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London Underground

11 am

Harry Cohen (Leyton and Wanstead): I thank Mr. Speaker for granting me this debate on the London Underground. I want to concentrate on future investment and funding plans and the Government's proposed public-private partnership.

I received a letter from Mr. Double, the director of the City Remembrancer's Office in the City Corporation. He wrote:

He asked me to bring his remarks to the attention of the House. I support his sentiments strongly on improving the Central line, upon which my constituency depends, and Crossrail. We need new capacity; Crossrail would provide that, and relieve overcrowding. There should be extra investment above what the Government now propose.

The Government have pledged £13 billion of new investment over the next 15 years, which is welcome, but a similar pledge was made before the 1997 election. It is disappointing that so little progress has been made. In their first term, the Government set up the Greater London Authority and the office of the London Mayor, but the court case this summer showed that the Government have been in control all along. More progress should have been made. The Government have said that they put £1 billion more into London Underground in their first term. That is true, but £2 billion went on the extra cost of the Jubilee line extension, so the rest of the infrastructure suffered during that first term.

There has been serious decline. Figures obtained by the hon. Member for Carshalton and Wallington (Tom Brake) for signal and points failures and track failures show a 35 per cent. increase for 2000-01 in comparison to 1999-2000. There were nearly 1,280 hours of delays in a 12-week period from January, showing the deterioration in the tube.

An article on the front page of today's edition of The Guardian states that anticipated investment has been cut by 30 per cent. The report states that when my right hon. Friend the Deputy Prime Minister was Secretary of State, he indicated that a grant of £775 million could be expected for the tube in this financial year, but that ended up as only £520 million. That did not really make an impact on the decline that I have mentioned, and it was against that background that the Government proposed their version of a public-private partnership. I feel that the Government are showing inflexibility, which is a matter for concern. It is also regrettable that they have fallen into dispute with the Mayor and his Transport Commissioner Bob Kiley.

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I want to talk about the Secretary of State's press aide Jo Moore. Her 11 September bad taste e-mail—

rightly has been criticised. The Home Secretary called it "extraordinarily stupid" and the Secretary of State for International Development described it as "cynical". However, it was the only serious breach of the Prime Minister's invocation that we stand shoulder to shoulder with the United States in moral outrage about the events of 11 September. She has apologised, there has been an official reprimand and, in my view, she should be encouraged to find alternative employment.

That incident overshadowed another issue that came to light; an official effort to denigrate Bob Kiley. Mr. Evans, an honourable civil servant, was removed from his post. He is said to have lost the confidence of my right hon. Friend the Secretary of State for Transport, Local Government and the Regions when he refused to be involved in political briefing to vilify Mr. Kiley. Members of the Labour party, trade unionists and Londoners do not want backbiting and spitefulness. They want consensus and co-operation with the Mayor. The Mayor was elected to do the job and, in due course, he and Mr. Kiley will have to take a degree of responsibility for the tube. The Secretary of State should apologise for that campaign of vilification against Mr. Kiley.

If Mr. Kiley were so useless, why, at the beginning of May, did the Prime Minister ask him to take charge of the negotiations with the PPP bidder? Vilification was not a good approach for the Government to take, and it should be abandoned. If the Government want to criticise Bob Kiley, Ministers need only look at Ian Williams' article in Tribune on 27 July. He points out the problems with the New York system, but also states:

I wish we had air conditioning on our trains.

That is a statement of what could be done in London. I am concerned by value for money, accountability and effectiveness of investment.

This is the first opportunity to raise in the House a report released in the summer by Deloitte & Touche. It compared, for value for money purposes, the PPP proposals with the normal public sector financing approach. London Underground sought to stop both its publication and its progress to the National Audit Office. However, Mr. Justice Sullivan allowed its publication on 31 July. He stated:

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I shall provide the Chamber the headings of the executive summaries in the report:

Mr. Edward Davey (Kingston and Surbiton): I am grateful to the hon. Gentleman for giving way. He is making a very serious speech, and I am worried that not enough of his London Labour colleagues—with the exception of the hon. Member for Brent, North (Mr. Gardiner)—are present to hear his remarks. Having read Deloitte & Touche's report, does the hon. Member for Leyton and Wanstead believe that the Public Accounts Committee, with the support of the National Audit Office, should conduct an urgent inquiry into the public-private partnership for London?

Harry Cohen : Yes, I support that proposal. As for my London colleagues, I know that they will read the account of this debate avidly.

In his article of 26 August, Will Hutton of The Observer refers to the "mendacious gerrymander" exposed by the Deloitte & Touche report. Will Hutton is a director of the Industrial Society, and in the past has spoken in favour of proper public-private partnership as a means of investment. His excellent summary refers to "four dodges" which I want to read into the record:

Mr. Barry Gardiner (Brent, North): I recall clearly the article to which my hon. Friend refers, but does he accept that the journalist concerned is making a mendacious point? When looking at a public sector comparator, one must remember that any cost overruns would be borne by the taxpayer rather than the public sector. In assessing the private finance method and the

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public sector comparator, one must make a financial assessment of the quantum of that risk. It is absolutely legitimate to try to put a price on that risk.

Harry Cohen : I will come to the point about private sector risk-taking, but as Will Hutton says, it was not right to state that the public sector comparator would cost £2.5 billion more.

Mr. John Horam (Orpington): The hon. Gentleman is making a very interesting speech. I, too, am sorry that—excluding Ministers—he is supported by only one of his colleagues, the hon. Member for Brent, North (Mr. Gardiner).

