HC Deb 15 June 1999 vol 333 cc137-8
1. Mr. Tom Brake (Carshalton and Wallington)

If he will assess the Chantrey Vellacott report into the financing costs of the public-private partnership for London Underground, a copy of which has been sent to him. [85779]

The Secretary of State for the Environment, Transport and the Regions (Mr. John Prescott)

We have assessed the note published by Chantrey Vellacott, but consider the analysis within it to be flawed.

Mr. Brake

I thank the Secretary of State for his response, even though, having given him advance notice of my question, I had hoped for a more considered reply. I repeat the question that I asked the Prime Minister at Prime Minister's Question Time: is the extra cost of the Government's public-private partnership proposals for London Underground going to be £8 billion—yes or no?

Mr. Prescott

The extra investment will be approximately £7 billion, but it will not be raised entirely through borrowing or through fares, so the analysis is flawed.

Mr. Llew Smith (Blaenau Gwent)

Given the very high commitment of public funds to private finance initiative schemes, has my right hon. Friend considered the risk that, by appraising schemes using the Treasury's discount rate of 6 per cent., a spurious impression of value for money will be created?

Mr. Prescott

In all those projects, we are required to demonstrate value for money; the House of Commons Select Committees and the Public Accounts Committee have all made that absolutely clear. Our proposals, whether on Treasury assessment, bond financing or anything else, all have to be subject to that judgment. In my judgment, the proposals that we shall announce later will meet that requirement.

Mr. Richard Ottaway (Croydon, South)

If the first mayor of London is elected on a pledge to reject the Secretary of State's public-private partnership, what happens?

Mr. Prescott

We have made it absolutely clear that we shall sign the deal. I am sure that the mayor of London wants a London Underground in which there is good investment, and our proposals will provide that. I cannot think of a Labour Member of Parliament who would not want a good underground system.