HC Deb 20 July 2004 vol 424 cc158-76 12.32 pm
The Secretary of State for Transport (Mr. Alistair Darling)

With your permission, Mr. Speaker, I wish to make a statement about transport strategy. Today, I am publishing a White Paper that looks at the factors that will shape travel, and therefore transport networks, over the next 30 years. The White Paper sets out what we need to do as a country to enable people and goods to move around in ways that are consistent with our environmental objectives. So I want to set out the context in which we plan, and the three things we need to do in response.

First, we need to invest in increased capacity for road, rail and other public transport. Secondly, we need measures to make better use of the capacity we have already got, and thirdly, we need to face up to difficult decisions in order to plan ahead to meet the pressures we know that we will face in the future. Let me set out the context against which we plan.

Looking ahead, the challenges we face are clear. By 2025, the population is expected to increase by 4.5 million people to 64 million. As the economy continues to grow, and with increased prosperity, we will want to travel more and the demand for goods from all over the world will grow. More than that, people are travelling longer distances—for example, whereas in the past people tended to move home when they changed job, increasingly people choose to stay in the same place rather than move nearer to their work. More people are travelling by air, travel by train has increased by 25 per cent. in the last few years, and the huge increase in car ownership is putting growing pressures on our roads.

Our job is to help people travel, not to stop them. The challenge for us is how we meet people's need and wish to do so while meeting our environmental aims. So that is the context in which we take investment decisions. Let me now set out our investment plans for the future. Last week's spending review confirms our commitment to sustained high levels of investment in transport. It raises planned spending over the next three years from £10.4 billion this year to more than £12.8 billion by 2007. That is 60 per cent. more in real terms than in 1997. Spending will be higher than the investment plans we set out four years ago. By 2010, we will be spending £1.2 billion more per year than the 10-year plan envisaged. As we promised, the White Paper today sets out planned spending showing that the high level of spending will continue to grow by 2.25 per cent. in real terms through to 2015.

These spending plans allow us to set up a new transport fund, which will be used to plan ahead for change and innovation and to support and encourage local and regional transport strategies to tackle congestion in towns and cities. It will also ensure that the contribution that regional and local schemes can make to our national productivity is reflected in their funding. Details will be announced with next year's Budget.

Major investment in road and rail is already under way, and it will continue. Spending will rise to build the transport network we need; but cost control is absolutely essential. Railway costs in particular have increased dramatically, so that even with Network Rail's intended efficiency measures, amounting to £1.5 billion a year, the rail regulator's findings last year were that the railways require an additional £7 billion—putting huge pressures on my Department's budget. But if we are to provide the transport for passengers and freight that we need, rigorous control is essential on road, rail and light rail.

Light rail can be very effective in persuading people to use public transport. Since 2000, new lines have opened in Croydon, Tyne and Wear, Manchester and Nottingham. Manchester's metro has been extremely successful, but plans for the extension have been dogged by successive cost increases. The central Government capital contribution rose from £282 million cash in 2000 to £520 million cash in 2002, on top of which the required annual central Government payments have also risen, from £5 million a year in 2000 to £17 million a year today—worth another £150 million.

There is a similar pattern in the Leeds and south Hampshire tram proposals. In Leeds, the present value of the public sector contribution was capped at £355 million, but is now estimated at £500 million, and in south Hampshire, the original £170 million present value is now £100 million more. In each case there is no certainty that costs will not rise further. The National Audit Office was right to raise concerns; indeed, looking back over the past 20 years, it has cost more to provide light rail in this country than elsewhere in Europe.

No Government could accept those schemes as they are on the basis of such cost escalations. We cannot, therefore, approve them. We need instead to look urgently at how light rail could be made affordable, including the best approach for procurement. We will work with local authorities on the development of schemes, building on the recent NAO recommendations.

The same considerations apply to Crossrail; cost control will be essential. The case for a Crossrail link across London is clear and will only get stronger as London continues to grow, but the plans need to be robust and value for money. That is why last year I asked a team led by Adrian Montague to review the business case for Crossrail. His report, which I am publishing today, makes it clear Crossrail is needed, but that at a cost of £10 billion it represents a huge challenge both to deliver and to fund.

We intend to introduce a hybrid Bill at the earliest opportunity to take the powers necessary for Crossrail to be built. At the same time, as the Montague report recognises, a major funding challenge remains. The Government will need to work with the Mayor and the London business community to find a funding solution where everyone pays their fair share. That will include consulting on appropriate alternative funding mechanisms. Copies of the report and my detailed response are available in the Library.

We believe that local decisions are best taken locally, and we intend to give local and regional authorities a greater role in deciding transport priorities in their areas, looking across the whole transport network. To achieve that, we will set regional guideline budgets for major schemes next year, and set out guideline capital allocations to councils in the autumn.

However, because of the timing of the Olympic bid, I am today announcing the equivalent settlement for London. Transport will be crucial to a successful British bid for the 2012 Olympics. The Mayor guarantees to fund and provide a package of transport improvements that will underpin the bid and provide lasting benefits for London. Details will be available in due course, but I can announce that it will be supported by additional Government funding of £340 million, above existing plans, and Transport for London's prudential borrowing plans of a further £2.9 billion for the period up to 2009—10, which the Government support.

Turning to the second part of our strategy, increased investment needs to go hand in hand with measures to get more from our existing capacity. That is why, for example, we introduced the Traffic Management Bill to keep traffic flowing in towns and cities. Starting in the west midlands, traffic officers are now patrolling the motorway; their aim is to keep traffic moving. We are also considering carpool lanes. The reforms for the railways that I announced last week will result in better management and increased reliability for rail.

