HC Deb 15 June 1999 vol 333 cc155-67 3.30 pm
The Secretary of State for the Environment, Transport and the Regions (Mr. John Prescott)

With permission, Madam Speaker, I wish to make a statement about London Underground.

London Underground is part of the lifeblood of London, and indeed the whole country, carrying 850 million passengers each year. For too many years, however, under different Governments and even under the Greater London council, investment in the underground has been inadequate to secure a modern, reliable underground system. As I explained to the House last year, we inherited an investment backlog of £1.2 billion. We intend to modernise the underground through a £7 billion public-private partnership which will bring long-term stability to the investment programme.

Train and station services will continue to be operated by a publicly owned, publicly accountable London Underground. However, in order to raise long-term finance, we will invite private companies to take responsibility for upgrading the infrastructure, including the track, tunnels, signals, escalators and trains. That would, however, be for a limited period only, after which the upgraded assets would return to the public sector.

That means that for the first time in living memory London Transport will know what it can spend on investment for years to come. Until now, London Transport investment plans have been approved in theory for a three-year period; in practice, they were chopped and changed every year, as in the savage cuts imposed on London Underground investment in the last year of the previous Administration. I cannot over-estimate to the House the value of being able to plan ahead in that way and to secure greater productivity in the use of capital. It will mean the travelling public—and London Underground employees—will get more reliable, better quality investment, delivered far more efficiently and cost-effectively.

Over the past year, London Transport has been laying the foundations for the public-private partnership. We have restructured the LT board, with Sir Malcolm Bates as chairman, Denis Tunnicliffe as the chief executive, and Derek Smith as the managing director of the underground. New board members with substantial financial and other experience will be announced shortly.

London Underground is creating within itself three infrastructure companies as well as the operating company which will remain in the public sector throughout, and will be made properly accountable to Londoners through their new elected assembly and mayor.

I am pleased to announce that London Transport is, today, inviting companies to pre-qualify as bidders to invest in the underground. Bidders will need to demonstrate the right mix of professional and project management skills and to harness the finance needed to take the tube into the 21st century.

Some concern has been expressed about the time needed to get to this point. I can assure the House that we do not intend to repeat the mistakes made by the previous Administration in planning the Jubilee line extension—now more than £1 billion over budget—the money wasted in British Rail privatisation, which amounted to billions of pounds, or the channel tunnel rail link deal, which we had to rescue from financial collapse. We decided to take the time to get it right and to protect the interests of the taxpayer.

In the autumn, selected bidders will be invited to submit tenders, based on a rigorous performance and payment system. For passengers, that will mean fewer delays, greater capacity and a higher quality of service. The Health and Safety Commission has been fully involved because safety is, of course, a top priority. We are aware of considerable interest in the market so we have good reason to expect keenly priced bids. However, as I have made clear before, we will not contemplate deals being done if they do not offer best value to the taxpayer.

For many years I have advocated linking the national railway with the underground to make it easier for the public to travel to, from, within and across London. I have therefore decided to allow London Transport to explore with Railtrack a way of linking the national rail network to the sub-surface lines in a public-private partnership under which Railtrack would undertake and finance the maintenance and upgrading of the sub-surface lines for London Underground, under contract to London Underground, and Railtrack would build links between the underground and the national rail lines.

This London link plan opens up exciting new possibilities for integration between surface and underground rail, providing fast new connections between all the major transport hubs, including London's five airports and the channel tunnel rail link terminals—a true example of a modern, integrated transport system. In particular, new services could run directly from Heathrow in the west into the City, connected to the channel tunnel link, and from Brighton via London Gatwick and east London to north London and beyond. Once these are in place, all five London airports—including Stansted, Luton and City airport—will have direct rail links into and through London, all connecting with the channel tunnel rail link. The plan will deliver a joined-up London—real integration for a world-class city.