Tom Brake (Carshalton and Wallington): He is opposed by his colleague.

Mr. Horam : Indeed. Does the hon. Gentleman agree that, in addition to more Labour Members, a Treasury Minister should also be present in the Chamber? It is clear that the real villain of the piece is the Chancellor of the Exchequer, who has controlled the situation from the beginning and continues to do so. That is why London is still suffering.

Harry Cohen : I hear the hon. Gentleman's point, and I shall refer to the Chancellor.

The article by Will Hutton continued:

He added that to lift the performance of the London tube, it would need to be run by an innovative and creative organisation managing an integrated system, and that that is not what the PPP could deliver.

I received a reply from the Minister in July about the comparator. He said:

Alongside the Will Hutton article, the Minister's response gives a new definition to the word robust. What is the total investment proposed, and what are its components? When I asked staff of the London Underground at the Labour party conference, they were vague. They talked of £900 million a month being introduced, but the total figure, or who was paying what, was not clear. At the party conference, the Chancellor said:

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The Minister's July reply quoted the £13 billion figure and said that an estimated 20 per cent. of finance for these plans would be provided by the private sector with the remainder coming from London Underground fares and Government grants. Is the Chancellor right? Will the public be putting in £13 billion? If that is the case, what will the private sector invest? Will it be a greater total? What is the amount expected from fares? Can we have some clarity on the total amount?

Mr. Eric Pickles (Brentwood and Ongar): I am sorry to interrupt the hon. Gentleman's fascinating speech. He mentioned the Labour party conference, but did he attend the question-and-answer session at which the Secretary of State promised that if independent evidence were produced to suggest that PPP did not offer value for money, PPP would not go ahead? Does the hon. Gentleman consider that the Deloitte report provides that evidence?

Harry Cohen : The Secretary of State did say that, and repeated it to the London group of Labour Members.

I would like the Minister to tell me what the total investment will be. What will be the input from the private infracos? What is their rate of return and what is it based on? Are they spending public money? If so, why should they get a rate of return at all? Or should not that rate be much less than if they were putting in their own money? Will they be getting their return before they have invested anything, or before they have invested the full amount? The Government have said that they will impose penalties on them if they do not perform, but will those penalties be paid for by public money? We need some answers.

Will the arrangement be comparable to that for the Isle of Skye bridge? That was the subject of a good article by Ian Aitken, again in Tribune, which is well worth reading; I recommend it to hon. Members. The islanders have to pay £5.70 each way to cross the bridge. He said that that was doubly outrageous given that £25 million of the cost of the bridge was shelled out by the taxpayer and only £500,000 came from the PFI consortium, which is now pocketing more than £3 million a year in revenues. I am worried that we will have that kind of set-up with the private infrastructure companies in London Underground; that is why we need to see the figures.

What are the implications of the Railtrack collapse? The language coming from the Government is of the private sector taking the risk, but the infracos will surely demand more cash and more profit, which will mean less value for money and perhaps none at all. The contracts are for 30 years with reviews after seven and a half years.

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What will happen at those reviews? Have the Government burned their bridges in terms of other options, so that if the infracos want substantially higher prices there will be no option but to pay them?

A process of perverse output accounting is taking place, although I am in favour of a degree of output accounting. In July, I asked a parliamentary question about London Underground's private finance initiative contracts. Following my hon. Friend the Minister's response—about more than £1 billion of investment in facilities such as the British transport police station at West Ham and better ticketing services—there was a footnote:

That is not the same thing as the actual amount that the private sector is investing. That form of accounting has serious implications, because it disguises the actual level of private sector investment and is, potentially, a fraud on the public. If it were applied to the PPP, the rate of return could end up being paid on money that was not actually invested. That is unacceptable. Will the public be given a clear understanding of what the private sector actually invests, and will there be proper accounts?

It is right to mention the Jubilee line extension at this point. The Chancellor described the £2 billion cost overrun on that project as a mistake that must not be repeated. LUL, which was presumably responsible for the extension and the cost overrun, has been put in charge of the current contract negotiations without any assistance from the Government or any other outside expertise. If the Government are saying that it was to blame for the Jubilee line cost overrun, it is strange to give it the chance to make similar mistakes.

Mr. Gardiner : It strikes me as odd, given that my hon. Friend agrees that LUL was poor in its performance in negotiating the contract for the Jubilee line extension and criticises the fact that it has been put in charge of negotiations on this occasion, that he should now want it to run the whole system.

Harry Cohen : I do not. The Minister outlined LUL's position on the Jubilee line overrun and said that it was not attributable to quality estimating. He said that significant risks and programme changes, such as those occurring as a result of the collapse of a tunnel—the project was using a new Austrian tunnelling method—at the concurrent Heathrow Express project, were the major contributors to the cost overruns.

If something similar happened again—a collapse of a tunnel, for example, with big implications for the infrastructure of the underground—I do not believe that the contractors, the infrastructure companies, would take the risk. That was a major tunnelling collapse, which had international implications. If that happened again, would the contractors of similar projects take risks? I do not believe it.

We need to see what is in the contracts. Will they mention risks specifically, or only generally? In that case, companies might accept liability, or they might not. Will there be absolute, unlimited requirements in

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the contracts, and can the public see them? Bob Kiley said that the risks will not be transferred wholesale, and that contracts will not cover risks concerning track, tunnels and signals. What if the water table rises, which in London it could, and causes damage? That would probably not be covered either. What will the contracts say about the potential cost of risks? Are there going to be fixed prices, or will the infrastructure companies simply be able to raise their prices should the risk materialise?