The White Paper sets out the measures that we are implementing, including new proposals to help manage bus services, because we need to make more effective use of buses to improve local transport in towns, cities and rural areas across the country. The vast majority of travel by public transport is by bus. Nearly two thirds of all public transport journeys—about 4 billion journeys last year—are by bus, and many people depend on it. As I have said before, where councils and bus operators work together in partnership, bus use increases, and we want to see more of that.

As I told the House last week, we intend to devolve significant powers and funding for rail to passenger transport authorities, but if we are to enable PTAs to make sensible decisions between rail, light rail and bus services, they will need to have the power to guarantee bus routes, timings and fares. That is why I can tell the House that we will make it more attractive for authorities to introduce bus franchising through quality contracts in specified circumstances, approved by the Secretary of State—for example, as part of a congestion charging scheme, or where authorities decide on a new balance between rail and bus. As part of that, we will streamline the statutory procedure for quality contracts, reducing the minimum period to implement a scheme from 21 months to six months. One advantage of our proposals to give local authorities the ability to take decisions about public transport in the round is that it will reduce some of the revenue risk on light rail schemes.

I now turn to the third part of the strategy. We also have to plan ahead for the pressures that we know that we will face in decades to come. I confirm our commitment to implement the conclusions of the air transport White Paper. We also intend to take a longterm approach to port development and will publish a review of the policy framework for ports by the end of next year. The White Paper also sets out a sustainable approach to freight.

We also need to deal with the potential environmental consequences of increased travel. Substantial progress has been made. Cars and lorries are becoming cleaner and quieter, so despite increasing car use over the past decade, air pollution from road transport has halved. But the White Paper looks at how we can ensure that transport makes its proper contribution to reducing CO2 emissions to achieve the Government's climate change commitments, by supporting the development of low—carbon vehicles and fuels, including hydrogen fuel, and continuing to ensure that the right tax incentives are in place to encourage the take—up of new technology and fuels.

That brings me to what is perhaps the biggest challenge for all of us: car use has increased and is likely to increase more, which has huge environmental and social consequences. As a country, we have to face up to some stark choices. Looking ahead over the next 20 or 30 years, we cannot try to build our way out of the problem—the cost, environmentally and financially, is unacceptable—nor can we accept eventual gridlock, which is the inevitable consequence of doing nothing. Therefore, we have to examine whether we can make use of new technology, as it becomes available, to make more efficient use of our roads.

As the House will be aware, in the next four years, we will introduce charging for all lorries using UK roads based on the distance that they travel. Accompanied by a reduction in fuel duty, overall, the UK haulage industry will not pay more. That will allow us in the future—for example, by varying charges—to encourage lorries to use motorways at off-peak times.

Last year, I set up a study, involving a broad range of motoring and environmental interests, to look at the feasibility of introducing road pricing for cars. That would involve moving away from the current motoring taxation system and introducing charges to use roads. Those charges would vary depending on how congested the roads are. Today, I am publishing the findings of that study, and copies are available in the Library. The study concludes that a national scheme has the potential to cut congestion by about a half, as well as providing environmental benefits. It says that road pricing will become technically feasible in the next 10 to 15 years; but, for a scheme to work, it would need general public acceptance and a great deal of preparation work over a number of years. There is still a lot of work to be done before we could be sure whether that could work, but one thing is clear: doing nothing would be the worst possible option.

Of course, we need to invest in public transport, and we are, but that will not be enough on its own. But if we are not bold now, we will be left behind when the benefits become possible. That is why I welcome the report. There needs to be debate about what would make pricing acceptable to motorists. We must build a public consensus around the objectives of road pricing and how to use the revenues. Although a national scheme is not yet feasible, undertaking road pricing at a local level could be feasible now, and the study says that that would greatly improve the understanding of the benefits, so we will need to look at that further with local authorities and take steps towards setting international standards for the equipment.

To duck this challenge now—to refuse to engage in the debate or to look at what new technology may make possible—would be irresponsible and condemn future generations to endless delays and increasing environmental damage. We need to rise to the challenge and to have the courage to look ahead and plan for the future, because our future prosperity and well-being depend on it.

There are no quick fixes for Britain's transport challenges. The long-term solution requires investment and a willingness to face up to difficult decisions. That is why we are making sustained high levels of investment and planning ahead to meet the needs of generations to come. I commend this statement to the House.

Mr. Tim Yeo (South Suffolk) (Con)

I am grateful to the Secretary of State for a copy of the White Paper and of the statement, which he made available earlier this morning. I welcome his recognition that a growing economy means that people want to travel more and that measures to enable people and goods to move around must be consistent with our environmental objectives. I particularly welcome the reference in the White Paper to the use of new technology to promote cleaner vehicles and fuels. We will want to examine that matter and in due course to debate it.

However, after seven years of Labour Government, motorists and train users do not have much to be grateful about. On the roads, congestion has got worse, even though motorists are paying an extra £10 billion a year in taxes compared with 1997. As the RAC points out, out of a total of £40 billion raised every year in motoring taxes, only about £6 billion is spent on the roads. On the railways, reliability has got worse and fares have risen faster than inflation. The 10—year transport plan, launched with such a fanfare four years ago by the Deputy Prime Minister, has been a disastrous failure.

Let us judge the Government's performance by their own standards and look at some of the key targets that they set out in the 10—year plan. According to the plan, by 2010 congestion on our roads was to be reduced. In practice, it has got worse. According to the plan, trains were to be made more punctual. In practice, they have become less punctual. According to the plan, rail passengers were to increase by 50 per cent. That target cannot now be met. According to the plan, bus travel throughout England was to grow by 10 per cent. In practice, outside London, it is static. According to the Secretary of State's own update of the plan just two years ago, the Strategic Rail Authority was to provide firm leadership, strategic direction and funding for the rail industry. In practice, it has been abolished.

