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Rail Regulator's Interim Review

The Secretary of State for Transport (Mr. Alistair Darling): The rail regulator published on 12 December

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the final conclusions of his interim review of track access charges (TACs), setting out his determination of what Network Rail needs to spend over the next five years, and how this expenditure should be financed.

I welcome the regulator's conclusions. In total, these represent a significant increase in Network Rail's income requirement over the next five years compared with the conclusions he reached in his October 2000 access charges review, but with a requirement for substantial efficiencies and improvements in performance. It is essential that the industry now works together to ensure that these are delivered.

The regulator is providing flexibility for Network Rail to reprofile its grant payments over time, including increased borrowing by the company in the short term. He has said that he expects Network Rail to use this flexibility. In respect of the years. 2004–05 and 2005–06, as long as he is satisfied that the balance of Network Rail's total income requirements will be met in full by borrowing, the regulator may confirm by the end of February 2004 a lower level of income from track access charges and grants for Network Rail than he has set out. From April 2006 Network Rail will receive the full revenues that the regulator has established.

It is common practice for companies to borrow to fund a peak in investment. I believe that on the basis of the sound financial footing that the regulator has established for Network Rail and the strength of its financial structure, including its proposed securitisation and proposed modifications to its existing support facilities, it should be able to increase its borrowing above the levels presently assumed by the regulator. For 2004–05 and 2005–06, taking account of the flexibility offered by the regulator for Network Rail to increase its borrowing, I expect the results of this review to be accommodated within the Government's existing expenditure total. Final decisions on how to fund the increases beyond that will be taken in the spending review next year.

In line with the Government's fiscal rules which prohibit Government borrowing for current expenditure over the economic cycle, it is appropriate that Government support for capital expenditure by Network Rail is funded through capital grants paid by the SRA, rather than through track access charges paid by train operators. The regulator is providing a mechanism under which the balance between grants and TACs will be also be determined by the end of February 2004.

The total income requirement determined by the regulator is unaffected by the relative proportions which are provided by network grant and TACs. The fact that a high proportion of Network Rail's income may be provided as grant from the SRA does not mean that they acquire any control or influence over the company. Network Rail must continue to operate at arm's length from the SRA. It must focus on meeting the needs of its real customers—the freight and passenger operators. I am sure this point is understood by all concerned.

In February 2003 I laid before the House a letter of comfort to the Strategic Rail Authority (SRA) setting out the Government's commitment to fund the SRA so that it could meet its financial obligations. I am aware that the SRA has a contractual obligation to fund in full increases in TACs resulting from access charges reviews.

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In addition, the SRA will enter a contractual commitment to pay the network grants determined by the regulator in his access charges review. Letters of comfort cannot and must not fetter the Secretary of State's discretion, but the letter to the SRA is a correct representation of my current intention in these matters.

In a statement to Parliament in June 2002, I set out the key overarching principles for the regulatory framework for railways. Independent economic regulation was one such overarching principle for which there was an "essential continuing requirement". This remains the Government's position.

In July 2004 the powers of the individual Regulator will transfer to a regulatory board, in line with reforms to regulatory authorities in other sectors. The checks and balances in decision making by a suitably structured Board should reinforce the independence of regulation. The functions and duties of the ORR are not being changed by the transfer to a regulatory board.


Contingency Planning

The Minister of State, Department of Health (Mr. John Hutton): Last December, I announced the steps that the Department were taking to strengthen our plans against any deliberate release of biological agents, including smallpox. That announcement included three main components: improved vaccine stocks; a plan of action; and a cohort of immunised staff.

We have no evidence of a specific threat of smallpox attack on the UK. However, it is sensible and prudent to ensure that the National Health Service can deal effectively with any potential threat.

Over this last year, we have taken action to increase substantially our stocks of smallpox vaccine, and have announced a contract for a second procurement. This will enable us to provide new vaccine for the whole population, if required.