There has been considerable speculation about a possible Railtrack takeover of the tube. That has never been part of our thinking. Unlike the Conservative party, we reject the approach based on selling off everything in sight quickly and then hoping for the best.

Railtrack has confirmed, and will announce, that it will not seek to pre-qualify for the two deep-tube public-private partnership competitions. Let me make it clear that throughout the negotiations we will impose rigorous conditions. Railtrack will have to improve on its previous record, especially on project management.

The vast majority of London Transport staff serve the public well, often suffering the same frustrations with an ageing infrastructure that passengers experience. I should like to place on record our appreciation for staff members' efforts, and to reassure them of two things. First, they will benefit more than most by having an upgraded system with a secure investment programme for years to come. Nothing could be worse for London Transport staff than to leave the underground to deteriorate further.

Secondly, I reiterate the assurances that I gave last year on employment rights, concessionary fares and pensions. People have welcomed the guarantees given to staff who transfer to a London Underground infrastructure company, but they ask what will happen to those who transfer to a sub-contractor. I can confirm today that the concessionary travel and pension arrangements also apply to any current LU staff members who subsequently transfer to a sub-contractor, provided that they remain in tube work. We will take the necessary steps to ensure that.

London is withstanding severe competitive pressure. We are determined that it should remain the premier city in Europe as we enter the new millennium. Investing in a world-class transport system is a vital element of the plans. We are already expanding the public transport network. By the end of 1999, London will have four major additions to its transport network—a new riverbus service, the full Jubilee line extension, the Croydon tramlink and the docklands light railway extension. From next year, the mayor of London will be able to build a properly integrated transport strategy for London.

At the end of the previous century, the London underground was the world's first metropolitan railway. During this century, it expanded, enabling London to grow as a great capital city. Our aim, as we enter the 21st century, is to ensure that London remains a global city with a world-class transport system.

The public-private partnership will bring £7 billion to modernise the tube. It will get away from stop-go investment and improve the quality of service for passengers. By exploring the imaginative London-link plan of through-running surface railways and sub-surface tube lines, London can look forward to a genuinely joined-up transport system. That is no less than Londoners deserve.

Mr. John Redwood (Wokingham)

I thank the Deputy Prime Minister for his statement. It was less joined up than muddled up, but welcome none the less, as it gives us a chance to ask some questions about the real issues facing London transport.

With your permission, Madam Speaker, I should like to pay tribute to my predecessor, my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard), and her team, who fought valiantly against the follies of the Government's transport policy. I welcome my new team and congratulate my new shadow Cabinet colleague. We regard transport as sufficiently important to deserve full shadow Cabinet status within the framework of the Department of the Environment, Transport and the Regions.

I have some advice for the Deputy Prime Minister. The man people outside the House like to call "two Jags John" should try to keep both cars and the chauffeur. This statement means continuing delays and chaos on the underground. Once high-living Ministers discovered that there was no first-class accommodation on the tube, they put their policy on ice for a couple of years.

Mr. Tony McNulty (Harrow, East)

When did the right hon. Gentleman last travel on the tube?

Mr. Redwood

I regularly travel on the tube, unlike the Deputy Prime Minister, who uses it only for photo opportunities and takes his Jaguar along to pick him up when the going gets sticky. He showed his lack of touch on the tube when he tried to push around a ticket machine. The statement shows that he is no more successful when he tries to push the whole railway system around.

Does the Deputy Prime Minister know that his two-year delay in designing a new policy for the underground has made matters a lot worse for all those who travel from High Barnet to Morden, from Ealing Broadway to Epping or to and from many other stops on the tube? Does he realise that since he took over from the Conservatives, service quality has plummeted, cancellations and delays are the order of the day and investment has been savaged?

We all remember Labour's promises. Before May 1997 a tube train broke down once every 21 minutes. That was not nearly good enough, so we proposed privatisation and a big injection of new money. After two years of new Labour, a tube train breaks down once every 16 minutes, and the Government have cut the investment. They dared to tell Londoners that things could only get better. They have got a great deal worse.