According to the plan, the maintenance backlog on local roads was to be eliminated. [Interruption.] In practice, that target is being dropped. According to the plan, Thameslink and the East London line were to be built by 2010. In practice, those target dates cannot possibly be met. According to the plan, rail freight was to increase by 80 per cent. In practice, in 2002 rail freight fell. [HON. MEMBERS: "Boring."] According to the plan, passengers were to travel by train more quickly and comfortably. In practice, overcrowding is bad, it has reached chronic proportions and it is likely to get worse. Not surprisingly, complaints have more than doubled.

According to the plan, the east coast main line was to be modernised and capacity was to be increased. In practice, that scheme has been put on ice. According to the plan, local roads were to be improved. In practice, the Freight Transport Association reports that their condition is worse than a decade ago. [Interruption.]

Not one of those failures received a mention from the Secretary of State but they are the issues that concern daily road users, railway users and freight customers. [Interruption.] The consequence of those failures, to which he is so reluctant to own up, is an economy whose competitiveness is weakened every day. According to the CBI, transport congestion now costs British industry more than £15 billion a year. [Interruption.]

Mr. Deputy Speaker (Sir Alan Haselhurst)

Order. I am sorry to interrupt the shadow Secretary of State but may I say that he should be given the same attention as the Secretary of State and should be heard?

Mr. Yeo

I am grateful to you, Mr. Deputy Speaker. The truth is that neither the Secretary of State nor Labour Back Benchers want to hear the truth about Labour's failures on transport.

Britain has less than half the European Union average provision of motorways per head of population and a lower motorway density than any of our major European competitors. In Britain, the proportion of road links that are congested for more than one hour a day is three times greater than in Germany and five times greater than in France.

Absolutely nothing in the statement suggests that the Government plan any specific new steps beyond what they have already announced to tackle any of the problems that I have mentioned. Their failure to do so is rapidly turning the challenge to which the Secretary of State referred into a full-scale crisis. The truth is that motorists who face jams today will face them tomorrow and for the foreseeable future, even if, unlike all those previous promises, the promises in the White Paper are kept.

Why do not the Government recognise that charging for road use is acceptable, but only if the money raised is used exclusively to pay for environmentally acceptable road improvements or increases in capacity, or to cut other motoring taxes? [Interruption.] Simply extracting more tax from drivers without any guarantee that those conditions will be met would be wrong.

Mr. George Foulkes (Carrick, Cumnock and Doon Valley) (Lab/Co-op)

Where is the question?

Mr. Deputy Speaker

Order. I say once to the right hon. Gentleman that I expect him now to maintain silence from a sedentary position. He cannot go on interrupting the hon. Gentleman; otherwise, we shall be better off without his presence.

Mr. Yeo

Even if the right hon. Gentleman does not intervene, we will be better off without his presence.

The timid nature of the Government's approach—launching a debate instead of taking a decision—will dismay road users and environmentalists alike. On local congestion schemes, do the Government realise that improvements in public transport should precede and not follow the introduction of local road pricing? What assurance can the Secretary of State give about the use to which money that may be raised by local councils through local congestion charging schemes will be put?

On spending, to which the Secretary of State is so addicted, does he realise that much of the investment that is needed to improve our transport system will come from the private sector, regardless of who is in power? Therefore, one key judgment on his White Paper is whether it promotes private investment. Will he say whether giving Ken Livingstone power over train services in London—two out of three rail journeys begin or end in London—will make it more or less likely that private investors will want to invest in the railway industry?

How will the new transport fund that the Secretary of State mentioned reduce congestion in towns and cities? Will it deal with the problem of road maintenance, a huge issue that I did not hear him mention at all? Will he admit that delaying repairs and maintenance on roads increases the need for complete rebuilding of many roads? When does he believe that the backlog of maintenance work will be addressed?

On Crossrail, will the Secretary of State confirm that after today, we are no nearer a firm date for completion of this project and that suggestions that it would be completed in time for the London Olympic games in 2012 are complete nonsense? Will he confirm that his failure to introduce the lorry road user charge means that Britain's hauliers will remain at a competitive disadvantage in relation to their foreign counterparts for several more years?

Given the fact that almost every promise made in the document published four years ago has now been broken and that almost every target has been missed, there can be little confidence that a fresh set of promises in this new document will be kept. Instead of a vision for our transport system, we are offered a muddle. Instead of decisions, we are offered debates. After seven years of Labour government, Britain has a transport system that inconveniences millions of travellers every day and burdens businesses with delays and costs that undermine our competitive position. Sadly, after today's statement, that inconvenience and those delays and costs are set to continue for years to come. Only the election of a Conservative Government will address our transport needs.

Mr. Darling

Well, I admire the hon. Gentleman's sense of humour, at least in relation to the last point. I am glad that he recognises the overall objectives and agrees with them; it is just a shame that where we differ to a great extent is on providing the means to achieve them. If one is committed, as he is, to cutting £2 billion from transport, many of the problems that he complains about will be compounded, not sorted out.

Let me go through the points that the hon. Gentleman raised. He complained that we were not spending enough on roads. He will recall that, in the early 1990s, the then Conservative Government, of whom he was a member, announced a very ambitious road programme. The only problem was that it completely collapsed by 1996, because of the economic problems that they ran into. We are spending 43 per cent. more on roads than in 1997, and the road programme that we have put in place will make a difference.

