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Mr. George Howarth (Knowsley, North and Sefton, East): I, too, congratulate my right hon. Friend on these proposals, not least because there will be appropriate and clear lines of communication.

Now that my right hon. Friend has the opportunity to turn his attention in a different direction, will he agree to meet my hon. Friend the Member for Liverpool, Walton (Mr. Kilfoyle), myself and others to discuss the excellent proposals Merseytravel has for a tram scheme in Liverpool?

Mr. Darling: For the avoidance of doubt, we will not be transferring Merseytram to Network Rail. I am aware of the Merseytram proposal, and I understand my hon. Friend's concern. I will be more than happy to meet one or both of my colleagues to discuss it at a convenient time.

Mr. Michael Jack (Fylde): Will the Secretary of State—to whom I also bid welcome—say who will set the financial performance criteria for Network Rail? To whom will it be answerable for the achievement of those performance criteria? Who will audit its accounts and, specifically, when can we expect a detailed statement of precisely what constitutes the upgrade of the west coast main line?

Mr. Darling: On the right hon. Gentleman's latter point, the Strategic Rail Authority is discussing with Railtrack, the train operating companies and, assuming that everything goes ahead, soon Network Rail how best to deliver an improvement to the west coast main line. That is likely to take a few months yet. I am not promising an oral statement but I will make sure that the House is kept informed in some way or another, because many

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right hon. and hon. Members have a direct interest in what happens on the west coast main line and we all want to see it improved.

The appointment of auditors is a matter for Network Rail. The company is limited by guarantee; its directors are answerable to its membership, and they will set the performance targets. Network Rail is also responsible for delivering the objectives set by the Strategic Rail Authority. One of the changes that we have made since coming to power is to bring more cohesion into the railway system. What was lacking in the past was a strategic direction to ensure systematic increases in investment that resulted in more people using the trains for travel as well as increasing freight. That is what the Strategic Rail Authority is there to do. However, Network Rail is an independent company, limited by guarantee. The directors are answerable to its members for its performance as well as its stewardship of the company, which is what the right hon. Gentleman is concerned about.

Glenda Jackson (Hampstead and Highgate): May I welcome my right hon. Friend to his new position and also welcome his statement? With regard to investment in our new railways, who will have the lead voice in deciding the prioritisation and plan for work? Will it be Network Rail or the Strategic Rail Authority? Who will have responsibility for those railway lands still in existence which may not at first sight be necessary for railway expansion or modernisation but which could be further down the line?

Mr. Darling: I thank my hon. Friend for her welcome, and apologise to the last few speakers who also congratulated me—I appreciated their remarks. It is nice to make hay while the sun shines; I do not suppose that it will always be this way.

It is for the Strategic Rail Authority to set out the key objectives, and for Network Rail to deliver them. Network Rail is responsible for delivering on the contracts that it enters into, whether they relate to the west coast main line or the suburban rail network, but the SRA lays down the strategy. There is now a clear sense of direction. The SRA will discuss with Network Rail, the train operating companies and others what the priorities should be, something that was missing in the past.

On any lands that Network Rail has acquired that are surplus to requirements and not needed, it is for the company, not the Government, to reach a view on whether to dispose of them. I will certainly look at any particular point that my hon. Friend may wish to bring to my attention.

Mr. Nick Gibb (Bognor Regis and Littlehampton): Although he referred to it, the Secretary of State failed to answer one of the key questions put by my hon. Friend the Member for Maidenhead (Mrs. May): how will the contingent liability represented by the £4 billion lending of last resort by the SRA be accounted for in the national accounts? To that end, what is the right hon. Gentleman's estimate of the risk of its being drawn upon?

Mr. Darling: I thought that I had dealt with that point. The SRA is providing facilities, first, to enable Network Rail to raise money to acquire Railtrack plc, to meet its

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immediate operating costs and to take over its debts, which are about £7 billion. Network Rail has raised £9 billion commercially; it is also taking over the European investment bank loan and the other loan to which I referred. The company has already raised that money from the private sector and it intends to securitise it. The process will start later this year and, contrary to the comments of some Opposition Members, there is much interest in it in the markets. That contingent liability will therefore fall away.

Secondly, the regulator has indicated that he will hold consultations on an early review. My expectation is that, in due course, the second tranche of funding—the £7 billion—will also fall away, until it, too, is taken over by purely private sources. The remaining backstop finance is £4 billion and that will remain a contingent liability. I very much hope that it will not be called down, because I hope that by that time Network Rail will be operating on a sound basis.

I repeat what I said to the hon. Member for Bath (Mr. Foster): the SRA will account for the moneys going to Network Rail, as the hon. Member for Maidenhead spotted—not difficult, as it was all over the newspapers. The process will be open, transparent and above board.

My statement may have been over long. I went into a great deal of detail because I was anxious that the House should understand everything, but finally—for the sake of completeness—I have laid two minutes before the House, which set out in full detail, chapter and verse, with all the supporting correspondence, exactly what the contingent liabilities are; how they will be covered; and where they are accounted for: so if the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) cares to spend the rest of the afternoon in the Library with a wet cloth over his head, he is welcome to do so.

Mr. Eric Martlew (Carlisle): Is my right hon. Friend aware that there will be great enthusiasm on the west coast main line for the new rail company and that no tears will be shed for the demise of Railtrack? I have two questions. First, is my right hon. Friend convinced that money will be available to provide us with a fast, modern, reliable rail service on the west coast main line? This week, we have once again experienced tremendous disruption.

Secondly, Railtrack was negotiating with Virgin to buy up to 10 new railsets. As Railtrack failed to deliver the second phase of upgrading—PUG II—will Network Rail have to pick up that debt, too?

Mr. Darling: Perhaps I may repeat what I said earlier about the west coast main line and the upgrades: now that Railtrack's books have been opened by the administrator, it has become apparent that some of the assumptions that had been made do not hold good. During the past few months, the SRA has been talking to the train operators—other companies are involved as well as Virgin—and to Railtrack to decide how best the west coast main line can be upgraded to bring year-on-year improvements systematically. As my hon. Friend knows, urgent attention to many points on that line could bring substantial benefits, whereas other places could be dealt with at a later stage. That work is still under way. I am hopeful that it will be concluded in the autumn, as I have been told. At that time, I shall ensure that, in one way or another, my hon. Friend and the rest of the House are kept informed so that they know what is happening.

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We are spending about £4.6 billion a year on average, which is three times as much as was spent during the 10 years prior to 1997. I am determined that, as that money goes in, we should try to ensure that people see improvements year on year. It may take a long time to reach the ultimate conclusion, but we need to make sure that each year brings changes that will make a difference, especially for passengers on the west coast main line. It is perhaps an indictment of successive Governments that the last substantial, large-scale investment in that line was in the 1960s when many of us were still at school.

Several hon. Members rose

Madam Deputy Speaker (Sylvia Heal): Order. May I make a plea for concise questions and answers, as a lot of hon. Members still hope to catch my eye?

Pete Wishart (North Tayside): I shall be brief, Madam Deputy Speaker.

Will the Secretary of State further describe the new board of Network Rail? For example, what will be the proportion of rail user groups vis-à-vis rail operators? May I further press him to describe how the nations and regions of the United Kingdom will be represented in the new structure?

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