HC Deb 30 October 1989 vol 159 cc10-1
10. Mr. Sumberg

To ask the Secretary of State for Transport what progress is being made in reducing the central Government public service obligation grant to British Rail in line with financial targets set in 1986.

Mr. Parkinson

The objectives that we set in 1986 called for a 25 per cent. reduction in British Rail's grant requirement by the current financial year. British Rail succeeded in achieving this target a year early, in 1988–89.

Mr. Sumberg

May I warmly welcome my right hon. Friend's answer? Is not the way forward a combination of public and private capital? In that context, may I say how grateful my constituents are to his Department for the investment in the Manchester metrolink which will considerably improve communications between Bury and Manchester as well as in the south of Manchester?

Mr. Parkinson

Yes, the metrolink is a good example of how the public sector and the private sector can co-operate to produce an improved service for the citizens of a very fine city.

Mrs. Dunwoody

Is it not clear to the Minister that every time the PSO grant is cut while British Rail is asked to improve its investment in new services, and improve safety and services to the customer, the customer pays through the nose? Is he aware that British Rail is in danger of becoming one of the most expensive, but not one of the best, railway systems in Europe?

Mr. Parkinson

I have to admit to the hon. Lady that there is a difference in philosophy between her party and mine on this matter. We believe in cutting the grant and increasing investment. The Opposition believe in increasing the grant and reducing investment. The net result of that was ever more heavily subsidised lines getting into ever greater disrepair. We thought that that was a foolish policy, so we changed it.

Mr. Franks

Does my right hon. Friend accept that British Rail operates under the apparent inconvenience of having customers, not least the inconvenience of having customers who expect a modicum of service? When he next talks to the chairman of British Rail, will he inform him that while the first faltering steps to improve the service have been taken, there is still a long way to go before the appalling service is improved?

Mr. Parkinson

British Rail is certainly open to criticism, and I have received many letters. But it is quite wrong to pretend that the system is not slowly but steadily improving. A large investment is being made, and I wish that once in a while people would give British Rail credit where it is due for improvements in services—and there is credit due.

Mr. Prescott

Is the Secretary of State asking us to believe that it is pure coincidence that countries such as West Germany and France, which have a higher PSO level, also have lower fares, higher quality and a safer system? That fact has been confirmed by the Government's own central transport consultative committee. As he is about to abandon the plan for the privatisation of British Rail, will he now set British Rail new financial targets that do not lead to exorbitant fare increases accompanied by a poorer quality of service?

Mr. Parkinson

We shall shortly announce the new objectives for British Rail. We see no point in subsidising journeys for which people are prepared to pay a fair price, but we see the case for subsidising rural areas where it is impossible to make the service pay. We think, and I repeat, that the policy of the Greater London council—the last example of the Labour party in charge of a public transport system—of increasing subsidies and cutting investment produced disastrous results for London Transport, which is why we are having to sort it out.

Mr. Tim Smith

Will my right hon. Friend confirm that British Rail's capital investment programme is running at record levels? Has he been able to approve any specific additions to it recently?

Mr. Parkinson

British Rail's investment programme is running much higher in real terms than it was under the last Labour Government. When the public expenditure settlement is announced, my hon. Friend will note that those figures have increased. Unlike the hon. Member for Kingston upon Hull, East (Mr. Prescott), we do not dream up schemes that will never come to fruition. Since I arrived at the Department, I have approved orders for more than £1 billion worth of new equipment for British Rail, LRT and local authorities.