HC Deb 02 December 1981 vol 14 cc152-3W
Mr. Garel-Jones

asked the Secretary of State for Transport whether he will increase the British Railways Board's external finance limit for 1981–82.

Mr. David Howell

The British Railways Board's external finance limit for 1981–82, set in November 1980, is £920 million, of which £53 million was earmarked for the costs of withdrawing from the collected and delivered parcels service.

Since that limit was set, British Rail has suffered a very severe loss of revenue due to falling passenger demand following heavy fare increases last year and lower business and holiday passenger traffic. In response, the board has made a concerted effort to secure substantial reductions in its costs, but it has not been possible for them to compensate fully in this financial year. It is clear that the provision of £867 million for the normal requirements of the business—which excludes the costs of withdrawal from C and D parcels—will be insufficient, and the Government have decided that this should be increased to £920 million. As the net costs of the withdrawal from the C and D parcels service have proved to be less than earlier anticipated, an additional allowance for this purpose is no longer justified. I consider that the new EFL of £920 million for all purposes represents a reasonable target for the board to work to in the remaining months of the financial year.