Our plan of action has been updated and revised following discussion and comment. The plan revisions incorporate valuable input from a wide range of medical experts and groups within the NHS as well as other Government departments. Implementation of the plan is being co-ordinated by the Health Protection Agency's (HPA) regional leads. I am today publishing the revised Plan, copies of which are available in the Vote Office and can be accessed on the Department of Health website at:

Regional smallpox response groups have been established in England, and core team members vaccinated in advance. We now plan to vaccinate a small number of ambulance workers to assist these groups, and to support the initial response to a smallpox emergency. Corresponding arrangements are being made for Scotland, Wales and Northern Ireland.

The Department's primary strategy is still to contain and "ring vaccinate" around any outbreak.

This work continues to be taken forward under the cross-Government civil contingencies machinery for which my right hon. Friend the Home Secretary has overall responsibility.

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UK Online Annual Report 2003

The Secretary of State for Trade and Industry (Ms Patricia Hewitt): The fourth UK Online annual report has been published today and copies have been placed in the House Libraries. The report is also available on the Office of the e-Envoy website.


Council Tax Benefit

The Parliamentary Under-Secretary of State for Work and Pensions (Mr. Chris Pond): Currently, people living in properties in council tax bands F, G or H have their council tax benefit restricted to the maximum amount payable for a band E property.

We have listened to representations from local government and others and we accept that this restriction is increasingly biting unfairly on people in larger properties. These will include pensioner owner occupiers who have worked hard all their lives to buy their houses, or large families in rented accommodation, who are not asset rich and unable to move to a property in a lower council tax band. Its removal will make council tax benefit fairer and easier to access. We have therefore decided to abolish the council tax benefit restriction from April 2004.

Local authorities also have the extra burden of having to collect small amounts of council tax from those who are required to meet the shortfall from their own resources. Abolishing the restriction will remove this burden too.

The introduction of pension credit has been designed in such a way as to ensure that some 1.9 million pensioners should qualify for more help, or help for the first time, with their council tax bills. We estimate some 310,000 pensioners will qualify for the first time.

Council tax benefit provides financial help to council tax payers on low income. However not all those who are currently entitled to help with their council tax bills are claiming this benefit. For example, although some 2.4 million pensioners already receive council tax benefit we estimate that up to 1.4 million pensioners may be missing out on the help to which they are entitled.

Local authorities have a statutory responsibility for promoting awareness of council tax benefit with their council tax payers. Many authorities have well developed take-up strategies while others rely solely on information issued with the council tax bill. However we want to do more to support them in this task and ensure more pensioners and those on low income are receiving the help to which they are entitled.

In the New Year the Government will be launching a campaign to raise the awareness of council tax benefit among those who are likely to be entitled and also their family, friends and carers. Working with local authorities, we will provide promotional material, and will develop guidance and advice to help ensure that procedures are in place to handle enquiries about entitlement and provide support for those, particularly pensioners, making claims.

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We are already working in partnership with local authorities to improve performance in housing and council tax benefit administration. We now need also to focus on take-up, where take-up of council tax benefit lags behind that of other benefits.

There is much that the Department is already doing. The pension service is already inviting claims for council tax benefit when an application for pension credit is made, and we recently introduced a shortened claim form for pensioners applying for housing or council tax benefit to make claiming easier. The local pension service is working with local partners, including local authorities, to help reach the more vulnerable pensioners.

We also recognise and appreciate the pivotal role that the voluntary sector can play in promoting take-up of benefits. We know some older people prefer to deal with organisations such as Age Concern and Help the Aged. As part of developing a "third age" network we are building closer and more effective partnerships with the voluntary sector. The campaign will reinforce the valuable work they already do.

The measures I am announcing today will provide local authorities with more support from central Government in undertaking their statutory responsibilities, and build on the work already taking place at local level.

More generally, the Government are committed to ensuring that local authorities can provide decent local services without making excessive demands on local taxpayers.

My right hon. Friend the Deputy Prime Minister has announced that the Government will next year be providing total support to local authorities of £54.5 billion—up from £50.8 billion for 2003–04 on a like for like basis.

Given the scale of the Government's investment in local services and the scope for efficiency improvements in local government, the Government believe next year local authorities must aim to deliver council tax increases in low single figures. The Government are prepared to use its targeted capping powers next year if necessary to protect local taxpayers.

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