The hon. Gentleman mentioned railways. He well knows that one of the biggest impediments to rail reliability was the lack of investment. Again, investment virtually dried up prior to privatisation. Less than 200 miles of track was being maintained thanks to the then Conservative Government. Privatisation also created a chaotic system of organisation that affected reliability. Both those things, investment and organisation, are being put right.

The hon. Gentleman had the gall to say that fares were going up. Is that another spending commitment? If fares are going to come down, the money has to be found somewhere. It is awfully difficult to see how it can be found if one is cutting £2 billion from transport spending.

As for this nonsense about private investment and the Mayor, the Mayor is getting very limited influence over what is happening in London, which is mainly directed towards rationalising the fare structure. From the conversations that I have had with the rail companies, which I speak to regularly, I can tell the hon. Gentleman that they were very happy with what I announced last week and saw that it was far more sensible than what the Conservatives had left.

The hon. Gentleman mentioned bus travel, which is increasing outside London, where, as I told the House earlier, good councils and bus companies are working together. The proposals that I have announced today—I suspect that Labour Members will want to draw me out on them rather more than Opposition Members do—with regard to limited franchising are a welcome reform and a good step forward.

Crossrail was never going to be ready for the Olympics. I have said that countless times in the House.

Mr. Yeo

That is in The Times.

Mr. Darling

I cannot be responsible for what The Times writes. God almighty.

Crossrail is another major step forward in providing a much-needed bit of infrastructure, but let us be fair: it is again something that successive Governments did not provide.

The hon. Gentleman went on about Thameslink, the East London line and the east coast main line. These are all things for which we are providing money, but from which he would take money away, because of his commitment. The settlement that I have announced for London today will allow the Mayor to make major progress on a number of these things.

The hon. Gentleman mentioned motorways. I have already announced the widening of the M1 and M25, and I recently announced proposals for the M6. Finally, he went on about road user charging. Here, there was just a glimmer of hope. The lorry road user charging scheme is due to be introduced in four years' time, and it will be. On the further proposals for cars, I welcome what he said on Sunday. He was asked about the issue twice by Mr. Boulton on a Sky programme, and he said about congestion charging and road pricing: There is nothing wrong in principle with a system of road pricing". He went on to say: in principle a system of road pricing which reflected the usage of particular roads is acceptable. So we are agreed on that.

Mr. Yeo

It is a debate.

Mr. Darling

Like his leader, the hon. Gentleman is rowing back on what he said only a few months ago. He has a real problem. He has no aviation policy, no roads policy and no rail policy. All he has got is a commitment to cut £2 billion of spending.

John Thurso (Caithness, Sutherland and Easter Ross) (LD)

May I thank the Secretary of State for sending an advance copy of the statement and also giving me the White Paper and reports?

Obviously, I have not had a chance to read the White Paper in detail, but I was drawn to the map on page 25, which deals with major airports and ports of the United Kingdom. Across the south of England and up into the midlands, there are lots of little aeroplanes denoting important airports. When one comes to the north of Scotland, however, there is no little aeroplane over Kirkwall or Wick, and even more importantly, there is none over Inverness. Is that an omission on the part of the Government, or do they seriously believe that Inverness is not a major airport?

The statement is something of a curate's egg; there are good bits and bad bits. It raises many issues and puts many of the right questions, but it is somewhat lighter on the answers. Perhaps one of the most obvious omissions is the lack of reference to an integrated transport policy. That is all the more surprising as research has revealed that the words "integrated transport policy" were first used in a Labour policy document in 1948. One therefore might have hoped to see the phrase in this important White Paper.

In addition to the White Paper, the Secretary of State has published today a report on Crossrail, which is welcome, and a report on road user charging, which is also welcome. It will be necessary to study those carefully to determine whether the detail in them provides more answers. Overall, they represent a road map to a strategy rather than a strategy document. Among the omissions in the documents is the absence of a serious analysis of the factors that shape travel—the White Paper does not consider that. Growth in the past has not been driven simply by growth in the economy, so we need to consider that matter. The Secretary of State is right to put the planning time frame at 30 years. Transport planning has been bedevilled by short-term outlooks, so until we have a clear long-term vision, it will be impossible to put forward a good short-term plan.

Perhaps the most important announcement that the Secretary of State made was on his decision to consider national road user charging, which I would support. He said in his statement that a national scheme could not be put into effect at this time, but is he aware that passive reading technologies, such as cell ID and triangulation, that use mobile operator black boxes, could provide a solution within a much shorter time frame? The Secretary of State also mentioned reducing fuel duty, with which I agree, but will he consider abolishing vehicle excise duty as part of the exercise, because it is a regressive tax that is costly to collect. Will he confirm that the overall tax take from the introduction of road user charging will remain the same, although the tax burden will fall differently on different users?

I was pleased to note that the Secretary of State accepted the need to adopt a long-term approach to port development—although I must say that Scrabster, Britain's most northerly deep-water port, was another omission from the map of major ports. Our ports are underused assets, especially for short sea freight, and the lack of capacity for long-haul container traffic must be addressed. As I have said on several occasions, the Government need to take a lead on that.

The Secretary of State has laid before the House the stark challenge and conflicting demands that exist due to more transport requirements and the equal requirement for less emissions—I suppose that he deserves one cheer for that, at least. We will find out whether the White Paper meets that challenge in the years to come, but one thing is certain: we must meet the challenge of halting and reversing our emissions growth. That alone will be the measure by which the statement will be judged.

