HC Deb 03 April 1996 vol 275 cc424-34

'In section 34 (annual report) of the London Regional Transport Act 1984, in subsection (3)—

(a) after paragraph (b), there is inserted— (bb) include details of any agreement entered into or continuing during the year in question under the provisions of section 3(2A) or 3(2B) above, together with a general description of the purpose and scope of each such agreement;"; and

(b) in paragraph (c), for the words "section 3(2)" there shall be substituted the words "section 3(2), 3(2A)(a) or 3(2B)".'.—[Mr. Spearing.]

Brought up, and read the First time.

5.42 pm
Mr. Nigel Spearing (Newham, South)

I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Sir Geoffrey Lofthouse)

With this, it will be convenient to discuss also the following amendments: No. 3, in clause 1, page 1, line 24, after `out', insert ',with the consent of the Secretary of State,'. No. 4, in page 2, line 2, at end insert— '(2) After subsection (8) of that section, there shall be inserted the following subsection— (8A) Where the consent of the Secretary of State is required to any agreement entered into by London Regional Transport under the provisions of this section, the Secretary of State shall lay before each House of Parliament notification of his consent together with a general description of the purpose and scope of any such agreement, not less than one calendar month before the agreement is to come into effect.".'. No. 8, in clause 4, page 3, line 14, leave out `34(3)(c),'.

Mr. Spearing

New clause 1 concerns the visibility of the decisions taken by London Regional Transport and the Secretary of State, whoever he or she may be. Quite apart from the merits of this important Bill and what it may permit, the new clause, which is in two parts—one requires additions to the annual report and the other requires the consent of the Secretary of State to any agreements—will essentially give visibility, as I think we can all agree. I hope that it will at least attract the Government's sympathy and assent in principle, because it pursues their advertised policy of open government.

To argue the case for the two safeguards, I have perforce to talk a little about the agreements that would have to be reported under the new clause in London Regional Transport's annual report and the other sort of agreements that I believe—and which the House should believe—the Secretary of State should have the power to assent to. Alas, to argue the merits of the two safeguards, some description of the Bill is necessary, without which it is impossible to understand their importance.

The intention behind the Bill is to extend, and facilitate the exercise of, the powers of London Regional Transport to enter into and carry out agreements; and for connected purposes. That is the long title of the Bill, which further emphasises that the agreements are at the centre of the legislation.

In shorthand, the Bill extends in certain respects London Regional Transport's power over and above the powers that it has in existing legislation. It adds to the London Regional Transport Act 1984. Section 3(2) of that Act reads: London Transport shall have power to enter into and carry out agreements with any person for the carrying on by that person, whether as agent for London Regional Transport or otherwise, of any activities which London Regional Transport have power to carry on". As one might expect, it gives London Regional Transport the power to contract for those persons for those purposes.

Section 2(1) of the 1984 Act gives London Regional Transport the general duty to secure the provision of public passenger transport services for Greater London".

Clause 1 of the Bill extends the agreements in two ways. It adds two powers to section 3 of the 1984 Act. I shall paraphrase because the Bill is complex. The first is to have power with the consent of the Secretary of State to enter into and carry out an agreement with any person for the carrying on by that person (`the contractor') of any activities which London Regional Transport does not have power to carry on if the agreement includes provision for one or more of the following". Constitutionally, the Bill is extraordinary, because it extends the existing powers granted to London Regional Transport under the 1984 Act without specifying what the activities should be, providing that one or more of three criteria are covered in the agreement with the said person or contractor.

This is a legally permissive Bill that allows lawyers, contractors and London Regional Transport a doorway to walk through into territory that is not perceived and might be unknown. For that reason, the nature of the agreement ought to be included in the London Regional Transport annual report as my new clause provides.

The remarkable thing about clause 1 is that it includes three necessary criteria in relation to the contractors. The first is the carrying on of activities that are already under the power of London Regional Transport. The second is the provision by the contractor of services ancillary to the provision of public passenger transport services", which goes beyond the present Act. The third criterion is the most remarkable. It concerns the use by the contractor of land or other property owned by London Regional Transport, or transferred to the contractor by London Regional Transport for the purposes of the agreement. I shall deal with the merits of that later. That is the legal outline of the Bill—it is the first type of agreement, with rather complex criteria.