The Observer on 4 March mentioned the likelihood of "constant contractual disputes". London Underground had not even completed an inventory of the assets that it was going to pass over, implying a weak position for post-contract negotiations. Is the Minister satisfied that the contract will be absolutely watertight this time?

On safety, the international engineering consultant Parsons Brinckerhoff has produced a report on safety standards. Its findings included:

It added that "Subject Committees" would be present

and, effectively, will be "self-regulating." The infracos can change them themselves.

The report, referring to disputes about standards, says that each standard

A further point is:

That is a pretty damning verdict, as it states how difficult it will be for that management tool to ensure proper safety.

The railway inspectorate's report was due to be published in March, and then in July; it has since been put off again. The inspectorate made a statement saying that London Underground and new companies would have to jump a significant hurdle before a final version of the safety case could be accepted. I understand that the inspectorate has written its report, but it seems to have been suppressed and delayed. Can the Minister tell us where it is and when we are going to see it?

On PPP contracts, my right hon. Friend the Secretary of State told a group of London Labour Members that he would take independent advice—it would be

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interesting to know who will give that advice—on the outcome of the London Underground infrastructure company negotiations. He would then make his decision, for which he would be held accountable, and then release whatever documentation he could. That sounds reasonable, but it is not.

Tom Brake (Carshalton and Wallington): Does the hon. Gentleman consider that advice from PricewaterhouseCoopers would be independent if that was where the advice was sought?

Harry Cohen : I would not want to cast a slur on PricewaterhouseCoopers and I do not know who will be chosen, but the Government should announce who it is to be. If the hon. Gentleman has a point to make about PricewaterhouseCoopers, he can make it during his speech and I will listen with interest.

The matter is complex and all aspects should be in the public domain before contracts are signed and irrevocable commitments are made. When the contracts have been signed, it will be too late for proper prior scrutiny, and Parliament will have been treated as a rubber stamp. Londoners want to know all the implications and to be satisfied that value for money will be achieved; they want to know that much-needed investment will not be wasted. There is already talk of station shopping malls taking priority over tracks and signalling. We must see the details before they are agreed to. The Select Committee on Transport recommended publication of the contracts before the decision was made.

In July, the Minister told me in reply to a written question:

Does that mean that contracts will be published before they are signed and agreed to by the Secretary of State? Perhaps the Minister will clarify what he said in his answer to me.

Unified management is much needed. A briefing to Labour Members in July stated:

I welcomed those comments, but there will be a split—it will not be the same as that with Railtrack—under the PPP between the operation of services and maintenance. Also, the tube will not be under public control between 1 am and 5 am when it is handed over to the infrastructure companies. There is a danger that the infracos will drive policy in their own interests, swallow cash and insist on priorities that may not be the same as

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London Underground's priorities. They may be able to ignore the Mayor and Londoners' wishes. What relationship will the companies have with Transport for London and the Mayor? When will London Underground become part of Transport for London? At the recent meeting with London Underground, doubts were raised about who is to run the business for the public sector. It was suggested that the business may be leaderless. When will the necessary appointments be made?

The Minister has been helpful and has given me some good and open answers, but many unanswered questions and too much uncertainty remains. That is deeply destabilising. There is great potential for the matter to go wrong with spectacular cost for years to come. Sir Cameron Mackintosh stated in the Evening Standard on 3 September that

I do not believe that, but we do not want the matter to reach that stage, and serious concerns exist. For example, the TUC stated:

The executive group of London Labour Members stated:

In his article in Tribune on 13 July, Ian Aitken said:

Mr. John Wilkinson (Ruislip-Northwood): Why have Her Majesty's Government gone against the evidence not just of the London transport commissioner, but of the Select Committee, Labour Members, the TUC and others; particularly in light of the Railtrack fiasco, which showed that providing public money to a private operator did not provide a solution? How will the PPP proposal for the underground differ?

Harry Cohen : There are significant differences between the London Underground PPP and the Railtrack one, but it falls to the Minister to respond to the general thrust of the hon. Gentleman's point.

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In his letter to me of 6 July, Bob Kiley said:

I urge greater Government flexibility. Private sector involvement and finance is acceptable, but must be under the full control of the public sector. London Underground is a public service, not a profit-making conduit. The proposed version of the PPP seems to contain many flaws. The Mayor will eventually have to take over responsibility for the tube. He was elected to do so. It makes no sense—including from a Labour party-political perspective—to tie his hands behind his back. We should be at ease with local democracy on matters such as the running of the tube. Even at this late stage, I urge a radical rethink.

11.38 am

Mr. John Wilkinson (Ruislip-Northwood): We are all most grateful to the hon. Member for Leyton and Wanstead (Harry Cohen) for, above all, his honesty, his candour and his willingness to face unpleasant realities. One such unpleasant reality has been demonstrated today, as the Jubilee line is closed from Waterloo northbound to Finchley Road. My constituents face such impediments daily. The frustrations of Londoners are legion, and hardly anything creates more frustration than the Government's total failure to modernise the underground system.

The Mayor's transport strategy put the alleviation of traffic congestion, especially in inner London, at the top of his list of priorities, and we are to have road-user charges, with all the pain and grief that they will impose. If he and the Government were to put the modernisation of the underground at the top of the list, Londoners and London's businesses would be most grateful. I appreciate everything that the hon. Gentleman said. The division of responsibilities, which is inherent in the operating companies and London Underground under the PPP model, is fatally, fundamentally and totally flawed. There has to be a clear chain of command from those who operate the service to those who have management responsibilities to those at a political level within the GLA who have the responsibility of laying down policy. If that model is pursued, the modernisation of the London underground is possible.

