Privatisation

HC Deb 06 November 2000 vol 356 cc86-129

Mr. Deputy Speaker (Sir Alan Haselhurst)

We now come to the motion on privatisation. I should announce to the House that Mr. Speaker has selected the amendment in the name of the Prime Minister.

7.31 pm

Mr. Don Foster (Bath)

I beg to move, That this House notes public concern about the effects of railway privatisation and about current plans to privatise National Air Traffic Services and London Underground and opposes the dogmatic pursuit of privatisation in public services. I am not surprised that Mr. Speaker chose to select the amendment in the name of the Prime Minister because—disappointingly, given that the Conservative party was responsible for many of the problems through its dogmatic approach to privatisation—it has not even bothered to table an amendment to defend its record. We tabled the motion because the privatised railways are in chaos at present and we are concerned that, if the Government follow their current proposals, we shall end up with exactly the same chaos in the London Underground and National Air Traffic Services.

When the Conservative party introduced many of its privatisation proposals, the Liberal Democrats warned it that privatisation simply was not the cure for all ills. At that time, the Labour party in opposition entirely agreed with us. The Labour party would accept that both our parties were correct in expressing our concerns. However, it appears that, in office, the Labour party has changed its spots. We are now in danger of seeing a Labour party introducing its own dogmatic approach to privatisation and the real possibility of putting lives at risk with its proposals for the part privatisation of NATS and the underground. It seems that the new Labour party has developed its own form of privatisation dogma.

The Liberal Democrats are certainly prepared to acknowledge that the private sector and the public sector can benefit from each other. We acknowledge that some of the privatisations that have occurred in recent years have had positive outcomes. Even if British Telecom has some way to go, the liberalisation of the telecommunications industry has undoubtedly brought significant benefits. We also acknowledge that the privatisation of gas and electricity has been instrumental in improving the standards of service offered, even though we were unhappy with the way in which and the price at which that was done.

It is interesting that some rather bizarre side effects have resulted from those privatisations. I suspect that the Conservative party did not anticipate that the electricity powering the lights in Parliament would come from an electricity company owned by the French Government. Therefore, rather bizarrely, given the views of the Conservative party, any profligacy on our part in this building will lead to a reduction of taxes in France—not what the Tories wanted.

There has been a growing acceptance that, in certain circumstances, some public services can be delivered by or in partnership with the private sector. A good example is the Government's recent announcement of the concordat between the NHS and the private health care sector. That seems to be a sensible form of partnership between the two sectors.

Mr. Gerald Howarth (Aldershot)

Will the hon. Gentleman bring pressure to bear on the French authorities to privatise those moribund state organisations in France to ensure that British companies are allowed reciprocity so that they can buy French companies in France?

Mr. Foster

That is the most bizarre intervention that I have heard for a long time. It is extremely bizarre for the hon. Gentleman, whom I have heard speak passionately against our integration into Europe many times, to express any concern whatever about how industry is organised in France. I hope that the hon. Gentleman, who supports a party that was so passionately committed to privatisation, is prepared to acknowledge that privatisation has involved many problems. I hope that he accepts that, where privatisation involving selling off the family silver and putting money into the Treasury coffers, very often the organisation was sold off far too cheaply and the nation sold short.

Mr. Paul Keetch (Hereford)

Would my hon. Friend care to comment on the Government's proposals to sell off the Defence Evaluation and Research Agency? Given that that sell-off has few friends in the Ministry of Defence or the American Department of Defence and, indeed, no friends at all on the Select Committee on Defence, is it not another case in which the only friends of the sell-off appear to be in the Treasury?

Mr. Foster

My hon. Friend is absolutely right. It is interesting that that case follows the pattern of the way in which the Labour Government are now pursuing privatisation. Having opposed the way in which the railways were privatised, with massive fragmentation, the Government are proposing to split DERA in two and flog off three quarters of the total package to the private sector. That has implications not only for public safety, but for national security.

As we look back on privatisation, I hope that hon. Members on both sides of the House accept that many mistakes were made, details were often not properly thought through and long-term consequences were often ignored for short-term gain. Many such examples abound. We have only to consider the way in which employees lost out, especially in early privatisations. For example, when local government services were privatised, it was ludicrous that the employees who worked in the public sector ended up doing exactly the same job as before, but their wages were lower and they had poorer pensions and conditions.

Protection was rightly introduced under the Transfer of Undertakings (Protection of Employment) Regulations 1981. However, equally bizarrely, transferees are protected, but new employees of the privatised service provider have poorer conditions, so there is a two tier system, which is not likely to raise morale.

Mr. John Bercow (Buckingham)

rose—

Mr. Foster

The hon. Gentleman is desperate to intervene, so I shall give way to him.

Mr. Bercow

Desperate is scarcely the word. The hon. Gentleman refers to the undervaluation of assets at flotation to the private sector. Would he care to cast his mind back and concede that the significance of the privatisation of the bulk of the state industrial sector was that industries which, in public ownership, were costing the Exchequer £50 million a week under the previous Labour Government now contribute tens of millions of pounds a week to the Exchequer?

Mr. Foster

I certainly do not accept the hon. Gentleman's suggestion. How did the Conservative Government manage to sell off the railway system? Their first act was to pay off £1.6 billion in debt. They ensured that the company's assets were widely spread, and they took various steps to make the company more attractive. If the hon. Gentleman examined the figures for many privatisations—the railways are a good example—he would appreciate that more state money is being put in to subsidise the various services than previously.

Mr. Geoffrey Clifton-Brown (Cotswold)

The hon. Gentleman appears to criticise the privatisation of the railways. I wonder whether he is aware that the right hon. Member for Yeovil (Mr. Ashdown) asked: is not the answer to give BR access to the private markets to increase investment and to give private services access to the rail network to increase competition?—[Official Report, 15 October 1991; Vol. 196, c. 148.] Does the hon. Gentleman agree with his right hon. Friend?

Mr. Foster

I hope that the hon. Gentleman will acknowledge that his point is a bit of a damp squib. I had been warned in advance by several Conservative Members that an exocet missile would be coming at me—I was told that a former leader of my party totally disagreed with the way in which the Liberal Democrats, and our predecessor parties, voted on the privatisation of the railways. Fortunately, I took the opportunity to check the record, which showed that my right hon. Friend voted in the same Lobby as the rest of my colleagues.

Mr. Clifton-Brown

So the right hon. Gentleman said one thing and supported another?

Mr. Foster

No. If the hon. Gentleman studied my right hon. Friend's comments, he would appreciate that my right hon. Friend suggested the possibility of a state-run sector becoming involved within the market. We have no problem with that—we have discussed it on several occasions. It is sad that the hon. Gentleman precisely illustrates my concern about the dogmatic approach that the Conservatives adopt in this context.

Mr. Clifton-Brown

Will the hon. Gentleman give way?

Mr. Foster

No. I want to make progress.

Many examples show that the involvement of the private sector in the delivery of public services has not been very smooth. For example, during the early days, Group 4 ran our prisons, and, more recently, there were failures in the administration of housing benefit.

Mr. Bercow

Group 4 was seven years ago.

Mr. Foster

I gave a more recent example. Even more recently, the private sector attempted unsuccessfully to turn around failing schools. The allegedly incomparable business skills and entrepreneurial flair of the private sector have not, frankly, been a huge benefit. I suspect that few of us support the continued use of the skills and flair of, for example, Connex South Central. The tragedy of the Hatfield rail crash threw the dangers of inappropriate privatisation into stark relief.

Mrs. Eleanor Laing (Epping Forest)

Will the hon. Gentleman give way?

Mr. Foster

Not for the moment.

The public must wonder why, during the past fortnight, whole swathes of our rail network had to be closed at short notice, and whether benefits would result from an approach that fragmented the service into hundreds of parts, which competed against rather than co-operated with each other. They must also wonder how, in recent years, there has been a significant reduction in the number of people employed to check the safety of tracks, a reduction described by Railtrack as an efficiency gain. The public must wonder how Railtrack could put out to contract the safety checking and maintenance of the track and the supervision of that work. It appears that Railtrack wants to distance itself from any responsibility. The public will begin to wonder why the many different contractors, who are all busy trying to out-do each other, do not talk to each other about the crucial issue of rail safety.

Mr. Phil Willis (Harrogate and Knaresborough)

Does my hon. Friend find it bizarre that Railtrack's first action was to invest heavily in tarting up Britain's stations rather than in improving outmoded track and signalling systems? In other words, safety was compromised in order to create nice stations at Paddington, York or Leeds.

Mr. Foster

My hon. Friend is absolutely right, although I should go further. The Government recently introduced a safe stations award. We want stations not only to look pretty but also to be safe and to provide adequate protection to the people who use them. However, after two years, only 63 of 2,500 stations have reached the relevant standards.

Hon. Members may be particularly surprised by the fact that privatisation of the railways means that Railtrack is fined if it closes track to carry out safety work and fined if it keeps the track open and does not carry out safety work. One might say, "Heads, you lose and tails, you lose."

The public would be most surprised of all by a report in The Daily Telegraph on Friday, which stated that a busy commuter train had been deliberately driven over a broken track. Railtrack said that it was "standard practice" to pass a train over a suspected break at low speed to assess the defect's seriousness. I find that horrific. Surely Railtrack has more sophisticated testing equipment and does not need to roll a train with 200 passengers on board over damaged rail to assess whether it would be derailed. That is an appalling indictment.

Mr. Richard Livsey (Brecon and Radnorshire)

I am listening carefully to my hon. Friend's speech. Does he agree that the situation is partly due to the incompetence of the contractors chosen by Railtrack to do that work, which has often allowed the track to get into that condition? Does he also agree that we need a major investigation into the way in which the railway system was privatised and into the involvement of people who are connected with the Conservative party and with companies that benefited from that privatisation?

Mr. Foster

My hon. Friend makes his point extremely well. He may not be aware of the full details about the current contractual arrangements between Railtrack and its contractors. If hon. Members studied them, they might be very surprised. Some contractors are given the task of ensuring the safety of the track, and of determining how much work should be done on the track, but they are provided with the same amount of money regardless of how much work is done on the track. Clearly, there is at least a temptation for contractors to minimise the amount of work that is done.

The public's concerns about rail privatisation make them worried about the Government's proposals for public-private partnerships for the tube.

Mr. James Gray (North Wiltshire)

I sense that the hon. Gentleman is about to discuss air traffic. The central thrust of his remarks so far has been to suggest, in a slightly snide way, that somehow or other privatisation has led to a decrease in safety on the railways. If so, how does he account for the fact that the number of signals passed at danger are half what they were before privatisation and that the number of fatal accidents has been cut massively? Of course, we all have the recent tragedy in our minds. None the less, there has been a great improvement in rail safety since privatisation. How does he account for that?

Mr. Foster

I explain it by asking the hon. Gentleman to look again at some of the statistics. The number of broken rails is greater and the overall state of the track is worse than at privatisation. Those are the official figures and I hope that the hon. Gentleman will accept them.

Mr. Gray

Will the hon. Gentleman give way?

Mr. Foster

No, because we shall end up by batting statistics—

Mr. Gray

rose—

Mr. Foster

Very well, I will give way.

Mr. Gray

I am very grateful to the hon. Gentleman for giving way again, as it is most important to correct the point that he made. He must have listened carefully to the evidence given by Mr. Gerald Corbett to the Transport Sub-Committee of the Select Committee on the Environment, Transport and Regional Affairs, last Wednesday. Mr. Corbett pointed out that Railtrack was checking 1,800 individual sites and that not one was in anything like the same condition as the broken rail at Hatfield. He said that the state of the railways was vastly better than it was before privatisation. The hon. Member for Bath (Mr. Foster) is wrong to say that the railways are worse.

Mr. Foster

This could become a rather silly argument between the hon. Gentleman and me. I hope that he will agree that merely to judge the matter on whether bits of track are in an identical condition to that found at Hatfield is not a fair way to assess the overall quality of the track. It is generally accepted that, overall, the track is in worse condition than at privatisation.

If the hon. Gentleman wants to get technical, it is more difficult to understand why gauge-corner cracking appears in the new high-stress, steel rails that did not exist at the time of privatisation—[HON. MEMBERS: "Ah."] The installation of those new rails may be leading to greater difficulties than occurred with the old rails. The right hon. and learned Member for North-East Bedfordshire (Sir N. Lyell) looks surprised, but he should be aware that, in the current programme of work, Railtrack is replacing the more modern rails with the softer type that was used previously. I hope that the hon. Member for North Wiltshire (Mr. Gray) will not pursue the matter.

Because of the public's concern about safety as a result of the way in which the railway was privatised, they are understandably anxious about the Government's proposals for the privatisation of National Air Traffic Services and of the London underground. All hon. Members agree that the underground desperately needs urgent attention. Hon. Members may have heard an item on the "Today" programme this morning, which referred to a District line driver who, yesterday, told passengers in his train that if you have a camera handy, there's a chance to record a rare sighting of a Circle Line train in its natural habitat. It is certainly true that there is overcrowding, delay, unreliability, dirt and discomfort. Decades of neglect have built up a huge backlog of faults and structural failings. We are all aware that at least £1.5 billion is needed to return the tube to a worthwhile condition.

Mrs. Laing

rose—

Mr. Foster

I want to make some progress.

How can we deal with the problems? The Liberal Democrat proposal was clear and was well publicised during the London mayoral elections: to allow Transport for London to raise money through a bond issue. We envisaged Transport for London having access to the market at a far cheaper rate—at less expense—than the Government's proposed private sector borrowing arrangement. Under our proposals, the money could be raised more cheaply, with the additional benefit that it would remain under democratic control.

I am sure that the Under-Secretary of State for the Environment, Transport and the Regions agrees that the majority of candidates who stood at that election supported our proposals—including the present Mayor of London. Indeed, the only candidate who supported the Government's public-private partnership obtained only 13 per cent. of the votes—such was the popularity of the Government's proposal.

