London Underground (Hansard, 8 January 2002)

§ The Minister of State, Department for Transport, Local Government and the Regions (Lord Falconer of Thoroton)
My Lords, London Underground is carrying out a thorough evaluation of bids for the 438 Tube modernisation contracts, considering all aspects of value for money. My right honourable friend the Secretary of State for Transport, Local Government and the Regions has taken on Ernst & Young to give him an independent opinion on the robustness of London Underground's conclusions. The Government will receive and publish Ernst & Young's report before any decisions are taken on whether to sign the contracts.

§ Lord Peyton of Yeovil
My Lords, can the noble and learned Lord give a categoric assurance that the Ernst & Young review of London Underground's assessment of the value-for-money aspects of its proposals under the PPP will, to quote the words of the Secretary of State, focus on the overall robustness of the conclusions reached? Is the noble and learned Lord aware of the anxiety that contacts—there will always be such contacts—between the Secretary of State or someone acting on his behalf and Ernst & Young may possibly have led to a diminution of that focus, from which could follow a review which would fall short of that which the Secretary of State has promised, and which users of the London Underground very much expect?

§ Lord Falconer of Thoroton
My Lords, I believe that I can give such an assurance. The purpose of instructing Ernst & Young is so that the company can evaluate the robustness of the conclusions that London Underground and PricewaterhouseCoopers come to as regards the value-for-money aspects of the three PPP contracts. The evaluation made by Ernst & Young, which is to test the robustness of the conclusions reached by London Underground and PricewaterhouseCoopers, will he published before any final decision is taken. In answer to the specific question put to me by the noble Lord, yes, it will focus on the precise issue identified by the noble Lord and, furthermore, it will be made available before a final decision is reached.

§ Lord Bradshaw
My Lords, has any thought been given to the irreconcilable responsibilities of the Mayor of London, who wants to run the Underground for 24 hours a day, and the infrastructure companies which need to occupy the Underground for far longer than is now possible in order to put right all the defects in the system? Such irreconcilable objectives were neglected at the time of the privatisation of the "big" railway and we are now paying the price for that. I am sure that we do not want to have to do that again in the case of London Underground.

§ Lord Falconer of Thoroton
My Lords, deep consideration has been given to such issues, but the nature of the PPPs in relation to London Underground is totally different from the nature of the privatisation undertaken in relation to Railtrack. In particular, London Underground remains responsible for the whole of the Underground service, including safety—unlike Railtrack, which remains responsible only for the track. The PPPs concern the letting out of three contracts to undertake maintenance work. In 439 response to the specific question put to me, yes, consideration has been given, but the analogy drawn by the noble Lord between Railtrack on the one hand arid the PPP's on the other is not accurate.

§ Lord Campbell of Alloway
My Lords, what is the remit of the Mayor of London in this affair?

§ Lord Falconer of Thoroton
My Lords, the Mayor of London is responsible for Transport for London. After the PPP has been put in place, London Underground will be transferred to Transport for London.

Lord Renton
My Lords, to whom is he really responsible?

§ Lord Falconer of Thoroton
My Lords, to the electorate.

§ Lord Faulkner of Worcester
My Lords, if the PPP for the London Underground fails in whole or in part to meet the value-for-money test, is an alternative plan being worked on in the department which could possibly involve Transport for London taking over some of the Underground lines?

§ Lord Falconer of Thoroton
My Lords, I believe that I have made it clear that at the moment we are concentrating on the proposals in relation to the PPP. It would be unwise for there not to be contingency plans were the PPP not to go ahead, but we believe that the PPP will go ahead. So far as concerns contingency planning, it must involve Transport for London.

§ Viscount Astor
My Lords, I welcome the Minister's commitment to publish the Ernst & Young report. No doubt the noble and learned Lord is enormously relieved at the return of his right honourable friend the Secretary of State because he has no doubt had to hold the fort over the Christmas and New Year period as regards transport issues. In welcoming the publication of the report, does the noble and learned Lord agree that, since 1997, average investment in London Underground has been lower than it was during the preceding five years under the Conservative government?

§ Lord Falconer of Thoroton
My Lords, as regards the past four or five years, covering the period of the Labour Government, the noble Viscount will know that almost £1 billion more in grant was provided than was planned by the Tories. That was enough to allow average investment in the core of the Underground network of around £530 million for each year. One must compare that investment with that made during the whole of the Tory period—that is, 1979 to 1997—which amounted to £395 million. The noble Viscount, being an expert in figures, selected a period when the figure happened, as a matter of averages, to be lower. That is not very convincing.

Lord Berkeley
My Lords, my noble and learned friend stated that the Mayor is responsible for the 440 safety of the Tube. How does that affect the PPP infrastructure people who have to maintain a safe infrastructure? Given the problems experienced by Railtrack in maintaining a safe infrastructure, who will pay when it is discovered that the track is worse than it was thought to be and that extra safety costs are applicable to the system?

§ Lord Falconer of Thoroton
My Lords, obviously London Underground remains responsible for safety and is subject to the views of the HSE. Safety is a paramount concern. The contracts provide for a particular outcome from the PPP contractors. If the PPP contracts go ahead, it will be for the PPP contractors to deliver standards that meet the safety requirements.

§ Lord Peyton of Yeovil
My Lords, do these exchanges mean that the full contents of the letter written by Ernst & Young on 4th October, a copy of which is in the Library, still stand? It is very important.

§ Lord Falconer of Thoroton
My Lords, I do not have the whole letter in front of me. I do not want to give an answer that may be inaccurate, so perhaps I may write to the noble Lord. The assurance I have given him is that it focuses on the robustness of the assessment by London Underground and PricewaterhouseCoopers and that it will be published before final decisions are made. I shall write to the noble Lord about the detail of the letter.

§ Earl Ferrers
My Lords, how do you focus on a robustness?

§ Lord Falconer of Thoroton
My Lords, I am sure that Ernst & Young will know how to.