§ Order for Second Reading read.3.45 pm
§ The Minister for Transport in London (Mr. Steve Norris)
I beg to move, That the Bill be now read a Second time.
§ Mr. Norris
London Regional Transport came into being technically as a statutory corporation—but more commonly described as a nationalised industry—on 29 June 1984. On that date, the London Regional Transport Act 1984 transferred political and financial control of what is generally known as London Transport, the old LT, from the Greater London council back to central Government, which had last been directly responsible for LT in 1969. As hon. Members would be aware, London Transport's principal duty is to provide or to secure passenger transport services in Greater London, having regard to the transport needs of London and to efficiency, economy and safety of operation.
The board of London Transport is headed by a chairman appointed by the Secretary of State for Transport. Peter Ford took over as chairman in September 1994 and, additionally, became chairman of LT's subsidiaries London Underground and London Transport Buses. There are currently three other full-time LT board members, one of whom is responsible for finance, one of whom is also managing director of London Underground and one of whom is also managing director of London Transport Buses. Additional part-time members, including a non-executive vice-chairman, bring a wide range of outside business experience to the LT board.
London Transport is also a parent or holding corporation with two wholly owned operating subsidiary companies. The first company is London Underground Ltd., which is responsible for the operation of the London underground. Since April 1994, it has included the Waterloo and City line between Waterloo and Bank, which was formerly operated by British Rail. The second wholly owned operating subsidiary is Victoria Coach Station Ltd., which is the principal London terminal for national and international express coach services, serving more than 1,000 destinations in 21 countries, with some 170,000 departures each year. Although VCS administers the coach station, it is not responsible for the operation of the coach services using it—they are the responsibility of the individual contractors.
A third operating subsidiary, London Buses Ltd., effectively ceased to trade when its 10 component companies were sold into the private sector by the end of 1994. London Buses Ltd. was set up in 1985 to operate London Transport's bus services and had, in turn, set up locally based subsidiary companies in anticipation of the new arrangements for bus services in London—although the Government announced in November 1993 that the original planned deregulation would not be implemented before the next general election. LT began competitive 989 tendering of its bus routes in 1985, and in 1993 those LBL routes not yet involved in the tendering process were placed on a contractual basis.
That development, together with the sale of the LBL subsidiary companies in 1994, placed those companies on a basis similar to that of the private companies which are also operating bus services on behalf of, or under contract to, London Transport. Overall responsibility for all bus services in London is now exercised by London Transport Buses, which is a department of LT, but with its own chairman, managing director and management board.
Against that background, the Bill is essentially technical in its nature. Its purpose is simply to extend the powers of London Transport in order to allow it to make full use of the opportunities available under the Government's private finance initiative. The Bill has the full support of LT itself. I should say that it was London Transport that identified the deficiencies in the existing legislation which the Bill is intended to address and which asked the Government to assist in taking that forward.
§ Dr. Godman
I hesitate to intervene in a London debate, but as someone who travels frequently between Heathrow and Westminster, may I ask the Minister whether anything can be done to improve the tube service between Heathrow and the centre of London, not just for Members of Parliament, but for visitors from our constituencies to the capital? We hear over and over again from our constituents the complaint that they have to put up with that terrible tube service between the airport and the centre of London.
§ Mr. Norris
One of the things that I have learnt about being responsible for transport in London is that there are 651 Members who have an interest in it. Although one's constituency may not be in the capital, hon. Members are likely to spend most of their week in it. Certainly, with regard to the licensed taxi industry I have at least 651 additional constituents with whom to deal. Therefore, I well appreciate the hon. Gentleman's question.
The hon. Gentleman will know that the hon. Member for Workington (Mr. Campbell-Savours) raised that matter in the House a few weeks ago. When I heard of his complaint I made it my business to take a personal interest in the apparent inadequacy of the arrangements for boarding the Piccadilly line. I have done it myself on many occasions and I agree that the service there is not as good as it should be because of the physical constraints of the layout of the station within the airport and also because of the difficulty that people often have in acquiring tickets, perhaps because they do not have change or British currency in their pockets, or because they have to ask questions in a foreign language or through some intermediary at the ticket office. All that means that the process of buying a ticket at Heathrow is infinitely more complicated than it is likely to be elsewhere.
990 London Transport has a programme of improvements for Heathrow station. Bob Bayman, the general manager of the Piccadilly line, has been in touch with hon. Members, circulating a note of the improvements. I can assure the hon. Gentleman that I will take a personal interest in ensuring that those improvements are delivered.
§ Mr. Norris
I shall give way first to the hon. Member for Newham, South (Mr. Spearing), who caught my eye previously, and then to my hon. Friend.
§ Mr. Spearing
May I revert to the Minister's remark that this is a technical Bill? Clearly, reading the long title, it is to extend the powers of London Regional Transport. In the notes on clauses, under clause 1, paragraph a says:the carrying on by the contractor of activities which LT do have the powers to carry on, in particular the provision of public passenger transport services.But clause 1 itself says:to … 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".It makes out that that can be done only with the consent of the Secretary of State. Therefore, surely the Bill gives the Secretary of State extra-statutory powers to let the contractor for London Transport do anything that he and London Transport want to be done. Is not that more than technical?
§ Mr. Norris
No. I am grateful to the hon. Gentleman because Bills such as this ought to be subject to forensic scrutiny and it is perfectly appropriate that he should raise that extremely important question. In many ways, it is the whole question posed by the Bill and the Opposition's reasoned amendment. But I shall be at pains to demonstrate in what I have to say on the subject that the technical amendment is simply to allow London Transport to benefit from the full potential of the private finance initiative, and that means the need to extinguish technical bars to its doing so, which I do not believe any hon. Member would seek to place in its way. I will give the hon. Gentleman a firm undertaking from the Dispatch Box that nothing in the Bill is intended to extend the effective powers—the de facto powers—of London Transport or, indeed, of the Secretary of State. I shall go on to assure the House that the intention behind the Bill is specifically not that about which concern is expressed in the reasoned amendment. I hope that the hon. Gentleman will allow me, as I develop my speech, to respond in more detail to the points that he has raised.
§ Mr. John Marshall
I revert to the question of Heathrow. Does my hon. Friend agree that one of the most important developments at Heathrow is the Heathrow to Paddington link, which is a joint private and public sector project? Can my hon. Friend tell the House when he expects that link to be up and running?
§ Mr. Norris
My hon. Friend is absolutely right, and that investment of £300 million by the British Airports Authority has set a considerable precedent in the provision of privately owned railways. The project is 991 intended massively to improve the public transport rail link between all the Heathrow terminals and central London. BAA is investing some £300 million in that large and imaginative project, and I am delighted to be able to tell my hon. Friend that in my most recent conversation with BAA, it confirmed that it hoped that the trial running of trains would begin next year, in 1997. Obviously. regular scheduled services will follow on from then.
As I understand it, the major restraint is the time it has taken to finish tunnel work into the airport terminals. The idea behind the scheme is that passengers and their baggage will have direct access to the rail link from the airport terminal at which they arrive. They will not be required to change terminals or to go outside in all weathers. Such seamless transfers will be attractive to every class of traveller, including the business user. In the past, some business users have chosen to use private cars or other forms of personalised transport, especially if they are going into the City—although that can be a very long and arduous journey. It does not take as long as it takes to get from Narita airport to the centre of Tokyo or to make a similar journey in New York or Paris, but it takes a very long time. The project will provide a high-quality link to the centre of London that will be attractive even to those business users who are met by chauffeur-driven limousine, because that will not have to be at Heathrow. It will be a tremendous benefit to other road users and the communities in that area.
§ Mr. Simon Hughes (Southwark and Bermondsey)
As somebody who served his time during the consideration of the London Regional Transport Act 1984, I return to the question asked by the hon. Member for Newham, South (Mr. Spearing). His question expressed the key concern about the Bill, although we support the other aspects of it.
Clause 3 would add a new section-31B—to the 1984 Act, which would provide thatthe Secretary of State may by order provide for any functions of London Regional Transport under any statutory provisions to be exercisable by that person","that person" being the agent. Does that section, when read together with section 3 of the 1984 Act—irrespective of the Minister's intent—permit the wholesale transfer of functions, either bus or rail or tube, to another body? I understand that the Minister says that that is not the intention, but what can he say to persuade us that the Bill would not permit that?
§ Mr. Norris
As the notes on clauses show, the new section 31B(1) would enable the Secretary of Stateto provide that certain of LRT's statutory functions are to be exercisable by"—a contractor—for the purposes of carrying out agreementsunder section 3(2) or (2A) of the London Regional Transport Act 1984. That means that the obligations laid on London Transport to provide services will not alter. What will alter is how LRT can procure such services so as to allow it to get the best value from the private finance initiative. On occasion, it will have the power, in a given commercial eventuality, to carry out such functions for itself.
The hon. Members for Southwark and Bermondsey (Mr. Hughes) and for Newham, South have both asked the important question in this context. I can tell them that 992 nothing in the Bill extends the powers of London Transport in the exercise of its functions. Nor does the Bill extend its field of responsibilities. They remain as defined in the 1984 Act.
§ Mr. Hughes
I understand that exactly. Section 3(2) of the 1984 Act gives LRT a statutory duty to provide an underground service, for instance. Although LRT may retain that statutory duty, what is to stop it contracting out wholesale any or every line of the network? Nothing on the face of the Bill would seem to prevent that. If the Bill becomes law, LRT could immediately give the private sector responsibility for running every tube line across Greater London.
§ Mr. Norris
The answer is that the powers given to LRT in the 1984 Act permit it to do precisely what the hon. Gentleman suggests—we should be under no illusions about that. Opposition Members will seek to draw out from me a commitment not to privatise; that is basically what their reasoned amendment is after. In due course I shall come to that point in my speech. I must repeat, however, that nothing in the Bill adds to the general powers that LRT possesses.
The specific power to which we are all referring is the power to provide or procure services in the context of public transport. The Bill represents no increase in that area of responsibility. London Transport is not being allowed to move outside the provision of public transport services. Moreover, there will be no change to LRT's ability to extend the involvement of contractors in its business—save only what is in the Bill.
Neither this Bill nor the 1984 Act provides for LRT to wind itself up. My advice is that further legislation would need to be brought before the House for that to happen. The hon. Member for Southwark and Bermondsey would no doubt want to make his own contribution on that occasion.
In short, a great deal of what the hon. Gentleman has suggested is already possible under LRT's current powers. The Bill deals with some practical areas for which its current powers are manifestly deficient. The deficiencies were brought to our attention by LRT. When it first told me that it needed more powers, my reaction was to ask it to go away and carefully justify the need for additional legislation. LRT did precisely that, and has furnished me with some examples with which I believe the hon. Member for Southwark and Bermondsey will be satisfied. I know that, throughout the years he has represented a London seat, he has always been a great supporter of London Transport. Like him, I want LT to deliver the best possible value for money. The central message is the acceleration of the improvement in services that all hon. Members want to see.
On that basis, I hope that the hon. Gentleman will be assured that nothing in the Bill extends LT's current power to proceed further with contracting. The Bill simply facilitates what hon. Members wish to achieve.
§ Mr. Spearing
In reply to the hon. Member for Southwark and Bermondsey (Mr. Hughes), the Minister has partly answered my question. As he is contemplating a contract for a power supply company under the current powers of the Act, surely it will be possible for, say, Wisconsin Central to lease the Central line to run trains or provide some of the line's functions and for the District line to have a management buy-out. If that is possible 993 under the Act, all he is saying is that the Bill will make it simpler under the PFI. Will he assure the House that that is not the intention and that London Transport will not be privatised on the pattern of British Rail, Railtrack and the present operators?
§ Mr. Norris
I can give the hon. Gentleman that assurance. LT may wish to enter into a power supply contract to improve the quality of its power supply. Hon. Members will recall the power supply failures of 18 months or a couple of years ago. Power supply failures account for a substantial proportion of total failures in the system. Much investment, therefore, is clearly necessary. It is likely that the most efficient contract would involve LT purchasing power from a contractor that may wish to sell additional power supplies to third parties. That is perfectly reasonable. It would represent an excellent deal to LT and a perfectly sensible deal to the contractor. We wish to put in place arrangements to allow London Transport to take over the contractor's function and to continue the commercial arrangement without disadvantaging Londoners. That is a perfect example of how the Bill will work sensibly and very much in the public interest. It will procure good value for money and sensible commercial bases for the contracts into which LT will wish to enter.
§ Mr. Simon Hughes
This will be my last intervention on the Minister's speech; I am grateful to him for giving way.
Clause 2 deals with land and its disposal. Will the Minister help the House by saying what is permitted under the clause? Quite a lot of LRT's land is not used for transport operations. Will it be possible under the Bill—it could not do this otherwise—for LRT to enter into a contract with an hotel or leisure chain to build and jointly operate an hotel, as some water companies did after privatisation?
§ Mr. Norris
We are having almost a Committee debate on technical points, but as the Bill is broadly technical in nature I see no reason why I should not attempt to give the hon. Gentleman as full an answer as I can.
Let us take the example of a contractor who acquires land that LT would need at the end of a contract. It might involve land on which a power sub-station is to be built, the power project having some limited life. Clause 2 ensures that the freehold could be acquired in LT's name, albeit that the land would have been identified by the contractor, who would be responsible for its development. The purpose is to minimise the possibility of disputes over ownership at the end of a contract. If we did not frame the Bill in that way, when a contractor's relationship with London Transport had ceased, the contractor would then have a sub-station on land that was not technically owned by London Transport, and London Transport would therefore encounter some difficulty in offering a re-tender to another party. We are providing a more flexible basis for London Transport to enter into such contractual arrangements without altering the basis of the powers that it exercises.
§ Mr. Edward Garnier (Harborough)
I wonder whether my hon. Friend can help me. I am trying to identify the 994 area of controversy between the two sides of the House. Is it simply the hoary old argument about the introduction of private finance into public services, or am I missing something rather more complicated?
§ Mr. Norris
No doubt, as this afternoon drags on—I mean, continues—my hon. and learned Friend will find the answer to his question. It may well be that, with his customary perspicacity—perspicacity that he has charged many a client thousands of pounds to savour—
§ Mr. Norris
Indeed—but I cannot possibly say that to my hon. and learned Friend, who comes from a distinguished libel chambers and with whom I do not wish to tangle.
My hon. and learned Friend has put his finger on what is, I suspect, at issue in the "reasoned amendment"— a euphemism if ever I heard one—that the Opposition have tabled. They simply say, "We have read the Bill and see nothing exceptional in it, but because the word `private' occurs somewhere in it, can we assume that this is privatisation by the back door?"
I think that my hon. and learned Friend has touched a raw nerve. The deputy leader of the Labour party, the right hon. Member for Kingston upon Hull, East (Mr. Prescott)—who was a very vocal transport spokesman and who is, if I may say so, a very great man—has said on many occasions that he invented the private finance initiative. [HON. MEMBERS: "Hear, hear."' Hon. Members are keen to press the right hon. Gentleman's claim. In that case, I am an inadvertent convert to his cause. I have been a convert to the cause of privatisation from my mother's milk; the difference between the right hon. Gentleman and me is that I can spell it.
The right hon. Gentleman's relationship with private finance is rather like the late Larry Grayson's relationship with rugby league—somewhat tangential. The right hon. Gentleman's idea of private finance is bludgeoning the private sector into pre-arranged contracts in which the private sector puts up all the money and takes all the risk, while he and his hon. Friends reap a reward that simply is not there, because the private sector never invests on that basis. But, in so far as there is great joy in heaven over every sinner that repenteth, I am delighted that Opposition Members have been converted to the cause of the private finance initiative, and that they are apparently prepared to support the Bill.
§ Mr. Brian Wilson (Cunninghame, North)
I am glad to hear the Minister reassuring himself that there may still be a place in heaven for him, but I am sure that he will go on to reassure the hon. and learned Member for Harborough (Mr. Garnier) that we might all have been saved a good deal of trouble today had it not been for the blundering, inopportune remarks of the Deputy Prime Minister, who became entangled in the debate just when we might have been considering whether the Minister's assurances were to be taken at face value.
§ Mr. Norris
With great respect to the hon. Gentleman, I am relaxed about the private sector's involvement in the provision of services, and that goes to the heart of my 995 remarks about the Labour party's attitude. Clearly, it is not relaxed. I am because the function of any Government, never mind that of London Regional Transport in relation to public transport services, is to provide or to procure services. In the health service, for example, it is important that the service should remain free at the point of delivery on the basis of need and not of means. To procure that, we should use the most efficient means of investment, bearing in mind the fact that, in such circumstances, the taxpayer is hard pressed to meet all the demands placed on him or her by the Government, whatever party is in power.
In this case, an absolute key to my proposition is that, in the past 10 years in particular, London Transport has made great strides in improving the quality of its services by taking advantage of massively greater public investment from this Government than ever before. My hon. Friend the Member for Chipping Barnet (Sir S. Chapman) is in his place. He has long been keen to point out the extent to which investment in London Transport has increased over the years. If he checks the figures, he will find that, at current prices, in 1979, investment in London was £167 million. It now stands at £543 million.
However, if one takes account of further expenditure on the Jubilee line extension, the real comparison is between total investment in 1979 of £257 million and investment this year—remember, these are at constant prices—of £1,880,000. That shows the huge increase in public finance committed to the underground, yet—all hon. Members appreciate this, including many hon. Members who represent London constituencies—much more needs to be done. We all recognise that the investment need is there. London Transport has identified it. In their plans for London transport, London Pride and London First recognise that that backlog is still there, although they pay considerable tribute to the Government's efforts in recent years to end it.
The essence of the Bill is that it allows us to harness more efficiently private sector resources so as to decrease that backlog even more quickly.
§ Sir Sydney Chapman (Chipping Barnet)
My hon. Friend's figures are right, but in 1978, the historic figure for investment in London Transport was only £66 million and, throughout the 1970s, the average figure was under £50 million. If he excludes even the £500 million per year invested in the Jubilee line extension, he will find that investment in London Transport is well over £500 million and has been for the five years of this decade. Allowing even for inflation, that means that, under this Government, we have quadrupled the amount of investment in London Transport. Does he agree that, if hon. Members on either side of the House still say that more investment is needed, because of the necessary priorities of Government spending, that investment can and must come only from private finance initiatives?
§ Mr. Norris
My hon. Friend has touched on an extremely important point that directly relates to the Bill. None of my right hon. and hon. Friends should ever take criticism of the Government's investment record on public transport in London, for it is exactly as my hon. Friend said—about quadruple that available under the Labour Government. We are trying to accelerate total investment on the basis that we, at least, recognise that the key is that 996 investment should be provided. We. at least, are not blinkered by the extraordinary presumption that somehow investment does not happen unless it is investment by taxpayers. We, at least, look for—and we say so wholeheartedly and openly—investment from both the public and the private sectors to ensure the efficient development of services.
§ Mr. Keith Hill (Streatham)
Will the Minister confirm that, until 1969, London Transport operated under a break-even requirement, and that its first call upon Government for funding did not occur until the late 1970s, for macro-economic reasons? Is it not therefore entirely bogus to draw comparisons between levels of central Government funding in the late 1970s and the current period? Would it not be more germane to reflect upon the fact that, in 1992–93, core funding for London Underground stood at £683 million per annum; and that, in two years' time, it will stand at £435 million? That is a deplorable comment on the Government's lack of investment in London Underground.
§ Mr. Norris
The devil may quote scripture for his purpose, but I read from the authentic work. The hon. Gentleman may squirm on the definition of public expenditure in London. He may try, under the great umbrella of the Greater London council, to bury the clear evidence that I and my hon. Friend the Member for Chipping Barnet elucidated—and, my goodness, there is not much that went wrong in London during the GLC's years that was not attributable to the GLC. The reality is one from which the hon. Gentleman cannot escape.
If the hon. Gentleman is referring to the fact that, over the past few years, investment has been at even higher levels than at present, I am grateful to him for drawing the attention of the House to that. He is right. If I had picked the most embarrassing statistics on which to judge the records of the Opposition and the Government, I would have referred to even higher levels of investment in previous years. However, as they already stand at an all-time high, I doubt whether the hon. Gentleman is on safe ground in criticising them. Of course, he has not let that stop him in the past, and I am sure that it will not stop him in future.
§ Ms Glenda Jackson (Hampstead and Highgate)
If the Government's investment in, for example, London Underground over the past 16 years has been so consistent and so large, why is it that, for the first time in its history—or so I believe—London Underground will have to close four separate sections of track and the Bakerloo line for about seven months simply to catch up on the backlog of maintenance work that it has been unable to fund until now?
§ Mr. Norris
The hon. Lady says, "Go on, answer that," as though that were a challenge.
First, I shall dissect the question, why is London Transport doing so much maintenance work that it has not previously been able to afford? I wonder whether it might have anything to do with the fact that it now has the money to do the work and the willingness to get on with it. The extraordinary double standards of the Labour party 997 are that it claims bitterly that there are inadequate maintenance resources, and then, when the work is being done, it complains about what it alleges to be disruption. It is the most fatuous example of double standards. The hon. Member for Hampstead and Highgate (Ms Jackson), who has considerable knowledge of London, knows better than that. She makes her point better than I could.
§ Mr. Wilson
The Minister surely realises that maintenance work often takes place because capital is not available for renewals. I am sure that he understands that basic point, and would wish to acknowledge it.
§ Mr. Norris
I do acknowledge it. The hon. Gentleman and I have had many discussions on the matter over the years, and he understands the issues extremely well. We have an entirely cordial relationship; we get on. I say to the hon. Member for Hackney, North and Stoke Newington (Ms Abbott) that I admit that, as my political career enters its twilight, the matter is more likely to damage the hon. Gentleman's political prospects than mine—but I am ruthless in such circumstances.
The hon. Member for Cunninghame, North (Mr. Wilson) is quite right. If one does not spend on capital, one almost inevitably reaps the consequence of higher levels of maintenance expenditure. London Transport, above all, is based on a culture of safe operations, which means that at no time is safety prejudiced—even if that means slow running or closures.
There is common agreement on the thesis, and that is why I know that the Labour party supports the main thrust of the Bill. We all want to accelerate the capital investment through use of the PFI, which will enable us to avoid producing a railway in which disruption brought about by historic under-investment and the need to accelerate the improvement programme happens more often than either the hon. Member for Hampstead and Highgate or I would want.
§ Mr. David Chidgey (Eastleigh)
I listened intently to what the Minister said about lack of investment. I think that he was referring to the planned closure of the Bakerloo and Northern tunnels under the Thames. He must be aware of the massive disruption that that will cause. Does he therefore agree that one could foresee the need for capital investment many years ago? Has not the fact that capital investment was not made available led to this sorry and parlous state?
§ Mr. Norris
The work would have necessitated closure whenever it happened. The hon. Gentleman is—I think—about the only hon. Member who is a fellow of the Institution of Highways and Transportation, and may therefore appreciate the civil engineering implications of the work. For example, in order to ensure entirely safe operation, the work at London Bridge requires continuous periods of ownership of station and track. In such circumstances, it is therefore necessary to close the line, and would have been, regardless of when new investment in London Bridge was made. I have LT's specific assurance on that matter.
It will not surprise the hon. Member for Eastleigh (Mr. Chidgey) that, if we could have achieved the renewals programme without any closures—although it 998 may have taken slightly longer to deliver—I would have been very keen to do so. Nobody likes to announce such closures. Having been satisfied that, for good, sound operational and safety reasons, it was right for London Transport to go ahead with the work and effect the closure, my job was to ensure that the closure was minimised to every possible extent, and that London Transport was able to carry out the works.
§ Mr. Peter Bottomley (Eltham)
I am sure that the House will appreciate and agree with my hon. Friend's explanation of those major capital works. May I return for a moment to the subject of Heathrow? Could my hon. Friend discover what London Underground regards as an acceptable time for anyone to wait in a queue to pay to travel? If it is not possible either to make change available so that people can use coins in the machines or for more kiosks to be open, could people who have had to wait for, say, more than five minutes be issued with a free pass? LT might then start getting people to sell tickets.
§ Mr. Norris
There are two aspects to my hon. Friend's point. As he will readily know from his experience, ticketing arrangements on the underground are necessarily complex. Point-to-point journeys require a knowledge of station names at both ends, which have to be found on the automatic machines, as well as the journey type—single, child or return fares. Day travelcards are also available from machines. The system is therefore quite baffling to newly arrived visitors to Britain.
London Transport is looking at a much simplified ticketing system that does not require staff to dispense tickets. That is of course where real economies can be made—indeed, it is extraordinarily efficient. Most hon. Members will find it more convenient and easier to drop the coins or feed a note into the machine to get a ticket. Certainly I do, but that is because I know my way around.
I readily agree with my hon. Friend the Member for Eltham (Mr. Bottomley) that that is by no means always the case. At Heathrow in particular, as I said in answer to an earlier question originally raised by the hon. Member for Workington, London Regional Transport does indeed need to address the issue; it is a real problem.
I shall take back my hon. Friend's suggestion that there should be some form of reimbursement scheme—although I cannot imagine that LRT will find it especially attractive. It will at least reveal the scale of my hon. Friend's concern.
§ Mr. Bottomley
There is a serious point here, especially for people who are not regular visitors to London and do not work here, as Members of Parliament do. For overseas visitors to arrive here and find themselves stuck in a queue for more than five minutes is unacceptable. Not only London Underground but Members of Parliament have a duty to ask for—indeed, to demand—the ability to get on to the underground within five minutes of arriving at an underground station. That is the minimum that we should demand.
§ Mr. Norris
I understand my hon. Friend's concern; indeed, as I have said already, I share it. I hope that the work 999 that London Underground has announced will be carried out at Heathrow can be done quickly, and will bear early fruit. I cannot think of a worse way of welcoming visitors to Britain than for them to encounter an incomprehensible arrangement for getting on to the metro system. That is especially true when we should encourage not only those whose first language is not English but many visitors from within the United Kingdom to gain access to central London via the Piccadilly line.
§ Mr. Norris
I give way to the hon. Member for Workington, who has arrived late to a discussion of which he is to some extent a parent.
§ Mr. Campbell-Savours
Yes, I think I am the parent. I have been in correspondence with the director of whatever the London transport undertaking is called—is it London Underground Ltd. or something?—and I do not think that the Minister has grasped what I am on about. In the letters that I have received from him, the most recent of which arrived last week, the hon. Gentleman does not seem to understand the fact that our complaint is about windows being closed when there are long queues of people.
However much I stress that fact, the Minister has not grasped it. I have asked only that, when there are queues, all the windows should be open. That is all—no more. Yet the Minister writes back to me with long explanations about all the other initiatives that are taking place, including selling tickets halfway round the world. Those are irrelevant to my complaint.
§ Mr. Norris
I appreciate that point, and I explained to the House before the hon. Gentleman arrived that I was taking a personal interest in it. Indeed, he will know that, when I saw his early-day motion, I wrote and told him that I too was concerned, and wanted to take the matter on personally. I can give him and the rest of the House an undertaking that I shall monitor progress.
We are all not only Members of Parliament but travellers around the system in the normal way, as the hon. Gentleman is. Like me, he has every right to feel frustrated when it looks as if a half-time service is being provided when there are clearly queues of people wishing to be served. That cannot be right, and I assure him that I shall take a close personal interest in the matter.
§ Mr. Garnier
If what the hon. Member for Workington (Mr. Campbell-Savours) and my hon. Friend the Member for Eltham (Mr. Bottomley) have said is true, the answer is to second a manager from a supermarket. No supermarket would tolerate long queues at a checkout.
Moreover, if what the hon. Member for Streatham (Mr. Hill) and other Opposition Members have said is right—for the purposes of argument, let us assume for a moment that it is, although I do not accept their contention—and the Government have engineered appalling levels of investment in London Transport over the past 15 or 16 years, surely the answer is to vote for the Bill.