Yet again, the Government are making a proposal that would lead to the fragmentation of a service—in this case, the tube—allowing different people to buy the various fragments. It is somewhat worrying that the Health and Safety Executive notes that some of the potential purchasers are bodies and organisations which were implicated in some of the safety problems with the national rail network. We are deeply concerned about the Government's approach for London underground and equally worried about their proposals for NATS.

I hope that we all agree that the only purpose of NATS is safety. The Deputy Prime Minister said: Air traffic control is all about safety, which must be paramount.—[Official Report, 20 December 1999; Vol. 341, c. 535.] In London and the south-east, at any time of day, thousands of aircraft are circling overhead, waiting to land. The demands on air traffic controllers increase monthly. There is little room for manoeuvre.

Despite all those pressures, NATS has an excellent safety record under its current arrangements. There can be no justification for anything that puts that record at risk. The PPP would provide an unnecessary and dangerous distraction and would put safety in conflict with profit—the same conflict that was so disastrous for our railways.

The Government claim that they have to adopt that arrangement, but they do not have to do so; it is not even necessary. We agree with the Government that it will be necessary to raise about £1 billion for investment in NATS over the next 10 years. Their proposal is to sell off 51 per cent. of NATS, possibly selling off more at a later date. The new partner will be expected to raise the money for that investment.

Our argument on raising money for the tube also applies to NATS. It would be cheaper for the Treasury to raise the money than if it were raised by a private sector borrower. Such a borrower would want a return of between 10 and 20 per cent. compared with the 8 per cent. needed by the Treasury. Something will have to go. Our concern is that the something will be safety.

Mr. Christopher Leslie (Shipley)

Many of the hon. Gentleman's comments will strike the general public as scaremongering. Is he aware that air traffic control in the majority of Britain's airports is already in private or independent ownership? Is he really saying that those airports are less safe as a result?

Mr. Foster

The hon. Gentleman makes the same mistake as those who suggest that we should no longer be concerned about airline safety after the privatisation of British Airways. The reality is that there is a difference between safety under a monopoly supplier and under a regime of tough competition. The provision of air traffic control is subject to competition at individual airports, just as there is competition between airlines. However, NATS is not subject to competition.

It is no wonder that so many people oppose the Government's proposals—pilots, air traffic controllers, the chair of the Transport Sub-Committee, and a large number of Labour Members and peers. It is not surprising that the Sub-Committee described the proposal as the worst of all possible options. However, the Government seem to refuse to listen. They are unable to listen to those who know what is at stake; unable to learn from the mistakes of rail privatisation and unable even to remember what they said four years ago.

Everyone in the House remembers the pledge given at the 1996 Labour conference by the current Chief Secretary to the Treasury. He was cheered to the echo for saying: Our air is not for sale. Liberal Democrats agreed with him then, and we continue to agree with that sentiment. We have seen no evidence to justify changing our mind.

The wording of the Government's amendment to our motion is interesting. Labour Members should note that it states that the House should welcome the Government's pragmatic policy of developing Public Private Partnerships for National Air Traffic Services and the London Underground. Hon. Members should note the word "pragmatic".

Liberal Democrats certainly prefer a pragmatic to a dogmatic approach. The Oxford English Dictionary defines the word "pragmatic" as dealing with things sensibly and realistically. We certainly do not accept that the two PPP proposals are sensible or realistic. However—given the Government's apparent refusal to listen to anyone—they perhaps used in the amendment the 16th century definition of the word "pragmatic". That definition is, "busy, interfering, conceited." It is my contention that pressing ahead in the face of significant opposition based on the failures of similar moves elsewhere is conceited. It is not pragmatic; it is dogmatic.

We hope that Members on both sides of the House will join together to support our motion and to oppose the dogmatic approach to privatisation being adopted by a Labour Government.

8 pm

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Keith Hill)

I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof: deplores the previous Government's incompetent privatisation of the railways which left the network fragmented, cost taxpayers billions of pounds and brought rail travellers hours of delays; welcomes the Government's creation of the Strategic Rail Authority to give direction to the industry from an industry-wide perspective rather than from the narrow interests of individual companies; recognises that the Government's 10-year plan is delivering the largest investment programme for the railways for generations to tackle the problems caused by years of under-investment in the public and private sectors; welcomes the Government's pragmatic policy of developing Public Private Partnerships for National Air Traffic Services and the London Underground, enabling much needed investment and private sector financial and management skills to be introduced to the public services while safeguarding safety and the public interest; and regrets the official Opposition's dogmatic pursuit of privatisation for the London Underground and the National Air Traffic Services. I have frequently proclaimed my affection and respect for the hon. Member for Bath (Mr. Foster), but I fear that he has slipped from his normal high standards on this occasion. I found his speech both disappointing and disingenuous. I could think of another word with the prefix "dis" to describe it, but our parliamentary conventions preclude my use of such a word. However, we all know what is going on here—it is the technique of the big slur.

The hon. Gentleman begins by citing the widespread, and perfectly understandable, public dissatisfaction with the privatisation of the railways by the previous Administration—a dissatisfaction that has certainly been heightened by recent tragic events and the continued shortcomings of the railway network—but then seeks to tar the Government's wholly different proposals for the public-private partnerships in London Underground and National Air Traffic Services with the same brush. It is an attempt at condemnation by innuendo, or guilt by association. It is typical Liberal Democrat opportunism and, as usual, it will not work.

Mr. Paul Tyler (North Cornwall)

I do not remember whether the Minister held responsibility for transport issues in the previous Parliament, but does he recall that the Liberal Democrats urged Labour Members to set their faces firmly against the privatisation of Railtrack by making it clear that, if it were to be privatised by the Conservatives, it would be bought back by an incoming Labour Government, with Liberal Democrat support if that was the way that the country had voted? We could have then stopped privatisation in its tracks. I judge from his comments that he still believes that the privatisation of Railtrack was a mistake. Why did the Labour party at that stage not take up our proposal?

Mr. Hill

I am always rather amused by the Liberal Democrats' rewriting of history. I notice that it is always the Liberals who lead on the issues and the rest of the House seems to follow tamely. However, the Labour party came to a clear judgment before the election and we stated in our manifesto that the reacquisition of the privatised railway system was a cost that was simply not worth bearing when set against other demands on the Exchequer from the nation's priorities of health, education and law and order. That is why we are working to improve the privatised railway system that we inherited in ways that I hope, with the indulgence of the House, I shall be able to describe soon.

The motion before the House is unacceptable and ought to be rejected. It ought to be rejected not because, as is usually the case, an opposition motion is an expression of opinion that does not reflect the opinion of the majority of the House, but because this motion is—in its premises—quite simply factually wrong.

The motion describes the Government's proposals for London Underground and NATS as "privatisation". That is just plain wrong. If we were planning to sell off the public's stake in these concerns lock, stock and barrel and pass over ownership and control in their entirety and in perpetuity to the private sector, that would be privatisation. That is what privatisation meant for water, for gas, for electricity, for telecommunications, for coal, for buses and for the railways under the Tories.

Mr. Don Foster

Given that the Minister's definition of privatisation involves selling off the entirety of a service, will he tell us that, having sold off 51 per cent. of NATS, the Government have no intention whatsoever of selling off any of the remaining 49 per cent? Were he to say that, he would be saying something that totally contradicts what he said in Committee during our consideration of the Transport Bill.

Mr. Hill

If the hon. Gentleman gives me a chance, I shall come to that issue in due course. What I said with crystal clarity in Committee—as he knows, that is my style—was that any such decision would have to come back to the House for its democratic decision.

By contrast with the privatisation carried out by the Conservatives, in the case of National Air Traffic Services, the taxpayer will not only retain a major shareholding in the public-private partnership. In addition, the Government will appoint "partnership directors" to protect the taxpayers' interest as an investor. Board unanimity will be required on dividends and reinvestment, and a special share will be entrenched in the new company's articles of association to protect the taxpayers' rights in key matters, such as the issue of new shares and dividend policy. Frankly, it is ludicrous to describe those arrangements as a privatisation.

Mr. Peter Lilley (Hitchin and Harpenden)

Will the Minister elucidate a little? Is he saying that selling 51 per cent. does not constitute privatisation and, therefore, that the previous Government's initial sale of 50 per cent. of British Telecom was not an act of privatisation?

Mr. Hill

I am certainly saying that the Government's proposals for NATS do not constitute privatisation. Indeed, if the right hon. Gentleman had not been so keen to make his point, he might have listened to the reasons that I adduced a little more carefully. If he had, he would have found out that the safeguards entrenched in the arrangements for NATS are totally distinct from, and contradict, any arrangements made for BT or any other privatisation under the previous Administration.

Mr. Clifton-Brown

rose—

Mr. Hill

I shall wait for a moment before I receive the exocet that has been prepared for me by Conservative central office.

To return to my thread, it is equally ludicrous to describe as privatisation our proposals for London Underground. They will leave the new public sector London Underground with responsibility for operations and safety, and they mean that a modernised London Underground will return to public ownership at the end of the PPP period.

Mr. Clifton-Brown

rose—

Mr. Hill

I take pity on the hon. Gentleman, so I shall let him have his moment of glory.

Mr. Clifton-Brown

I am grateful to the Minister for letting me have my moment of glory. Does he agree with the report of the Select Committee on the Environment, Transport and Regional Affairs? It says: The current proposal for a public-private partnership for NATS is, in our view, the worst of all the possible options. Given that their lordships—with the assistance of Liberal Democrat peers and some Labour peers—defeated the Government on an important amendment to the Transport Bill last week, will he clearly state whether he intends to try to overturn that amendment in this House and to bring about a public-private partnership for NATS?

Mr. Hill

On the hon. Gentleman's first point, we do not agree with the judgments expressed in the report of the Select Committee on the Environment, Transport and Regional Affairs. We found them ill considered and ill thought out. On the question of support for the amendment carried in another place, our position is entirely clear. We do not intend to jeopardise the new investment that will flow from the PPP and the improved project management. That is why we shall seek to reverse the amendment in this House.

Mr. Robert Syms (Poole)

Will the Minister give way?

Mr. Hill

I shall give way to the hon. Gentleman, but I do not wish to detain the House for as long as the hon. Member for Bath did. After this intervention, I shall seek to make some progress.

Mr. Syms

A second amendment carried by the Lords was designed to protect the pensions of NATS employees and to include provision for doing that in the Bill. Do the Government intend to overturn that amendment, too?

Mr. Hill

We want to look at that amendment very carefully, and we will return to that in due course.

The public-private partnerships that we are putting in place for London Underground and NATS are neither privatisations nor, as the motion would have it, remotely inspired by dogma. After all, by what stretch of even the Liberal Democrats' lurid imagination could the Labour party and this Government be charged with a dogmatic commitment to privatisation? On the contrary, those PPPs represent carefully devised, appropriate and pragmatic solutions that deliver the best possible outcomes for the underground and NATS. They are the solutions that the Government's amendment commends to the House.

It is indisputable that the British Rail privatisation was flawed. The Labour party spelled out its alternative approach in its general election manifesto—and we have delivered in government. We have set up the shadow Strategic Rail Authority to provide leadership and direction. The Transport Bill will establish the SRA proper and provide for stronger accountability and enforcement. Our 10-year plan provides the resources for massive investment in the railway: £49 billion over 10 years, including £7 billion of public money for a rail modernisation fund.

In the past few weeks, the Rail Regulator has published the results of his review of Railtrack's access charges for maintenance and renewal, including necessary expenditure on safety improvements. By the end of this year, Railtrack's industrywide safety responsibilities will be separated from its commercial operations. Next year, Lord Cullen will publish his report on the Ladbroke Grove accident and on the culture and management of railway safety. Those initiatives herald more investment, more public accountability and a better deal for passengers—including a safer railway.

Mr. Lembit Öpik (Montgomeryshire)

Will the Minister give way?

Mr. Hill

I will give way, but after doing so I must make progress.

Mr. Öpik

On a non-confrontational point, the Minister is describing how he will try to make rail privatisation work. One very common and specific problem arises when companies such as Northern Spirit and Virgin Trains abandon passengers at stations other than their final destination. Customers often have to haggle with station staff for a taxi or some other means of completing their journeys. Will the Minister give me a commitment that one thing for which the money and his legislative powers will be used will be ensuring that those companies make it easy for customers to get to where they need to go even if they are abandoned at a station on the way?

Mr. Hill

In a non-confrontational way, I entirely agree with the hon. Gentleman that a very dissatisfactory situation all too often prevails in our railway system. Frankly, the train operating companies ought to be improving their act right now. We inherited some flawed franchising agreements. We are in the process of refranchising and certainly expect to wrest from those contracts much higher standards of customer care along the lines that the hon. Gentleman has outlined.

I think that we can all agree on the scale of the financial problems faced by the underground, and the need for urgent measures to deal with them. The previous Government left a huge investment backlog on the tube, and their public expenditure plans envisaged still further cuts in funding.

We set about dealing with the underfunding immediately. In March 1998, we announced an additional £365 million of funding for London Transport over and above existing plans. In July 1999, we announced that we were allocating £517 million of additional resources to London Transport over two years, to help it deliver real improvements to passengers in the run-up to the PPP. In the Budget this year, we announced that a further £65 million would be allocated to London Underground in 2000–01—plus an additional £40 million to deal with claims on the Jubilee line extension.

The extra funding still does not provide a long-term solution to the underground's funding problems. Even with the increases, London Underground is left with changes every year to its funding arrangements, making it impossible for it to plan its investment efficiently. That is what the PPP is designed to transform. It is quite wrong to suggest that the PPP is in some way like rail privatisation, and that it will somehow undermine safety. In fact, the whole point of the London Underground PPP is to learn from the mistakes of previous privatisations, not to repeat them.

That is why the PPP structure is so different from a privatisation. It is based on fixed-term contracts rather than permanent transfers to the private sector. So assets will return to the public sector in a much improved condition. The PPP structure retains clear public sector accountability from the outset. Statutory safety responsibility for the whole underground remains with public sector London Underground. Indeed, the recent Industrial Society report that was commissioned by the Mayor of London on the PPP said that it recognises the special effort made by Government in ensuring that safety is managed centrally and rests ultimately in public sector hands.

