HC Deb 17 March 1994 vol 239 cc1126-45

11.5 pm

Mr. John Marshall (Hendon, South)

>: Having raised the subject of the Northern line more often than any other hon. Member, I do not apologise to the House for raising it yet again. Earlier this evening, someone told me that the answer to the Northern line's problems would be to steal some of the trains from the Central line and put them on the Northern line. I asked how that would be done and he said, "Well, you'd stop running trains to Epping." I said that that would not necessarily win the support of my hon. Friend the Minister for Transport in London, as his constituency would be adversely affected.

First, I thank the media for the publicity that they have given to this campaign, particularly the Evening Standard for its constant support of all campaigns to improve the quality of life of Londoners, especially those who travel on the Northern line. Although I thank the media for their support, their tactics in trying to doorstep the Chief Secretary may be slightly counter-productive. He should not be treated in the same way as Lady Buck or someone else who is frequently doorstepped.

Everyone knows that the Northern line is characterised by a series of disasters. Many of the trains on the Northern line go back to 1959 and, therefore, are 35 years old. It is a sobering thought that the trains on the Northern line are older than certain Members of the House. That brings the problem home vividly. The track is literally crumbling; the signalling belongs to the dark ages rather than state-of-the-art technology; and the dot matrix system is certainly not infallible. The Northern line originates in the Victorian era and the quality of service today is inadequate for the last decade of the 20th century.

The result of all that is that the service is inadequate and irregular and the trains are often graffiti-ridden and rather dirty. Although there has been some improvement in service recently, it is as much due to the recession as to anything else. The dangers inherent in the current state of the Northern line have been underlined by two recent events. Only the other day, one of the 1959 variety of trains was derailed at Edgware station. Previously, there had been no service for some days between Edgware and Colindale because the embankment had collapsed and the trains could not get by. A bus service had to replace the train service. How many more disasters must we have before the Treasury recognises that seeking to run trains that date from 1959 is not terribly sensible in 1994? Port dating back to 1959 may be all right, but 1959 trains are not suitable.

The Northern line serves the City and the west end. The City was a victim of the recession but will clearly benefit from the continued upturn in the economy. A number of surveys have suggested that tens of thousands of jobs will be created in the City in the next few years. As the number of those jobs increases, so the pressure on the Northern line will become more severe. That serves to underline the need to improve the service.

The Northern line is also an important service for tourists seeking to go to the west end and the south bank complex. In a few months' time tourists will be disgorged at Waterloo international station, having come through the channel tunnel and then up through Kent. They may need to take the Northern line for the last bit of their journeys. What sort of impression will they be left with if they make their first tube journey in a 1959 train on the Northern line?

The issue facing the Government and London Transport is simple: the Northern line needs to be modernised, and quickly. Asea Broron Boveri has come up with a scheme that meets the needs of London Transport, and I believe that it is financially ingenious. Any business man would accept it. London Transport should not be allowed to founder on an unimaginative interpretation of Treasury rules. There is a rumour—perhaps the Minister will be able to comment on it—that the Treasury is saying that although the costs of the scheme will be spread over 20 years, and although the amount each year will not be large, the total cost must be charged against LT's external financing limit in the first year of the scheme.

That is quite barmy; it is not how a business would operate. No private company going in for a long-term scheme would ask how the total cost compared with one year's depreciation charge. It would ask how the cost in any one year compared with the cash flow of the business in that year. At a time when we are trying to encourage private sector financial initiatives, I hope that the Government will look at the scheme in these more sensible terms, especially as it will be cash-positive within a short time. I hope that a Treasury ideology that seems designed to stop private sector involvement will not be pursued.

In 1993, the Government agreed that ABB could build and lease 41 Networker express trains for the north Kent routes. The justification was that British Rail would be privatised, whereupon the obligation would be transferred from the public to the private sector. I hope that my hon. Friend the Minister is not so lacking in initiative or ambition that he tells us that the Northern line and London Transport will not be privatised in the next 20 years. That would be a fairly unambitious and unimaginative approach for any Minister in the Government to adopt.

Surely the Minister will be able to say that the same rules as applied to Network SouthEast will apply to London Transport. I cannot understand a system that decrees that trains can be provided for the commuters of Kent but not for the commuters of London. There is no logic in that at all, and I hope that the Minister will confirm as much.

The Treasury is full of men who are much cleverer than hon. Members—certainly cleverer than an hon. Member who wants to speak here at 11.15 in the evening. Those ingenious men, instead of saying non, nein or nyet, should set out to find a way of breaking the impasse and encouraging this proposal.

The Government have rightly encouraged private financial initiatives. Sir Alastair Morton, after his success with Eurotunnel, has been encouraged to persuade the private sector to invest in public sector projects. The Opposition have decided to support some private sector financing of public sector projects.

Perhaps my hon. Friend the Minister can tell the House this evening whether Sir Alastair Morton approves of the ABB proposals. I suspect that he does, but my hon. Friend may be better able to inform the House about the position. ABB is willing to take part of the risk, but it is quite unrealistic for the Treasury to suggest that ABB should be asked to take a revenue risk.

One factor in any revenue risk is the level of fares. We would not expect. ABB to have any influence over the fares charged on the Northern line. After all, a little word called politics can sometimes intervene in the fares charged on London Transport. We all remember what happened in 1981. The fares dropped dramatically when there was a change of control—until the law courts told the hon. Member for Brent, East (Mr. Livingstone) that his policy was illegal, and the fares went up again.

A private sector business providing trains could not be expected to run the risk created by future fare levels, over which it would have no influence or control and which might be determined by politics rather than business.

I accept that ABB has produced an ingenious scheme, but it is equally fair to say that when a large sum of public money is involved, it would be quite wrong for one company automatically to get the contract. If the Government were even to promise ABB the project because it had been ingenious enough to think of it, and because it has the spare capacity and therefore would give them a better deal, they would be open to challenge from GEC, as a British company, and from other suppliers within the European Community. The challenge would go on for months.

By far the quickest solution, as well as providing the best value for money for the taxpayer, would be to have an auction between ABB and GEC and whoever else seeks to bid for the contract. I believe that ABB would win that contractual auction, as it has delivered trains to the Central line and will run into a capacity problem later this year. GEC is in a different position. It still has to deliver the trains for the Jubilee line and does not have the under-utilisation that ABB will have in a few months' time. A competitive deal would almost certainly end up with ABB getting the contract and it would be perceived as providing value for money for the taxpayer within the rules of the European Community.

