20 Jul 2001 : Column 529

House of Commons

Friday 20 July 2001

The House met at half-past Nine o'clock


[Mr. Speaker in the Chair]

Summer Adjournment

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Pearson.]

9.34 am

Harry Cohen (Leyton and Wanstead): Before the House adjourns for the recess, I ask it to reflect on the Government's handling of the London underground and to consider committing itself to a future debate on the subject.

I have four tube stations in my constituency, so the matter is of considerable concern to my constituents, who are also the main users of a fifth station. When I read the letters in my postbag and meet people on the streets of Leyton, Leytonstone, Wanstead and Snaresbrook, I am aware of increasing concern about the Government's handling of the underground. They promised billions of pounds of investment before the 1997 general election, but Londoners, who have been very patient, are still waiting for it to come to fruition. There was a reason for the delay: legislation had to be introduced to establish the Greater London Authority, and we had to elect a Mayor who, we were promised, would have power to improve the underground. There is now no excuse.

The Government have received a hostile press regarding the underground, but that is a little unfair, as their intention is genuine. They have promised to invest big money—£13 billion over 15 years—but the way in which they are dealing with the matter risks jeopardising much-needed improvements to the tube. The public perception is that the underground system is at risk of becoming a dog's breakfast because of the method of financing that was chosen and the obfuscation of clear management responsibility.

Before the election, I wrote to Bob Kiley, the Mayor's choice to take over the tube as Commissioner of Transport for London. I asked him about the public service comparator that will be used to check the financing for the two types of bid. Bob Kiley has a splendid record of managing underground systems around the world. His sacking this week by the Government, for their purposes, should not detract from his outstanding record.

Bob Spink (Castle Point): I have listened carefully to the hon. Gentleman, who knows much about the subject. In view of his remarks about Bob Kiley's record and professionalism, did it not concern him greatly to hear Mr. Kiley talking about the possibility of loss of life occurring on the underground as a result of Labour's policies?

Harry Cohen: Safety is a clear issue and is tied to the need for managerial responsibility and clear management lines. I shall deal with that point in due course.

20 Jul 2001 : Column 530

I asked Bob Kiley about the public service comparator that is used to check methods of financing to ensure that the taxpayer—especially the London council tax payer—will get the best value for money. In reply, he stated that the comparator would be used as

The system of preferred bidders has been attacked in the past week or so by the European Union, which has called it anti-competitive, but that is a matter for another day. Mr. Kiley went on to state:

—that is part of the Government's case—

Clearly, some of the risk will stay with the public sector. Bob Kiley continued:

He went on to say that, before considering the public service comparator,

His conclusion was not that different from the Government's position. He stated that,

I raised obfuscation of managerial responsibility with the Leader of the House at business questions yesterday. Confusion exists and could continue. London Regional Transport and London Underground Ltd. currently run the tube, but they will eventually be subject to the control of Transport for London. The Leader of the House did not appear to know that; he did not say that in his reply to me yesterday. Although the Government have sacked Bob Kiley, provided that he remains Commissioner of Transport for Transport for London, he will take over running the tube if the plans go ahead.

I presume that, if the board members are unsatisfactory to Bob Kiley and the Mayor, their days will be numbered when the transfer goes ahead. Confusion therefore exists about the role of the current LRT board and London Underground Ltd. There is a great deal of secrecy about the infrastructure companies, which are responsible for maintenance and repair and are supposed to contribute money, too. We do not know the details of their role—for example, the sort of risks that they will take. We do not even know their identity. I presume that Transport for London will run the whole system; at least, it will have a co-ordinating role. However, it will have no impact on the maintenance and repair functions.

20 Jul 2001 : Column 531

Chris Grayling (Epsom and Ewell): The hon. Gentleman has graphically described the current confusion about the future management structures and the process for dealing with London Underground. Does he share my anxiety that months are passing, yet we are further away than ever from any genuine improvements to the underground? I believe that the process will drag on for years.

