§ Lords amendment: No. 229, in page 77, line 3, leave out ("In")
§ Mr. Deputy Speaker
With this, it will be convenient to discuss Lords amendments Nos. 230, 231, 297 to 333, 335, 569 and 705 to 707.
§ Mr. Edward Davey (Kingston and Surbiton)
On a point of order, Mr. Deputy Speaker. Could you investigate the fact that, apparently, the Division Bells are not ringing in Norman Shaw North?
§ Mr. Deputy Speaker
I am grateful to the hon. Gentleman. That point has already been made and steps are being taken to investigate the matter.
§ Mr. Hill
This group of amendments makes a number of largely technical or clarifying changes to the provisions relating to the London Underground public-private partnership. The structure and overall effect of the PPP provisions remain the same as they were when this House last considered the Bill.
The first batch of amendments relates to PPP agreements and the arrangements for designating key assets. Amendments Nos. 287, 299, 300 and 335 extend to a subsidiary of London Regional Transport and Transport for London the powers already held by those parent bodies to enter into PPP agreements and to designate key system assets for the special protection provided by the Bill.
Amendment No. 298 provides for the PPP agreements to be entered into while infrastructure companies are still subsidiaries of London Underground Ltd. Amendments Nos. 301 to 304 give Transport for London greater flexibility over the format, but not the content, of the information about key assets that it is required to make publicly available.
Amendments Nos. 305 to 310 and amendment No. 329 provide for TfL to make transfer schemes for the distribution of property among its subsidiaries and PPP companies, so as to enable the mayor to retrieve all protected assets at the end of PPP contracts.
The second and largest batch of amendments—Nos. 318 to 328, 330 to 333, and 560—adjust and expand the existing provisions regarding the PPP arbiter, a post created by the Bill to determine the price to be paid by London Underground for the work undertaken by a PPP company, if a dispute were to arise at a periodic review of the contract. The provisions allow the same person to hold the offices of Rail Regulator and arbiter, although I stress that no decision has been taken on an appointment. The provisions clarify the circumstances in which the arbiter can issue directions and guidance; refine the drafting of some of his statutory duties; provide legal protections and sanctions relating to his information-gathering powers; and ensure that terms used in the chapter are adequately defined.
The third batch of amendments makes technical or editorial changes. Amendments Nos. 229 to 231 clarify London Transport's existing powers of disposal. Amendments Nos. 311 to 317 adjust the existing land provisions to avoid uncertainty in the treatment of PPP leases. Amendments Nos. 705 to 707 delete a couple of superfluous provisions in schedule 11.
§ Mr. Woodward
I am grateful to the Under-Secretary for his explanation of this group of amendments. We have a special interest in amendment No. 332. Our interest is heightened because I am aware that the hon. Gentleman, 742 who is relatively new to his post, has, like Opposition Members, had some difficulty in fathoming the extraordinary number of amendments that we have had to consider.
The job of the Opposition has been made especially difficult by the absence—by and large—of explanatory notes for the amendments. Last Wednesday, the day before we first considered Lords amendments to the Bill, the Under-Secretary made some notes available. As there are 818 Government amendments, it has, however, been extremely difficult to cope at this late stage with the explanatory notes, which do not in any case include an explanation of many of the amendments. I hope that my preamble is giving the Minister for Housing and Planning time to provide his assistant with the necessary information to cope with my comments. My questions are genuine. Perhaps the Under-Secretary will be able to satisfy us—perhaps not. We look forward to hearing what he has to say.
Amendment No. 332 follows on from the previous amendment—they are interrelated and deal with the power of the PPP arbiter to requisition any information that he desires, within legal bounds. However, amendment No. 332 seems to restrict the arbiter from making some of the information public. Its stated purpose is to give statutory protection to third parties against the disclosure of information collected by the arbiter. How do the Government reconcile that protection with the principle of open government and freedom of information? What has happened to the principle of freedom of information in the Bill?
