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Northern Rail Franchise

The Parliamentary Under-Secretary of State for Transport (Derek Twigg): I am today announcing the conclusions of the review of the Northern rail franchise. Copies of the consultant's report detailing their review will be placed in the House Library.
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Northern Rail, one of the largest franchises, provides services across the north–east, north-west and Yorkshire and Humber. Passenger journeys have grown by 10 per cent. in the past 12 months, and now stand at more than 71 million passenger journeys each year and public performance measure is currently 89 per cent.

The projected public subsidy is £2.4 billion (in 2004 prices) for the 8¾ year period of the contract. Collectively, the five northern Passenger Transport Executives (PTEs) are co-signatories to the agreement and sponsor the majority of Northern services.

The Strategic Rail Authority initiated a review in March 2005 with the purpose of reviewing the current timetable, which had not changed over several years, to ensure it meets present day demand and secures value for money for the taxpayer.

The review started with a comprehensive assessment of the franchise in its present form. It looked at the different markets served, current and future demand, revenue, costs, the number of trains being used and funding arrangements. It considered options for cost changes.

The review found that the franchise operates efficiently, with its trains allocated to meet the needs of peak time travel into the major towns and cities.

It found that revenue through fares, at 11p per passenger mile is lower than for other comparable rail operators. In the PTE areas, which account for 72 per cent. of passenger journeys, the figure is as low as 8p per passenger mile.

In the light of these findings, and the growth which the franchise is currently experiencing the Department has concluded that there is no compelling case for amending the current timetable or allocation of rolling stock. Service patterns will not change as a result of this review. The current levels of subsidy are also unaffected by this review.

There has been concern within the regions affected that the service review would lead to service cuts and fail to support predicted growth and economic development. We are committed to supporting current and future rail services in this franchise area and across the rail network. We will continue to work closely with Northern Rail and Passenger Transport Executives to make sure services meet future demand and that Government policy for the regions is supported.

Civil Aviation Authority (Price Control Review)

The Secretary of State for Transport (Mr. Alistair Darling): My Department has responded to the Civil Aviation Authority's Price Control Review consultation. The response makes the following points.

The economic regulation of London airports is, in general, supported by users. Regulation is designed to further the interests of airport users, promote efficient operation of airports and encourage investment in new airport facilities.

Air travel is essential to the United Kingdom's economy and to our continued prosperity. Airports are a key part of the country's strategic transport
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infrastructure and are important drivers of regional growth and employment. For these reasons, securing the delivery of the White Paper, "The Future of Air Transport" (Cm 6046), remains central to Government policy. This is most urgent in the south-east of England, where the White Paper recommends two additional runways be provided by 2030, with the first to be delivered as soon as possible at Stansted.

The Government therefore support the view, recently expressed by the CAA, that it is important that any owner of a London airport should recognise the significant near and medium-term investment requirements. This is likely to require the maintenance of credit quality sufficient to ensure the cost-effective financing of future investment.

The Government welcome the CAA's approach to the equitable sharing of surface access costs between aviation users and the public sector. The White Paper makes clear the importance of airport operators making a proportionate contribution to the costs of any road or rail improvements catering for airport-related traffic. The Government are actively considering these issues in respect of the London airports, and will keep the CAA informed.
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Pension Transfer Values

The Minister for Pensions Reform (Mr. Stephen Timms): When a person moves their pension rights from one scheme to another, a cash value is put on those pension rights and that cash sum is passed from one scheme to the other.

The Government have delegated to the actuarial profession the responsibility for specifying the framework within which actuaries must work when advising pension scheme trustees on the calculation of transfer values.

Recently the actuarial profession consulted on changes to their guidance on the calculation of transfer values. The consultation gave rise to a significant difference of view on the way forward.

The Government have been in discussion with the profession about the results of their consultation. We have now agreed with the profession that the time is right for the Government to set out the principles in legislation that should underpin the calculation of transfer values.

The Government intend to consult soon on draft regulations designed to reflect these principles.