§ Question proposed, That the clause stand part of the Bill.
12.40 pmThe Second Deputy ChairmanIt will be convenient also to debate clause 2 stand part and Government new clause 1—Experimental reopening of lines for railway passenger services—plus the following amendments to the new clause:
- (a), in line 3, after 'line', insert 'or from a station'.
- (b), in line 6, after 'line', insert; or from that station'. Government amendment No. 4.
§ Mr. Tony Speller (Devon, North)In bringing this measure to the attention of the House, let me first explain how it came into being. It is common belief that this is the age of the train and that it is time that, wherever possible, we got people off the roads and back on to trains. Moving into a new house, I discovered without surprise that adjacent was a railway line that carried a fair amount of goods but no passengers. It goes from Barnstaple to Bideford and on to the constituency of my hon. Friend the Member for Devon, West (Mr. Mills). With commuters crowding the road outside my back door, it seemed logical that they would be more comfortable on a train, particularly as the line was already there.
That small and fairly obvious thought brought me to the discovery, as a new Member of Parliament, that British Rail has every right to open or reopen a line, but, if the experiment fails, it is a lengthy and extremely expensive process to close the line. Principally for that reason many perfectly good lines carry only a little freight, when they could be used much more usefully.
Gathering around Me four of my hon. Friends and four Opposition Members of like mind, I have produced a simple Bill that seeks to allow British Rail to open experimentally lines closed to passenger traffic and, if the experiment fails, to allow British Rail to close them on notification to the Minister, without the length of time and cost at present involved.
In my early ignorance, I omitted to realise that not only the line had to be reopened but also stations. I accept entirely that the Minister's clauses are superior to my original ones and thank him, but hope that he will accept my amendments (a) and (b) because stations are important. The amendments will ensure that line and station go hand in hand.
There is probably more general interest in railways now than at any time since they began. Few constituencies do not have a good and active railway conservation group, probably allied to a group seeking to increase the number of trains along a line or to improve timetabling, and often feeling frustrated that their efforts appear to go for naught.
That is not the fault of the British Railways Board which now appears to be more far-sighted and far less 1050 defeatist than in the 15 or 20 years that I have been involved in local government and now in the House. At long last, the organisation has gone from defensive and defeatist, if not on to the attack at least to comparative aggression, and I hope that it may be possible to do the logical thing and work hard to revitalise and reinvigorate our system.
I hope that my hon. and learned Friend the Minister will tell us that we shall not have a continual increase in the number of closures of rural lines. I hope that we shall hear that the Government will support the idea of the rail-bus. I hope that the Government will go forward, as they seem now to be doing, in encouraging railways and saying that it is better to move people and, wherever possible, freight by railway than in an inevitable polluting motor vehicle.
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The basic problem is that we do not have flexibility, particularly in local services. The high-speed trains are a great boon to those who live near high-speed train services. Some of us who have to drive 45 miles to find them have a slow-speed lane in Devonshire to reach a high-speed train in Exeter or Taunton.
We are grateful to British Rail for the greatly improved timetabling that is being produced and are grateful for every face-lifted station. At this stage, it seems right to grant more freedom for the British Railways Board, which can be given at no cost at all to the Government, and to remove the involvement of the Minister in the day-to-day operation and short-term forecasting of the railways. Anything which reduces ministerial involvement reduces cost and reduces bureaucracy. As this measure is aimed at improving a vital public service, I feel confident that we shall not get too much opposition to it today.
When one talks about railways these days, one must talk about pollution—if only because railways must be the least pollutant and most comfortable way of moving people. I come from a rural area with a long coast line. However, it is 42 miles from the nearest major railway station and inevitably our tourist business suffers because British Rail cannot improve the service, because of the sheer cost of doing so under present conditions.
The rail-bus is what it says it is. It is a bus chassis, produced by British Leyland and built in Britain. A single unit can carry 50 seated passengers. A double unit can carry 100 seated passengers and 100 standing passengers. This gives it a good capacity at a low running cost. It has export potential—"Made in Britain"; excellent. It has already been on trial in Massachusetts. I believe that its first trial run was on the Boston-to-Concord line, which has historical interest to Britons as a place where we had a fairly rough ride a few centuries ago.
As we have this rail-bus potential and are ahead of the world, let us for once capitalise on our advantage. The rail-bus concept offers the most likely way of opening the country up, from the urban to the rural and the rural to the urban, for the commuter, for students, and, perhaps most important of all, for the day-to-day car-bound motorist who has not one but possibly two private cars in his family. In Devon he probably has a lower than average income, but he requires two cars—one to get to work, and the second to get his family probably to school and certainly to the shops.
This simple measure can give great advantage in reducing congestion on our roads, in the cost of roads, arid perhaps even in reducing the size of vehicles. Most 1051 important of all, it will give the public a genuine choice about how they want to move at, one hopes, a fair and economic rate.
