§ Mr. Skeetasked the Minister of Transport what is the British Railways Board's external finance limit for 1980–81; and if he will make a statement.
§ Mr. FowlerI announced on 18 September that the Government had decided to increase the British Railways Board's external finance limit for 1980–81 from £750 million to £790 million. This followed a full review of the reasons for the worsening in the board's finances in the current year, and the steps the board had taken to counter this.
The board has suffered a heavy loss of traffic from the recession, especially freight 400W traffic. It has taken stringent measures to cut back on services, impose cost ceilings and increase their sales of assets. But these economies would not fully offset the board's loss of revenue and we have decided that the right course is to increase the board's external finance limit for 1980–81 by £40 million.
This decision will help the railways. It avoids any need for the losses on freight to lead to cuts on essential maintenance and renewal or to be loaded on to passengers in the fares increase the board has announced for 30 November. But it still leaves the board with a very demanding short-term objective. I have impressed on it the need to do its utmost to keep within the new limit.