STANDSY GRANTS FOR NFC
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STAND-BY grants of up to £50 million will be made available to the National Freight Corporation under a Bill introduced in the Commons last week.
The Transport (Financial Provisions) Bill also authorises the Secretary of State for Transport to make grants of up to £45 million to the British Railways Board to help meet the rail freight deficit.
A spokesman for the NFC told CM that the money was "purely for future use" and did not include the E19 million the Government had already given the Corporation this year.
"This legislation gives the Government the power to make grants to us, but it does not necessarily mean that we will need them," the spokesman added.
"There is no suggestion at the moment of the NFC asking for more money. Whether it is used or not depends on future trading and how quickly the Government acts on the capital restructuring that the Corporation has been pressing for."
Under the terms of the Bill grants up to the £50 million total would be made to meet cash flow deficits.
The spokesman said that the NFC would make money this year on its current account trading. But it still had the problem of its inherited capital debts.
The Bill came under heavy fire from Mr Norman Fowler, the Opposition spokesman on Transport.
He said that the taxpayer was being asked to provide E95 million to subsidise freight operations.
"There can be no social or economic reason for such subsidies," said Mr Fowler. "It is particularly objectionable when the Government must cut back on public expenditure and when passengers face ever increasing fares."