Economic facts must be faced. Much of our public transport will always be subsidised. One of the problems that we have had in the past has been that, when a local authority sought to assess the cost of any transport grant, it could not assess the cost of just one or two years but had to do so for a far longer than "trial" period. Should the British Railways Board reopen some sector of line, or station, it had to accept that it was lumbered with that cost right through the long closure process if the experimental reopening was a failure. This simple measure gives local authorities a great deal of assistance in costing and forecasting cost within acceptable limits.
I am grateful to the Association of District Councils for its thoughts and comments on the Bill. Not one, but 131 district councils took the trouble to reply Some made the case that I have already made about stations being as essential as lines, some referred to costs and, in many instances, specified areas where they would welcome improved services and, by definition, since they have to fund them would accept the costs involved to their ratepayers.
The spread across the country is perhaps the most remarkable of all. I started out to seek a simple measure to help a small stretch of railway line in north Devon. The replies came from areas as widespread as Cannock Chase, Cardiff, Carmarthen, Merthyr, Milton Keynes, old and new, from Watford and Stockton and many others. I find it encouraging that local authorities clearly support the need to reconsider our basic means of public transport and to go back to the sensible railway as opposed to the expensive and pollutant road.
We talk about the people who would use the railways under this Act, as I mist it will become, but we have not mentioned goods traffic. I shall not expand too much upon this aspect, if only because the goods traffic side has specific handling problems. Having said that, I am delighted to say that in my part of the country we have had a grant to improve goods handling facilities for clay at Meeth in Devon. Here is a bulk material which is far better off on the railway, and consequently reduces congestion on the roads.
The rural commuter going to work by train could save one car per family in many families. There is also the rural commuter who goes to study. This is a great problem. We lose young people only too easily as they grow up if they have to find work outside our country areas. if we can help them to get to their studies and encourage business to come into rural areas because communications are better, that will be of great help to our students and of value to our communities.
People travel to town to do their shopping and they may live in rural areas all the year. But what of the holidaymaker? The one thing that holidaymakers do not want to do on holiday is change trains or buses when they have children, a carrycot and possibly a plastic bucket with them.
A good inter-city service will get tourists to this country, but not out into our countryside and to the coast. Here, the rail-bus concept offers the best possible hope for short journeys, but it is equally important for business visitors and others going from the country to the big cities 1052 to get good connecting trains. This means having a coach to hook on to a through train and also means better timetabling, which British Rail may find it easier to afford if it is getting more revenue from tourists who love the coast but do not enjoy lugging their children and luggage from one place to another when they have to change at some terminus.
I suspect that there is a railway development group in almost every constituency. There are certainly strong ones in the West Country. Two years ago most of the railway development group literature was hostile towards the Government. It was felt that the Government did not have any concern for the smaller units outside the big cities. I was fascinated to see only this morning the May edition of the North Devon railway line development group's publication. It refers to the Minister approving a freight improvement grant. It states that the "most helpful development" for years is a new passenger timetable. It refers to a 'facelift' for Barnstaple station. These are interesting straws in the wind, because for so long Governments of both complexions have been unpopular as they appeared to talk down or write off our railway system.
I believe that we have the public with us. I do not think that we shall create any great problems in allowing British Rail to work with local authorities rather than the Minister to encourage these experimental services. For all these reasons, I give heartfelt support to the whole spectrum of change covered by this much-amended Bill.
If we hear at the end of this debate that there will be not more closures, but no more closures, it will be good news. There is now a better future for British Rail than at any time in the past decades. We need flexibility and economy in our transport system. As one who drives many miles to and from the House each week, because there is no suitable train within reach, I believe that my experience can be multiplied a thousandfold or even a hundred-thousandfold throughout the land.
I very much welcome the Government's interest in the Bill. I welcome and accept every one of the proposed amendments.
§ Mr. Roger Stott (Westhoughton)I congratulate the hon. Member for Devon, North (Mr. Speller), the promoter of the Bill, together with his colleagues and my hon. Friends who are sponsors on introducing this short but important measure. I pay tribute to the hon. Gentleman's tenacity and his keenness to ensure the survival of the British Rail network as it is today and the prevention of any further closures, whether rural or otherwise.
Perhaps I may take the opportunity of this truncated debate to make some observations about the general condition of British Rail, remembering the neeed to stay in order. My party is committed to the maintenance of the present overall rail network. That includes the rural and unprofitable lines that genuinely meet a social need. I think that almost everone rejects the Beeching approach these days. Certainly my right hon. Friend the Member for Barrow-in-Furness (Mr. Booth) and I reject it. We believe that the railway system cannot be planned simply as an accountancy exercise, regardless of the community's dependence on what are essentially unprofitable lines.
