London Underground: Investment (Hansard, 20 December 2000)

§ The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty)
My Lords, the best and final offers for the two deep tube contracts were received by London Transport on 20th November and were invited for the subsurface contract on 18th December. The report of the National Audit Office into the financial analysis has been received, and London Underground will shortly submit its safety case for the PPP.

§ Lord Ezra
My Lords, is the noble Lord prepared to comment on whether the much-publicised proposals by Mr Robert Kiley, the new Transport Commissioner for London, who is credited with having revived the New York subway, are being seriously considered by the Government? Does the Minister agree that those proposals contain what appear to be some very considerable beneficial features, such as maintaining the unity of the management and responsibility for running the Underground, raising money externally without recourse to public funds and bringing in substantial private sector expertise?

§ Lord Whitty
My Lords, recently the Deputy Prime Minister and Mr Kiley had two useful and constructive discussions on the future of London Underground during which those points were raised, and they intend to have further contact in January. Both recognise the valuable work carried out by London Underground on the PPP. The Government want to consider the points that Robert Kiley put to the Deputy Prime Minister and have asked for further information. However, all of that is within the process of the PPP, which is going ahead.

§ Lord Brabazon of Tara
My Lords, is the Minister aware that the District and Circle lines, which I and no doubt many other noble Lords use every day, have not been running properly for months? Yesterday's excuse was a shortage of train operators, which I presume means drivers? Surely, that is a question of management, not investment. Do the Government have confidence in the present management of London Underground not only to run the system as it is now but to accommodate the proposed new investment?

§ Lord Whitty
My Lords, there have been operational and management problems within London Transport for some time. That is why we have made radical proposals to change its structure. We recognise that the problems of London Underground arise not only from under-investment, important 735 though that is, but also from its structure, which makes it difficult for it to invest efficiently. Senior management within London Transport has been changed over the past two years in anticipation of the PPP, which is intended to solve the problems of structure, management and also under-investment.

§ Earl Russell
My Lords, does the Minister agree that it is more important that arrangements for London Underground should be right than that they should be immediate? In the light of that, is the noble Lord able to say whether the approach described as "son of PPP" will be given full consideration?

§ Lord Whitty
My Lords, I said in my first response that the points raised by Mr Kiley were being given serious consideration by the Government. The constructive discussions between Mr Kiley and the Deputy Prime Minister have involved looking at the process and possible areas in which we can agree the way forward. However, the contract process is going forward. It is important that we do not rush these matters. We have the terrible example of the political pressures which caused the previous administration to rush into the privatisation of British Rail, and we do not wish to make the same mistake. We shall give due consideration to what is being said by Mr Kiley and others while we continue to work with those who have bid for these contracts.

§ Lord Dixon-Smith
My Lords, in the light of articles in today's newspapers about the report of the National Audit Office, which appears to suggest that investment in London Underground has not been in particularly short supply but has been poorly and ineffectively applied, is the Minister satisfied that when the new structures are in place they will improve the record and effectiveness of the investment so that we do not have a similar report at a future date?

§ Lord Whitty
My Lords, I have already indicated that the problem is not simply the quantum of investment; it is also the management of that investment. In the past couple of years the Government have invested over £500 million in the core of the London Underground network each year, compared with an average of £370 million over the period of the last few years of the previous administration. During those last years investment was run down drastically and was planned to run down to zero this year. Therefore, there is a problem of quantum of investment. But I accept that there is also a problem with the management and correct application of that investment.