§ Mr. Norris
The trouble with having bright lawyers in the House is that they always ask the right questions. My hon. and learned Friend has gone straight to the heart of the Bill.
1000 We can defend our position indefensibly, as the hon. Member for Streatham (Mr. Hill) tried to do, or in a concrete way, as I tried to do, but it does not matter, because, whatever the present level of investment, we all agree that more is needed. If we agree about that, and if we agree—as appears to be the policy of the Labour party—that the public sector cannot be landed with further commitments and none of us wishes to burden the taxpayer more than necessary, my hon. and learned Friend is entirely right to say that we should support the Bill, and I hope that in due course the House will do so.
If I may, I shall say something about the Bill itself. [Laughter.] It may be a somewhat novel proposition, but none the less I intend to advance it. I appreciate that it may be a risible notion.
§ Mr. Peter Bottomley
Bulldozer Norris. Mr. Norris: None the less, I shall try.
It is generally agreed that London Transport has made substantial strides in improving services and efficiency in recent decades. The quality of service has progressively improved, and LT has been right to focus carefully on the needs and views of passengers, thus reflecting the principles of the citizens charter—a charter in which I strongly believe.
The citizens charter gives consumers of services which, as it happens, are provided by the state, the rights that they would automatically expect to enjoy if those services were provided by the private sector. The citizens charter has been one of the singular achievements of my right hon. Friend the Prime Minister. In my opinion, it is not yet appreciated how much it is changing the culture of public services and instilling in them a recognition that, at every level of interface with the public, the public have a right to demand quality of service from operations in the public sector, just as they have the right to demand those services in the private sector.
London Transport's charters for tube and bus users emphasised its commitment to that concept. Efficiency in services has also been much improved by measures such as London Underground's company plan and the contracting out to the private sector of non-core services.
Much of that improvement reflects a transformation in the management of LT and the efforts of LT's hard-working staff, but much has depended on the availability of funds for investment. Much of the underground network dates back to about the turn of the century, so much of it needs to be renewed and brought up to modern standards.
To help meet that need, investment has been running at record levels. As my hon. Friend the Member for Chipping Barnet reminded the House, this year LT will invest more than £1 billion. More than half is being devoted to improvements in the existing network, such as the comprehensive upgrade of the Central line—which, purely accidentally, happens to go through my constituency—which nears completion, and the remainder is principally being spent on the construction of the Jubilee line extension.
To date, most of that investment has been funded by the taxpayer, although I emphasise that the operating surplus that is now being generated by LT is making an increasing contribution. There is often criticism that fares on London Transport are relatively high. That criticism, in so far as it draws comparisons, is a fair comparison.
§ Mr. Norris
I hear the hon. Member for Hampstead and Highgate say that it is a justifiable comparison. I believe that in that respect she is correct, but I want to make it clear that investment in the service can be funded only by the taxpayer or the farepayer. It is vital that we get the balance right and that we look to farepayers—those who use the service—to make a substantial contribution to investment in the system.
For every pound by which lower fares would not cover the running costs of an operation such as London Transport, it would be necessary for any taxpayer contribution to make good that deficiency before it could be invested in improving the service.
I am therefore proud that, in the nearly four years that I have been responsible for London Transport and have been the Minister to whom its chairman has been answerable, we have moved from making losses to making a substantial operating profit, which has then been made available for accelerated investment. The House must not ignore that consequence of a fares policy that I am frequently asked to justify in answer to tough questions from reporters and commentators.
Although our approach is entirely right, we and LT are keen for the private sector to make a fuller contribution to investment financing, which I believe is a common aim among hon. Members on both sides of the House. If we can involve the private sector more directly in the financing and provision of public services, it will help us to deliver higher-quality and more cost-effective services through the exploitation of the full range of private sector commercial, management and creative skills. The Government's private finance initiative has been designed to do precisely that.
LT has already achieved conspicuous success with the PFI through the contract we concluded last year for the provision of new Northern line trains. Hon. Members on both sides of the House with constituencies through which the Northern line runs have very much welcomed that announcement. That £400 million deal will provide a new train service for one of London Underground's busiest lines, with the supplier, GEC Alsthom, taking the responsibility for, and the risk of providing and maintaining, the required number of trains to run the service for the next 20 years. Those new trains are expected to begin entering service from the middle of next year.
London Transport is naturally keen to make further use of the PFI, and competition for further substantial schemes is already in hand. To illustrate the need for the Bill's technical measures, I should like to mention four of the most immediate PFI projects, the first of which is in relation to communications.
We have undertaken a project with LT that will require a contractor to provide an integrated radio system for the underground, based on a fibre-optic network. The network will not only provide updated systems for London Underground's communications systems, but will have sufficient spare capacity for the contractor to provide telecommunications and information technology services to third parties. Sharing costs in that way will greatly reduce the cost to LT. [Laughter.] Does the hon. Member for Newham, South find something amusing in that concept? If so, would he care to unburden himself of it?
§ Mr. Spearing
Imagine a cable going through a tunnel that takes not only London Transport's traffic, as it 1002 currently does with conventional cable, but that of other businesses as well. At the same time, someone will be running the trains, and someone else may be contracting for the track. Imagine the complications that will ensue as to who will deal with safety, who will be trained to do what, and what the line of management will be.
The Minister should consult railwaymen about the difficulties that have already been encountered above the ground and the risks that have been taken because of all sorts of patterns of mismanagement. He would then discover that the risks to the underground in London would be increased by contracting out power and telecommunications facilities, and possibly ticketing, to individual contractors.
§ Mr. Norris
I am tempted to dissect the hon. Gentleman's intervention in the same manner as I did that of the hon. Member for Hackney, North and Stoke Newington, but I shall content myself by observing that he has set his face against the use of the PFI in respect of telecommunications.
The hon. Gentleman's stance will not sit easily with that of his colleagues on the Opposition Front Bench, but that is a matter for him. He is pretty old to be a member of new Labour, and I suspect that he might have the skids placed under him very quickly if he goes on in that old recidivist vein. There are ugly rumours that that has already happened. I have personal affection for him because he is a good cyclist and enjoys the river, so sharing two of my passions. I fear that we may be seeing the last of the hon. Gentleman with outbursts of that sort. His point is a logical absurdity.
There is not the slightest difficulty in running the cabling in the way we propose. The only difference, on which the Bill concentrates, is the issue of the spare capacity that the contractor may wish to sell to third parties, the effect of which would be to defray costs that would otherwise have to be borne by London Transport. This is a straightforward way to optimise the cost to the taxpayer and to the service.
§ Mr. Peter Bottomley
My hon. Friend has answered that point very well. I wish to raise a separate issue that does not necessarily require an immediate answer, but I would like my hon. Friend to consult railway operating businesses about it.
If a train for some reason comes off the track, neither automatic train protection—if it is available—nor other communication systems can immediately tell a train coming in the other direction or on an adjacent track that the line is blocked. Will my hon. Friend consult his technical experts to find out whether there is some way for a driver or guard, if there is one, to advise other trains in the locality, whether underground or overground, that they should stop, even though they cannot see a signal?
§ Mr. Norris
I shall ask London Transport for an answer to that question. It is in the interest of the system as a whole that we have an effective and instantaneous method of communication on the underground system.
§ Mr. Bernard Jenkin (Colchester, North)
I may be speaking out of turn, but I understand that there is such a system, and that it is extremely simple. Along the side of the tube, two exposed wires run parallel to each other.
1003 If any driver or member of staff wishes to stop traffic on that track, he squeezes the wires together, which creates a circuit, sends a signal and cuts out electricity to all trains on that track. It is simple technology. It does not matter who owns the wires or how they are financed—it will still work.
§ Mr. Norris
My hon. Friend is right, and I especially endorse his point on the ownership of the two wires, but the question posed by my hon. Friend the Member for Eltham was slightly different. He asked about how the information could be transmitted more widely and how more useful information could be transmitted, rather than merely about switching off the power to trains in the immediate vicinity of the point where the power has been disconnected. I will send a reply on that to my hon. Friend, and copy it to my hon. Friend the Member for Colchester, North (Mr. Jenkin).
The second type of PFI project we want to undertake involves ticketing and what we call the "prestige" project. It would involve the complete modernisation of London Transport's ticketing systems, based on the progressive introduction of smart card technology. The contractor would take over responsibility for providing and selling tickets for tube and bus services and for the equipment to validate them, such as the ticket gates at underground stations.
Giving the private sector responsibility for the whole system would itself provide scope for the introduction of innovative and efficient systems. As with the communications project, there may be scope to spread costs if the smart cards can be used with third parties—for instance, as an electronic purse accepted by retailers. It could be used as a means of paying for parking charges or whatever. That is the underlying basis of the need for the Bill in relation to that project.
The third scheme involves power supply. That would involve a contractor taking over LT's existing power generation plant and taking responsibility for the provision of main and emergency power supplies for the underground network. As with the schemes that I have already mentioned, the contractor would be able to spread costs by supplying power for third parties.
Finally, LT is developing plans for extensions of the east London line. Powers are being sought under the Transport and Works Act 1992 for the northern extension to the line, while LT is also considering proposals to extend its southern end. It is intended that they will be taken forward with the private sector under the PFI.
In total, those projects would involve private sector capital investment in LT of about £750 million. Competitions for two of the schemes—for power supplies and for the prestige ticketing project—are under way. London Transport is evaluating pre-qualification bids, and hopes soon to move to the full competition stage. London Transport is also about to invite pre-qualifying bids for the communications project.
In working up those competitions and schemes, LT has run into some potential or actual legal problems in taking them forward within the PFI. As I have said already, LT's powers derive from the London Regional Transport Act 1984, when schemes of that sort were simply not envisaged. The Act, quite rightly, constrains LT's powers to public transport, so as to prevent its becoming, in effect, a Government-sponsored general trading 1004 company. However, it has now become clear that the effect of those restrictions is also to circumscribe LT's ability to enter into agreements under the PFI, whereby the private sector party to the agreement would carry out non-transport-related activities.
For example, under its present powers, LT could not enter into agreements of the sort proposed for communications, power or ticketing to the extent that they would involve the private sector partner in the provision of services to third parties to any substantial extent. Nor could LT enter into agreements that might at some stage need to be transferred to a third party: for instance, if the original contractor were to default and the financiers to the deal wished to appoint a new contractor.
Unless addressed, those restrictions will limit the scope for LT to execute successful PFI deals, and will especially reduce the opportunities for pursuing deals involving the use of assets both for LT's own services and for third parties, which promise value for money and the benefit of private sector funding.
The aim of the Bill, which, as I have said, commands the full support of London Transport, is therefore to remove those constraints, and to ensure that LT has the ability to make full use of the PFI. Given the desirability in principle of removing impedances to the PFI, and given that the problems that have been identified would prevent LT from taking forward schemes for which it has competitions under way already, it is clearly important to put the deficiencies right as quickly as possible.
Before I go on to explain the purpose of the Bill in more detail, I should like to emphasise—[Laughter.] It is an important measure. I shall emphasise to the House what the Bill does not do.
§ Mr. Norris
The Bill is not intended to widen the role or functions of LT itself, other than where that is necessary as a by-product of facilitating PFI schemes. As I said before, we are not in the game of setting up LT as a general trading company.
In response to the amendment tabled by Labour Members, I reassure the House that the Bill in no way erodes LT's powers or changes its status. It is not a privatisation Bill; thus, it does not affect the basic duty of LT—as set out in section 2 of the 1984 Act—to provide or secure the provision of public passenger transport services for Greater London".Nor does it affect LT's functions under section 8 of that Act in relation to the planning of fares and services. The Bill does not change the wide range of other provisions in the 1984 Act that would almost certainly need to be changed if the underground were to be privatised.
Of course, we on Conservative Benches believe in the benefits of privatisation, which have proved themselves already in so many transport industries: British Airways, the British Airports Authority, the National Bus Company, the National Freight Consortium and the ports, to give just a few examples. Those benefits are now being extended to the national rail network.
1005 However, we have no plans to privatise London Underground, and we are not in the business of privatisation by stealth. The Bill is essentially a technical one. It has the strictly limited aim of extending—
§ Mr. Norris
I hope that my hon. Friend is not suggesting that it is a shame that the Government do not act by stealth. He may be suggesting that the Government have a real enthusiasm for the benefits of privatisation, which I heartily share.
§ Mr. John Marshall
Does my hon. Friend accept that London's commuters are concerned about the quality of service and the level of investment in the underground? Many of them would welcome privatisation, because, wherever it has taken place, it has led to increased investment and better-quality service. The sooner my hon. Friend gets on his bike and privatises London Underground, the better.
§ Mr. Norris
My hon. Friend is correct—although I do not wish to inflict the sight of me on my bike upon more Londoners than is absolutely necessary.
§ Mr. Jenkin
The Minister is seeking a transformation of London Underground, the like of which has been achieved in other nationalised industries only by privatisation and the preparations for it. I wish him well in trying to transform that business, while keeping it in the public sector. However, I fear that customers will expect a complete transformation—particularly when they see the success of rail privatisation and how services have been transformed. [Laughter.] We are now hearing hoots of derision from Labour Members—as we did with British Airways, British Telecom, and so on.
Mr. Deputy Speaker,
I see that you are looking at me sternly, but I wish to make the point that, unless we actually achieve that kind of transformation in customer service, we must surely look to go to the next stage—to go the whole hog—and shift the business into the private sector, so that we get access not only to private capital but to private sector management techniques. That will lead to the transformation we seek.
§ Mr. Norris
The issues of private or public ownership and capital are germane to the Bill—they are the very essence of it. I heartily endorse my hon. Friend's observations about the extraordinary success that privatisation has brought to British Airways, for example. He is entirely right to remind hon. Members that, when the privatisation of British Airways was debated in this place, Labour Members constantly decried the proposition, derided it, and said that it would never work in commercial terms.
Labour Members pointed to the fact that no nation in Europe had privatised its national flag airline, and that it was therefore, de facto, impossible. They said that the baby would never fly. That baby is now not only the world's favourite airline but is hugely profitable. Instead of taking money from taxpayers to support its operation, it is making a significant contribution by way of corporation tax.
§ Mr. Deputy Speaker (Sir Geoffrey Lofthouse)
Order. Although this is interesting, we are debating not British Airways but the London Regional Transport Bill.
§ Mr. Norris
I accept your ruling, Mr. Deputy Speaker, and I have no wish to stray any further down that path, except to point out that, in relation to the involvement of private capital in transport operations, Labour Members have consistently maintained that private capital would not work, and that privatisation would not work—in this respect, they were spectacularly and self-evidently wrong.
I fear that I may have to disappoint my hon. Friend so far as London Transport is concerned. I have made it clear that this is not a plan to privatise London Transport or London Underground. I have said in quite specific terms that the Government are not in the business of privatisation by stealth.
I believe that the observations that my hon. Friend made about the success that will clearly follow from the actions that we have taken in relation to the railways—as success has followed in every other area—will soon become so clear that the cloak of obfuscation, which is all that the Opposition have been able to deliver over the last few years, will become nothing. Customers will see the benefits for themselves on the ground, in services such as the London-Tilbury-Southend service, of which my hon. Friend has some considerable experience.
§ Mr. Norris
I shall give way to the hon. Gentleman, who is no doubt enthusiastic to point out that he has always been a supporter of privatisation, and that he wishes to endorse it on this occasion.
§ Mr. Hill
I may do that in due course, if I manage to catch the Chair's eye. In relation to the success of privatisation in public transport, will the Minister identify the success in the deregulation and privatisation of buses in this country? Since 1986, there has been an annual loss of 30 million passengers. Where is the success of privatisation in that?
§ Mr. Norris
I shall tell the hon. Gentleman very directly: since 1985, costs in the industry have been reduced by one third, public subsidies have more than halved, the proportion of routes run profitably has increased from 65 per cent to 86 per cent., and one third more mileage is being run. In the past year, the decline in bus use—which is attributable to the growth in the use of the private car—has been almost entirely arrested. Bus usage is London has increased.
That significant gain would not have been brought about without the benefit of deregulation and privatisation. However, I note that the hon. Gentleman confused the two—they are very different concepts.
§ Mr. John Marshall
I thank my hon. Friend for his usual courtesy in giving way this afternoon. Does my hon. Friend accept that where London Buses has put routes out to competitive tender, a process that he described earlier in his speech, substantial savings have been made? That shows that London Buses, when owned by the taxpayer, was inefficient, but when routes were put out to competitive tender, working practices improved and the cost to the community went down.
§ Mr. Norris
My hon. Friend is entirely right. That has been the benefit of the franchising process and of involving private bus companies in the operation of London Buses services. My hon. Friend knows that we have recently sold the operating subsidiaries of London Buses Ltd. into the private sector, many of them, incidentally, purchased by the management, and further efficiency gains and savings to the taxpayer have been brought about thereby, while the quality of the service is manifestly improving.
My hon. Friend also knows that in all the recent surveys by bus user groups, it is the privately operated services that have tended to win the first prize within the capital city. There is absolutely no doubt that we have had some tremendous benefits from the involvement of the private sector.
As I say, the Bill is essentially a technical one. It has the strictly limited aim of extending LT's powers only in so far as that is necessary, first, to remove certain restrictions imposed by the present legislation on LT's ability to enter into agreements for the purposes of the private finance initiative, and, secondly, to deal with the possibility that LT may have to take over the functions of a PFI contractor at the end of a contract.
Clause 1 would extend the scope of section 3 of the 1984 Act by empowering LT, subject to the consent of the Secretary of State, to enter into agreements with contractors which involve the contractor carrying out activities for which LT has no powers. That is needed to provide for schemes such as those related to communications and power, where the value for money of the scheme will be enhanced if the assets being provided by the private sector can be used for commercial activities as well as for purposes directly related to LT's services. Clause 1 also allows LT to enter into agreements with persons such as financiers where that is needed for the purposes of a contract.
Clause 2 makes provision for LT to acquire land, by agreement, for purposes connected with such agreements. That would, for example, as I have said, enable land to be acquired in LT's name for an electricity sub-station not directly required for LT's own purposes, but for use by the contractor in supplying electricity to LUL. I would emphasise that that is not a compulsory purchase power; it is intended to safeguard LT's claim to essential assets at the end of a PFI contract.
The clause also provides that LT may, with the consent of the Secretary of State, carry on the commercial activities of a PFI contractor when the contractor ceases to do so. That power, I emphasise, is intended to be used only as a last resort. It is not the Government's intention that, as and when PFI contracts come to an end, LT should progressively acquire a portfolio of commercial interests.
The expectation is that when PFI contracts expire, the commercial activities associated with them will normally either cease or pass to a new private sector contractor, following a further competition. But we do need to provide for what I trust will be very rare circumstances in which a contract comes to an end prematurely, for instance through default of the contractor. In that situation, LT would clearly want, and would have the powers, to take over immediately those functions connected with the running of its own services. But it would be perverse if services being provided to third parties then had to be terminated.
1008 Thus the aim is that LT would in those exceptional circumstances be able to take over on a caretaker basis the provision of such services, pending the establishment of suitable arrangements to put them back into the private sector. The Secretary of State would expect to give consent to such arrangements only on the basis that LT would do its best to find a private sector party to take over as soon as practicable.
Clause 3 provides the facility for certain of LT's statutory operating powers, not including LT's main functions under the 1984 Act, to be transferable by order to or from another party. The aim of the provisions is to ensure that for schemes involving the provision of some aspect of passenger services involving statutory powers, those powers may be exercisable, for the duration of the contract, by a PFI contractor.
We also want to ensure that the necessary statutory powers can be exercised by LT at the end of a PFI contract. For example, a scheme for the east London line extensions might involve a PFI contractor in providing a train service, for which he would need the relevant operating powers. But again I emphasise that while in such cases a contractor might physically be providing the service, and should have as much commercial freedom as possible to respond to public demand, the service would remain within the overall control of LT under the terms of the 1984 Act.
Finally, clause 4 simply makes consequential amendments to the 1984 Act and to other legislation. Clause 5 is a standard financial provision. It does not mean that we expect the Bill to increase public expenditure. Indeed, by enabling LT to gain the maximum benefit from the private finance initiative, it should reduce LT's need for Government grant. Clause 6 contains the usual provisions in relation to short title, commencement and extent.
Summing up, therefore, the Bill is a limited but important measure which, while not affecting the fundamental role or powers of London Transport, will substantially enhance its capacity to secure maximum benefit from the Government's private finance initiative. LT has been closely involved in the preparation of the Bill and is fully supportive of it.
In particular, the Bill will enable LT to take forward and secure best value from schemes already in progress such as those relating to power supplies, ticketing and communications. In turn, developments such as those, and others in the pipeline, will deliver real benefits to passengers.
On that basis, I commend the Bill to the House.
§ 5.5 pm
§ Mr. Brian Wilson (Cunninghame, North)
I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:this House declines to give a Second Reading to the London Regional Transport Bill because although the House welcomes the higher levels of investment in transport infrastructure provided in the Bill by the development of Private Finance Initiative projects by London Regional Transport, it does not believe that the privatisation of London Underground would be in the interests of London, and fears that this Bill contains powers which will be used to that end.I suppose that I should first express gratitude to the Government for having managed to fit such a lengthy debate into their heavy business programme. At that point, for the benefit of Hansard, I should say: he said ironically. I also congratulate the Minister on a bravura performance.
1009 He is put up on occasions such as this because he is one of the few who has the wit to think on his feet. That is meant to be a compliment, incidentally.
I thought that I should equip myself with suitable research, so the House of Commons Library kindly provided John Glover's "London Underground". If things should flag a bit, there is a slightly weightier tome entitled "A Regional History of the Railways of Great Britain". If, at about 8 o'clock tonight, things are really desperate, we might need some international perspective and I have here "Underground Railways of the World—Their History and Development" by H. C. P. Havers. However, I am sure that none of that will be necessary because many of my hon. Friends are anxious to contribute to this important debate on a much valued public institution, London Underground.
I make it clear that the Labour party will support any sensible measure which makes it easier for London Underground to get more money into the system for desperately needed investment so long as it is consistent with a public operation of an integrated system. In so far as the Bill advances that objective, we shall facilitate its progress. But the water has been muddied in a most unhelpful manner by the blatherings of the Deputy Prime Minister and lord high everything, the right hon. Member for Henley (Mr. Heseltine), who, only last month, was demanding that a commitment to privatise London Underground should be included in the next Tory manifesto.
It is unfortunate that the right hon. Gentleman is not with us today so that he could pay his debts to London, if to nobody else, by making it clear that his desire to privatise London Underground does not underlie the Bill. In his absence, we can only take the Minister's word for it, which I am happy to do.
But first let us consider what the Deputy Prime Minister has said. I quote from the London Evening Standard of 1 February in which we were advised thatA radical new drive to sell off London Underground to the private sector is being planned by Cabinet Ministers.It says:Michael Heseltine, the deputy prime minister, has told the Transport Secretary Sir George Young that he wants to include `a commitment' to privatise LU in the party manifesto for the General Election. The plan, one of a number of options being studied by Mr. Heseltine for inclusion in the manifesto, is now being actively considered by the two Ministers.That may sound like a contradiction in terms.
The London Evening Standard continued:Exactly how the sell-off … would be accomplished is not yet known. But, with expanding and guaranteed passenger numbers … LU has long been viewed by some senior Tories as 'ripe' and the next in line for privatisation following British Rail.None of that is very encouraging for those of us who have followed the progress of British Rail's privatisation. I might say in passing to the hon. Member for Hendon, South (Mr. Marshall) that I would be happy to engage in a general discussion about the merits and beneficial effects or otherwise of privatisation, but the characteristic of the first two privatised rail franchises is that the managers have already said that they will make no new investment in rolling stock during the lifetime of the franchises. I see the hon. Member's brow furrow at that 1010 modest challenge to his ideological position. I assure him that that is the position, and I heard from the lips of Mr. Brian Souter of Stagecoach that the franchising system does not allow for investment in new rolling stock. There will be no new rolling stock from South West Trains or from Great Western Trains or, I suspect, from any of the other seven-year franchises, because the system militates against investment in rolling stock.
§ Mr. Wilson
I shall give way to the Minister, and I shall give way to the hon. Member for Hendon, South later.
§ Mr. Norris
I wish to say what I imagine my hon. Friend the Member for Hendon, South (Mr. Marshall) wishes to say. The hon. Gentleman may be right to make that observation, but he will not have heard either of the two contractors say that they are not dedicated to bringing about substantial service improvements. Mr. Brian Souter and those who manage Great Western Trains are quite clear that, even within the seven-year contract period, they can deliver substantial service enhancements which, so far at least, British Rail has failed to deliver.
§ Mr. Wilson
I do not accept that. In the Great Western Trains and South West Trains areas, British Rail has delivered rather good services. I will let the Minister's comment pass because I do not want to start a general debate about privatisation. But I notice a rapid shift in ground. I picked up the hon. Member for Hendon, South specifically on the subject of investment, because he referred to investment. I thought the Minister might say that there would be no new trains on the underground if it were privatised, but that there will be investment in tracks, tunnels, bridges and the infrastructure. If he had said that, I would have said that, with many fanfares of trumpets, Railtrack has produced a 10-year investment plan that actually envisages less investment than has been provided in the past 10 years. However, I will leave that point for another time.
§ Mr. John Marshall
I met Mr. Brian Souter of South West Trains at the Confederation of Passenger Transport dinner and I spoke to him about investment and how privatisation was going. He said that when he took over the franchise, he was told that a relatively modest investment would improve the reliability of service. He asked how much it would cost and he told the individuals concerned to go ahead. They said that they had been trying to get the investment for 18 months under British Rail and they had got it in less than 18 days from South West Trains. Mr. Brian Souter has invested in improving the quality of the service, and the hon. Gentleman is wrong to denigrate him as he does.
§ Mr. Wilson
That sounds like a rather partisan account of the conversation between the hon. Gentleman and Mr. Souter. The hon. Gentleman extolled the virtues of privatising London Underground on the specific ground that it would bring investment in rolling stock. I pointed out, inconveniently for the hon. Gentleman, that the franchisees in rail privatisation have gone on record as saying that they will not invest in rolling stock. Incidentally, The Independent today reports that, after the first month's operation of South West Trains and Great Western Trains, there has already been a decline in time 1011 keeping. That will not matter to Conservative Members because they are interested not in time keeping or the effects on passengers, but in the dogma of privatisation.
§ Ms Glenda Jackson
My hon. Friend will be aware that a Conservative think tank—in 1994, I believe—floated the idea of the privatisation of London Underground. The improvement in services for Londoners contained in that document was a reduction in the network of almost two thirds. The document also suggested that one way to raise the necessary funding for investment would be to offer for sale the names of existing London Underground stations. For example, it was suggested that perhaps Harrods would like to bid to change the name of Knightsbridge station to Harrods. Although the Minister has argued fairly forcefully that the Government are not attempting to privatise London Underground, the idea has been floating around in the Conservative party for some years.
§ Mr. Wilson
My hon. Friend is right. I always think that "Conservative think tank" is a contradiction in terms, but her general point is perfectly accurate.
I accept the spirit of the Minister's assurances today, but I must point out that he is an old lag. He has made comments on the subject before that were not in line with what he has said today. The Evening Standard article, to which I referred earlier, states:Just over two years ago Steven Norris, London's minister for transport, in an interview with the Evening Standard, described franchises"—in the context of London Underground—as 'just pure common sense.' At the time Mr. Norris said: `Franchises could be offered on line-by-line basis. That is a concept we have clearly got to examine.'One does not have to be paranoid—having read those quotations, considered the history and, indeed, listened to the comments from Tory Members this afternoon—to suspect that even in this apparently innocuous or constructive Bill all might not be quite as it seems. The not very cleverly hidden agenda is the privatisation of London Underground.