If that principle is accepted, it means public expenditure to support uneconomic rural lines. The core of the British Rail network is the branch and rural lines. 1053 The demand for the profit-making services such as the inter-city service, depends to a large extent—varying by region—on the way in which those lines can feed the mainline rail terminals.
We must constantly look for a way to maintain the rural branch lines on a low-cost basis and try to encourage public authorities to make available funds for that purpose. Therefore, the Opposition welcome the Bill, because it provides a better opportunity for British Rail to reopen branch line services on a more flexible, albeit experimental, basis.
The 1962 Act is too inflexible. As I understand the Government's amendments, British Rail will still be obliged to make known to the public its intentions for all lines, even if the procedure for consultation through the transport users consultative committees is not to be enforced. That is a good principle if we are embarking on an experimental system.
The Bill should not be regarded as sufficient to secure the future of branceh services. The debate gives us an opportunity to consider two additional problems of which the Minister should be aware. First, many believe that the level of investment for repairs and replacements, as well as for new projects, has reached a critically low level. British Rail's investment needs are critical at this time, given the life expectancy of some of its rolling stock. It is not good enough for the Government to mantain that the level of investment over the years has been sufficient to sustain that. British Rail needs substantially more money if it is to maintain its existing services at this critical time.
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I am informed by reliable sources that about 3,000 miles of the 12,000 miles of railway track risk being placed under speed restrictions and, who knows, ultimately closed as a result of inadequate investment. The long-term future of both the Barmouth and Ribble Head viaducts is in question if replacement decisions are not taken soon. I am also reliably informed that the central Wales line can operate only a diesel multiple unit because of the threat to the track posed by heavier rolling stock. A further example of the declining services of British Rail is the withdrawal of the inter-city service between Oxford and Worcester, which I am informed has been replaced by a diesel multiple unit.
The situation will become worse if local authorities, like British Rail, respond to the Government's cash limits and withdraw support from many of the non-profit making lines. Investment in the railways is coming to a standstill this year with a deliberate underspending by British Rail of some £50 million below an already inadequate investment ceiling, due to the necessity for British Rail to keep within its external financing limit. British Rail cannot even spend the amount that it is permitted to spend because of borrowing restraints placed upon it by the Government and adherence to the external financing limit. If British Rail is to have a secure future, as we all wish, its investment and borrowing ceilings must be reviewed urgently and increased.
Secondly, we should take very seriously the points made by the hon. Member for Devon, North and look carefully at the innovations now taking place in order to achieve value for money and to run rural lines at as low a cost as possible. British Rail continues to put forward 1054 proposals involving its light-weight rail-bus, as the hon. Gentleman said. Radio signalling and automatic crossings also form part of that package of proposals.
Those developments are needed, and I believe that they are a more attractive solution to rural transport needs than the replacement of rail services by bus services. We have all seen railway lines closed when agreements were reached and assurances given that they would be replaced by an adequate bus service. All of us who represent constituencies with a rural element recognise that that has not taken place. Railway lines which had been in existence for a long time have been closed, but the bus services intended to take the traffic have either been very infrequent or they have not been permanent. It is therefore vital to take on board at this stage the suggestions made by the hon. Member for Devon, North.
There must also be a commitment to British Rail's innovation of the rail-bus. That is one way in which the transport requirements of our rural lines and communities could be revitalised. I hope, therefore, that the Government will see the suggestions from BR as a positive way in which to serve our rural communities.
My right hon. Friend the Member for Barrow-in-Furness (Mr. Booth) described in a speech to the House on 10 February this year our dissatisfaction at the level of the public service order grant. Although the Government raised the grant by £23 million last December, we believe that if the Government are serious in their commitment to maintaining rural services they must go for a realistic level of PSO grant. We believe that they are serious, because, in a reply to a question put down by my right hon. Friend, the Secretary of State for Transport stated:
I wrote to Sir Peter Parker on 9 November to make it clear to him that the option of closing 40 services is one that the Government reject."—[Official Report, 10 December 1979; Vol. 975 c. 472.]I therefore believe that the Government are endeavouring to maintain existing services and lines. I do not doubt their sincerity in trying to do that, but I doubt the capacity of BR to maintain them if it is placed in a financial strait jacket. If an EFL imposed on BR prevents it spending £50 million, and if the Government insist on not raising the PSO grant level, none of the good ideas that are coming forward from BR and from hon. Members—including the hon. Member for Devon, North in his Bill—will come to fruition. Without a commitment to finance them, they cannot succeed.Therefore, it is time that the Government took this issue on board. It is a pity that we cannot debate the state of the railways. Perhaps at some stage we shall. I am grateful to the hon. Member for Devon, North, however, for bringing the Bill forward. It has enabled me briefly to state the Opposition's case on railway finance. We certainly view it as an encouragement and we shall give it every support.