Dr. Jenny Tonge (Richmond Park)

The Minister will appreciate how successful bond issues for funding public transport have been in the United States. Will he explain why it is such a bad idea here and why the Government will not consider it?

Mr. Hill

That is exactly what I intend to do. I noticed that the Front-Bench spokesman, the hon. Member for Bath, skated over the Liberal Democrat proposals. I intend to give them careful scrutiny and to explain precisely the reasons for rejecting them.

I return to the question of the proposed PPP for London Underground. Unlike on the privatised railways, there will be no separation between train and track infrastructure maintenance. London Underground will retain responsibility for all operational matters—from switching signals to driving trains and staffing stations. So it will be a far more unified system.

The PPP will also be subject to two key validation tests: safety and value for money. On safety, we have consistently made it clear that the PPP will not proceed unless it can be shown that it will make a substantial contribution to improved safety. As I have said, the safety regime for the PPP retains a structure in which statutory responsibility for safety of the whole network remains with public sector London Underground.

The transition to the new arrangements for the PPP requires three sets of changes to London Underground's safety case—to ensure that safety is maintained and improved both in the run-up to the PPP and when it is under way. Two of those revised safety cases have already been approved by the Health and Safety Executive. The transition process also requires a safety audit, which will begin shortly, and the submission and acceptance of the third set of changes to the safety case.

I am not making any new political commitment when I say that the PPP will not proceed unless and until the HSE has taken an independent view and has stated that it is satisfied with the revised safety case. I am simply stating the legal position. Our plans will deliver a network that is publicly run, publicly accountable and properly financed. It will reverse the increase in serious injuries that we have seen on the tube over the past 10 years.

The second key test for the PPP, after safety, is value for money. As the House will be aware, London Transport and its advisers have been devising a public sector comparator against which the bids for the PPP will be judged. Bids will be considered against not only traditional funding methods but a public sector bond option. We have published the methodology for that comparator, which has been independently audited by KPMG.

Most importantly, in August, the National Audit Office—Parliament's public expenditure watchdog—announced that it would bring its scrutiny of the comparator forward so that it could report on it before contracts were signed. That will ensure that the comparator represents a fair and rigorous test of the PPP bids.

Mr. Bercow

Will the Minister give way?

Mr. Hill

I know that the hon. Gentleman has not yet intervened, but I hope that he will forgive me for not giving way because I need to make progress. If I feel that I have made satisfactory progress, I will of course yield to him in due course. After all, he used to represent me on Lambeth council—albeit not, I hasten to add, with the benefit of my vote.

The Liberal Democrats' alternative to the PPP is a bond option. Fair enough—we are not dogmatically opposed to bonds, but we do not believe they are the right solution for the underground. They would do nothing to bring management efficiencies to the system; they would introduce a further delay in getting a financing regime in place; and, as the Industrial Society itself concedes, they would not be a realistic prospect without new powers to raise local taxes. We do not believe Londoners want more delay—perhaps of up to two years—in modernising the tube, nor do we think that they want to pay more taxes, or to confer tax-raising powers on the Mayor and the Greater London Assembly.

We are convinced that the PPP is the best option for NATS; let me explain why. NATS provides a world-class service, but air traffic is growing by more than 5 per cent. each year and increasing delays are inevitable unless significant improvements are made to the system. We are already addressing these needs: the £700 million Swanwick centre will open in the winter of 2001–02. However, NATS managers say that they also need more than £1 billion over the next 10 years to invest in safety. In particular, major investment is needed to bring the new Scottish centre at Prestwick on stream when it is needed, probably by 2007–08.

Under the PPP, we will bring in a long-term strategic partner from the private sector that will fund and deliver the next generation air traffic control system. Under the PPP, NATS will be freed from Government financial constraints. With stable and long-term funding provided by the strategic partner, NATS will be able to plan its investment to provide significant benefits to the United Kingdom, airlines and their passengers as soon as possible. Freedom from Government financial constraints will also put NATS in a good position to export its expertise at a time when there is an increasing realisation that international air traffic control systems must be consolidated if they are to be able to cope with continuing increases in air traffic.

We have rejected the privatisation of NATS precisely because we do not believe that it would provide the necessary safeguards that the travelling public deserves. Crucially, under the PPP, we are able to build in specific safeguards that would not be possible under a privatisation. For example, as I have already said, by retaining a significant shareholding, the Government will retain the right to appoint directors to the board of the company. Under the PPP, the main strategic decisions of the NATS board will require a unanimous vote of all directors, including those who will be appointed by the Government. Under that structure, the Government and the taxpayer will also be able to share in the future success of the PPP and to have a say in key decisions affecting the company. None of that would be possible with a 100 per cent. sell-off.

Air traffic control is all about safety. That will continue to be the overriding priority under the PPP. That is why we have amended the Transport Bill in another place to make it clear that maintaining a high level of safety in the provision of air traffic services must have priority over every other consideration when functions are exercised under the legislation.

Of course, setting up the PPP is also crucial in delivering the final and complete separation between safety regulation by the Civil Aviation Authority and the provision of air traffic control services by NATS. The mid to late 1990s saw a 35 per cent. increase in the number of risk-bearing air proxes involving commercial air transport. That is why we are determined to strengthen aviation safety by separating air traffic services from safety regulations, which is something that the industry, the Select Committee on the Environment, Transport and Regional Affairs and other aviation interests have sought for some years now.

It goes without saying that our proposals for a NATS PPP have proved contentious, but everyone, including the Select Committee and the unions, accepts that doing nothing is not an option. We have considered various other funding mechanisms, including trusts, bonds, and publicly owned companies, but we are convinced that none of those will deliver all the benefits that a PPP will provide.

The Liberal Democrats want a not-for-profit company to take over NATS. The reasoning behind this is, I assume, to establish that profit is not put before safety. Let me reassure the House that the PPP will not jeopardise safety: rather, it is designed to enhance the safety regime for air traffic control. Safety regulation will remain firmly in the public sector in a reformed CAA and, as I have just said, we have amended the Transport Bill to reiterate our commitment to safety. In short, I do not accept the profit-before-safety argument, and nor should the House.

I should stress that there is nothing in the PPP structure or in the Transport Bill that would prevent a viable not-for-profit company from becoming our strategic partner, but for us to take a view on what offers the best future for NATS, there needs to be a competitive process which allows rational assessment of the bids we receive. Any not-for-profit bid needs to stand up and be assessed alongside the others. Limiting the selection criteria in the way the Liberal Democrats propose would knock out potential candidates who might, at the end of the day, be a better partner.

Other funding mechanisms for NATS have also been mentioned in the past, including trusts, bonds and publicly owned companies. We have considered those options, but we are convinced that none of them will deliver all the benefits that a PPP will provide. Last week, we announced that we have three robust potential strategic partners for NATS. We shall now work with those world-class consortiums to find the best option for the future of the company and of air traffic control in the UK.

I have gone out of my way to set out the grounds for rejecting the alternatives for the future of NATS and the London Underground propounded by the Liberal Democrats. Given the deplorable terms of their motion, there are those who might take the view that I have been too generous and reasonable in my response. However, let us not lose sight of the real villains of the piece: the gung-ho privatisers of the official Opposition, who, despite all the evidence, still advocate the wholesale privatisation of the underground and air traffic services. Will they never learn?

The Conservatives privatised and deregulated the bus industry, with the result that bus passenger journeys went down by a third and bus services in the countryside were decimated. The Labour Government have stemmed the decline in bus passenger numbers: through our rural bus grant, last year, 16 million new passenger journeys were enjoyed by country people benefiting from new and enhanced rural bus services.

The Conservatives privatised the railway, broke it up into 100 parts and got an appalling deal for the taxpayer into the bargain.

Mr. Bercow

I am grateful to the Minister for giving way, even though he has never allowed the facts to intrude on his private prejudices. Given that, this year, London Underground will receive an investment that is precisely £282 million less than was provided in the last year of Conservative Government, how does he justify the expenditure by his Administration of more than £60 million on consultancy fees in connection with a botched privatisation?

Mr. Hill

That is rich coming from a member of the Conservative party, which spent £450 million on a rail sell-off that will deliver less to the travelling passenger and the taxpayer than the London Underground PPP will achieve. Let me allow the facts to intrude on the debate: were the hon. Gentleman to take the trouble to look at the forward projections of the public expenditure figures produced by the last Conservative Government in 1996, he would find that projected investment by central Government in London Underground this year was zero. He is on pretty thin ice when he condemns the Labour Government, who have invested £1.6 billion in London's underground system in our three years in office.

When the Tories left office, Railtrack was £700 million behind in its investment programme. With Labour, rail investment is now 33 per cent. higher than in 1997, and we have announced plans for a massive injection of £49 billion into the rail system over the next 10 years. The Conservatives left a £1.2 billion investment backlog in the tube; they made a £400 million cut in tube investment in their last Budget; and, if they had stayed in office, they would by now have cut Government funding to London Underground to zero. Yet now the Conservatives have the effrontery to propose the full-scale privatisation of London Underground, breaking it up into five companies competing with each other, and they still want to sell off NATS lock, stock and barrel. If we are talking about dogma, they are the dogmatists. Like the Bourbons, they have learned nothing and forgotten nothing.

We have learned from the mistakes of the dogma-driven programme of the previous Administration. We are working hard to put right the mistakes made on the railways, and we have developed innovative, custom-built solutions for the underground and NATS. That is the right way forward, and that is why the House should reject the disreputable and opportunistic motion tabled by the Liberal Democrats and support the Government's sensible and forward-looking amendment.

I commend the amendment to the House.

8.30 pm

Mr. Robert Syms (Poole)

In the early years of the previous century, Sidney and Beatrice Webb and the Fabians had high hopes that central planning and governmental control were the way of the future. By the end of the century, the overwhelming lesson was that that did not work and never had any chance of working. Around the world—not only in Europe, but in the far east and South America—most countries, whatever the political persuasion of their Governments, are privatising industries and looking to free enterprise to deliver the goods.

A free enterprise system is more likely to generate wealth, innovation and enterprise. It is more likely to devolve decision making to millions of people who are consumers and who, through the market mechanism, make choices. That mechanism has proved over the past century to be the one that delivered the best economic outcomes. Even left-wing politicians have concluded that free enterprise is best and that one can control an agenda without having to own an industry.

The one party that seems to have a problem with that notion is the Liberal Democrats. I know that the past century did not treat them well, and if they continue in their current vein, this century will not treat them well either. The social democrats in Germany dropped their Marxist tag in 1959, the socialists in Spain did so in the 1970s and became the Government throughout the 1980s, and even the Labour party, one of the most conservative institutions in this country, dropped clause IV, because it did not see the relevance. [Interruption.] I hear someone mutter, "Not all of us." That is a good point—only last week an hon. Member asked the Prime Minister about renationalising the rail industry. The Labour party still has not quite adapted to the changes that its constitution has produced, but it is going in the right direction.

Free enterprise brings home the bacon and is the system most consistent with democratic government, because it devolves decision making. The Conservative party has been a defender of free enterprise for most of the past century because as a party we realise that property and a diverse economy are essential for a healthy nation. We defended free enterprise even when the Labour party tried to nationalise and control. We have always been proud of that, but not for any great dogmatic reason.

One could probably say of the private sector the same as Churchill said of democracy: he said that democracy was the worst system, except for all the alternatives. Free enterprise requires a sensible competition policy, and capitalists must be prevented from taking advantage of people, because the natural capitalist tendency is sometimes to do that. Government have a role to play in setting parameters, setting rules and ensuring that fraudsters have no place in the system.

During its 18 years in office, the Conservative party found that a shake-up of the large state sector would result in substantial gains. The burden on the state was extensive in terms of taxpayers' subsidies. As my hon. Friend the Member for Buckingham (Mr. Bercow) made clear, what has changed and what has assisted the current Chancellor's finances is that instead of the taxpayer being a contributor to many industries, many companies that were in the public sector are contributing through corporation tax and are more efficient organisations than they were.

Many industries that were privatised by the previous Government have been able to expand overseas, investing in other countries and creating great world-class companies. We are a great trading nation, and many companies have expanded and undertaken projects that they would not have considered in an earlier generation. We now have a worldwide perspective. The lessons of that Government have been learned not only in this country but abroad, where many Conservative policies have been adopted because of the benefits that have become apparent.

The Conservative party is pragmatic in its approach and looks at each individual case on its merits. The Defence Evaluation and Research Agency was mentioned earlier. It would be surprising to find my party in the same Lobby as the Government on DERA, because there are real concerns about our relations with the Americans and our defence interests. It would be wrong to suggest that we wanted to privatise everything in sight.

With regard to National Air Traffic Services, in principle we would prefer a proper privatisation, with a listing, to create a world-class company. However, NATS is a difficult matter. If it were an easy privatisation or a popular one, I expect that Baroness Thatcher or my right hon. Friend the Member for Huntingdon (Mr. Major) would have privatised it when in office, but the issues are complex and the benefits of privatisation are a little less obvious than in some other areas, not least because most of the income derived from NATS comes from international treaties negotiated across Europe and across the world.

The ability of NATS to generate more income is dependent on the volume of air movements increasing. Unlike previous privatisations, such as that of BAA, which is a great retailing company that has expanded across the world and opened many stores, NATS cannot generate significantly more income, as the Government evidently expect it to do.

We should remind the Government that when they were in opposition, they said that our air was not for sale. They did not include their proposals for NATS in their manifesto. What the Lords have done is sensible—they have asked the Government to think again. In the case of the British Telecom flotation, we allowed the electorate to make its choice. We passed legislation and had a general election. Only after we were confirmed in office did we proceed with the flotation. It would not be unreasonable for the Government to accept the Lords amendment, put it in their manifesto, fight an election on it and, if Labour is successful in being re-elected, carry it through.