I would have thought that by now even the tiny band of zealots assembled on the Tory Benches this afternoon might show some restraint in so uncritically singing the praises of the railway franchising concept, because it is certainly not proving very popular in public opinion. The Minister is on the record as supporting the principle of franchising London Underground services and privatising the whole system. Even more importantly—if that is possible—the Deputy Prime Minister has come straight out and said that he wants to see the privatisation of London Underground in the next Tory manifesto. The gaggle of Tory Members of Parliament from whom we have heard today are all clearly committed to the privatisation of London Underground. So we are entitled to inspect the Bill closely and we will do that this afternoon and again in Committee.
I might as well lay down a marker. We will resist and we will prevent the privatisation of London Underground this side of a general election. The Minister, voluntarily, will not be in the House thereafter, but the people who want to privatise everything that provides a worthwhile public service in this society will not be in government to fulfil those ambitions.
I do not want to get into a general argument about privatisation, but I despise the way in which public service is denigrated in the House. The Tories can make some 1012 claims on behalf of some privatisations. They can point to British Airways as a success story and to the success of British Telecom, although it would have been successful anyway and it probably would not have shed so many jobs in the process. But the idea, which Conservative Members propagate, that everything in the public sector was a failure and a burden on the taxpayer is so mendacious as to require correction. For example, British Airways is now a profitable and successful airline, but when it was in the public sector it was also profitable. The electricity industry has never paid as much to the Exchequer in tax as it did prior to privatisation in profits. In the gas industry, the price of domestic gas has not yet returned to 1979 levels in spite of the fact that we are now self-sufficient in gas. In all these industries, the public sector did a good job for the country. It would behove Tory Members to recognise that, instead of getting caught up in their ideological obsession with denigrating everything in the public sector.
§ Mr. Norris
In 1979, the nationalised industries consumed just over £2 billion in public support; in 1994, they cumulatively paid more than £2.5 billion in corporation tax to the taxpayer. Does the hon. Gentleman accept that unarguable proposition?
Secondly. whatever the hon. Gentleman's view of the merits of British Airways, and of whether it would have made a profit if allowed to continue in the public sector, it was his colleagues who claimed that that privatisation would be a disaster. It has palpably not been a disaster, which is why we would claim the same success for the railways and other privatisations. That, surely, is the hon. Gentleman's real logical difficulty.
§ Mr. Wilson
If we were going to debate this in more detail, I would accept some of what the Minister says about British Airways. But I do not accept his more general point. What he says about what the public industries cost and now produce is straight out of the Conservative central office crib sheet. In fact, there were two heavy loss makers in the public sector: the coal and steel industries—
§ Mr. Deputy Speaker
Order. I have allowed hon. Members to stray rather wide with their examples, but now we should get back to the Bill.
§ Mr. Wilson
The public utilities used to put more money into the Treasury than they do now—that fact should not be forgotten. The analogy between British Airways and the railways, or London Underground, is false. British Airways was a profitable transport business. In this country as in every other, however, the railways require public subsidy. So the question of the railways is qualitatively different from any question attaching to previous privatisations. The only question is whether the public subsidies provided anyway by the taxpayer, in the private or public sector, are better spent on developing the industry and maximising the quality of public service or on funding the private profits of the operators.
§ Mr. Keith Hill
Is my hon. Friend aware of the findings of the Transport Select Committee, of which I am a member, that the consequences of the franchising system for the British taxpayer are an annual extra cost of £600 million? Does he agree that there is every reason to 1013 believe that if London Underground were privatised, the burden on the taxpayer to sustain that privatisation would be similarly increased?
§ Mr. Wilson
My hon. Friend is of course right. The all-party Select Committee under the—not exactly Trotskyite—chairmanship of the hon. Member for Southend, East (Sir T. Taylor) reached the unanimous conclusion that privatisation would cost the taxpayer £600 million a year more for no extra services. If the Tories think that is good value for money, theirs can hardly claim to be the party of business.
§ Mr. Garnier
Can the hon. Gentleman spare us a few minutes to explain how he reconciles the two halves of his amendment? His partywelcomes the higher levels of investmentprovided by the PFI, yet does not believethat the privatisation of London Underground would be in the interests of London".Can he explain the apparent inconsistency?
§ Mr. Wilson
We have heard a great deal about this brilliant lawyer who presumably collects large sums of money outside the Chamber for that quality of intervention. I am surprised to have to point out to him that the PFI, even under the Tories, is not synonymous with privatisation. There is no contradiction between a joint funding approach and public control—the public operation of a public asset.
§ Mr. Wilson
Do people pay the hon. and learned Gentleman for this kind of intervention? Does he win any cases? I do not understand his difficulty. Even the Minister was generous enough to point out that my right hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) realised that there are ways of getting private money into public projects so as to facilitate the public sector's operation and provide the private sector with returns. [HON. MEMBERS: "The right hon. Gentleman is a great man."' Indeed he is, as even the Minister, who appears to be demob happy, would agree. Such partnerships also create employment and accelerate the pace of investment in public projects. They are therefore wholly desirable.
Ever since I have taken an interest in these matters, Ministers—notably the right hon. Members for Henley and for South Norfolk (Mr. MacGregor), now known as the right hon. Member for Hill Samuel MacGregor—have stood at the Dispatch Box and said that it is impossible to get private money into public projects. They said that that was a naive approach to circumventing public spending rules. They said that it could not be done; a project had to be wholly private or wholly public. That was the Government's approach until recently. They are latecomers to the idea of public-private partnerships.
The problem is that, once converted, the Tories cannot get off the ideological hook. They cannot allow the public sector to remain in the driving seat. All the experience of the PFI so far shows that public-private partnerships 1014 happen only when the ultimate commitment to the project remains in the public sector. Without that, the private sector will not accept the risk entailed in most of these projects. That is why I genuinely believe that there will be a great many of these projects under a Labour Government. We will not be hung up on insisting that an unreasonable degree of risk must be passed to the private sector. We will go for pragmatic arrangements that allow the private sector to do what it is good at and the public sector to do what it is good at. London Underground will benefit from that.
§ Mr. Stephen
Would we be mistaken if we concluded that the hon. Gentleman and his party have an ideological objection to privatisation?
§ Mr. Wilson
We have no such objection in principle. I have no wish to buy back the Carlisle pubs for British Rail. Over the years some things have passed into the public sector that should not be there and which can be better done in the private sector. But our residual antipathy, such as it is, to the idea that the private sector can do everything better than the public sector is as nothing compared with the hatred that Tory Members display towards the public sector, and compared with their obsessive, irrational and unsubstantiated belief that there is nothing that the public sector can do better on behalf of the taxpayer.
I say that the public sector can do some things better and more efficiently, in the social, environmental and economic interests of the wider community.
§ Mr. Norris
I support the hon. Gentleman's remarks, in that my right hon. Friend the Member for South Norfolk (Mr. MacGregor), the former Secretary of State, used to make that very point to the right hon. Member for Kingston upon Hull, East (Mr. Prescott) when he was Labour's transport spokesman. The one thing that the Government do better than the private sector is to borrow money at finer rates. The right hon. Gentleman continually proposed leasing, a concept that he identified to accelerate public investment. But the only consequence was to impose far greater costs on the Exchequer than it would have borne if the Government had invested the funds in the first place.
The hon. Gentleman has neglected to identify how the PFI works: the transfer of risk from the public to the private sector, together with the responsibility for operations, forces greater efficiencies and greater economies. That is not because the people involved are inherently superior—I readily concede that point to the hon. Gentleman—but simply because they have more financial muscle available to them.
§ Mr. Wilson
The Minister is more reasonable than some of his colleagues in that he enters the latter caveat. There are no absolutes in this. Of course, risk should be transferred to the private sector, but it is a matter of degree.
I return to London Underground and the Northern line project, which is in the process of going ahead under the PFI. ABB, the company that was to the fore in advocating the project and carrying it forward, and, ultimately, I argue, making it happen, eventually pulled out because of the degree of risk that the Government wished to 1015 transfer to it. I recall that the value of residual assets was the stumbling point. As a result 700 people are unemployed. It also happened for GEC Alsthom, and the managing director left shortly afterwards. It will be interesting to know what the highest echelons of GEC Alsthom think about the level of risk that it has accepted on the Northern line project. It will be even more interesting to know whether the Government will get away with it a second time, as it is fairly well known in the industry that nobody else would have accepted the level of risk that was passed on to make the Northern line project happen. I note that the Minister does not deny that.
We are talking here about a matter of balance. We want the projects to happen. We are happy to facilitate a measure that will make them happen, but we do not want any form of back-door privatisation. Ministers cannot complain if we thoroughly test every word that they say on this subject, because the precedents and their public utterances on the subject have been very much in the direction of all-out privatisation.
I could continue with further cuttings that show that what the Government really have in mind for London Underground is privatisation. After I had got through the first few cuttings about the privatisation of London Underground, which I got from the Library today, I noticed that one was written by the crime correspondent of the London Evening Standard. I immediately thought that we were on to the LTS contract, but we shall pass on that. The Bill should include a clause, perhaps, that the public sector should not be defrauded by the private sector, but that is not Tory philosophy either.
§ Mr. Spearing
Before my hon. Friend leaves privatisation entirely, does he agree that although the Minister said that it was not his intention to let Wisconsin Central or its equivalent play a big part in the Central line in future—other Ministers may well allow it—the Bill permits large-scale contractorisation, which is not very different from privatisation, which we would not accept, because it would not be in the interests of a coherent London Transport railway system, which was created in the 1930s but is now in the process of being dismantled?
§ Mr. Wilson
My hon. Friend is absolutely right. We do not want the fragmentation of the London underground system any more than we wanted the fragmentation of the British railway system, which is now happening with such deleterious consequences.
I am told that all-out privatisation could take place under existing legislation and that the Bill will not make it technically more possible for privatisation to occur, and to some extent we have to be guided by what we are told in these matters. What is important, however, is the credibility of the assurances. That is what we are anxious to test tonight. I cannot find the notes on clauses, so I shall have to paraphrase. The Secretary of State says that there are no manpower implications in the Bill, but then linked to that the statement that manpower employed by London Underground Ltd. will decline as contractorisation increases. That is not exactly encouraging if that is the motivation that underlies the Bill.
§ Mr. Norris
This is an important point. The hon. Gentleman was generous enough to say that he did not have the notes on clauses in front of him, so I shall correct 1016 a misapprehension that I know that he would not wish to leave the House with. The explanatory and financial memorandum says specifically:The Bill will have no direct effect on public sector manpower, although the number of LRT employees will decline to the extent that more staff are transferred to contractors under Private Finance Initiative agreements.That simply acknowledges that the number employed by LRT directly falls as those staff are transferred to PFI contractors. It is not in any respect a statement about numbers of staff overall.
§ Mr. Wilson
It is useful that the Minister put that on record. I put it on the record that we would prefer to see a directly employed work force under London Underground Ltd. with all the securities and conditions of service that that involves. In getting private money into these projects, there is no need to transfer the employees to separately established private companies. There is no necessary corollary between those two actions. I hope that the Minister recognises that.
Returning briefly to the provision of ticketing at Heathrow, I defer to my hon. Friend the Member for Newham, South (Mr. Spearing), who was good enough to point out to me that, 20 years ago, the Greater London council tried to get ticketing right at Heathrow. He suspects that it might have been more successful if the GLC were still operating it rather than the present quango. We all have a shared interest. I endorse what the Minister said and welcome his remarks that, as the entry point to this country, the provision of ticketing at Heathrow is a disgrace and that something should be done about it.
I have spoken for long enough—[Interruption.]—if that is possible. I could not help but think when I was doing my research that there used to be more interesting debates in the House. I noticed that, in 1862, means of traction were debated, and John Fowler, the engineer, was said to have envisaged that trains would be blown through an airtight tunnel, using giant compressors at each terminus. If we had that quality of debate now instead of mere political rhetoric, the nation would probably be better informed and better governed.
We have put down our markers. The tube and safety on it is of immense importance. If people did not realise before just what high risks are involved in running an underground system, the tragedy of King's Cross reminded them that it is not something with which to play politics. It is an immensely complex system that needs a high level of investment and maintenance. In so far as the Bill facilitates those ends, we will support it, but it is essential to point out that we do not want the same games to be played with London Underground in terms of fragmentation, franchising and privatisation that have taken place with British Rail.
§ Sir Sydney Chapman (Chipping Barnet)
I am grateful to be called early in the debate. I consider it a pleasure to follow the Front-Bench spokesmen. The hon. Member for Cunninghame, North (Mr. Wilson), who speaks for the Opposition, was courteous enough to tell me that he has to go to a meeting shortly. I shall not take that amiss. I enjoyed his speech very much. I did not agree with much of it, but he made his points in a balanced and, at times, amusing way.
1017 I very much enjoyed the speech of my hon. Friend the Minister. I do not know whether he realises it, but he spoke for one hour and 21 minutes. It seemed—this is the greatest tribute that can be paid to anybody who speaks at length in the Chamber—to be only half an hour long. It probably was if the interventions are discounted. I shall not say that the hon. Member for Cunninghame, North spoke for only half an hour but that it seemed like twice that length, as that was not the case. I cannot match the eloquence of either, but I shall try to be a little more brief.
The Bill is essentially technical, conferring very limited powers. It is basically intended to encourage and increase capital investment in London Transport in general and London Underground in particular. I consider it right for London Transport's limited powers to be increased in the restricted sense in which the Bill increases them.
The Bill is also about private finance initiatives. My hon. Friend the Minister identified one of those initiatives, which is already—so to speak—in train: the Heathrow link. The British Airports Authority is to contribute £300 million in a partnership between the public and the private sector. I welcome that; I also welcome—this is nearer to my parochial home—the £400 million that is being in vested in new rolling stock on the Northern line. Many hon. Members on both sides of the House have encouraged that investment, including my hon. Friend the Member for Hendon, South (Mr. Marshall) and the hon. Members for Hampstead and Highgate (Ms Jackson), for Streatham (Mr. Hill), for Newham, South (Mr. Spearing) and for Ealing, Southall (Mr. Khabra), all of whom are in their places.
I am not sure whether I understood my hon. Friend the Minister correctly, but he gave the impression that the new rolling stock—which I prefer to call trains; the stock on the Northern line is certainly rolling at present—would not start to be introduced until the middle of next year. I was rather disappointed by that: I had hoped that the first trains would be introduced at the end of this year. Perhaps my hon. Friend will be able to reassure the House, later if not now. Certainly, we welcome the 100 or more trains that will come on to our local Northern line.
In addition to the private finance initiatives that have already been announced and are about to be implemented, my hon. Friend mentioned a further £750 million that will enable London Transport to invest in three further specific projects. First, it plans improvements to the communications system, which I gather involves an integrated radio network. I must confess that, as a product of the pre-computer age, I do not really understand these matters, but such a system is certainly needed.
Secondly, London Transport also proposes to improve the ticketing system, and that too is necessary. Hon. Members have mentioned arriving at Heathrow. I take the Northern line, rather than fly to Heathrow, to get to Westminster. I use the underground regularly. I have used it even more since I ceased to be a Minister. There are two types of automated ticket dispenser: there is the type that demands the exact price of the ticket, and the type that gives change. I have observed that, although there is rarely a queue at those machines, there is always a queue at the window and that it consists of people who do not have any change and, no doubt, a few who do not know how to use the automated machines. I do not believe that 1018 the replacement of automated machines by any number of people would speed up the dispensing of tickets. I say that not for ideological reasons, but on the basis of observation at the sharp end.
Thirdly, there is a private finance initiative project to improve the power supply throughout the underground. It is entirely reasonable that the Bill should contain approval for electricity sub-stations in private ownership to be built on LT land. I see nothing wrong with that.
Let me make one of the few party political points that I shall make. I feel that it needs to be made. I welcome the Bill because it will encourage more private finance initiatives. I also welcome Labour's support for some of the projects that are already under way. The hon. Member for Hampstead and Highgate and I debated the matter on television a few months ago, when I re-entered that medium after six and a half years observing a vow of silence in the Government Whips Office. I believe that the private finance initiative is accepted on both sides of the House; that is certainly the message that I received from the hon. Member for Cunninghame, North.
We all look up suitable quotations not only from what we have said ourselves, but from what our political opponents have said. Let me draw Opposition Members' attention to what was said only six months ago by the hon. Member for Oxford, East (Mr. Smith), who I understand is one of the Labour party's economic spokesmen:Alongside our corporate tax strategy is our widescale commitment to nurturing partnership between the public and private sector, particularly with regard to partnerships in infrastructure investment, putting old battles between public and private behind us.That, I think, reflects the general view of hon. Members on both sides of the House.
§ Mr. Norris
Was it not also the hon. Member for Oxford, East (Mr. Smith)—who succeeded me in the second greatest constituency in England—who said that no alternative to the present Government could conceivably contemplate higher levels of public expenditure than those in which the Government were currently indulging? Does not that show very forcefully why the Bill is essential and, moreover, that Opposition Members could not possibly disagree with it?
§ Sir Sydney Chapman
My hon. Friend is absolutely right. Let me add that I hope that rumours that he will not be standing at the next election are without basis. Not only would that be a dreadful loss to the parliamentary Conservative party; the quality of debates in the House would take a tumble. I am sure that at least some Opposition Members share that sentiment. I can say very sincerely of my hon. Friend that he has a rare ability to speak at the Dispatch Box with authority and assurance while displaying no sign of arrogance. He also manages to speak confidently without showing any complacency. I pay due tribute to him.
The Bill is directly related to London Transport, mainly London Underground. It is therefore directly related to the Northern line. I should like to make a few comments about what my hon. Friend the Member for Hendon, South described eight years ago as an abominable system. The Northern line is indeed the misery line in the London Underground network, not only because it needs a good deal of investment but because it really consists of two separate lines.
1019 Anyone who has studied the configuration of the line will know that one section goes from High Barnet in the north, via the City, to Waterloo and southwards, while the other section starts at Edgware, goes into the other spur at Camden Town and then proceeds southwards, via the west end and Waterloo. The line is rather like a chain, in that its strongest point is its weakest link—Camden Town, where the track is not sufficient to deal with the demand for services, especially during the rush hour.
I am told that, if the two parts of the line were separated, between 20 and 30 per cent. more traffic could use it. I suspect, however, that if they were separated—which I understand would cost billions of pounds—my constituents would complain when they wanted to go to the west end, just as the constituents of my hon. Friend the Member for Hendon, South would complain that they could not go directly to the City.
The Northern line is unique. For a considerable amount of its length—from, I think, East Finchley to Morden—it contains the longest tunnel in the world. Although that might be the proud boast of people who espouse the Northern line's cause, it results in its being probably the most unpopular line for employees in the London Transport network. I suggest that staff who work on the Northern line should be paid a premium, to try to ensure that more employees will agree to work on it. Although there may not be a shortage of employees on the London Underground system as a whole, there inevitably is a shortage on the Northern line.
I shall not bore the House by reminding it of some of the investment figures that I managed to glean from my hon. Friend the Minister in an intervention, but the problem facing London Underground has been caused by chronic underinvestment in the 1950s, 1960s and 1970s. It is hard for us to realise it but, until the late 1970s, planning for London Transport assumed that, each year, fewer people would use the system or, to be more precise, people would use the system on fewer occasions. That was partly to do with the great growth, during those three decades, of car ownership.
Suddenly, towards the end of the 1970s—when Labour and Conservative Governments were in power—it was realised that the chronic underinvestment had to be dealt with. In the 1970s, capital investment in London Underground averaged under £50 million a year. Between the end of 1979 and the beginning of the 1990s, it increased to more than £500 million a year. That does not include an additional £500 million of annual investment in the Jubilee line extension at present.
§ Mr. Keith Hill
I am deeply reluctant to labour a point that I have already made but, until the late 1960s, London Transport was under a statutory break-even requirement and, as the hon. Gentleman has conceded, its demand for central Government funding did not emerge until the late 1970s. It is bogus to draw comparisons between funding in the 1970s and in the current period as, in the 1970s, London Transport did not demand the same level of central Government subvention. I hope that the hon. Gentleman will agree that it is far more relevant to examine the decline in core investment in London Underground from £683 million in 1992–93 to—this is a revised estimate—some £380 million in 1997–98. That is a scandal and he must justify it.
§ Sir Sydney Chapman
I do not try to justify it because it is nowhere near the reality. I understand what the hon.
1020 Gentleman says, but even if he were correct—which he is in technical terms—the vast increase in investment far outweighs those esoteric considerations. We could debate this all night, but most certainly will not.
In saying that investment has risen from under £50 million a year in the 1970s to more than £500 million a year in the 1990s, I exclude inflation. Allowing for inflation, but still excluding investment in the Jubilee line extension, a real comparison of those figures shows that we have quadrupled investment, but that is, perhaps, more an argument for the Committee stage of the Bill. I hesitate to say that only because I should like to assure the Government Whip on the Front Bench that that is not an invitation for me to be invited to join the Committee.
I am grateful for the House's indulgence. More and more investment is needed on the London Underground system. After the Government reached investment of £500 million a year, London Underground managers demanded that it should be £750 million a year. We would all like to wave our proverbial wands and to give more to London Underground.
That brings me back to the central point of the debate and of why we need the Bill. The taxpayer will, I hope—we cannot be certain about the future—put more and more into London Underground, year on year. Given the other priorities of public spending—pensioners at my constituency meetings do not put investment in London Underground ahead of the need to increase the state retirement pension—the only way that we can find the finance to secure the necessary investment in London Underground in the next decade is the private finance initiative. That is why I welcome the Bill.
The Bill is short. As my hon. Friend the Minister said, it has six clauses but, essentially, it has just three. It is technical but important and I commend it to the House.
§ Mr. Keith Hill (Streatham)
Despite the Minister's protests of injured innocence, my hon. Friend the Member for Cunninghame, North (Mr. Wilson) was clearly right to subject the Bill to his usual scathing analysis as it is a possible paving measure towards privatisation of London Underground.
Bitter experience has taught Labour Members that the Government are not always entirely transparent in their intentions on matters of privatisation. Like my hon. Friend, and also my hon. Friend the Member for Hampstead and Highgate (Ms Jackson), I spent many weeks on the Standing Committee that considered the Railways Bill in 1993. During that long consideration, did Ministers mention their intention to privatise Railtrack before the completion of the franchising process on British Rail? Did they mention even Railtrack's flotation?
It is not without reason, therefore, that we are suspicious of the Government's intentions—all the more so in this case. After all, there has hardly been an absence of smoke about the Government's preference for privatisation of the tube system. My hon. Friend the Member for Cunninghame, North referred to the story in early February in The Independent headlined:Tory plan to sell off tube".According to The Independent, that is one of the pet projects of the indefatigable First Secretary of State and viceroy of Henley—that is about the only title that he has 1021 not yet assumed, and I hope that I have not planted the idea in his mind—for inclusion in the next Tory party manifesto.
§ Mr. Norris
My right hon. Friend the First Secretary of State will be reading the record of these proceedings.
§ Mr. Hill
Exactly—no doubt he will read the record assiduously on the morrow and we shall receive an announcement in due course.
The interesting thing about that story was that it was not ascribed just to the First Secretary of State. The Independent was able to find a number of London Conservative Members who were ready to justify the scheme, so it is hardly news to them. There is, as they say, no smoke without fire. Judging from Tory Members' interventions, the privateers are snapping at the Minister's heels, despite his disavowals. Frankly, as a London Labour Member of Parliament I am almost tempted to welcome any proposal for privatising the tube. After the chaos of rail privatisation, for the majority of Londoners the privatisation of the tube would be the final nail in the Government's coffin.
If the Minister and the Government mean what they say about the Bill having nothing to do with privatisation, they will not vote against Labour's reasoned amendment. If they do vote against it, Londoners will draw the obvious conclusion, which is that a sell-off of the tube is in the Government's sights. I just hope that Ministers are braced for the consequences.
§ Mr. Wilson
Does my hon. Friend agree that there is an exact parallel with rail privatisation? While Londoners, including my hon. Friend's constituents, are wholly opposed to any privatisation of the tube, they would be even more appalled by its possible fragmentation.
§ Mr. Hill
I am grateful to my hon. Friend for that intervention. He is right. The frightening thing is that the Tory think tank's favourite scheme is to sell all 10 London tube lines. It is a recipe for chaos and disaster for London's travelling public. When Londoners learn that Conservative Back Benchers, at least, are contemplating fragmentation of the tube, they will be even more pronounced in their reaction to the Bill.
I shall adopt a more charitable note and take the Minister at his stated intentions. If the Bill is simply devised in part, as the Minister has assured us, to permit London Underground to diversify its profit-making activities—for example, the fibre-optic cable scheme—I, for one, certainly have no objection. On the contrary, I am all for public sector companies engaging in profitable innovation. Many of the former nationalised utilities did so very successfully, which is why the Government were able to privatise them in due course. That sort of profit-making innovation is an entirely proper activity for a public sector company in a mixed economy. It is exactly the sort of freedom that the Labour party wants for the Post Office, but which the Government are consistently resisting.
If, in addition and as the Minister declared, the Bill is designed to facilitate London Regional Transport's participation in further private finance initiatives, I am all 1022 for that, too. We welcomed the initial embrace of the private finance initiative concept in 1991 by the right hon. Member for Kingston upon Thames (Mr. Lamont), in his previous incarnation, and the subsequent, even warmer, embrace of the concept by the Chancellor of the Exchequer. Of course, Labour Members know that the true origins of the concept lie not in Kingston upon Thames but with my right hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott). It is exactly the right sort of public-private partnership that we should be aiming for in British industry at the end of the 20th century.
It is also indisputably the case that the PFI has hardly been a roaring success under the Government, with only one fifth of authorised expenditure having been expended on schemes to date. That is why I have been impressed by the detailed thinking undertaken by the Labour Treasury team on this. I have read all the documents carefully. As the Member of Parliament who acted as secretary to the all-party Northern line group during the lengthy and tortuous negotiations on the Northern line PFI—which ultimately succeeded, much to the advantage of my constituents in Clapham and Balham—I appreciate Labour's new proposals on the PFI concept. For example, I appreciate the objectives of securing greater prioritisation among the PFIs, of achieving greater clarity in the terms on which the private sector should be required to submit tenders and how risk and returns are to be shared and, not least, of streamlining the decision-making process. I am also interested in Labour's newer thinking about mechanisms to insure private and public sectors against the risks involved in such projects.
The PFI offers the leverage of private sector borrowing because of the efficiency gains from private sector management of the projects, but it is important to recognise that it does not actually secure significant extra funding. PFIs can bring forward projects, but at the end of the day they still have to be paid for out of public funds—either out of enhanced revenues, as is anticipated with the Northern line PFI, or directly from the Exchequer. Nevertheless, where PFIs are possible, they are very much to be encouraged. The Bill is designed to facilitate PFIs associated with power supply on the underground and with a new ticketing system. I hope that there remains scope for further PFIs more directly concerned with infrastructure on the underground—rolling stock, track and signalling renewals and, perhaps, station development.
As the Minister has already said, PFIs will succeed only where there is a real profit incentive for the private sector. The truth is that much, if not most of the renewals still desperately needed on the underground relate to intrinsically loss-making infrastructure and services. It is obvious that investment in such areas should be the subject of direct Government expenditure; yet the blunt truth is that the Government have proved reluctant to fund more than, at most, 60 or 70 per cent. of the capital investment that London Underground has identified as necessary to create, in its words, "a decently modern metro".
That level of investment was set at £700 million by the Monopolies and Mergers Commission in 1991. Although I have seen subsequent disavowals that the Government ever accepted that figure as the correct level, the very fact that in 1991, the year of the report, the then Secretary of State for Transport convinced the Chancellor to increase investment to that precise level is persuasive enough proof that the Government knew that it was the right level.