There is an alternative—the "refurb" option. What does that do? It gets rid of the guards and costs £60 million. It would not improve the quality of trains; they would be increasingly unreliable and accident-prone, and breakdowns would become more frequent. Getting rid of the guards would simply ensure that there is one fewer person to whom customers can complain. That is not what the travellers on the Northern line want.

If we do not accept the ABB option, and take the "refurb" option, there will be no new trains for the Northern line until 2009, when the present trains will be 50 years old. That is far too long to wait. There will be no signalling until 2010, which again is far too long to wait.

The ABB proposal offers London the chance of new trains on the Northern line by Christmas. I promise my hon. Friend that, if we can have those new trains, I shall not call for another Christmas Adjournment debate. I can guarantee that he will then have an early night. My hon. Friend has been pestered; he had to come here in July at 3 o'clock in the morning and he has to stay up late tonight. But if he can be Father Christmas to London and give us an early train, he can have the night off.

Mr. Nick Raynsford (Greenwich)

The hon. Gentleman referred to Christmas Adjournment debates. Does he recall a debate on the Consolidated Fund Bill shortly before Christmas, when, at about 6.15 in the morning, just before a debate on London Transport was due to begin, he acted to stop it taking place? Is he not somewhat hypocritical now to call for debates on this subject?

Mr. Marshall

As the hon. Gentleman will know, I instigated an Adjournment debate in July that took place relatively late at night. I have instigated a number of Adjournment debates on London Transport and have raised the subject frequently at Question Time. If the hon. Gentleman compares the number of times that I have raised the matter with that of other hon. Members, the comment that I made at the beginning—[Interruption.] If the hon. Gentleman goes back to the events of last December, he will remember that the Labour party, or a number of Labour Members—

Mr. Raynsford

What about the debate on London Transport?

Mr. Marshall

Let me finish.

The hon. Gentleman will remember that many unnecessary Divisions were called, which cut into private Members' time. He will remember also that, on the previous Friday, the hon. Member for Bolsover (Mr. Skinner) spied Strangers to stop my hon. Friend the Member for Calder Valley (Sir D. Thompson) from having his private Member's debate. Quite frankly, the delaying tactics prevented an important debate from taking place later that night on the prosecution of City fraud.

Since last December, the House has come back to its senses to some extent. It is much better to carry on in that frame of mind. What we discovered last December was that if one side spied Strangers, the other side would do so equally as effectively. If we have taught the House that lesson, we did some good last December.

Mr. Raynsford

The hon. Gentleman has not.

Mr. Marshall

Well, it is certainly true to say that the House has come back to its senses since last December in quite an effective way.

Our choice is simple. If we support the ABB scheme, the Northern line could have 75 per cent. of the new trains by the end of 1997—within three years. The Northern line could have new signalling by 2000, and what a great bonus that would be to celebrate the millennium. The quality of service would improve. Journeys would be quicker. Trains would be more frequent, cleaner and better ventilated. There would be less disruption and an increase in peak capacity of 30 per cent.

The Government have an opportunity to show that a private finance initiative can improve services in the public sector. They have an opportunity to show that they care about the infrastructure of London and that they listen to the concern of Londoners, who, I suspect, are more worried about public transport than about any other local issue. The ABB project is supported by London Transport, London First, the Financial Times and the Evening Standard.

I have spoken this evening on behalf of the 400,000 people who use the Northern line every day. I have spoken on behalf of the residents of Barnet, Islington, Haringey, Morden, Westminster, Camden, Lambeth, Southwark and Wandsworth who use the Northern line every day. That underlines its importance for Londoners. I believe that what is proposed could be of great benefit not only to the residents of those boroughs but to the City of London as a whole, the people of London as a whole and the millions of people who use the Northern line throughout the year. I am sorry that the hon. Member for Hampstead and Highgate (Ms Jackson) is not here, because I was going to end by saying that that project managed to unite her and me. That is quite a rare event, but it may even have united me and the hon. Member for Holborn and St. Pancras (Mr. Dobson). If it has done that, it has achieved almost a miracle.

11.24 pm
Mr. Keith Hill (Streatham)

I congratulate the hon. Member for Hendon, South (Mr. Marshall) on securing this important debate. I agreed with almost everything that he said. I was relaxed about his promise that London Underground would be privatised over the next 20 years, because, palpably, we shall not have a Conservative Government during that time.

Notwithstanding that somewhat partisan shaft, let me declare at once that I speak as secretary to the all-party Northern line group, and also on behalf of thousands of my Balham and Clapham constituents who use the Northern line and endure its misery daily.

I do not propose to detain the House for long, as the arguments are obvious. If all the usual economists' tools are used, the proposal to renew rolling stock on the Northern line shows a positive result. It shows a 3:1 benefit-to-cost ratio; it maximises passenger benefits; and it will start earning profits in the year 2000. The attraction of brand new rolling stock is equally obvious.

I understand that there is a cheaper alternative—to which the hon. Member for Hendon, South has already referred—involving the refurbishment of the 1959 rolling stock, which is apparently being touted by some elements in the Treasury. The argument for that scheme, compared with the benefits of an entirely new build, do not stand up to scrutiny. The refurbishment will prolong the life of trains for a mere 10 years and will mean that the introduction of new trains will be deferred until the year 2009. It will even mean a delay of 10 years in the introduction of new signalling, to the year 2010.

Moreover, the refurbishment will still mean a longer journey time for the passenger, more waiting time, more overcrowding and a less regular and reliable service. By contrast, the new rolling stock will mean faster journeys, reduced waiting times, less crowding and a vastly more reliable service. It will give the commuter better security, better passenger information, better ventilation and a smoother and less noisy ride. There really is no choice—and there ought to be no hesitation either. ABB has come up with a welcome and highly innovative lease-back scheme.

I recognise the requirement for competitive tendering via the Official Journal of the European Communities, but the Government should get on with it now. It is preposterous that inappropriate Treasury rules should be invoked to stymie the scheme. Nowadays, there is consensus across all the parties on the virtues of such private-public initiatives. How will the Chancellor's own new and commendable commitment to projects of this kind ever get off the ground if such antiquated Treasury thinking is allowed to prevail? Are the rules made for men and women, or are men and women made for the rules?