As I made clear in an intervention, I am also interested in whether the Government will reverse another amendment to protect the pensions of NATS staff. I hope that the Under-Secretary will give us more information on that.

The Government's solution for NATS is bizarre. They began with a proposal for 49 per cent. Government ownership, 46 per cent. private ownership and 5 per cent. of shares for NATS staff. That was to be done not through a listing but by negotiating with a private strategic partner. The Government have no clear idea about how employees can benefit. There has been talk of setting up a trust to enable the 5 per cent. shares that the staff own to be internally traded. I hope that the Under-Secretary can give us more information about the way in which staff could benefit from such trading.

We are also worried about the identity of the strategic partner, and especially about foreign ownership. There is a defence element to the topic that we are discussing. Anxiety therefore exists about foreign ownership, especially by a company that has substantial state ownership. Now that the Government have received some expressions of interest, I hope that they can reassure hon. Members that the strategic partner is not likely to be a foreign company with heavy state ownership.

Mr. Geraint Davies (Croydon, Central)

How does the hon. Gentleman reconcile his worries about foreign ownership with his desire for wholesale privatisation?

Mr. Syms

We should do our best to protect an independent British company. A strategic partnership, possibly with a foreign-controlled company, which provides air traffic services, might skew policy. I would require substantial reassurance before entering into a relationship with a foreign-owned company, especially if it was owned by a foreign Government. There was talk about the French company Thomson CSF being one of the strategic partners. I should therefore like the Minister to tell us more about the number of organisations that have expressed an interest and with which the Government are currently negotiating. There is currently great uncertainty.

The Government believe in spending money on consultants and have spent £2.2 million on them. We had a short debate in Committee about the money that would be generated from NATS. There was some confusion about it. Perhaps the Under-Secretary can give us more information about the income that will be generated. He gave us an assurance in Committee that the money would be used by the Department of the Environment, Transport and the Regions, not the Treasury. On what will it be spent? If those questions are answered, we shall have a clearer idea of the Government's thinking.

Mr. Clifton-Brown

My hon. Friend knows that NATS has outstanding loans of approximately £300 million. That money is urgently needed to pay for the new facility at Prestwick. Will my hon. Friend press the Under-Secretary to say when the proceeds from the public-private partnership are likely to be received? If there is a delay, safety could be jeopardised because the facility at Prestwick will not be built on time.

Mr. Syms

I shall not answer my hon. Friend directly because the Under-Secretary heard the question and will doubtless take it into account. Time is limited, and several hon. Members want to speak.

The Government presented an optimistic scenario about the results of their policy. They stated in Committee that they and many people believed that the number of air traffic control centres in Europe would be reduced to two and that one of the benefits of privatisation—or PPP as the Government call it—is that Britain would be in a strong position to provide them. I cannot envisage other nations allowing their aerospace to be controlled from Britain. There is a danger that we might be the loser in that competition, especially if there is some foreign ownership, control or influence over what happens in our aerospace. Our solution is better; the Government's is over complicated, but at least they will have an opportunity to reconsider when the Lords amendments are presented.

The target date for the strategic partner has been given as March 2001. I hope that the Under-Secretary will be able to tell hon. Members whether the date remains relevant.

Hon. Members have raised the issue of safety. There is a strong culture of safety in aerospace and in NATS, and I do not subscribe to the idea that following the route that we are considering is likely to be detrimental to safety. The Minister clearly set out some of the reasons for that. Nevertheless, there are anxieties, and reassurances should be given. The Select Committee has criticised the proposal, but I shall not go into that.

We have heard that the Government intend to overturn the Lords amendment that relates to delay. We hope that the Minister will give us more information about what the Government intend to do about including protection for pensioners in the Bill.

We have a general concern about aerospace policy, and particularly the role of Eurocontrol, which we spent many happy and productive hours debating in Committee. We have concerns also about the European Community's single sky policy and how that will impact on Britain's aerospace policy.

We privatised the railways, and not for any great political benefit to the Conservative party. I do not believe that there was any such benefit to be gained by doing so. We privatised them because we felt that there would be a benefit to the nation. Mainly, we wanted to attract substantially more private money and investment into the industry. During the 40 years from 1952, the share of journeys made by rail fell from 17 per cent. to only 5 per cent. The amount of goods moved by rail dipped dramatically from 42 per cent. to 7 per cent. British Rail had been allowing our railways to go into genteel decline over many decades. If we are to have a world-class economy—ours is the fourth largest economy in the world—we must have a transport infrastructure that delivers the goods. I believe that the Conservative Government were right to privatise the railways. The benefits of privatisation will be seen only over a number of decades because of the backlog of under-investment of a nationalised industry.

I say that we did the right thing, but that does not mean that we got everything absolutely right. There are many areas where there can be improvement and systems need to be worked better. As we have heard in the debate, in various interventions, there is some division about whether the current system is safer than the previous system. The figures show that the current system is safer. However, we must all be concerned that our railways are not as safe as those in continental Europe. We should try to prevent any accidents. We must do far more in terms of safety.

The Opposition have raised several concerns, especially about the interaction of the Rail Regulator and Railtrack and the fining network. That is one area where we should examine carefully whether the post-privatisation system is working as it should. It seems somewhat perverse that Railtrack is fined if it tries to repair certain stretches of railway, and the fine level suggested by the Rail Regulator has increased quite substantially. We have concerns about that, and that is why the other day we called for the new deal that the Rail Regulator announced to be risk assessed. The regulator has no direct role in terms of safety. That was our major concern.

Overall, I think that privatisation has been successful. There was a 5 per cent. increase in passenger journeys between May 1997 and September 1999, with rail patronage now the highest in 40 years. Domestic rail freight increased by 15 per cent. in two years. More than 1,300 more trains are being run daily to meet increased demands. Since 1997, 13 new stations and more than 50 new freight terminals have opened. Rolling stock worth £1.95 billion has been ordered for delivery by 2002. There were 480 safe station car parks on the national rail network with CCTV or video surveillance by the end of January 2000. Much progress has been made, but much more still needs to be done.

London Underground caters for 3 million trips per week day, including journey-to-work trips made by 35 per cent. of those in central London. About 90 per cent. of tourists use the tube during their stay in London. It generates more than £1.1 billion in fare revenue annually. With 3,954 railway cars travelling on more than 1,140 km of track, the underground now carries more passengers than the entire rail network in the UK. It is undoubtedly the only real method of rapidly transporting large numbers of people round London.

It is important to get things right. That is desperately important for our capital. My hon. Friend the Member for Buckingham (Mr. Bercow) made it clear that when the previous Conservative Government left office, investment in the underground was substantially more than it is now. This year, the tube will receive £753 billion, which is a substantial reduction on the £1,035 billion that the Conservative Government were investing in 1996–97. Part of the problem is that the tube needs a great deal more investment. The delays and the Government's decision to go for such a convoluted public-private partnership have contributed to the rundown of the network.

In the Labour party 1997 election manifesto, the Prime Minister promised London: Labour will improve the Underground and guarantee value for money for taxpayers and passengers. However, the Government are unlikely to deliver on that with the plans they have set out. Labour's PPP has been described as half baked and either naive or dishonest by The Economist; a "convoluted compromise" by the Select Committee on the Environment, Transport and Regional Affairs; and towards the bottom of the list of options by Peter Ford, a former chairman of London Transport. It has not had the rave reviews that the Government would have wanted. The privatisation will be botched. My concern is that they will give privatisation a bad name, as they have with NATS.

Proposals for the tube include a one-off finance deal for a 30-year period to fund the investment and maintenance backlog. That cannot finance route extensions and new lines, which a privatised underground would be able to do. London Underground will still be run by a single state-owned company, and investment decisions will be dictated by politics. The nationalised industry culture will remain and there will be few incentives for higher standards and innovation. Furthermore, Maurice Fitzpatrick, head of economics at Chantrey Vellacott DFK, has estimated that fares will have to rise by 30 per cent. under Labour's botched privatisation. That is hardly value for money. At the start of the year, fares for a single journey in zone 1 increased by 7 per cent., but people have not seen much improvement in the service.

We want fully to privatise the underground, and we want to issue shares to generate badly needed funds for investment. We are also keen to give shares to Londoners, members of staff and season ticket holders, so that we give the tube back to Londoners. It is important that we get the policy right. Privatisation is one way in which we could improve the tube. It would certainly reduce traffic congestion in our capital. The Jubilee line—a fine Conservative project—has air conditioning, and it has shown how important it is that whoever takes over the tube spends money on air conditioning for the system and on building new underground lines. We do not want to stick where we are; we want to improve the network substantially.

The Conservative party is pragmatic. Conservatives believe in free enterprise. We are not ashamed of anything that we have done because we have delivered a more efficient economy. Its growth over the past few years—even under this Government—has, to a large extent, been due to the fact that it is more flexible and efficient, which is a result of many of the reforms introduced by the noble Baroness Thatcher and my right hon. Friend the Member for Huntingdon. Although we are concerned about the direction of the Government's policy on NATS, we are more concerned about their plans for the underground.

We are not complacent about the railways. We appreciate that there is a long way to go to improve the network, but we still believe that the direction that we took was right. If the Government believed that we were wrong, they would have tried to change the structure that they inherited when we spent six happy months together debating all the clauses—all the bits and pieces—of the Transport Bill. Apart from the Strategic Rail Authority and the regulator, the Government have, on the whole, run the system as they inherited it because they have accepted that they can work with the system that the previous Government left them. The Conservative party will be constructive. We certainly want to improve the safety record and, if the Government do what is right, we will back them.

8.54 pm

Mr. Geraint Davies (Croydon, Central)

I am pleased to return to the House after a week of paternity leave. A week ago, in the midst of a storm, my wife gave birth to a daughter. For that reason, my mood is naturally one of benevolence towards the Liberal Democrats, and I would have loved to agree with the sentiments expressed in their motion but for three reasons: the motion is opportunist, it is irresponsible, and it is financially incoherent.

The proposals that we are discussing must be seen in the context of Labour's 10-year plan for an extra £180 billion of investment in our transport infrastructure, to build a new integrated transport infrastructure for Britain. If I may put it simply, £56 billion of that will be private money that is being levered in by private-public partnership. The first question to the Liberal Democrats must be, where will that £56 billion come from? Will it come from another 2p on income tax?

While I am on the subject of financial incoherence—

Mr. Michael Moore (Tweeddale, Ettrick and Lauderdale)

I am sure the hon. Gentleman is prepared to acknowledge that the £56 billion of private investment is not spelt out in detail anywhere in the Government's proposals. Surely it is an indicative sum, with no backing whatever.

Mr. Davies

As I proceed, I shall isolate specific amounts of private-sector investment. Perhaps the Liberals will let us know where they would get the money.

As well as the extra 2p on income tax that the investment would inflict on the public, we must bear in mind the recent Liberal U-turn on fuel tax. Only a year or so ago, the Liberal Democrats were saying that their promised extra billions of expenditure would be predicated on environmental taxation, especially fuel taxation. They now say that for five years there will be a freeze on fuel duty, irrespective of the world price of oil. If the world price of oil falls from its current level of $34 a barrel to $10, and everyone suddenly starts driving more and doing a lot of environmental damage, the Liberals will apparently retain the freeze. That is sheer opportunism, and I fear that the leader of the Liberal party is on the waiting list for a spine transplant.

Mr. Don Foster

It does the House a great disservice to misrepresent the position of any political party. I know that the hon. Gentleman missed a debate on this subject, but he will, I hope, be well aware that the Liberal Democrats have changed their policy because they have now found better ways of targeting the key issues of congestion and pollution. When a better way can be found, it is sensible to change.

Given that we have changed, it is interesting to note that all independent commentators say that only the Liberal Democrats have transport policies that are likely to solve the country's transport difficulties.

Mr. Davies

That is false. In fact I did attend the debate that the hon. Gentleman mentioned, and I ask him to set the record straight.

If, for argument's sake, the world price of oil dropped to $10 a barrel in two years' time, would the hon. Gentleman's policy enable him to increase fuel duty? I think the answer is no.

Liberal policy is based on the assumption that fuel duty will not change, irrespective of the world price of oil. As I have said, that is an incoherent and opportunist position; what is more, it shoots a big black hole in the Liberal finances, ripped even deeper by the latest proposition that private money—it seems—is dirty money in today's Britain. That is an outdated and outmoded view.

Mr. Foster

I do not wish to go into the difficulties experienced by the hon. Gentleman and his party when the Prime Minister is not even prepared to support such moves as congestion charging. I simply ask the hon. Gentleman this: if on Wednesday the Chancellor of the Exchequer announces proposals to freeze fuel duty, as is widely predicted in the newspapers, will the hon. Gentleman vote against the Chancellor?

Mr. Davies

I will not support the proposal to freeze fuel duty for five years regardless of the global price of oil, as that would be foolish. I accept that my right hon. Friend the Chancellor may, in the short term, choose to freeze duty or change it in any way that he sees fit. However, he will give himself the flexibility to alter our tax position in the light of world conditions, the environmental threat and problems faced by this country. People listening to our debate should be aware that while we have slightly higher fuel duty than the rest of Europe, we have much lower tax overall. Our tax position is correct, not the European one. We will find that harmonisation is moving towards the Labour way, not the running-scared Liberal Democrat way.

As for privatisation versus PPP, it has been suggested that privatisation and the Government's position are precisely the same. I am a member of the Public Accounts Committee, which, in July 1999, received a report on the privatisation of our railtrack system, which took place just before the 1996 election and which, in my view, was an appalling act of robbery. The British taxpayer saw our railtrack system sold for less than £2 billion but, by July 1999, when we received the report, it was worth £8 billion. People will not witness that sort of situation under this Government. The Tories take the same position on the tube, and believe that we should sell it off cheap so that, before anyone knows it, the private sector owner will have jacked up prices and reduced the number of people who use the tube. That would serve neither the public purse nor the passenger and would be a Tory rip-off that, like the privatisation of the railways, would lead to a fragmented and incoherent shambles.