1023 The trouble was that that munificence extended for just 12 months. Having geared up to spend £683 million at 1995–96 prices on the core network in 1992–93, London Underground found its capital investment slashed by £150 million the following year. Since then, there has been a see-sawing in capital investment in the core network from one "Financial Statement" to the next—but, on the whole, there has been a distinct downward trend. There was £550 million for the core network in 1993–94, £546 million in 1994–95 and £549 million in 1995–96. Last year London Underground requested £581 million for 1996–97, but got £413 million. For the following two years to 1999, the equivalent projected sums are £383 million for each year.
§ Mr. Norris
Did the hon. Gentleman refer to grant or did he refer to investment? If he is referring to grant, he must acknowledge that to any grant provided must be added the very substantial internally generated investment by London Transport to give a total figure for what actually matters, which is investment in service. He will acknowledge that investment in the service is at a consistent all-time high.
§ Mr. Hill
I certainly accept that point, but I do not think that there is any point in having a partisan dispute. The Minister is absolutely right about the global figure for investment in the core network and the Jubilee line extension, about which I shall comment in a moment, and it would be foolish to challenge that assertion. It seems highly unsatisfactory, however, that the admirable efforts of London Transport to generate its own funding, which is running at £200 million a year, should be responsible for almost 40 per cent. of its capital investment funding. I doubt whether any public transport system in any major capital city in the western world has such a requirement for self-generated capital funding placed on it.
§ Mr. Garnier
So that I may understand the hon. Gentleman's point, can he say what level of direct grant he would propose if he were the Minister responsible for London Underground?
§ Mr. Stephen
If a business has the ability to generate a substantial proportion of its own funds for investment, is there any reason in principle why it should not do so?
§ Mr. Hill
Absolutely not, but the essence of my argument is that there should not be such a heavy burden placed on self-generated funding in the overall capital programme. We ought to be innovative in our approach to possible funding for transport infrastructure programmes. Self-generated funding is one source. Central Government funding is another. Perhaps we should also be considering other sources, about which I shall comment. In principle, of course there is no objection to internally generated funds forming part of the capital programme.
I should like to make two points about the record of investment in London Underground over the past few years. First, the investment is inconsistent, and that is no way to run a railway. It is grossly unfair on policy makers in London Underground, who cannot construct reliable future 1024 investment programmes against a backdrop of the see-sawing profile of central Government grant. It creates a demoralising climate of uncertainty in the company—hopes are raised for the implementation of projects and then subsequently dashed. Such uncertainty also creates its own dis-economies. Time and resources invested in developing projects are wasted when funding ceases abruptly. I am not recommending it, but it would have almost been better for planners at London Transport to have been guaranteed stability at a lower level than to suffer the slings and arrows of such inconstant fortune at the Government's hands.
Secondly, funding for the core network will approximately halve between 1993 and 1998. The original figure suggested by the Monopolies and Mergers Commission of £750 million at current prices was a realistic assessment of what is needed to develop a modestly improving metro system for our capital city. The Government and their successors ought to recognise their responsibility in that respect. I hope that that satisfies the hon. and learned Member for Harborough (Mr. Garnier). We are talking not about megabucks in this context but about making the difference between an underground system that is set on a process of slow decline and one which, in an unspectacular fashion, can continue to meet the needs of London as a working economy and a centre of tourism.
I should anticipate a further intervention by the hon. and learned Member for Harborough by hastily adding that, as a mere Back Bencher, someone of my humble status cannot possibly be construed as offering a spending pledge on behalf of Labour in the lead-up to the next election. I am talking as much to my hon. Friend the Member for Cunninghame, North as I am to the Government, who apparently have neither the will nor the time to make the necessary change, since they are so obviously on their way out, when I say that London nowadays is short-changed in the relationship between its contribution to the national economy and its share in investment in the Exchequer. It generates one fifth of the nation's wealth and gets back one seventh in Exchequer expenditure.
Of course, I accept the principle of redistribution—I do not suppose that I would be sitting on the Opposition Benches if I did not. There are great riches in London, but it also has the greatest reservoir of unemployed persons in the country. Half of the top 25 parliamentary constituencies with the highest level of unemployment are in London—one of them is mine. It is my firm belief that a new balance must be struck to correct the present distortion in the distribution of national wealth. Higher investment in London's transport infrastructure would be one means of doing that. I repeat my belief that such higher investment ought to be forthcoming from the Government and I express my hope that it will be from the next Labour Government.
In any circumstances, either as an alternative or, it is to be hoped, as a supplement to higher Government funding—to address the point to which I referred in response to the hon. Member for Shoreham (Mr. Stephen)—we ought to be ready to consider other sources of financing the London transport infrastructure, including the London underground.
For many years, a company levy has helped to develop Paris's massively impressive overground and underground railway system. Remarkably, that is exactly what is on offer from London's businesses as well. Almost six years ago, 1025 in May 1990, the Corporation of London published its far-sighted report on London's transport, "A Plan to Protect the Future". That report contained a proposal for a supplement to the then unified business rate, to be earmarked for transport improvements in London.
The same plan has been taken up by the excellent London First group as part of its transport initiative. Its essential proposal is to invite businesses to vote on whether to contribute to a specific programme of investment in existing and new railway lines—overground and underground—in London. If that were agreed, the contribution would be collected through a surcharge on the national non-domestic rate. The potential of the scheme is obvious. A 10 per cent. addition to the NNDR would yield in London between £300 million and £400 million a year—more than enough to fill the gap between Exchequer funding and the needs of the core underground network.
I regret that Ministers have shilly-shallied about the proposal—I suppose that we can hope for no more—which I repeat has been on offer from London's businesses for almost six years. Ministers have raised concerns about expenditure being counted against the public sector borrowing requirement. As London First has pointed out, routes around the PSBR concept were devised for the community charge, for council tax and for grant-maintained schools, and a route ought also to be found to secure such a remarkable offer.
§ Mr. Stephen
The hon. Gentleman makes an interesting proposition. Does he accept that although most businesses do not mind paying tax on money that they have earned, they object to paying tax on money that they have not earned? The problem with non-domestic rates, as with national insurance contributions, is that they do not relate to a business's ability to pay.
§ Mr. Norris
I am grateful to the hon. Member for Streatham (Mr. Hill) for giving way, because I think that my hon. Friend the Member for Shoreham (Mr. Stephen) is making an extremely important point. I must tell the hon. Member for Streatham that government is about slightly more than sucking it and seeing, inviting though that prospect may be. [Interruption.] I do not see what the hon. Member for Lewisham, East (Mrs. Prentice) finds so risible.
If the hon. Member for Streatham suggests the notion of additional taxation for London's hard-pressed business community, and if he accepts the undeniable fact asserted by my hon. Friend the Member for Shoreham—that the national non-domestic rate takes no account of the profitability of an individual enterprise or of its ability to pay—precisely what has the hon. Member for Streatham sucked and seen that the rest of us do not know about? Will he enlighten us? Will he get away from all the hyperbole and vague arm wavings and give us some details of his scheme for a tax on London's businesses? For example, does he think that the small shopkeepers of Streatham would be happy to pay a tax to deliver crossrail? I should be interested if he can give us an answer.
§ Mr. Hill
Recoiling from that devastating intervention, I must point out that it is not for me to suck it and see in that 1026 context. Notwithstanding the Minister's many claims to esteem in the House—many of us have already said that we regard him as an ornament to the Chamber—he will surely accept that both the Corporation of London, which produced a report on London's transport entitled, "A Plan to Protect the Future", and the London Pride Partnership, the representative organisation which incorporates businesses across the capital and is doing a wonderful job promoting London, have published reports in which they make precisely the proposal that I have described. Both those organisations say that the test should be to put the proposition to the businesses themselves. As representative organisations, they obviously have a strong suspicion that London businesses would say yes, because they want to put London first. London First is surely right to observe that if businesses are willing to contribute to transport investment, it would bebizarre to veto a scheme which enables them to do so in an equitable way".I earnestly hope that both the Government and my party will revisit that proposal, which has been on offer so long. It is a gift horse that it would be mad to kick in the teeth. That investment is desperately needed.
§ Mr. Garnier
Reverting to the hon. Gentleman's point about a London transport business tax, did he say what percentage the tax would be of a company's profits or turnover? If he did I missed it. Did he say which authority would levy the tax—a London Transport body, a local government body or central Government? What would be the consequences of the appeals system that would have to be set up to deal with any applications against any unfair levy of taxation that may be made by the body that he hopes to invent? Finally, what total sum does the hon. Gentleman hope that his new tax will raise? Would it be different from the £750 million that he mentioned earlier?
§ Mr. Hill
I will give the hon. and learned Gentleman an example. It is estimated that a 10 per cent. supplement to the national non-domestic rate for London businesses would yield between £300 million and £400 million. I cannot dispute that figure as it appears in a document entitled, "Liberate the Tube", published by the Centre for Policy Studies, so it would appear to have the stamp of approval of one of the hon. and learned Gentleman's Conservative party think tanks. He might have a word with the CPS about the idea; I dare say that he is closer to it than I am.
§ Mr. Hill
No. I have answered the hon. and learned Member perfectly adequately.
It is perfectly true, as the Minister has repeatedly told us, that capital investment in London is at an all-time high. However, almost half that capital expenditure is devoted 1027 solely to the Jubilee line extension. I do not complain about the Jubilee line extension; I am all for new lines. In fact it would suit me if the Minister would here and now give the immediate go-ahead for an extension of the tube to Streatham. That was first promised in 1926, but we are still waiting for it 70 years on. What a wonderful millennium gift that would be for the people of Streatham. I would gladly give way to the Minister if he would make that offer now.
I would not complain about the Jubilee line extension, even if it showed the lowest cost-benefit analysis return of the four new rail projects identified by the 1986 central London rail study. I am sure that it will be a state-of-the-art underground line. But where is the advantage in adding a few miles of the most modern metro in the world to the remaining 250 miles of London underground which is falling into greater decay and dilapidation?
In my view, London Underground is doing a terrific job in keeping the network running, generating an annual £200 million of its own funds for investment and moving as swiftly as it can to capital renewal of the system, even if that makes life difficult at times for underground users. My daily journey to work now involves my negotiating both work on a new ticket hall at Brixton tube station and work on a new escalator at the interchange between the Victoria line and the District and Circle lines at Victoria, and then emerging at the industrial site here at Westminster.
§ Mr. Norris
When the hon. Gentleman asks where the advantage is to the rest of the tube system of developing the Jubilee line extension, he falls into the trap of assuming that new developments have no impact on the existing system. But of course they do. One of the key advantages of the Jubilee line extension is that it will take travellers from Stratford, for example, directly to the west end. Those people currently use the Central line; the hon. Gentleman will know that even after a £830 million improvement, overcrowding on the east-west flow of the Central line remains a key consideration. One of the greatest advantages of the Jubilee line extension is that it will alleviate pressure on a piece of the existing infrastructure.
§ Mr. Hill
Again, I accept the Minister's observation. In passenger traffic terms, he must be right. But it is still worth returning to my original question: is the advantage that he describes great enough to justify devoting half the current capital programme of London Underground to a relatively short extension?
The truth is that on its present funding, London Underground Ltd. cannot keep up with the cross-pressures of the backlog of years of underinvestment in the system, together with increasing passenger demand. London Underground can now take on only the most essential engineering upgrades on the unseen parts of the system—signalling, track, bridges, embankments, and so on.
The rising backlog of renewals is highly visible even on the other parts of the system—the parts that passengers see. It would be an education for the Minister to see the appallingly decayed Bakerloo-Northern line interchange at the Elephant and Castle, or to witness the cave-like condition of many of the stations on the City extension of the Northern line.
It has been rightly said—I owe this quotation to the fascinating document published by the Centre for Policy Studies—that 1028For many workers in London an underground station is the most dilapidated place they have to experience in their everyday lives.No wonder so many of them prefer the modernity and convenience of the private car, and increasing car use will be the penalty for neglecting the underground.
This week the Department of the Environment's report, "Indicators of Sustainable Development for the United Kingdom", reminded us of the consequences of the continued supremacy of the great car economy in terms of higher energy consumption, congestion and declining air quality. The Government proclaim their commitment to reducing car dependency but systematically hack away at investment in our transport infrastructure—down 15 per cent. in real terms between 1991–92 and 1997–98. It is high time that the Government put their money where their mouth is, and they could make no better start than by significantly boosting their investment in the tube.
§ Mr. John Marshall (Hendon, South)
It is always a great pleasure to follow the hon. Member for Streatham (Mr. Hill) because he and I played an important role together in the all-party friends of the Northern line group, which helped to get the Northern line trains that will come on stream next year.
Of course, the hon. Member for Streatham displayed the irresponsibility that people in opposition enjoy.
§ Ms Clare Short (Birmingham, Ladywood)
I hope that the hon. Gentleman will soon enjoy being in opposition.
§ Mr. Marshall
I have no desire to enjoy that irresponsibility, and do not intend to this century.
The hon. Member for Streatham said that a greater percentage of Government expenditure should be devoted to London, but—naturally—his hon. Friends the shadow Secretaries of State for Scotland and for Wales say that there should be more Government expenditure in Scotland and Wales, those who come from the north-east want the Government to spend more in the north-east and those who come from the north-west say that more should go to that region.
§ Mr. Marshall
We believe in a better deal for London, but the proposals that the hon. Gentleman advocates would not help London.
The hon. Member for Streatham spoke about an employment tax in London. Such a tax would help destroy jobs in London. London First may support the idea, but I remind the hon. Gentleman that the leading light behind London First is Lord Sheppard of Didgemere, from Grand Metropolitan. If one is part of a big multinational company, one is likely to be able to afford an employment tax in London, but if one asked small shopkeepers, who are struggling, or the small business man who employs two or three people, whether they wanted an employment tax in London, they would say no. Many official organisations that claim to be representatives of industry or commerce or farmers and so on are not representative of the opinions of many of those people.
§ Ms Glenda Jackson
My hon. Friend the Member for Streatham (Mr. Hill) did not refer to an employment tax.
1029 He referred to the idea, which has been presented by the transport initiative of London First, of businesses agreeing to pay to improve London's transport. The London chamber of commerce and the Confederation of British Industry are participating in that London transport initiative. Were it not for the fact that I know interventions must be short, I should read the whole list.
§ Mr. Marshall
Most people would regard a payment made by industry to a central fund as a tax. It is all very well for the hon. Lady to indulge in semantics, but that is how most people would view it. If they looked at their budget and found that there was a payment "to improving London Transport", they would regard that as a tax, which would reduce their profitability and might put some of them in queer street.
The point that I was trying to make before the hon. Lady asked me to give way was that some of those organisations are not representative of individual companies. I am sure that the Whip on duty, my hon. Friend the Member for Stroud (Mr. Knapman), will have sympathy with the story that I am about to tell. In October 1990, when I was in Scotland, talking to some fanners, the farmers asked me, "Can you try to prevent us joining the exchange rate mechanism?" I said, "I have a lot of sympathy with your point of view"—as I suspect that my hon. Friend the Member for Stroud would—"but unfortunately the National Farmers Union, which seeks to represent the farmers of the country, is telling the Government that they should do it, and do it now."
Those farmers were right; the NFU was wrong. Often organisations such as the Confederation of British Industry, which are run by large companies, which say that they are representative of industry, are not representative of small firms, which lack the time or inclination to send their major directors to interminable meetings to express their views. London First is not representative of industry; it is representative of its members, and they are not representative of every employer in this great capital.
There is a tradition that, when one speaks in a debate, one declares one's interests. The first interest I wish to declare is that, like my hon. Friend the Member for Cumbernauld and Kilsyth (Mr. Hogg), I am an adviser to the Confederation of Passenger Transport. There is an historic symmetry in that appointment because, when I was convenor of the municipal transport committee in Aberdeen, my socialist shadow was the then Councillor Norman Hogg, the father of my hon. Friend the Member for Cumbernauld and Kilsyth. I am also, as the hon. Member for Streatham knows, chairman of the all-party friends of the Northern line group—friends of the Northern line not as it is, but as it should be, and as it will be next year.
Importantly, I travel by the Northern line and other routes on the London Underground. I can boast that I have asked more questions about London Underground than any colleague and made more speeches about it than any colleague—sometimes at anti-social hours.
Interestingly, early in his speech the Minister spoke about London Buses, which demonstrates some of the advantages of the Government's policy of using private management in transport. When London Buses started a 1030 franchise programme under which routes were put out to tender, there were substantial savings—I believe of more than 10 per cent.—in running costs, Spanish practices were eliminated and efficiency became the name of the game. When London Buses was sold to the private sector, one of the advantages to London Underground was that part of the capital received was reinvested in the underground to improve the quality of service.
Reference was made to the history of London Regional Transport, and to the fact that, between 1969 and 1984, it was the responsibility of the Greater London council. My right hon. Friend the Secretary of State for Transport, who is on the Treasury Bench, was a member of that august body. I remember that when he gave a speech in the constituency of Ealing, Acton, someone asked, "What have you learnt since you became a member of the Greater London council?" and my right hon. Friend answered, "I have learnt not to admit that I am a member of the Greater London council."
That is understandable if one considers the way in which the Greater London council handled London Underground. London Underground's worst years—the locust years—were the Livingstone years, when emphasis was placed on cheap fares, not capital investment to improve the quality of service.
§ Ms Glenda Jackson
The hon. Gentleman is talking about the Fares Fair period of London Underground's history, when passenger numbers increased by 16 per cent. and road accidents—there is always a benefit—decreased by 3,500.
§ Mr. Marshall
Although of course the number of passengers increased, the problem with the policy was that, simultaneously, capital investment in maintaining and improving the service was held down. The Greater London council should have invested in improving the service, not in lowering fares. It is remarkable that Opposition Members who talk about the level of past investment—
§ Mr. Keith Hill
The hon. Gentleman asserted that investment in London Underground declined during the years of the Fares Fair scheme. My recollection is that that scheme operated from between approximately 1980 and 1984. He should therefore be interested to learn that, in 1980, investment in London Underground was £78 million. In 1981, it rose to £91 million; it decreased to £82 million in 1982; it increased to £110 million in 1983; and it ended up at £147 million in 1984. That does not sound like a reduction in investment in London Underground, as a penalty for the Fares Fair experiment.
§ Mr. Marshall
I was trying to say—I thought it was obvious even to some Labour Members—that the GLC clearly had a choice about how to spend money, and it chose to spend it keeping fares down rather than investing in the future. It is illogical that Labour Members, who are the spiritual successors to that body, should come forward in this debate and complain about past investment in London Underground, particularly as public transport in London is being transformed.
We have discussed the Jubilee line extension. I was somewhat surprised to hear the hon. Member for Streatham complain about that massive improvement in public transport in London, which will benefit not only the 1031 economies of the areas in which the line will be extended, but passengers across the capital because it will take some passengers away from present routes.
There have been improvements to public transport in docklands. Earlier in the debate, we heard about the position at Heathrow, and the fact that the Paddington-Heathrow link will cut that journey time by about 12 minutes. That is a £300 million investment that has been provided substantially by the British Airports Authority.
The Northern line will be transformed. I am sure we can get cross-party agreement on the fact that, for years, it was the misery line in London. The misery line will be transformed into the most modern line in London. Many of the trains currently on that line date back to 1959. That year was a particularly good vintage in political terms, and let us hope that the trains that are coming in 1997 will have an equally good political vintage.
Some hon. Members may have noticed the announcement in the press this morning aboutLondon trams to return in £160 million deal".We have been discussing the role of the private sector in funding new developments in London, and it is significant to examine who is funding most of that scheme. It includes groups such as Bombardier Eurorail, Sir Robert McAlpine, Amec Construction, the Royal Bank of Scotland and Centrewest, a bus operator. Three quarters of the project is being funded not by my right hon. Friend the Secretary of State and his Department but directly by private enterprise. Surely that demonstrates that the private sector is willing to come in and produce a better service for our constituents in London.
It is appropriate at this stage, although in his absence, to pay tribute to my hon. Friend the Member for Epping Forest (Mr. Norris), who has been the first Minister for Transport in London. He has been a very effective Minister and there is a feeling of regret on both sides of the House that he will not be seeking re-election at the next general election. I think that people would give him the advice that was given to another politician: resign, retire, return. Many of us hope that he will return to grace our debates and to prove once again what an effective operator he is as a Minister of the Crown.
We have discussed the LU Northern line on many occasions in the House. I have explained that the trains are very old and that they are graffiti-ridden. There is so much graffiti on the trains that some of it is now two, three or even five years old. There is nothing more miserable than standing at a station at 7.10 in the morning and seeing a miserable, grey train coming in. We can only look forward to the day next year when we will see bright red and blue trains coming in that will lift our spirits.
§ Mr. Marshall
They certainly will not be covered in grafiti, as my hon. Friend has said, because the new trains will be much more graffiti-resistant. It will be very much easier to get graffiti off in the future.
Graffiti is not the only problem with the LU Northern line. The dot-matrix system, which is called an information system, all too often is a misinformation system. Stations are tatty and they need improvement. That is why I welcome the Northern line's £1 billion regeneration, which is, of course, due solely to the PFI.
§ Mr. Marshall
It is very amusing to hear the Labour party claiming parentage of the PFI, because it seems that, whenever it is proposed, Labour Members criticise it. Those hon. Members who were in the Chamber yesterday for Health questions will remember what happened. Did the hon. Member for Halifax (Mrs. Mahon) welcome the PFI? Of course she did not; she criticised it. There was even an interruption by the hon. Member for Peckham (Ms Harman), who was, no doubt, seeking to re-establish her socialist credentials. She was critical of the PFI. It sticks in the gullets of most Conservative Members to hear Labour Members come along and claim parentage of the PFI, when they have been completely scathing about every attempt to get private finance into improving the health service, education or transport. They cannot have it both ways.
§ Mr. Marshall
I know that BT, once it decided that the Labour party was a soft touch, thought that it would be rather fun to negotiate with the Labour party. Last October, it turned out that the Labour party was a soft touch and that it gave BT everything that it wanted.
People recognise that if one is bidding under the PFI, it is the Government's duty to get the best possible terms for the taxpayer, for the consumer and for the future of this country. It is quite wrong for politicians to stand up, as the hon. Lady has done, and say, "We will be a soft touch. We will let bidders get what they want." Surely that is not what government is about. The Minister should not be about signing the cheque that GEC wants. I am surprised at the hon. Lady saying that a Labour Government would give big business what it wants, and that this wicked Tory Government are being too tough on big companies.
§ Ms Short
Obviously the hon. Gentleman has not talked to people who have bid under the PFI. If the public sector asks the private sector to carry inappropriate risk, one problem is that the capital is attained at very great expense to the public purse. If we reorganise the PFI to distribute risk properly—properly hold the risk that belongs in the public sector with the public sector and get the private sector to take appropriate risk—we will get cheaper capital, which will be cheaper for the public sector.
§ Mr. Marshall
I am surprised at the hon. Lady. She has come to the House and, in effect, said, "The Labour party would like to be a soft touch. We would like to give GEC a little more of what it wants, and we would like to take more of the risk." She is obviously listening to the moans of poor GEC.
The idea is that poor Lord Weinstock is having to take more of the risk than he wants. Of course Lord Weinstock will be allocated more of the risk than he wants—after all, he wants the public sector to take all of it and GEC to take 1033 none. The hon. Member for Birmingham, Ladywood (Ms Short), despite her left-wing credentials—I think she used to write for Tribune—has now revealed that she will visit poor Lord Weinstock in the other place to say, "When I am Secretary of State for Transport I will have a cosy party with you and Lord Prior, you can tell us the amount of risk that you want the Labour party to take, and we will take it." I never thought that I would hear the hon. Lady say, "I am the friend of GEC. These wicked Tories are the friend of the taxpayer. They want GEC to take the risk, but I would like the taxpayer to take it." I am amazed that the hon. Lady has come forward as the friend of the capitalist rather than of the taxpayer. Long may we witness conversions from the left wing of the Labour party—it is a badge of honour to be worn by the hon. Lady. I have made my point even if it took two or three interventions from the hon. Lady to do so.
The hon. Member for Ladywood is right that GEC has taken on risks for the Northern line which are currently borne by the taxpayer. She will also be aware that the principle governing the scheme into which GEC has entered is, "No train, no pay." On those days when a train comes along with the slogan "Not in service", which happens quite frequently at the moment, GEC will not be paid. Under the PFI, there is therefore every incentive for GEC to ensure that trains turn up. That is why it is currently investing £23 million in upgrading the Morden and Golders Green depots. That programme will safeguard the jobs of my constituents. Just as important, however, it will guarantee that those who travel on the Northern line will be given a good-quality service, which will enjoy decent maintenance. As my hon. Friend the Minister for Transport in London said earlier this week, half the current delays on the Northern line are caused by faulty maintenance.
I was somewhat surprised by the comments of the hon. Member for Cunninghame, North (Mr. Wilson), who said that ABB had withdrawn from the negotiations for the Northern line tender. The hon. Member for Ladywood may not be aware that I have spoken to representatives of that company many times and they told me that they submitted a tender. The company certainly did not retreat from the negotiations in the manner suggested by the hon. Member for Cunninghame, North.
The Northern line is being regenerated because of the PFI. I have frequently discussed that line in the House and invited Ministers to travel on it. I was rather surprised by the hon. Member for Streatham, who asked how often the Minister for Transport in London had seen the Northern line at work. My hon. Friend has travelled on that line with me on a number of occasions and seen for himself the practical problems created by it.
We know that the Northern line's modernisation would not have occurred without the PFI and I believe that there is even greater scope for its application to other parts of London Underground.
Only this week we have witnessed the schizophrenic attitude of the Opposition to the PFI. The right hon. Member for Sedgefield (Mr. Blair) and the hon. Member for Dunfermline, East (Mr. Brown) welcome it, as does the hon. Member for Ladywood, who now says that she will be kinder to those private companies than the Government. We are aware, however, that the unofficial leader of the Opposition, the hon. Member for Bolsover 1034 (Mr. Skinner), the hon. Member for Halifax and other Opposition Members have criticised the PFI time after time.
I am also surprised at the attitude of some hon. Members to the modernisation of the Northern line. I welcome that as a Member representing a constituency served by the Northern line and as a passenger on it. That is why I was surprised by the comments on Monday from the hon. Member for Hampstead and Highgate, (Ms Jackson). Instead of welcoming the proposed improvements, she concentrated solely on the short-term difficulties caused by the brief closure of parts of the route later in the year. I am sure that everyone understands that when a railway system is modernised, it is sometimes necessary to close the track in order to improve its quality so that, in future, that track will not have to be closed and trains can run more effectively on it.
Such modernisation reveals why we should look to the future. In the next Parliament I hope that measures will be taken to transfer London Underground to the private sector. It is illogical for certain hon. Members to say in speech after speech that London Underground has received inadequate investment and then to say that it should not be transferred to the private sector. They suggest that public ownership has failed London Underground, but argue that that means that it must not be transferred to the private sector. I am appalled that those hon. Members advance such an illogical argument.
I believe that the privatisation of London Underground would improve the quality of service and the efficiency of operation and increase levels of investment. That is in the interests of London, Londoners, all those who work in our great capital city and the many millions of tourists who come here for enjoyment. I hope that that privatisation will take place. I apologise to hon. Members for the length of my speech, in part due to the fact that I gave way every time I was asked to do so.
§ Mr. David Chidgey (Eastleigh)
May I add my congratulations to the Minister on his speech? We all enjoyed his bravura and generosity. It seems that, as the weeks go by, the shackles of office slip ever further from his shoulders. His free spirit fills the Chamber and adds a greater dimension to it. I for one am sad at the thought of him not being with us in the next Parliament.