We now know that some serious questions have to be answered regarding safety in our public transport system. For that reason, some people have been especially concerned about whether it is appropriate to continue to hold negotiations between Railtrack, the Secretary of State and five of the London tube lines. Questions have been put about freedom of information and the background to those negotiations, but the Secretary of State has strenuously refused to supply an answer. If the amendment were accepted, would it mean that, if Railtrack did not want to disclose information, it would—or could—have the power to stop that disclosure?
People are rightly concerned that the Secretary of State for the Environment, Transport and the Regions has been content to hold secret negotiations with Railtrack, despite concerns about safety, and that he continues to refuse to allow information to enter the public domain in any shape or form. We have no information about his negotiations: we know nothing about the tender, or about the demands he is making with regard to safety. The answer to those and many other questions is that we simply do not know.
Perhaps when he has finished consulting his colleague the Minister for Housing and Planning, the Under-Secretary will he able to answer our questions. If he cannot, I am sure that his right hon. Friend will take time off from his campaign duties to advise the House. In the current circumstances of concern about public transport, secrecy is unfair. Why should the travelling public not know what is happening to the currently publicly owned tube? Why, in the age of open government, can information pertaining to the relationship between the PPP and, for example, the Civil Aviation Authority, be obliged to be made public, whereas 743 information pertaining to discussions between Ministers and Railtrack on the PPP remain secret? What guarantees are being made in respect of safety?
We know that large numbers of trains on the underground—a system held in public ownership—have gone through red lights. We know that a train protection system is in use on the underground. As Ministers will know, concerns have been raised by those working on underground trains about the adequacy of that train protection system. Will the PPP arbiter be obliged to keep background details about such safety issues, and can that information be made public? Will the arbiter have access to all the papers currently in the possession of the Secretary of State as he takes advice on those issues? Will he have access, as the House does not, to the unpublished Deloitte and Touche report on the PPP, which we believe says that the PPP cannot work and will not work commercially without a dramatic increase in fares and a diminution of service provision to the public? What access will the Assembly have to information held by the arbiter? If the people of London cannot have it, will the Assembly be allowed to see it?
Subsection (4) of amendment No. 332 would appear to give the Secretary of State the order-making power to modify the preceding subsections, as and when he wants, and so to undermine subsections (2) and (3). What is the reason for that provision, and in what circumstances would it be used by the Secretary of State?
The amendments would appear to be ill-considered. Perhaps the Minister will be able to provide a genuinely satisfactory explanation and tell us that the PPP arbiter will be able to gain the necessary information and that all the information will be made public. Perpetuating a climate of secrecy is the wrong way to proceed in the current circumstances. As for the on-going negotiations with Railtrack, does amendment No. 332 mean that Railtrack could be obliged to disclose information, or that the company could say, as the amendment suggests it could, that the information was notfor the purpose of facilitating the carrying out bythe Secretary of State or othersof any or his or, as the case may be, its functions",and so could remain secret?
§ Mr. Brake
The House heard earlier the rather weak and confused grounds on which the mayor is to be denied the opportunity to issue bonds. Now we have heard the Minister's explanation of the current group of amendments, but many doubts about the PPP remain.
First and foremost of those concerns is the role of Railtrack in the public-private partnership, to which amendment No. 332 is highly relevant. We need to know what negotiations with Railtrack are taking place; why the subsurface lines have not been put out to tender; and whether there is any likelihood that that might in future be subject to legal challenge on the grounds that it is anti-competitive.
What is the timetable for signing the PPP contracts? Earlier, I quoted a response to a parliamentary question in which I was told that the contracts would be signed when they were ready; that is not a satisfactory response. If they are to be signed in 18 months or two years, what impact will that have on the availability of funds for investing in the tube during the period before the PPP kicks in?
744 I hope that the Minister will be able to answer my questions in detail. We have faced continuous stalling, month after month and year after year. Unless the Minister is able to provide a satisfactory response, many hon. Members will go away believing that the PPP is off course and bound to fail.
§ Sir Sydney Chapman
I rise to support my hon. Friend the Member for Witney (Mr. Woodward). We are clearly entering new territory with the concept of the public-private partnership. My view is that a service or industry is either in the public sector or privatised, and that to try to mix the two does not augur well unless the parties involved have information and unless that information is open to the public to judge for themselves.