An ABB-style scheme will cost London Underground some £35 million a year. London Underground's annual capital programme is running at £450 million-plus—it ought to be more—and its revenue amounts to £1 billion a year. An extra £35 million a year is clearly manageable, against the background of that capital spend and revenue base, the Government's own total spending programme and the variations that inevitably occur each year in that spending total; indeed, it is hardly measurable. It would be ludicrous to allow short-term considerations about the control of public expenditure to undermine a project of such inestimable long-term value to the people and economy of London. With proper dispatch, the new trains could be on stream by December this year.

The message to the Government is simple, urgent and clear. We want the tender in the Official Journal now; we want the leasing deal now; and we want the new trains now.

11.29 pm
Mr. Richard Tracey (Surbiton)

>: I support my hon. Friend the Member for Hendon, South (Mr. Marshall) and, like the hon. Member for Streatham (Mr. Hill), I wish to congratulate him on bringing this subject before the House. Unlike other hon Members in the Chamber, I do not have a constituency on the Northern line. I shall speak rather more generally. I am honoured to be the chairman of the London Conservative group of Members of Parliament.

The Northern line is a disgraceful sore thumb in the overall underground railway structure of the capital city. There is no doubt that the underground service is critical to the commercial and tourist life of London. As my hon. Friend the Member for Hendon, South pointed out, in the near future, tourists from Europe will come to Waterloo via the channel tunnel route. They will come off the trains and possibly continue their journeys to some other part of London by the Northern line. What an extraordinary and undesirable contrast that will be.

To be fair to London Underground, a great part of its service is now to be commended. Management has taken a greater grip on affairs since the Monopolies and Mergers Commission report of the early 1990s. I am told that in the past year 98 per cent. of scheduled trains were running in the peak period, and 92 per cent. of lifts were in service, as were 89 per cent. of escalators. I am not sure that 89 per cent. of escalators is quite the figure that I would wish to see, but things are improving greatly.

In its report last year, the Health and Safety Executive talked of a "transformed" safety culture on the underground. That is something which we all welcome, particularly those who travel on the underground regularly. In 1992–93, the generous funding of the 1991 autumn statement allowed 60 underground stations to be refurbished, with 'work taking place on 40 more. The first new Central line train entered service in April 1993, and the reconstructed Angel station opened in September 1992.

That is a fairly optimistic picture, and one which my hon. Friend the Minister for Transport in London will be building on in his reply to the debate. However, alongside all that progress, which we welcome, there is the disgrace of the Northern line, which has been described graphically by my hon. Friend the Member for Hendon, South and has been described for several weeks in the Evening Standard as the misery line. I commend the newspaper for that.

Many of us are taking a message to our colleagues in the Government—my hon. Friend the Minister for Transport in London and, through him, to our colleagues in the Treasury. We are approaching the time when we will see tourists coming in through the channel tunnel link and we must get to grips with the problems on the Northern line. How do we do it? There is no doubt that my right hon. Friend the Chief Secretary is doing his best for the benefit of this country and the taxpayers to reduce the horrendous £50 billion deficit that confronts us. That is an essential task.

As my hon. Friend the Member for Hendon, South said, the ABB company from the north midlands has put a business proposition to the Government. It has proposed a lease arrangement, with full service back-up, for Northern line trains that would ensure a good service for users of the line and, indeed, for my constituents who travel by British Rail to Waterloo and take the Northern line to other parts of London, and about whom I, as a London constituency Member, am concerned.

My right hon. Friend the Chief Secretary is worried about the public sector borrowing deficit constantly creeping up. I do not dispute that whatever solution is found must be consistent with the sound management of the economy, but I call on him to put the brains of the Treasury to work to find a solution to the problem.

My hon. Friend the Member for Hendon, South mentioned the involvement of the private sector in the funding of British Rail trains. Why cannot the same solution be adopted for the underground? As we approach 11.40 pm, time is running out. The Treasury and my right hon. Friend the Chief Secretary must get to grips with the problem for the benefit not only of Londoners but of the commercial life of our capital city and of this country as a whole.

11.36 pm
Mr. Simon Hughes (Southwark and Bermondsey)

I am here to complete the set. There are about 30 stations on the Northern line, which diverts into two branches at its northern end, loops around the middle of London and as one line almost goes off the edge of the planet—

Mr. Tracey

Morden.

Mr. Hughes

Yes—almost off the planet!

The line is represented by a number of hon. Members, three of whom have spoken and many of whom represent the Conservative or Labour parties. By definition, not many London Liberal Democrat Members represent the Northern line: I encapsulate the lot of them, which is a modest honour.

I am grateful to the hon. Member for Hendon, South (Mr. Marshall) for initiating the debate. He has raised the profile of the issue, backed by others who have signed on. He has had the support of the Evening Standard, which has adopted the line as its campaigning issue. It is all to the good if the only daily London newspaper can take on a key public sector infrastructure project and be willing to rehearse the argument.

I wish to make three brief points. Some work has been done in recent years not on stock or vehicles but on the structure as a result of pressure within tight confines. I represent three stations—London Bridge, Borough and Elephant and Castle. Elephant and Castle was dire and Borough, which was dire, has been refurbished. London Bridge is in the process of wholesale revamping as a result of the work done after the King's Cross fire to make it safe and because it will intersect with the Jubilee line.

Access and the entrance to London Bridge have been improved significantly, and they needed to be. It was bad enough having a grim set of rolling stock that might have appeared, full of people, or that might not have appeared at all, but it was even grimmer if one was on a terrible platform that was reached by a lift that often did not work or by stairs that were very deep.

In addition, the entrance to London Bridge looked like a building site—it still does to a certain extent. There is a great wall which is just awaiting a wonderful mural, an idea which I hope to persuade London Transport to accept. At the moment, however, the wall is raw, unfinished concrete. For a long time, one had the impression of passing through a building site and into a half-finished building. That is not inviting and it certainly is not good public relations; nor does it encourage people to use the station or to feel comfortable and safe on it.

Progress has been made, but, irrespective of rolling stock, it would be good if there were an early programme to finish the small amount of remaining work, which would not be costly, but would make the difference between stations being nearly finished—nearly adequate—and adequate.

Secondly, I make the fairly obvious point that has already been mentioned by the hon. Member for Holborn and St. Pancras (Mr. Dobson). The Jubilee line extension will be very welcome—I, for one, will be able to step out of this building and arrive home in four stops. It will clearly be a well-used line, and the Minister for Transport in London knows that we have battled long and hard, especially about getting two stations in Southwark that we were not necessarily going to get. The Jubilee line extension and crossrail will be very useful, but, while we are thinking about or proceeding with new lines, we should not forget that the Northern line is a strategic through line, and therefore needs a continuing commitment of public investment.