The subject of the debate, the London Regional Transport Bill, seems to have been shunted into a side turning somewhere along the line in the past hour or so. At first sight, the Bill seems to be an innocent, almost pedestrian affair, as the Minister suggested. It has a mere six clauses, and is designed to tidy up the London Regional Transport Act 1984. It will allow LRT to do a number of sensible things to facilitate PFI projects connected with London Underground's power supplies; the introduction of smart card technology in the ticketing system; the exploitation of London Underground's fibre-optic cable network; and the extension of the east London lines. Those are sensible, sound ideas.
Within that simple, three-page Bill, however, lies a potentially powerful weapon about which many hon. Members have already expressed concern. It is rather like a snake in the grass—the smaller the creature, the more lethal its venom. The terms of clause 3 are so vague and so widely drawn that they give Ministers potentially 1035 all-embracing powers to direct London Underground to do whatever those Ministers may wish. The Minister gave us a firm undertaking that that was not the Bill's intention, but, as he knows, and is so aptly demonstrating, undertakings, like Ministers, have a habit of coming and going.
In that context, the House will recall that the Railways Bill made no mention of the privatisation of Railtrack. On the basis of that legislation, however, the Government have found the means to pursue what I believe to be their ill-founded plans to privatise Railtrack without any further reference to the House. It would be unacceptable for the Bill to pass through the House in a form that would enable Ministers to privatise London Underground through a statutory instrument. I shall return to that later.
I shall deal with what is purported to be the Bill's main thrust: facilitating the PFI for capital projects to enhance London's passenger transport system. There is a danger of the Government being seduced by the idea that the PFI can be used to fund any public project or service, while hiving off all risks and responsibilities to private contractors. The concept of the PFI must be one of partnership between the public and private sectors.
If the PH is to be a success, the Government must heed the warnings of the private sector, the banking sector and experts in financial management and the management of large assets. They are not contractors trying to make an extra bob, but people with responsible views on how best to finance and run the country's major institutions and engines. They argue that they suffer high costs from the tendering process.
Every negotiation for a PFI contract is treated as a unique contract. There is a desperate need for the Government to find ways of standardising the PFI process by introducing standard specifications and conditions, making the system more efficient, transparent and easily followed, and allowing negotiations and contracting to be made easier.
There must be a sensible distribution of risk. We have to recognise that, with the extended contract periods of the PFI arrangements, which can be for 20 or 30 years, there must be increased uncertainty about the responsibilities and the risks associated with them. With major project contracts, it has always been the case that there should be a clause to deal with force majeure. Over a period as long as 20 or 30 years, is not a change of Government or policy a force majeure that no contractor can foresee or take account of when assessing the risk? We must recognise that, when question marks are put into such contracts, the price immediately increases. The price to the taxpayer increases, not the profit to the contractor.
The message from the people, firms and organisations engaged in PFI contracts is that we need, through Government, to build and retain expertise in how to operate the PFI system. There is a clear case for taking the PFI out of the hands of the Treasury, which is understandably, and rightly, primarily concerned with cost-cutting and expenditure control. That is its function. The PFI' s main contribution should be to increase investment, not to decrease the public sector borrowing requirement.
The Government appear to believe that public and private partnerships are an ingenious way of removing their more onerous responsibilities, while continually trying to place the majority of the risk on the private sector. It is hardly surprising that the companies that have 1036 become involved in the PFI understandably expect a higher return on investment to cover the higher risks. The Treasury has little understanding of the ethos of the private sector. There is a clear case—I would welcome a comment from the Minister—for considering a separate agency to deal with the PFI and build experience, expertise and confidence with the private sector.
It is worth remembering that the PFI was launched to provide additionality to public expenditure. It was to provide the means to fund projects that the public sector had difficulty in funding. In practice, it is being used more and more as a substitute for public expenditure. A good example is the channel tunnel rail link, which shows how Governments can abdicate their responsibility to provide timely financial backing for projects that are essential to the public good.
The Government are so anxious to grasp the short-term advantage of the PFI that they are failing to recognise and support the genuine opportunities to develop public and private sector partnerships to invest in London's transport system. Hon. Members have drawn the House's attention to the London First initiative, and there was some debate about the benefits of its proposals. It is important to bear it in mind that that is an initiative from the people of London to provide and develop an imaginative transport programme to take us to the year 2010, by combining public and private funding to develop a partnership and proposals for a transport infrastructure fund.
There was much debate about the assumed unfairness of big business imposing on small business a requirement for what some regard as a tax and what others might call a contribution to improving London's transport system. It is important to remember that London First's initiative talks about the business community being asked to decide whether it would support such a scheme through a surcharge on the non-domestic rate. That means the whole business community, not only the chambers of commerce or the CBI. That is a democratic process—something that we should recognise and encourage.
London First has proposed another initiative that the House and the Government should examine as a worthy way of helping to fund London's transport. It has proposals for raising revenue through congestion charging, with revenue being directed solely to improving London's transport system. Before hon. Members get into a state and say, "This is more taxation, more burdens on the taxpayer," both surcharges—or additional contributions through the business rate—and congestion charging are not merely ideas but in place and working very well.
§ Mr. Peter Bottomley
I am sorry that I will not be able to stay for the whole of the hon. Gentleman's speech. Will he reflect on what level of congestion charging would have achieved what the changed traffic arrangements in the City did, or would have left Oxford street as it is now, with private cars banned and pedestrians still able to walk faster than taxis or buses? Are they to be charged?
§ Mr. Chidgey
I am grateful to the hon. Gentleman for taking me back 25 years to when I was involved in the pedestrianisation of Oxford street. The reaction from businesses and major hotels to the horrendous effect that stopping cars from driving by and parking outside their front doors would have on their businesses was amazing. A quarter of a century later, we have found that freeing major London streets from cars improves both business and the quality of life.
1037 The level of charging for congestion or for using valuable road space in city centres has been established in cities throughout the world, from Singapore to Oslo. Throughout the western world, there are examples of how we could regulate access charges to valuable and much sought after road space in city centres.
Those ideas are not new; they are in place. They have been tried and tested and found to work. As usual, we hide and cringe from any innovation and let the Treasury damp down any enthusiasm by claiming that any such expenditure or fund raising would count as part of the PSBR.
To return to the PFI, which is the skeleton of the Bill, the PFI' s main contribution should be to increase investment, not to decrease the PSBR. We must generate public and private partnerships that are mutually beneficial. I put it to the Minister that the Government should try to use the PFI as a source of front-end expenditure. The Government should try to lever in private capital, at the same time recognising that they should assume many of the risks that are primarily their responsibility. Long-term investment in transport and other essential services is too important to be left to the vagaries of the electoral cycle. The PFI offers an opportunity to escape from short-termism, and, through its devolution, to afford people more control over the development of their communities.
The Bill offers an opportunity to address London's key transport issues. By definition, London is the hub of much of Britain's transport system. London's transport policy is a concern not just for Londoners, but for those who live in the south-east of England and across the United Kingdom. The powers in the Bill could be used to pursue the essential aims not only of transport in London but of the transport system as a whole. The essential aims of London transport should be to improve the transport services, to maximise co-ordination and integration of existing services, and to improve accessibility to transport services for all those who live or work in London or who travel through the city.
We must ensure that there are safe, affordable and efficient links within and between all London's communities and transport terminals. We must protect London's environment and avoid the imposition of further environmental burdens on the south-east. Improvements in London transport will contribute to securing a more dynamic, efficient and sustainable economy.
I believe that the most effective means of implementing an integrated transport policy for London—such as I am outlining—would be through the establishment of a strategic transport authority for London. It would have the power to co-ordinate transport needs, encourage and support integration of services across the region, and provide Londoners with an effective voice on transport and land-use planning. Does the Minister recognise those key aims and objectives for London's transport? What role does he envisage for London Regional Transport in achieving those aims and objectives, with the benefit of the powers that it will acquire under the Bill?
In addressing the future of London's underground and rail networks, it is clear that a key aim must be the development of a co-ordinated and integrated system. We should not see piecemeal development that is dictated by the drive to maximise profits for a particular operator 1038 in a particular area: rail and underground services must operate and be available to passengers as a complete network. Investment must be available in order to raise standards across the network and improve the reliability and frequency of services. Passengers' interests must be the prime consideration, and the underground, bus and rail networks must be marketed as a total service underpinned by the travelcard system.
There is much evidence of the dismal failure to meet those aims and objectives. The Minister recognises that neglect of investment in the London underground system has led to the closure of the Bakerloo line and Northern line tunnels. He claimed that that was inevitable because of the passage of time. However, I believe that postponing investment in maintenance has magnified the scale of the necessary repair works, with traumatic consequences for millions of people who travel, live and work in London.
I do not blame the Minister for that situation, and I thank him for his earlier comments in recognising my fellowship of the Institution of Civil Engineers. I congratulate him in return on being awarded a companionship of that institution.
§ Mr. Chidgey
It is indeed a high and exclusive honour—unlike so many honours that Conservative Members attain for their services to this place. I am sure that the Minister will take pride in that award for many years to come—whatever other honours may come his way as a result of his ministerial position.
As a companion of the Institution of Civil Engineers, the Minister will move in different circles, and meet the great men of engineering who visualise and plan major projects. Through talking to them, he must know that there were other ways of dealing with the problems presented by the Bakerloo and Northern lines, rather than forcing their closure for 18 months in the capital city. I do not expect the Minister to respond to that point now, but he may do so in a few months, following further conversations with my friends and colleagues.
The postponement of the Thameslink project to 2006, and the fact that there is no clear commitment to crossrail—the interchange for Thameslink and crossrail has not been constructed at Farringdon—are examples of the failure to plan and introduce proper transport infrastructure for London. The Minister may not be aware that the inability to reach a decision and the delays on that project are jeopardising the key project design and planning team, which is threatened with redundancy. That would be a tremendous loss to the impetus and progress of the scheme, as the team's skills are not easily replaced. They must be retained, and the project must be seen to go forward.
Will the Bill promote and strengthen an integrated, co-ordinated public transport system for London, or will it result in a fragmented free-for-all? Will the powers granted under the Bill enable Ministers to pave the way for the privatisation of London Underground? The Minister said earlier that that was not his intention, and I accept his word, but time moves on. Does the Bill provide an opportunity for privatising London Underground and fragmenting what must be an essentially integrated transport system?
It is interesting to hear Conservative Members' comments about privatisation, but privatising London Underground piecemeal would clearly prejudice 1039 passengers' ability to transfer between the various lines at some 50 interchange stations in the network. The concept of passengers being unable to move between lines to complete their journeys is incomprehensible. Journeys across London would be made immeasurably more difficult, and the essential unified management of the station interchanges would be destroyed. Such unity is essential in order to maintain public safety in the event of an accident, such as the King's Cross tragedy.
I believe that the Bill must be redrafted to contain the clear and unequivocal statement that it will give Ministers no powers to privatise London Underground. Any such powers must be the subject of fresh, primary legislation—which the Liberal Democrats would oppose vigorously should it ever come before the House.
§ Mr. Edward Garnier (Harborough)
I am grateful to be called to speak in this important debate. I feel as though I have joined a secret society comprising those hon. Members who are fascinated by the London underground and who spend their evenings in the House—rather than in other areas of the Palace or in their constituencies in Scotland or in Leicestershire in my case—discussing this interesting subject.
I thank my hon. Friend the Minister for Transport in London for introducing the Bill. It is largely—if not wholly—an uncontroversial measure, which I suspect could have been disposed of in short order. However, I understand hon. Members' enthusiasm in wishing to contribute to the deliberations this evening.
The Bill is uncontroversial partly because few Labour Members represent London constituencies—as do few Conservative Members, although my hon. Friend the Minister is a wonderful exception to that rule.
The discussions that the Minister and I have had about transport matters have related predominantly to the Market Harborough bypass scheme. I was extremely grateful to him for coming—no doubt via St. Pancras, which is on the underground system—to look at the consequences of the bypass scheme and to see the traffic-calming measures that have exercised residents of that wonderful town for a few years. The point I wish to draw out of the Minister's journey from St. Pancras to Market Harborough is the fact that beside the present St. Pancras main line and tube station will be the cross-channel transport link, which is a classic example of the private finance initiative—provision for which is contained in the Bill.
The clauses of the Bill are designed to allow the PFI to be introduced into the workings, management and capital structure of the London underground system. In my view, the biggest project will be at St. Pancras—the underground station will no doubt be integrated with the overground station as a consequence of the Bill and the PFI.
I draw hon. Members' attention to the statement that my right hon. Friend the Secretary of State for Transport made on 29 February, in which he announced this project—which I believe to be the largest construction project in London for some time, if not ever. He stated:The main CTRL"—I cannot remember what that stands for.
§ Mr. Garnier
I thank the Minister. He continued:terminus at St. Pancras will provide an excellent interchange for services to the midlands and the north along the midland main line and the east coast main line, and also with the Thameslink 2000 project which I announced on Tuesday. The new St. Pancras terminus will, of course, respect the architectural integrity of that magnificent building.That is a point for the hon. Member for Cunninghame, North (Mr. Wilson)—I hope that his book contains a picture of the wonderful structure of St. Pancras station. It is one of the architectural gems of London. It sits above the underground station at St. Pancras.
§ Mr. Wilson
I agree about the architectural merits of St. Pancras. Does the hon. and learned Gentleman agree that, as the public purse has paid for every penny of the refurbishment of St. Pancras station, it should not now be given away to a private consortium without any financial consideration?
§ Mr. Garnier
The public should enjoy it—and they will. The travelling public will be able to use the facilities in that building and in the new building, which will be of great benefit to them. It is King's Cross and St. Pancras—it is the same place. The hon. Gentleman is perfectly right. My right hon. Friend the Secretary of State continued:The Government will transfer certain assets to the promoter: European Passenger Services, free of capital debt; Union Railways, the Government-owned company which has developed the project thus far and supported us in promoting the hybrid Bill; and, lastly, the land and property needed for the project, in particular the railway lands at Kings Cross and Stratford, and surplus properties acquired in connection with previous rail link schemes.The Government will also provide financial support with a present value of around £1.4 billion, compared with the overall construction cost of about £3 billion. That is an excellent investment for the nation"—I agree with him—since we estimate the benefits of the project to be worth around £6 billion".—[Official Report, 29 February 1996; Vol. 272, c. 1000.]That money will be spent in London, and will be indirectly, if not directly, spent on the underground system—in which the hon. Member for Cunninghame, North apparently has such a great interest.
§ Mr. Wilson
The problem for the Tories is that they do not know which faction to be part of at any given time. The hon. and learned Gentleman is taking the view that it is an excellent public investment—excellent value for the public purse—to put £1.4 billion of public money, plus a couple of billion pounds of assets, plus a £1.5 billion debt write-off, into this. Does that not put him at odds with Lord Parkinson, who, in 1989, vetoed the scheme on the ground that not one penny of public money should go into any of it?
§ Mr. Garnier
I am not as old as the hon. Gentleman and I cannot remember Lord Parkinson or anything that he may have said in the House. The hon. Gentleman gave a characteristically bravura performance—I always enjoy his contributions to the House. On another evening, much later than this, he spent about 45 minutes prolonging a debate on vehicle excise by giving us a Wilson's tour of the highlands and islands, which was fascinating.
1041 This evening, he has confined himself to half an hour and, at times, he managed to bring himself back to the terms of the Bill.
The Bill does not allow the so-called reasoned amendment that the Opposition has put down on the Order paper, which reads as follows:That this House declines to give a Second Reading to the London Regional Transport Bill because although the House welcomes the higher levels of investment in transport infrastructure provided in the Bill by the development of Private Finance Initiative projects by London Regional Transport, it does not believe that the privatisation of London Underground would be in the interests of London, and fears that this Bill contains powers which will be used to that end".I have looked at the Bill to see whether that fear is justified. I shall refer to the explanatory and financial memorandum on the face of the Bill.
Hon. Members may be interested to know that the notes on clauses provided by the Department, the House of Commons Library brief and—if I can give away a top secret—the central office brief seem to say more or less the same thing: this is an uncontroversial Bill. There is not one shred of evidence to justify the Labour party's fears that this is a back-door privatising measure.
The second paragraph of the explanatory and financial memorandum states:The Bill empowers LRT to enter into agreements with contractors for the carrying on by the contractors of any activity which LRT does not have the power to carry on".I shall compare that with the national health service: it cannot build hospitals, it does not always do the laundry, and it does not always provide the food—it buys those services from private companies. That is not privatisation: it is a sensible use of public money to enable public corporations—such as the national health service or London Regional Transport—to get the best of what is available in the private sector.
§ Mr. Tim Smith (Beaconsfield)
Is my hon. and learned Friend aware that according to the Evening Standard of 5 March, Jimmy Knapp, the leader of the Rail, Maritime and Transport Union, called the Bill privatisation by the back door? Does my hon. and learned Friend think that Mr. Knapp may have drafted the Labour party's amendment?
§ Mr. Garnier
I gather that, under new Labour, all the doors have been relabelled—so we cannot be sure whether Mr. Knapp knows what a back door is. I was seeking to disprove the soundness of the case put forward by the Labour party's amendment. The explanatory and financial memorandum continues:Clause 1 empowers LRT, subject to the Secretary of State's consent, to enter into certain agreements with contractors for the carrying on by the contractors of activities which LRT does not have the power to carry on.Clause 2 makes provision, subject to the Secretary of State's consent, for LRT to acquire land".I refer again to the national health service which, through trust boards and health authorities, can acquire land. That is not deemed to be privatisation by the back door, front door or through the roof.
The memorandum continues:"Clause 3 enables the Secretary of State, by order, to provide that certain of LRT's statutory functions are exercisable by another person".1042 A whole host of nationally important functions are carried out on behalf of the Government or on behalf of public bodies by individuals who are not part of the Government machine or who are not direct employees of public bodies. There is no diminution in the quality of the oversight or of the service provided by those individuals.
§ Mr. Eric Martlew (Carlisle)
Would the hon. and learned Gentleman be happy if the train drivers did not work for London Transport? Would that be acceptable?
§ Mr. Garnier
What is important is that the driver of the train is qualified to do so. I ask the hon. Gentleman: would he be happy if a fully qualified brain surgeon performed an operation on his head, but happened not to be employed by the national health service? Of course he would. He would be interested in whether that specialist had the necessary skills and qualifications to perform the operation.
§ Mr. Garnier
It is not for me to enter into personal banter with my hon. Friend, or to make comments about what is inside the head of the hon. Member for Carlisle (Mr. Martlew).
As my hon. Friend the Member for Wimbledon (Dr. Goodson-Wickes) is precluded from speaking in the debate, because he is the parliamentary private secretary to my right hon. Friend the Secretary of State for Transport, I want to pay tribute to him for the work that he has done on behalf of his constituents to ensure that the Government and London Transport are kept fully up to the mark with regard to the southern end of the Northern line, about which a great deal has been said this evening. He has pressed vehemently for improvements in rolling stock, particularly new arrangements through the PFI, which was discussed earlier by my hon. Friend the Member for Hendon, South (Mr. Marshall) and which has provided huge improvements to what used to be called the misery line, but which I understand can no longer be so called.
My hon. Friend the Minister and many other hon. Members this evening have described this wholly uncontroversial Bill as a technical measure. It removes legal obstacles which would otherwise prevent LT from getting on with what it should be getting on with. This is part of a range of initiatives that the Government and the Department have entered into during the past year or so in order to introduce private finance into these huge and most important publicly needed projects.
Listening to the hon. Member for Eastleigh (Mr. Chidgey), I found it extremely difficult to decide whether he intended to vote for or against the motion, to abstain, or perhaps to go for a combination of all three. No doubt we shall discover later this evening.
I hope that, by the end of the evening, when members of the official Opposition have reached a conclusion and no doubt drawn into the Chamber to listen to their arguments all the other London Labour Members of Parliament who wish to hear the hon. Member for Cunninghame, North, they will have had a change of heart, having realised that their amendment is meaningless and contains the seeds of its own destruction; and that 1043 they will either go quietly away and abstain, or will enthusiastically join the Government in voting for the Second Reading.
§ Ms Glenda Jackson (Hampstead and Highgate)
The hon. and learned Member for Harborough (Mr. Garnier), at the behest of the Secretary of State for Transport, began his contribution to this evening's debate by referring to the channel tunnel rail link. The Secretary of State pointed out to him the relevant passages in Hansard when the Secretary of State made his announcement to the House. I am presupposing that, as the hon. and learned Gentleman had to have the initials CTRL translated for him.
§ Mr. Garnier
I am not a professional actor so I am not as good at learning my lines as other hon. Members may be. I should inform the hon. Lady that the Secretary of State did not put me up to speak about the channel tunnel—whatever it is called. What I did was, because I am a Leicestershire Member whose constituents use St. Pancras station, ask my right hon. Friend the Secretary of State for the details and the reference in Hansard since I knew that he had spoken about it on the occasion that I mentioned. I appreciate that there must be a degree of to-ing and fro-ing in a debate such as this, but I would not like the hon. Lady to advance her case on a false premise.
§ Ms Jackson
I am grateful for what the hon. and learned Gentleman has said, but clearly the Secretary of State is desperate to make his case since he left the Front Bench and went to the hon. and learned Member for Harborough. If the hon. and learned Gentleman was asking for information, I should have thought that it would have been more courteous for him to have gone to the Secretary of State.
However, that was the opening of the hon. and learned Gentleman's contribution. He referred more than once to St. Pancras station and to what has been handed over to the designated operator by the Government, which has been estimated to he £5.7 billion of the nation's assets in cash and kind and, if memory serves, he believed that that was a good exchange for the country.
Writing in The Guardian on Monday 4 March, Victor Keegan, in his economics notebook, the headline of which was, "Public taken for a ride on railways", said:Don't be deceived by claims that the fast rail link is a triumph for the Government's private sector finance initiative. As the Financial Times pointed out on Saturday, this scheme may even be costing the Exchequer more than the British Rail option which bit the dust in 1989",and would in fact have cost just £1.4 billion as opposed to the £5.7 billion the CTRL is now costing us. He goes on to say:There is no chance of the private sector extending the link to the north unless the Government, as usual, underwrites the whole risk while leaving the profits for someone else.That is what is at the heart of the Opposition's concern about the Bill.
In common with, I believe, every other hon. Member who has spoken in the Chamber this afternoon, I congratulate the Minister for Transport in London on a sparkling and entertaining speech. We have come to expect the Minister to be invariably entertaining, but he excelled even his high standard this afternoon. He spoke for more 1044 than an hour and he was generous in allowing interventions. The fact that 99.9 per cent. of the time he managed to deflect attention away from the Bill is a great compliment to his abilities. In common with other hon. Members, I think that it is sad that the House will lose his presence if he is true to his word and does not stand again at the next election.
The hon. Member for Hendon, South (Mr. Marshall) claimed to have spoken more often, asked more questions and made more speeches regarding the Northern line than any other hon. Member. It must be a bitter agony to him that after all those questions and speeches and after all that time, he managed to bring about absolutely no improvements on what has become known as the misery line without the aid of the all-party Northern line group which, by excessive pressure, managed to get the Government to move from what seemed an intransigent position to consider the proposals that at that time were being presented by ABB on the leasing of new rolling stock for the Northern line.
Here again, I must pay tribute to the Minister, who assisted the all-party Northern line group in bringing pressure to bear upon the Treasury and assisted in at least getting new rolling stock on one of the oldest sections of the oldest underground system in the world.
The hon. Member for Hendon, South was somewhat excessive when he suggested that the leasing of new rolling stock is somehow transforming the misery line into some modern, efficient and consistently reliable line. That is not what I and my constituents know it to be. We will indeed have new rolling stock, but that is about all that will be new. There will still be the agony of waiting to see if the trains will arrive because the track and signalling have yet to be modernised. All that is in the future. The plans that the Government have presented to us this afternoon via the Bill do not lead me to believe that we will be seeing those improvements in the near future.
One of the most charming aspects of the Minister's speech this afternoon was the way in which he presented London underground as being already almost perfect. His description bore no relation whatever to the London underground that I know and which anyone who has occasion to use it regularly will know to be the system for this, our great capital city.
We could undoubtedly argue all night and probably all day tomorrow about the root cause for London's underground system becoming, according, I believe, to the Evening Standard, the worst underground system in the world. Opposition Members have made strong representations that the basic root cause has been the failure to invest adequately in it during the past 16 years. A briefing put out by the Capital Transport Campaign in November 1995 speaks of broken promises and says:In 1991 the Government commissioned an investigation into London Underground by the Monopolies and Mergers" Commission—This blamed "chronic underinvestment" for deficiencies in the levels of service—this was five years ago—and recommended that investment rise to around £700–750 million a year.In response, Malcolm Rifkind (then Transport Secretary)"—he is now Foreign Secretary— 1045said the Government was 'committed to providing the resources for both improving the existing underground and expanding the system'. He promised that investment in the existing railway would be over £700 million by 1993/94. Last year it was just £528 million.In 1991—just before the general election—the Government also promised £2.1 billion over three years for the existing underground. In the Autumn Statement the following year it was slashed by £700 million. Last year the Chancellor cut the three-year figure back to just £1.2 billion.The system has had reduced budgets and many broken promises from the Government on the investment that is desperately needed to make the London underground "a moderately modern metro", to quote the managing director of London Underground.
The infrastructure is in serious trouble. For example, London Underground has to remove more than 3 million gallons of water from the system every day. The pumps and the drainage systems were designed in the Victorian era. The problem of flooding was identified in an internal London Underground report in 1993, which stated that emergency investment in drainage systems—at a cost of £18 million—was required simply to keep the network operational. In the event, only £9 million was made available and current investment in the drainage system is running at £5 million a year.
I find it hard to believe—although I would be delighted to be proved wrong—that the Government's private finance initiative, as it is at the moment structured, would attract that level of investment to London's underground system. I regret to say that I have forgotten which of my colleagues made the point—it may have been my hon. Friend the Member for Streatham (Mr. Hill)—but the drainage system is one of those hidden problems into which the private sector is always somewhat slow to put its money. The private sector tends to like to have its contribution publicly emblazoned and visible. Something as basic as modern pumping and drainage systems would be unlikely to attract the private part of the private finance initiative, given—as my hon. Friends have pointed out—that the system as devised at the moment by the Government is both cumbersome and expensive for those businesses which would be interested in entering a public and private partnership—we consider that the best way forward—to invest in the vital and necessary infrastructure of our capital city and the rest of the country.
The lack of investment has led to speed restrictions being imposed on a number of routes and, unless the problem is tackled in the next three years, whole sections of line face closure. We have already had advance warning from London Underground of major closures this year on four lines—the longest and, it could be argued, the most serious being the Bakerloo line, which is expected to be closed for between six and seven months. There are also speed restrictions on the East London line, between Surrey Quays and Wapping; on the Central line, between Stratford and the west end; on the Northern line, between Leicester Square and Moorgate—although it seems on some days that there are speed restrictions to the point at which no trains are running at all on the Northern line; and on the Piccadilly line, between Piccadilly and King's Cross. That is not the only area on the London Underground system that is in desperate need of major investment.
If we look at the supporting structures of the underground, we find that at Sloane Square station last year a supporting girder cracked and the platform had to 1046 be closed. There was no risk to passengers or staff on that occasion, but that girder was fitted in 1868. The problem of aging support structures is compounded by the age of the network. We have the oldest underground system in the world. The East London line was built in 1869, the Metropolitan line in 1863, and the Circle and Hammersmith lines in 1863.
The track on the network is now so old that the number of speed restrictions on the network has doubled over the past two years. London Transport has videos showing the track physically bending as trains run over it. I would hate Conservative Members to accuse me of scaremongering. It is not my intention to suggest that the bending of the track is necessarily a danger to the millions of people who use the underground system every day, but it significantly lengthens journey times and increases the deterioration of the track and the rolling stock. Renewal expenditure alone in 1994–5 was £56 million, but even that level of investment is insufficient to tackle the problem.