We inherited such a position, which is why we introduced the Strategic Rail Authority, which has a co-ordinating role. We shall invest an extra £60 billion through our 10-year-plan, much of which will be private money. On the issue of PPP and Railtrack, hon. Members may not know that the SRA has 1 million shares in Railtrack. If there is increasing subsidy from the public sector, one wonders whether the public think that we should take a greater equity share in getting feedback and having a proper PPP. That should be part of the future debate about the restructuring of Railtrack, not least because a greater Government stake would enable Railtrack to borrow more money for investment from the City. A greater stake would mean less public investment and more investment from the private sector.

Our debate is about how we maximise the leverage of private sector money in our transport infrastructure. That is a precondition for safety, as investment is the first thing that safety needs. The Liberal Democrat motion does not allow for the approach of trying to maximise partnership, investment and value for money for the taxpayer. The Public Accounts Committee will examine that matter when it looks at its options.

Before coming to this grand place, I was the leader of the largest local authority in London and oversaw the introduction of Tramlink. I very much hope that you, Mr. Deputy Speaker, will come and visit Tramlink, which, in six months of operation, is already the most successful tram system in Britain. It is more successful than the system in Manchester and has levered in £100 million of private money, as well as £125 million of public money. Unlike the Jubilee line, which was heralded by the Tories as a great Tory success, Tramlink was not delayed for a year and billions of pounds over-budget because we managed the contract correctly. In fact, Tramlink was delayed, which shows that the public sector does not have a monopoly in delays. However, the cost of that delay—or the risk—was transferred to the private sector.

The issue is therefore about finding value for money and transferring risk. It is all very well for the hon. Member for Bath (Mr. Foster) to say that it is cheaper for the Treasury to borrow money, but is that so? One must look at cost and time overruns and consider their price. The matter is not just about the cost of capital, so the Liberal Democrat position is rather naive. There is a choice between Liberal Democrat dogma, Tory failure and the success of this Government.

The first question that has to be asked is—I have been asking it throughout—do the Liberal Democrats rule out a public-private partnership? If they do not, what sort of PPP do they rule in? Then we are in a different debate.

Someone asked me specifically for examples of extra cash. The channel tunnel is levering in an extra £3.3 billion, the tube £8 billion and National Air Traffic Services £1.3 billion. That is £12.6 billion. Where is that coming from? "Another few pence on income tax," is the normal response from the irresponsible Liberal Democrats.

Then we get into, "We will not do that. We will take the Canadian trust model, we will do tube bonds or whatever." The Minister has made it clear that the Public Accounts Committee will analyse the value-for-money options objectively. As a member of that Committee, I am open-minded about the different vehicles. The issue is how to get the best value for money in the right amount of time to deliver the standards that the public demand after years of neglect from the Tories. It is about independent regulation, risk transfer and investment in safety.

The next question that was posed is: can the private sector deliver safety? The dogmatic presumption of the Liberal Democrats was that private means unsafe because of profit-grabbing capitalists. We only have to compare British Airways with Aeroflot. What are the issues? They are investment and regulation, not simply ownership.

After all, let us face it: one of the reasons why there is underinvestment in NATS is because the Tory Government had other priorities for expenditure. If they wanted to spend more on tax cuts, the national health service or whatever, they could squeeze NATS. PPP gives a guaranteed cash flow and certainty for investment. It enables NATS to invest in innovation in safety, rather than leaving the situation static.

Air traffic is growing year on year at 6 per cent. To a great extent, the challenge in terms of safety is an information technology challenge: how do we get the computer systems, the IT technology, to manage the system? The question is: where are the skills in the marketplace? As a member of the PAC, I have seen many reports on public sector management of computer systems for national insurance, immigration or whatever. It is not a very good record. The skills are in the private sector. That is another reason why we need a PPP—to ensure investment, smart purchasing, smart operation and safety.

Safety is a cost—it is true—but it is also a product for sale. It needs innovation. People who give me lectures but who have never been in a business in their life might not understand that.

Again, it is about skills and technology. Who knows about that? What is the right structure? "How much public, how much private?" is not an a priori dogmatic question. It is an empirical question about what is right—what is the right mix in a certain situation. What can be tried and tested, rather than rejected through dogma from the Tories, who say simply that private is right, public is wrong, or the Liberal Democrats, who also seem to have a dogmatic approach?

This country is moving from years of neglect into a new era—£180 billion, a 22 per cent. real terms increase, of investment in rail, road and all our transport to deliver a modern, safe and integrated transport system for the new millennium. I support the Government's bid to do that.

9.8 pm

Mr. Tom Brake (Carshalton and Wallington)

It is a pleasure to follow the hon. Member for Croydon, Central (Mr. Davies). I am pleased that he has had a new child, but in that case, he might have followed what I believe is current Government policy and taken two weeks' parental leave, rather than one.

It is my pleasure to focus on just one aspect of the debate: the part privatisation of London Underground. The tube is the lifeblood of our capital city. Just last week, a report by Business Strategies said that poor transport is jeopardising strong jobs growth in central London, so having a smooth-running tube is not optional. It is a vital service for Londoners and visitors to London. It needs to be safe, clean, affordable and reliable. The way in which London Underground is funded is vital in ensuring that those objectives are met.

After 18 years of underfunding that left the tube with a £1.2 billion investment backlog, privatisation is the best option that the Tories can think of. Conservative Members' ideological commitment to privatisation is very reassuring. It shows that they are incapable of change, and that they will be flying the tube privatisation banner high as they lose their seats at the next general election.

Privatisation will not work for the underground. It would be a repeat of the railways disaster. Gerald Corbett said that railway privatisation was designed to maximise the proceeds to the Treasury. It was not designed to optimise safety, optimise investment or, indeed, cope with the huge increase in the number of passengers. —and he should know about the effect of railway privatisation.

In view of their priorities, we can only hope that Conservative Members never get their hands on our public services again. They have already made their intentions, including at least £8 billion of cuts nationwide, very clear. That amounts to a cut of £24 million in my London borough.

If underground privatisation follows the Tories' past record of stunning business acumen, the underground will be sold off for much less than it is worth. As we have heard today, privatisation and undervaluation of Railtrack lost taxpayers £6 billion. Additionally, privatisation does not even guarantee that the private sector will invest in the tube. Railtrack has had to be dragged kicking and screaming to deliver its investment programme.

Labour's public-private partnership may seem better than privatisation, but in an attempt to get the best of both worlds, Labour runs the risk of getting the worst of both. There are a number of problems with the public-private partnership. The Minister quoted the Industrial Society, but he did not quote its statement, as reported on BBC news in September, that the Government's plans to modernise London Underground represent "poor value for money" and could put passenger safety at risk.

The Government can no longer dismiss those safety concerns—

Mr. Hill

The hon. Gentleman should read the whole report.

Mr. Brake

The Minister should read it again.

Fragmentation of the railway industry led to deteriorating communications. How can the Government guarantee that a similar break-up of London Underground will not lead to an identical breakdown in communications? We have heard nothing from the Minister on that point.

PPP does not make sense financially. Glaister, Scanalon and Travers suggests that over a 30-year period, a bond issue would work out at about £80 million cheaper per annum. That would be a very significant saving.

PPP could also cost travellers more. Under the Government's current expenditure plans, grant funding for London Underground is to be withdrawn and the underground is to be funded by fares revenue alone, with the possible exception of major extensions to the network. I have heard rumours that the Government may cave in and accept that grant funding will remain necessary in 2001–02 and beyond. If that is correct, I hope that the Minister will confirm as much, as it would set many Londoners' minds at rest. If he cannot give us that reassurance, the public-private partnership and the withdrawal of grant, taken together, could mean that investment costs are shifted even more on to passengers.

Additionally, public-private partnership could mean that one of the problems with our tube system—affordability—is exacerbated. If fares continue to increase at current rates—the figure of 30 per cent. has been mentioned today—the tube will be out of the reach of many of London's citizens.

PPP is also about standing still—maintaining and upgrading the current system and dealing with the repairs backlog, but ignoring the desperate need for expansion and new lines.

The infrastructure charges that London Underground will have to pay to the PPP companies are expected to increase almost annually as more work is done on the network. Once contracts are signed, London Underground will have to meet those charges regardless of whether revenue increases. Responsibility for meeting any shortfall will rest, ultimately, with the Mayor and the Greater London Authority. The shortfall after two years of the operation of PPP has been estimated at around £175 million—a substantial sum.

On accountability, Labour is to bring in a system that the GLA members—London's elected representatives—do not want. They will be the ones left to pick up the pieces if it all goes wrong.

The Minister was worried earlier that he was not going to get his fix of Liberal Democrat public interest companies; he was wondering why no one had referred to them. I can reassure him that I am about to do exactly that. We believe that public interest companies provide a true alternative to the PPP fudge. Allowing those companies to raise their own capital, freed from the public sector requirement constraints, would provide a far cheaper means of finance than the private sector—a point the Minister did not respond to. We will be happy to put up this proposal for analysis with the public sector comparator—something that the Government have still to use on PPP. Incidentally, their plans could still unravel at this very late stage.

Public interest companies can work to public sector objectives; this has been done in New York. As we know, New York's successful tube supremo Mr. Kiley has been drafted in to London Underground. He must be somewhat disillusioned with his scope for action, as he is stuck with PPP. It is as if that other foreign import, the England team manager, had been asked to put together his best team but could only use left-footed players.

With public interest companies, the tube would not lose all Government-supplied revenue, which would run the risk of raising ticket prices. Additional sources of future funding, such as congestion charging, could be used later to top up the investment fund. Public interest companies do not carry the safety problems caused by fragmentation into different parts—another point that the Minister did not respond to. He has not explained how he will address the risks of a fragmented system under PPP—risks that we have already seen following rail privatisation.

Public interest companies would provide a financing system that truly would be in the public interest—bringing in desperately needed finance, but also safeguarding the public interest, not just businesses.

The Minister talks about the delays that would arise if a public interest company if were introduced now. The PPP was expected to be completed in April this year, yet no contract has been signed for the two deep tube lines. For the sub-surface line, the fiasco of attempting to cobble together an agreement between London Transport and Railtrack—which many felt was anti-competitive—means that a deal is not expected until April 2001 at the latest, four years after the Labour Government came to power.

The Government have inherited one of William Hague's Conservatives' least attractive features—obstinacy. However, it is not too late for the Government to abandon PPP—

Mr. Deputy Speaker

Order. The hon. Gentleman should know by now that we do not refer to Members of this House in that way.

Mr. Brake

Thank you for pointing that out, Mr. Deputy Speaker.

It is not too late for the Government to abandon the public-private partnership. The Minister should think again, learn the lessons from railway privatisation, hear the voices of millions of Londoners and dump PPP.

9.18 pm

Mr. Geoffrey Clifton-Brown (Cotswold)

The Liberal Democrats' motion is opportunist, and much of what the hon. Member for Bath (Mr. Foster) said was inconsistent with their own manifesto. If we compare the manifesto with what he said tonight, we will see whether this is a case of the Liberals being consistent—or, as usual, facing both ways at the same time.

In the manifesto, the Liberal Democrats said that they would retain London Underground in public ownership and give it the right to seek private finance for new investment without an assured government guarantee. We have not heard much from them today about how they propose to bring in the £7 billion that the Government will raise on the public-private partnership for London Underground. The hon. Member for Carshalton and Wallington (Mr. Brake) criticises the lack of investment in London Underground without giving us any clues about how his party proposes to raise the money.

The Liberal Democrats said that they would Treble the freight and double the number of passengers carried on Britain's railways by the year 2010. Again, they did not tell us how they would raise the money. They vaguely said that they would require Railtrack to meet targets for greater investment and increased passenger and freight traffic but we heard nothing from their spokesman about what that really means. It is pure words.

The only point in their manifesto with which I can agree is when they said that they would strengthen the powers of the rail regulators. I must give the Government credit: the Strategic Rail Authority brings into one pot a number of different authorities, and that is badly needed for the railways. However, I will not let the Government entirely off the hook on safety, to which I shall return.

The Liberal Democrats said that they would withhold public subsidies from Railtrack if the targets are not met. Goodness knows what that will do. It will surely make matters worse. If Railtrack cannot increase its own investment and there is no public subsidy, the railways will suffer.

The motion is opportunistic and the Liberal Democrats have failed to explain their policies, but this is still an important debate, in which we must get one or two facts on the record. Much has been made of the failure of my party's privatisation of the railways. Let us look at the facts. Between May 1997 and September 1999 there was a 5 per cent. increase in passenger journeys, and we now have the largest number of passenger journeys on the railways for 40 years.

Privatisation can hardly be called a failure if we have that record number of passengers—which has, of course, given rise to some of the problems that we now face. The rails are simply not standing up to the huge increase in traffic, and are suffering from metal fatigue. We want to encourage more freight and passengers onto the railways, but we must be extra vigilant on safety.

Despite what the Liberal Democrats want, domestic rail freight increased by 15 per cent. in the two years to March 1999, to a record 17.4 billion tonnes moved. There are 1,300 more trains being run daily to meet increased demand since privatisation. Since 1997, 13 new stations and more than 50 new freight terminals have opened and £1.95 billion of rolling stock has been ordered. That is not a bad record.

The Government claim the credit for increased investment in the railways, but in the next breath they criticise us for privatising them. They cannot have it both ways. Their own spokesman, Lord Macdonald, said: I acknowledge readily that credit must be given to the railway industry for the advances made in safety management in recent times. Indeed, the number of signals passed at danger has been reduced significantly. I am pleased that Railtrack felt able to announce earlier this month that the number of broken rails in the half year in question, compared with the previous period, had declined by 32 per cent.—[Official Report, House of Lords, 19 October 2000; Vol. 617, c. 1201.] To listen to some of the scaremongering, one would think that the whole system was falling apart.

Caroline Flint (Don Valley)

The hon. Gentleman acknowledged that many of the achievements that he cited have happened since 1997. Does he agree that the new Labour Government brought a different ethos and attitude, and that the combination of encouragement and pressure for improved standards and better and more frequent services has come from this Government, and not from the Conservative Government, whose tactics were simply to privatise?

