London Underground: New Trains (Hansard, 22 March 1994)

§ The Parliamentary Under-Secretary of State, Department of Transport (Lord Mackay of Ardbrecknish)
My Lords, the timing for the acquisition of any new trains for the Northern Line is for London Underground Limited. The Government are urgently considering whether a leasing arrangement, such as the one recently proposed by ABB Limited, is consistent with the published criteria for such deals under the Government's private finance initiative.

§ Lord Jay
My Lords, as these trains are acutely needed by hundreds of thousands of people who use the line every day; as British industrial plant stands ready and waiting to produce them; and as the leasing scheme to which the noble Lord referred involves no government expenditure of public money, will the Government refrain from obstructing any longer the leasing scheme on grounds which appear to be no more than Treasury theology?

§ Lord Mackay of Ardbrecknish
My Lords, we are not obstructing the scheme. We are assessing the details of the scheme and we at the Department of Transport and others at the Treasury have had detailed discussions with ABB Limited. We are assessing the project to see how it accords with the rules for private funding. I expect a decision to be made in the near future.

§ Lord Jenkin of Roding
My Lords, is it not clear that the financing of these Northern Line trains is becoming something of a litmus test for the Government's good faith over the private sector/private finance initiative? If that is the case, do the Government recognise the enormous importance for this and many other projects which stand or fall by the new rules? If the new rules are substantially unchanged from the old Ryrie rules, does the Minister expect Sir Alistair Morton and his team to remain in office?

§ Lord Mackay of Ardbrecknish
My Lords, we fully appreciate the importance of the scheme for the Northern Line and its customers as an indication of the kind of scheme that we can encourage through private funding. That is why it is important for us to study the scheme properly and reach a properly balanced assessment that it accords with the rules.

§ Lord Clinton-Davis
My Lords, what is the difference in principle between the provision that was made for network express trains to be built and leased to British Rail and the situation that affects the Northern Line? Is it not the case that the Treasury and the Department of Transport have not seen eye to eye on 584 this issue and that, as Winston Churchill once put it, the Treasury is continuing to behave like an inverted Micawber waiting for something to turn down?

§ Lord Mackay of Ardbrecknish
My Lords, the noble Lord is being extremely unkind to the Treasury, as noble Lords who are former Treasury Ministers will expect me to say in their collective defence. The noble Lord rightly mentioned other projects on leasing that have been allowed. However, it is important to note that this project varies in some respects and we must explore it carefully to ensure that it obeys the rules and that there is a sufficient transfer of risk from the public to the private sector. That is one of the key components of private-sector funding.

§ Lord Clinton-Davis
My Lords, is it possibly the case that the Government are waiting until the brink of the local elections to make an announcement about the matter?

§ Lord Mackay of Ardbrecknish
My Lords, I cannot think why the noble Lord should have such an ungracious thought. If the Government were waiting to make an announcement I could think of no better occasion than my appearance at the Dispatch Box today.

§ Lord Jay
My Lords, election or no election, as the Government have been making their balanced assessment for some months will the Minister say when the decision will be taken?

§ Lord Mackay of Ardbrecknish
My Lords, we have not been making the assessment for "some months", in the plural view which the noble Lord implied. We have treated the matter seriously and hope to make an announcement soon. We are well aware of the importance of the work that is needed on the Northern Line, as on the whole of the Underground. That is why during recent years we have put such large resources into London Underground and we intend to do so during the next three years.

§ Lord Tugendhat
My Lords, does my noble friend agree that London's future, not only as an international centre but as a business centre within the United Kingdom, depends on the efficiency of the public transport system, in particular the Underground system? Does he further agree that the delays that have taken place in respect of the Northern Line, CrossRail and London Transport do not inspire great confidence in the importance that the Government attach to the position of the capital as a business centre and an international financial centre?

§ Lord Mackay of Ardbrecknish
My Lords, I am afraid that I cannot agree with my noble friend's sentiments. As I mentioned in answer to the noble Lord, Lord Jay, the Government have made considerable investments in London Underground. Indeed, during the next three years we shall invest approximately £3 billion, including in the Jubilee Line. Currently the £0.75 billion Central Line modernisation is on course for completion next year.

§ Lord Dixon-Smith
My Lords, I am an occasional user of London Underground and admit that I am constantly impressed by the speedy and efficient way in which it moves large numbers of people about our capital city. However, some of its rolling stock is more fit to be in a museum. Will the Minister assure me that every effort is being made to find a way to facilitate this deal, which might slip through our fingers? Will he further assure me that it has nothing to do with the fact that the Treasury insists on treating both capital and revenue expenditure in the same way?

§ Lord Mackay of Ardbrecknish
My Lords, I echo my noble friend's point about the efficiency of London Underground. Every day it moves a large number of people in a complex structure and it does so remarkably well. I fully appreciate the need, for example, for the Northern Line to be refurbished; that is the track, the electrics and the carriages. The Government are well aware of the importance of refurbishing the line. I assure him that if the project meets with the rules the Government will be more than willing to see it go ahead.