§ The Under-Secretary of State for Transport (Mr. Kenneth Clarke)I begin by congratulating my hon. Friend, the Member for Devon, North (Mr. Speller) on bringing forward this valuable Private Member's Bill. The Government amendments that are selected for debate with the new clause look drastic and amount almost to a complete re-writing of the original draft. They are, however, technical changes. We support entirely my hon. Friend's proposal that experimental rail services should be allowed to open as he suggests. It is a useful innovation and the amendments are intended to be helpful.
1055 My hon. Friend has discovered that the 1962 Act, which is designed to protect the public against uncalled-for closures of passenger services, can in certain circumstances unintentionally inhibit the reopening, for passenger services, of whole lines, lines presently used for freight only or individual stations. If anyone at the moment wishes to try out the market to see whether there is a general public need and the necessary custom to justify, with some subsidy, the reopening of branch lines to passenger traffic, they can be deterred by the thought that if the experiment is unsuccessful they will have to undergo the full 1962 Act procedure, involving reference to the TUCC, obtaining the Secretary of State's consent and so on, before closure can go ahead and money be saved.
Obviously no one ever intended that those safeguards should deter anyone who wanted to reopen lines or stations experimentally. It is a sensible suggestion that BR should be able to reopen on an experimental basis and if, unfortunately, the experiment fails, should be able to retreat without too many statutory inhibitions. That would be the effect of the Bill. No one knows how quickly or to what extent the Bill will be taken up. It may be some years before anything comes forward. A great deal will depend not only on BR, which will have to be the initiator of any proposal, but also on local authorities and their judgment of the transport needs of rural areas. I am sure that this is a valuable change to the law. I hope that it succeeds in initiating some useful experiments, perhaps in North Devon which I know is my hon. Friend's chief concern. As he has discovered from his response, he has excited much interest throughout the country.
I should explain the effect of the Government's amendments before I deal with the general policy behind the Bill and the points touched upon by my hon. Friend and the hon. Member for Westhoughton (Mr. Stott). The Government's amendments deal first with drafting points, with which I shall not burden the House, and to make it quite clear that there should be no role for the Secretary of State in experimental rail passenger services of this kind. Having considered the suggested procedures, it seemed best to suggest that the railway board should begin and end an experiment and not involve the Secretary of State or the Government. That could lead, under some Governments to political and other difficulties in the process. We tried to draft the Bill so that it would allow a simple procedure whereby proper notice is given to the public that a service is being opened on an experimental basis outside the 1962 Act safeguards and that proper notice is given to the public if the experiment fails and the service has to be withdrawn.
The Government's new clause seeks to achieve those objectives. New clause 1(1) provides that section 56(7) of the 1962 Act, which requires that the railways board should announce locally a proposal to withdraw a rail passenger service and permit users to object to their local TUCC, should not apply to experimental services. It still provides that the Board should give due notice of its intention to close what we are calling an experimental service.
Clause 1(2) provides:
rail passenger services shall be taken to be provided on an experimental basis only if'1056 the Railways Board has published due notice of that intention and warned the public that it regarded it" as an experimental service and not protected by statute.Clause 1(3) merely provides a common procedure for both notices—the notice of intention to reopen on an experimental basis and the subsequent notice of proposal to discontinue the service. We are proposing that, when notice of either kind is required, it should be published not less than six weeks before the opening of an experimental service and closure for two successive weeks in two local newspapers.
The real effect of the Bill is in clause 2, which provides that the provisions of the 1962 Act which require the Board to offer the opportunity for users to object to proposals to withdraw ordinary passenger services should not apply to experimental services. British Rail initiates the discussions, no doubt with the help of the local authority, and gives straightforward notice that it is to be an experimental service. If it goes wrong it can give straightforward notice that the service is to be withdrawn.
The fact that the Government are backing that is yet another indication that we share the optimistic approach to the future of the railways which has been voiced both by my hon. Friend and by the hon. Member for Westhoughton on behalf of the Opposition. Of course, we all want to see this truly made the age of the train. The problem is to ensure that our railways are changed into a modern, efficient and cost-effective system, that can win its traffic by the standard of its service and the quality of its trains.
Some services may have to be rationalised—perhaps occasionally some retreats made such as the reduction of services in line with demand such as is taking place in various parts of the country to ensure money is not wasted by running empty or near-empty trains. On the other hand, equal attention must be paid to looking for new business and new traffic, trying to win back passengers and industrial users by service, quality and price. In the rural areas as elsewhere, the opportunity should be provided for the railways to seek new business or for the local authority to call on the railways to provide transport needs, which at present are inadequate for some of our scattered rural communities.
That is the basis of the Government's approach. I shall explain, as I have been invited to do, how we apply that approach to the rural rail and branch services about which there is understandable concern.
