Rail subsidy grants to be secret

Funding privatisation: Dilemma for franchise director as Labour is accused of 'muddled' policy
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Information about money given to private operators to run the railways is likely to be kept secret, it emerged yesterday.

Roger Salmon, the franchising director who is responsible for allocating the pounds l.9bn of government money used to subsidise rail services, yesterday said he had not yet decided if such details would be released.

While the overall level of Mr Salmon's budget will be known, he said: "I haven't yet reached a decision on what level of detail will be provided" and in particular whether amounts given for each line will be made known. Under the system, all 25 lines to be franchised will need substantial subsidy.

Mr Salmon was speaking as the final bids for the first three lines to be franchised were being submitted, renewing the political row over the privatisation process. Labour's confusion over its response to privatisation deepened with Clare Short, Labour's new transport spokeswoman, failing to keep to the narrow line between the party's ban on spending commitments and its promise to regain public control of the railways.

Speaking on the BBC Radio Today programme, she appeared to go further than previous Labour statements by saying: "We will get whatever gets away back into public ownership." She also said that this would be done "as cheaply as possible". Sir George Young, the Secretary of State for Transport, said Ms Short was in a "muddle" and appeared to be making a clear commitment to renationalising the railways.

Mr Salmon is also in a difficult position. He is reluctant to release the financial information over the first bids because if he has been too generous he may not have enough money to ensure all the other subsidised services on the rail network can be run. Earlier this year, he told the Commons transport committee that should this happen, he would go back to the Government to ask for more money but this seems politically impossible given the precarious state of the government's finances.

Only half a dozen outside companies are known to have expressed an interest in one or more of the first three franchises - South West Trains, LTS, the London, Tilbury & Southend railway, and Great Western Railway - along with management buy-out teams on each of the lines. The demands for subsidy to run them are likely to be high, putting Mr Salmon under intense pressure.