The hon. Member for Carshalton and Wallington (Mr. Brake) asked why the subsurface lines were not being put out to tender. Incidentally, I should like to put on record the fact that "subsurface" is a contradiction in terms, but, setting that aside, there must be some explanation. In addition, if one is to try to make the concept of public-private partnership work, the length of the contracts to be awarded is crucial, as are the back-up compensation clauses for the private organisation that has its tender accepted.
A myriad of issues must be addressed—if not before the Bill is passed, then when the PPP concept begins to take shape. The Government have prided themselves on open government and joined-up government; sadly, in respect of putting flesh on the bones of PPP, they have achieved neither.
§ Mr. Edward Davey
I rise to support the argument advanced by the hon. Member for Witney (Mr. Woodward) in respect of his concerns about amendment No. 332 and the restrictions on disclosure of information.
As the hon. Gentleman said, we debated the matter in Committee, where we expressed our concern about the financial modelling of the PPP scheme. Ministers told us that we had nothing to worry about and that huge fare increases were not contained in the modelling. The consultants' report which the Government used to dream up the scheme contained no assumption of huge tube fare rises. However, only recently, London Transport has announced that fares on the London underground are to rise by 7 per cent.—that is incredibly worrying as it goes against the spirit of many of the speeches made by Ministers in the Committee.
§ Mr. Woodward
I am struck by the way in which, whereas Ministers have resorted throughout our two-day debate to saying that all the Lords amendments are technical, if we examine one amendment and pull it apart, we find that it is anything but technical and has implications that extend well beyond the scope of the Bill.
§ Mr. Davey
The hon. Gentleman is absolutely right.
Returning to the matter of fares, the PPP scheme and future versions of the PPP scheme as considered by the PPP arbiter, are we going to find in future years that large fare increases have been negotiated yet again? Behind the PPP and the secret negotiations, is there a hidden agenda of fare rises stretching into the future? If London 745 Transport is prepared to announce publicly a 7 per cent. rise before the GLA elections, what is being decided behind closed doors, out of public view?
I am incredibly worried by the amendments, which make problems that were highlighted in Committee even worse. Most disturbing is the fact that, during the run-up to the GLA elections, when the different parties put before the people of London their different models and agendas for London transport, we shall not know what financial modelling assumptions lie behind the PPP scheme and the negotiations that will be going on at that time.
Perhaps the Greater London Authority, as it takes power and starts its work, will not be informed until the PPP has been signed. Until it has been signed, the mayor will not be privy to the assumptions behind it. The absurd situation could therefore arise in which the mayor and the Assembly members had fought an election without knowing the fare increases that had been debated in the negotiations on the PPP. Such secrecy makes a mockery of open government and of the Government's claim that they are modernising their methods of government.
I hope that the Government will withdraw amendment No. 332 because the debate exposes their vulnerability to attack during the election campaign. We shall be able to claim that they try to prevent debate and refuse to provide information on their plans. Unless the Government are prepared to withdraw such gagging measures, I warn the Minister that we shall have the benefit of the Government's actions as proof to back up our argument that they have a secret agenda of fare rises.
§ Mr. Paul Burstow (Sutton and Cheam)
I want to speak briefly to the amendments, and pick up one or two of the anxieties that have been expressed by Conservative Front Benchers and my hon. Friends.
The PPP and its genesis could be seen to symbolise the Bill and the large number of amendments that have been tabled at almost every stage of its passage. In its Commons and Lords stages, the Government have attempted to create on the hoof an elaborate architecture for the fabrication of the funding for investment in London Transport. It beggars belief that, at this stage, Ministers are unable to come to the House and provide detailed figures and the assurances that we need about how the PPP will work in practice.
My hon. Friend the Member for Carshalton and Wallington (Mr. Brake) said that we are still told by Ministers that we will not know when the PPP is ready: that it will be ready when it is ready and signed when it is signed. That is unsatisfactory both for mayoral candidates and for the House. We are being asked to approve legislation tonight that will establish a procedure whose implications we cannot foresee or understand. Ministers seem unable or unwilling to share with us the Bill's consequences.
