London Underground Limited: Finances (Hansard, 18 February 1991)

§ The Minister of State, Department of Transport (Lord Brabazon of Tara)
My Lords, as my right honourable friend the Secretary of State for Transport announced in another place on 14th February, the Government have decided to increase London Transport's external finance limit and grant for 1990–91 by £62.55 million to £510.55 million. This will allow London Underground to meet its immediate cash requirements.

§ Lord Boyd-Carpenter
My Lords, I thank my noble friend the Minister for that very interesting Answer. However, can he say whether the Government are really happy about the financial management of this company and whether they have in mind appointing someone with financial experience to the board of London Underground Limited?

§ Lord Brabazon of Tara
No, my Lords; the Government are not entirely happy about the position. London Transport has accepted that, as well as unforeseen economic circumstances, failures in financial control have contributed to its problems. Revised financial systems are being put in place. The finance directors of both London Transport and London Underground Limited have been replaced.

§ Lord Mellish
My Lords, despite all the criticisms which have been made about the finances of London Underground, does the Minister agree that it is still the finest system of its kind in the world and that it is run efficiently and well? In my view it is a great pity that some people do not spend a little more time praising it rather than denigrating it.

§ Lord Brabazon of Tara
My Lords, I am not certain as to whether it is the finest system in the world. In my answers to my noble friend I suggested that there are certain aspects of the system which could be better run and I outlined the steps which we are taking to ensure that that happens.

§ Lord Clinton-Davis
My Lords, is the Minister aware of a statement which was made by the chairman of London Underground about the inadequacies in accounting systems in which he said of the retiring financial director that: the gentleman concerned had many talents, but one of his talents was not controlling cash! Can the Minister tell the House whether the result of the increased grant aid which is being given to London Underground Limited by the Government will result in their meeting in full the recommendations and requirements of the Fennell Committee as regards the King's Cross accident? If not, what points will not be met, notwithstanding the Government's increased grant aid?

§ Lord Brabazon of Tara
My Lords, in reply to the first part of the noble Lord's question, that is presumably why that particular finance director has been replaced. As regards the second part, the addition to this year's EFL, which has just been announced, is to enable London Transport and London Underground Limited to maintain safety, and to allow the quality of service standards to continue along with the committed investment projects. Safety remains London Transport's and the Government's top priority; there is no question of skimping.

§ Lord Tordoff
My Lords, in the light of that answer, is the Minister aware of the increasing number of lost time accidents shown as having occurred on London Underground during the past year? Further, on a slightly different matter, if the gentleman referred to was appointed, can the noble Lord say who nominated him? Do the Government have no responsibility in such matters?

§ Lord Brabazon of Tara
My Lords, the Government's responsibility so far as concerns London Transport is to appoint the board, to set the external finance limit and the financial targets, and to set the quality of service targets.

§ Lord Shepherd
My Lords, if it is the Government's responsibility to appoint the board and the board appears to have failed in the matter of the appointment of those who are responsible for the finances, what are they doing about the composition of the present board?

§ Lord Brabazon of Tara
My Lords, so far as I am aware, neither the present board nor the present chairman has been in post for very long. It is up to the present chairman to put the situation right. I hope that he will do so.

§ Lord Boyd-Carpenter
My Lords, in the light of my noble friend's two previous answers, will he now answer my question as to whether the Government are contemplating the appointment of someone of financial standing and experience to the board of London Underground?

§ Lord Brabazon of Tara
My Lords, I very much hope that such a person is already a member of the board of London Underground; indeed, that certainly should be the case.

§ Lard Clinton-Davis
My Lords, can the Minister translate hope into action so far as concerns this matter? Further, can he give the House some indication of the likely rise in fares for consumers as a result of the current financial position and the action which the Government have taken?

§ Lord Brabazon of Tara
My Lords, the Government are discussing with London Transport its financial projections for 1991–92. No decisions have yet been reached. Decisions about further increases are taken each year in the circumstances which prevail at the time. The level of fares for 1991 has already been settled, but no decisions will be taken about 1992 for some time.