It is not necessarily a question of private sector involvement. What is necessary is effective political leadership from the Mayoralty, and support for the Mayoralty from Her Majesty's Government, instead of the consistent effort of Her Majesty's Government to undermine the Mayoralty for party-political reasons and out of sheer spite. The Government should have the magnanimity to acknowledge that the Mayor may be correct in choosing a professional to be transport

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commissioner for London—most Londoners believe that he is correct in that judgment—and that the transport commissioner for London requires and deserves the support, at the very least, of Her Majesty's Government.

The Department for Transport, Local Government and the Regions seems to be more interested in looking into "Old Moore's Almanac" than listening to the voice of Londoners as expressed through the GLA and the Mayor. I am pleased that my party in its manifesto made it clear that it was unacceptable for the Government to maintain the division that they propose between the operating companies and London Underground.

I want to concentrate on the need for investment in the system, which the hon. Gentleman mentioned at the beginning of his speech, and to identify areas of investment that would benefit my constituents in north-west London and help the regeneration of London's economy by improving the transport system within the capital. Setting in place appropriate underground links to the fifth terminal at Heathrow should be at the top of the list.

The downturn in air transport is a temporary, understandable and tragic phenomenon, the causes of which we all understand. Civil air transport and its support is a matter of critical importance for the capital's economy. The fifth terminal at Heathrow must be built, and a Piccadilly line extension constructed. The Heathrow Express line must be extended also and, most important of all, Crossrail should get the go-ahead. The initiation of the Crossrail project from Reading and Heathrow out to the north-east and to Stansted, and down from Aylesbury, through Paddington and out of Stratford, would do more than almost any other project to revitalise public transport in London and free up the capital from the congestion that bedevils it today. That should be a priority for Her Majesty's Government, using public money. The City of London has said that it is possible for private finance to be obtained, which may be the case. However, London Underground should take the lead in supporting the Crossrail project.

There are also minor projects of particular importance to the west London economy. The Croxley link would extend the Metropolitan line beyond Northwood in my constituency up to Watford junction. At present, it is impossible for passengers coming from north-west London on the tube to go beyond the end of the tube at Watford. They then face a long journey on foot, by public transport or by taxi, to get to Watford junction and the railway network to the north-west and beyond. A small stretch of track is required, but the amelioration of transport problems in north-west London would be remarkable.

Likewise, it is necessary for a much better rail connection to be put in place between north-west London and Heathrow. A first step would be an extension of the tube from Ruislip Gardens on the Central line to Uxbridge and, I hope, beyond Uxbridge down to Heathrow. That, too, would be invaluable.

To set the proposals in perspective, the Government are minded to spend hundreds of millions of pounds to extend the channel link, under its second phase, eventually as far as St. Pancras. The current link to Waterloo may be slow, but it serves a part of London that is an equally important catchment area from the

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point of view of passengers. Now that the Jubilee line goes from north-west London all the way to Waterloo, there is no great problem for passengers in north and north-west London to reach Waterloo, the terminus. The money that is to be allocated to the second stage of the channel tunnel link would be much better spent on Crossrail and the improvements that I outlined. Again I thank the hon. Member for Leyton and Wanstead for his candour and for the service that he has done the House in obtaining this morning's debate.

Mr. Frank Cook (in the Chair): Order. I remind the House that in this slot on a Wednesday morning, we aim to start the winding-up speeches at 12 noon. I hope that those hon. Members seeking to catch my eye will bear that in mind.

11.46 am

Sir Sydney Chapman (Chipping Barnet): I congratulate the hon. Member for Leyton and Wanstead (Harry Cohen) on introducing this important debate for Londoners this morning. I welcome the new Minister and hope that he enjoys his poisoned chalice. I have particular affection for him because, as he will recall, we used to pair in what I now regard as the good old parliamentary days when the pairing system worked.

More than two thirds of Londoners now say that they receive poor value for money in using the London Underground. More than half the people who use the underground say that they receive a poor and unacceptable level of service. There is overcrowding and congestion, too many trains are terminated early and there are too many delays and breakdowns. As a London Member of Parliament, I have never received so many complaints as I have about London Transport, and London Underground in particular, over the past two years.

My constituency is at the end of the Northern line, which has been dubbed the misery line; although, in fairness, it now has new rolling stock that was ordered and built before 1997. Several of my constituents live near the end of the Piccadilly line, where the problem of the early termination of services at Arnos Grove, instead of Cockfosters, is especially prevalent.

The modernisation of London Underground requires a large and rapid investment, as we all know. However, sadly, that is the exact opposite of what is happening at the moment, as the front-page report in today's edition of The Guardian, to which the hon. Member for Leyton and Wanstead referred, spells out.

Despite what the Secretary of State said in the summer, Government support for London Underground has not substantially increased. According to The Guardian report, investment has been cut by 30 per cent. The Secretary of State claims the doubling of the grant, to £520 million, this year. I make two points. First, last year's investment by the Government of £267 million was a rock-bottom low, so it was a pretty low base from which to start. Secondly, I calculate that London Underground will be lucky if it receives only £400 million of that £520 million.