Harry Cohen: There is no need for the process to drag on for years. Delay is a serious problem, which I shall discuss shortly.

I want to consider managerial responsibility, because the Government are setting up the system and will therefore be responsible for the future running of the underground. Yet there is a risk that they will not answer the questions of London Members of Parliament on the subject. They may claim that the tube is the responsibility of Transport for London, the Mayor and the infrastructure companies and that they are not therefore answerable. That would be a serious abuse of the House when the Government have such a hand in establishing the system.

I have read the Government's briefing, which states that the proposed system for London Underground Ltd. is not the same as that for Railtrack when the Conservative Government privatised the railways. I support the Government on that, but I am worried about the obfuscation of managerial responsibility, which continues to be imported, albeit in a slightly different form, into the Government's system. That is unacceptable; it is not a decent way in which to run a railway.

Jeremy Corbyn (Islington, North): I am sorry to interrupt my hon. Friend's excellent contribution. Is he aware that one of the Government's defences is that they must have some control over London Underground because £13 billion is being invested in the system? It is unclear how much of that comes from public sources and how much will be raised through a private finance initiative. Does not that negate the principle of devolved government for London? We will end up with no one being accountable.

Harry Cohen: My hon. Friend makes a good point, which shows that confusion exists about future managerial arrangements and accountability. I do not know whether the Government said that they will have some control over the system; I believed that they were going to hand it over to Transport for London. That reveals the confusion about the current position.

Cost and delay pose a problem to the proposed new system. The Evening Standard reported this week that £80 million had been spent on consultancy fees on the Government's public-private partnership. That money would have been much better spent on the trains. The Government appear to believe that, because they have spent such large sums, they have to go ahead with the consultants' recommendations. That is a problem.

Let us consider the rate of return for the infrastructure companies. There is great secrecy about that, but I have read that it is likely to be some 15 to 20 per cent. per annum on the capital investment; perhaps we will find out later this year. If the figure is correct, it would be cheaper to finance the tube publicly.

The public-private partnership means vast extra expense simply because the international institutions and the Treasury follow the unnecessary ideological dogma

20 Jul 2001 : Column 532

that private is good and public is bad. That is simply not the case, especially for the tube. We could lever in private funds, but at a lower cost than is proposed. Even managers who are responsible for private finance initiative systems and public-private partnerships do not believe that the Government's proposals for the underground make sense.

The International Project Finance Association, which represents the interests of private sector companies involved in project financing, conducted a poll of its members on the PPP deal. It asked three questions. The first was:

The result was that 78 per cent. voted yes and 22 per cent. voted no. The second question was:

The result was that 37 per cent. voted yes and 63 per cent. voted no. The third question was:

Forty per cent. voted yes and 60 per cent. voted no. The Government are not even winning in the constituency that one would expect to support them.

The Government rightly embarked on a programme of devolution, which applied to London. A Mayor was elected to run the underground. The Government should let go and let him get on with it. He is directly elected and Londoners will hold him accountable for his actions on the underground. The Government are confusing matters by keeping their hand in and obfuscating.

I wish to make two final points. First, big players in the Cabinet have been dealing with the underground for a long time, but they are not Londoners; even the Minister for Transport, who has responsibility for the underground, is not a Londoner. There is a growing feeling among Londoners that those big players have little knowledge, care or regard for London. That is a serious problem, which could hurt the Government.

Secondly, there has been much talk of grudges between some of the big players and the Mayor of London, Ken Livingstone. I do not mind their having political differences and spelling them out in detail, but they should not use London as a playground, because the underground suffers. Londoners should not be the subject of a feeble political feud.

There is a strong case for a full debate on the underground, and for the Government to think again about the public-private partnership and to start working with the Mayor of London so that we can get the best of what they both want: the big cash investment that the Government want, and the clear managerial responsibility that the Mayor wants. I call for that debate.

Next Section

IndexHome Page