that British Rail accepts—as I hope the hon. Gentleman will accept—that is is a demonstration of our commitment to the future of our railway system.

§ Mr. Adley
Is my right hon. Friend aware that there will be a widespread welcome for his announcement about the East Anglian electrification? Nevertheless, does he realise that the piecemeal method of doing it is not entirely satisfactory? For example, his refusal to sanction the Cambridge part of the arrangement means that British Rail's planning will have to continue to rely on a mixture of diesel and electric on East Anglian lines, which is not the most efficient forward planning. In view of the continuing disagreement between the NUR and ASLEF, is there anything that my right hon. Friend can do to try to bang together the heads of these two unions to see whether they can reach an agreement that will enable the Government to sanction a full-scale electrification programme?

§ Mr. Howell
Obviously we do not want industrial disputes on the railways, and I hope that these matters can be resolved in a sensible and realistic way.
My hon. Friend asked about the electrification programme. It is right that the sanction and approval of electrification plans should be linked closely to productivity and business performance. There is a widespread recognition that this is a sensible and businesslike way to proceed in fulfilling the commitment in principle that the Government made in the summer to the 10-year rolling electrification programme.

§ Mr. Cowans
Is the Secretary of State aware that by not increasing the EFL to a more realistic level he lays himself open to the accusation from hon. Members and people outside the House that he is doing a Beeching by financial stealth?

§ Mr. Adley
Rubbish.

§ Mr. Howell
Talk of that kind is a little on the wild side. I have made it clear that in the Government's view there should be no substantial cuts in the network. British Rail recognises, as do the nationalised industries and the public services and private industry, that it must work within the disciplines and economic constraints demanded of it. I am confident that British Rail will make good progress within these constraints.

§ Mr. Booth
Will the Secretary of State confirm that the increase in the EFL that he announced is less than the increase in the public service obligation and therefore that the borrowing limits of British Rail for that year will be reduced? Does the right hon. Gentleman accept that this constitutes a restriction upon British Rail's ability to invest, bearing in mind that at least one-third of its investment programme, on its own estimate, will have to come from borrowing?

§ Mr. Howell
The need to borrow will be reduced. I think that the right hon. Gentleman was talking about the present year. The original EFL was set at £867 million, but, as a result of adjustments, which I have announced to the House, it was raised to £920 million for the current year. Within that, it is correct to say that the PSO grant has been increased, but that reduces the need to borrow within an adjusted EFL.