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The put options were exercised yesterday (5 February), and I have today been advised by TfL that all the conditions for their exercise have been met. Having regard to the commitments in my predecessor’s letter of March 2003 and to the 2007 Comprehensive Spending Review, I will make available to the GLA a grant under Section 31 of the Local Government Act 2003 of £1.7 billion specifically for the use of LUL for the payment of the put option price.

The timetable for payments under the put option agreements means that a cash advance of £1.7 billion is needed from the Contingencies Fund to make the grant payment. Parliamentary approval for this new expenditure, repaying the Contingencies Fund advance, will be sought at the earliest opportunity in a supplementary estimate for the Department for Transport.

The net effect of this grant payment and other changes to my department’s resource accounts made

6 Feb 2008 : Column WS98

as part of the settlement with Transport for London will be £2 billion, which will go through the operating cost statement as capital grants. In addition to the sums associated with the put option, this funding provides:

additional grant payments to replace planned Metronet borrowing up to 2010—these borrowings were already provided for in planned public expenditure aggregates and so the additional grant does not involve any net increase in public expenditure; and additional grant payments to give TfL short-term flexibility while the costs associated with Metronet's administration remain uncertain.

The settlement gives London Underground the resources needed to manage Metronet’s administration, and support moving toward a more stable long-term footing and continue the work to maintain, renew and upgrade the Underground.

Transport: Correction to Written Answer

Lord Bassam of Brighton: My Answer to Parliamentary Questions HL 597 to 602 (Official Report, 18 December 2007,col. WA 132) regarding the study of longer and heavier goods vehicles has been subsequently found to contain an error.

The Answer incorrectly stated that the study was

While the decision to undertake a study of longer and heavier goods vehicles was made by the then Minister of State for Transport, the honourable Member for South Thanet (Dr Ladyman), the study was in fact commissioned in October 2006. It was in December 2005 that a decision was taken to refuse applications from two hauliers each wishing to trial a goods vehicle longer and heavier than those currently permitted. The study was commissioned later following growing interest within the road freight industry, elsewhere in Europe, and by the European Commission who are considering these vehicles as part of the Community’s Freight Transport Logistics Action Plan to improve the efficiency of transport and logistics.

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