As the Bill says, the agreements are within the consent of the Secretary of State. Therefore, the Secretary of State has to consent to them. As the Bill stands, London Regional Transport does not have to lay anything before Parliament about that, nor does anything have to appear in its annual report—unless the Government agree to this change.

The second sort of agreement is even more remarkable in constitutional and legal terms. The proposed subsection (2B) provides: Where an agreement has been entered into under subsection (2) or (2A) above, the powers conferred on London Regional Transport by that subsection include power to enter into and carry out other agreements with other persons". There is a cascade of these two sorts of agreement, with two sorts of contractor. It is remarkable—London Regional Transport can enter into and carry out this second type of agreement with other persons for the purpose of (a) fulfilling any condition which must be fulfilled before the agreement can have effect; or (b) satisfying any requirement imposed by or under the agreement.

In other words, there is a labyrinth of agreements for purposes that are outside the scope of the present Act. For those reasons, the consent of the Secretary of State is wanted not only for the first set of agreements but for the second set of agreements. This presents a possible scenario that must be made public. I shall use the analogy of doorways to a remarkable legal labyrinth, which could give powers to the Secretary of State, to London Regional Transport and to a contractor for all sorts of activities that are not related to the provision of public transport.

The Minister for Transport in London quite openly said in Committee and in the notes on clauses—but it is not stated in the Bill—that this is to facilitate the use of what is known, in the jargon, as the private finance initiative. The private finance initiative allows private money—from banks or investment agencies—to be used for public purposes to finance, design, build, maintain and operate any public facility for which the contract with the money lender, the bank or the credit house is available. That is tremendously important these days, because we hear about these things in many respects, even in relation to hospitals. Perhaps in the future it will relate to roads—I do not know. The PFI is now a big thing in local government and there are attempts to use it to provide all sorts of public facilities, of which public transport is one.

The Minister was very kind and answered a question that I submitted for answer yesterday. It is not yet in Hansard—I believe that it will be printed in a big version that will come out shortly. I asked for details of how visible the public finance initiative agreements would be. The Minister provided the following answer: The London Regional Transport Bill does not require London Transport or its subsidiaries to publish information about their projects under the Private Finance Initiative. Invitations to tender will continue to be published where this is a legal requirement. I do not know what the legal requirement is—in other words, they may not be visible at all. The answer continues: I understand that London Transport will normally announce the award of such contracts, giving an indication of their value and duration where this information is not commercially sensitive. We know that, very often, information on contracts of this sort is commercially sensitive.

The answer continues: When a contract ends, assets transferred from London Transport to the contractor at the beginning of the contract will generally be transferred to a new contractor, or will revert back to LT until a new contract can be let. Assets no longer needed by LT may remain with the contractor, and LT already have powers to make such disposals. I submit that that answer suggests that we would not get the visibility that the new clause and the consent of the Secretary of State would like if it is laid before Parliament. I suggest that, without these safeguards in the legislation, all sorts of things will happen—there will be a cascade of agreements for purposes that are not necessarily known or clear. That is why amendment No. 4 states that consent should be laid together with a general description of the purpose and scope of each such agreement". I refer to agreements of both sorts.

I hope that the Minister—purely on the merits of public visibility, of open government and of the arrangements that we may come to in later amendments—will agree to my proposal. Without it, how can we tell what is going on? This also applies in relation to the annual report, because it will show the use of powers that Parliament is giving the Government.

If we give powers to the Government, they should have a responsibility to tell us how they are using them, both in respect of London Regional Transport's annual report and the use of the Minister's powers when he gives consent under the Bill. He should be accountable to the House for that agreement. That is covered in amendment No. 3. Such matters should be laid before Parliament. I hope that, purely on the merits of open government, the Minister will give a nod in the direction of the new clause and these amendments—perhaps better ones could be made in the other place. In any event, public visibility is absolutely essential.

Mr. Peter Brooke (City of London and Westminster, South)

The new clause is called "Reporting to Parliament". Yesterday, the Secretary of State answered a written question on crossrail, a project that was always envisaged as requiring private finance and thus, presumably, falling within the scope of the Bill. Some hon. Members might think that crossrail would have been a fit subject for a statement rather than a written answer.

