Examination of Witnesses (Questions 260-279)|
15 JULY 2004
MP, MR NICHOLAS
Q260 Mr Walter: Owned by the Government.
Mr Brown: It is an independent
company operating in the private sector not in the public sector.
Q261 Mr Walter: But you are the shareholder.
Mr Brown: Network Rail is partly
financed obviously through money that is provided in the transport
settlement, but the idea that Network Rail is not an independent
company is wrong.
Q262 Mr Walter: So you are not responsible
at all for the activities of Network Rail?
Mr Brown: What actually happens
is that the transport settlement, which Alistair Darling, the
Transport Secretary, will be talking about this morning, enables
the Government to fulfil its commitment to meet Network Rail's
funding requirements, so we are committed to meet its funding
requirements. Its funding requirements were set out, as you knowyou
have just referred to itin the Rail Regulator's conclusions
of March 2004; but then Network Rail sets out its own borrowing
plans, and did so at the time of the Regulator's conclusions.
You have to understand the context in which we talk about Network
Rail. Network Rail does its own borrowing, but there is money
provided, obviously, for funding its requirements from government.
The relationship is not that government is responsible for all
the decisions of Network Rail.
Q263 Mr Walter: But it is a nationalised
Mr Brown: I think you are trying
to push me into a position that is not either the position of
the Government nor certainly was the position of your party. If
I may recall the history of this, your party privatised the rail
industry. You set up the company that was called Railtrack. Railtrack
had been run in such an inefficient and unsuccessful way that
we had to make special arrangements to continue Network Rail in
being; but Network Rail is an independent company. It does its
own borrowing, but we provideas we did for Railtrackfunding
for that company. We provide funding for its requirements. That
is the position. It arises from the situation that we inherited
when we came into power in 1997, created by a decision to privatise
the railway network.
Q264 Mr Walter: But Network Rail is in
public ownership, and therefore it is
Mr Brown: I think you are trying
to leap to a conclusion that the borrowings that Network Rail
undertake should be on the public borrowing requirement. That
is what you want to get to, and I am not going to go down that
road because that is not either the legal position nor the technical
Q265 Mr Mudie: Chancellor, this is a
historic meeting; this must be signalling a new era in British
politics, where you say transport is a matter for the Transport
Minister. Does this apply to every department?
Mr Brown: Absolutely. We are mere
technicians. We provide the finance.
Q266 Mr Mudie: I have been at you before
in terms of child poverty, but this document that you have produced
almost makes you feel we have a Labour Party again. I do not know
how you got it through the Cabinet. You state that all social
housing will be brought up to decency standards by 2010. Is that
Mr Brown: We have set down expenditure
that we are giving to the Office of the Deputy Prime Minister
essentially to increase by 50% the amount of social housing that
is built by
Q267 Mr Mudie: No, this is not built,
this is decency standards, Chancellor.
Mr Brown: Sorry, I thought it
was about building and improvement. We have also set out expenditures
for the improvement of substandard accommodation. Again, there
was an announcement made on Tuesday by the Deputy Prime Minister
about the detail.
Q268 Mr Mudie: Mr Macpherson, it is on
page 43, the bottom paragraph, to save a bit of time!
Mr Brown: We have set out expenditures
both for building and for renovation of houses. If I am right,
we fund the existing nine housing market renewal pathfinders,
and we are providing more funding for areas in the north and Midlands,
where there has been low demand and therefore
Q269 Mr Mudie: Especially in Leicester
and Birminghamvery important!
Mr Brown: There has been abandonment
of homes, and our help to regenerate these areas; and the total
amount of money is 450 million a year in 2007-08, and that compares
to 150 million a year in 2005; and that is why I said on Monday
that it was a trebling of the finance available.
Q270 Mr Mudie: I am just delighted that
you can assure this Committee that all social housingbecause
there is some dispute going on about the fact that, if tenants
refuse to allow their housing to be handed over to outside bodies
or ALMOs, they will not be covered by this decency pledge. Can
we be assured that the decency pledge applies to all social housing
regardless of the awkward tenants who might disagree with the
Mr Brown: I will just read out
what we said, and this is the position. "The Spending Review
confirms the Government's commitment to its target to make all
social housing decent by 2010 . . . "
Q271 Mr Mudie: Fine.