The Government have wasted the past four years and failed to deal with the urgent issues facing London Underground, which must either remain in the public

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sector or be run by the private sector. Public-private partnership will achieve the worst of both worlds. The body that owns the assets must run the operations; the recent history of the running of public transport has taught us that lesson. Someone has to be held to account, but poor performance by the public part of the industry will be blamed on the private sector, and vice versa.

Complete privatisation would work if it was backed up by a good and unambiguous contract, but Londoners have made their choice. Parliament has established a Mayor, a new Greater London Authority, and Transport for London to run London Underground. My party accepts that. However, if I correctly judge the feelings of my constituents—which I think I do—they do not much care whether London Underground is in the public or the private sector. They want a safe, reliable and clean service with fares that are good value for money.

The Government must sort out their problems by joining up their policy with regard to public transport in London and by getting on with the job of providing a decent service to Londoners.

11.51 am

Mr. Mark Field (Cities of London and Westminster): I endorse the comments of my hon. Friend the Member for Chipping Barnet (Sir S. Chapman).

The subject under discussion is a Treasury-related matter, and I have some sympathy for the Minister. I am also aware that there are many bodies and individuals in place—such as the Mayor, Mr. Kiley and the Greater London Authority—which means that hon. Members are yet another layer of politicians involved in dealing with the problem; perhaps we interfere with it more than we help. However, our voices must be heard. My constituency contains the largest number of tube stations, most of which are stations of destination rather than departure.

Fundamental issues are at stake. Before 1 May 1997, the tube was not in a fantastic state, and it is important that my party acknowledges that. However, matters have only got worse since then. It appears that there is no strategy. In the Government's first term, the Deputy Prime Minister was the Secretary of State with responsibility for Transport. He constantly said that he wanted an integrated transport policy but did not do much about achieving it. The present Secretary of State lacks any credibility. An article in today's edition of The Guardian suggested that there was a cancer of cynicism in his Department; it will be difficult to cure, and I was concerned to read about the misleading statements that have been made.

London's infrastructure is falling apart; that is true with regard to not only the tube but the health and education services. A fundamental rethink is required and I hope that the debate can help to identify the problems. However, it is now up to the Treasury and the Department for Transport, Local Government and the Regions to try to make a difference.

I am particularly concerned about the matter because London—by which I mean my constituency and the other 74 London-related constituencies—earns much of

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the nation's wealth. However, despite the massive amount of wealth that London brings into the country, Londoners have to live with third world infrastructure, and there is no real strategy to improve it. The situation that Londoners have to put up with is unacceptable, especially when one considers the amount of money that is being pumped into other devolved regions, particularly Scotland. It is high time that the Chancellor—who, of course, does not represent his constituents in this place on many of these infrastructure-related matters—was made aware of that, because it is entirely unacceptable. There will be a massive political backlash—particularly because 55 out of the 74 London Members of Parliament are on the Government Benches—as this fact continues to be exposed.

I am also concerned about Crossrail, and I agree with the remarks of the hon. Member for Leyton and Wanstead (Harry Cohen). It is important that that is introduced; again, the Conservative Government put a stop to the proposals that were made in 1992-93. One of my greatest concerns is that any sign of an economic downturn in London will take the edge off demand for the transport infrastructure. The reductions may be only marginal—a 5 or 10 per cent. fall in numbers—but that might give the impression that things are not as bad as they have been in the past two or three years. That might be used as an excuse—the Treasury is considering paring off a lot of its financial commitments—for putting things on the backburner. That is particularly likely in the case of Crossrail, but it could also happen with some of the necessary investment in London Underground.

I appreciate that much of the matter is in the hands of Mr. Livingstone and Mr. Kiley, but the plans for a congestion charge, which affect my constituency more than virtually any other in the country, were predicated on the idea that there would be a demonstrable improvement in public transport. Since Mr. Livingstone's election, he has made it quite clear that the underground requires a decade or more of investment before such improvement can be achieved. He is absolutely right to identify that as the time frame. There will be no quick fix on the underground and it requires long-term investment. That investment must start now, because things are likely to get worse before they get better. If we do not have a strategy in place, things will go from bad to worse.

All of the emphasis is now on bus transport. This may be the only instance of the integrated policy to which the late, lamented Secretary of State for the Department of the Environment, Transport and the Regions—the Deputy Prime Minister—referred. We cannot simply rely on buses. We can introduce bus lanes and improve bus services, but the idea that that can happen before January 2003, which—although I expect it to change—is still the expected start date for the congestion charge, will not prove realistic.

Bob Kiley was brought over from New York at great expense. Clearly, he has experience in this area, notwithstanding the rubbishing that one or two Government Ministers and advisers have tried to give him. He must be given the tools to do the job. I like to think that I speak on behalf of all 13 of the Conservative London Members of Parliament in saying that.

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The whole issue of PPP and PFI-related projects is up in the air after the fiasco of Railtrack. I do not think that City financial institutions, other investors or even the employees of any of those future companies will feel that this is a sensible way forward. As a result, we must look to the Treasury to make a firm, and long overdue, commitment to the investment that is required. It has been required for more than a decade, although my party would obviously have to accept some responsibility for that.

The crying shame is that we have wasted four and a half years. Nothing has been achieved. There has been parroting of various slogans, but no real strategy has been put in place. This has been an interesting debate. London Members of Parliament should, in a sense, get off the stage, because we need to get the core decisions made in Government and then give Mr. Livingstone and Mr. Kiley the opportunity to get on and do the job.