Most of the embankments—not an invisible part of the network—on which the track is built were built and designed in the Victorian era. The Victorian building techniques involved piling up mounds of earth that were then overlaid with the rail line. As a result, large sections of the network face problems of subsidence and land slippage. London Transport is engaged in a costly programme of reinforcing the embankments with steel girders to deal with that problem.
I return to the subject of that well-known misery line, the Northern line. Signalling on parts of the Northern line is pre-war. The cost of replacing the signalling on just a small section of the network will be £22 million.
That is enough of the depressing list, which I could lengthen with no great difficulty, to show that there is, and has been for a considerable time, a total lack of the necessary investment in what surely should be the central and supporting arm of London's transport system.
We have heard contributions from hon. Members on both sides of the House, and I regret that I do not know their constituencies in some cases. We heard about the enormous benefits that have been produced for the travelling public by the introduction by the Government of passenger and citizens charters. I know, from talking to my constituents, that charters have increased complaints and smoothed the line between the consumer and the provider of the service so that it is easier to make complaints, but they have not improved services.
Much was made during our debate on fares on the London underground that fare revenues could he used as part of London Transport's central investment structure, but we know that some fares have risen in real terms by 70 per cent. in the past 10 years. For many people, who have no other means of transport to and from home and work other than the underground, the increase in fares can be an increasing burden, especially as the Government have been assiduous in the past few years in ensuring that wage rises have been kept very low.
The point was made that there is already a way of stopping trains on the underground because a driver can close together two wires that run along the tube train tunnels. That is fine, but I have read about the possibility of totally unmanned underground trains without even a driver—although I cannot imagine that they are going to be any part of the Government's plans in the future. There is enough technological expertise around at the moment 1047 to allow trains to run without any staff on board at all. I would not want to travel on such trains, and in any case I cannot see it happening in the foreseeable future.
The last clause of the Bill has to do with reductions in staffing. That causes me some concern. One of the first ways of cutting costs in previous privatisations has always been to reduce staff numbers. I know that the Minister has said that there would be no overall reduction in staff numbers; staff employed by London Underground will simply move, he says, to the private business that is due to enter the two schemes to which he referred. I find that unsatisfactory. Whenever private businesses have taken over from public sector entities, in whole or in part, there have been staffing reductions, wage reductions and usually an extension of the hours that staff are used to working.
I am most concerned about the gradual erosion of LU manning levels and its impact on the safety of the travelling public—especially women. Perhaps the popular press like to dig up stories on this subject, but lately there seem to have been too many reports of attacks on women travelling on their own late at night on certain parts of the underground system.
I approach this issue with no small trepidation. Belsize Park station is one of the stations on my line. I had occasion to raise this matter with the managing director about a year ago. The station contains many long, empty and usually badly lit tunnels. There are no staff on duty late at night. People have to catch a lift which rides down a very long way—the line is deeply sunk in that part of north London—often to alight on a platform that is deserted. There are no staff in sight; there is no means of summoning anyone should an incident occur.
Environmental reasons are certainly paramount when it comes to attracting more people to the underground system—presupposing that London Underground can run a system that meets Londoners' genuine needs. That being so, however, we need to guarantee that everyone travelling on the underground is safe.
§ Mr. Norris
I acknowledge that the hon. Lady has been stalwart in defending the interests of women passengers, and she raises a serious point about their safety. I know that she will want to reinforce the fact that although there have been worrying incidents on the system, the underground's safety record has measurably improved over the past five years because of steps that London Transport has taken and paid for to make the system safer. LRT recognises that unless people feel safe on the system they will not use it. I know that the hon. Lady would not want to create the impression that passengers on the system are unsafe. Statistically they are safer on the system than in the streets up top.
§ Ms Jackson
I accept that, but I hope that the Minister will agree that I was describing one type of transport on the network at one particular time—night. Statistical improvements, moreover, mean nothing to a woman who may be raped when attempting to travel on the underground. Statistics meant nothing to one of my constituents whose son was killed in an accident on the underground.
§ Ms Jackson
The Minister knows who I am talking about. She will be convinced to her dying day that her son's life could have been saved if there had been a member of staff standing on the platform, or if there had been any means of halting the train or summoning help.
There is still room for a great deal of improvement. The most immediately recognisable and reassuring form of improvement would be an increase in staffing at certain hours on the underground.
Despite its pronouncements, London Underground has not done enough yet to make its services accessible to people with disabilities. I can understand the difficulties, but there is a need for major investment, and the Government's private finance initiative will not produce the investment necessary to modernise the system or make it accessible to all Londoners wanting to travel on it.
The PFI, as devised and structured by the Government, is the Government's way of opening the back door to privatising a service which I believe must remain in the public sector. The Opposition believe that the only way to provide the right amount of investment for this system and all our public transport systems is via a genuine public-private partnership. The Government's PFI is not the way forward.
We strongly urge Conservative Members to look at our reasoned amendment with open minds. We all agree that London needs a modern, integrated public transport system, not just for the benefit of the people who live here but for the millions of tourists who come to this great capital city of ours. We need such a system for the economic prosperity and for the well-being of this great city. If we do not sort out our transport problems, companies looking to invest here may go elsewhere. The City might conceivably lose its primacy as well. Information technology and the Internet make it quite possible for financiers, bankers and people who make money by moving it around to relocate their businesses in one of Europe's other capital cities. So a decent transport system for the capital is a vital economic and national necessity.
The arguments expressed in this debate have made it abundantly clear that the Government have not chosen the right way to proceed. I hope that Conservative Members will seriously look at our amendment and consider voting with us, thereby putting the interests of their constituents before those of the party Whips. I hope that they will join us in the Lobby tonight.
§ Mr. David Congdon (Croydon, North-East)
I have listened carefully to the debate. I tried to understand exactly the arguments that the hon. Member for Hampstead and Highgate (Ms Jackson) was advancing, but I am not sure that I am any the wiser in determining exactly where she and her right hon. and hon. Friends stand. The hon. Lady talked about a partnership between the public and private sectors. It was to be noted, however, that whenever the private sector was mentioned, the reference was disparaging. In those circumstances, I am not sure why the private sector would wish to invest.
I pay tribute to my hon. Friend the Minister. Unfortunately, I was unable to listen to the whole of his speech. I heard, however, a tour de force on London's transport system. My only disappointment arose out of my hope that he would give us a potted history of each and every station on the network. I am sure that, on another 1049 occasion, before he leaves the House, he will do so. I am sure that such a presentation would be fascinating. It would enhance his contribution, which has already been excellent, to transport in our great capital.
§ Mr. Tim Smith
I am sure that the speech of my hon. Friend the Minister was a tour de force. Would not it have been a tour d'horizon if he had covered all the underground stations?
§ Mr. Congdon
That is true. I welcome my hon. Friend's comment.
The hon. Member for Hampstead and Highgate commented on problems that stem from a lack of investment in London Underground. Since the early 1990s, however, investment has increased significantly. When I listen to debates about the underground system and talk of a lack of investment, it seems to be suggested that problems have arisen only since 1979. I remind the hon. Lady that the Conservative party was in power for only four of the 15 years from 1964 to 1979. What were the levels of investment in the underground service during the dark years of Labour government? During those years there was little money in the kitty for anything and the then Chancellor of the Exchequer had to go running to the International Monetary Fund, begging bowl in hand.
That has been the pattern of investment in the London underground system. When the economic climate has become difficult, money has not been forthcoming. That is why the private finance initiative is so important, especially to a service that is as capital intensive as London Underground.
As a London Member, I am only too well aware of the importance of the underground system to Londoners; as a Member from a Croydon constituency, I am aware of how regrettable it is—I am sure that my hon. Friend the Minister will take due note of this—that the system never managed to penetrate beyond Crystal palace towards Croydon. Indeed, it never reached Crystal palace. Some say that that was because of geological reasons. I am not so sure.
I want to illustrate the importance of the underground system to Londoners. There being no underground stations in my constituency, I recognise how crucial the system is to the transport system as a whole in our great capital.
In transport debates, there is always an argument about whether people should use their cars and whether there should be a congestion tax. That is what we heard from the hon. Member for Eastleigh (Mr. Chidgey). It leads to a sterile debate about either public transport or the private car. There is a lack of understanding of the crucial role of each in a city such as London.
In the Croydon area, the car is crucial in getting to the city centre. The train is vital in travelling from Croydon into central London. The tube is vital in getting about central London. I have always believed that different transport systems have different roles to play. The crucial role of public transport is to get a large number of passengers from A to B, but such a system will never be able to satisfy the myriad peculiar journeys that many people make, especially outside peak travelling hours. The sooner some Opposition Members recognise the key role of the car, the better. They should then put public transport in its proper context.
1050 In London, and especially in south London, my colleagues have not been arguing for more investment in the road network. Instead, they have been arguing for investment in the rail network, including the underground system. As London Members, we recognise the need to ensure that we have a first-class underground system that is able to meet Londoners' needs.
I am never too clear whether too much priority is given to grandiose projects at the expense of some basic infrastructure when it comes to investment in the underground system. The hon. Member for Hampstead and Highgate mentioned important, but unglamorous, issues such as signalling and track maintenance. London Transport needs to get the investment balance absolutely right between large projects, such as the Jubilee line extension or other major investments and extensions, and bread-and-butter improvements to the basic infrastructure.
I draw my hon. Friend the Minister's attention to the situation at Victoria station. It is a crucial station on the network used by Croydon residents. There are excellent rail links from East Croydon station to Victoria, but standing on the Victoria line platform during the morning rush hour is a pretty hazardous experience. There are difficulties if one tube train does not come in immediately after the other.
I understand that the main impediment to achieving a fast throughput of tube trains is the lack of very modern signalling that can introduce built-in intelligence into the system. More antiquated signalling systems tend, unfortunately, to be the norm on the network. It is surely important to he able to maximise the benefits of the massive investment in tunnels by ensuring that sufficient tube trains pass through the system, especially at peak times, so that any dangers to passengers may be avoided.
My plea is to ensure that the balance is right between grandiose projects and bread-and-butter projects. I understand, of course, London Transport management's pressing for big schemes, but more minor projects may be neglected.
I argue—this might be controversial, but I make no apology for that—that ensuring that track is absolutely right and that the signalling system is the most modern available should take precedence over modernising tube stations. I accept that it is important to have modernised stations, but I do not believe that that is as fundamental as having the most up-to-date signalling system and ensuring that track is improved.
There has been significant investment in the underground system. I have mentioned the Jubilee line extension. The PFI involving Northern line trains is another example. In a sense, it becomes false to distinguish funding between London Underground and British Rail. I welcome the recent massive commitments to London in the forms of Thameslink 2000 and the channel tunnel rail link. Those projects demonstrate that the Government are serious about directing large sums into public transport, which is vital to the life-blood of our great capital.
Given the history of capital investment being turned on and off like a tap depending on the state of the economy. surely Opposition Members should welcome the PR with open arms. It provides an opportunity to secure a continuing high level of investment in a vital infrastructure. In a sense, of course, the Bill is a tidying-up measure to remove one or two anomalies in London Transport's powers. I am surprised, however, that it has not been welcomed by Opposition Members.
1051 As I have said, I listened with care to the hon. Member for Hampstead and Highgate. It seems that the Opposition are concerned that the Bill might lead to the privatisation of London Underground. I have no problems with that. I do not care who runs the system as long as it is run well and provides a first-class service for Londoners. As I understand it, however, the Bill is not about privatisation. We may be able to return to that issue on another occasion because it is certainly worth considering.
I was intrigued by some of the proposals that are in train—pardon the pun—for London Underground. I was especially interested in the discussion about using cables alongside the network. The hon. Member for Streatham (Mr. Hill) talked about using cables for various activities. Putting fibre-optic cable alongside the underground track is an excellent suggestion. Surely that would be far better than digging up the road to lay the cables that the Labour party seems to consider so important to our infrastructure. If the Bill provides the possibility for such developments, it should be supported.
The most important aspect of the Bill, however, is its encouragement of the private finance initiative. I hope that many more projects will be possible, providing Londoners with a much improved public transport infrastructure. As I have said, Londoners depend on the existence of a first-class public transport system. We do not want more and more people to drive into the centre of town in the morning rush hour unless that is essential—and the quid pro quo, unless we resort to draconian measures, is sustained investment in the public transport infrastructure.
Unlike the hon. Member for Hampstead and Highgate, I do not think that the real terms increases in fares that have taken place constitute the most serious disincentive; I think that the main disincentive is delay.
§ Ms Glenda Jackson
May I point out that millions of Londoners have no means of travel other than public transport, which, in many instances, means the underground? For them, fares are of major significance. For example, 56 per cent. of those who live in Camden have no access to any form of private transport. The fact that the hon. Gentleman's party has kept wages down and allowed fares to rise has caused real difficulties for many of my constituents.
§ Mr. Congdon
With respect, I consider that argument nonsensical. If fares are kept artificially low, the net result is that Londoners—and others, but when the Greater London council was in control it was Londoners via their rates—end up subsidising wealthy tourists to use the underground. That is absurd. There is another net result that is equally significant. The Minister mentioned it earlier. If fares are kept low, London Transport cannot generate surplus revenue to reinvest in the capital infrastructure of the network.
§ Lady Olga Maitland (Sutton and Cheam)
My hon. Friend has made a valuable point. Does he agree that considerable concessions are already available to those in need—pensioners and students, for example, who have their own travelcards? Most of those who pay for tickets at the normal rate are in work.
§ Mr. Congdon
My hon. Friend has made a good point. Such schemes are very helpful.
1052 I do not accept that, when people are deciding whether to travel by road or rail—or by bicycle, perhaps—their choice is determined primarily by price, especially in the rush hour. I believe that it is determined primarily by the nature of their journey. For those who live near an underground or overground railway station that method of travel is very convenient, but it is inconvenient for those who live some way from a station and whose place of work is some way from the station at the other end. I believe that the key factor is convenience in relation to people's travelling patterns—and, as I have said, the incidence of delays is crucial.
A far better way of encouraging more people to use the network with the minimum of inconvenience is to invest in maintaining it to a high standard, ensuring that the signalling works properly and that the track does not cause problems. There would then be no excuse for delays. I mentioned Victoria underground station. The one problem with using that station is that it is not very pleasant to stand on the platform in a crush because there has been a delay as short as two or three minutes. We need investment in signalling, to ensure the maximum number of trains at peak times. I hope that investment via the PFI, over a certain period, will yield the improvements that we all want.
§ Mr. Toby Jessel (Twickenham)
If, as the hon. Member for Hampstead and Highgate (Ms Jackson) suggested, users of the London underground were heavily subsidised, would that not be a monstrous injustice to residents of south and south-west London, where underground lines are extremely sparse because the railway network is the old British Rail southern region and, before that, Southern Railways? Nevertheless, people there have to pay their taxes and local taxes to subsidise the inhabitants of the hon. Lady's constituency. Is that not unjust? Surely we should have nothing to do with it.
§ Mr. Congdon
My hon. Friend is absolutely right. At the time of the GLC's Fares Fair policy I, as a Croydon resident, did not like having to subsidise other people's fares, and I am sure that many of my constituents would have felt the same.
§ Ms Jackson
It was something of a revelation to hear the hon. Member for Twickenham (Mr. Jessel) talk about something other than military bands. May I ask him, and the hon. Member for Croydon, North-East (Mr. Congdon), how people in Twickenham will benefit if the air that they breathe is thickly polluted with fumes from petrol-driven vehicles? I know that my constituents would much prefer cars to be taken off their roads. One of the problems is this way of looking at London as if it were a series of totally separate entities, rather than perceiving that the failure to meet its transport needs is one of the reasons why, in transport terms, it is in such a mess.
§ Mr. Congdon
I certainly accept that it is right to look at London's transport needs as a whole. As I have said, my constituency has no underground stations, but I do not object to the investment of large sums in London Underground. However, I take issue with what the hon. Lady said about her constituents' wanting to get cars off the road. That really means that people want to get other people's cars off the road, but to continue to drive their own. 1053 I am afraid that all the arguments about restraining cars, through bans or congestion taxes—as suggested by the hon. Member for Eastleigh—are dishonest in terms of the electorate. Most people with cars want to be able to use them. The challenge to transport policy is to ensure that, especially during rush hours, people have a realistic alternative and that they can be sure that, if they turn up at the station, they can expect a train to arrive and to take them to their destination on time without their having to leave two hours earlier than they would otherwise have done.
The best way of encouraging people to leave their cars at home is not to ban or restrict the use of cars, but to ensure that trains run reliably. That is why I support the privatisation of British Rail. It is why I support the private finance initiative and it is why I welcome the announcements of further investment in London's transport infrastructure that have been made in the past couple of weeks. I congratulate my hon. Friend the Minister on his efforts to ensure that London has its fair share of transport money. As was pointed out at Question Time on Monday, the vast majority of his Department's spending on London goes to public transport rather than on roads. I have no problem with that and, particularly because I come from south London, I am happy to support the Bill.
§ Mr. Tim Smith (Beaconsfield)
I am pleased to follow my hon. Friend the Member for Croydon, North-East (Mr. Congdon) as he is an old friend of mine and I agree with much of what he said. He made an especially important point when he said that, although the price of public transport is important, people are essentially looking for reliability in terms of a good public transport system. If it is published that a train will leave the station of departure at a certain time and reach the destination at a certain time, people want to know that on the whole that is likely to happen because they have appointments and meetings to get to and they are busy people.
My constituents have told me that they would not mind paying a bit more to travel in from Beaconsfield, Gerrards Cross and Denham on the Chiltern line to secure a bit of investment, a reliable service and decent trains. That important point demonstrates that, although price is important, a number of other factors are involved in assessing public transport.
§ Mr. Wilson
Does the hon. Gentleman think that, through public investment, the Chiltern line provides a decent service? If so, why does he want to give it away?
§ Mr. Smith
Of course—they know that they can provide an even better service if the shackles of public ownership are removed from them. I have discussed with Mr. Adrian Shooter, managing director of the Chiltern line, his plans for privatisation. The investment has been 1054 a success and we have a better service, but let us not be complacent about this. There is always room for improvement. On the Chiltern line in particular, there is tremendous room for improvement in using assets more effectively. We need an effective marketing campaign. Mr. Shooter believes that he will be able to conduct that campaign much more successfully in the private sector.
I do not know whether Mr. Shooter will win that franchise, but I hope that he does because the management has done a good job and would do an even better one if the company were in the private sector. Therefore, the privatisation of British Rail has my full support. I do not understand how anyone can fail to support it when public ownership has been so disastrous in the past 40 years.
§ Mr. Wilson
I am sorry to intervene again, but I am interested in the hon. Gentleman's argument. He says that the public service on the Chiltern line is disastrous—to use his word. He says that a public service, delivered within the public sector, paid for by the taxpayer and operated by Mr. Adrian Shooter et al, is disastrous. Is that his position? If not, he is proposing that the public sector should pay for the assets and that the profits should go to a private operator. Where is the long-term perspective in that?
§ Mr. Smith
I said no such thing. I said that, generally, since nationalisation, British Rail's history had been disastrous and most people would agree with that. In many ways, the Chiltern line is an exception to that rule. [MN. MEMBERS: "Ah."] It is. Not many hon. Members can say perhaps, as I can, that most of the customers of the line in their constituency are satisfied with the service. Nevertheless, there is no room for complacency and improvements could and will be made if the service is privatised.
I better say a word about the Bill. I was pleased when, on 28 February, I discovered that the Government had decided to publish the London Regional Transport Bill because it is a model Bill. It will have no direct effect on public expenditure or on public sector manpower and it will not create any compliance costs for business. Those are three attractive characteristics.
On 28 February, I was serving on the Standing Committee considering the Finance Bill, which ran to some 200 clauses and about 30 schedules. Another tremendous virtue of this Bill is its brevity. It has six clauses. Into those six clauses, the Opposition have managed to read privatisation. I have considered those clauses carefully and I cannot find any reference to the privatisation of London Underground Ltd. I have therefore concluded that the fears referred to in the Opposition's so-called reasoned amendment are utterly unfounded.
My understanding of the Bill—on more than a cursory reading—is that it does something important for London Regional Transport. It removes commercial shackles that were inadvertently placed on it by the London Regional Transport Act 1984. The Bill has my full support because I am a strong supporter of the private finance initiative. All public sector bodies, including London Regional Transport, should make maximum use of it. There has been much talk in the House about how Conservative Members cannot provide any concrete examples of the PFI in practice, but I have two almost concrete examples—I say almost concrete because the M40 will be not concrete, but tarmac.
1055 The first example is the widening of the M40 motorway between Denham and Loudwater in my constituency from three lanes in each direction to four in each direction. I am pleased that, because of my tireless efforts, a surface called porous asphalt will be laid on that motorway and much less noise will result. The important thing to note about the contract is that it will be the subject of a so-called DBFO contract. DBFO is a bit of PFI jargon. It stands for design, build, finance and operate.
The Department of Transport is considering tenders for that contract. Soon a contract will be awarded to one company to take over work on the whole of the M40 between Denham and, I believe, Warwick, to operate the whole motorway and to widen the first section. That substantial contract would not be taking place if we did not have the excellent PFI.
§ Mr. Congdon
Does my hon. Friend agree that in PFI projects it is important to ensure that risk is genuinely transferred to the private sector?
§ Mr. Smith
It most certainly is. That is one of the reasons why there has been some delay. Some critics of the PFI have said that it is not moving along quickly enough. I sympathise with that view and with the construction companies that have been expressing it, but the PFI is new and it is extremely important that the Government should ensure, as my hon. Friend says, that risk is fully transferred to the private sector. That may have been a slight sticking point in some of the negotiations. I understand that in the case to which I have referred the delay has been minimal and that we can expect construction to start later this year.
The second example is the PFI contract to extend Wycombe hospital. That excellent national health service contract was referred to by the Chancellor of the Exchequer on Budget day as an example of attracting private sector money into the health service. The Labour party immediately says that this is privatisation, but of course it is not-it is simply doing something intelligent. If we have finite resources, as we always will have for the health service, why not bring in private sector resources to supplement them with a capital project of some scale?
§ Mr. Stephen Timms (Newham, North-East)
Will the hon. Gentleman confirm that even though that hospital project was mentioned in the Chancellor of the Exchequer's speech, still no contract has been signed to complete it?
§ Mr. Smith
I can confirm that only last week I received a letter from the chairman of the South Buckinghamshire NHS trust telling me that he was making good progress and that the project was on track. As it is one of the first PFI contracts in the health service, he is leading the way and he is having to ensure that he gets it right. As my hon. Friend the Member for Croydon, North-East would say, the chairman wants to ensure that the risk is transferred to the private sector. He tells me, however, that the project is on course and that we can expect an announcement reasonably soon. I am confident that it will go ahead.
The same applies to LRT. It, too, has a limited amount of cash to spend, so it is sensible to create opportunities for it to supplement whatever the Treasury feels able to make available through PFI contracts. I understand that 1056 the present legislation is such that there is some considerable doubt whether that is possible. That is why the Government have introduced the Bill and I welcome it for that reason.
As someone who represents a constituency on the periphery of London, but with large numbers of constituents who are commuters travelling not just on the Chiltern line, not just on the M40, but on the underground from Amersham, my perception is that the service has improved greatly over the past few years. There has been a tremendous amount of investment in London Underground. My hon. Friend the Member for Croydon, North-East referred to that in his speech and he was right. In a way, it is disappointing that so much money has had to be devoted to safety measures, but what higher priority is there than safety? After the King's Cross fire, it was essential that priority should be given to getting rid of the old wooden escalators and replacing them with modern non-wooden escalators. A great deal of money has been spent on doing that.
As I travel around the London underground system, I am constantly impressed by the quality and quantity of the improvements that have been made. I was at Angel tube station the other day—I had not been there for some time—and I was amazed by what I saw. There used to be a platform in the middle with a tunnel over the top and trains coming in on each side. People felt exposed standing on that platform. The station has now been transformed.
A great deal of work is being done at Bank and on the connection with the docklands light railway. The whole complex is substantial. London Underground has put up a helpful explanatory note about the complicated works. It is spending millions of pounds improving transport facilities for Londoners. I am a great supporter of London's underground. I always travel around London by tube. Anyone who takes a taxi from here to the City needs his head examined. One need only pop on the tube at Westminster to be at Blackfriars, Mansion House, Cannon Street or Monument in a matter of minutes. The same will be true when the Jubilee line is complete. Access to docklands will be transformed. We will be able to travel from here to Canary Wharf in 14 minutes.
The other great LRT success is the transformation in the bus services. The Public Accounts Committee recently examined the sale of the bus operating companies. The Department and London Transport excelled themselves. A report by the National Audit Office concludedthat the Department and London Transport achieved the sale objectives. No purchaser achieved more than a 25 per cent. share of the London bus market. The Department and London Transport completed the sale virtually on target and successfully promoted employee participation in the sale. Four of the ten companies were purchased by management and employee teams.At £233 million, gross proceeds were substantially higher than expected. A high level of interest was generated by London Transport's marketing campaign and some bidders were more optimistic than expected about the prospects for their targeted business. London Transport, the Department and their respective advisers successfully devised a bidding process which took advantage of this. They generated substantial bidding competition and obtained final prices which were some £30 million higher than the eventual purchasers' initial indicative bids and some £70 million higher than the mean of all indicative bids.That was excellent. 1057 The PAC has examined many privatisations and many lessons have been learnt. The NAO report is excellent—indeed, a classic of its kind. The report concluded:Overall, the sale was managed effectively. London Transport and the Department took account of best practice from previous sales and the recommendations of the Committee of Public Accounts. For example, they set clear sale objectives, clearly defined responsibilities, established a project steering group and project director, introduced clawback arrangements on property and commissioned a benchmark evaluation.My hon. Friend the Minister for Transport in London did all that, and I congratulate him on his achievement. It was a very successful sale, as the NAO has confirmed.
What is more, London Transport's customers will benefit in the long run from the fact that those companies are now in the private sector and have a big incentive to improve and provide the best possible quality of service for their customers. At the end of the day, it is all about customer service—about providing quality of service whether on the underground or on the buses. The way to do that is by bringing in the private sector more and more, so that there is greater competition and better service. The Bill has my support.
§ Mr. Stephen Timms (Newham, North-East)
I apologise to you, Madam Deputy Speaker, and the House, as although I was present at the beginning of the debate, I had to leave the Chamber to attend a meeting of the Treasury and Civil Service Select Committee and therefore missed much of the earlier part of the debate.
It is a remarkable comment on the Government's management of the private finance initiative that we should be spending our second full day this week on rather hasty and brief Bills that have appeared out of nowhere, but which are required to reassure private sector finance sources before they provide funding for private finance initiatives.
Yesterday, we spent the day on the National Health Service (Residual Liabilities) Bill which, on my reading of it, is even more alarming than this Bill. The NHS Bill provides NHS trusts with security for borrowing potentially enormous sums outside the control of the Secretary of State. It will also have the effect of shifting the risk back from the private sector to the public sector—in direct contrast with what we heard a few moments ago about the requirement for the private sector to take over all the risk. The NHS Bill will achieve exactly the opposite, in an attempt to secure private finance for the national health service.
During recent weeks, the Select Committee has been taking evidence on the PFI from a large number of interested parties. It has become clear that the transport sector is a much more appropriate area than the health service for the application of private finance. The particular reason for that is that the construction of transport infrastructure or the acquisition of new rolling stock creates future revenue streams, typically fare income, that would not have been available otherwise. That can be used to release a sum of privately provided capital for application today in establishing infrastructure, without affecting public finance in any way.
That is not the case in the health service. When a new hospital is built new, small revenue streams may be created from charges for car parking, from the sale of 1058 refreshments in the cafeteria or from sales in the hospital shop—but that revenue is insignificant compared with the cost of building the hospital. Ultimately, the whole cost of the Wycombe hospital referred to by the hon. Member for Beaconsfield (Mr. Smith) will be met from taxation. As capital provided under the PFI is more expensive than capital provided directly by the Government, there is every likelihood that hospitals built under the PFI will, in the long run, cost more than hospitals funded by conventional means.
