GORDON BROWN has secured a £21 billion victory after the Office for National Statistics ruled that the Chancellor does not have to take the Network Rail bailout on his books.

The ONS issued a statement showing that it had upheld its controversial classification of Network Rail as a private-sector body despite reforms that have tightened the Government’s control over the railway network’s debts.

At issue this time was the Railways Act 2005, under which the Department for Transport (DfT) took over the Strategic Rail Authority’s liabilities in relation to its £21 billion support for Network Rail’s borrowing.

If the ONS had ruled that scrapping the SRA meant that Network Rail was now effectively nationalised, its liabilities would have been added to the National Accounts, significantly weakening Mr Brown’s fiscal position. Instead, ONS statisticians told the Treasury that the Railways Act made no difference and that control of Network Rail’s general corporate policy remained with its private-sector members and the directors they appoint.

George Osborne, the Shadow Chancellor, attacked the ruling. “It’s crazy accounting not to put Network Rail on the Government balance sheet,” he said. “It’s precisely why we need independent statistics, free from government interference, so we can have a true account of Britain’s finances.”

The ONS’s original classification of Network Rail as being in the private sector in 2001 followed repeated negotiations with the DfT and the Treasury over the new company’s structure, and was disputed later by the National Audit Office.

Michael Fallon, the Conservative chairman of the Treasury Select Committee’s sub-committee, said that it was “inconceivable” that the Government could let Network Rail collapse. “It’s a fiction — you can’t pretend Network Rail is a private body. The Government stands behind it, and the more the ONS tries to camouflage this, the more ludicrous it seems.”

The Treasury declined to comment on the ONS decision.

Colin Mowl, the ONS’s executive director for macroeconomics, said: “The classification follows international guidelines. What . . . matters for this purpose is not the degree of government financial support for Network Rail but who controls general corporate policy, and that control clearly lies with Network Rail itself through its board and the members of the company who appoint it, the majority of whom are from the private sector.”

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