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British Railways (Subsidiaries)

Volume 979: debated on Wednesday 20 February 1980

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asked the Minister of Transport what proposals he has received from the British Railways Board about the future of its subsidiary businesses.

At my request, the Railways Board has made proposals to my Department for involving private capital in its subsidiaries. I have now asked it to examine the opportunities more widely, including the possibility of setting up a holding company. I am discussing this with the chairman.

Does the Minister recognise that he has made a significant statement? Does he accept the fundamental difference between the involvement of private capital that he proposes and hiving-off? Will he give a clear undertaking now to the House that he will not sanction the hiving-off of valuable British Rail assets, such as the shipping and hotel interests, and that he does not see the arrangements he has outlined as a prelude to eventual hiving-off if the collaboration projects are successful?

We are talking about the involvement of private capital in operations like hotels, Sealink and property. How that is arranged and organised is clearly a matter for discussion between myself and the chairman of the British Railways Board. I can certainly give the hon. Gentleman an assurance on that point. Our belief is that this will provide better opportunities for the subsidiaries which. I believe, have not had those opportunities in the past, and also better opportunities for those people who work for them.

The House welcomes any proposals that will place British Rail on a stricter and sounder commercial basis, but does my right hon. Friend not agree that these proposals must make for greater efficiency? Does not he also agree that there must be greater efficiency in services for commuters, especially in the south-east area of Southern Region, which is currently experiencing a 70 per cent. decline in services leaving Londan stations for areas in the South-East?

I agree with the hon. Gentleman's point about commuter services, although this does not strictly arise out of the issue of subsidiary businesses. The point my hon. Friend makes about the efficiency of subsidiaries does arise. It is one of the aims of any new arrangement that they should be more efficient and that they should have greater opporunities and a greater commercial future than they have at the moment.

Will the right hon. Gentleman give an undertaking that, if British Rail is successful in attracting private capital, that capital will be exempt from the financial external limits? Does he not appreciate that if it is not so exempt, the effect of attracting private capital will not increase the resources of British Rail by one quid but will merely result in a reduction in the amount of money it obtains from the public sector?

I cannot give an assurance of the kind that the hon. Gentleman wants at a time when I am discussing the plans with the chairman. I believe that an arrangement of this kind gives, or would give, however organised—whether by a subsidiary grouping company or some other way—more commercial freedom to the subsidiary companies and, therefore, provide a better future for those working in them.