Mr. Darling

The map is intended to show major airports. I appreciate that Inverness is not on it, although it is a busy airport; a further glaring omission is Stornoway, which is a pity because I was hoping to fly into it next month—I shall have it reinstated at the earliest possible opportunity. I have been to Scrabster; although I appreciate its importance, it is not quite like Southampton or several of the London docks. However, I take the point that the hon. Gentleman makes.

The words "integrated transport" are used endlessly, but what matters is to enable the people who can make transport work do so more properly—a lot of responsibilities are devolved to local authorities and regions—which is what we are doing. I appreciate that the document on road user travel charging is large and that the hon. Gentleman received it at only 10 o'clock this morning, but when he reads it, he will see that the experts' view is that the scheme is technically 10 to 15 years away. He is right about moving away from the present taxation system towards something completely different. That will be new territory. We will be trailblazing in that respect, but I appreciate his general welcome to the fact that we are examining such measures.

Several hon. Members


Mr. Deputy Speaker

Order. There is considerable interest in this statement, the next statement and the main debate to follow. I do not believe that I will be able to call everybody, and I would appreciate short questions and answers.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich) (Lab)

The Secretary of State will be aware that his statement is warmly received because of its clarity and commitment, especially regarding the aspects on bus policy, which will mean that local authorities will be able to guarantee that buses are where they are wanted and needed in the future. Will he use some of his new funds to examine ways to reinvigorate the manufacturing industry for both rail and light rail in this country? That is what we should be doing, so will he give us some hope that he will look at it?

Mr. Darling

The funds will be applied for specific purposes to get traffic improvement. That might have a consequential effect on orders for buses or light rail, although of course there would not be direct payments to manufacturers. On my hon. Friend's general point, the bus franchising proposals that I am outlining are to be used in specific circumstances. I suspect that the majority of schemes will continue under the present system for some time, but I welcome her general comments.

Mr. Mark Field (Cities of London and Westminster) (Con)

On the Crossrail project, the Secretary of State makes it clear that he wants all partners to pay what he describes as a "fair share" of the expense. Can he give us an indication of what the Government's fair share of the project will be?

Mr. Darling

As I said, we will have to discuss how much central Government, London, the Mayor and businesses contribute. I think that there is an appetite among businesses to contribute to something from which they would hugely benefit, but such discussions must continue.

Linda Perham (Ilford, North) (Lab)

As chair of the all-party group on Crossrail, I warmly welcome the Secretary of State's announcement and accept his warnings about costs. Will he think about the costs of congestion and overcrowding if the system does not go ahead, and the delivery of regeneration to east London? The completed Crossrail scheme might bring £20 billion to the UK economy as a whole and we cannot afford to pass that by.

Mr. Darling

I agree that Crossrail could bring huge benefits to London in the future and relieve a lot of pressure now. However, the situation for Crossrail and other rail schemes throughout the country is exactly the same: we must ensure that we are far better at controlling costs in the future than we have been in the past so that we get £1-worth of benefit from every £1 that we spend. The case for Crossrail and many light rail schemes is strong, provided that we get the sums right.

Mr. Eric Pickles (Brentwood and Ongar) (Con)

Crossrail starts in my constituency, so the announcement is welcome. I understand what the Secretary of State says about consulting on the formula for funding, but surely by now he has a clear idea of the balance among public and private funding, the fare box and the Mayor. Will he give us an indication of that balance and tell us whether risk will be determined on the basis of it? Does he envisage Transport for London being a prime mover behind raising funds for the project?

Mr. Darling

I refer the hon. Gentleman to the business case for Crossrail that I published this morning—I know that he will not have had time to read it—which examines all those issues. My answer to him is the same as that which I gave to the hon. Member for Cities of London and Westminster (Mr. Field) a few moments ago. The Montague report recognises that there are complex issues to consider and huge challenges to overcome. It is important to have the right mix of funding and to organise things in the right manner. I have agreed proposals in the document with the Mayor on the future organisation and delivery of the project.

Mr. Graham Stringer (Manchester, Blackley) (Lab)

I hope that my right hon. Friend will accept that his decision on light rail in Manchester will be met by anger and disbelief. I, and virtually everyone in Greater Manchester, I am sure, think that stopping the scheme at this stage is unacceptable. Does he accept that the National Audit Office report gave the Metrolink a clean bill of health and that the cost-benefit analysis of the scheme was positive? Does he also accept that if the Deputy Prime Minister had not dithered four years ago, the scheme would have gone ahead at much less cost? Will he look forward to getting the scheme going as quickly as possible because it is good for the environment and the travelling public, and essential to the economy of Greater Manchester?

Mr. Darling

I fully recognise the disappointment that will exist in Manchester. I accept that the Manchester metro has been successful and that it got a good assessment from the NAO, but there is no getting away from the fact that the cost of the extension has increased dramatically over the past few years. As I said earlier, no Government can accept such escalating costs—there is no guarantee that they have peaked yet. We were being asked to pay more money for the scheme. The situation applies not only to Manchester, but to the schemes in Leeds and south Hampshire. I suggest that we need to sit down with local authorities to determine whether there are ways of making such schemes affordable. As I have said before, and as the strategy document makes clear, light rail is important, but we cannot find ourselves in a situation in which annual payments rise at such a dramatic rate over a short time. No Government could sign up to that. I understand what my hon. Friend says, and I hope that the measures I have announced on further discussions, franchising and so on will help to resolve what is undoubtedly a difficult problem, but we have to ensure that if we spend all this money, we get value for money.

