London Underground: Restructuring (Hansard, 3 November 1999)

§ Lord Ezra
asked Her Majesty's Government:
What progress has been made in the restructuring of the London Underground.

§ The Minister of State, Department of the Environment, Transport and the Regions (Lord Macdonald of Tradeston)
My Lords, good progress has been made. London Underground has been reorganised into a structure which foreshadows that of the proposed public private partnership. The pre-qualification process for those competing to run the infrastructure companies is now complete and invitations to tender for the two deep Tube PPPs were issued on 19th October. Discussions between Railtrack and London Transport on the possibilities for integration between the sub-surface lines and the national network are also making good progress.

§ Lord Ezra
My Lords, I thank the Minister for that information. In the light of the recent Paddington rail crash, are the Government still convinced that the proper solution for the Underground is to separate responsibility for train and track operations? In those unfortunate circumstances, and in order to avoid any replication of them anywhere in the rail network—whether above or below ground—are the Government considering alternative possibilities, in particular the continued integrated operation of the Underground network and the possibility of providing the Underground with the facility for raising the financial resources it requires by public bond issues, which is a widespread practice on the Continent? I am sure that there would be great public understanding and support if the Government were now to reconsider the whole situation.

§ Lord Macdonald of Tradeston
My Lords, the Government have made clear that the safety of passengers and staff is paramount on the Underground, as on the national railway, and the safe operability of any integration scheme will always be the prerequisite for proceeding.
We believe that the approach to integration and train control will need to take account of many of the findings of the investigations into the recent Paddington tragedy. We also believe that the structures we are putting together will leave London 876 Underground at the apex of the safety regime. Indeed, it will be the single controlling entity in that safety regime.
We also believe that the PPP we are putting together will prove better value than bond financing. If the bids showed otherwise, we would not go through with that PPP, which will be measured against a public sector comparator. We believe that it would be difficult, if not impossible, for London Underground to finance its own investment if it could issue bonds. The comparison with New York is often made. There, less than one third of the bonds are repaid from revenues. The rest are paid directly by the taxpayers.

§ Lord Brabazon of Tara
My Lords, the Government have often said that they want to learn lessons from rail privatisation. However, does the Minister agree that, since rail privatisation, there have been record levels of investment, more new trains, more passengers and more freight? Yet even after two and a half years of a Labour Government, nothing much has happened to the Underground, except that fares have risen, the number of delays and disruptions have risen and core investment has fallen. When will Londoners see improvements on the Underground, or must we wait for my noble friend Lord Archer to be elected mayor, when we shall have someone with the energy to do something about it?

§ Lord Macdonald of Tradeston
My Lords, one of the cardinal purposes of the PPP is to make up for 18 years of underinvestment. We are putting together a financial structure which will encourage the investment of £7 billion in the first 15 years of the contracts.
In reply to the implication of underinvestment on our part, £1.6 billion in investment will go into the London Underground this year and next. During the summer, the Government invested an extra £500 million, which means that the grant going into London Underground will be £1.1 billion this year and next. That is far more than in the final years of the previous Administration.

§ Lord Clement-Jones
My Lords, in view of the delay in the contracts for the Underground, what assurances can the Minister give that it will receive adequate funding before the PPP contracts are concluded?

§ Lord Macdonald of Tradeston
My Lords, I can only repeat that this summer we invested an extra £500 million in the funding of London Underground, which brings the grant to £1.1 billion over this year and next. It is our belief that the present timetable will bring in bids from the five consortia which have expressed an interest in the two deep tube franchises by March. We also believe that we shall receive a price bid from Railtrack at the same time. We would aim for early 2001 as the time when the new contracts would come into force in the deep tubes.

Earl Ferrers
My Lords, in order to help some of your Lordships who are less knowledgeable about these matters, will the Minister when answering Questions be kind enough to avoid the Civil Service habit of talking in acronyms? Most people, when they think of PPP, think of Private Patients Plan. What does the noble Lord mean when he talks about PPP?

