I will attend the Budget ECOFIN to be held on 13 July in Brussels. Discussion will be on the Preliminary Draft Budget for the European Communities for 2008 and the meeting will include conciliation with the European Parliament, during which Council and the European Parliament will discuss expenditure levels. Items on the agenda are as follows:

Preparation for the conciliation meeting with the European Parliament;

Conciliation with the European Parliament;

Establishment by the Council of the draft EC Budget for 2008.

The Public Guardianship Office's Annual Report and Accounts for 2006-07 have been laid before Parliament today. This document gives full details of the agency's performance and expenditure for that year.

The Department are today announcing that Arriva Trains Cross Country Ltd has been awarded the New Cross Country franchise. The new franchise combines most of the existing Cross Country services currently operated by Virgin Cross Country and some services currently operated by Central Trains.

The contract will begin on 11 November 2007 and run for eight years and four months with the option for the Department for Transport (DFT) to terminate the contract after six years if performance targets are not met. The DFT will pay Arriva Trains Cross Country Ltd a subsidy of £1.056 billion.

The contract which DFT has signed will add capacity by nearly 3,000 seats each day on key routes at the busiest times by June 2009. Most additional seating capacity will be provided by reintroducing high speed trains to the network. These trains will be refurbished to the standard of the Voyager trains used on current Cross Country services; further seating capacity and additional luggage space will be added by modifying the Voyager fleet. The Stansted - Birmingham and Nottingham - Cardiff routes will see refurbished trains by June 2009 featuring more seats, and new first class accommodation.

A new timetable will be introduced in December 2008 based on the route structure specified developed by a cross-industry group to maximise the benefits of the West Coast Mainline modernisation. Arriva Trains Cross Country Ltd will offer a limited number of service extensions above and beyond the minimum specification maintaining some current direct journey opportunities which were not included in the franchise specification.

Extra help will be provided for passengers who need to change trains, especially at Birmingham New Street. Onboard staff will be equipped with technology to give up to the minute information on train times and connections. There will be an information campaign to advise passengers of other stations where they can change more easily than at Birmingham New Street. Extra staff will be employed to help passengers during major timetable changes in December 2008.

Arriva Trains Cross Country Ltd is contracted to improve performance and will introduce state of the art web based ticketing which will allow customers to print tickets at home.

The Government will continue to regulate fares for the franchise in line with national policy, currently RPI+1 per cent. As with all franchises, unregulated fares are the responsibility of individual operators.

In the New Cross Country franchise, Arriva Trains Cross Country Ltd has indicated possible average rises in unregulated fares of 3.4 per cent. above inflation each year.

The New Cross Country franchise will offer a single compensation policy for all passengers. As with other recently announced franchises, discounts in renewal for season tickets valid between one month and one year in compensation for poor punctuality and reliability will be replaced by compensation based on delays to individual journeys, known as Delay/Repay. Under the new system, all passengers will be entitled to claim compensation for all delays, whatever their cause:

50 per cent. of the price paid for a single-leg journey delayed by between 30 and 59 minutes;

100 per cent. of the price paid for a single-leg journey delayed by between 60 and 119 minutes; and

100 per cent. of the price paid for a return journey delayed by more than 119 minutes.

The changes will also start to standardise disparate compensation arrangements for single, return and weekly season ticket holders on different train operators.