British Rail (Hansard, 10 February 1982)

§ 12. Mr. Ioan Evans
asked the Secretary of State for Transport if he will make a statement on the future financing of British Railways.

§ Mr. Kenneth Clarke
The external financing limit for 1982–83 has been set at £950 million, which is the same level in real terms as the external financing limit originally set for 1981–82.

§ Mr. Evans
What action will the Minister take to bring a just settlement to the dispute on the railways by bringing British Rail and the railway unions together? In view of the disastrous effect of the Government's financial and industrial policies on British industry generally, will the hon. and learned Gentleman agree not to use this dispute as an excuse to privatise sections of the railway industry?

§ Mr. Clarke
We do not believe that Government intervention would be helpful at the present time. We hope that ACAS and Lord McCarthy will succeed in bringing together all the parties to achieve a sensible settlement. The Government have a long-standing agreement with British Rail to introduce private capital into its hotels and Sealink. That was agreed with Sir Peter Parker two years ago. I am sure that we shall soon see that agreement being fulfilled.

§ Mr. John Townend
Will my hon. and learned Friend make it quite clear that the Government will not increase the EFL to cover the losses caused by the strike, and that, if money is needed for investment in the railways, far from introducing private capital, the Government will now encourage the British Railways Board to sell off its non-railway assets lock, stock and barrel, and without the condition, that the hotels should continue to operate an NUR closed shop?

§ Mr. Clarke
The Government will have to consider the long-term financial problems that the strike is causing. As my right hon. Friend the Secretary of State said, we wish to look to the long-term future once some common sense is achieved. On the question of non-railway assets, it would be of great benefit to the hotels business and Sealink if they were free of public sector constraints and had access to private capital. On that basis, the Government and the board are pursuing the policy of privatisation which, I hope, will soon reach a successful conclusion.

§ Mr. Speaker
Mr. Robert Hughes.

§ Mr. Robert Hughes
Is the Minister aware that the continual insistence—

§ Mr. Speaker
Order. I called the hon. Gentleman in the hope that he would ask the next question on the Order Paper. Is he asking a supplementary question on No. 12

§ Mr. Hughes
With permission, Mr. Speaker, my question arises on question 12. Is not the Government's 968 insistence on linking investment with industrial relations in the railway industry making it difficult to gain the trust of the unions on future plans?

§ Mr. Clarke
Public investment must achieve a real return and a real economic benefit. An essential part of that is to improve the productivity and performance of the railways. That goes hand in hand with common sense. If the railways fail to achieve higher productivity, that makes it difficult for the Government to contemplate beginning vast programmes of electrification or investment.

§ Mr. Michael McNair-Wilson
Does my hon. and learned Friend believe that future financing should be made conditional upon British Rail and the unions reducing manning levels to realistic figures?

§ Mr. Clarke
We must examine the financial needs of the railways in the light of all circumstances, including trading conditions, business performance and productivity. We have done that with flexibility and realism during the past two or three years. In the long run, the health of the railways depends on getting rid of overmanning, restrictive working practices and operating the railways as a modern railway should be operated. The two go inextricably hand in hand.