I was tempted to put down a private notice question, which may or may not have been accepted by Madam Speaker. However, I did not, because I recognise how much business the House has to discharge today and because Ministers at the Department of Transport, in a manner not universal in other Departments, have earned a considerable fund of good will in the House as a result of the regularity with which they have kept hon. Members fully informed of developments in their Department.

Both Madam Speaker and the Leader of the House periodically invite hon. Members to use their ingenuity in raising certain matters on certain business. Crossrail is a serious issue. The House is due to rise later today and I would be grateful if the Minister for Transport in London, when responding to the new clause, gave those of us who are London Members a greater reassurance than was available in the bald question and answer yesterday.

Ms Glenda Jackson (Hampstead and Highgate)

I strongly endorse everything that was just said by the right hon. Member for City of London and Westminster, South (Mr. Brooke), who in a sense picked up on the opening remarks of my hon. Friend the Member for Newham, South (Mr. Spearing), who tabled new clause 1.

My hon. Friend the Member for Newham, South spoke of openness and transparency. It is extraordinary that the Bill, which contains powers for London Regional Transport to enter into money-raising ventures with outside organisations under the Government's private finance initiative, contains nothing relating to crossrail.

6 pm

Yesterday, an announcement should have been made to London and Londoners, via a written answer, that a project that the Government have consistently supported—certainly for the past two years, every time that the issue has been raised with them—has in effect been axed. That is scandalous, not least because £150 million of taxpayers' money was spent on the feasibility study.

A vast body of opinion in the capital city—in commerce, in industry, in the financial sector, among commuters in London and among millions of commuters who, morning and evening, travel into this city to their place of work—regarded crossrail as part of a properly integrated public transport system that would begin to solve the problems of transport and traffic. It is unacceptable that that body of opinion should have been sloughed off.

The Secretary of State for Transport made no statement to the House. Had he done so, that would have allowed London Members, who obviously believe that their constituents' interests have been betrayed, and hon. Members with constituencies outside what might be deemed the Greater London area, justifiably to question him about why what we understood to be a promise—a strong commitment by the Government—has been reneged on.

It is almost farcical that we are debating a Bill called the London Regional Transport Bill in the light of the fact that crossrail—which all who have an interest in this city and its transport would have argued was integral to the proper expansion of London Regional Transport, which I understood was what the Bill is about—has been taken away without any presentation to the House. It is nothing short of scandalous.

Mr. David Chidgey (Eastleigh)

As has been said, the new clause proposed by the hon. Member for Newham, South (Mr. Spearing) is about openness in the Bill, and he should be congratulated on the assiduous way in which he has looked through the Bill.

The main question is, however, why should we debate a Bill that will not be used to any effect? I refer to the comments by the hon. Member for Hampstead and Highgate (Ms Jackson) about crossrail.

It is a scandal that we are in the ludicrous position of trying to pass a Bill that would allow London Regional Transport to use the PFI to create better transport for London, to provide a major artery connecting the City to Heathrow for the first time, yet here we are in a position in which the Bill can no longer be used to implement such a scheme.

I shall leave further remarks until later in the debate.

Mr. Deputy Speaker (Sir Geoffrey Lofthouse)

I am grateful to the hon. Gentleman. I have been very tolerant. The new clause is headed "Reporting to Parliament, etc."

Mr. Brian Wilson (Cunninghame, North)

I hope that your tolerance will last a few more minutes, Mr. Deputy Speaker. Obviously, we hoped at some stage of the proceedings to mention crossrail, which is very relevant to the Bill, and to some extent the right hon. Member for City of London and Westminster, South (Mr. Brooke) set the hare running. If the Minister is to discuss the issue, I hope that a few remarks of my own can be accommodated before he does so.

The Bill is a mouse of a Bill, which may already have had more parliamentary time on the Floor of the House and in Committee than it warrants. The contrast with other, far more controversial, pieces of legislation is obvious, but so is the contrast between the treatment of the Bill and the failure of Ministers to come to the House to explain, and face questions on, the apparent collapse of the crossrail project.