11.59 am

Tom Brake (Carshalton and Wallington): I welcome the opportunity to have this topical debate and, like other Members, I feel very sorry for the Minister. I understand why he has such a grim and determined expression on his face.

It is worth recapping what has happened in the past four years under London Underground and Government management. The hon. Member for Leyton and Wanstead (Mr. Cohen) quoted from parliamentary answers that I obtained, which reveal a significant deterioration in services. Statistics reveal the extent of train delays of 15 minutes or more. Several lines have experienced significant increases in such delays over recent years. Significant increases in the length of time that people have to wait in queues for tickets are also occurring. Under the present management and the present Government, services are definitely deteriorating.

London Underground has spent £300,000 of our money on an advertising campaign. "Publicly run, privately built" was its slogan, which sounded suspiciously like a Labour party slogan to me. That campaign has now stopped and, "The quickest line to improvement" is its latest slogan. The advertising shows a pound sign at the end of the tunnel; precisely what the consortia will be interested in.

In response to the front page of today's edition of The Guardian, will the Minister place in the Library all correspondence between his Department and London Underground on the 2001-02 budget? Members can then judge for themselves whether the figure was nothing more than a bargaining ploy by the Government or a firm figure on which the Government have subsequently reneged. Will the Minister also confirm what safety imperatives will be cancelled or delayed as a result of the £30 million cut in the safety budget mentioned in The Guardian article?

What has been the Government's approach? They resorted to smear tactics in attacking Bob Kiley and we have received no apology from any Government spin doctor for that attack. Presumably the same Government spin doctors are currently spinning against London Underground because it made public its concerns about the proposed cut. It takes a peculiar spin on the Government's part to fall out both with Transport for London and with their own appointees, London Underground.

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Some dubious claims have been made about the value for money of PPP. The Deputy Prime Minister stated in December 1999:

The Minister for London spoke about

However, we know from the report of the highly reputable Deloitte & Touche—a report that the Government tried but failed to suppress—that no value for money could be demonstrated in the first seven and a half years of the contract.

Does the Minister still anticipate a saving in the order of £4.5 billion, or anything remotely close to it? Following the Railtrack debacle, is he confident that £3 billion of private sector efficiencies can be achieved? Does he believe that PPP will generate the supposedly massive efficiency savings in the tube investment programme? Do the terms of the PPP contracts include specific figures on how little money winning bidders have to invest in London Underground? A proper amount should be stipulated as a minimum requirement for delivery.

A crucial issue is who will validate whether PPP represents value for money. At the Labour party conference, the Transport Secretary said that he would take his own independent advice. That is why I intervened on the hon. Member for Leyton and Wanstead to ask whether he thought that PricewaterhouseCoopers would be independent. That company has been adjusting the public sector comparator and making the bond issue look much worse than I, and others, think it is. One must question whether it is capable of giving independent, impartial advice to Ministers on whether public-private partnership represents value for money. Will the Minister confirm whether PricewaterhouseCoopers will be the independent advise?

There is so much uncertainty about whether PPP represents value for money that it is necessary, as other hon. Members have said, for bodies that are clearly independent of the Government, London Underground and PricewaterhouseCoopers to examine the question. It is for that reason that my hon. Friend the Member for Newbury (Mr. Rendel) will later today present a letter on our behalf to the new Chairman of the Public Accounts Committee, who is due to be elected today. The letter will ask the PAC to examine the issue as a matter of urgency and to put pressure on the National Audit Office to consider PPP before, rather than after, contracts are signed. It will be no consolation to Londoners if, as the Transport Secretary said,

That's all right, then. If PPP fails and the NAO finds that it does not represent value for money, we can all criticise the Transport Secretary. However, we would still have to live with PPP for the next 30 years.

There is one final reason why PPP should be stopped in its tracks. Many hon. Members have referred to it; Railtrack. The Transport Secretary said on Monday:

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He also said:

I can envisage a situation a few years hence—as I am sure can other hon. Members—in which the Transport Secretary's successor comes to the House to say similar things about the PPP project.

Finally, I ask the Minister to convey to the Secretary of State the following message. He had the courage to pull the plug on Railtrack. Will he now take decisive action against the Chancellor's pet project, PPP, and put it out of its misery?

12.7 pm

Mr. Eric Pickles (Brentwood and Ongar): I congratulate the hon. Member for Leyton and Wanstead (Harry Cohen) on what has been a timely and fortuitous debate on London Underground. He and several Members referred to Crossrail, and I should declare an interest. Crossrail will start about 300 yards from my bedroom window and, if it proves to be noisy, hon. Members should be sure that I will regularly report that back to them.

My hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) was right to talk about the need for a clear line of command for safety and investment. He was also right to point out that Mr. Kiley deserves our support. My hon. Friend the Member for Chipping Barnet (Sir S. Chapman) spoke about the deteriorating reliability of the underground and about particular problems on the Northern and Piccadilly lines, and I support his comments.

My hon. Friend the Member for Cities of London and Westminster (Mr. Field) said that the network was not in a particularly good state when the Government came to power, at which point I saw the Minister scribbling away. However, he should remember that since the war, the only bumper time for the London underground was in the first two years of Mr. Major's Government. The facts speak for themselves. However, that level of public investment was unsustainable and there has been a gradual downturn in investment since then. Most of the London underground is 150 years old. More worryingly, we should also realise that no one has a real idea of the state of the tunnels on the underground, a fact that Mr. Kiley candidly volunteered to me in a meeting a couple of weeks ago.