§ Mr. Dennis Skinner (Bolsover)The Minister says that the Government will back the idea. He implied that he would back British Rail in the experiment and assist the local authorities. To what extent will the Government back the experiment other than by words?
If local authorities use ratepayers' money to assist, I hope that the Government will assist local authorities by providing grants. Such an experiment can be pushed along by British Rail only in accordance with the money available. British Rail does not have sufficient money. To what extent will the Government back the experiment with money? It is no good the Minister telling us that he will back it. The country, British Rail and the railwaymen have a right to know how much cash will be given.
§ Mr. ClarkeThe hon. Gentleman reinforces the argument of his hon. Friend the Member for 1057 Westhoughton. I shall take the opportunity to rebut some of the myths that surround the subject. Support is available to local authorities and British Rail to provide services, so long as they provide them cost effectively and where there is real need. We have increased the cash available to British Rail and we have been flexible about its external finance limit. More real resources are now at British Rail's disposal.
We give substantial grants to local authorities in the form of revenue support for bus services and railways. The bus industry receives subsidies of about £500 million from central Government. Local government receives enormous help from central Government in grants for railway services. Many local authorities, particularly in the metropolitan counties, already support their passenger transport executives. This year we accepted in full all the metropolitan counties' bids for revenue support for rail services. We have not cut the rail element of the grant that we give to local government.
I shall state our policy towards rural rail services and branch lines. The hon. Member for Westhoughton said that the opposition would reject a repeat of a Beeching-type approach. We share that view. The present Government reject any return to the Beeching-type approach. My right hon. Friend has said repeatedly that there will be no fresh round of Beeching branch line closures. I do not know how many times we have to repeat that. The hon. Gentleman was fair in his criticisms today, but at regular intervals there is a flurry of excitement when somebody starts a rumour that a programme of closures is being planned.
Sometimes maps are published. It is claimed that the maps exist in our Department, so we make great efforts to find them. Sometimes the maps exist but sometimes they do not emerge. A flurry of excitement is sometimes caused in a locality because someone has the idea that a local line is about to be closed.
Eventually the public will believe that the Government have not received proposals for such mass closures. We should not contemplate such closures. We are discussing with British Rail how to preserve the branch line network and how to turn our backs on the Beeching-type approach.
I shall deal with the most topical of the campaigns which has aroused excitement throughout the country. British Rail, Eastern region, published a statement entitled "Branches on the Brink". That suggested that 34 local services were at risk because of inadequate support for the railways. That caused widespread alarm in my constituency. A number of hon. Members have approached me since then. I am sure that the publishers were well intentioned but it has given rise to much alarmist nonsense. There are tiny proposals for closures in South Yorkshire but I do not think that they are on the list. I think that I am right that for the entire 34 local services we have received no proposals for closure and we are not aware that anybody is contemplating such closures. If we received such proposals, they would have to go through the statutory procedures. That is what my hon. Friend wishes to avoid for his experimental lines in the Bill. If ever proposals were put forward, the board would have to give full publicity under the 1962 Act and allow users the opportunity to object to their local transport users' consultative committee.
If there were objections, the TUCC would report to my right hon. Friend, usually after a public hearing, on the possible hardship that might be caused by the closure of 1058 a service and how that might be alleviated. He would then consider the report and any other relevant matters, including social and economic circumstances, before making a final decision on whether to make the closure.
It is not a dead letter but a live statute. My right hon. Friend's latest demonstration that he is reluctant to agree to passenger closures when there is any suggestion of hardship arises from his refusal to agree to the closure of London Transport's Epping-to-Ongar line when such a proposition was put to him not long ago.
I shall not avoid the main thrust of the Eastern region's argument. It is rather similar to the argument of the hon. Members for Bolsover (Mr. Skinner) and Westhoughton. The suggestion that 34 branch lines are at risk arises because it is suggested that British Rail may have to close branch lines because of inadequate Government financial support. It is important that I set out the facts of Government financial support and take the opportunity of dispelling one or two myths.
Reference has been made to the so-called PSO grant. British Rail is obliged to provide passenger services and it is paid large sums in compensation for doing so. That grant tends steadily to increase rather than decrease. The Government increased it recently by £23 million. At present the British Railways Board is receiving from the taxpayer by courtesy of the Government about £2 million every day to operate the passenger railway. That is the extent of the subsidy. It can be described as loss-making, a subsidy or the maintenance of an essential passenger network, the last term probably being a more sensible way of describing it. However, £2 million a day is a large amount to be going into one nationalised industry.
The PSO grant is large and it has recently been increased. However, as every traveller knows, the real level of fares on British Rail has increased. The inter-city service is an expensive way of travelling. The fare contribution from the travelling public remains fairly buoyant. Therefore, the board's total income for running its passenger rail service is not following a pattern of cut and decline. Its income tends to increase.