Mr. John Redwood (Wokingham) (Con)

I welcome the Secretary of State's realism on new tram schemes. They are heavy loss makers and cost overruns are big. Is he saying, as I would, that they should not be subsidised, or is he saying that there is a level of subsidy that he would negotiate, but it should be much lower than the current level?

Mr. Darling

Nearly all public transport is subsidised to some extent. I am certainly not against the principle of the public contributing; the question is the degree of subsidy. I was happy to agree a contribution two years ago. What concerns me is that costs have risen again since then. There comes a point when we have to say, "Hold on. Are we doing this the right way?" My hon. Friend the Member for Manchester, Blackley (Mr. Stringer) was right: the NAO said that the Manchester metro is a good scheme. It was critical, however, of how Governments of both parties procure such things and ensure that they are done properly. Frankly, if we are to build light railways, we have to ensure that we get the sums right in the first place. I understand the disappointment in different parts of the country, but the bigger folly would be to proceed with something when the costs are not nailed down.

Mr. Andy Reed (Loughborough) (Lab/Co-op)

For the one third of my constituents who rely on buses, it is great that there will be specified circumstances for the new quality contracts. Will my right hon. Friend give examples of the specific circumstances in which they will be allowed for local authorities? Will they include places such as Loughborough? It has a good quality bus initiative, but it needs to go much further because passengers are seeing bus services slashed almost overnight. For the two thirds of motorists in my constituency, can he guarantee that there will be clean fuels through biomass, biofuels and fuel cell technology in the near future?

Mr. Darling

I like the way in which my hon. Friend divides up his constituents so neatly.

On the latter point, the White Paper has a lot to say on the need to promote cleaner fuels. On bus franchising, I deliberately said that we are making proposals in specific circumstances. For example, last week I said that I wanted to devolve power to passenger transport authorities in relation to rail travel. If a PTA makes sensible decisions about heavy rail, light rail or buses, it might be able to implement them only if it has some control of the buses, and we might consider that request. Similarly, if we establish a pilot scheme on the measures relating to road pricing, bus franchising would almost certainly have to be part of the scheme. The London scheme showed that there needs to be overall control. However, I shall not approve schemes when nothing is happening to improve public transport. The evidence up and down the country is that when councils and bus companies work together, they can achieve a great deal. The proposal is specific, but it is welcome as an extra power that we need to make transport work.

Mr. Mike Hancock (Portsmouth, South) (LD)

The people of south Hampshire will obviously be disappointed, but they will accept that the announcement was fairly predictable because of the cost escalation. However, several million pounds have been spent over 15 years on trying to create an affordable light railway system. Will the Secretary of State expand on his statement that the Government will look urgently at how light rail could be made more affordable, including the best approach to procurement, because we have been trying to do that with his officials for the past 10 years?

Mr. Darling

I welcome the hon. Gentleman's realism on the decision and the problem with costs. It is only in the past two or three years that there has been a real problem with costs, and account must be taken of the amount of risk that investors are willing to take and the cost of that risk. I have said before that I have spoken to the banks that are investing in the scheme. They said that the business is marginal to them and they are upping their costs. One memorably said to me in private, "If you pay, you're daft." We have to ensure that we have a sensible way of procuring such schemes and it must provide value for money. That is not the case with the current system, as the hon. Gentleman recognises. I am afraid that time after time, light rail, heavy rail and road schemes cost a lot more than the original proposal. That has to stop.

Mr. Colin Challen (Morley and Rothwell) (Lab)

I am naturally disappointed, as I think my other colleagues from Leeds will be, about the announcement on the Leeds supertram. As my right hon. Friend has left the door open on discussions to find creative ways to finance it, will he meet representatives from Leeds, which is, after all, the north's most successful city after 24 years of a Labour administration, to discuss those creative ways and see how creative the Government can be in financing the Leeds supertram scheme?

Mr. Darling

I met representatives from Leeds, although I appreciate that the regime has changed since then. I made it clear earlier this year that we could not pay the sort of costs that they faced. On top of that, the scheme that they proposed was less substantial than the original one. That cannot go on. That is why I made it clear that we cannot accept the proposals because of the cost escalations. We and the local authorities in Leeds and elsewhere will, of course, discuss how such schemes can be better procured in future. However, I do not think that anything has changed materially since I met the Leeds representatives a few months ago. Of course, my ministerial colleagues and I are always happy to discuss such matters with all hon. Members.

Chris Grayling (Epsom and Ewell) (Con)

The Secretary of State will be aware that the original 10-year plan document contained future projects for the rail network that appear to have been dropped in the past couple of years or so. The new document contains no specific references to future rail projects. Which projects does he expect to bring back and complete during the period covered by the document?

Mr. Darling

A number of rail projects are under way and planned. They will go ahead, not least because the railways are getting a large share of the money—for example, the southern power supply is being upgraded. The hon. Member for South Suffolk (Mr. Yeo) said that nothing has been done on the east coast main line, but work is being done there and the west coast main line is getting £7.5 billion. The bigger problem for him and his Front-Bench colleagues is how on earth he can say what he does when he is committed to cutting transport spending by nearly £2 billion.

Rob Marris (Wolverhampton, South-West) (Lab)

What will the Government do to encourage bicycling?

Mr. Darling

The strategy document sets out a range of measures to encourage people to cycle. I strongly believe that we should make it as attractive as possible through cycle lanes and similar measures, but at the end of the day it is up to individuals to choose whether they get on a bike. We are doing a lot, but I strongly believe that people should make their own decisions on that.