The position is different with transport because there is the opportunity to use future fare revenues, which might attract significant private finance that would not otherwise have been available to the project without a heavy call on public funding.
I must take issue with the hon. Member for Beaconsfield about the M40. I am sceptical about the ability of the PFI to generate additional revenue in projects such as the widening of the M40. It will not lever any significant additional finance from the private sector. Ultimately, the whole cost of widening the M40 will be borne by the public sector in future payments in future years.
§ Mr. Tim Smith
I agree with the hon. Gentleman that, in effect, the cost will be spread over a number of years, perhaps 30. The point is, however, that the capital will be provided by the private sector now and if it were not, the widening would not take place at all.
§ Mr. Timms
I am grateful for the hon. Gentleman's point, which makes exactly my argument. We are not gaining anything new. We are just deferring payment to future years. Since those payments will have to be made for many years to come, there will in future years be fewer resources available for the investment in transport infrastructure that we all want around London and elsewhere.
When additional revenue is created—I am thinking particularly of the construction of railway lines or the acquisition of new rolling stock—the use of private finance is beneficial, but that is not so in the construction of new roads or the widening of motorways unless tolls are imposed. Although that is a different debate, it at least attracts additional revenue.
The principle of the use of private finance is much less contentious when applied to London Regional Transport than it is when applied to the subject of yesterday's debate. The Bill is more problematical because it raises the prospect of slipping towards privatisation—specifically of the underground—by stealth. I was present for the exchanges between the Minister and my hon. Friend the Member for Newham, South (Mr. Spearing) and the hon. Member for Southwark and Bermondsey (Mr. Hughes) about the extent to which the Bill is simply a technical measure. Unlike the hon. Member for Croydon, North-East (Mr. Congdon), I certainly would not support the privatisation of London Underground. I do not think that it would benefit underground passengers, and I do not think that the vast majority of underground passengers believe that it would either. There are many reasons that one could give in support of that view. The underground's future depends and will always depend on substantial public sector support and, therefore, the case for privatisation is not very strong.
§ Mr. Congdon
I am following the hon. Gentleman's argument carefully. Will he at least concede that the one thing that London Underground is able to do is generate a significant income stream because its operating revenue is more than its operating cost?
§ Mr. Spearing
On creeping privatisation, is my hon. Friend aware that, in a later exchange, the Minister did not deny that there could be wholesale contractorisation, which would amount to privatisation in all but name of existing services, such as power supply, and new railways such as the Hackney-Chelsea line and the line from Whitechapel northwards? In effect, therefore, the Bill is, as it were, blood transfusion by PFI. As my hon. Friend has been learning about that, will he confirm that it gives powers to plan, finance, build and operate?
§ Mr. Timms
I am grateful to my hon. Friend. I was not present for that exchange, but I entirely agree with him that splitting up the underground network in the way that he has implied would be a seriously retrograde step. It is most important that we maintain an integrated, publicly owned underground network.
Nobody can deny that there is a need for additional capital investment in London Transport at all levels, from the very small to the very large. Some of those requirements might be suitable for the application of private finance—some most certainly are not. I was elected in June 1994 and a couple of weeks later I met the District line management about the need to refurbish East Ham and Upton Park underground stations in my constituency. Exactly the same concerns relate to Plaistow station in the constituency of my hon. Friend the Member for Newham, South. The stations are old and grim and have been neglected for a long time. They have the potential to be restored to a much more attractive condition. There is a lingering charm about their structures, the potential attractiveness of which I would not want to minimise. It would not cost a great deal to make them attractive again.
Those stations are also extremely heavily used. East Ham is one of the seven or eight most heavily used stations on the entire underground network. Indeed, the revenue that it generates for London Underground is also in the top seven or eight revenues generated by all stations in the whole system. Much less well used stations, which generate much less revenue, further down the line have been improved and refurbished, yet East Ham, Upton Park and Plaistow—indeed, the whole string of stations from there down to Aidgate East—have not been refurbished.
The then business manager of the District line attended the meeting to which I have referred. We met at the stations and he assured me that there would be substantial refurbishment in that financial year. Indeed, he even told me the identity of the contractor who had been selected to carry out the work. A few weeks later, however, that commitment was withdrawn. I was told that it had all been a misunderstanding, that there had never been a scheme for carrying out work on the stations and that we would have to wait considerably longer for it to be carried out. I was very upset and surprised by that turn of events.
1060 I subsequently met the chairman of London Regional Transport and I am pleased to say that another good scheme has been proposed. This time I have seen the drawing so I know that the scheme exists to refurbish all the stations from East Ham westwards. In fact, some work has already begun. Closed circuit television has been installed and is operating at East Ham station. I commend the fact that at long last that work has been carried out. It is a considerable reassurance, especially to women using East Ham station and others who use it late at night, as many do.
The rub is that the bulk of the refurbishment scheme on those stations will have to await a decision of the London Regional Transport board, which I understand is to take place in the next month or so. The scheme will have to compete with others. It is necessary and I very much hope that it will be given the go-ahead, but the truth is that there is not enough capital going around even to carry out that essential maintenance. Until that capital is available, the fabric of the network will continue to decline, as it clearly has done in recent years. I do not think that in the particular instance that I have described—station refurbishment—private finance will help much. Elsewhere it may.
The best case that I have seen made for increased investment in London's transport network was made by London First, whose programme has already been mentioned in the debate. Its document, "London's Action Programme for Transport: 1995–2010", is an impressive, well-presented overall view of the needs of London's transport infrastructure. The Minister was present at its launch in the autumn.
I recently received London First's annual report, and I shall read one or two sentences from it, which show what that organisation says about its plan, its programme and the response that it has received so far from the Government. In the introduction the chairman, Lord Sheppard, says,London's Action Programme for Transport: 1995–2010, published by the London First Transport initiative on behalf of the London Pride Partnership in the autumn, is a landmark document"—I agree with that—the first comprehensive and fully costed plan for London's transport needs in 20 years.The fact that there has been nothing like it for 20 years is startling, but I think we know the reasons why such an important plan has not been drawn up for such a long time.
Lord Sheppard continues:The challenge for London First in 1996 is to show that, with full commitment, the plan can be made to work and to demonstrate that the benefits to London and the UK from doing so will far outweigh the modest extra investment required.In his review, the chief executive. Stephen O'Brien, explains how the plan was drawn up. He says:The Programme is based upon realistic and positive assumptions about London's future and calls for an end to the short-termism which has characterised transport funding and development under successive administrations. It contains three main elementsaction to improve existing transport systemsa new infrastructure programme andan estimate of the funding required.The total cost over 15 years is estimated at £23 billion. Of this, £11 billion would come from the public sector and, spread over the life of the programme, would not represent a higher average annual expenditure than at present.It calls on the Government for immediate decisions on commitment to a consistent and adequate programme of investment in the Undergroundassurance of the funding necessary to accelerate the completion of the bus priority and cycle networksauthorisation to start the statutory procedures for Thameslink 2000"—1061 of course, we have made some headway with that in recent weeks—andfirm commitment to proceed with CrossRail.The chief executive's report goes on to say:The first test for the Programme was the November 1995 Budget which…failed to provide the level of funds called for in our Programme.
§ Mr. Norris
Surely the hon. Gentleman has not dealt with the statement in the London First report adequately. He correctly identified the sentence in which the total programme over 15 years was valued, and pointed to the extent of the public contribution that London First assesses might be necessary, but he neglected to mention the balance that London First acknowledges can be provided through various forms of private finance. Is not that figure as large as the figure that London First suggests should come from the public purse? Does not that fact make the point behind the Bill, which would facilitate that large proportion of private finance that London First itself says must be aggregated with the taxpayer's contribution?
§ Mr. Timms
Consistently throughout my speech I have said that I accept the need for private investment in the development of London's transport, so I agree with the Minister there. However, what I want to emphasise is the fact that London First says that last year's Budget was the first test of the programme and that itfailed to provide the level of funds called for in our Programme.
§ Lady Olga Maitland
I have been listening carefully to the hon. Gentleman's reservations about the private finance initiative. He has said that he accepts it, but under something of a socialist scheme. Does he not agree that his party's proposals would make the PFI a sham, because it would be so restrictive that it would drive away investment, and thus would not achieve the real inward investment that we hope will come into the transport system. Labour's proposal simply would not work.
§ Mr. Timms
I do not agree with that at all. Indeed, as I said earlier, what we saw yesterday was an attempt to shift risk away from the private sector and back into the public sector. The word "sham" could well be used in that connection, to describe the attempts to use private finance in the health service.
I have said throughout the debate that we need private finance in the development of London's transport system, and the hon. Member for Sutton and Cheam (Lady Olga Maitland) can rest assured that that will be successful under a Labour Government.
I have only a few minutes left, so I shall make my final point. I greatly welcome the recent announcement that the Government will support the proposal for an international passenger station at Stratford on the channel tunnel rail link—a project in which the Minister has taken a close interest for many years. I am delighted by the outcome of the Government's decision-making process. The announcement was the best news that east London has had for 50 years. It was also good news for the prospects for imaginative development of public transport in this country.
1062 The hon. Member for Croydon, North-East was rather uncertain about the prospect of the completion of the Jubilee line, but I welcome it. The decision about Stratford highlights the need for a planned dispersal by London Regional Transport from the channel tunnel rail link.
St. Pancras is already overcrowded and it is not easy to travel from there to the most likely destinations. Crossrail would provide us with the opportunity for people to leave the channel tunnel trains at Stratford, get on to crossrail and travel to their destinations in central London, the west end, Heathrow and elsewhere by rail. Ideally, I would like to see a connection to crossrail from the channel tunnel rail link at Stratford—and an amendment has been tabled to the Channel Tunnel Rail Link Bill to facilitate that.
I emphasise the fact that when the Jubilee line is complete, if the Government simply maintain the level of investment now going into it and use it to build new rail infrastructure, that will be sufficient to build crossrail. I hope that when he replies to the debate the Minister will be able to say something about the prospects for crossrail in the light of the deliberations that I know are already under way.
I have no doubt that private finance will need to be secured to build crossrail, and I am happy with the idea. I hope that we can achieve real progress in giving the scheme the go-ahead quickly.
Finally, I endorse what my hon. Friends have said in the debate and what London First, too, has said: we need an adequate and consistent level of finance. We need both. Investment must be not only sufficient, but stable, consistent and predictable, so that LRT knows where it is and we can develop the transport infrastructure that London needs for the future.
§ Mr. Nirj Joseph Deva (Brentford and Isleworth)
Madam Deputy Speaker, I am fortunate indeed to catch your eye in this important debate. I am only sorry that so few Labour Members are listening to an important debate that affects the lives of Londoners.
Brentford and Isleworth, my constituency, is blessed with seven tube stations and two tube lines, which I estimate are used by about 8,000 of my 80,000 constituents daily. The tube is the life-blood of my constituents, who use it as a means of reaching the City and elsewhere, and part of their everyday life. I therefore find the Bill an important measure—but a marginal one—in the great improvements that must be made in London Underground.
I should say, as an aside, that often my constituents have written to ask that Turnham Green station be more frequently used by the tube lines, which sometimes do not stop there.
The private finance initiative is an important step in introducing private finance to the process of improving our transport infrastructure. The measure is essentially technical; it is not revolutionary or earth-shattering. It will allow London Transport to take full advantage of opportunities for increasing investment.
Much of the London Underground network is very old—Victorian—and needs substantial investment. Accordingly, the Government have increased investment to record levels in recent years—to £1 billion in 1995–6.
1063 Much of that investment has been directed to upgrading the Central line, which is now nearly complete, and constructing the new Jubilee line.
The benefit of private finance is that the Government and London Transport will look to the private sector as a source of further substantial investment. The Labour party, however, appears totally unaware of the great changes in capital financing of infrastructure projects that are taking place throughout the world. Labour Members talk as though they are on another planet—another economic environment.
The useless, almost asinine, debate about whether finance should be private or public shows a failure to understand that there is no such thing as public finance. Public finance is drawn only from people in the private sector making enough returns to pay taxes so that the Exchequer can put that money back into the coffers—the investments—of the economy. Public finance is not created uniquely by any group of people—civil servants, Ministers and the like—creating enterprise for themselves. They simply use the private sector's money in a different form.
If we can enable the private sector to put its money directly into improving our infrastructure projects without the interference of Ministers, civil servants and even parliamentarians, so that the return on capital is fair and equitable, what is the sense of that asinine point that the Labour party keeps wheeling out?
I was fortunate to follow the excellent speech of my hon. Friend the Member for Beaconsfield (Mr. Smith) and the earnest speech by the hon. Member for Newham, North-East (Mr. Timms), but I say to my hon. Friend the Minister for Transport in London that we must consider the private finance initiative in the light of the way in which private sector investment is improving the infrastructure of much of the globe.
The world is changing rapidly. One cannot keep capital at home. Capital is global and moves to find the right rates of return. No party—not even the Labour party—can prevent British capital from moving out of Britain to find a better rate of return elsewhere. We are competing with other countries for the capital that is here, which should be invested in our infrastructure projects. That is why, although I may sound rude when I say so, I find the Labour party's argument very muddled. Labour Members do not seem to know what they are talking about.
Today, even the World bank—that great instrument of international development—the International Finance Corporation and our Commonwealth Development Corporation are investors with the private sector in building roads, power stations and water systems with private capital in far-off places such as the Philippines, Indonesia, India and Malaysia. That private capital seeks the highest rate of return, provided that the risks are fair.
Against that competition, we must encourage the same capital sources to fund our infrastructure projects and to develop our infrastructure. Throughout the world, schemes such as "build, own and operate", "build, own and transfer", and "build, lease and transfer" are operating. In the past few years, £6,000 million has left this country to be invested in India alone. In the past five years, £30 billion has left this country to be spent on infrastructure projects around the world. We need that capital here to develop our infrastructure. If we are unable to give the best rate of return for that capital, it will not stay here.
1064 I must say to my party and to the Opposition that cautious little measures such as the Bill, introduced drip by drip, ain't going to do the job. We need to be as bold and imaginative as other countries, which have taken such investment opportunities by the horns and attracted our capital, our insurance investment funds and our pension funds. That capital is now building roads, toll systems and many other things in those countries. We can move forward to attract private finance only by avoiding the muddled thinking that the Labour party has been peddling all evening and taking a clear, decisive view that we need to put such a private finance policy into operation as soon as possible.
§ Mr. Wilson
Given the hon. Gentleman's evangelical zeal about this matter and the £30 billion that he said has unnecessarily left Britain to fund public-private projects in other countries, he must surely be deeply ashamed at how late in the day it was before the Tory party embraced the PFI.
§ Mr. Deva
Not at all, because the Tory party has created the climate in which that capital could be accrued. The Tory party created the climate that has turned our country into a major investor in various projects around the world. Last year, this country accrued £36 billion in dividends from our overseas investments, both indirect and project investment. It was not our party that left behind a ramshackle state of affairs in 1979, and which created a climate that led investment to go abroad. Now the Tory party has created the climate for that investment to be made in this country.
With great respect, when the Labour party talks about understanding private finance, I laugh because it has not the slightest idea what it is talking about. It is clear tonight that Opposition Members still do not know what they are talking about in terms of private finance and capital project investment.
For that reason it is important that even this small Bill, which is not a revolutionary one, should not be opposed as it has been tonight. It should have gone through on the nod because it is part of the continuing progress that we must make to involve the private sector in the development of our infrastructure. I therefore support the Bill.
§ 9.7 pm
§ Lady Olga Maitland (Sutton and Cheam)
First, may I say three cheers for this excellent little Bill? I am merely sorry that I was not in the Chamber when my hon. Friend the Minister for Transport in London opened the debate because I know from experience what a witty speaker he is. He has a constant twinkle in his eye and, more than that, he has always taken a great interest in some of the causes that I have put before him. I have taken constituents to see him who have been concerned about red routes in London and he has offered them a sympathetic ear. I also remember from a debate on roads that we had a shared concern about over-zealous local authorities putting in road humps, about which I have powerful and strong feelings.
The Bill is a significant and important one because as a traveller on London underground I rejoice in the fact that the Government have not only spent more than £1 billion on investment in the past financial year alone, 1065 but have recognised the importance of making sure that we have an underground system that is ready and capable of coping with travellers' needs way into the next century.
The truth is that good transport in London is not only important for residents and for those who work here, but important to those who travel here from all over the country; to those who invest here from overseas; to those who decide to base their business headquarters and companies in London and to the many tourists who come here. They come for many reasons but one is that they can get around our great city.
As a traveller, I feel safe on our London underground. I would not say that about the New York subway. I have travelled many, many miles on the London network, which covers 200 stations, because I know that it is reliable and gets me from A to B. I accept that it is sometimes slowed down by signalling problems but by and large, I know that I can set out at a certain time and get where I want to go. A good example of that, and one where timing is crucial, is getting out to Heathrow airport. The last thing that I would want to do is miss a plane. If I tried to go by car, I could face indescribable log jams that would cause frayed nerves. Travel on the underground means getting there on time and without a frazzled mind.
The efficacy of our underground means that it is safe, although there have been instances of handbag snatching. By and large, I do not feel at risk. Nor is there any danger to the safe management of the underground. It upsets me when Labour tries to suggest that if we bring in private investment—or come the day, on which I would rejoice, that the system is privatised—safety will go awry. That is not true. It did not happen with British Airways or Stagecoach. They have gone from success to success.
This is an effective Bill that is designed to bring investment and resources for projects that everyone accepts cannot not be paid for from the public purse. The question is how to bring the money in. The Labour party hops from one leg to the other. It says that it is in favour of the PFI, then it is not, then it is, then it is muddled and then it wants restrictions on investment. Companies will not play its game. They will go away and leave the taxpayer with the cost. That is another spending pledge by the Labour party that this country will not wear.
Under the Government's scheme in this effective, neat little Bill, funding will be provided to give us a thoroughly modern metro system with new and refurbished trains.
§ Madam Deputy Speaker (Dame Janet Fookes)
Order. I am sorry to interrupt the hon. Lady, but I am tired of the burblings on the Opposition Front Bench.
§ Lady Olga Maitland
Burblings are about as much as the Labour party can produce.
Not only will the investment that I was describing give us new and refurbished trains on all lines, it will help us to provide more frequent services, faster journeys, less crowding, high-quality stations, greater capacity and a better general standard of services. It will help locally with other aspects of infrastructure such as reliable lifts and escalators and provide new opportunities all around.
Perhaps the most significant aspect of the Bill is that it enables projects that need big capital outlays and a broader perspective. I rejoice that the Bill could provide 1066 resources for better communications in the underground service. The use of fibre-optic technology will mean a better, faster, more efficient system for the underground service and better information services for passengers. In sum, it will be a communications service that takes us well into the next century.
I welcome the investment in the prestige ticketing system. Its technology will also take us well into the next century. I like the idea of a smart card system, which will undoubtedly modernise London Transport ticketing management; let alone the idea that it could be interactive with the bus service. The contractor would be responsible for selling and checking tickets, and basically assume all the responsibilities that London Underground does not need to handle. There must be considerable investment in order to ensure an efficient power supply and the Bill will allow that to occur.
I am encouraged by the fact that there is no shortage of prospective investors in any of the three areas. I understand that about 10 serious inquiries have been made to each sector and that, all told, potential investment could total £750 million—money that would otherwise come out of taxpayers' pockets, which is clearly what Labour Members favour. There is no doubt that the legislation will benefit all concerned.
I am sorry that Labour Members are being rather churlish about the Bill. I do not understand why they have tabled a reasoned amendment—I do not think that it is at all reasonable. They suggest that "privatisation" is a bogey word and that is irresponsible. Labour Members remain in the stone age while countries across the globe are following the British example and privatising their industries. The Labour party is out of touch: it has no credibility when it comes to economic management.
We are planning a transport system of which London can be proud. London is a respected world capital and we want to maintain that position by enhancing our existing facilities. I have no doubt that the Bill will provide a thoroughly decent and modern metro system. That is a real, not an elusive, goal and I congratulate my hon. Friend the Minister on introducing the measure.
§ Mr. Toby Jessel (Twickenham)
It is a pleasure to follow my hon. Friend the Member for Sutton and Cheam (Lady Olga Maitland), particularly in the light of her reference to the importance of London. London's prosperity as a tourist centre—not only because of the millennium, but year in, year out—is of tremendous value to the economy of the United Kingdom as a whole and affects the prosperity and the employment of the entire country. It is essential that the transport and economy of London are buttressed and placed in a flourishing position as soon as possible.
My hon. Friend spoke about less crowding on the London underground. At about 6.30 this evening I saw a very crowded Piccadilly line train. As a matter of fact, I have spent nearly all of today travelling to and from the funeral of a relative in Wales. For that reason, I apologise to you, Madam Deputy Speaker, to the Minister and to the House for having missed most of the debate.
I was driving back to London along the M4 between Heathrow and London. As I came to the raised part of the motorway. I saw a Piccadilly line train—at that point the track is above ground—travelling along a viaduct about 1067 10 or 12 stations and eight or nine miles out of central London. It was packed with people and I could see through the windows that the pressure upon the passengers travelling home from work, or perhaps in some cases to Heathrow, must have been hugely uncomfortable. It is very important that investment in the underground relates to capacity and to steps that will eliminate crowding in the long run.
Of course, it is true—as hon. Members have already said, including my hon. Friend the Member for Beaconsfield (Mr. Smith)—that there has been a huge amount of investment in London Transport in recent years. We have had the Victoria line, and the Jubilee line is now well advanced and under construction—as we can see in the square outside the building every working day of our lives. It is very important that the Jubilee line is completed and goes out to Greenwich in time for the millennium exhibition—apart from its vital need to serve people in south-east London.
There is the prospect of crossrail; and on the way to Heathrow—not the underground, but a surface railway line—an extension of the line from Paddington, with its spur to Heathrow, in which my hon. Friend the Minister has been greatly involved in recent years. That will be of enormous benefit. But there is not, and has not been, enough investment. Hon. Members on both sides of the House are right to point out the need for more investment in London transport—and I do not mind whether it comes from public or from private sources, as long as it takes place and enhances the quality and the capacity of the London underground service.
I used to be a member of the Greater London council, about 25 years ago, and it used to control London transport. The Greater London council and the London county council before it were usually Labour-controlled—and they did not provide enough investment for it. The fact is that there has been a backlog in investment over the years, and this Bill will do something—even if it is only a marginal amount—to put matters right by enhancing the provision of investment in London transport, which is what we need and which both sides of the House ought to encourage.
Transport by the tube has always been uncomfortable. I can remember that in the Greater London council's county hall library there was a book called "Traffic and Theatre Rhymes" by Guy Boas, who I believe was a schoolmaster. One of the rhymes was called "The Underground" and it went as follows:
That is an annoying reflection of officialdom on the London underground between the wars. There is another poem in the book "Traffic and Theatre Rhymes", which relates not to the underground but to trains generally.
- "The underground goes round and round and also to and fro
- And men in blue look after you and tell you how to go
- They never quite direct you right, although of course they know
- The platform man has got a plan for dealing with the queue
- He makes men wait behind a gate until their train is due
- They watch their train depart again and then he lets them through".
1068 It is:
There are a lot of duffers in this place, and most of them are on Opposition Benches. I think that it is important in these matters constantly to seek to improve standards. I am glad to see that the Secretary of State has just arrived. When he was a member of the Greater London council about 25 years ago, he wrote a pamphlet, which I remember reading, about building up tourism in London. Although his pamphlet was mainly about hotel provision, it touched on the underground and on the railway system as well.
- "When a puffer
- Meets a buffer
- One of them
- Is bound to suffer
- If the buffer
- Then the puffer
- Knows itself
- To be the rougher
- If the puffer
- Then the buffer
- Knows itself
- To be the tougher
- If the puffer
- And the buffer
- Both unhappily
- Should suffer
- Then the buffer
- Knows the puffer
- Must be driven
- By a duffer".
It has already been pointed out in this debate that approximately 25 per cent. of the passengers on the London underground are overseas visitors. As I have already said, the expansion of tourism is vital to the economy of London and the economy of Britain as a whole. If we are to encourage tourism, we must ensure that our transport facilities are not only efficient but pleasant.
Research by the Society of West End Theatre showed that when people decide to go to a play in the evening their choice is affected not only by whether they think that they will like the play itself, but by the whole idea of the outing—their refreshments, transport, parking provision and so on. If they do not like the transport, they will be put off from going to the play. The theatre is one of the things that pulls visitors into Britain and London as tourists. People will not come to London and Britain in such large numbers if the transport facilities are not satisfactory, pleasant and comfortable.
I would like to see sponsorship and the private finance initiative, on which I have heard my right hon. Friend the Secretary of State speak, extended not only to tickets and stations, but to the trains themselves. If, as my hon. Friend the Member for Beaconsfield suggested, one was catching a tube from here to the City, one would get on a train which might have, say, a Tesco carriage, a Sainsbury's carriage and a Marks and Spencer carriage. One would then have companies whose names everyone knows vying with one another in order to promote facilities that are pleasant and attractive. Their good name would depend on the quality of the carriages and the comfort and convenience of passengers. They would have 1069 every incentive to ensure that the transport was more comfortable, more pleasant and less crowded than it is at the moment.
I would like to see that included in the Bill and I hope that when my hon. Friend the Minister replies, he will cover all those points. It is on the future quality of public transport in London that wealth, prosperity and employment in London so largely depend. I have great pleasure in supporting the Bill, but I should like to see it more widely drawn and that should be attended to in Committee.
§ Mr. Wilson
I was trying, on the back of an envelope, to compete with the poetic efforts of the hon. Member for Twickenham (Mr. Jessel). I got as far as,The debate has concluded without rancour,
Although the last speaker was the hon. Member for Twickenham. It was a little unsporting of the Tory Whips to keep the crème de la crème of Tory Back Benchers to the last. In the past half hour we have had a veritable banquet of elocution. It is a tribute to the hon. Member for Twickenham, and probably to a public school education, but I do not know anyone else who can make the words "go", "through", and "queue" rhyme.
The calibre of speeches that we have heard recently suggests that the subject is not taken immensely seriously by the Government. I pay tribute to the Minister, as has been done earlier, for at least giving it the courtesy of a long and full speech. [HON. MEMBERS: "Hear, hear."] I do not over-egg the pudding, but it was not bad. By the standards of what we heard later, it was the performance of a maestro.
Recent speeches have also demonstrated that the standard of Tory central office brief is not what it used to be. We heard several speeches that were based on the patently false premise that the Opposition are opposing the principle of public-private co-operation in extending investment in the London underground system. That is the antithesis of the truth. As I said in my opening speech, we might well not have needed this debate if the Minister and I had been able to sort things out between us and accept each other's words as our bonds. The problem that muddied the waters in advance of the debate was the fact that the deputy leader of Tory party, I mean the Deputy Prime Minister—he has so many titles, but that is not one of them—produced the statement that he wanted privatisation of the underground in the next Tory manifesto. I hear cluckings of agreement from Conservative Members.
To be fair to the Tories, virtually every hon. Member except the Minister has said today that it is a pity that the Bill would not privatise the underground, because they are all in favour. Some have gone further and said that they want the same franchising system for the underground as is being introduced for the railways. Others obviously want to separate the trains from the tracks. Opposition suspicions are, therefore, obviously justified.
1070 Today, we have had an opportunity to explore the argument and to put down markers against the privatisation of the London underground system. I have not the slightest doubt that that view will be shared by the vast majority of people, not only in London but throughout the country. Just as some 90 per cent. of public opinion is opposed to rail privatisation, so 90 per cent. of public opinion would be opposed to the privatisation of London Underground, for all the excellent reasons that have been adduced by Opposition Members.