We have no information about the PPP's long-term cost to the public purse. Yet that is fundamental to assessing whether the PPP constitutes the right way to proceed. How can we have a serious mayoral debate about investment in London transport when amendment No. 332 and many other provisions in the Bill deny us essential 746 information about the PPP? I hope that the Government will withdraw the amendment and rethink a structure that would leave Londoners with an unsatisfactory arrangement and cost the taxpayer far more than necessary.
§ Mr. Hill
The amendment has provoked a wide range of grievances and charges. I shall attempt to deal with them more or less in chronological order.
The hon. Member for Witney (Mr. Woodward) began by complaining about lack of information on amendments. I acknowledge that there is much to be tackled. However, as the hon. Gentleman should concede, we have been scrupulous in ensuring that the Opposition in another place were sent explanatory notes on all major amendments during the Bill's progress through the House so that they were able to scrutinise them fully. In response to a specific request in the form of a parliamentary question on Monday last week by the hon. Gentleman, we were able to place in the Library on Wednesday explanatory notes on all new clauses and schedules that were added in another place. The explanatory note on amendment No. 332, which has proved so contentious, was available from the Library almost a week ago—in good time for deliberations on it today.
Various points have been made about the proposed London Underground public-private partnership. Let me deal with one of them—safety. I cannot emphasise too strongly that safety is paramount when considering the PPP. We shall take account of any lessons of the Southall and Ladbroke Grove accidents that have implications for the underground. The PPP deal is structured so that public sector London Underground will continue to have responsibility for the statutory railway safety case for the whole underground. The PPP infrastructure companies will take over existing safety cases that are agreed with Her Majesty's railway inspectorate. They form part of London Underground's overall safety case and the PPP companies will be obliged to maintain them. I stress that public sector London Underground Ltd. will have overall responsibility for safety. It will be the guiding mind on safety on the London Underground under the PPP.
There has been some scaremongering about fares from the official Opposition and the Liberal Democrats. On a point of information, the report that the hon. Gentleman had in mind was not by Deloitte and Touche, as the hon. Gentleman claimed, but by Chantrey Vellacott. That report suggested that the PPP would lead to a 30 per cent. increase in fares. The analysis in the note that Chantrey Vellacott published is flawed.
§ Mr. Woodward
Of course, I was right: there are two reports. The Chantrey Vellacott report is available to everyone; we have all read it. It claims that tube fares will increase by 30 per cent. under the PPP—the hon. Member for Brent, East (Mr. Livingstone) claims that the increase will be 40 per cent. The other report analyses the various options for the future of London Underground. It has been on the Secretary of State's desk, but he refuses to make it public because it claims that the PPP proposals are barmy and that the Government should not proceed with them.
§ Mr. Hill
The hon. Gentleman may not have done so, but one of his sidekicks on the Liberal Democrat Benches asked about it. Therefore, I shall deal with that point first. We shall deal with other reports in due course. There is a fundamental position on fares on London Underground under the PPP, about which I shall speak shortly.
I have not forgotten the hon. Member for Ruislip-Northwood (Mr. Wilkinson), but I want to comment on the Chantrey Vellacott report first. We do not accept that fares will increase on the scale that Chantrey Vellacott suggested. Its working assumptions were flawed. It is an error to assume that the bulk of initial investment will be financed through borrowing. Neither does Chantrey Vellacott take account of the efficiency savings that will result from London Underground having a stable longterm investment programme. The savings have been variously projected at between 15 and 20 per cent., so they will be substantial.
We have repeatedly stated that we shall award the contracts only if they represent best value. We would not be embarking on a PPP competition if we did not believe that there was a very good chance of achieving best value for the taxpayer.
I thank the hon. Gentleman for his patience; I now give way.
§ Mr. Wilkinson
I am grateful to the Minister for his patience, and I appreciate the opportunity to intervene now. Will he assure the House that, when the PPP finally becomes operational, annual fare rises on the London underground will be significantly lower than the inflation-busting increases that Londoners have had to endure since May 1997?