Over the final 10 years of Conservative Government, we made steady investment in the tube system—[Laugher.] Labour Members should read the figures; the Labour Government are spending a quarter less than was being spent when they came to power, while they should have been spending more. The Government have cancelled privatisation, and there is a great hole in the accounts. No one knows where the extra money will come from or even whether the tube can keep going. I pay tribute to the staff who struggle to do well in extremely difficult circumstances without any clear policy or any decent investment. Far from giving managers certainty, the Government have left them in the dark.

The Secretary of State has pulled off an almost impossible treble. The unions are against him, the Treasury is against him and most of the potential bidders are also opposed to his scheme. Everyone has told him that franchises should be longer than 15 years, but he knows best. He will not achieve good value for money for the taxpayer. Does he realise that there is a huge gap between the expectations that Labour aroused before the election and the reality of public transport since then?

Mr. McNulty

Mind the gap.

Mr. Redwood

Labour Members understand that much, at least. The Secretary of State should mind the gap. He has certainly failed to mind the shop.

How many extra services will the Deputy Prime Minister pledge to introduce? How many new train sets will be available over the next two years? When will the rate of breakdowns return to the level that he inherited from the Conservatives? The rate is now much higher. What will be the extra burden on taxpayers as a result of his policy? What will happen if the new mayor disagrees with his plans?

When will the Railtrack heads of agreement become a binding contract? What guarantee will the Deputy Prime Minister secure regarding responsibility for safety? Does he regret saying that a fragmented railway would be a less safe railway, now that he has decided to fragment it himself? What is his new, and delayed, timetable for the proposals? Is there any hope of their introduction before the next general election, or will he go to the public having done nothing to improve the tube?

What can the Deputy Prime Minister say to reassure Londoners about future fare levels? How does he explain his change of heart about Railtrack? He used to condemn it, he threatened to re-nationalise it and now he wants to give it a bye into the next bidding round without any competition.

The Deputy Prime Minister rants and raves about the private rail companies but he has no idea how to run a railway. Few people want to buy a second-hand railway from him. His transport policy is to clobber the motorist, bankrupt the haulier, invite in the foreign lorry, put a bus lane on the M4 so that traffic can tail back to the M25 and give us Hobson's choice on public transport. Today's statement is another milestone along the traffic jam that passes for Labour's transport policy. How will that policy work, and what can the Deputy Prime Minister do to make it better?

Mr. Prescott

I congratulate the right hon. Gentleman and welcome him to his new role as the shadow spokesman on the Environment, Transport and the Regions. I hope that he will eventually begin to learn the facts of his case—it is a little early for him to understand them now. I also hope that working with the environment will bring him more in touch with planet earth.

May I also express my appreciation for the kind remarks of the right hon. Member for South-West Norfolk (Mrs. Shephard). I will certainly miss her friendly face and, at times, her cutting tongue. She will be sadly missed from the Front Bench. She feared that she would be replaced by a face that was younger or fresher—I am not so sure that that has been achieved.

The right hon. Gentleman pointed out a catalogue of disasters on the underground. He is right. There are delays, considerable problems and breakdowns. However, 18 years of disinvestment in the underground to the extent of £1.2 billion would affect the quality of the service. If he is not sure about that £1.2 billion disinvestment in 18 years, I must point out that in the last year of the previous Administration £360 million was cut from investment in the underground. How the right hon. Gentleman has the cheek to come to the House and lecture us about the quality of a railway system in which the previous Government massively disinvested, and which had no future and no possibility of securing investment, I do not know.

In the two years that I have been in this job, I have reorganised the underground system. While I was doing so, I was also renegotiating the deal for the channel tunnel rail link, which had collapsed under the previous Administration. We were being asked for £1 billion more. I renegotiated and arranged new bond financing and it did not cost us a penny more. That is the difference in approach, in detail and in fact, of this Government, and we have produced a good system.