Capacity on the underground is severely limited. There is much talk about shifts from the road to the underground, but there is virtually no capacity for significant increase. My hon. Friend the Member for Cities of London and Westminster rightly talked about a possible world recession, but this is none the less an ideal time to press ahead with improvements in the rail network and the underground. That might give us a few valuable years of breathing space to get those projects under way before there is an inevitable increase in capacity.

The hon. Member for Carshalton and Wallington (Tom Brake) talked about the new displays on the underground that show a pound at the end of the tunnel,

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representing valuable investment money floating away from the underground. They demonstrate more honesty than the spin doctors.

Thanks to The Guardian, we now know that despite the Government's promises a few weeks ago—they trumpeted a vast increase in the money available for the underground—their so-called increase actually represents a 30 per cent. decrease. I find myself in a position that I would not have believed any Conservative spokesman would be in; I am almost tempted to table an early-day motion demanding the return of the Deputy Prime Minister to his former transport role.

Mr. Field : It is not that bad.

Mr. Pickles : I think it is. Messages should be sent to Ukraine, where I understand the Deputy Prime Minister is in negotiations—

Mr. Field : For political asylum?

Mr. Pickles : I am sure that it is not for that. The Deputy Prime Minister should return immediately because he had the clout. We know from talking to London Underground officials that firm promises were made for £775 million of investment. They were shocked to find that a press release from the present Secretary of State claimed that they would receive considerably less—30 per cent.—and that that sum was heralded as some kind of triumph. The cut means a £30 million cut in safety improvement, a £16 million cut in the maintenance of lifts and escalators, a £72 million cut in the upkeep of stations and a £34 million cut in infrastructure. The backlog of repairs and maintenance now stands at the princely sum of £1.2 billion. There is a paradox in that because the amount of money put aside to set up the PPP—perhaps the Minister would give us the exact figure; we are certainly talking about hundreds of millions of pounds—would otherwise be available for improvements.

We need a clear grasp of how important the underground is in terms of moving passengers about. The City of London has a 92 per cent. commuter intake, larger than any other city in the world. The underground carries 3 million passengers a day, roughly the equivalent of the railway network for the whole of the United Kingdom. However, it is old and outmoded. As the hon. Member for Carshalton and Wallington said, the number of signals passed at danger increases as funding for the rail network decreases. Punctuality is decreasing. There is a suggestion—I hope that the Minister will refute it—that we are seeing before and after shots; that the Government are following a deliberate policy of running down investment in the underground to show clearly some great benefit after PPP comes in. If that were the case, it would be a scandal. The Minister is scowling, and I am sure that he will refute that argument.

It needs to be stated clearly that, even with PPP, the money generated by fares will not be sufficient to guarantee improvements to the infrastructure. It will not even be sufficient to deal with the basic safety

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requirements. The success of the underground will be determined by the level of state subsidy. That will play a significant part because of the way in which the PPP is structured; there is no getting away from it. The Government could do to the underground what they did to Railtrack; turn off the resources and make the company go bust. Those people who are thinking of investing in PPP will have the image of a Secretary of State deliberately destroying a company very much in their minds before they make that investment.

The hon. Member for Leyton and Wanstead was particularly courageous to refer, as did Opposition Members, to the regrettable and unfortunate incident involving the Secretary of State's spin doctor. The hon. Gentleman was quite right; she should go. The staged apology yesterday was ill-timed and ill-considered—particularly in its failure to address the families of those who died—and made matters considerably worse. My principal concern is not only that the disgusting e-mail was sent; what seems to be forgotten is that the Government acted on it. The various consultation documents that they later suggested should be put out were, indeed, put out.

Mr. Edward Davey : Is the hon. Gentleman not even more concerned about the way in which the director of communications at the Department was treated—we are told—by the Secretary of State himself?

Mr. Pickles : That relates directly to the underground. We must remember that the way in which Mr. Evans was dealt with was connected to the Parsons Brinckerhoff report about safety on the underground. Ms Moore saw a possibility that the report might be regarded as unfavourable and thought it appropriate to send out information about Mr. Kiley, an honoured and dedicated public servant. That should not surprise us. This is the woman who saw the destruction of the twin towers as a good way to get out bad news about councillors' pensions and who tried to deny and defer information on the safety of the railways.

Mr. Wilkinson : My hon. Friend is making an important constitutional point. Has it not always been the tradition that Her Majesty's Ministers are answerable personally for the conduct of public servants in their Department? It is a preposterous notion that a public servant should appear on television to try to exculpate herself. The Secretary of State himself must take responsibility, and he ought to resign.

Mr. Pickles : Indeed. I have called for the Secretary of State to resign. He does not seem to realise the seriousness of the situation. The Opposition parties have stopped the normal criticism of Government to offer support in these difficult times. There is an obligation on the Government to keep their own house in order and to accept responsibility for that despicable e-mail. It certainly leaves us all with a bad taste in our mouths, which is not good as we move on to the next stage—trying to ensure that sufficient investment goes into London Underground. I am afraid that the Secretary of State has been looked upon, weighed in the balance and found wanting on this important issue.

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12.20 pm

The Parliamentary Under-Secretary of State for Transport, Local Government and the Regions (Mr. David Jamieson): First, I congratulate my hon. Friend the Member for Leyton and Wanstead (Mr. Cohen) on securing this important debate. A number of hon. Members have commiserated with me on my task. I can assure them that I am pleased to have this job and to respond to the debate. The hon. Member for Carshalton and Wallington (Tom Brake) said that I had a grim expression on my face. I can assure him that it was a happy expression; any grim expression may have been in anticipation of what he had to say.