§ Mr. Hill
I am glad that the hon. Gentleman raises that point, because I want to come to precisely that issue. The economic modelling on which the PPP proposals have been based has operated on the assumption that fares would increase by no more than the retail prices index plus 1 per cent. in the next two years, and in line with inflation after that. Therefore, I assure him and the wider public, whom he is attempting to terrify, that there is absolutely no question of significant fare increases under the PPP. It will be funded by the efficiency savings achieved by a long-term stable rolling programme of investment.
§ Mr. Edward Davey
I am grateful that the Minister has tried to reassure the House—I am not sure that he has succeeded—that, once the PPP is in operation, fare increases will not be of the size that we have just 748 experienced. Is that because there will be many more huge fare increases before the PPP is signed? Is that why there has been such a delay in signing the PPP? Just like the Tories did before rail privatisation, the Government might want to sneak in a few high fare increases.
§ Mr. Hill
Rather than sitting there preparing his intervention, the hon. Gentleman should have listened more carefully I made it absolutely clear that, in the first two years leading up to the PPP, the assumption in the economic modelling is that fares will not increase by more than the retail prices index plus 1 per cent. There is no question of huge increases leading up to that point. From spring next year and up to the conclusion of the PPP, the mayor will have a stake in the arrangements for the PPP, including those for the fare levels. I am certain that the new mayor of London will not be in the business of encouraging substantial fare increases.
The hon. Member for Witney (Mr. Woodward) referred to the Deloitte and Touche report and made several accusations. I confirm that we are not aware of any Deloitte and Touche report on the PPP. The hon. Gentleman may be referring to the study that my Department commissioned from PricewaterhouseCoopers, which was concluded last year. We published a summary of it, but we cannot publish it in its entirety because of commercially confidentiality. I am sure that the hon. Gentleman will understand that. It certainly did not say that fare increases would result from the PPP.
On the achievability of the PPP, I reiterate what I said in an earlier debate: London Transport announced on 7 October that five consortiums have pre-qualified in the competition for deep tubes and will be invited to tender for the deep tube infrastructure contracts. The invitation to tender was issued on 19 October and bids are due back next March. The House will be pleased to hear that there was a strong field of applications, and that reflects the keen interest for the PPP in the marketplace. It is on stream and will be achieved.
§ Mr. Redwood
Before the Minister leaves the subject, will he tell the House how much preparations for the PPP have so far cost? What is his estimate of the total cost, including all the expenses of legal and financial advice from inside and outside his Department? Will that be paid for out of the fare box or out of taxation?
§ Mr. Hill
The right hon. Gentleman has a bit of a cheek in raising that issue. Few of us will forget that the cost of consultancies and preparations for the deeply flawed privatisation of the railways, which broke up our railway system into a hundred pieces, was about…650 million. The last parliamentary answer provided by the Government in response to a question about the cost of the preparations for the PPP stated that they had cost not more than…20 million to date. There is a massive difference between the extortionate costs that the right hon. Gentleman's Government imposed on the taxpayer and the extremely reasonable and cautious attitude adopted by this Government.
Reference was made to negotiations with Railtrack and to the provision of information. I emphasise that amendment No. 332 is not relevant to the negotiations of PPP agreements, including those with Railtrack. It relates 749 to periodic reviews of contracts after they have been entered into. Information on the negotiation of PPPs will be made available in the normal way to the National Audit Office. My right hon. Friend the Deputy Prime Minister has also made it clear that details of the public sector comparator, another issued raised by Opposition Members, will be published.
§ Mr. Woodward
If the PPP arbiter wishes to review the terms and conditions of a contract with Railtrack once the mayor is in post, will it be possible to disclose that information and make it public?
§ Mr. Hill
The hon. Gentleman raises two issues. I am not able—the hon. Gentleman could not reasonably expect me to be able—to speculate about the final costs of the consultancy and preparatory work for the PPP. No one could do that. I think that I have demonstrated clearly, however, that the Government have adopted an extremely prudent and cautious approach to such costs.
The Government have repeatedly made it clear that we will publish the public sector comparator before the conclusion of the PPP. When that occurs—we presume that it will be in 2001—the hon. Gentleman, other Members and the public will be able to judge on the basis of that test. My right hon. Friend the Deputy Prime Minister made it clear that, if the public sector comparator were negative about the PPP, there would be no question of our going forward with it.