Mr Brown: Then it says: "The
number of non-decent social rented houses will be reduced by 1.6
million between the date we started in 1997 and 2008. Progress
towards this will be assisted by the GAP funding scheme announced
by the . . . ."
Q272 Mr Mudie: I read that in bed last
night, Chancellor. I am okay with that, as long as you are telling
us that, because it is an enormous relief to a lot of tenants
that they do not have to come out of local authority landlords
to get this money.
Mr Brown: My understanding is
that a vote takes place, and that is what I understand the position
to be. If I have got that wrong, I will write to you
Q273 Mr Mudie: Good. Moving to educationyou
can say something about education, can you not? The big word is
"choice". As the Prime Minister keeps telling us, to
give choice you need additional capacity. How do you tie that
in, in secondary education, with efficiency?
Mr Brown: I think what is being
said is that, clearly, where there is limited capacity, parents
are not getting the preferences that they state. We want to make
it possible for the schools that are doing well to expand, and
the schools that are doing well to link up with schools that could
do better, and therefore there are arrangements for partnerships
between existing schools, where one has got good management and
is working to link up with others. That is one way that parents
are more likely to get the preferences that they want.
Q274 Mr Mudie: I am coming down to you
as a technician now, and asking you: "Chancellor, you are
asking local authorities to save brass. One of the things government
is always at us at is, surplus placesclose them down. I
have schools being closed down in my constituencysurplus
places, demographic trends." The Prime Minister says, "No,
no, no; to give parents choice, you need capacity." Is this
again a new policy? Are surplus places no longer a good thing?
Mr Brown: I think you are raising
the issue about whether schools that are popular, do well, and
can expandcan we give the resources to enable them to expand?
That is the issue. The answer is that there are more resources
available for education than in the past.
Q275 Mr Mudie: I understand that, Chancellor.
Mr Brown: Then I moved on to the
second issue. Maybe you should come back but the issue was then
Q276 Mr Mudie: No, let us stay on that
one. I am in an inner city constituency, and the popular schools,
as you can well imagine, are the leafy suburb schools; so you
expand them; greatyou give parents choice. That means there
is more capacity in the inner city schools. Do you accept that
we would keep those inner city schools open despite that capacity
Mr Brown: That is when I came
to my second point. One of the proposals in the Education White
Paper is that the school you are talking about and the school
in the suburbs and in the inner citiesperhaps a link-up
between the two is also possible. As you expand capacity, you
are also making it possible for a good school to have an influence
over the development of the school that has not been so good.
That is one of the proposals in the Education White Paper.
Q277 Mr Mudie: The business of capacity
and surplus places: the discussions are taking place in secondary
education, but do they apply to primary education?
Mr Brown: That is an issue because
the main gist of the Education White Paper was about specialist
schools and the different types of school in secondary education.
Q278 Mr Mudie: Mr Macpherson, let me
read page 58, paragraph 546, the first sentence: "Academies,
which are independent publicly-funded all-ability schools . .
. "it sounds like a comprehensive if it had not been
for the word "independent"! "Academies have been
created to replace chronically under-funded schools in disadvantaged
areas." Why go to this business of building a new school,
when you have diagnosed the problem as chronic under funding?
Why do we not just deal with the chronic under-funding, which
I see as a feature related to the performance of inner city secondary
schools? What is the magic of not facing up to under-funding,
labelling it a bad school, knocking it down and building a new
school and funding it properly?
Mr Brown: The advantage that the
city academies have is that they are a fresh start in these areas
where there has been a long cycle of decline.
Q279 Mr Mudie: Under-funding.
Mr Brown: I think it is a mixture
of under-performance and perhaps under-funding; but there has
been a long cycle of decline, where the view is taken that a fresh
start is necessary. People come in to make that fresh start possible.
Sometimes, it is an entirely new building, and that is how the
city academies that have been successful. Basically, you decide
that a completely fresh start is needed.
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