The hon. Member for Brentford and Isleworth (Mr. Deva) gave us a little lesson in global economics and the way in which British capital is taking flight to build roads and railways everywhere in the world except Britain. That tells us more about the loyalties of British capital than about the Bill. If the hon. Member actually believes that if only the vehicle for public-private investment in infrastructure had existed, British capital would have been put into Britain instead, he must explain to us why the public-private initiative was launched only in 1994. Before then, contractors had plenty of business in this country and other parts of world on the basis that they were hired to do the job and were paid for the job. They performed a task—usually the construction phase of projects—and they were good at it.
Labour recognised quite some time before that there were possibilities in extending and harnessing the role of the private sector to bring capital in, not only to fulfil the contractor role, but to take some of the maintenance risk, as is only reasonable, and—on other less easy to define occasions—perhaps to take some operational risk. That principle has not been in dispute for some time in the Labour party, so it is a bit rich for the hon. Gentleman to give us lectures when the Government have been so belated in coming to that conclusion.
We had a more general discussion earlier about the merits of privatisation and some relevant examples were quoted. Since then, by pure coincidence, I have received a parliamentary reply, the contents of which I shall share briefly with the House. In preparation for the latest phase in the disposal of the family silver—Railtrack—I thought it would be a good idea to find out how much debt has been written off by the Government for each privatisation since 1979. I got the answer today. It is extraordinary.
Since 1979, £22.5 billion of debt has been written off by the Government to facilitate privatisation. We mentioned British Airways earlier. At today's prices, £347 million of debt was written off as a sweetener for the privatisation of British Airways. Frankly, if any business suddenly had £347 million of debt written off, it would find it an awful lot easier to make a profit—because it would not have to service the debt—than it did before the debt was cancelled.
It is quite a revelation to find that this Government, who plead parsimony on every other count, have written off a staggering £22.5488 billion in debt owed to the public purse to facilitate their privatisation programme. I wonder how much more debt will be written off to facilitate Railtrack' s privatisation. If Conservative Members who have spoken today get their way, how much more will be written off to facilitate the privatisation of London Underground? Fortunately that will not happen because it cannot be done before the general election.
1071 We often hear the great Tory masters and mistresses of finance talking about prudence with the public purse, and about how there is never enough money to spend on anything worth while, yet they are quite prepared to write off £22.5 billion of taxpayers' money to fulfil their political aim of privatisations that enrich those who have invested, but certainly not taxpayers. That is an extraordinary commentary on the values of the Government.
This has been an interesting debate which, although lighthearted at times, has had a serious purpose. It has given us the chance to discuss the underground system, and there have been knowledgeable speeches from hon. Members familiar with the subject. Of course one way of getting more money into the system is through the fare box. I know it is not fashionable nowadays to do so, but I want to pay tribute to the way the Greater London council operated public transport in London. At least some of its legacy survives, to the great benefit of the underground system.
In 1981, fares on the underground had reached their highest point in history. Owing to the introduction of the Fares Fair scheme, patronage of the underground soared to new heights. [Interruption.] If any Conservative Member wants to intervene and has the courage of his convictions, he can easily be accommodated.
§ Mr. Tim Smith
I am grateful to the hon. Gentleman for giving way to me so enthusiastically. Holding fares down artificially meant that the taxpayers of London had to foot the bill for rich tourists—that was my point.
§ Mr. Wilson
Reasonably priced public transport certainly attracts tourists, just as it attracts me. The Tories are ideologically blind; they never can recognise that there is a balance to be struck. Lower fares lead to greater use. Of course there is a point below which fares cannot be taken, but if they are too high, people are driven away from the service. Once the Government of the day—unfortunately they are still the Government—stepped in and forced the abolition of the Fares Fair scheme, patronage of the underground fell to its lowest level since the dark days of war in 1943. The underground has had to recover from that low point ever since.
The hon. Member for Sutton and Cheam (Lady Olga Maitland) said, in her Madam Bountiful way, that the needy are already assisted by means of concessionary schemes. It is worth remembering that those schemes are paid for by the London boroughs—that is their political decision. They have had the political courage to do that because such a socially equalising charge makes it possible for people of various categories and income groups to use the underground system.
Even the existence of the travelcard is a legacy from the days of the GLC—and the Government cannot get rid of them, as part of their drive towards rail privatisation, because it would be so politically unpopular. The Tory idea running through these debates—that everything in the public sector is bad—is both bankrupt in terms of truth and dogmatically unreasonable. The electorate increasingly realise that. The hon. Member for Beaconsfield (Mr. Smith)—a good example of what I am talking about—cannot wait for the Chiltern line to be privatised. We heard a rant about the disastrous record of British Rail in the public sector. The Chiltern line attracts a great deal of interest in the private sector, unlike most 1072 British Rail franchises, because public investment has made it a first-class railway service that is run in the social interest. It is operated so that it can make a contribution to the overall finances of the railway.
If the Chiltern line, which has the potential to be profitable, is removed from the system and is converted into a profitable railway in the interests of private shareholders, that will be to the financial disadvantage of the rest of the network, much of which will still be in the public sector.
That is typical of the Government's approach to the public sector. It is all right, apparently, if the public sector provides moneys and creates assets. That having been done, the Government move in, write off the debt, sell the assets cheap and let the private sector milk the profits that have come from public sector finance.
I have referred to books that set out the history of the London underground system. I should explain that I am a great admirer of enterprise. Where would we be without the Victorians? The Victorians built the underground system, built the railways and created many wonderful public assets, which we still enjoy. Enterprise is a wonderful thing, as is vision. It is sad, however, that the Tories have diluted enterprise to the point at which they believe that it consists of stealing public assets and securing profits the taxpayer paid to create. That is the Tories' idea of enterprise.
§ Mr. Wilson
I note that the hon. Gentleman wishes to intervene.
If someone has paid for something and another person takes it away without paying, what is a better word for that than stealing? It seems not to be an unreasonable word in the circumstances. It is surely not a moral transaction to take the Chiltern line, for example, it having been paid for by the taxpayer, and convert it so as to make private profit, without any recompense to the taxpayer. If that is set as an example of enterprise against what genuine entrepreneurs did, what a pathetic bunch the Tories are today. The sadness and the tragedy for the United Kingdom is that a Government who have been in office for 17 years cannot appreciate what constitutes enterprise.
The Government have had it so easy for so long. There have been public assets to rip off for so long. It is only when the well runs dry that, it is to be hoped, someone will get round to the idea that part of the role of politicians is to stimulate and engender genuine enterprise to ensure that there is investment, rather than to take assets created by entrepreneurs in the public sector and dress them up with a self-congratulatory term such as private enterprise.
§ Mr. Wilson
All will be revealed in due course. The hon. Gentleman is obviously in the know. Will he tell me whether there will be a golden share? Is there to be a sale of 51 per cent. or 100 per cent.? Perhaps he will tell me if it will be possible to sell Railtrack at all. After all, it is clearly a high-risk investment in every sense of that term.
1073 I return to London Underground. We shall not vote against the Bill. Instead, we shall vote for the Opposition amendment, which is on the Order Paper to demonstrate our support for the public-private concept, on which we have led the way and with which we find no ideological difficulty. We are talking all the time to those with whom we shall work to make public-private partnership projects come to fruition. Indeed, that is not an issue of division within the House because, to some extent, the Tories have caught up with us.
How can Tory Members be satisfied with the Government's record? Throughout London, lawyers' offices are full of documents—they are piled to the ceiling—setting out public-private partnership projects that have never come within 100 miles of being fulfilled because of the terms that the Government have set. Lawyers who work on such projects tell us what they think of the Tories and their version of the private finance initiative: they will speak of the frustration that is caused by negotiating endlessly on projects that never come about. They do not believe that the present Government have any commitment to the PFI. Unless it can satisfy their ideology by transferring all the risk—including the operational risk—to the private sector, the Government are not interested.
Throughout the genuinely entrepreneurial sphere, there is a real thirst for a Labour Government who will work with the private sector to make public-private partnership projects work to the benefit of the national infrastructure, and specifically to the benefit of London Underground.
§ Mr. Norris
With the leave of the House, Mr. Deputy Speaker, it is with a considerable sense of relief that I utter the immortal words, "This has been an interesting debate." We heard excellent speeches from my hon. Friends the Members for Chipping Barnet (Sir S. Chapman), for Hendon, South (Mr. Marshall), for Croydon, North-East (Mr. Congdon), for Beaconsfield (Mr. Smith), for Brentford and Isleworth (Mr. Deva), for Sutton and Cheam (Lady Olga Maitland) and for Twickenham (Mr. Jessel), and from my hon. and learned Friend the Member for Harborough (Mr. Gamier). We also heard extremely interesting speeches from my good friend the hon. Member for Streatham (Mr. Hill) and from the hon. Members for Eastleigh (Mr. Chidgey), for Hampstead and Highgate (Ms Jackson) and for Newham, North-East (Mr. Timms)—and, of course, from the hon. Member for Cunninghame, North (Mr. Wilson). Many of them made extremely kind personal remarks—albeit with a faint whiff of those old-fashioned obituaries that I fear I shall have to accustom myself to in the House.
I am delighted to see that my hon. Friend the Member for Chipping Barnet is present. He is a long-term supporter of London Transport. He made a germane point about Northern line trains: he said that it was extremely desirable for us to secure the new trains through the private finance initiative, at a gross contract cost of about £400 million, 1074 but expressed regret that they might not be delivered as quickly as we might have liked. I am advised that GEC Alsthom, which won the contract—
§ Mr. Norris
Indeed. I understand that GEC Alsthom is currently suffering from a delay in production. One of the key features of the contract that we have been able to negotiate with GEC Alsthom is that the delay will not simply result in further delay for London's taxpayers and passengers; GEC will have to pay a penalty to London taxpayers, in the form of a rebate of part of the price of the contract, in recognition of the fact that it was not prepared to start the contract on time.
I cast no aspersions in relation to possible reasons for the delay. No doubt there are perfectly good reasons for it. I merely make the point that it underlines the cardinal advantage of transferring that part of the risk to the private sector. For the first time, the contractor has a real stimulus to ensure that what is promised is delivered when it is asked for.
The hon. Member for Eastleigh was kind enough to refer to my election to the companionship of the Institution of Civil Engineers. I promised myself that I would get that into Hansard at least once before my retirement; I have done it now, so I can retire tonight a happy man. It was extremely kind of the hon. Gentleman to bother to mention it, and I was greatly honoured to receive it.
More to the point, I understood the hon. Gentleman's analysis and his points about a strategic London authority. I hope that he will accept that the creation in 1992 of a specific post in the Department of Transport to take a multi-modal overview of transport in the capital has been of value to London. The hon. Gentleman is right that it is impossible to consider these issues in a disaggregated way. We must have an integrated view of how services in the capital operate, but such a view does not imply that all services need be under one control or ownership. That is the wrong sort of integration. It leads to a sclerotic view of transport provision and to the sort of provision that for many years handicapped the development of the public transport service not only in London, but outside the capital.
I issue a word of caution to the hon. Gentleman. If he is saying, on behalf of his party, that he will fund crossrail, Thameslink 2000 and all the other expensive projects to which he referred, I should like him to say so and the House to be able to cost such a commitment. He asked me a simple question: does the Bill facilitate privatisation? I hope that, listening to the argument throughout the long debate, he has been convinced that the answer on that straightforward point is of course no.
The hon. Member for Cunninghame, North made the discreditable suggestion that my hon. and learned Friend the Member for Harborough might not be worth the fees that he is privileged to charge to his occasional clients. In an emergency, I would certainly turn to any hon. and learned Member who, with Madam Speaker herself in the Chair, could introduce the Market Harborough bypass and the channel tunnel rail link into a debate on London Regional Transport. He gave a brilliant exposition, stretching my credulity only when he asserted that he was too young to have known my noble Friend Lord Parkinson because that cannot conceivably have been the case.
1075 My hon. and learned Friend touched a raw nerve in the Opposition by suggesting that the reasoned amendment might have been drafted by Mr. Jimmy Knapp rather than by the Labour party.
§ Mr. Norris
If the hon. Lady says so, I accept that assertion.
My hon. and learned Friend touched on a point that is absolutely seminal to the debate. He pointed out how extraordinarily foolish it was to concentrate on who the employer of an individual might be, whatever function he was to discharge in the public service, without considering properly whether he was properly trained, qualified and equipped to do his job. That is what is important and Conservative Members have never lost sight of it because they are interested in practical solutions. It was significant that the Opposition should have drawn the distinction which led my hon. and learned Friend to make that point.
The hon. Member for Hampstead and Highgate, who represents the deepest station on the underground—192 ft down—said some kind personal words, but then lowered her normal high standards by asserting that the Evening Standard had referred to the system as the worst in the world. It was not the Evening Standard but, sadly, the hon. Member for Rotherham (Mr. MacShane) in a petulant and intemperate outburst which was immediately contradicted by informed Members on both sides of the House.
The Healey and Baker survey of international world cities establishes the relative worth of a number of characteristics which determine the quality of life in great cities. It concludes that, among the major cities in every continent included in the survey, London had the best public transport system.
§ Mr. Norris
Better than Paris. I know that the hon. Lady has not been in her job long. I recommend that she obtain a copy of that survey, which could make extremely embarrassing reading for the Labour party, and I caution her not to make statements about the paucity of provision in London before reading that objective assessment of the quality of the system.
§ Ms Jackson
I am grateful to the Minister for pointing out my error. Does he agree that although the opinion did not begin in the Evening Standard, the newspaper certainly splashed it in banner headlines over that evening's edition, so it was clearly a view with which the newspaper probably agreed?
§ Mr. Norris
Stewart Steven, when he was editor of the Evening Standard, told me when I complained to him about the mild petulance of one of his editorials: 1076Steve, my entire readership is hanging from a strap on your system when they read my paper. If I tell them what I know to be the case, which is that it is the best system in the world, they will never believe me and, more to the point, they will never buy my paper.I have always admired Mr. Steven—he is an excellent journalist and he was a superb editor of an always readable paper—hut I let him make his headlines in his own way.
The important point is that I am determined to ensure that we base our opinions on objective evidence. I am not in the business of decrying London or its transport system because it is important to establish London not only as the finest city in the world, which it is beyond peradventure, but as the city with the best international links to and from it—that, too, was a conclusion of the survey—and the best transport links within it. That is the reality, and Labour Members would do well to remember it. They should also not be quite so free in their denigration of London. It ill behoves hon. Members, many of whom represent London seats, to degrade the reputation of what is in fact one of our greatest national assets.
I want to make a technical point. The hon. Lady mentioned pumping, and she was right: there is a huge operation on the underground which daily pumps out the millions of gallons of water which comes into the system, as it does into any subterranean structure. The hon. Lady said that because of the rising water table in London the problem is likely to become worse and then suggested that, because it would not be possible to stick an advertising hoarding down the side of such a pump, the private sector would somehow not be interested. She misses the point. There is every virtue in taking such an operation and ensuring that it is put out to public tender so that we can see whether the private sector might be able to perform that vital role on behalf of London Underground in a more efficient and less expensive way than London Transport is currently able to do. Hon. Members do not have to rely on my words, because that is exactly the attitude that London Transport takes.
My hon. Friend the Member for Croydon, North-East, in his interesting speech, referred to the subject of fares. I pay tribute to the former Greater London council, which was far-sighted in introducing the travelcard. My hon. Friend was right to say that that has been of lasting benefit to Londoners and I am delighted to confirm that, as ever, it remains central to our ticketing policy. I fear, however, that my hon. Friend was quite wrong in what he said about the consequences of the Fares Fair policy. I have never denigrated the ambitions of those who introduced that policy, who no doubt believed that such a policy would result in improved ridership and reduced congestion. It did the former, but not the latter. The tragedy is that the additional journeys made on the underground were by people who were not transferring from cars: they were simply additional riders.
My hon. Friend was right to say that the consequence of a great lowering of fares on the underground is that the major recipients are the millions of Londoners who already use the system. They will no doubt be grateful. However, if we are looking for an efficient use of public funds, that is not the way to go about it.
The Bill is a modest measure—a limited but important one, which while not affecting the fundamental role of London Transport will enable it more effectively to harness the talents, skills, enterprise and finance of the private sector in a way that any sensible Londoner will wish to encourage.
§ Question put, That the amendment be made:—
§ The House divided: Ayes 154, Noes 185.1079
|Division No. 76]||[10.00 pm|
|Ainger, Nick||Grocott, Bruce|
|Allen, Graham||Gunnell, John|
|Alton, David||Hall, Mike|
|Anderson, Donald (Swansea E)||Hanson, David|
|Armstrong, Hilary||Heppell, John|
|Ashdown, Rt Hon Paddy||Hill, Keith (Streatham)|
|Ashton, Joe||Hoey, Kate|
|Austin-Walker, John||Home Robertson, John|
|Barnes, Harry||Hood, Jimmy|
|Barron, Kevin||Howarth, Alan (Strat'rd-on-A)|
|Battle, John||Howarth, George (Knowsley North)|
|Beckett, Rt Hon Margaret||Hughes, Robert (Aberdeen N)|
|Berth, Rt Hon A J||Hughes, Roy (Newport E)|
|Benn, Rt Hon Tony||Hughes, Simon (Southwark)|
|Bennett, Andrew F||Illsley, Eric|
|Berry, Roger||Jackson, Glenda (H'stead)|
|Betts, Clive||Jackson, Helen (Shefld, H)|
|Blunkett, David||Jamieson, David|
|Brown, N (N'c'tle upon Tyne E)||Jones, Jon Owen (Cardiff C)|
|Bruce, Malcolm (Gordon)||Jones, Lynne (B'ham S O)|
|Burden, Richard||Keen, Alan|
|Byers, Stephen||Kennedy, Charles (Ross,C&S)|
|Caborn, Richard||Khabra, Piara S|
|Callaghan, Jim||Kilfoyle, Peter|
|Campbell, Mrs Anne (C'bridge)||Kirkwood, Archy|
|Campbell, Menzies (Fife NE)||Lestor, Joan (Eccles)|
|Campbell, Ronnie (Blyth V)||Lewis, Terry|
|Campbell-Savours, D N||Lloyd, Tony (Stretford)|
|Canavan, Dennis||Loyden, Eddie|
|Chidgey, David||Lynne, Ms Liz|
|Chisholm, Malcolm||McLeish, Henry|
|Clapham, Michael||McWilliam, John|
|Clark, Dr David (South Shields)||Madden, Max|
|Clarke, Eric (Midlothian)||Maddock, Diana|
|Clarke, Tom (Monklands W)||Mahon, Alice|
|Clwyd, Mrs Ann||Marek, Dr John|
|Cohen, Harry||Maxton, John|
|Connarty, Michael||Michael, Alun|
|Cook, Frank (Stockton N)||Michie, Bill (Sheffield Heeley)|
|Corbyn, Jeremy||Michie, Mrs Ray (Argyll & Bute)|
|Cox, Tom||Milbum, Alan|
|Darling, Alistair||Miller, Andrew|
|Davies, Bryan (Oldham C'tral)||Morgan, Rhodri|
|Davies, Chris (L'Boro & S'worth)||Morris, Estelle (B'ham Yardley)|
|Davis, Terry (B'ham, H'dge H'l)||Murphy, Paul|
|Denham, John||Nicholson, Emma (Devon West)|
|Dewar, Donald||O'Brien, William (Normanton)|
|Dixon, Don||Olner, Bill|
|Dobson, Frank||Pike, Peter L|
|Dowd, Jim||Pope, Greg|
|Eastham, Ken||Powell, Ray (Ogmore)|
|Etherington, Bill||Prentice, Bridget (Lew'm E)|
|Fatchett, Derek||Prentice, Gordon (Pendle)|
|Faulds, Andrew||Primarolo, Dawn|
|Flynn, Paul||Quin, Ms Joyce|
|Foster, Rt Hon Derek||Raynsford, Nick|
|Foster, Don (Bath)||Rendel, David|
|Fyfe, Maria||Roche, Mrs Barbara|
|George, Bruce||Ruddock, Joan|
|Gerrard, Neil||Sheldon, Rt Hon Robert|
|Godman, Dr Norman A||Short, Clare|
|Godsiff, Roger||Simpson, Alan|
|Golding, Mrs Llin||Skinner, Dennis|
|Gordon, Mildred||Smith, Andrew (Oxford E)|
|Griffiths, Nigel (Edinburgh S)||Smith, Chris (Isl'ton S & F'sbury)|
|Griffiths, Win (Bridgend)||Smith, Llew (Blaenau Gwent)|
|Soley, Clive||Tyler, Paul|
|Spearing, Nigel||Wallace, James|
|Spellar, John||Wareing, Robert N|
|Steel, Rt Hon Sir David||Watson, Mike|
|Stevenson, George||Wicks, Malcolm|
|Strang, Dr. Gavin||Williams, Alan W (Carmarthen)|
|Sutcliffe, Gerry||Wilson, Brian|
|Taylor, Mrs Ann (Dewsbury)||Winnick, David|
|Taylor, Matthew (Truro)||Wright, DrTony|
|Thompson, Jack (Wansbeck)|
|Timms, Stephen||Tellers for the Ayes:|
|Tipping, Paddy||Mr. Joe Benton and Mr. Eric Martlew.|
|Alexander, Richard||Gale, Roger|
|Allason, Rupert (Torbay)||Gallie, Phil|
|Amess, David||Gill, Christopher|
|Arbuthnot, James||Goodlad, Rt Hon Alastair|
|Arnold, Jacques (Gravesham)||Goodson-Wickes, Dr Charles|
|Arnold, Sir Thomas (Hazel Grv)||Greenway, Harry (Ealing N)|
|Atkins, Rt Hon Robert||Greenway, John (Ryedale)|
|Baker, Rt Hon Kenneth (Mole V)||Griffiths, Peter (Portsmouth, N)|
|Baker, Nicholas (North Dorset)||Grylls, Sir Michael|
|Banks, Matthew (Southport)||Hague, Rt Hon William|
|Bates, Michael||Hamilton, Rt Hon Sir Archibald|
|Batiste, Spencer||Hamilton, Neil (Tatton)|
|Bellingham, Henry||Hampson, Dr Keith|
|Beresford, Sir Paul||Hargreaves, Andrew|
|Brffen, Rt Hon John||Harris, David|
|Bonsor, Sir Nicholas||Hawkins, Nick|
|Booth, Hartley||Hawksley, Warren|
|Bottomley, Peter (Eltham)||Heald, Oliver|
|Bowis, John||Hendry, Charles|
|Brandreth, Gyles||Hill, James (Southampton Test)|
|Brazier, Julian||Hordem, Rt Hon Sir Peter|
|Bright, Sir Graham||Howard, Rt Hon Michael|
|Brooke, Rt Hon Peter||Howell, Rt Hon David (G'dford)|
|Browning, Mrs Angela||Hughes, Robert G (Harrow W)|
|Bruce, Ian (South Dorset)||Hunt, Rt Hon David (Wirral W)|
|Burns, Simon||Hunt, Sir John (Ravensbourne)|
|Burt, Alistair||Hunter, Andrew|
|Carlisle, Sir Kenneth (Lincoln)||Jack, Michael|
|Carrington, Matthew||Jessel, Toby|
|Cartrjss, Michael||Jones, Gwilym (Cardiff N)|
|Chapman, Sir Sydney||Jones, Robert B (W Hertfdshr)|
|Clarke, Rt Hon Kenneth (Ru'clif)||Kirkhope, Timothy|
|Clifton-Brown, Geoffrey||Knapman, Roger|
|Congdon, David||Knight, Mrs Angela (Erewash)|
|Coombs, Simon (Swindon)||Knight, Rt Hon Greg (Derby N)|
|Cope, Rt Hon Sir John||Knight, Dame Jill (Bir'm E'st'n)|
|Couchman, James||Knox, Sir David|
|Cran, James||Kynoch, George (Kincardine)|
|Currie, Mrs Edwina (S D'by'ire)||Lart, Mrs Jacqui|
|Day, Stephen||Lawrence, Sir Ivan|
|Deva, Nirj Joseph||Legg, Barry|
|Devlin, Tim||Lester, Sir James (Broxtowe)|
|Dorrell, Rt Hon Stephen||Lidington, David|
|Dover, Den||Lloyd, Rt Hon Sir Peter (Fareham)|
|Dunn, Bob||Luff, Peter|
|Eggar, Rt Hon Tim||Lyell, Rt Hon Sir Nicholas|
|Elletson, Harold||MacKay, Andrew|
|Emery, Rt Hon Sir Peter||Madel, Sir David|
|Evans, Jonathan (Brecon)||Martland, Lady Olga|
|Evans, Nigel (Ribble Valley)||Malone, Gerald|
|Evans, Roger (Monmouth)||Mans, Keith|
|Evennett, David||Mariow, Tony|
|Fenner, Dame Peggy||Marshall, Sir Michael (Arundel)|
|Field, Barry (Isle of Wight)||Martin, David (Portsmouth S)|
|Fishbum, Dudley||Mates, Michael|
|Forman, Nigel||Mills, lain|
|Forth, Eric||Moate, Sir Roger|
|Fox, Dr Liam (Woodspring)||Monro, Rt Hon Sir Hector|
|Fox, Rt Hon Sir Marcus (Shipley)||Montgomery, Sir Fergus|
|Freeman, Rt Hon Roger||Needham, Rt Hon Richard|
|Fry, Sir Peter||Neubert, Sir Michael|
|Newton, Rt Hon Tony||Steen, Anthony|
|Nicholls, Patrick||Stephen, Michael|
|Norris, Steve||Stern, Michael|
|Onslow, Rt Hon Sir Cranley||Streeter, Gary|
|Oppenheim, Phillip||Sweeney, Walter|
|Ottaway, Richard||Taylor, John M (Solihull)|
|Paice, James||Temple-Morris, Peter|
|Pattie, Rt Hon Sir Geoffrey||Thomason, Roy|
|Peacock, Mrs Elizabeth||Thompson, Patrick (Norwich N)|
|Pickles, Eric||Thurnham, Peter|
|Porter, David (Waveney)||Townsend, Cyril D (Bexl'yh'th)|
|Powell, William (Corby)||Trend, Michael|
|Rathbone, Tim||Trotter, Neville|
|Redwood, Rt Hon John||Twinn, Dr Ian|
|Renton, Rt Hon Tim||Viggers, Peter|
|Riddtek, Graham||Waldegrave, Rt Hon William|
|Rifkind, Rt Hon Malcolm||Walker, Bill (N Tayside)|
|Roberts, Rt Hon Sir Wyn||Waller, Gaiy|
|Robinson, Mark (Somerton)||Whitney, Ray|
|Rowe, Andrew (Mid Kent)||Whittingdale, John|
|Sackville, Tom||Widdecombe, Ann|
|Shaw, David (Dover)||Wiggin, Sir Jerry|
|Shaw, Sir Giles (Pudsey)||Willetts, David|
|Shephard, Rt Hon Gillian||Wilshire, David|
|Shepherd, Sir Colin (Hereford)||Winterton, Mrs Ann (Congleton)|
|Sims, Roger||Wolfson, Mark|
|Smith, Tim (Beaconsfield)||Wood, Timothy|
|Speed, Sir Keith||Yeo, Tim|
|Spencer, Sir Derek||Young, Rt Hon Sir George|
|Spteer, Sir James (W Dorset)|
|Sproat, lain||Tellers for the Noes:|
|Squire, Robin (Hornchurch)||Mr. Derek Conway and Mr. Patrick McLoughlin.|
|Stanley, Rt Hon Sir John|
§ Question accordingly negatived.
§ Main Question put forthwith, pursuant to Standing Order No. 60 (Amendment on Second or Third Reading), and agreed to.
§ Bill read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 61 (Committal of Bills).