We must consider not only income but the extent to which the railways can keep clown their costs if we are to come to a conclusion on how healthy the financial position of the railways can be. As I have said, the Government are putting £2 million a day into the industry. The level of fares tends, unfortunately, to be pressed upwards by British Rail in response to cost pressures. In 1980 support for rail passenger services was 2 per cent. higher in real terms after allowing for inflation than it had been in 1975. There has not been a loss of support, a loss of subsidy or a loss of income. There has not been a decline in the real level of fares. However, British Rail is being damaged by the loss of traffic that is being experienced in some areas, That is partly because of competition and partly because of the recession. However, Government support is on an upward rather than a downward trend.
There has been reference to British Rail's investment ceiling. The Government have kept that ceiling—it is the board's responsibility to determine its own investment priorities—constant in real terms. We have kept the ceiling at exactly the same level that was bequeathed to us by the previous Labour Government. It is terribly easy to say, "It was always too low." The ceiling has been maintained at the same level despite the severe pressures that the Government are under in terms of public spending cuts and the heavy cuts that we have had to make elsewhere.
1059 We realise that people are concerned that more investment is needed and that British Rail's ability to spend up to its ceiling is affected by the cash limits, the external finance limit set for the board and the economies that it must make if its operating performance deteriorates and it gets into difficulties within its EFL. Last year we responded to the board's pleas, which were eminently sensible, that it was suffering particular trading difficulties because of the secession. It suffered dramatic losses of traffic and its losses on the freight business in particular were climbing rapidly. We therefore—against the background of being a Government meant to be making sweeping cuts in all directions—increased the EFL by more than £40 million in the middle of the year to help deal with the problem of the recession.
It is true that British Rail is still having great difficulties. Its financial performance must be improved. It is still losing traffic, and it is having to make—I commend it for doing this—considerable efforts to get its cost down in response to the pressures upon it from its present EFL. As I have said, we have increased the EFL, but there must be some limit to overall British Rail borrowing.
When the right hon. Member for Barrow-in-Furness (Mr. Booth) leads for the Opposition, he is sometimes so carried away by his oratory that he seems to imply that there is no need for any EFL on British Rail. No Government could manage the nationalised industries on that basis. It was the right hon. Gentleman's own Government, the last Labour Government, that introduced the present system of external finance limits, because it recognised that nationalised industries borrowing had to be subject to some cash limit. It is not possible for any Government engaging in sensible management of the nation's economic affairs to allow open-ended borrowing by any part of the public sector.
Therefore, we have an EFL. The present Government have been flexible in increasing it in response to British Rail's trading problems. Within that EFL, British Rail has to accommodate all its costs, including investment, but the investment ceiling that we allow has been maintained at its former level There are those who claim that it should be increased. We are considering—this is not the time to debate it—British Rail's longer-term investment needs, including electrification and so on, and any implications that they may have for the ceiling in the future.
§ Mr. SkinnerThe Minister said that about £2 million a day was going to assist British Rail. The figures sound grand, but they must be compared with many other travel costs. When the hon. and learned Gentleman says that there is a limited amount of money, is he saying that that applies across the whole of transport? How much of that £2 million a day assistance from the taxpayer is allocated to each British Rail train, and how does it compare with, say, assistance to each of the Concordes that are still in existence?
The Second Deputy ChairmanOrder. If the Minister answered that question, he would be going wide of the Bill.
§ Mr. ClarkeI accept your guidance, Mr. Armstrong. Fortunately, it is no part of my task to defend investment in Concorde over the years. That is perhaps not the most apt alternative to choose.
1060 Over £600 million a year, £2 million a day, to meet the PSO is a substantial sum. We are often accused of giving more support to the roads than to the railways. We are under constant pressure to increase spending on road building, from people who believe that present budgets are too constricted. The road haulage industry, rightly, and the motorist, somewhat controversially, are substantial payers of tax revenue to the Government, way beyond the track costs that they impose on the community, whereas British Rail is a substantial net recipient of huge sums of public money—again, quite rightly.
Within that overall financial context, let me deal with a particular problem that has given rise to concern about branch lines, a matter to which the hon. Member for Westhoughton devoted some attention: whether possible closures will have to go ahead because of deterioration of track and signalling. It is even sometimes suggested that there is risk to safety on some of our country lines.
§ Mr. StottI do not wish, nor would I be allowed, to engage in an economic debate with the Minister about the rightness of the EFL or the public sector borrowing requirement. A much more flexible approach should be taken with each nationalised industry. Although the Minister says that his Government have maintained and marginally increased the money that they have given to British Rail, he cannot avoid the current situation facing British Rail, and it is one of history. The DMU fleet is clapped out and the railway system generally is getting clapped out. If we accept that as a fact, either we live with it or we do something about it. The only thing to do about it is to get rid of the nonsense of the EFL as it applies to British Rail now and give it more public money.