It is no good if, having inherited the Northern line as part of London Underground, we do not sustain regular investment to upgrade the line continuously. We need to upgrade the system of information to inform passengers when trains are due, how far away they are and so on to make it a line that people want to use. We do not have a straightforward underground system like that of some capital cities, but the Northern line is of central importance; it carries huge numbers of people. We have already debated how much the Government, and London Regional Transport, invest in the underground compared with what the Greater London council invested. Whatever is or has been invested, we need to catch up, because it has not been enough to keep pace with demand or need.

My third point was reflected in the substantive part of the speech of the hon. Member for Hendon, South and in those of the hon. Members for Surbiton (Mr. Tracey) and for Streatham (Mr. Hill). What deal can be done this year, can it be achieved and is it desirable? The Minister has been kind enough to listen to representations, so he knows that there is very little dogma or prejudice about this issue in any of the parties. No one is saying that there is a categorical reason why there cannot be some sort of leasing agreement. As we understand it, the reality is that the problem is fitting common sense into the process of government; it is about making sure that what the Department of Transport and we who represent the users of the Northern line think could be a perfectly viable system can be processed quickly without running into any buffers, or Treasury rules.

The Minister has heard this before, but it bears repeating: it is generally accepted that common sense dictates two things. We, of course, have to go through the process of ascertaining who might be the best tenderer for the deal. I accept that, but, if we bear in mind timetables and the date by which things need to be done, we must ensure that by the end of the year—comments were made about Christmas presents—the necessary commitment is made and, if necessary, Treasury rules can be modified to allow for flexibility of financial arrangements. The deadline must be the end of the year because it would allow the matter to be taken on board in the Government's public expenditure statement in the unified Budget in the autumn.

The hon. Member for Kingston upon Hull, East (Mr. Prescott), on behalf of the Labour party, and others have long argued that we are prisoners of old accounting procedures in public and private sector financial partnerships. Such procedures are a barrier, not an advantage.

I hope that the Minister understands that he will have no opposition from any part of the House. He will have the support of professionals in the transport industry and of politicians on all sides for any necessary effort to get the Treasury to be much more flexible than, traditionally, it has been. We understand why public sector controls have been put in place, but, rather than constituting an advantage, they may be standing in the way of a partnership and preventing money from being brought into the system.

I hope that the Minister will be able to leave the debate having told us of his commitment—a commitment that I do not doubt—and with his hand strengthened so that, with our assistance, he can go to the Treasury and get a deal that moves quickly. I hope that, having grasped the nettle this year, we shall be able to come up with a solution. We believe that it is possible. It is a matter of political will. There would be no huge additional financial cost. We are not asking for billions of pounds; we are asking that we be provided with a system which works, and that the Treasury be accommodating.

11.45 pm
Mr. Frank Dobson (Holborn and St. Pancras)

>: I congratulate the Evening Standard on its campaign in favour of Asea Brown Boveri's proposal, which was made in the 14 days since I first gave it the information. It has done an excellent job for Londoners. ABB's proposal is eminently sound and full of common sense. Consequently, it does not appeal to the Treasury. ABB recognises that if the Government will not find the money to upgrade any part of the Northern line—whether the permanent way, the signalling, the escalators or the lifts that do not work—they will not find money for new trains either.

ABB—at least, this part of it—is a maker of trains. It is already making trains for the Central line, and it wants to keep its process going to produce similar trains for the Northern line. That makes eminently good industrial sense to ABB and to the skilled people working in Derby, who, when they complete the order for the Central line trains, will lose their jobs unless more work can be found for them. From an industrial point of view, therefore, it would be perfectly sensible to give them the job of providing new trains for the Northern line. If they do not get that job, it is likely that they will be out of work. Indeed, the production line may close altogether.

If, for some bizarre reason, the Government decide to postpone the purchase of new trains for the Northern line, the works at Derby may go out of business, and when it is eventually decided to order new trains, they may very well have to be procured abroad. That would be economic lunacy, but it would be par for the course for the people currently at the Treasury.

The proposition that ABB has put forward is that, instead of London Underground having to find the money to buy trains, it should lease them from ABB, which would maintain them at its own expense for the next 20 years. There is nothing novel about lease arrangements. I expect that even some Treasury mandarins and Ministers use this means of ensuring that they have up-to-date, working television sets. The proposition that has been put forward is as simple as that. If it is accepted, new trains should be running on the Northern line by about this time next year. All the rotten, stinking, rattling, clapped-out trains currently on the line could be replaced within about a couple of years. That would be good for London passengers, it would be good for ABB, and it would be good for Britain.

We might therefore ask why the Treasury cannot see the sense of the proposal. The answer, apparently, lies in the Treasury rules. I must remind hon. Members that the Treasury rules were laid down, not when Gladstone was First Lord of the Treasury, but when Mrs. Thatcher, as she then was, was First Lord of the Treasury. There is nothing old about the present rules. They are stupid but they are modern. If they could be changed in the early 1980s, we should be able to change them in the early 1990s—indeed, we are approaching the mid-1990s. The rules are stupid and archaic, and they inhibit the development of our country. They need to be changed.

It is worth reminding the House that even before they had the present set of rules the people at the Treasury were a backward-looking lot when it came to anything practical to do with British industry. Churchill once said that they were like inverted Micawbers, waiting for something to turn down. Nothing gives those people greater pleasure than turning down some practical proposition suggested by practical people to bring some practical help and benefit to others.

We understand that the Chief Secretary to the Treasury has announced that the plan would not be a good bargain for the taxpayer. Presumably he came to that conclusion. as he travelled about in his chauffeur-driven car, paid for by the self-same taxpayer. I should have thought that a perfect example of a bad bargain for the taxpayer was having to fund the transport arrangements of the Chief Secretary to the Treasury. Certainly the right hon. Gentleman might have a different point of view if he had to travel to work on the clapped-out ruins that presently shuffle along the tunnels of the Northern line. He, like everyone else with a bit of common sense, might see that it should be a bargain to go ahead with the proposition.

The Minister for Transport in London is an eminently talented chap. Before Christmas, in the space of one short winter's day, he told the journalists from the Evening Standard that the Government would privatise the underground, but before the afternoon was out he told the House of Commons that they would not. In view of the explanation recently given by the Chancellor of the Duchy of Lancaster about the veracity of some of the statements made by Ministers at the Dispatch Box, we can probably assume that what the Minister told the Evening Standard was the truth. However, that does not change the position.

