HC Deb 04 April 2000 vol 347 cc793-5
3. Mr. Harry Cohen (Leyton and Wanstead)

What plans he has for reform of the management of London Transport. [116143]

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

I have reformed the London Transport board and appointed a new chairman and a new managing director of London Underground and a new chief executive. The Government have also decided to introduce the public-private partnership. This will tackle the £1.2 billion investment backlog, provide a stable funding environment and secure long-lasting improvements for the underground.

When the mayor takes office, Transport for London—one of the functional bodies of the Greater London Authority—will take over all London Transport's current responsibilities, except London Underground. London Transport will continue to manage London Underground until the public-private partnership has been put in place.

Mr. Cohen

I support the changes to London Transport that my right hon. Friend has announced, which will make it more dynamic and effective in delivering better public services. However, with two French and one US-dominated consortiums shortlisted to run the deep-level underground, and with several other arrangements involving the private sector, what special arrangements will the Government make to ensure that there is effective public service management at London Transport? Will my right hon. Friend assure me that we will not end up with a situation similar to the one involving Railtrack and the train operating companies, in which they blame each other for performance failures?

Mr. Prescott

It is important to ensure that the outputs of the infracos, or infrastructure companies, can be measured and that we have the proper management to measure them and make proper checks on the financial contributions that are made. Of course, incentives will be built into the system. If the organisations achieve their targets, they will do well. If they fail, they will face a penalty. That point will be built into the contracts. It is my belief—this will be subject to the public sector comparator—that public-private financing will be cheaper than the bond issue that is talked of. Those matters will be settled later, but I have no doubt that Londoners will benefit from a long-term approach to investment in the modernisation of the underground. That will be in contrast to the difficulties that we have faced from the stop-go economy which has reduced the necessary public investment in London Underground.

Mr. Don Foster (Bath)

Does the Deputy Prime Minister have confidence in the management of London Transport, given that the money that it has spent on private consultants has gone up two and a half times since the Government came to office? Could that money not have been better spent on repairing the 55 escalators that are currently out of action on London Underground? Is that really the fault of the management—or is it not perhaps the fault of the Government for persisting with their ill-advised and costly sell-off of the underground?

Mr. Prescott

The problems with the escalators and their age are a function of disinvestment in the underground over many years. We are attempting to establish an entirely different financial framework for the underground, so that it is publicly owned and publicly accountable. That will guarantee a proper maintenance programme, so that there will not be breakdowns as there are at the moment. If we are to achieve that, consultants must give advice. Surely the hon. Gentleman does not expect me to make a judgment without proper and informed advice.

Mr. Andrew Love (Edmonton)

I am a London Member, and my constituents are looking for a modernisation of the tube that will achieve two things. First, they want reassurance that it will remain in the public sector. Secondly, and perhaps more important, they want value for money for the public purse. Can my right hon. Friend reassure my constituents that both those aims will be achieved?

Mr. Prescott

It is clear that, under legislation, I have an obligation to the House to subject whatever ideas I have for the financing of the underground to the public sector comparator. I have to provide best value. That is what I am required to do by the House and that is what I intend to do. We have received the bids in the past few days, and I believe that those aims will be achieved. My hon. Friend will be able to judge whether we achieve them.

London Underground will be publicly owned, publicly accountable and properly financed. Indeed, in those circumstances, it will offer a better opportunity for the proper investment to be made in it. It is not privatisation; I do not know of any facility that has been privatised where the assets have been returned to the public.

Mr. Bernard Jenkin (North Essex)

As the Secretary of State refers to the £100 million spent on consultants, can he recall any time, when he was in opposition, when he supported any money being spent on consultancies? He talks about disinvestment, so will he explain why in every year that he has been in charge less Government money has been spent on the tube than under the previous Conservative Government? Is not the chaos on the tube the result of the PPP being more than a year behind schedule, and is that not another emblem of the right hon. Gentleman's own personal failure? As he boasts about an extra £280 million from the Budget for transport, will he come clean with the House and explain that £100 million of that has been cut from his roads maintenance budget?

Mr. Prescott

The hon. Gentleman has his facts wrong. There is more core investment going into the underground than went in under the previous Administration. I defy him to find any instance of my complaining about spending money on consultants in such matters; all Governments have to take advice. Considerable criticism was made of the sums that the previous Administration spent on consultants—up to £500,000 in respect of rail privatisation—and there was a legitimate argument about that. We shall produce an underground that receives proper investment to deal with the problems left to us as a result of the Conservatives' disinvestment in the underground.