§ Mr. ClarkeI agree that cash limits, or EFLs, should be realistic to be effective, and that there are circumstances in which one should be flexible. We have been flexible in our attitude towards British Rail, as was demonstrated last year when we increased the EFL in response to the pressure of the recession.
The hon. Gentleman suggests that investment should be substantially increased because the system is clapped out. Yet British Rail's investment ceiling is enabling it to do quite a lot of investment. My hon. Friend the Member for Devon, North cited some examples. British Rail has been able to introduce high-speed trains, experiment with the advanced passenger train, and electrify the route from St. Pancras to Bedford. Diesel multiple units were mentioned, and 200 electrical multiple units a year are being built within the investment ceiling.
The problem with the diesel multiple units is that many of them are ageing and due to be replaced, and so far British Rail has not approached the Government with any plans to replace them. So far British Rail has not submitted any plans to replace them, because it has not completed the designs for a diesel multiple unit. No doubt in due course a proposal will be put to us, and we are by no means convinced that it will not be possible to do that within the existing financial limits. The investment ceiling is maintained, and the support is still there.
However, we must look at the other side of the equation. British Rail has to make a contribution. It has to reduce overmanning, raise productivity, make itself a better service industry and more responsive to the public and public needs, and improve the financial forms of its 1061 business. Then it will be possible to look at the problem of the branch lines and track renewal. All the arguments about the future of rural lines and the fear that 3,000 miles of line are at risk arise from arguments about expenditure on track renewal. I accept that the board needs to spend more on the infrastructure of the rural rail services, but most of the services that have been mentioned have been starved of investment in recent years, unlike inter-city and suburban lines.
British Rail's own estimate is that it needs an extra £20 million a year for track and signalling investment to secure the future of rural services. That sounds a lot, but it is a relatively small sum for a business whose total costs each year are £2,250,000,000. So £20 million is a tiny adjustment in that budget.
It is our opinion—to some extent, that opinion is shared by British Rail, if one looks at the corporate plan—that it should be possible to find that kind of sum by improving productivity and efficiency. The board will save £40 million a year by withdrawing from the collect-and-deliver parcels business, thus far exceeding the adjustment in the budget that is supposed to be necessary to save the 3,000 miles of rural line. I shall not dwell on the implications for the pay settlement of the £20 million. A little over 1 per cent. of the pay is involved in the £20 million that is required for investment in these 3,000 miles at risk. However, within British Rail's resources, a comparatively modest improvement in productivity and efficiency will provide that modest sum to get on with the track and signalling renewal of rural railway lines.
I shall not go into the particular cases that have been cited today. I am aware of the problem at Barmouth. I have met deputations from that part of the world. They came to see me in some concern when the line had to be closed—for the extraordinary reason that the ageing wooden viaduct was being eaten by some obscure marine worm, and millions of pounds were required to replace it.
No one has yet blamed the Government for the activities of this submarine life. We have looked at the problem. I am glad to say that British Rail has now been able to assess the extent of the problem and will be reopening services this summer—admittedly, on a very restricted basis. We have promised to look at the problem of renewing the Barmouth viaduct on the broadest possible basis, bearing in mind the transport and social needs of the area and not taking just a narrow financial view.
I shall not go back into the details of lightweight rolling stock on the Central Wales line. I well remember that line from my youth. As far as I can recall, the Central Wales line has always had lightweight rolling stock. It was a rather interesting museum piece in my youth, with Victorian steam engines going up and down the line. We are probably some years away from the advanced passenger train running through to Aberystwyth. But the fact that there are some weight restrictions is not too surprising.
Both my hon. Friend the Member for Devon, North and the hon. Member for Westhoughton touched on a very valuable point, about which not only the Government but British Rail are concerned, when they said that when looking at these branch lines we have to look for low-cost operating techniques which will enable the financial support and fares for passengers to be kept down to a reasonable level. I have had the pleasure of visiting Derby to see some of the research work that is being done there, where the new British Rail-British Leyland rail-bus was 1062 developed and where new techniques in electric signalling are being developed. My right hon. Friend has made an official visit to the Mid-Suffolk line, which British Rail would like to use on an experimental basis for demonstration projects to show what can be done.
It must be right to seek a low-cost way of running these lightly used lines. If that can be introduced, it will help to secure their future.
Both hon. Members have talked about the development of lightweight rolling stock. The board has now developed with British Leyland a rather larger rail-bus, which is capable of carrying about 100 seated and standing passengers. I am glad to say that the board believes that this rail-bus has considerable export potential if it can be produced for lines in Britain. There is certainly scope for running it on rural lines in the United Kingdom.
