§ 25. Mr. Formanasked the Secretary of State for Transport what progress he is making with the reduction of public subsidies to British Rail.
§ Mr. David MitchellMy right hon. Friend the Secretary of State for Transport announced on 10 October that he had been able to settle this year's public service obligation grant to the railway at £712.3 million. This was comfortably within the cash ceiling on PSO grant for this year of £736 million, which represents the target which my predecessor set in 1983. I pay tribute to Sir Robert Reid, his board and the staff of the railway for the considerable achievement of reducing the railway's call on the taxpayer by over 25 per cent. in this period.
On 21 October, my right hon. Friend announced updated objectives for the railway including a new grant target. He confirmed that Inter-City, which is achieving a remarkable financial turnround in financial performance, will not be eligible for any PSO grant from 1 April 1988, and asked Sir Robert Reid to reduce the Network SouthEast and provincial sector's requirement for taxpayers' support to £555 million (in 1986–87 prices) by 1989–90, while securing improvements in the quality of service provided.