Mr. Clifton-Brown

The Government have been able to build on the investment put in by Railtrack to improve the railways as I described. That simply would not have been possible under the old public sector ethos. We all remember the dirty and delayed trains under British Rail. The system was crumbling and getting worse by the year. Now at least we are getting significant sums invested in the railways, which is exactly what they need. I am very grateful to the hon. Lady for bringing that out.

I follow the hon. Member for Carshalton and Wallington in echoing my concerns for the people of London, the tourists and others who use the London underground system. There is a significant problem—we all acknowledge that London Underground has been suffering from underinvestment for many years. What worries me is that the Government have planned for a huge amount of income from the public-private partnership, yet it seems that there will be a considerable delay if ever they manage to get the scheme off the ground. Their own figures prove that: last year London Underground received £338 million in public sector grants, while this year the figure is only £89 million, and next year it is planned to be £102 million. I suggest that the reason for those significant reductions is that the Government were planning for the income to come from the public-private partnership. If that money is not forthcoming, and if the public subsidy drops, the passengers of London Underground will continue to suffer considerably more pain yet before things get better—if they ever get better under this Government.

Whatever happens, I call on the Government to get on with their public-private partnership. We would prefer a full privatisation, but whatever the outcome, there needs to be a significant increase in investment in the London underground system for all the passengers who travel on it. I have travelled on it recently—[Interruption.] I have travelled on it ever since I was a small child. I remember when I was five years old being stuck on the underground for two and a half hours with my mother. That was in the 1958 floods, as it happens—but not many people can remember that far back. That demonstrates that we need more investment. I hope that the Minister who replies to the debate will be able to explain what will happen in the interim before the money comes in from the public-private partnership.

The privatisation of National Air Traffic Services is also an important part of the debate. How will the Government fund the £300 million needed for the new investment at Prestwick? Everybody who is involved with air traffic control agrees that the facility at Prestwick is urgently needed. As I understand it, the Government were relying on the proceeds of the NATS privatisation for that £300 million. When are the Government confident of getting the Bill through the House, and when are they likely to receive the money from the NATS privatisation? Will that pay for the Prestwick facility, and can they give an assurance that it will be built on time?

Ms Sandra Osborne (Ayr)

Is the hon. Gentleman aware that the previous Government's plans for a private finance initiative delayed the Prestwick centre by several years?

Mr. Clifton-Brown

This Government have been in power for almost four years. They have had more than sufficient time to sort out any problems regarding Prestwick. The previous Government introduced the PEI for the new facility at Swanwick, and that facility will come on stream, as the Minister said, by the end of 2001 or the beginning of 2002. I am quite certain that had the Conservative party been elected by the British people in 1997, we would have sorted out the problems and the hon. Lady would have had the facility in Prestwick by now. I do not think that there can be too much criticism there.

What do the Government propose to do about the golden share? The Minister said quite emphatically that this was not a privatisation. However, the Government are selling off 46 per cent., with another 5 per cent. being sold to the employees. They are keeping a golden share and retaining 49 per cent. Is that compatible with European law? Will the European Commission allow the Government to keep the golden share? If not, they may have to sell off a majority stake. In that case, as my hon. Friend the Member for Poole (Mr. Syms) said, how can they prevent a French company from purchasing NATS?

I should also like the Minister to tell us whether the Government are in favour of the European skies policy, and how it will affect the public-private partnership of NATS. That policy has not been mentioned this evening. [Interruption.] If the Minister would listen instead of laughing and talking all the time, he might learn something. That policy is of considerable concern to the military, which will not, as it does now, have reserved airspace over Europe, and which is worried about operational safety.

The Liberal Democrats, who tabled this evening's motion, favour some sort of bond issue.

Mr. Don Foster

Some have.

Mr. Clifton-Brown

Are the Liberal Democrats in favour of a bond or not? My understanding was that they were. PricewaterhouseCoopers, the well known firm of accountants, has estimated that assuming an AA rating—if that can be assumed—a bond issued by London transport would have to pay 1.2 per cent. more than a Government gilt. If one has to pay over the odds to issue a bond, why not let the Government borrow the money in the first place? Even better, the money could be raised far more cheaply by privatising London Underground and relieving the pain that commuters on the underground have to suffer under this Government. At the next election, the commuters of London will give their verdict on having had to suffer that pain.

9.31 pm

Ms Margaret Moran (Luton, South)

I have listened to some of the debate with increasing incredulity, partly because the Liberal Democrat motion does not distinguish privatisation from public-private partnerships. Conservative Members claim credit for the improvements in rail usage, saying that it results from privatisation. That is fantasy. The reality is that privatisation left the legacy of disinvestment and disrepair in our railways that we have all seen in the past few weeks. The Government's determination and pressure has resulted in increased rail use and greater investment by Railtrack.

Let us get the facts straight. We inherited from the previous Government a huge investment backlog, ever increasing traffic, crumbling roads and 20 years of public transport neglect. Rail privatisation broke the network into 100 parts, and we know that it was a bad deal for taxpayers. Between 1986 and 1996, the proportion of public transport journeys fell by 11 per cent. and the number of car journeys increased by 21 per cent. Bus journeys outside London fell by 31 per cent. in the last 10 years of Conservative Government, who left us with a funding backlog of £1.2 billion for London Underground.

Comments that Railtrack's increased investment was due to the legacy of privatisation do not bear scrutiny. By May 1997, Railtrack was £700 million behind in its rail investment and maintenance programme and—day by day, week by week—we see the effects of that legacy. The proportion of freight carried on our rail system has decreased; congestion on our road has grown by 66 per cent., and there are 70 more cars per mile of road since 1979.

Conservative Members have elaborated a fantasy; it is a myth to suggest that privatisation has somehow enhanced the experience of the travelling public and those who use public transport and our railways. Let us consider what was the intention of the Tories. In 1994, the right hon. Friend the Member for South Norfolk (Mr. MacGregor) said: Increases in fuel duty, and motorway tolling, will help people to make … informed choices—[Official Report, 30 March 1994; Vol. 240, c. 930.] We were told: Private enterprise given its head to build toll roads could get Britain back on the move. That is what Conservative Members told us then. Their agenda is purely one of privatisation, and their call for the privatisation of London Underground does them no credit.

The Liberal Democrats argue that we should not take the public-private partnership route, but their approach contains a significant gap of £56 million in public transport investment. Where do they intend to find £8 billion for London Underground, £3.3 billion for the channel tunnel rail link and £1.3 billion for the National Air Traffic Services? Those sums would be needed for a significant improvement in our public transport system, and they would have to come from private sector investment. That approach is similar to the usual Liberal method of funding: it involves fairy-tale politics and returns us to the 1p—the longest 1p in history—or, in this case, 2p or 3p, on income tax.

I shall recount two examples, with which I have been directly involved, that show how PPPs can work well. The first involves the docklands light railway extension to Lewisham. Lewisham council, of which I was leader, joined with the private sector—we produced money from our resources in local government and from central Government—to extend that railway to Lewisham. That brought significant benefits, including reduced risk, on-time delivery of the network and regeneration of the local economy in Lewisham. I am proud to have been involved in that PPP. The extension brought immense benefits to a part of south-east London that has suffered severe transport difficulties, not least because of the appalling rail service that goes through south London to Lewisham.

My second example is London Luton airport, which I am pleased to have in my constituency. I want to put the record straight—a PPP will not undermine the safety of airways. London Luton airport has never been run through NATS; nor were other airports, including Birmingham, and Sheffield. More airports are run under private arrangements than are covered by NATS. Do the Liberal Democrats truly believe that the skies over those airports are unsafe? That is nonsense.

If we had not entered into a PPP for London Luton airport, the massive increase in passenger throughput during the past few years would not have occurred. Significant investment in a new air terminal and rail interchange has brought life to the notion of an integrated transport policy. The Government advocated and implemented that approach—a combination of commitment and investment and a determination to lever in private sector investment that would not otherwise have been available. [Interruption.] Despite the protestations of an Opposition Member from a sedentary position, Luton airport benefited significantly from a PPP. The airport has increased its passenger throughput by several million; the figure should rise to 5 million during the next few years.

Mr. Clifton-Brown

Will the hon. Lady give way?

Ms Moran

Time does not permit me to accept an intervention.

Mr. Clifton-Brown

I gave way to the hon. Lady.

Ms Moran

The hon. Gentleman did not give way to me, and time does not allow me to give way to him. I hope that I will be able to let him intervene another time.

For every million passengers who pass through the airport, 1,000 extra jobs are created in my constituency. That is good news in terms of investment and new infrastructure, and it is excellent news for the travelling public, my constituents' employment and the local economy. The evidence clearly shows that PPPs work. The airport is retained under local authority control, but with a PPP that enabled the investment to occur. The effort will continue during the next few years.

Those are just two examples of the benefits that PPP can bring to our transport system and to our local economies. I wish that Liberal Democrat Members were a little more clear-headed as to the difference between privatisation and PPPs. The way in which they intend to end PPPs does them no service whatever.

9.40 pm

Mr. David Rendel (Newbury)

I am grateful for the opportunity to make a few, brief points in relation to the closing words of our motion, on the dogmatic privatisation of public services in general.

No one has yet mentioned the health service. In my constituency, it is of considerable concern because our lovely, new cottage hospital, which is just about to be built, will be of the type that deals only with minor operations and day surgery. We have heard from several Conservative Front-Bench spokesmen that, in future, such procedures will be carried out only in the private sector. That means that the privatisation of the new hospital in Newbury would be almost inevitable, were the Conservatives ever to come to power again.

That is a considerable worry to my constituents. I hope that Ministers agree that if that were to happen, it would be simply awful and that, if the Conservatives continue with that policy, they deserve to lose every vote in west Berkshire.

9.41 pm

Mr. Michael Moore (Tweeddale, Ettrick and Lauderdale)

The debate has been interesting—except for those of us who served on the Transport Bill Standing Committee, for whom it has merely been a repetition of many, old arguments. Although Liberal Democrats might have been accused of opportunism on a few occasions, such accusations come ill from members of two parties that have shifted position so quickly—albeit in a heavy-footed way—during the past few years and especially during the past few months.

I shall focus on the privatisation of NATS. There is mounting public concern about privatisation in the transport sector. As there is raging uncertainty across the sector, the ill-conceived plans to privatise air traffic control should be scrapped. There is no public support for the proposal and little need for the Government to sell any NATS shares.

Frequently, the Government advance their case for privatisation by highlighting investment requirements and the need both to involve private sector expertise and to separate safety regulation from practitioners. As we have often pointed out, we do not dispute those objectives but the route proposed to achieve them.

Our proposal for an independent, publicly owned corporation or trust satisfies each of those requirements, but—crucially—retains public sector control. That means that it will retain public confidence.

Since our previous debate on NATS privatisation, two significant developments have occurred. First, the Civil Aviation Authority produced proposals for the regulatory regime after privatisation. Secondly, the shortlist for the strategic partner has been published and has already been whittled down.

Our central concern about the privatisation of air traffic control is the nature of the market in which NATS operates. Competition—rightly—does not exist and revenue is heavily regulated; thus profit-driven corporations will be forced to cut costs to deliver their objectives. Cutting costs sits uneasily beside the paramount importance of safety. That is at the heart of public concern about the privatisation of NATS.

It is especially alarming that the first attempt by the CAA to set out a post-privatisation regime for economic regulation of air traffic control has been condemned by NATS itself. NATS described the proposals as "totally inappropriate", not least because the severe cuts in operating costs and investment are inconsistent with the proper carrying out of its functions— especially its— prime duty … the safe provision of air traffic control. The criticism is breathtaking—in civil-service-speak, perhaps even brave. Equally breathtaking is the silence that followed. To date, there has been no ministerial comment and no resolution of the conflict at the heart of privatisation. How can any bidder seriously prepare to take on the role of strategic partner next March when the market rules after privatisation are still unknown? It is a real mess.

We now know the final three bidders in the beauty contest to become NATS' strategic partner. The list of bidders exposes the serious problems at the heart of the NATS privatisation proposal. I shall briefly highlight the conflicts of interest that each bidder involves.

Novares is a partnership principally between Lockheed Martin and the Airways Corporation of New Zealand. Lockheed Martin is a huge multinational corporation with many different interests but, as we know, it is the prime supplier at Swanwick and it is believed to have lost between £150 million and £300 million through the delay and ineffective control of that project. It has more recently won the contract for the new Scottish centre, and the blunt truth is that it has a great interest in controlling the paymasters of that project. The Airways Corporation of New Zealand is an overseas air traffic control outfit which has also run into controversy recently, because it has changed its two-centre strategy—which has been the core of many concerns, not least in Scotland—to a one-centre strategy with very little public support.

Nimbus is another bidder and one of the main components of that, Aeronautical Radio Inc.—ARINC—is an equipment supplier for NATS and falls foul of the same conflicts of interest as Lockheed Martin.

The final consortium is the Airline Group. It is interesting that it specifies that it is a not-for-profit organisation. Perhaps that reveals what it thinks of bringing the profit motive into this sector. However, it cannot escape from the basic reality that eight airlines—including British Airways, Virgin and British Midland—are in the consortium and that they generate the vast proportion of NATS' revenue. It is no wonder that they want to get their hands on it if it is to be privatised. Sitting beside the airlines as advisers are three air traffic operators from overseas. They are all on board, but it is not clear what relationship they would have with NATS after privatisation. In particular, we do not know the implications that there might be for national security. It would be helpful if the Minister could tell us what the Ministry of Defence says about that.

Our motion rightly condemns the dogmatic pursuit of privatisation in public services while the Government amendment welcomes the Government's policy of developing Public Private Partnerships for National Air Traffic Services and the London Underground. However, bereft of principles and bereft of arguments, the Government have raised pragmatism to the status of the dogma, doggedly pursuing an agenda out of touch with public opinion.