§ Mr. Woodward
I am grateful to the Minister for giving way again. We may wish to divide the House on the amendment, so it must be made crystal clear. Is the Minister saying that amendment No. 332 will not stop the PPP arbiter from obtaining all the background information on the negotiations with Railtrack, the consultation documents and the advice to the Secretary of State, and that that information can be published—yes or no?
§ Mr. Hill
I shall revert to that. I had intended to go on to the safety issue. Let me deal with that before I deal with the question about the role of the arbiter. [HON. MEMBERS: 750 "Come on.] It is a matter of good order in responding to the points raised in the debate, as I am sure hon. Members understand.
Let me deal with the issue of whether amendment No. 332 covers disclosure affecting functions relating to the Health and Safety Executive and safety provisions. I am surprised that the hon. Gentleman raised the issue. Subsection (2) makes it clear that the provisions of the new clause do not applyto any disclosure of information which is made"—I draw the hon. Gentleman's attention to subsection (f)—for the purpose of facilitating the carrying out by the Health and Safety Commission or the Health and Safety Executive of any of its functions under any enactment or of facilitating the carrying out by any enforcing authority, within the meaning of Part I of the Health and Safety at Work, etc. Act 1974, of any function under a relevant statutory provision within the meaning of that Act".That makes it crystal clear that no matter relating to health and safety on the underground will be subject to any prevention of disclosure under the terms of the Bill.
On the broader issue of freedom of information, I remind the hon. Gentleman that amendment No. 332 provides statutory protection to third parties against disclosure of information collected by the arbiter, except where it is necessary to carry out the specific statutory functions referred to in the clause. It is enforceable by means of a civil injunction.
The hon. Gentleman asked how that was compatible with freedom of information principles. I find that an extraordinary question.
§ Mr. Hill
For the simple reason that the provisions are again based on the Railways Act 1993, but again, for reasons of proportionality, provide a civil rather than a criminal sanction. In other words, the legislation introduced by the Conservative Government imposed a criminal sanction for the disclosure of information. The legislation that the present Government are introducing imposes a civil rather than a criminal sanction. The House will recognise where the balance of openness and transparency lies between a criminal sanction for those seeking to disclose information and a civil sanction in that situation.
§ Mr. Corbyn
I wanted to give my hon. Friend a little time to catch up with the other issues that have been raised. Many people are deeply concerned about the PPP and the possibility that it will fail and that Londoners will be saddled with an expensive bill and large fare rises to pay for it. Will the matter come back before the House before the PPP is signed, or will the mayor to be appointed next year have to implement the deal that has been done? Will the scrutiny of the PPP be for the mayor and the Assembly, or for the House before such a deal is signed?
§ Mr. Woodward
As we all know, the Minister is filibustering while he desperately tries to obtain 751 the answers. Any accusations of filibustering made by the Government will sit uncomfortably in the House. I hope that the Minister has now got the answers. Will he wind up the debate by telling the House whether, when the mayor is in place, if the PPP arbiter wishes, he will be given all the advice behind the commercial dealings currently going on with the Secretary of State and Railtrack? Will that information be made available to the PPP arbiter and will it be made public—yes or no?
§ Mr. Hill
Not all of it. Despite the hilarity on the Opposition Benches, it is an entirely reasonable proposition that there will be elements of commercial confidentiality, which I clearly recollect the previous Government were only too eager to plead on many occasions. It is not an intrinsically unreasonable principle.
I have already made it clear that amendment No. 332 is not related to the negotiation of contracts and that information on all PPPs will be available to the National Audit Office, which will no doubt wish to scrutinise them.
§ Mr. Edward Davey
The Minister told the hon. Member for Islington, North (Mr. Corbyn) that there would be a report back to the House before the PPP was signed. Are the Government minded to allow the House to vote on that report, and will it contain details of the negotiations behind the PPP—details that we have not yet seen?
§ Lords amendment agreed to.
§ Lords amendments Nos. 230 to 238 agreed to.