Examination of Witnesses (Questions 440
- 448)
TUESDAY 11 DECEMBER 2001
RT HON
GORDON BROWN,
MP, MR ED
BALLS, MR
GUS O'DONNELL,
MR NICHOLAS
MACPHERSON AND
MR NICHOLAS
HOLGATE
Mr Laws
440. I want to ask a final question on the Wanless
consultation process. In your famous interview in the Sun
you mentioned that there would be a consultation process and you
said—you have got a copy of this one—"I have
started a big national debate and Sun readers are so important.
I wanted to hear their views about our future health service.
I want to hear what people say so we can consider this".
You also said that you cannot speak for the Health Secretary and
he may have views on earmarked tax or social insurance. If a lot
of Sun readers do write in about this and they support
strongly social insurance or earmarked tax, and if the Health
Secretary has those sorts of views as well, would you still at
the end of this consultation be willing to review your own conclusions
that you have to go for this publicly funded system?
(Mr Brown) We will listen to all the consultation
during this period. You must remember that Mr Wanless is going
to do regional visits around the country and, therefore, he will
be hearing people at first hand, whether it is professionals in
the health service or members of the general public who are patients.
441. You might well change your mind?
(Mr Brown) You must remember what this consultation
is about. It is about how we build the best health care system
for the future, how we can put the National Health Service on
a sustainable financial footing. I have said that my view, having
looked at the evidence, is the same as that of Mr Wanless on these
issues, that social insurance carries bigger administrative costs,
raises issues about equity and in any case in the systems in which
it is applied has other features that are not attractive to the
United Kingdom, like the charging that takes place in the French
medical system. But the wider debate is also about how you match
reform to resources. So, yes, we will listen to people. Yes, if
people have views about how we can reform, modernise, the health
service as well as improve the financial footing of the health
service we will listen, and that is what the debate will also
be about. Obviously we have produced evidence on the social insurance
system that makes us feel as a social insurance system, which
is essentially an employers' insurance system in France, it is
not necessarily the best way forward for us, but we will listen
to what people say.
442. If you got hundreds of thousands of representations
from Sun readers that might weigh in the balance?
(Mr Brown) Representations from the readers of every
newspaper, or any newspaper. I look forward to seeing the reasoned
and detailed representation that comes from the Liberal Party
about what policy you wish to pursue. By the way, the representations
are being invited by 22 January and they can be by e-mail as well.
Mr Laws: There is still time.
Chairman
443. Chancellor, the last section is on transport.
The Transport Committee has formally sent to the Treasury Committee
a number of memoranda relating to transport expenditure. There
are two issues of concern in the context of the Pre-Budget Report.
One is the funding of the administration of Railtrack plc and
the other one is the arrangements for funding London Underground
under PPP. Can I ask you a number of questions on this. Firstly,
what estimate have you made of the likely additional burden arising
to public funds in the current financial year from the placing
into railway administration of Railtrack plc?
(Mr Brown) We have advanced money through the DTLR
to the Railtrack administrator. The administrator thinks that
a considerable amount of additional money may be needed by the
end of March. It equates to the amount that Railtrack was aiming
to borrow over this period but was unable to do so. There is,
however, no impact on public sector net borrowing from the short
term loans to the administrator because they are loans and they
score in DTLR's capital departmental expenditure limit, as do
repayments which will effectively cancel them out.
444. How much of this will be met from expenditure
already allocated to transport and how much will be met from the
AME margin and DEL reserves?
(Mr Brown) Transport, of course, has a very large
budget, not just for this year but over a period of many years.
It is very much part of the ten year transport plan. Within that
decisions will be made by the Secretary of State for Transport.
445. When do you expect the additional cost
in 2002-03 and how will this be split between funds already allocated
for transport and the total reserves respectively?
(Mr Brown) I think we have to put this in its context
and this perhaps answers the detailed point. The administrator
will repay the loans by borrowing himself and that is what is
going to happen.
446. Under the PPP issue, we understand that
the Treasury has committed funding for London Underground for
at least seven and a half years. What are the implications of
this for the planning of transport expenditure?
(Mr Brown) In our ten year transport plan, we did
set aside provisionally amounts of money as the public support
for the London Underground Modernisation. I think what we have
to remember is this is the biggest single infrastructure investment
that has taken place in London Underground. It is one of the biggest
infrastructure programmes that we are seeing. It is the equivalent
to six or seven times the Jubilee Line, which was itself a very
large project. We have set aside large sums of money as a public
subvention to this programme but obviously we want to achieve
as the funder of this value for money and that is why the PPPs
are being looked at.
447. Lastly, Chancellor, what implications do
the seven and a half year review of Government support have for
private partners' assessment of the overall financial returns
from this project?
(Mr Brown) I think the potential private participants
were relatively happy with that arrangement. This is Government
looking at things over more than a one year, three year, or even
five year cycle, it is looking at it over a longer period of time.
I think that we have shown ourselves willing to put large sums
of public money. This is essentially a huge infrastructure project.
There are a billion passengers on the London Underground. We are
trying to raise the capacity of the underground—which is
overused at the moment for the capacity it has—to 1.3 billion.
It is essentially, therefore, a huge underground infrastructure
and modernisation project. We do need to work with the private
sector to achieve it and that is what we are doing.
448. Can I thank you, Chancellor, for this morning's
session. We are very grateful to you and we look forward to further
exchanges as time passes.
(Mr Brown) Thank you. I will send these notes as quickly
as possible with Christmas cards to the Members.
Chairman: Thank you.
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