We are now embarked on the process that I described, which will keep the system publicly owned and publicly accountable because we do not believe in a privatised system. That is what we are doing in the three proposed contracts and our work with Railtrack. I well understand Railtrack's difficulties. It was not given any regulatory control and has been free to do whatever it likes—in the main, to make an awful lot of profit—because the previous Administration put no controls on it. Railtrack has made millions of pounds at the taxpayer's expense.

Mr. Bernard Jenkin (North Essex)

What are you going to do?

Mr. Prescott

I am just about to tell the hon. Gentleman. He may have entered the shadow Cabinet, but he should not get too keen at this stage. He will find that I negotiated another deal for the channel tunnel rail link, which involved Railtrack, but I ensured that the controls and contracts were tight enough to ensure that we achieved 10 per cent. completion ahead of time and on budget. I wish that I could have done that with the Jubilee line, for which the previous Administration were responsible.

During the past two years I have had to deal with all those problems. I have come to the conclusion that this is the best way forward. It will bring about the investment that we are agreed needs to be put into the transport system. However, I have suggested much more. I have offered a vision of integration—the connection of transport systems—to make London a truly global city at the transport hub of Europe and the world. That is the vision that one needs for transport and that is what I am embarked on.

Frankly, many of the questions that the right hon. Member for Wokingham (Mr. Redwood) posed he almost answered himself. He is not in tune with the facts—although I will allow him a little more time to study them, as he has only just entered the job.

I shall give one quick example. The right hon. Gentleman should not rely on what he reads in the press for information; he should go and find out. He mentioned the M4 bus priority lane and all the talk of tailbacks. Last Friday, I did the journey myself to find out what was happening. I did the journey right through the so-called tailbacks—

Mr. Redwood

What time of day?

Mr. Prescott

At 8.00 am. I did 15 miles in 15 minutes. That does not sound like congestion to me. The buses were going faster and offering—[HON. MEMBERS: "In the wrong lane."] No, no. In exactly those lanes. As I understand it, the Highways Agency has also made it clear that the effect on motorists is neutral. I would say, "Find out for yourself instead of relying on the press and we will get a better-quality transport debate."

Mrs. Gwyneth Dunwoody (Crewe and Nantwich)

My right hon. Friend will be aware that investment in London Underground is so disastrously overdue that what he has proposed will be regarded as an enormous step forward. The neglect of the previous Government was both criminal and shameful. My right hon. Friend's decisions on the staff will be warmly welcomed by those who believe that we cannot run a railway system without the men and women who are fundamental to its operation. They must have faith and certain assurances before they are able to fulfil their task to the best of their ability. However, he will be aware that Railtrack has an extremely poor record of fulfilling its investment obligations. There is no point trying to hide the fact that the company makes large sums of money, and does not carry out what it has promised. I warmly welcome the fact that my right hon. Friend is keeping the assets in state hands, but there will be reservations about Railtrack, and a demand for tight and constant monitoring. Will my right hon. Friend assure me that the project will not be left entirely to a management who are already beginning to whinge about their share price, even though many of us believe that they are already making outrageous profits out of the taxpayer, with little to show in return?

Mr. Prescott

I thank my hon. Friend for her comments. She makes sound points about transport and about the workers in that industry—indeed I have constantly given those workers assurances about guaranteeing their pensions. I had to do so because, under many of the privatisations, people were robbed of their pensions. In respect of one privatisation by the previous Administration—that of the National Bus Company—I have already announced to the House that it has now cost the taxpayer about £360 million to compensate for the injustice that was perpetrated on those people. That is why I have had to spend so much time reassuring people about their employment rights.

My hon. Friend makes an important point about Railtrack. I agree that there has been more concern over share prices than over the level of investment in the industry. That point was made by the regulator appointed by the previous Administration. I now have a tougher regulator; furthermore, a different regulator will be appointed for the underground. We intend to have public accountability for public money; that is what we shall do in order to secure investment.

