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British Rail (Financial Objectives)

Volume 983: debated on Wednesday 23 April 1980

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3.

asked the Minister of Transport if he is now able to make a further statement on the financial objectives for British Rail.

I announced financial objectives and interim financial targets for the Railways Board's freight and Inter-City businesses on 17 March. Work is proceeding on financial objectives for the board's other commercial businesses.

Will the Secretary of State say what the position is on British Railways freight operations? Will those operations cover their costs in future?

It is the position of the Government—as it was that of the previous Labour Government—that we want to see British Railways' freight business running commercially and covering its costs. That is one of the reasons why we have set the financial objectives. Clearly, the annual report of British Railways is not encouraging in that respect. However, our aim remains as I have stated.

Is the Secretary of State aware that the too rigid application of cash limits to the railway industry is causing a rapid deterioration in rail services throughout the country? For instance, on the London to Birmingham service—starting with the May 1980 timetable—there will be a 10-minute slow down in services? Is the right hon. Gentleman further aware that he is the first Minister of Transport for over 30 years to move Birmingham further away from London, in rail terms?

I ask the hon. Gentleman also to study the reality of the situation and refer him to what I have just said to the right hon. Member for Barrow-in-Furness (Mr. Booth). The position is, of course, that British Railways have had to make economies in line with the Government's general programme. But. if the hon. Gentleman consults the chairman of British Railways he will not find that British Railways have been treated in any way unfairly in that programme.

Given the general concern about financial objectives, I believe that the House will be reassured by my right hon. Friend's statement that the 4 per cent. payment for productivity will not be made until productivity has increased. Can my right hon. Friend say how that productivity is to be measured?

I understand that the chairman of British Railways is negotiating on this issue with the trade unions. Sir Peter Parker has made it absolutely clear that the productivity payment will not be made until an agreement has been signed.

May I press the Secretary of State further on the question asked by my hon. Friend for Sunderland, South (Mr. Bagier)? Is it not a fact that comparative studies of British Railways and European railways are extremely favourable to British Railways? Is it not further a fact that, if British Railways had anything like the amount of money that is poured into their railway systems by the Governments of France and Germany, the problems of British Railways would be greatly eased? Does not productivity in British Railways stand excellent comparison with our much-vaunted European counterparts?

It is not realistic now, nor was it realistic a few years ago, to talk in those terms. It is true—and I pay tribute to British Railways—that compared with other European railway systems, our system is cost-effective. There is no question about it. However, I do not think that it follows from that that we should continue to pour more money into British Railways. What we surely need is a balance between the passenger on the one hand and the taxpayer on the other. I believe that we have achieved that.