Whereas the Bill may facilitate some useful but modest joint ventures between public and private sectors within the activities of London Underground Ltd., the abandonment of crossrail is an enormous issue for London and beyond and at least £150 million of taxpayers' money has been squandered, yet no opportunity has been offered for the House to hold Ministers to account. I hope that at least a small voice will emerge from the House tonight, to the people of London especially, that the Labour party at least believes that the priorities with which we are confronted are entirely wrong.

Tonight we should be holding Ministers to account for the collapse of crossrail to facilitate the utterly unwanted privatisation of Rai1track. I regret that we do not have the opportunity to do so in a more procedurally correct way than we are attempting to follow at present. I, too, will leave my further remarks on the subject until later in the proceedings, but it is important, as the right hon. Member for City of London and Westminster, South rightly raised the crossrail issue, to place on record at this stage the fact that we, too, believe that it is absurd to discuss the Bill without discussing crossrail.

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

I never cease to marvel at the ingenuity of my right hon. Friend the Member for City of London and Westminster, South (Mr. Brooke), which he demonstrated admirably today. I, in my naivety, came prepared to discuss the Bill—a mistake that I make all too frequently in the House. I have on occasions instructed officials in the Department that it would be appropriate for all officials other than those concerned with the subject of the Bill to attend, because the ones who know something about the Bill are never required, whereas one frequently wants to call on all the others.

Mr. Wilson

Is the Minister not admitting a structural weakness in his Department, if the people who know something about crossrail are different from the ones who know something about London Regional Transport?

Mr. Norris

The issue is that I came prepared to discuss the mouse of a Bill—the Bill that the hon. Gentleman and I know will make modest improvements to the ability of London Regional Transport to enter into several PFI and related projects—and to discuss the amendments tabled by the hon. Member for Newham, South (Mr. Spearing), which I am sure enjoy the hon. Gentleman's full support. Mr. Deputy Speaker, if I had known that you would show the tolerance to which I suppose I should have become accustomed in the years of sitting under your chairmanship, I might have come better briefed to deal with crossrail.

Let me deal with the substance of the issue in passing. I would have deeply regretted feeling that I had shown discourtesy to the House in the matter of crossrail, and it would indeed have been a discourtesy, had my right hon. Friend the Member for City of London and Westminster, South in effect said something that was at variance with the oft-repeated line that we have taken in relation to crossrail.

The line was that it was important, in the capital city of London, for these major capital projects to emerge sequentially, first, because of the cost implications of running more than one mega-project at a time in the city—bill costs are classically about —500 million a year—and, secondly, because of the disruption, of which my right hon. Friend will be well aware, that might be caused to this city if more than one such project were running at a time.

My right hon. Friend the Member for City of London and Westminster, South will be prepared to admit—I suggest, somewhat at variance with Opposition Members—that in the past few weeks London has had some extraordinarily good news. We had the very good news that the Jubilee line extension is still on track to open on 28 March 1998. I shall be there, and I hope to see you there too, Mr. Deputy Speaker, as well as many of my hon. Friends. I am sure that my right hon. Friend will cut some ribbon or slice some cake on that occasion.

In addition, my right hon. Friend will know that we hope thereafter to see the completion of the Thameslink 2000 project—a £600 million project. Thereafter, we shall embark on the channel tunnel rail link extension, with the tens of thousands of new jobs that it will bring, especially to east London and Stratford—a fact which I had hoped that the hon. Member for Newham, South, if no one else in the House, would have acknowledged with pleasure. It is appropriate, therefore, that we should make it clear that the right time for crossrail to start—for the record, we remain committed to that project—is as the channel tunnel rail link project ceases.

My right hon. Friend made it crystal clear that crossrail will follow the channel tunnel rail link—no more and no less. In an ideal world—or the world of fantasy finance inhabited by the hon. Member for Hampstead and Highgate (Ms Jackson)—it might be possible to assume that all the good things will come at once. The hon. Lady always makes great addresses to the House without having talked first to the Opposition Treasury spokesman, her hon. Friend the Member for Dunfermline, East (Mr. Brown). Were she to consult him, she would find him rather less than forthcoming on the issue of running several projects of that scale in London. Indeed, he would be hard pressed to countenance the level of investment that we have seen in London in the past 10 years.

