§ Mr. Bradleyasked the Secretary of State for Transport, pursuant to his answer on 31 March, Official Report, column 140, by what method he will arrange to earmark part of the public service obligation grant to British Railways for the specific purposes of renewal and maintenance of equipment; and under what provision of the relevant European Economic Community regulation he proposes to exercise this power.
§ Mr. David HowellUnder section (3) of the Railways Act 1974 and EEC Council Regulation 1191/69, I am required to determine compensation in respect of the public service obligation imposed on British Rail as the difference between the costs attributable to British Rail's passenger business and its revenue. I announced on 31 March that this grant for 1982 would be £804 million from Central Government, together with an estimated £80.3 million from passenger transport executives.
I share the board's concern about the backlog of infrastructure renewals and their concern that expenditure on them should not be cut to meet short-term needs. I shall therefore determine, in consultation with the board, an appropriate figure for infrastructure renewals in 1982. At the end of the year my Department will establish with the board the actual amount they have spent on these renewals and to the extent that there is any underspend on the set figure, the grant will be adjusted downwards by a corresponding amount.
In taking this decision I am complying with the requirements of article 13 of EEC Regulation 1191/69, which specifies that decisions on the amount of compensation to the board shall at the same time set out the factors which might cause the amounts to be adjusted.