The Minister is trying to do the same sort of double shuffle now. As I understand it, there is a sort of general responsibility; people who sit on what is called the Treasury Bench do what the Treasury tells them. In this case, that is to turn down ABB's proposal to get new trains on the Northern line. But apparently all that is being blamed on the Chief Secretary to the Treasury, and the Minister is letting it be known that he strongly supports the proposition. He had better sort himself out. He must either go to the Back Benches and support common sense, or stay on the Treasury Bench and stick with the Treasury rules. That is the choice that he must make.

One or two more general points need to be made. The state of the London underground is deplorable. The hon. Member for Surbiton (Mr. Tracey) described the Northern line as though it were a swine among pearls. He implied that the rest of the system was pretty good, and that the Northern line alone was a mess. That is not how large numbers of travellers on the other lines regard their journey to and from work every day. Many of them are discontented. They use stations with lifts or escalators that do not work, suffer from signalling failures and so on.

Just before Christmas we saw the virtual collapse of the whole tube system for a day or two because a 71-year-old cable on the Central line had burnt out. That is unacceptable. The present state of the underground system means that it teeters on the brink of collapse almost every day, and it fell over that brink not long before Christmas.

A vast amount needs to be done to the underground, and one of the problems is that the Government's top priority for investment was not to get the existing system back into good nick so that it could provide a decent service; their topmost priority was to finance the extension of the Jubilee line, largely to bale out the banks which had taken such a caning over Canary wharf, and also because those self-same banks were finding £300 million towards the cost of the extension.

I may add that when these geniuses, presumably presided over again by Treasury Ministers, negotiated the arrangement with the banks, they made no allowance for inflation, so that the famous £300 million is to be paid out by the banks in instalments over a period of 20 years and, on some of the projections that I have seen, it could cost them all of £19 million at the end of the process if inflation reaches certain levels. The reason why the Government decided to invest in that line was that it would help their friends who are now the newly enhanced speculators at Canary wharf and the small contribution that they were prepared to make.

If the Minister had asked Londoners where the money should be invested, they would have told him to invest it in the Northern line and in the other lines which are already not working and which offer a lot of scope for investment. Even if the Government see sense, accept ABB's proposal and get these new trains on to the Northern line, it will not resolve all the Northern line's problems by any means. The track is in a terrible state. The signalling is in a terrible state. In my own constituency the French escalators at Kentish Town station have never worked properly for the past six years, and Mornington Crescent station is now closed indefinitely because they cannot afford to replace the lifts. Similar circumstances apply all the way down the line.

This was one way forward, one way in which at least a good part of the investment for improving the Northern line could have been found. The Government could then have been left to find the rest of the money to improve the permanent way, the signalling, the electrics, the lifts, the escalators and the stations. That is what could be done if this is approved.

It ought to be approved. It will be a disgrace if it is not approved. I do not think that in their present humour Londoners will forgive the Government if it is not approved. It makes sense for the travelling public. It ought to make sense for the Treasury. It certainly makes good sense for ABB, which is not some obscure outfit from Derby, after all, but one of Europe's most significant manufacturing companies, with a good track record all over Europe. They are not the sort of people to enter into fly-by-night arrangements with anybody.

The Government ought to accept their proposition, and accept it now, for two reasons. First, the people who travel on the Northern line are entitled to a better deal. Secondly, we cannot allow the rundown of the manufacturing capacity at Derby to proceed much further, or a large number of the skilled work force will disappear to other places and we will never get them back.

11.58 pm
The Minister for Transport in London (Mr. Steve Norris)

We have had a rather good debate. I join the many hon. Members who have congratulated my hon. Friend the Member for Hendon, South (Mr. Marshall) on securing it. I want to put it on the record that he is a tremendously assiduous campaigner for the Northern line. His assertion that he has probably asked more questions and instigated more debates on it than any other hon. Member is likely to be proved correct, and I congratulate him on his assiduity.

My hon. Friend is right to say that the Evening Standard campaign on the Northern line has been an effective one. I share with him the observation that it illustrates more than anything else the good humour of our right hon. Friend the Chief Secretary who, I think, has dealt with the concentration of the Evening Standard on his personal role with his usual aplomb and with considerable panache.

I am also pleased to see the Member for Streatham (Mr. Hill) here. I appreciated his speech. He has developed considerable expertise on transport issues. I have admired the work that he has done with the Select Committee. He knows the Northern line extremely well and he has devoted a great deal of attention to it. He is noted for knowing what he is talking about, like the other hon. Members who have spoken in the debate, I am delighted to say. I am grateful to him for what he had to say.

My hon. Friend the Member for Surbiton (Mr. Tracey), who is the chairman of the London group of Conservative Members of Parliament, made a powerful speech which, I am sure, will be noted in a number of quarters. He articulated sentiments which I know are widely shared across the Benches. I am sure that he was right to ensure that those sentiments were put on the record.

The hon. Member for Southwark and Bermondsey (Mr. Hughes) is an habitué of these late-night occasions. I did a brief calculation while he was speaking. As far as I can recall, there are 50 stations on the Northern line if one takes accounts of the bifurcations. As my hon. Friend the Member for Hendon, South said, 400,000 journeys are made every day on the line. That shows what a massive enterprise the Northern line is. The hon. Member for Southwark and Bermondsey was right to say that there has been a refreshing lack of dogma about the debate about rolling stock, about which I hope to say some more in a moment.

Mr. Peter Bottomley (Eltham)

>: Before my hon. Friend goes, he ought also to pay a tribute to our hon. Friend the Member for Harrow, West (Mr. Hughes), who was sitting here silently, and to our right hon. Friend the Member for Ealing, Acton (Sir George Young). Those who are not able to speak ought also to get their tributes from the Minister.

Mr. Norris

It is characteristic of my hon. Friend the Member for Eltham (Mr. Bottomley) that he should be kind enough to draw attention to those of our colleagues who are required to be silent. I entirely endorse his sentiments.

I am pleased to see the hon. Member for Holborn and St. Pancras (Mr. Dobson) attend upon our proceedings. He is a Northern line Member. I am extraordinarily grateful to him for his advice on my career path. I shall probably be able to resist most of it. He reiterated some of the usual canards. He referred to the Central line failure. I hope that I am not stealing too much of London Transport's thunder, but Sir Wilfrid Newton has now completed the inquiry into that incident with his usual thoroughness and objectivity. He has made it clear and will shortly publish in terms that neither the age of the equipment nor any question of underfunding was related to that regrettable failure.