Mr. Tom Brake (Carshalton and Wallington)

I listened to the Secretary of State's statement with interest, awaiting new information about the public-private partnership, but there was none. There was merely a restatement of past investment plans. I have several questions that I hope the right hon. Gentleman will be able to answer. If there is further delay to the PPP plans, what allowance has he made for the extra finance that will be required to ensure that maintenance and investment continue? At what point will he show that the public-private partnership is best value, and will he use the public sector comparator to do that? Are the Government holding discussions with other consortiums—which could, of course, include Railtrack—about the possible integration between the national rail network and the sub-surface lines to which he has referred? Will there be competition, or is only Railtrack in the running? What level of fines does he plan to impose on Railtrack, if it performs badly? Finally, is it with a sense of dread or of pride that he proposes to hand over part of London Underground to Railtrack?

Mr. Prescott

In relation to investment and any possible delays that may occur in the completion of the contracts, of course investment will be kept up. We showed that when we came into office by finding about £360 million to reverse the cuts that had been made. [Interruption.] That was during our first two years. We said, therefore, that, when the contracts were negotiated, we would consider meeting some of the investment from a public-private partnership. One of the purposes of my statement today was—as I said—to announce that I am embarking on inviting bids for those three PPPs, and that is what we are doing. Any resources needed to maintain the level of investment will therefore be met. That is our obligation.

In relation to the use of the public sector comparator, as a member of the Transport Sub-Committee, the hon. Gentleman is aware that that is our commitment; we have to show value for money and we shall use that practice. However, we cannot do that until we get the deal and we shall not get the deal for a little while—I suppose that is only logical. When we have completed the negotiations, we shall be forced to make the comparison—we have to do that. That is value for money, using the best-value principle to which the hon. Gentleman refers. We can reassure the Sub-Committee about that.

As for Railtrack and the investment deal, it is a unique deal between Railtrack and London Underground, both of which own the tracks that are involved. We have given them an opportunity to combine those tracks in a unique way.

We shall start the negotiations now, and we hope to achieve heads of agreement by autumn. Then, if the deal satisfies the tests that the hon. Gentleman wishes to apply, or we achieve what we consider to be value for money or our objectives of integration, we shall proceed. I assure the hon. Gentleman that we shall keep the House informed of progress.

Joan Ruddock (Lewisham, Deptford)

As one who joined my right hon. Friend on the shadow transport team all of 10 years ago, I can testify to his long-term commitment to the London link line, as he described it today. Can he confirm, in the interests of my constituents and those of my hon. Friends representing south London, that when that vision is brought forth, there will be an extension of the East London line from New Cross Gate to Croydon?

Mr. Prescott

I recall the occasion on which my hon. Friend and I worked together on that team and mapped out the M25, then known as the orbital link, which required the building of a new section of the East London line. I am pleased to say that that is exactly what the proposals I have announced today will do and that the connection she suggests will be made. For the first time, we shall have an orbital link around London and a line that is as close to a cross-London link as we are likely to achieve in the immediate future.

Mr. Peter Brooke (Cities of London and Westminster)

Given the Government's disarray on the subject of the underground during the Committee stage of the Greater London Authority Bill, may we take it from the right hon. Gentleman's statement that the Government's confidence in the outcome is now such that they will be prepared to subject themselves to the most vivid litmus test of all—a debate on the underground in Government time, rather than in Opposition time?

Mr. Prescott

From beside me comes the whisper, "Not yet." There are many competing claims on the time of the House, but I understand that there is to be an Adjournment debate tomorrow on the very subject of connecting London's surface and sub-surface lines. I believe that that debate is to be introduced by a Labour Member representing London.