I congratulate my hon. Friend on the sensible and courteous manner in which he conducted the debate and on his characteristically robust presentation. I also congratulate him on his perseverance, both in tabling questions to me and the Department and in writing to the Department. He has been a serious player. I congratulate him on the way in which he has robustly taken up matters on behalf of his constituents. That may not always be convenient or comfortable for the Government, but it is important that people do as he has done.

I agree with my hon. Friend right from the outset. He says that we want an underground system that gives value for money and accountability. We want something else, too. His constituents and those who use the tube—I use it regularly, both in my ministerial capacity and privately—want it to be safe, clean and reliable. That is what we will deliver. I hope that my praise for my hon. Friend has done less damage than his praise for me. I cannot cover all the points in the time available. However, as always, if there are points that he or others feel we have not covered sufficiently I shall be happy to deal with them in writing.

A number of hon. Members referred to one of the Department's press officers. My hon. Friend quite rightly said that she should be condemned. It was also right for her to apologise yesterday. This debate, however, and the ongoing debate, should be about the issues and not about the personalities. I intend to move on to the issues. Before I attempt to answer some of the points in the debate, it is important to set my response in context.

I welcome the debate today. London Underground is a vital national asset. The hon. Member for Brentwood and Ongar (Mr. Pickles) gave some of the figures. We need to get a clear grasp of the value of the underground, which carries 3 million passengers a day and is essential for the functioning of London as one of the great cities of the world. But for too long, London Underground has suffered from a lack of investment. It struggles to run a 21st century service with old and outdated equipment.

We recognised those problems when we first came to power. It was clear that to make the fundamental changes needed to secure the long-term future of the tube would take time. But the underground's needs were urgent. Some may have forgotten—those involved in trying to make the improvements to the tube need to remember—that the previous Government's spending plans would have seen investment fall to £160 million and beyond that to zero. We reversed those cuts.

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An additional £365 million of funding for London Underground was made available in March 1998. Another £517 million over two years was announced in July 1999. In our first term as a whole, the Government provided the underground with almost £1 billion more in grant than the Tories planned. It is important to get those figures on the record. We are providing another £520 million of grant this year, almost double the amount available last year. We will continue to provide the additional resources needed to keep the underground from getting worse and to make a start on the vital improvements needed.

Mr. Pickles : Does the Minister think that it was wrong that a senior London Underground manager told the Evening Standard that the Government were resorting to old-fashioned hypocrisy by announcing with a fanfare that they were doubling the money this year?

Mr. Jamieson : The old-fashioned hypocrisy may be coming from the Opposition, not the Government. I shall come to funding in a moment.

It is clear that even Government grant year on year could never be enough to achieve the faster, cleaner and more reliable service that the constituents of the hon. Member for Leyton and Wanstead want. We cannot build a better system by just throwing money at the problem, whether that money comes from taxpayers or from issuing bonds. The tube needs new life and a new structure to ensure that the money that we put in is well spent and delivers the service that we want.

It has been suggested that the Government are taking a dogmatic approach to the matter, but that is not the case. The tube modernisation plans are not the creation of an official hidden away in an obscure corner of the Treasury; they are the result of a huge amount of careful thought by expert advisers and, most important, by the people in London Underground, who really know how the tube works. They know the system inside out and know the real problems.

The Government ruled out privatisation at an early stage, contrary to some claims. We passionately believe in quality public services; it is often forgotten that we looked at all the options for the best way to modernise the tube. When the Deputy Prime Minister announced our approach, he published a document setting out the options we considered, including the use of bonds, a

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trust and a joint venture. The tube runs intensive services and the operation of the tube lines need to be co-ordinated, with signals, trains and stations managed together in real time. That is why we insisted on keeping all aspects of the tube operation firmly in the public sector.

It was necessary to change the management of the investment to upgrade the infrastructure and to avoid past problems of projects being late and over budget. My hon. Friend the Member for Leyton and Wanstead referred to the Jubilee line being over budget and out of control. We had to avoid such mistakes because we wanted to ensure that the money that went in would provide the service and give the value that passengers wanted. We needed a new solution to help to fix that infrastructure.

The underground needs a new way to manage investment, to ensure that improvements are carried out on time and, most important, on budget, and to ensure that essential maintenance work is not overlooked.

My hon. Friend mentioned the £2 billion overrun—as he called it—of the Jubilee line extension, which we do not want to be replicated in the future. I am glad that he asked a proper question about private profits from the infracos. Those companies will make a profit only if they deliver a punctual, quality service that provides value for money according to the contract negotiated with London Underground. If they do so, and meet the new high standards, they will be able to make a profit as private companies.

My hon. Friend the Member for Leyton and Wanstead asked about the railway inspectorate. A report is expected shortly, certainly before Christmas; we hope it will be next month. My hon. Friend asked whether the contracts would be in the public domain; we have put the criteria that we are using to draw up the contracts in the public domain, but my hon. Friend will appreciate that much of the commercially confidential material cannot be released. There have been comments from various sources about the £775 million; that was an expectation of London Underground, which said in its press release yesterday:

I have been allowed very little time to respond to the many important issues raised by today's debate. There are many matters that Members will want to take further. If they would care to indicate them in correspondence or otherwise, I should be happy to take them forward. This is an important debate about a matter of great substance. I am glad that we have had an opportunity to air some of the issues today.

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