The length of the failure was caused more than anything by the singularity of the fault. It was the type of fault that occurs literally on one in a thousand occasions. It was extraordinarily difficult to trace. Once it was traced, it was relatively simple to fix. That is worth putting on the record. I appreciate that the hon. Gentleman might seek to have some fun with the idea that it was all down to underfunding and the age of the equipment. I know that the fact that that is not true is inconvenient from his point of view, but it happens to be the case.

Mr. Dobson

Will the Minister confirm that the bit of cable that conked out was 71 years old?

Mr. Norris

No, I will not confirm that the piece of cable that conked out, as the hon. Member so elegantly puts it, was 71 years old. I will simply tell him that the whole report will be available for him to see. He will see that Sir Wilfrid has specifically made it clear in his conclusions that neither the age of the equipment nor any question of funding was related to the failure that he investigated. I hope that that is as clear as it possibly can be. The important thing is that the report will speak for itself.

It is extraordinary that the hon. Member for Holborn and St. Pancras and his party chided me for months for not abandoning the idea of a private sector contribution to the Jubilee line extension and wanted me to pass the whole cost of the scheme on to the taxpayer. They said to me for months, "Get on with it. There is great regeneration potential south of the river and you must get on with it if you believe in regenerating London." Now the hon. Gentleman says that we did an extraordinarily tough deal with the creditors at Canary wharf.

Incidentally, it is amusing that the hon. Gentleman has just woken up to the fact that the cash sum is to be discounted. If we are talking about Treasury theory and the brain that exists in the Treasury and if the hon. Gentleman hopes to be a member of a Government, I hope that he will be quicker on the mathematical uptake than he appears to be. Now that £400 million in cash has been taken from the group of banks that are creditors of Canary wharf, he has the temerity to suggest that those bankers deeply wanted and approved of the deal. The expression on some of their faces did not show the approbation that he ascribed to them.

It was an extremely good deal for Londoners and an excellent deal for the taxpayer. Thanks to my right hon. Friend the Secretary of State sticking out for the contribution that he insisted must come from those financial institutions, the taxpayer was saved £400 million in cash over more than 20 years.

We are here tonight to talk about the Northern line, and I hope that my hon. Friend the Member for Hendon, South will forgive me for diverting slightly to deal with the wide-ranging speech of the hon. Member for Holborn and St. Pancras. I want to give the context of the proposal. The line has been a favourite butt of jokes—many of which were doubtless deserved.

I completely accept that the line is in need of modernisation. As has been said, most of its trains and signalling need to be replaced. However, such a decision is ultimately for London Underground, which has to balance the books and live within the resources available. The line is next on the list for modernisation once the £750 million Central line project, which is currently under way, is completed next year.

I want to pick up an issue raised by my hon. Friend the Member for Surbiton. It is true that the line has shown great improvements in performance over the past few years, largely through the positive steps taken by the line's management. Indeed, the Monopolies and Mergers Commission report of 1991 on London Underground, with which hon. Members are reasonably familiar, singled out the Northern line for special praise. It stated: the Northern Line management team has … achieved a remarkable improvement in performance, by management action to identify the causes of train cancellations and to tackle them directly. Staff absence has, in particular, been dramatically reduced. That was the clearest evidence that, if improvements in service are to be attained, investment has a place, but management also has its place. I am sure that the House would wish to place on the record its appreciation for the excellent work that successive managers of the Northern line have done to help transform its performance.

The improvement has continued. In the current financial year, the average figure for scheduled Northern line trains in passenger service stands at about 98.6 per cent., making it one of the best performers on the system. The line is currently performing ahead of its target, in terms of both headways between trains and delays. If a "misery line" tag was once attached to the Northern line, it is not attached to it now.

Having said all that, I am not suggesting that nothing needs to be done. I am as keen as anyone for an early start to be made on the wholesale modernisation of the line, but it is important to remember that there are other measures that London Underground has already taken, or is already planning to take, which are delivering improvements both to trains and stations on the line.

The single most important scheme is the £72 million virtual reconstruction of Angel station. That was one of the biggest projects of its sort ever undertaken by London Underground and involved the replacement of the infamous single-island platform, which used to serve both northbound and southbound trains. That platform was replaced by the more conventional arrangement of two separate platforms for northbound and southbound traffic. It meant replacing those four aging lifts, which were the major means of access, with new banks of escalators. It meant constructing a brand new ticket hall. That station is now safer and less congested and provides a cleaner and more comfortable travelling environment. The escalators, after initial teething troubles, have worked extremely well.

It cost £72 million to renovate one station. That is a vivid indication of the scale of costs that are involved when one takes on the tasks of reforming a major piece of infrastructure such as the Northern line.

Other schemes are under way and there are programmes for the near future. They include the much-needed substantial remedial works to the 10 stations on the southern end of the line, to which the hon. Member for Southwark and Bermondsey referred. He was right about that. I think that the hon. Member for Streatham knows the need all too well. I pass those stations every day on my way from Camberwell. I do not believe that they look satisfactory; I do not think that they operate satisfactorily. I am glad that London Underground's programme includes urgent remedial works to those stations.

Let us now turn to the ABB proposal. The House knows that London Underground and ABB are pressing hard for a Government announcement on the project. I know that it has the support of many of my hon. Friends. Although the hon. Member for Holborn and St. Pancras appears to be seeking to divide me and my colleagues in the Treasury, I believe that I would not be doing my job as Minister for Transport in London properly were I not an enthusiastic advocate of the idea that we should subject the deal to all the scrutiny necessary to see whether it can be available to the people who use the Northern line. That is straightforward.

I have also said that that does not mean that we abandon financial prudence and throw all the rules of good housekeeping and husbandry out of the window—as I fear the Labour party would do, were it to be confronted with a decision. For the Labour party, "new sources of finance" means abandoning all the rules on expenditure controls. That is a seductive path to go down—there always are jolly good reasons why one should spend public money on all types of desirable schemes—but it is an invitation which I believe it is proper for the Treasury to remind all Governments they must resist unless they have been able to satisfy themselves that the important financial criteria involved have been satisfied.