In addition, the board is also developing a lightweight diesel multiple unit based on the same rail-bus concept. The prototype vehicle of that project will soon undergo passenger trials, which I understand will be completed by the autumn.
Automatic level crossings also have a part to play in reducing the cost of rural lines. The Mid-Suffolk line may be a spectacular example, but from presentations that I have had I recall that because it runs along flat country it has some 26 old-fashioned manned level crossings, and obviously that leads to high-cost operations on a line which inevitably, because of the job, would be lightly trafficked.
The British Railways Board has accepted the recommendations of a joint British Rail and Department of Transport working party on level crossing protection in favour of a programme of level crossing modernisation. My right hon. Friend the Secretary of State has made it clear to the chairman of the board that he would welcome progress in this direction. Not only would it help us to reduce costs on rural lines but the economic benefits from level crossing modernisation on lines of all kinds are very worth while. Obviously, it is very good value for money as public investment.
I am also glad to say that this programme is eligible for a European Community grant. Fifty per cent. of the cost is payable as a grant under EEC regulation 1192/69 whenever a level crossing is modernised.
I am glad to say that all of us support the idea of continuing experiment in the introduction of low-cost techniques of running rural lines. No doubt my hon. Friend's experimental services, when introduced, will almost certainly be on this low-cost experimental basis.
I conclude by dealing with the question of the role for local authorities in all this, and local authority support, upon which my hon. Friend touched.
In the first place, British Rail would have to decide whether it wished to open a particular line or station. I am glad to accept my hon. Friend's amendments. Not only could stations further along the line be reopened but even a station on an existing line could be reopened experimentally. The possibility of having to go through the full statutory procedure of closure could deter an experiment to see whether an intermediate station could get the traffic by reopening it for an experimental period. The amendments are valuable.
We are talking about rural transport and communications, where one cannot expect services to be provided out of the fares box. My right hon. Friend and I are concerned about the state of rural transport and are actively looking for ways in which the subsidy available for essential rural 1063 transport can be spent in a sensible and cost-effective way. We provide substantial grants to enable local authorities to have revenue support for all kinds of rural services. Inevitably in rural areas a great deal of it is concentrated on buses, which we hope will enable essential bus networks to be maintained. However, in many areas, the old-fashioned traditional network is still on the retreat. A large organisation is not able to run a big bus through villages where only one or two people get on.
We are making progress with many councils in getting the revenue support used in and intelligent and discriminating way, whereby particular transport needs can be identified and served, with the help of revenue support from local government, by a variety of experimental and unconventional services, such as car sharing, minibuses and community buses. Under this measure local authorities will be able to look to experimental railway lines.
The Government must look primarily to local authorities to decide whether they wish to support the introduction of an experimental service. Local authorities' legal powers to pay grants extend to paying grants to the British Railways Board. At present they are used almost exclusively by the metropolitan counties in the payments that they make through the agency of PTEs to British Rail commuter services. The West Midlands has reintroduced in recent years an extensive suburban passenger service, but other shire counties are taking a growing interest in the potential for supporting the railways.
Local authorities that wish to fund experimental rail services will have to be prepared to find the necessary funding from within realistic resources—that means the resources that they are prepared to find from the ratepayers, supplemented by the reasonable level of grant that they can expect to receive within the grant-giving procedures that we have set down. Realistic budgeting within the expectations of public spending levels must be maintained in the light of the country's overwhelming economic needs in the next few years.
The terms upon which grants are paid for particular services must be a matter for negotiation between the British Railways Board and local authorities. Authorities may have to undertake to support a service for a minimum period, to accept a different minimum period for notice for withdrawal and even to bear the cost incurred by the board if it eventually has to withdraw an unsuccessful service. I suspect that the Board will understandably want some level of commitment to a particular service for some period before it will open anything on an experimental basis.
However, those are all matters which, once my hon. Friend's Bill reaches the statute book, it will be open at least for local authorities to explore and for British Rail to consider. The measure will be a minor addition to the armoury of potential transport services that can be provided in rural areas, even in line with modern difficulties and the fact that we are dealing not only with scattered communities but sometimes with prosperous and heavily populated communities, where so many people use private motor cars. Some have access to one and sometimes even two cars in the more prosperous villages in the South. However, a minority of the population have no access to a car and are dependent on public transport 1064 or the goodwill of their neighbours in helping them to make essential journeys to shops, the chemist, the doctor and so on.
Who knows how many experiments will take place? The response may be modest. It may be many years before the option is taken up, but I am sure that it is worth exploring. I congratulate my hon. Friend once more for bringing the measure forward. I hope that he will accept that our amendments are helpful. They are merely technical. If anything, they simplify the process. Our aim has been to make the measure a workable and worthwhile addition to the statute book.
§ Question put and negatived.