Sir Nicholas Winterton (Macclesfield) (Con)

I very much share the objectives mentioned by the Secretary of State and agree that infrastructure improvement, not least road improvements, are essential to economic progress. Does he accept, however, that road pricing could be regressive in rural areas? The Under-Secretary of State for Transport, the hon. Member for Harrow, East (Mr. McNulty), was courteous and sympathetic when I led a delegation to meet him. Does the Secretary of State agree that road pricing in rural areas, where there is only limited public transport, could be damaging and very regressive?

Mr. Darling

The report recognises that many issues need to be resolved in the new system as against the current system, and the hon. Gentleman is right to say that we need to do that. We need to consider all of them. For example, rural drivers complain that they have to travel longer distances. If there is a consensus—there is a glimmer of one in that the Front-Bench spokesmen say that there is nothing wrong with the principle—it is important to consider the detail. The new system is at least 10 to 15 years away. It would be nice if we could all work together because, frankly, whatever we decide has to stand the test of different Administrations over many years.

Joyce Quin (Gateshead, East and Washington, West) (Lab)

I very much welcome what my right hon. Friend said, in particular on local and regional transport strategies, but in view of the interest in the House and the recent presentation of Bills, including one by myself, on free passes for pensioners, will he continue to look at the case for extending free bus travel for pensioners across England and ending the current postcode lottery? Given that that would cost £300 million, which compares favourably in economical terms with some of his spending announcements, will he consider that with his Cabinet colleagues before the next election?

Mr. Darling

I think that it is better if local authorities decide those things. On the question of the £300 million, however, the problem in transport is that there are lots of demands for £300 million, but the rail regulator has asked for a total of £5 billion. It is not as if we have lots of money and are short of ideas on how to spend it. I accept the point made by my right hon. Friend, but to be realistic, at the moment I am not persuaded that I should take £300 million to spend on that proposal. It would be better to leave those things to local authorities, because, as I said, a large part of our budget is under pressure. Although there will be improvements, we must make sure that we spend the money on the right things.

Pete Wishart (North Tayside) (SNP)

Can the Secretary of State confirm that any plans for national road tolling will extend to Scotland? He will know that responsibility for setting tolls for Scotland's roads rests with the Scottish Parliament. What discussions has he had with them, and what would happen if the Scottish Parliament rejected the idea?

Mr. Darling

Essentially, we are talking about moving away from the present system of taxation to a new system of charging. Because taxation is a reserved matter and applies to the whole of the United Kingdom, the proposal would apply to all of the UK. I know that the hon. Gentleman has terrible difficulty with that—I tried to persuade him earlier that the UK is a very good thing for Scotland—but he is in a minority of one. I see that he is still sitting on his own—I do not know where his colleagues have got to.

Mr. Clive Betts (Sheffield, Attercliffe) (Lab)

Could I bring my right hon. Friend back to bus franchising? Many Labour Members welcome the extension in principle of bus franchising, but are concerned about the specified circumstances in which it would be introduced? In South Yorkshire, despite the efforts of the local authority and the passenger transport authority to work with bus operators, bus ridership has fallen year on year because bus services have failed local people.

Mr. Darling

I am aware that in some parts of the country the relationship, for whatever reason, between bus companies and the local authority is not good. I do not, however, want to introduce franchising simply to get people to work together if they ought to be working together in the first place. I set out clearly in my statement and in the strategy paper the circumstances in which we will consider an extension. If there is a particular problem in Sheffield, I shall look at it—in fact, I will ask the Under-Secretary of State for Transport, my hon. Friend the Member for Harrow, East (Mr. McNulty), to do so at the end of this statement.

Mr. Robert Key (Salisbury) (Con)

In working up his concepts for the future of transport, will the Secretary of State bear in mind the sophisticated position of rural areas? It is not just a question of people in the countryside or people in the towns—most people in the countryside work in towns, and whether we are talking about road pricing, congestion charging, fiscal regimes or bus subsidies, we face a problem now. Our constituents and local authorities need a steer, and the sooner that the Secretary of State can attract attention to the problem, the better for all of us.

Mr. Darling

I appreciate that the hon. Gentleman has probably not had a chance to read the paper yet, but it looks at transport in the round. I also appreciate his point about the sometimes artificial division between town and country. The world is not like that and, thanks to his teaching many years ago, I know enough about geography to understand that.

Mr. David Watts (St. Helens, North) (Lab)

I very much support my right hon. Friend's statement, but can he turn his attention to Crossrail? He said in his statement that it will cost £10 billion, but he will be aware that many people think that it will cost —15 billion or more. Who will pay for any overspend, and can he assure me that it will not come out of the national budget?

Mr. Darling

I asked Adrian Montague to look at that in detail because I wanted to be satisfied that we could nail down the costs. If my hon. Friend looks at the review, he will see that Mr. Montague has taken a robust look at the issue, and believes that the cost will be about —10 billion. He recommending dropping—we are doing so—the line into Richmond, which will save about £1 billion. As with every big project that we have talked about this afternoon, we must be clear at the outset what the costs are and nail them down. We must also make sure that the risk falls in such a way that there is a huge incentive to control costs.

Mr. Andrew Rosindell (Romford) (Con)

The Secretary of State will be aware that the Crossrail project will have a major impact on my constituency of Romford, particularly the Crowlands area of central Romford, where it is proposed to build a large depot, and Gidea Park, where a railway siding is to be constructed. Will the Secretary of State assure my constituents that a full and meaningful consultation will take place before final decisions are made, that changes to the plan are possible, and that the current proposals are not set in stone? If they do go ahead, can he confirm that people along the route who are affected will be offered sufficient compensation for the blight that those two projects may well cause in my constituency?