Simply because we have not yet reached a conclusion, 14 days may seem a long time to the Evening Standard between hearing of the proposal and concluding on it. It might appear that we have been sitting still, but I think that hon. Members recognise what an achievement it has been for us to have undertaken the intensive analysis of the financial technicalities of the proposal and several rounds of complex negotiations in the relatively short time in which the Department has been aware of the deal.

I make it clear to the hon. Member for Holborn and St. Pancras that I first became aware that this proposition was on the table in very general terms at around the turn of the year. I think that he knows from his experience of Government that it has been dealt with extraordinarily rapidly and urgently. Incidentally, that is also a reflection of the fact that the deal that we were originally offered was not in any sense a complete deal, as ABB will confirm.

The deal started very much as a back-of-an-envelope suggestion, pretty much as the hon. Member for Holborn and St. Pancras outlined it. As I hope that other hon. Members and especially my hon. Friends will appreciate, one cannot do deals of that type involving £0.5 billion on the back of an envelope. They are immensely complex negotiations. They have been undertaken with goodwill and they are continuing.

If I may recap, late last year ABB offered to supply London Underground with 100 seven-car trains similar to those currently being supplied for the Central line. The proposal was a form of sophisticated leasing over 20 years, and obviously it has taken some time for us to establish the exact details of the proposal and to evaluate it in its own right and against other options for the future of the Northern line's rolling stock.

The hon. Member for Streatham referred to some of the available options. He said that he felt that this option was the most attractive; I understand that point of view. He was kind enough to recognise that it is not the only game in town and that we have to satisfy ourselves that it is, on every sensible criterion, the right deal. To try to come to that conclusion, our assessment has focused on two sets of issues: first, whether the deal would satisfy the Government's published criteria for such deals under the terms of the private finance initiative and secondly, whether it would offer value for money.

The proposals are being considered under the terms of the PFI, whose object is to find new ways in which to mobilise the private sector to meet needs that have traditionally been met only by the public sector and to enable the private sector to provide facilities in addition to the existing public sector plans. The whole concept is to encourage a closer partnership between the public and private sectors; an essential plank of the initiative is that the private sector must genuinely assume much of the risk attached to such projects. I say that simply to underline a simple truth.

If the only "advantage" of introducing private finance is that the taxpayer has the dubious privilege of paying finance house rates of interest rather than gilt rates of interest, there is, the House will recognise, little value in the proposition. Too often, leasing is seen simply as a way in which to circumvent inconvenient Treasury spending totals. Yet every Government, of whatever complexion and at whatever time in their life, need to set firm spending totals if they are to control overall Government economic growth. There is no difference between that proposition and the proposition that would be advanced if any other party in the House were sitting on the Government Benches.

The reality is that we have to do a lot more than simply find someone who is prepared to lend the Government money. It is not difficult to find people who are prepared to lend the Government money, because the Government tend to be a fairly good risk. The important point is that, for the taxpayer to get a benefit out of taking on board private sector finance, there must be a genuine transfer of risk to the private sector so that the taxpayer's risk in the matter is defrayed to offset the increased cost of financing the project.

The practical application of that policy to particular schemes is extremely complicated. However, I hasten to say that we endeavour to apply the conditions in a flexible and deal-driven manner. We do not seek to impose unnecessary constraints on private sector ventures by inventing a mechanism of arbitrary rules and we always welcome ideas such as those from private companies that are prepared to bring their enterprising approach to public sector projects.

We have also sought the advice, as the House knows, of the private finance initiative panel, led by Sir Alastair Morton, which was recently formed for the purpose of assisting the Government to promote and appraise initiatives such as these. We are grateful to the panel for its helpful comments.

Crucially, we must not lose sight of the need to ensure that whatever we do for the Northern line offers proper value for money to the fare payers who use the line and to the taxpayers who provide, and will continue to provide, substantial support to LT's services. We should remind ourselves that we do not want to jump into a deal, no matter how attractive it appears on the surface, if it leaves major risks and major costs for the public sector to face, whether this year, or in five, 10 or 20 years' time. That is the substantial obligation, and no Government should lightly undertake it.

Mr. Dobson

Will the Minister confirm that the Government have come to a leasing deal for the Networker trains for Kent? Will he also confirm that the Treasury is seeking harsher criteria for this new leasing proposition to satisfy—harsher than those that applied to the Networkers? Is that simply because they are obstructive, or is the Minister saying that the Networker leasing deal was a bad deal?

Mr. Norris

The answers to the hon. Gentleman's two questions are yes and no. Yes, the Government are contemplating a leasing deal for Networker trains on Network SouthEast—[Interruption.] I am grateful to the hon. Gentleman for confirming that we have done that. And no, the Government are not applying more rigid criteria to that proposition.

Mr. Dobson

ABB says that the Government are.

Mr. Norris

It may not understand, and clearly the hon. Gentleman does not understand, that the difference is that, now that the Railways Act 1993 is safely on the statute book, an aftermarket for rolling stock on the heavy railway is in prospect, allowing the Government to take the view that those trains will be hired by train-operating companies for a period and then transferred to new owners. That is the difference between an operating lease and this lease, which is for 20 years to a single lessee with, at this stage, no prospect whatever of an aftermarket—[Laughter.]

The hon. Member for Holborn and St. Pancras obviously finds all that terribly difficult to come to terms with. The hon. Member for Streatham is a bit brighter about those matters and has already overtaken the hon. Gentleman. He accepts that, if we are to introduce private sector capital into the system, one of the great advantages of a franchising concept is precisely that it allows us to contemplate the same kind of aftermarket as exists with BR.

I suspect that the mirth of the hon. Member for Holborn and St. Pancras masks his embarrassment. Once one goes beyond the first chapter of the most elementary economics manual, the hon. Gentleman's ability to flap around and miss the point is legendary. Although I wish him well in his present position, if he seriously aspires to sit on the Government Benches he must do a lot better than simply laugh to drown out the common sense that he hears from these Benches, which is so massively inconvenient to him.

Clearly, there is a tremendous advantage to the Government having decided to broaden the scope of investment in the railways—.

Mr. Dobson

What broadening?

Mr. Norris

It is kind of the hon. Gentleman to ask that, because I was about to tell him. Broadening so that we look beyond merely the taxpayers and fare payers. They are ever the butt of the Opposition's ire and ever the easy target for those like the hon. Gentleman, whose sole answer to these issues is to shout, "Please write bigger cheques on the public purse," and to point to governmental meanness as the reason why those facilities are not available. We must look beyond that.