Mr. Harry Cohen (Leyton and Wanstead)

I warmly welcome the long overdue investment and the links between London's surface and underground lines, but can my right hon. Friend tell me where the public element of the public-private partnership is to come from? Will there be any public subsidy for the operations of London Underground next year and beyond? If not, and if that money were to come from higher fares or congestion charging, which would restrict the freedom of action of the future London mayor, does my right hon. Friend recognise that that would be unsatisfactory? When will we hear further details of the public element of the PPP?

Mr. Prescott

My hon. Friend will be aware from his experience of the activities of the Greater London council that there have always been great restrictions on fares and investment policy; and that the GLC was unable to find the resources necessary for investment, even though fares continued to increase. We need to get the finances of the underground onto a proper footing. The system is publicly owned; we are mortgaging the assets and those assets will return to public ownership, so there is public accountability.

The judgment to be made is on the balance between the income derived from fares and investment. That will be the subject of negotiations on the PPPs and a matter for the mayor during the final stages of that process and when the system is in operation. I do not suppose for one moment that there will not be further demand for new underground investment—I am talking only about existing links. Judgments will have to be made about whether public money is to be used for investment or whether that money will have to come from fares. To be frank, I do not think that all the money can come from fares; there will have to be some public money involved in investment.

Mrs. Eleanor Laing (Epping Forest)

My constituents will be disappointed that the right hon. Gentleman has made yet another statement on the future of the underground without announcing that there is to be full privatisation. This afternoon, he has said yet again that the Government do not believe in privatisation. Perhaps he does not realise that he is being rather—you might not allow me to use the word "hypocritical" Madam Speaker. I see that you will not, so I shall say instead that the right hon. Gentleman is being inconsistent when he says that he does not believe in privatisation. Does he not realise that Railtrack, on which the proposals he has announced this afternoon depend, would not even exist had it not been for the successful privatisation of British Rail carried out by the Conservative Government?

Mr. Prescott

Perhaps I could help the hon. Lady with her difficulty with descriptions. I understand that she was an adviser to the right hon. Member for South Norfolk (Mr. MacGregor) when he was the Secretary of State for Transport in the previous Parliament. [HON. MEMBERS: "Distinguished".] He may have been distinguished, but he did not have too many facts about rail privatisation. The stupid ideas then proposed cost the taxpayer millions of pounds, and I am having to deal with the problems that they caused.

It is a bit much for the hon. Lady—who entered Parliament at the last election—to tell us what should be done to improve rail transport. I do not know what she said during the election campaign, but everybody else thought that the privatised railway lacked investment and was failing, as was Railtrack. We are seeking to change that situation, and hon. Members will be able to measure our success by the next election.

Mr. John Cryer (Hornchurch)

I welcome increased investment in the tube, which is badly needed. What kind of return on that investment does my right hon. Friend envisage the private sector will look for over 15 years?

Mr. Prescott

It will depend on the bids made by different companies. It is argued that, because of its circumstances, Railtrack can borrow much more cheaply than other companies. That is one difference between the different bids and it is one of the reasons why I am glad that Railtrack has agreed not to bid for the deep lines. If it had bid, there would have been a deficit of interest.

Mr. Jenkin

Who wants it?

Mr. Prescott

The signs are clear and stories in today's papers suggest that companies will be pleased to bid. However, I must wait and see. I have announced the pre-qualifying period and, as to the rates of return—which vary between companies—I will wait and see what terms I am offered. Competition will have an effect on those rates, and I will take that into account.

Mr. Edward Davey (Kingston and Surbiton)

In his answer to the hon. Member for Leyton and Wanstead (Mr. Cohen), the right hon. Gentlemen said that he could guarantee investment in London Underground from April next year. Has he talked to the Chancellor of the Exchequer about that? If so, what sorts of sums will come from the public purse to ensure that that investment continues?

Mr. Prescott

The first sum from the public purse was the £360 million—

Mr. Davey

Answer the question.