In the privatisation of air traffic control, the bidders are riddled with conflicts of interest. NATS does not believe that the Civil Aviation Authority's proposals will work and the public have no confidence in the plans. They should be scrapped.

9.48 pm

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Chris Mullin)

This has been an interesting debate. I am not sure that those of us who are veterans of proceedings on the Transport Bill have heard many new arguments, but we have heard one or two old arguments presented in a slightly different way.

As I listened to the hon. Member for Bath (Mr. Foster) huffing and puffing about the wickedness of privatisation, the thought idly passed through my mind that there might have been no privatisation at all if the Liberals had not voted with the Tories to bring down the Callaghan Government in 1979. I hope that the House will forgive a little trip down memory lane, but the hon. Member for Poole (Mr. Syms) took us back as far as Beatrice and Sidney Webb, so I thought that I would chance an outing back to 1979. We all change but, at that time, the Liberals preferred a Government led by Mrs. Thatcher to a Government led by Mr. Callaghan. That had consequences that we can all vividly recall.

I am opposed—and so are the Government—to the dogmatic pursuit of privatisation in the public services. Such a pursuit of privatisation was a characteristic of the previous Government. I exempt the hon. Member for Poole since, as he explained, he is pragmatic. Most members of the previous Government believed as a matter of principle that the public sector was bad and the private sector was good—and some of them said so in such stark terms. Tory Ministers believed at the time that privatisation was a panacea, and that has led us to all sorts of problems—not least the mess following privatisation of the railways that they have left us to clear up.

The Government's approach has been entirely different—[Interruption.] Stay with me. We are seeking to combine the strongest features of both the public and private sectors. We want to work together for the public good.

Mr. Don Foster

It says here.

Mr. Mullin

Yes, it does say here; I wrote it.

As the Under-Secretary said in his opening remarks, the public-private partnerships that we are putting together for the London Underground and National Air Traffic Services represent carefully devised, appropriate and pragmatic—yes, there is that word again—solutions to problems that have arisen from years of under-investment and poor project management in the two services.

The Government will retain a major stake in NATS, allowing it to retain a significant degree of influence over the management of the business. If the hon. Member for Bath will forgive me for saying so, he made several irresponsible points about safety. Safety, far from being undermined, will be enhanced. It will remain with the public sector—the Civil Aviation Authority—and will be entirely separate from day-to-day operational control. As for London Underground, strategic control will remain with the public sector, reporting to the Mayor. In 30 years' time, the assets, far from being permanently privatised, will revert to the public sector.

The advantage of a public-private partnership is that it is the best way in which to lever in private sector investment and project-management expertise while preserving the safeguards that the travelling public rightly demand. Various alternative models have been proposed. The Government have examined them all and concluded that PPP is superior.

The main alternative—I am sure that it is one that would find most favour on the Liberal Democrat Benches—is for the Chancellor to write out a cheque. I have lost count of the number of times during the past three years that the Liberal Democrats have spent their extra penny on income tax—a point made by my hon. Friends the Members for Croydon, Central (Mr. Davies) and for Luton, South (Ms Moran). We have not heard so much about it recently. Now they want to help the Chancellor spend his surplus—a surplus, incidentally, that he would not have had but for his sound management of the economy.

As you may have noticed, Mr. Speaker, the Chancellor has not been short of advice from a variety of quarters in the past few weeks on how he might spend his surplus. Even the right hon. Member for Kensington and Chelsea (Mr. Portillo) has been at it. He wants tax cuts and more public spending. Well, life is not like that. It is folly to pretend that everyone can have more of everything.

The plain truth is that if we are to cope with all the demands for more investment in public services, we must make some choices. Where investment can be raised from the private sector without jeopardising the public interest, it makes sense to do so—quite apart from which we need some of the private sector project-management skills that some parts of the public sector so obviously lack.

I turn to some of the points made in the debate. My hon. Friends the Members for Shipley (Mr. Leslie) and for Luton, South rightly pointed out the little-known fact that, at more than 30 small and medium-sized airports around the country, air traffic control is in private hands, and has been so for many years. We have all been landing and taking off at those airports without even noticing the fact—whether it be at East Midlands, Bristol, Luton or Newcastle airport, where I took off this morning. If it were true that only the state can manage industries where safety is essential, we would all travel on Aeroflot rather than British Airways. [Interruption.] I know that that is an old joke, but I am sure that not everyone has heard it before.

The hon. Member for Poole made a thoughtful speech. He comes from the civilised wing of his party and is not one of the true believers who sit on the Conservative Back Benches, not that there are many of them present tonight. He said that the Conservative party is pragmatic—he can say that again. Had he attended our previous debate, he would have heard his hon. Friend the Member for Teignbridge (Mr. Nicholls) call for the restoration of the link between earnings and the state pension—a link that the Conservative party broke many years ago. That is pragmatism for you.

The hon. Member for Poole asks whether March 2001 was still the date for the sale. Yes, the Government intend the sale to go ahead on that date. He asks whether we intend to reverse the Lords amendment relating to pensions. Yes, the position of existing employees is already adequately protected. He asks about overseas ownership, and the hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Moore) mentioned the three companies on the final shortlist. We do not accept the argument that only a British strategic partner can be the right one. The right partner will be the one that provides the best solution and future for NATS; that is the basis on which we shall assess the bids. Incidentally, we have some plans to protect the Tory party from foreign ownership: part IV, chapter II of the Political Parties, Elections and Referendums Bill will prevent foreign donations, and not before time.

The hon. Member for Poole made a serious point about safety. He expressed concern about the interaction between the rail regulator and Railtrack and about the fact that Railtrack could be fined for not meeting punctuality targets and for delays to trains. We recognise the seriousness of that issue, so we have asked Sir Alastair Morton to consider with the industry the contractual and regulatory regime. The framework was created at the time of privatisation, but we shall have to consider what revision is needed.

The hon. Gentleman asked what effect a delay to the PPP of the sort proposed by the Lords would have. We intend to reverse that Lords amendment. Were it to stand, it would jeopardise the PPP.

Ms Osborne

Will my hon. Friend confirm the implications for the new Scottish centre of the Lords amendment standing and the NATS' PPP being delayed until after the general election?

Mr. Mullin

As I say, the programme for the new Scottish centre, which, after initial difficulties, is now going quite well, would be jeopardised.

The hon. Member for Carshalton and Wallington (Mr. Brake) quoted the Industrial Society report and suggested that it said that passengers would be put at risk. In fact, the report stated that the society did not subscribe to the view that the PPP was inherently unsafe, and it welcomed the Government's efforts to ensure that safety was kept in public sector control.

The hon. Member for Cotswold (Mr. Clifton-Brown) asked whether the Government were confident of being able to retain a golden share. Yes.

In conclusion, the Government have no desire to repeat the mistakes of Conservative privatisations, in which public assets were simply looted. Our aim is to channel badly needed private sector funding and management skills into our transport infrastructure for the benefit of all. Ours are not the "flog it and forget it" exercises that the Conservatives continue to advocate. We are retaining a significant Government presence precisely for the purpose of protecting the public interest.

The London Underground PPP enables us finally to reverse the historic decline of the tube. It offers billions of pounds of investment—

Mr. Tyler

rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—

The House divided: Ayes 43, Noes 272.

Division No. 319]	[10 pm
AYES
Allan, Richard	Kennedy, Rt Hon Charles (Ross Skye & Inverness W)
Baker, Norman
Ballard, Jackie	Livsey, Richard
Berth, Rt Hon A J	Llwyd, Elfyn
Bell, Martin (Tatton)	Maclennan, Rt Hon Robert
Brake, Tom	Michie, Mrs Ray (Argyll & Bute)
Brand, Dr Peter	Moore, Michael
Breed, Colin	Morgan, Alasdair (Galloway)
Burstow, Paul	Oaten, Mark
Cable, Dr Vincent	Öpik, Lembit
Campbell, Rt Hon Menzies (NE Fife)	Rendel, David
	Russell, Bob (Colchester)
Chidgey, David	Sanders, Adrian
Cotter, Brian	Stunell, Andrew
Davey, Edward (Kingston)	Taylor, Matthew (Truro)
Foster, Don (Bath)	Thomas, Simon (Ceredigion)
George, Andrew (St Ives)	Tonge, Dr Jenny
Gidley, Sandra	Tyler, Paul
Hancock, Mike	Webb, Steve
Harris, Dr Evan	Wigley, Rt Hon Dafydd
Harvey, Nick	Willis, Phil
Hughes, Simon (Southward N)	Tellers for the Ayes:
Jones, Nigel (Cheltenham)	Mr. David Heath and
Keetch, Paul	Sir Robert Smith.

NOES
Adams, Mrs Irene (Paisley N)	Bradley, Keith (Withington)
Ainger, Nick	Bradley, Peter (The Wrekin)
Ainsworth, Robert (Cov'try NE)	Bradshaw, Ben
Alexander, Douglas	Brinton, Mrs Helen
Allen, Graham	Browne, Desmond
Anderson, Donald (Swansea E)	Burden, Richard
Anderson, Janet (Rossendale)	Burgon, Colin
Armstrong, Rt Hon Ms Hilary	Butler, Mrs Christine
Ashton, Joe	Campbell, Alan (Tynemouth)
Atherton, Ms Candy	Campbell, Mrs Anne (C'bridge)
Atkins, Charlotte	Campbell, Ronnie (Blyth V)
Austin, John	Campbell-Savours, Dale
Banks, Tony	Caplin, Ivor
Barnes, Harry	Casale, Roger
Barron, Kevin	Caton, Martin
Battle, John	Cawsey, Ian
Beard, Nigel	Chaytor, David
Beckett, Rt Hon Mrs Margaret	Clark, Rt Hon Dr David (S Shields)
Bell, Stuart (Middlesbrough)	Clark, Paul (Gillingham)
Benn, Hilary (Leeds C)	Clarke, Charles (Norwich S)
Benton, Joe	Clarke, Eric (Midlothian)
Bermingham, Gerald	Clarke, Rt Hon Tom (Coatbhdge)
Berry, Roger	Clarke, Tony (Northampton S)
Best, Harold	Clwyd, Ann
Blackman, Liz	Coffey, Ms Ann
Blizzard, Bob	Coleman, Iain
Blunkett, Rt Hon David	Connarty, Michael
Boateng, Rt Hon Paul	Cook, Frank (Stockton N)

Cooper, Yvette	Jones, Mrs Fiona (Newark)
Corbett, Robin	Jones, Helen (Warrington N)
Corston, Jean	Jones, Martyn (Clwyd S)
Cousins, Jim	Jowell, Rt Hon Ms Tessa
Cranston, Ross	Kaufman, Rt Hon Gerald
Cryer, Mrs Ann (Keighley)	Keeble, Ms Sally
Cummings, John	Keen, Alan (Feltham & Heston)
Cunningham, Rt Hon Dr Jack (Copeland)	Keen, Ann (Brentford & Isleworth)
	Kemp, Fraser
Cunningham, Jim (Cov'try S)	Kennedy, Jane (Wavertree)
Dalyell, Tam	Khabra, Piara S
Darling, Rt Hon Alistair	Kidney, David
Davey, Valerie (Bristol W)	King, Ms Oona (Bethnal Green)
Davidson, Ian	Kumar, Dr Ashok
Davies, Geraint (Croydon C)	Ladyman, Dr Stephen
Davis, Rt Hon Terry (B'ham Hodge H)	Lammy, David
	Laxton, Bob
Denham, John	Lepper, David
Dobson, Rt Hon Frank	Leslie, Christopher
Doran, Frank	Levitt, Tom
Drew, David	Lewis, Terry (Worsley)
Eagle, Angela (Wallasey)	Liddell, Rt Hon Mrs Helen
Eagle, Maria (L'pool Garston)	Linton, Martin
Edwards, Huw	Lloyd, Tony (Manchester C)
Efford, Clive	Love, Andrew
Ellman, Mrs Louise	McAvoy, Thomas
Ennis, Jeff	McCabe, Steve
Etherington, Bill	McCafferty, Ms Chris
Field, Rt Hon Frank	McDonagh, Siobhain
Fisher, Mark	Macdonald, Calum
Fitzpatrick, Jim	McGuire, Mrs Anne
Fitzsimons, Mrs Lorna	McIntosh, Miss Anne
Flint, Caroline	McIsaac, Shona
Flynn, Paul	MacShane, Denis
Follett, Barbara	McWalter, Tony
Foster, Michael Jabez (Hastings)	McWilliam, John
Foulkes, George	Marsden, Gordon (Blackpool S)
Fyfe, Maria	Marshall, David (Shettleston)
Gapes, Mike	Marshall, Jim (Leicester S)
George, Bruce (Walsall S)	Martlew, Eric
Gibson, Dr Ian	Maxton, John
Godsiff, Roger	Meale, Alan
Goggins, Paul	Michael, Rt Hon Alun
Golding, Mrs Llin	Milburn, Rt Hon Alan
Gordon, Mrs Eileen	Mitchell, Austin
Griffiths, Jane (Reading E)	Moffatt, Laura
Griffiths, Nigel (Edinburgh S)	Moonie, Dr Lewis
Griffiths, Win (Bridgend)	Moran, Ms Margaret
Grocott, Bruce	Morgan, Ms Julie (Cardiff N)
Grogan, John	Morley, Elliot
Hain, Peter	Morris, Rt Hon Sir John (Aberavon)
Hall, Mike (Weaver Vale)
Hall, Patrick (Bedford)	Mountford, Kali
Hanson, David	Mowlam, Rt Hon Marjorie
Healey, John	Mullin, Chris
Henderson, Doug (Newcastle N)	Murphy, Denis (Wansbeck)
Henderson, Ivan (Harwich)	Murphy, Jim (Eastwood)
Heppell, John	Naysmith, Dr Doug
Hewitt, Ms Patricia	Norris, Dan
Hill, Keith	O'Brien, Bill (Normanton)
Hodge, Ms Margaret	O'Brien, Mike (N Warks)
Hope, Phil	O'Hara, Eddie
Howarth, George (Knowsley N)	Olner, Bill
Howells, Dr Kim	Organ, Mrs Diana
Hoyle, Lindsay	Osborne, Ms Sandra
Hughes, Ms Beverley (Stretford)	Palmer, Dr Nick
Hughes, Kevin (Doncaster N)	Pearson, Ian
Hurst, Alan	Pendry, Tom
Hutton, John	Pickthall, Colin
Iddon, Dr Brian	Pike, Peter L
Illsley, Eric	Plaskitt, James
Jackson, Helen (Hillsborough)	Pollard, Kerry
Jamieson, David	Pope, Greg
Jenkins, Brian	Pound, Stephen
Johnson, Alan (Hull W & Hessle)	Powell, Sir Raymond
Jones, Rt Hon Barry (Alyn)	Prentice, Ms Bridget (Lewisham E)

