Red Star parcel service to be sold

THE FIRST step to the privatisation of British Rail services was announced yesterday by John MacGregor, Secretary of State for Transport, when he authorised the sale of Red Star Parcels.

A consultation paper on the franchising system for BR passengers services will be published on Monday, Mr MacGregor told the Conservative Party conference in Brighton. 'Even before it has been published, I can tell you that there has been sufficient enthusiasm to show that the first round of passenger franchises will be successful,' he said.

The Bill to privatise the network will be published in November and will be strongly opposed by Labour MPs and peers. It will establish a new rail regulator which will award the franchises. BR will continue to provide passenger services until they are franchised to the private sector.

Mr MacGregor said the consultation paper would provide for open access to competition for services on routes which are franchised. Nearly 50 companies have expressed an interest in taking out franchises. The minister said they were not limited to the profit-making InterCity routes. He said he could not guarantee every individual line would be kept open when the system was gradually privatised, but Mr MacGregor said the basic rail network with closure procedures would be maintained. The privatisation of BR, with the parcel service and individual stations, was a key manifesto commitment for the Tories. Although Labour will hotly contest the Bill, it will help unite the Tories at a time when the party will be facing splits over the Bill to ratify the Maastricht treaty.

Mr MacGregor, a supporter of John Major's strategy on Europe, hinted that the European summit in Edinburgh will take away from Brussels the power to intervene in British road schemes, as part of a package to spell out the principle of subsidiarity, to make the treaty more acceptable to Britain and the Danes. He also confirmed that the pounds 12bn road building programme would be hit by the public spending cuts, adding: 'We have to contain our ambitions.'