Mr. Prescott

Yes, I am in touch with the Chancellor. We have already announced the investment over the three-year programme. It is true that a year with zero subsidy had been envisaged because we hoped that some of the contracts would be completed before the Greater London Authority is established. We are not prepared to step back and say that that will be a zero funding period, but I am negotiating on PPP contracts at present and we will look for investment. As with the channel tunnel rail link, we may be able to spread investment over time. That is a matter for negotiation, but the House may be assured that there will be investment during that period.

Mr. Clive Efford (Eltham)

I welcome my right hon. Friend's statement and draw his attention to the fact that, beyond the Jubilee line extension and the docklands light railway, my constituents and those in surrounding areas do not have direct access to London Underground. They rely primarily on Network SouthEast to commute to and from central London. Further to the question raised by my hon. Friend the Member for Lewisham, Deptford (Joan Ruddock), may I draw my right hon. Friend's attention to the potential that the East London line has to extend to North Kent lines rather than westward to Croydon? That would provide a direct link to London Underground in central London for people in south-east London.

Mr. Prescott

I have often asked how we can make the existing infrastructure work more effectively. Sometimes it is a matter of filling in the gaps. There was mention of "mind the gap"; but "bridge the gap" is important for rail infrastructure. We are considering different ways of achieving that.

I have united the national railway and underground systems for the first time, which will create considerable potential. The bid that I have allowed and the agreement with Railtrack—if we can achieve it—will see the union of the national railway system and the underground system. We will want to explore other potentials, but—in view of the timetable—that is more likely to be a matter for the London authority and the London mayor rather than for me.

Mr. Nicholas Soames (Mid-Sussex)

I use the underground twice a day, almost every working day of the week—like thousands of my constituents. Anything that can be done to improve the service on the tube is welcome. However, I think there is a danger of painting too black a picture of the tube, which, considering its limitations, provides a first-class service. Although it suffers terrible difficulties—including breakdowns and other problems—by and large, it is a very effective service, and I pay tribute to Sir Malcolm Bates and his staff. What provision will the right hon. Gentleman make to ensure that the feet of the contractors involved are held to the fire more effectively than occurred previously, when one of the greatest civil engineering companies in the world had to be brought in to finish the Jubilee line extension?

Mr. Prescott

I am grateful for the hon. Gentleman's comments about the running of the service. I have tended to react to the introductory comments of the right hon. Member for Wokingham (Mr. Redwood) about the quality and level of service. The staff do a very good job under difficult circumstances and they enable 840 million people to move around that system. That is one of the biggest contributions to the movement of people of any transport system. The hon. Gentleman is right to point out that we need to draw up tight contracts. I shall cite in evidence the contract that I negotiated on the channel tunnel rail link, which he should compare with the one that I inherited, and he will see the difference that I am trying to make to our transport systems.

Mr. Tam Dalyell (Linlithgow)

May I contribute to the proceedings as someone who does not care to drive in London or to bring his car here? What is the state of the tunnels, and what advice has the Department been given? Is not it true that tunnels age, like the rest of us, and that the Victorian tunnels are ageing together? The idea that stone lasts for ever is simply not true. What advice has been given about the long-term problems of renovating, and in some cases, rebuilding tunnels that have lasted a century or a century and a half, but which, as I said, are all ageing together?

Mr. Prescott

My hon. Friend makes an important point. A number of years ago, I discussed with the chairman of the underground how one deals with investment on that scale. Much of the system, including many of the walls, bridges and tunnels, is 100 years old, and would cost billions of pounds to replace. Because of disinvestment in that infrastructure, the replacement costs would be as much as those for the sewerage system which was built 100 years ago.

One of the advantages of our proposals is that we can consider those assets, as companies need to do, and assess the risks. If public and private money is to be involved in the underground, a judgment must be made about risk. That risk is greatly influenced by the quality of investment and assets.

