London Underground (Hansard, 20 November 2001)

§ 3. Harry Cohen (Leyton and Wanstead)
What discussions he has had with the Mayor of London and his transport commissioner about arrangements for monitoring investment in the London Underground: and if he will make a statement. [13554]

§ The Minister for Transport (Mr. John Spellar)
We regularly meet the Mayor of London and his transport commissioner to discuss a range of matters to do with transport in London.

§ Harry Cohen
Have the Government lost control of the public-private partnership contracts for the tube? In a letter to me, the transport commissioner said that they were immensely lengthy and involved a web of complex formulas. He described it as a dangerous game, and said that, as happened with Railtrack, the formulas would have to be renegotiated and restructured completely. He added that that process would cost a great deal—more than would be the case if they were right at the outset. Surely, given such dire warnings, the Government will not go ahead with those contracts?

§ Mr. Spellar
The contracts will deliver considerable investment in the tube, and considerable improvements for the travelling public. In addition, the Government and London Underground are engaged in robust negotiations with the bidders. It is an interesting reversal to see that the Opposition seem to be against the private infrastructure companies, which have considerable expertise. My hon. Friend should look at the considerable success achieved as a result of private sector involvement on the Northern line. That has delivered real benefits for passengers in terms of both comfort and reliability.

§ Mr. John Wilkinson (Ruislip-Northwood)
Will the Minister explain how the performance formula will work? How will the infrastructure companies be rewarded or penalised according to performance? The formula baffles 160 the hon. Member for Leyton and Wanstead (Harry Cohen) and the transport commissioner, and it most surely baffles me. I hope that the Minister is wiser.

§ Mr. Spellar
Discussions are taking place between London Underground and the infrastructure companies. They are working together to achieve a formula that will ensure that proper performance is rewarded. There will be penalties for failure, and rewards for delivery. I should have thought that the hon. Gentleman would have welcomed such incentivisation. The parties involved must get the negotiations right to ensure that the companies deliver for the travelling public. At the end of the process, the schemes will be evaluated to ensure that they deliver value for money. If they do, they will go ahead. That is good news for the travelling public—and for taxpayers, who will get value for money.

§ Tom Brake (Carshalton and Wallington)
May I draw the Minister's attention to a few facts? Since the Government came to power, the number of cancelled peak-time trains has reached record levels. There have been 23 million customer hours lost in the past 12 months. Absenteeism among London Underground staff is at its highest level for five years. In addition, the annual service charges that London Underground will have to pay to the private—

§ Mr. Speaker
Order. That is far too long.

§ Mr. Spellar
I do not accept all the figures set out by the hon. Gentleman but, given all the problems that he has described, I am surprised that he wants to leave the system as it is.

§ Mr. Eric Pickles (Brentwood and Ongar)
On 8 December 1999, the Deputy Prime Minister said that the PPP on London Underground would save £4.5 billion, which could be spent on education, health and other priority needs."—[Official Report, 8 December 1999; Vol. 340, c. 847.] Things seem to have changed a little since then. The PPP contract is complex and no one understands it, and London Underground is having to meet interest rate costs of an extra £10 million a year. The Minister has just praised the contracts that have been drawn up, but they involve bonuses worth £90 million to the contractors, regardless of whether there is an improvement in the tube. What has gone wrong since 1999—besides the dead hand of the Secretary of State?

§ Mr. Spellar
The hon. Gentleman will have to wait for the final outcome of the negotiations and the package that will be put together. We will evaluate whether that represents value for money. I should have thought that the hon. Gentleman would welcome the extra £13 billion investment, which will ensure that we have a tube for this century. It will also ensure London's position as a world financial centre and capital. That is what we are doing, and I am surprised that the hon. Gentleman continues to carp about it.