§ Lord Macdonald of Tradeston
My Lords, I mean public private partnership. I accept the reprimand and will try to do better in future.

§ Lord Geddes
My Lords, as we are on a general subject, may I ask the noble Lord how goes the Jubilee Line?

§ Lord Macdonald of Tradeston
My Lords, at the risk of boring noble Lords who were present yesterday when that question was answered, the Jubilee Line is already in operation from Stratford to Waterloo and from Green Park to Stanmore. However, we are looking for through running to be achieved in the next few weeks and for the opening of Southwark station, too. I am told that it is a jewel of design and architecture, as indeed is much of the line. During the next two weeks, we shall have every occasion to celebrate one of the great engineering and aesthetic achievements in the capital in recent decades.

Viscount Eccles
My Lords, will the Minister agree that passenger comfort is an important consideration? Will he also agree that in summer the temperature in London Underground's carriages rises to an unacceptable high? Therefore, in any restructuring, will the Government ensure that the train operators commit themselves to the introduction of climate control on a phased basis?

§ Lord Macdonald of Tradeston
My Lords, as a traveller on the Underground, I accept that it can be uncomfortable during the height of summer, particularly in temperatures that we experienced this year. We believe that the public private partnership that we are putting in place will allow an investment of £7 billion in areas of infrastructure, which will considerably advance the conditions and resources available to the Underground.
I cannot give an assurance that that investment will stretch to the kind of temperature control across the Underground system which the noble Viscount requests, but as a passenger on the Underground I believe that such an achievement would be excellent. However, it might be difficult to do in terms of expense.

§ Lord Marsh
My Lords, will the Minister comment on the suggestion that the overrun on the Jubilee Line is probably in excess of £2 billion rather than£1 billion?

§ Lord Macdonald of Tradeston
My Lords, the last public figure put forward on the cost of the Jubilee Line was £3.2 billion. There have been suggestions that it has gone up a little since then. I do not have the final figures, but I believe that the noble Lord may be right in saying that the overrun was closer to £2 billion than £1 billion.

§ Lord Acton
My Lords, to echo the immortal question of the noble Lord, Lord Allen of Abbeydale, will the Minister say whether some of the billions of pounds he mentioned could be used to employ someone who knows how to mend escalators?

§ Lord Macdonald of Tradeston
My Lords, I take the noble Lord's point. On the other hand, we should be aware that any faults with escalators can be extremely dangerous. Few minds in this House will stretch back to the early 1940s, but there was a tragedy in Bethnal Green caused by a faulty escalator. Indeed, when problems were discovered with an escalator recently, I am delighted to say that the rail inspectorate and London Underground acted with great expedition in ensuring that all the escalators were inspected. A number were found to be defective and were taken out of service, but normal service was resumed as soon as possible. Certainly we could not tolerate the risk involved by not acting decisively.

§ The Lord Bishop of Bradford
My Lords, does the Minister agree that, however comprehensive the restructuring of London Underground, a major step forward in safety might be achieved by a simple change in attitude of mind, by accepting that red means "stop" and that green, and only green, means "go"? Does he further agree that that might have safety implications for the railways as well?

§ Lord Macdonald of Tradeston
Indeed, my Lords, we have made it clear that, in appointing Lord Cullen to conduct a public inquiry into rail safety, the question of a safety culture—I apologise to the noble Earl if that sounds like a bit of jargon—in this case means a dedication to safety that runs from the top to the bottom of every organisation. We know that safety is paramount on London Underground. The lessons of the King's Cross disaster were well learnt and the way in which the trains operate on the Underground differs from the way in which they operate on the national network. They travel at a lower speed, and we understand that the number of incidents of signals passed at danger—SPADs—which have been recently reported are being worked on so that they might be reduced. They do not carry the same serious implications as they would on the railways, but safety is paramount.