Ms Glenda Jackson

rose—

Mr. Norris

I shall complete my point, as the hon. Lady might like to reply to it. I do not propose to detain the House; I simply wish to respond to the hon. Lady.

Mr. Deputy Speaker

Order. The Chair will not allow the Minister to detain the House on that subject. I have shown more than usual tolerance. The Minister must now return to new clause 1, which is before the House for consideration.

Mr. Norris

I accept your ruling, Mr. Deputy Speaker. Logic suggests that you are correct, and that those who have sought to divert the debate are trading too much on your customary courtesy. Leaving clearly on the record the Government's commitment to the scheme and the rationale behind my right hon. Friend's statement—both of which, if one looks at them independently and objectively, are perfectly rational and are evidence of a well-structured policy—I now turn happily to new clause 1 moved by the hon. Member for Newham, South.

The new clause requires LRT to include in its annual report not only a description of the purpose and scope of any agreement entered into under new section 3(2A) but a similar account of any subsidiary agreements that are entered into. The hon. Gentleman should understand that the existing legislation requires LRT to report any contracts which have been entered into that will affect the co-ordination of public passenger transport services. That is the qualification on the obligation to publish. In clause 4(2), the Bill extends the requirement to publish similar contracts—those that are made under the new powers—in the same way as those contracts made under the old powers. To the extent that the hon. Gentleman is concerned about ensuring a continuity of the duty to publish, I am happy to reassure him that that provision is contained in clause 4(2).

I fear that new clause 1 is unduly onerous—I know that the hon. Gentleman is a great supporter of London Regional Transport, so he will understand why I say that. For example, it would require the publication of the details of contracts that are, quite rightly, commercially confidential. The hon. Gentleman should recognise that that is not a cloak under which Ministers can hide, but a perfectly proper commercial arrangement that ensures that LRT is able to go about its normal commercial activities. For example, new clause 1 would affect the contractor's financial backers in relation to any arrangements that LRT might make under the Bill. Therefore, I believe that the new clause would not sensibly extend the powers of disclosure, but would prove extremely unhelpful to LRT.

As to amendment No. 3, proposed subsection (2B) in clause 1 enables LRT to enter into subsidiary agreements with persons other than the contractor to allow a main private finance initiative deal to be achieved. It is important to bear that in mind, as it is the cornerstone of the Bill. It follows that some of the projects that we envisage will result from the PFI shall involve contracts of considerable value. Therefore, we believe that it is reasonable for both LRT and the contractor's financiers to be able to give each other a direct assurance in respect of their rights if the contractor should default for any reason. LRT has no powers to enter into such agreements under the London Regional Transport Act 1984—hence the need for the Bill.

The hon. Gentleman's amendment proposes that those subsidiary agreements should be subject individually to the consent of the Secretary of State. As it stands, the Bill requires the Secretary of State to give his prior consent to any agreement that LRT proposes to sign under proposed section 3(2A). In giving that consent, the Secretary of State has powers under existing legislation to impose conditions that could, in theory, extend to cover the details of any financial issues. Therefore, it is difficult to see what additional protection the amendment could provide.

In practice, I think that the small print in the contractor's financial arrangements is best left to the experts to determine. Without casting any doubt on the immense abilities of my right hon. Friend the Secretary of State, I do not think that he needs to be involved in details of that sort. I hope that the hon. Gentleman is not suggesting—to put it simply—that the House is capable of managing the affairs of LRT. The House is obviously not in a position to do so, and it should not attempt it.

As to amendment No. 4, I appreciate the hon. Gentleman's eagerness to be kept fully informed of all developments regarding LRT, particularly its PFI projects. However, he should consider the additional time and cost involved if the amendment were accepted by the Government. LRT is presently able to enter into major, high-value contracts—whether for conventional projects, such as the Central line trains deal or train refurbishment contracts, or PFI projects, such as the Northern line trains deal—without notifying Parliament. In some cases, LRT may have sought the agreement of the Secretary of State before authorising the project, but there was never any requirement to notify Parliament. I believe that the existing arrangements for advertising major projects—whether PFI or conventional schemes—are perfectly adequate.