The last Labour Government were pathetically inadequate in their funding of London Underground. When the hon. Gentleman was in the House, before the hon. Member for Greenwich (Mr. Raynsford) arrived, he was part of a Government whose annual funding—

Mr. Dobson

I was not.

Mr. Norris

Well, he supported that Government. I admit that, in those days, they had a few people bright enough to occupy their Front Bench, but things have moved on in the Labour party. The hon. Gentleman was here when his party was in office, and its funding of London Transport, at 1993–94 prices, was the princely sum of £120 million a year. If he cares to check the record, as I suspect he has done, he will see damn well that that is the case. He may like to have a bit of a laugh about that, because it contrasts embarrassingly with the £470 mill ion which the hon. Member for Streatham rightly said was the present funding level at 1993–94 prices, and the amount in excess of £1 billion a year this year, next year and the following year, which will be invested in the system as a whole.

Mr. Dobson

rose

Mr. Norris

If we are to argue about who is the better funder of the system, I shall take on the hon. Gentleman's arguments any day, as I am about to now.

Mr. Dobson

I invite the House to attach as much credence to what the Minister has said about investment in London Transport as I attach to his recollections of my record as a Member of this House. I have never been a Member when there has been a Labour majority—I was elected in 1979—but I will be.

Mr. Norris

It is a great tribute to the hon. Gentleman that I thought he had been here from the year dot. I readily accept that I was wrong. I hope that he will accept my apologies; I did not mean to misrepresent his length of service. Admittedly, very few people ever want to associate themselves with that Labour Government, but, given the disparity in funding levels under the two Governments, it comes ill from the hon. Gentleman to lecture me or the Government on the subject.

The hon. Gentleman was, however, right about the two conclusions of the Select Committee, which were—in the first paragraph of its report on London—that the Government are spending record amounts on the system, and that they are still not enough. The legacy of half a century of underfunding will now have to be dealt with. This is a serious and good debate about how to augment the funding for the system. The answer of course is to bring in private capital. That does not mean accepting a cheque on any terms, however. We do not accept any deal merely because it is put to us. We have to be rigorous about ensuring that these private finance initiatives fit into a sensible financial matrix.

Mr. John Marshall

It was perhaps too much to hope for that this debate could be conducted in non-partisan terms, given that the hon. Member for Holborn and St. Pancras is taking part in it.

Does my hon. Friend agree that the real locust years for LT followed 1981, when the hon. Member for Brent, East (Mr. Livingstone) was in charge of the GLC and when the investment in London Transport was much lower than it is today?

Mr. Norris

You might chide me, Mr. Deputy Speaker, if I strayed too far into the locust years. The idea might find more favour if there is a debate on agriculture later tonight.

The House will have noted what my hon. Friend said. If we had a prolonged debate on the impact of the "Fares Fair" policy on London Transport, I would point out that, however well intentioned that proposition was—and it was—it was a disaster for London. The experience pointed up some uncomfortable lessons. I note the arrival of the hon. Member for Lewisham, East (Mr. Dowd), who I know takes an interest in these matters.

One lesson was that a whole lot of additional journeys were generated, but they did not displace journeys made by private car; they were known as additional opportunity journeys. More costs are created for the system, but the revenues flowing into it are massively reduced. Reductions in ticket prices are not compensated for by increases in ridership—which was never more than 8 or 9 per cent. The result is a huge reduction in the net funding of the system—a gap that then has to be filled by the taxpayer. The gap was usually several hundred million pounds.

A second false premise is that the only way to attract people to public transport is to lower its price. The fact is that we need to use both the carrot and the stick. We certainly have to make public transport more attractive. My own view is that fares are the last thing to look at. Londoners always say that they will regard the system as representing good value only provided that it works. That is the key: above all, we want a reliable system.

Mr. Dobson

Just to get one or two facts straight, will the Minister confirm that the limit on capital investment in London Underground when it was the responsibility of the GLC was set by the Tory Government?

Mr. Norris

So far as it goes, that is an accurate statement. However, I fear that the conclusion that the hon. Gentleman is asking the House to draw may not be what he suggests.

That was not the only source of capital funding available to the GLC at that time. Had it wished to do so, it could have augmented the amount of capital spent. There is no evidence that the GLC wanted to do that. At the time, it thought, as so many Administrations, both Labour and Conservative, had thought over the previous half century, that one could simply postpone the necessary investment to the next year because the system would always last just a little longer.

The hon. Member for Holborn and St. Pancras and I agree that that is no longer acceptable. He and I and others in the House are responsible for dealing with that historic backlog of underinvestment. We have to be creative about how we address it.

Having already spoken about the various strictures that apply to the financing of the deal, we must not neglect to ensure that the proposal represents good value for money when we compare it with other options such as refurbishment, option to which the hon. Member for Streatham referred. There are a variety of subsets of refurbishment from major refurbishment through to essential refurbishment, which provides one-person-operated trains and not much more.

Whatever approach we take, we must always ensure that the proposition is exposed to sufficient competition so that we get the best deal available. I am grateful for the understanding of the hon. Member for Streatham and other hon. Gentlemen.

Bearing in mind the perfectly sensible comments made by the hon. Member for Holborn and St. Pancras about employment prospects at ABB in Derby, if we decided that a scheme on the lines of the ABB proposal was worth taking forward, the next step would be for London Underground to invite proposals in open competition. As my hon. Friend the Member for Hendon, South said, and the hon. Member for Streatham confirmed, in this day and age we want ultimately to ensure that the taxpayer gets good value for his or her investment in new rolling stock.

As the hon. Gentleman knows from his previous incarnation, ABB, albeit an excellent manufacturer of trains, is not the only manufacturer of trains, and no doubt others in the Community will wish to know that the competition for the supply of trains on the terms ABB has proposed will be made available if the scheme goes ahead.

I understand that a competition advertised in the Official Journal will be able to attract interest from the European Community. I also understand that the hon. Member for Holborn and St. Pancras is fully signed up to the idea of Community participation, and I am sure that that does not cause him any grief.

We fully recognise that much remains to be done, including rolling stock modernisation on the Northern line. We are considering the ABB proposal entirely on its merits against the criteria established by the private finance initiative and the need to demonstrate good value for money. We must not lose sight of the fact that very substantial amounts of public money are involved.

I assure the House that we are evaluating this complex proposal as a matter of considerable urgency. We have reached the final stages of discussion, and I hope that the Government will announce its conclusions within the next few days.