Mr. Darling

For the sake of brevity, I refer the hon. Gentleman to my written statement, which is being issued in parallel with this oral statement and covers many of those issues. Of course, consultation is needed, and the route is subject to the provisions of a hybrid Bill. It may not quite be a unique opportunity, but there will he a chance for all hon. Members to participate in the proceedings on that Bill. The hon. Gentleman may wish to serve on the hybrid Bill Committee—if he has a word with the Whip, I am sure that he can sign up to it, although anyone who has served on one may caution against doing so.

Mr. Clive Soley (Ealing, Acton and Shepherd's Bush) (Lab)

I thank the Secretary of State for his announcement on Crossrail, which is vital to the prosperity of west London. I agree that it is probably right to drop the Richmond link, which was one of the most environmentally damaging sections of the route. Echoing the point that he has just made, consultation and giving information to the public, given the nature and size of the project, are incredibly important, and I should be grateful if he would keep his eye on that.

Mr. Darling

I agree with my hon. Friend.

Mr. Richard Allan (Sheffield, Hallam) (LD)

When the channel tunnel rail link is completed in a few years' time, it will be faster to travel to Paris from St. Pancras than to Sheffield. While we are all happy for travellers to Paris, does the Secretary of State sympathise with many people in Sheffield and the east midlands who feel that they have a Cinderella rail service? Can he assure us that investment in everyday services will not lose out to prestige projects elsewhere?

Mr. Darling

I agree that it is important to improve domestic services. There have been problems on the midland main line, some of which have been exacerbated by the work currently taking place at St. Pancras. The hon. Gentleman makes a perfectly good point, but it is possible to have good domestic services as well as fast links to the continent.

Mr. Keith Bradley (Manchester, Withington) (Lab)

The people of south Manchester will be hugely disappointed by the latest delay in the Metrolink extension through my constituency to Manchester airport, which would achieve a truly integrated system of heavy rail, light rail and air travel. However, will my right hon. Friend's officials urgently meet officials from the passenger transport authority in Greater Manchester to discuss procurement, refranchising agreements and devolved capital budgets to ensure that a scheme for south Manchester can be introduced at the earliest opportunity?

Mr. Darling

My right hon. Friend has done a great deal to promote the cause of Manchester Metrolink, particularly the extension to south Manchester, and I have had many discussions with him, for which I am grateful. I readily accept his general proposition but, as I said in my statement, we need to consider urgently how we procure those things more sensibly so that we can secure the gains of a tram link between various forms of transport, not least at the airport. I am happy to agree with that proposition, which would benefit light rail, not just in Manchester but throughout the country.

Clive Efford (Eltham) (Lab)

I welcome my right hon. Friend's statement on Crossrail, which is crucial to the capital's future prosperity and will create transport links essential to the regeneration of the south-east Thames gateway area and some of the most deprived communities, not just in London but throughout the area. May I stress the need for a station at Woolwich so that that part of south-east London can enjoy the wider benefits of that major infrastructure development?

Mr. Darling

That is one of the many issues that we must consider, as must the Cross London Rail Links company before it promotes the scheme that will come before the House. I agree, however, with my hon. Friend's general proposition about the regeneration effect in south-east London.

Mrs. Lorna Fitzsimons (Rochdale) (Lab)

My right hon. Friend will undoubtedly be aware of the great disappointment in Rochdale and Oldham, which have long been first in the queue of people asking for an expansion of the Greater Manchester Metrolink. Will he agree to meet my hon. Friend the Member for Oldham, East and Saddleworth (Mr. Woolas), my right hon. Friend the Member for Oldham, West and Royton (Mr. Meacher) and myself at the earliest possible opportunity to look at the chink of light offered by paragraph 16 of his statement where, if I understand him correctly, he is not saying "never" but "not now"?

Mr. Darling

My hon. Friend is understandably expressing her concern, but I do not wish to repeat what I said to other Greater Manchester Members. I, or one of my Ministers, will be more than happy to meet them as soon as possible.

Joan Ruddock (Lewisham, Deptford) (Lab)

Londoners will welcome the extra money that my right hon. Friend has allocated, but can he provide reassurance about the extension to the east London line? Is it his intention that that project should be undertaken by Transport for London and, if so, is sufficient public money available to meet the need and to enable us to start the project as soon as possible?

Mr. Darling

Yes. I can confirm that we have allocated that additional money to London, following discussions with the Mayor. He will decide what projects he wishes to prioritise. We have given sufficient money to enable the Mayor to do what is necessary for the Olympics and also to undertake other schemes, if he wishes to do so. In the spirit of devolution and in recognition of the fact that perhaps the Mayor ought to announce these things himself, I shall go no further at this stage.

Jonathan Shaw (Chatham and Aylesford) (Lab)

My right hon. Friend is aware that we have investment in buses—some £10 million in Medway—but he is also aware that we have some misgivings about the Strategic Rail Authority's proposals for the integrated Kent franchise. Can he confirm that he will take charge of the new franchise for Kent and that he will be prepared to meet a delegation from Medway to discuss the cuts in Cannon Street services, which we oppose?

Mr. Darling

I may be wrong, but I recall meeting my hon. Friend very recently. My hon. Friend the Minister of State thinks he met him recently as well. While it is always nice to bump into each other, perhaps we cannot do so every week. In relation to the integrated Kent franchise, I am well aware of the controversy and the difficulties in Kent. As I said last week, the SRA will continue to be responsible for these matters until it is wound up next year. It is in the process of evaluating the latest round of consultations. I know that there are many issues to resolve and Ministers will be devoting their attention to them. At some stage, I shall be more than happy to see my hon. Friend yet again.

Mr. Deputy Speaker

Order. We must move on.