6.15 pm

LRT advertises its major commercial opportunities publicly in the Official Journal of the European Communities. It usually announces publicly the award of major projects, giving an idea of their value and duration when that information is not commercially sensitive. That is the correct way to advertise: to attract potential bidders at the outset and to inform passengers at the conclusion. Hon. Members are also in a position to ask questions if they require further information about a particular project. I see no value in imposing an obligation on the Secretary of State to notify Parliament in all cases when he has given his consent under section 3, and to do so before the agreement has been concluded.

In light of the reassurances that I have given about the publication of information about PFI contracts, I hope that the hon. Member for Newham, South will feel able to withdraw his motion.

Mr. Spearing

With the consent of the House, I shall refer in passing to the questions regarding crossrail, on which perhaps the Minister could comment later. He referred to contracts, but I have heard nothing so far that would prevent London Regional Transport from entering into a big contract with, shall we say, crossrail plc to construct the central part of the line from Paddington to Stratford—the Minister is correct in saying that I would welcome such a project—under the Bill. Perhaps we can deal with that issue on Third Reading.

Mr. Norris

I remind the hon. Gentleman of our original discussion concerning the purpose of the "mouse of a Bill", to quote the hon. Member for Cunninghame, North (Mr. Wilson).

Mr. Wilson

Do not be harsh.

Mr. Norris

The hon. Gentleman must know that I am his good friend in the House. That is the ultimate kiss of political death and, having delivered it, I return to the point that I am making to the hon. Member for Newham, South.

Nothing in the Bill alters the fundamental obligation placed on London Regional Transport by the London Regional Transport Act 1984 to—I shall paraphrase the legal language—provide or ensure the procurement of public passenger transport services in London.

The hon. Gentleman referred to an agreement that London Regional Transport may enter into with crossrail—he mentioned a body such as Crossrail plc and, for the purposes of the argument, we shall forget about Railtrack and assume that such an entity will emerge with a plan to deliver the scheme. That plan could be delivered under the provisions of the 1984 Act.

The disclosure provisions—including the disclosure of commercially sensitive information—would be precisely those that apply at present. The Bill extends into those areas where LRT previously had no power—where services provided by contractors are ancillary to the main services provided by LRT, but which will involve LRT as a partner in the agreement. That is the key to the hon. Gentleman's point and I hope that on that basis he will see that his crossrail line of questioning is, to some degree, misdirected.

Mr. Spearing

I am grateful to the Minister for that most interesting and lengthy intervention. I am reminded of the famous phrase about the lady protesting too much.

I have used crossrail as a test case of the visibility and reportage of agreements, but I see from the Bill that agreements can be made containing provision for the carrying on by the contractor of such activities as are mentioned in subsection (2) above". Subsection (2) is, of course, in the existing London Regional Transport Act 1984.

We have to leave the argument here, but I cannot see why a project for a crossrail plc could not be reported to the House and why the consent of the Secretary of State is not possible. I shall pass over the merits of crossrail, but given the possibility of its construction by a contractor, I still think that the Bill might be rather more than a mouse. The Minister has not yet convinced me that it is not a mouse of a Bill.

On the question of reports to the House under new clause 1, the Minister claims that we cannot require them because of commercial confidentiality. We now know that if contractors, in the health service or anywhere else, have to bid for projects, public accountability is prevented by the chasm of commercial confidence. I understand the Minister's reasons, but they make accountability all the more important.

On amendment No. 3, the Minister claimed that the Secretary of State would not have to give consent to the second layer of agreements because LRT and the contractor would deal with them. We do not know how big those contracts will be and I find the Minister's explanation unconvincing.

On amendment No. 4, the Minister claimed that the notifications do not need to be laid before the House. They do not include confidential or financial information, since amendment No. 4 states: the Secretary of State shall lay before each House of Parliament notification of his consent together with a general description of the purpose and scope of any such agreement, not less than one calendar month before the agreement is to come into effect. What is the Secretary of State afraid of? The Minister said that we need not worry because the notification will be laid in the Official Journal of the European Communities. Why cannot it be laid before the House? I find the Minister's explanations unsatisfactory.

I hope that our discussion about the visibility of such matters will provoke debate elsewhere and I hope that it has been useful, if only on the subject of crossrail, and for the public who own the railways at the moment. I therefore beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

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