HC Deb 25 March 1981 vol 1 cc914-5
9. Mr. Foster

asked the Secretary of State for Transport how the public service obligation grant is calculated; and how it is allocated to each branch line.

Mr. Fowler

The public service obligation grant is assessed as the forecast shortfall between total passenger revenue and the total costs attributable to the passenger business. The grant is paid towards the passenger railway as a whole. It is not allocated to particular services or branch lines.

Mr. Foster

Does the Secretary of State agree that the public service obligation grant is totally inadequate to avoid the closure of branch and rural lines? Will he explain how I can assure my constituents that the money provided to support the Bishop Auckland and Darlington line and other lines under threat in the North-East is spent for that purpose?

Mr. Fowler

On the last question, the hon. Gentleman has been assured on a number of occasions. As for the inadequacy, as he claims, of the PSO grant, I remind him that the nation spends almost £2 million a day on direct passenger support. I do not regard that as inadequate.

Mr. Anderson

Is the Secretary of State aware that there is some anxiety in South Wales that the area is not getting its fair share of the PSO grant? As the situation has altered since the 1974 Act, will he consider opening the books a little to permit proper debate about the allocation?

Mr. Fowler

I am in favour of having the maximum amount of information published and divided down. I have put this point to British Rail over a number of years. The Railways Board has developed its avoidable cost concept. We shall have to see how far that gives us information. I agree with the hon. Gentleman's point.

Mr. Michael McNair-Wilson

Is my right hon. Friend satisfied that the PSO grant is the best way of assessing the social cost of the railways?

Mr. Fowler

Yes. I think that it is the best way. To go back to the previous question, it is possible to make divisions in it to make it more comprehensible; in other words, not to have quite the same block grant method as at present. Any improvement that can be introduced to make British Rail and its units more accountable is something that we should pursue.