As anyone who is familiar with the London Underground system will know, there is a considerable amount of water in the system and pumps work all the time just to keep the water at the correct level. The age of the system is a problem, and I cannot kid myself that the proposals that I have announced today address all the fundamental problems of dealing with all the long-term deterioration of the underground's ageing assets.

Mr. John Bercow (Buckingham)

Further to what the right hon. Gentleman said about the opportunities for improvement in the future as a result of the invitation to bidders, will he explain the precise difference between pre-qualification and qualification? Secondly, when did he last travel on the Northern line or the Circle line, both of which, I am sure he will agree, have been afflicted by serious problems? What scale and speed of improvement in their services does he anticipate?

Mr. Prescott

I often travel on the underground and have done so two or three times in the past week. I think everyone in the House has a great deal of experience of it. I was grateful for the comments of the hon. Member for Mid-Sussex (Mr. Soames) about the quality of the service despite the difficulties.

The difference between pre-qualifying and qualifying arises from the fact that it will be very expensive to bid for the deals, so we shall invite people to bid in the pre-qualifying stage, when they can say whether they are interested and what their plans are. If, by the autumn, they have done so—I believe that a number of them will—we will invite one or two to take the more significant step of making a serious bid. It is a very expensive proposition to make a bid under the proposals. The different stages are therefore intended to distinguish the serious contenders—some of whom, I have no doubt, will be consortiums—and we shall have to judge which of them we should invite to make a more permanent, serious bid.

Mr. Mike Gapes (Ilford, South)

I welcome the statement, but I want to highlight the daily problems experienced by many hundreds of thousands of people who travel into central London from east London. Does my right hon. Friend agree that there is a problem of capacity on the Central line and that, despite his welcome announcement, there are difficulties that must be tackled so that capacity can be increased for travelling from east to west across London? Will he and his colleagues reconsider the possibilities of using crossrail or an alternative means to improve capacity for travelling across our city?

Mr. Prescott

I would not want to encourage my hon. Friend to think that we had in mind another £4 billion or £5 billion project for crossrail—certainly not during the next two years, when I would have responsibility for it. The proposals that I presented today allow for cross-London transport and will be welcomed. We are also looking at ways to increase the throughput of trains, which can be achieved by improvements to signalling and track to enable trains to go faster and to be better controlled. In that way, we will get more "flights", as they are called, along the routes, which will give us more capacity. Furthermore, the bids include the lengthening of some station platforms, so that we can put more coaches on trains. Even though there may still be the same length of track, we plan to work it much more effectively and efficiently than at present. That will be one of the benefits of the investment.

Mr. Geraint Davies (Croydon, Central)

First, does my right hon. Friend agree that the £7 billion announced today represents much better value for money to the taxpayer than the privatisation of Railtrack, which was sold for £1.9 billion and is now valued at £8 billion? Secondly, does he agree that we all welcome the fact that the right hon. Member for Wokingham (Mr. Redwood) is going down the tube? Thirdly, does my right hon. Friend envisage the integration of the current tube network and the newly arriving tramlink in Croydon, which he was kind enough to mention in his proposals? The people of Croydon welcome the initiative and look forward to the integration of London transport, which includes the link-up of tramlink to the wider network.

Mr. Prescott

I certainly believe that the £7 billion is an investment in the future of London and will be welcomed by everyone. It is clearly needed, and we look forward to getting the agreements to achieve it. On the question whether the Croydon light railway system will be integrated, I have told my hon. Friend previously that various opportunities arise once one stops thinking of the underground, the national rail system and airports as separate, and begin to integrate them and find ways of making the system work more effectively. That is a practical example of how we can get value for money.

Dr. Howard Stoate (Dartford)

May I tell my right hon. Friend how welcome his statement on joined-up transport for London will be to my constituents, many of whom are commuters? Can he reassure my constituents in Dartford that the channel tunnel rail link phase 2, including the Ebbsfleet station, is on target and will deliver the much-needed improved services for Britain and the whole of Europe?

Mr. Prescott