BR to cut £70m freight losses
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BRITISH RAIL must end its losses on freight services—now running at £70m a year—by 1978. That was the firm instruction issued last week by Transport Minister John Gilbert. But it was not clear this week how BR intends to carry out this instruction.
A spokesman denied that there were plans for a big cut-back in services like those being schemed for passenger operations. In fact, the result of the move may mean a strengthening of rail freight marketing pressures on transport users.
BR management seems to be relying heavily on its TOPS system of computerised control for freight wagons— inaugurated last month—as a means of stimulating new business and cutting costs. TOPS (Total Operational Planning System) is claimed to improve efficiency by doing away with 20,000 wagons (worth 00m). A spokesman said that the system would "hopefully win new business from our competitors." TOPS, which will have cost about £27m by 1980, will also save Om a year in reduced wagon maintenance costs.
The spokesman also said that steps were being taken to reduce administration costs in the freight sector, but he admitted that all this would hardly amount to .E70m a year. Unless there is a major switch to rail transport—and the Government's grants for new rail sidings have so far only attracted one company—there seems no alternative to largescale cuts. This, however, would mean a considerable political storm.
In a meeting with the Minister last week, the unions were told that while the Government took the view that there would be a "continuing need for a substantial railway system," a limit on the amount of external financial support had to be set. BR will cost taxpayers more than .£500m this year.
It appears that all sides will have to await a decision on railway policy until the Government's long awaited White Paper on transport strategy is published early next year. This will lay down guide-lines about relative investment in road and rail services, but Dr Gilbert said that individual cuts were a matter for BR. He told Labour MPs in the Commons who complained at this : " My friends may not like it, but it is a fact . . that the choice which we have to make is between some retrenchment and some economies in the services that BR operates or continually increasing deficits."