Network SouthEast: Subsidy (Hansard, 13 March 1990)

§ Viscount Ullswater
My Lords, the public service obligation cash ceiling for 1989–90 is at present £496 million. This applies to BR's grant-supported sectors, Provincial and Network SouthEast, as a whole and is not broken down by sector. But Network SouthEast's grant for the current year is likely to be £100 million. The final settlement of British Rail's grant claim for 1989–90 will be announced shortly. The new objectives for British Rail announced by my right honourable friend in December endorsed the British Railways Board's objective of reducing Network SouthEast's grant requirement in 1992–93 to zero.

§ Lord Allen of Abbeydale
My Lords, I thank the noble Viscount for that reply. Is he aware that it will not be of much comfort to those who read the announcement in today's papers about increased fares, a reduction in services and cuts in investment? Does the noble Viscount agree that it all adds to the risk that people will abandon the railways and instead drive into London, probably in a heavily subsidised company car, and thereby add to the congestion and pollution on the roads? Can the Minister say whether the Government have any overall transport policy affecting journeys into and out of the capital?

§ Viscount Ullswater
My Lords, the Government realise that a subsidy will be required for the foreseeable future on some provincial lines which are socially necessary and where otherwise there would be no railway. However, there is no need to subsidise a railway which has plenty of customers. There has been an increase in demand on Network SouthEast of 26 per cent. between 1984 and 1988, though that increase has slowed down. Since 1982 revenue has boomed. British Rail became more 1458 efficient partly due to modernising investment and so the subsidy fell. The subsidy has halved since 1983.

§ Lord Underhill
My Lords, does the noble Viscount take the view that the report of the Central Transport Consultative Committee published today belies everything that he has just said? That body is the consumers' watchdog for British Rail. In dealing with Network SouthEast the report says that British Rail must take another look at its corporate plan. The committee demands that greater attention should be given to a subsidy so that Network SouthEast can proceed with the improvements that it wants to make.

§ Viscount Ullswater
My Lords, I accept that much still has to be done on some parts of the network's new investment and that new investment will help. Tough quality objectives have been agreed with British Rail. Unfortunately, quality has been hit this year by damaging and unnecessary industrial action.

Noble Lords
Oh!

§ Viscount Ullswater
My Lords, that is correct. Delays in the delivery of new trains have not helped. The Government are confident that British Rail is doing all it can to recover that position.

§ Lord Nugent of Guildford
My Lords, while I should certainly be critical of the quality of management in British Rail and feel sure that there is room for great improvement there, is my noble friend aware that the logistics of commuter traffic into London—I am a daily sufferer so I am aware of the problems—are unlikely to be met satisfactorily with an adequate standard of service simply by relying on the commercial market? Does my noble friend agree that it will be necessary for a certain amount of public funds to be made available in order to maintain a good standard of service in place of a service which is at present very far from good?

§ Viscount Ullswater
My Lords, I am sure that British Rail will listen very carefully to the remarks made today in your Lordships' House. It will be for the board to react to those figures. It is also right to say that it needs to look at its short-term as well as its long-term investment. I believe that what my noble friend has said is true.

§ Lord Tordoff
My Lords, the noble Viscount told us that the rate of increase in the number of passengers is slowing down. Is he aware that that is not surprising since there is no more room to get additional passengers on to the trains? Does he agree that what is necessary is investment in new rolling stock, with doors on trains which open automatically, and better motors that allow the trains to accelerate more quickly so that we can get more trains on to the existing track and attract more customers into the trains and off the roads?

§ Viscount Ullswater
My Lords, I agree with the noble Lord. Investment is currently running at record levels. It is the highest since the change from steam to diesel. In the past two years the 1459 Government have authorised investment in 1,000 new vehicles and there is a massive ongoing programme of infrastructure improvements, resignalling, electrification, station refurbishment and platform lengthening to take longer trains. I hope that answers the noble Lord's question.

§ Lord Molloy
My Lords, is the Minister aware that in his reply to the noble Lord, Lord Nugent, he appeared to imply that one of the answers might be for British Rail to grant itself a loan? That does not seem possible. Is not the only real answer that British Rail must be helped as a public service and must be publicly assisted by the Government?

§ Viscount Ullswater
My Lords, as I made clear, there are some services which will continue to receive a subsidy. However, those that can be run commercially will not need a subsidy.

§ Lord Aldington
My Lords, is my noble friend aware that one of the problems of the commuter lines, particularly from the south-east of Kent to London—which are quite appalling—is the massive overdemand in the morning and the underdemand in the middle of the day? Is he aware that it is very difficult to run a commercially profitable service like that? I took part in an inquiry 20 years ago and that was the main reason then and it is the main reason now for British Rail's difficult commercial problems and for the commuter traffic problems in the South-East of England. Is my noble friend really not aware that, despite all the investment in British Rail, absolutely none of it in the past five to 10 years has come through to the south-eastern region and the routes from London to Ashford to Folkestone? I travel to London every day and I can assure him that the conditions of equipment and arrival times are shameful.

§ Viscount Ullswater
My Lords, I take note of the strictures noble Lords have made. All I can add is that investment is planned into the resignalling work, as I suggested, which will increase the logistics of running more trains on a crowded rail network.

§ Lord Jenkins of Hillhead
My Lords, will the noble Viscount accept that many of the questions and criticism are made not against the management policy of British Rail, though undoubtedly there are some faults there, but against the Government's lack of a convincing overall transport policy? In the circumstances in which almost the whole of the South-East is snarled up and where there is grave danger of such remaining areas of outstanding natural beauty as there are in southern England being concreted over, will the Government explain why they think that London—almost unique among the great cities of the world—can run an effective commuter transport system without subsidy from 1992 onwards?

§ Viscount Ullswater
My Lords, over the next three financial years there will be investment of around £.1.2 billion in Network SouthEast. There will be extensive replacement of old rolling stock with 1460 modern vehicles, as I said in answer to the noble Lord, Lord Tordoff. British Rail also plans investment in new lines to Stanstead and Heathrow airports, electrification of other lines—for example, Southampton to Portsmouth which is due to come into service in May—and not least in extra vehicles to cope with the growth in passenger demand when it turns round.

§ Lord Williams of Elvel
My Lords, will the noble Viscount grasp the point? The investment being made, which he quite rightly mentions, is being made by British Rail out of British Rail cash-flow. It has nothing to do with Government subsidy. Will he accept that there is no other capital city in Western Europe which has a commuter service with the characteristics to which his noble friend Lord Aldington quite rightly referred and which operates without extensive public subsidy?

§ Viscount Ullswater
My Lords, at the moment Network SouthEast operates under a public subsidy. However, it is the intention that that subsidy should phase out when it becomes commercially possible to run that section of British Rail efficiently.