Prosser, Gwyn	Stuart, Ms Gisela
Quin, Rt Hon Ms Joyce	Sutcliffe, Gerry
Quinn, Lawrie	Taylor, Rt Hon Mrs Ann (Dewsbury)
Radice, Rt Hon Giles
Rammell, Bill	Temple-Morris, Peter
Rapson, Syd	Thomas, Gareth R (Harrow W)
Robinson, Geoffrey (Cov'try NW)	Timms, Stephen
Roche, Mrs Barbara	Tipping, Paddy
Rogers, Allan	Touhig, Don
Rooker, Rt Hon Jeff	Trickett, Jon
Rooney, Terry	Truswell, Paul
Ross, Ernie (Dundee W)	Turner, Neil (Wigan)
Rowlands, Ted	Twigg, Derek (Halton)
Ruane, Chris	Twigg, Stephen (Enfield)
Ruddock, Joan	Tynan, Bill
Russell, Ms Christine (Chester)	Vis, Dr Rudi
Sarwar, Mohammad	Walley, Ms Joan
Savidge, Malcolm	Ward, Ms Claire
Sawford, Phil	White, Brian
Sedgemore, Brian	Whitehead, Dr Alan
Sheerman, Barry	Wicks, Malcolm
Sheldon, Rt Hon Robert	Williams, Rt Hon Alan (Swansea W)
Short, Rt Hon Clare
Smith, Rt Hon Andrew (Oxford E)	Williams, Alan W (E Carmarthen)
Smith, Angela (Basildon)	Williams, Mrs Betty (Conwy)
Smith, Jacqui (Redditch)	Winnick, David
Smith, John (Glamorgan)	Winterton, Ms Rosie (Doncaster C)
Soley, Clive	Wood, Mike
Southworth, Ms Helen	Woodward, Shaun
Spellar, John	Worthington, Tony
Squire, Ms Rachel	Wright, Anthony D (Gt Yarmouth)
Starkey, Dr Phyllis	Wright, Tony (Cannock)
Steinberg, Gerry
Stevenson, George	Tellers for the Noes:
Stewart, David (Inverness E)	Mr. Clive Betts and
Stewart, Ian (Eccles)	Mr. Jim Dowd.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments):—

The House divided: Ayes 260, Noes 68.

Division No. 320]	[10.11 pm
AYES
Adams, Mrs Irene (Paisley N)	Bradshaw, Ben
Ainger, Nick	Brinton, Mrs Helen
Ainsworth, Robert (Cov'try NE)	Browne, Desmond
Alexander, Douglas	Burden, Richard
Allen, Graham	Burgon, Colin
Anderson, Donald (Swansea E)	Butler, Mrs Christine
Anderson, Janet (Rossendale)	Campbell, Alan (Tynemouth)
Armstrong, Rt Hon Ms Hilary	Campbell, Mrs Anne (C'bridge)
Ashton, Joe	Campbell, Ronnie (Blyth V)
Atherton, Ms Candy	Campbell-Savours, Dale
Atkins, Charlotte	Caplin, Ivor
Banks, Tony	Casale, Roger
Barnes, Harry	Caton, Martin
Barron, Kevin	Cawsey, Ian
Battle, John	Chaytor, David
Beard, Nigel	Clark, Rt Hon Dr David (S Shields)
Beckett, Rt Hon Mrs Margaret	Clark, Paul (Gillingham)
Begg, Miss Anne	Clarke, Charles (Norwich S)
Benn, Hilary (Leeds C)	Clarke, Eric (Midlothian)
Benton, Joe	Clarke, Rt Hon Tom (Coatbridge)
Bermingham, Gerald	Clarke, Tony (Northampton S)
Berry, Roger	Clwyd, Ann
Best, Harold	Coffey, Ms Ann
Blackman, Liz	Coleman, Iain
Blizzard, Bob	Connarty, Michael
Boateng, Rt Hon Paul	Cook, Frank (Stockton N)
Bradley, Keith (Withington)	Cooper, Yvette
Bradley, Peter (The Wrekin)	Corbett, Robin

Corston, Jean	Keeble, Ms Sally
Cousins, Jim	Keen, Ann (Brentford & Isleworth)
Cranston, Ross	Kemp, Fraser
Cummings, John	Kennedy, Jane (Wavertree)
Cunningham, Jim (Cov'try S)	Khabra, Piara S
Darling, Rt Hon Alistair	Kidney, David
Davey, Valerie (Bristol W)	King, Ms Oona (Bethnal Green)
Davidson, Ian	Kumar, Dr Ashok
Davies, Geraint (Croydon C)	Ladyman, Dr Stephen
Davis, Rt Hon Terry (B'ham Hodge H)	Lammy, David
	Lawrence, Mrs Jackie
Denham, John	Laxton, Bob
Dobson, Rt Hon Frank	Leslie, Christopher
Doran, Frank	Levitt, Tom
Drew, David	Liddell, Rt Hon Mrs Helen
Eagle, Angela (Wallasey)	Linton, Martin
Eagle, Maria (L 'pool Garston)	Lloyd, Tony (Manchester C)
Edwards, Huw	Love, Andrew
Effort, Clive	McAvoy, Thomas
Ellman, Mrs Louise	McCabe, Steve
Ennis, Jeff	McCafferty, Ms Chris
Etherington, Bill	McDonagh, Siobhain
Field, Rt Hon Frank	Macdonald, Calum
Fisher, Mark	McGuire, Mrs Anne
Fitzpatrick, Jim	McIsaac, Shona
Fitzsimons, Mrs Lorna	MacShane, Denis
Flint, Caroline	McWalter, Tony
Flynn, Paul	McWilliam, John
Follett, Barbara	Mallaber, Judy
Foster, Michael Jabez (Hastings)	Marsden, Gordon (Blackpool S)
Foulkes, George	Marshall, David (Shettleston)
Fyfe, Maria	Marshall, Jim (Leicester S)
Gapes, Mike	Martlew, Eric
George, Bruce (Walsall S)	Maxton, John
Gibson, Dr Ian	Meale, Alan
Godsiff, Roger	Michael, Rt Hon Alun
Goggins, Paul	Milburn, Rt Hon Alan
Golding, Mrs Llin	Mitchell, Austin
Gordon, Mrs Eileen	Moffatt, Laura
Griffiths, Jane (Reading E)	Moonie, Dr Lewis
Griffiths, Nigel (Edinburgh S)	Moran, Ms Margaret
Griffiths, Win (Bridgend)	Morgan, Ms Julie (Cardiff N)
Grocott, Bruce	Morley, Elliot
Grogan, John	Morris, Rt Hon Sir John (Aberavon)
Hain, Peter
Hall, Mike (Weaver Vale)	Mountford, Kali
Hall, Patrick (Bedford)	Mullin, Chris
Hanson, David	Murphy, Denis (Wansbeck)
Healey, John	Murphy, Jim (Eastwood)
Henderson, Doug (Newcastle N)	Naysmith, Dr Doug
Henderson, Ivan (Harwich)	Norris, Dan
Heppell, John	O'Brien, Bill (Normanton)
Hewitt, Ms Patricia	O'Brien, Mike (N Warks)
Hill, Keith	O'Hara, Eddie
Hinchliffe, David	Olner, Bill
Hodge, Ms Margaret	Organ, Mrs Diana
Hope, Phil	Osborne, Ms Sandra
Howarth, George (Knowsley N)	Palmer, Dr Nick
Howells, Dr Kim	Pearson, Ian
Hoyle, Lindsay	Pendry, Tom
Hughes, Ms Beverley (Stretford)	Pickthall, Colin
Hughes, Kevin (Doncaster N)	Pike, Peter L
Hurst, Alan	Plaskitt, James
Hutton, John	Pollard, Kerry
Iddon, Dr Brian	Pope, Greg
Illsley, Eric	Pound, Stephen
Jackson, Helen (Hillsborough)	Powell, Sir Raymond
Jamieson, David	Prentice, Ms Bridget (Lewisham E)
Jenkins, Brian	Quin, Rt Hon Ms Joyce
Johnson, Alan (Hull W & Hessle)	Quinn, Lawrie
Jones, Rt Hon Barry (Alyn)	Rammell, Bill
Jones, Mrs Fiona (Newark)	Rapson, Syd
Jones, Helen (Warrington N)	Robinson, Geoffrey (Cov'try NW)
Jones, Martyn (Clwyd S)	Roche, Mrs Barbara
Jowell, Rt Hon Ms Tessa	Rogers, Allan
Kaufman, Rt Hon Gerald	Rooker, Rt Hon Jeff

Rooney, Terry	Timms, Stephen
Ross, Ernie (Dundee W)	Tipping, Paddy
Rowlands, Ted	Touhig, Don
Ruane, Chris	Trickett, Jon
Ruddock, Joan	Truswell, Paul
Russell, Ms Christine (Chester)	Turner, Neil (Wigan)
Sarwar, Mohammad	Twigg, Derek (Halton)
Savidge, Malcolm	Twigg, Stephen (Enfield)
Sawford, Phil	Tynan, Bill
Sedgemore, Brian	Vis, Dr Rudi
Sheldon, Rt Hon Robert	Walley, Ms Joan
Smith, Rt Hon Andrew (Oxford E)	Ward, Ms Claire
Smith, Angela (Basildon)	White, Brian
Smith, Jacqui (Redditch)	Whitehead, Dr Alan
Smith, John (Glamorgan)	Wicks, Malcolm
Soley, Clive	Williams, Rt Hon Alan (Swansea W)
Southworth, Ms Helen
Spellar, John	Williams, Alan W (E Carmarthen)
Squire, Ms Rachel	Williams, Mrs Betty (Conwy)
Starkey, Dr Phyllis	Winnick, David
Steinberg, Gerry	Winterton, Ms Rosie (Doncaster C)
Stevenson, George	Wood, Mike
Stewart, David (Inverness E)	Woodward, Shaun
Stewart, Ian (Eccles)	Worthington, Tony
Stuart, Ms Gisela	Wright, Anthony D (Gt Yarmouth)
Sutcliffe, Gerry	Wright, Tony (Cannock)
Taylor, Rt Hon Mrs Ann (Dewsbury)
	Tellers for the Ayes:
Temple-Morris, Peter	Mr. Clive Betts and
Thomas, Gareth R (Harrow W)	Mr. Jim Dowd.

NOES
Allan, Richard	Laing, Mrs Eleanor
Amess, David	Lansley, Andrew
Baker, Norman	Lewis, Dr Julian (New Forest E)
Ballard, Jackie	Livsey, Richard
Beith, Rt Hon A J	Llwyd, Elfyn
Bell, Martin (Tatton)	McIntosh, Miss Anne
Bottomley, Rt Hon Mrs Virginia	MacKay, Rt Hon Andrew
Brake, Tom	Maclennan, Rt Hon Robert
Brand, Dr Peter	McLoughlin, Patrick
Breed, Colin	Michie, Mrs Ray (Argyll & Bute)
Burstow, Paul	Moore, Michael
Cable, Dr Vincent	Morgan, Alasdair (Galloway)
Campbell, Rt Hon Menzies (NE Fife)	Oaten, Mark
	O'Brien, Stephen (Eddisbury)
Chidgey, David	Öpik, Lembit
Clifton-Brown, Geoffrey	Randall, John
Collins, Tim	Rendel, David
Cotter, Brian	Russell, Bob (Colchester)
Cran, James	St Aubyn, Nick
Davey, Edward (Kingston)	Sanders, Adrian
Day, Stephen	Stunell, Andrew
Fabricant, Michael	Syms, Robert
Foster, Don (Bath)	Taylor, Matthew (Truro)
Garnier, Edward	Thomas, Simon (Ceredigion)
George, Andrew (St Ives)	Tonge, Dr Jenny
Gidley, Sandra	Tyler, Paul
Green, Damian	Webb, Steve
Hancock, Mike	Wells, Bowen
Harris, Dr Evan	Whittingdale, John
Harvey, Nick	Wigley, Rt Hon Dafydd
Howarth, Gerald (Aldershot)	Willis, Phil
Hughes, Simon (Southwark N)	Winterton, Mrs Ann (Congleton)
Jones, Nigel (Cheltenham)	Winterton, Nicholas (Macclesfield)
Keetch, Paul	Tellers for the Noes:
Kennedy, Rt Hon Charles (Ross Skye & Inverness W)	Sir Robert Smith and
Kirkbride, Miss Julie	Mr. David Heath.

Question accordingly agreed to.

MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved, That this House deplores the previous Government's incompetent privatisation of the railways which left the network fragmented, cost taxpayers billions of pounds and brought rail travellers hours of delays; welcomes the Government's creation of the Strategic Rail Authority to give direction to the industry from an industry-wide perspective rather than from the narrow interests of individual companies; recognises that the Government's 10-year plan is delivering the largest investment programme for the railways for generations to tackle the problems caused by years of under-investment in the public and private sectors; welcomes the Government's pragmatic policy of developing Public Private Partnerships for National Air Traffic Services and the London Underground, enabling much needed investment and private sector financial and management skills to be introduced to the public services while safeguarding safety and the public interest; and regrets the official Opposition's dogmatic pursuit of privatisation for the London Underground and the National Air Traffic Services.