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Westminster Hall

Tuesday 8 January 2002

[Sylvia Heal in the Chair]

London Underground

Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Pearson.]

9.30 am

Harry Cohen (Leyton and Wanstead): During my speech, I shall refer in a political context to my right hon. Friend the Chancellor of the Exchequer. At the outset, I want to express my deepest sympathy to him and his wife Sarah on the tragic loss of their baby. I am sure that all Members will want to express their condolences.

I thank Mr. Speaker for again granting me an adjournment debate on the important matter of London Underground. I initiated a debate on the subject on 17 October, and I shall try not to repeat what I said then despite the fact that several of my concerns remain. I have also corresponded with the Under-Secretary of State for Transport, Local Government and the Regions, my hon. Friend the Member for Plymouth, Devon Port (Mr. Jamieson), and I thank him for his informative and helpful letter to me of 22 November, to which I shall refer in due course.

The public-private partnership proposal continues to develop, and I should like the Minister to explain the latest situation and tell us of London Underground's investment plans. My hon. Friend the Under-Secretary rightly said on 17 October that

It is also essential for those Londoners who use it regularly and who rely upon it. Sadly, it has been starved of sufficient investment for more than two decades, and it shows.

The Government have promised big money—£13 billion over the next 15 years—and that commitment is most welcome. However, it must be regarded as a one-off chance significantly to upgrade the tube. It is unlikely that such an investment will be repeated for several decades if it is done wrongly now. It must be got right. The investment could help to create a first-rate transport system in London; but it might not have the impact necessary to prevent the present deterioration continuing. That deterioration has a high cost for passengers, business and employment, and for London's environment as the roads become more over-burdened, and for the nation's economy.

Several aspects of the Government's currently preferred method of investment remain of concern. The first is safety. In his letter to me, the Under-Secretary wrote:

My hon. Friend added that a decision on the current safety case was expected before Christmas, with a decision on the revised safety case, which reflects the role

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of the private sector infrastructure companies, being expected this financial year—that is by the beginning of April. Will the Minister give us more information about that? The question of safety is important, because the public are not yet convinced.

A report in The Independent on 7 December referred to the disclosure that safety chiefs are not expected to clear the project for its scheduled start date next year. It stated:

The main reason for the delay is London Underground's failure to compile its final so-called safety case, which covers the full handover of the system to commercial firms. The article went on to say that

The paper also said:

However, I have not seen such a report from the HSE or, indeed, the railways inspectorate, in the public domain. Will the Minister explain what those bodies have declared and arrange for their full reports to be published and placed in the public domain?

In his November letter, the Under-Secretary responded to my concerns about the Parsons Brinckerhoff report on safety management, which was prepared for the Transport Commissioner for London, Bob Kiley. The Minister said that the infrastructure companies could not

and that they

However, in a letter to me on 19 November, Bob Kiley stated that Parsons Brinckerhoff's

He emphasises the point, saying:

Ministers should take that serious point into account and should perhaps, even at this late stage, arrange for an urgent standards rewrite; otherwise, a potentially serious safety loophole could emerge.

In its written testimony to the Select Committee on Transport, Local Government and the Regions, Parsons Brinckerhoff recommended, first, that the standards update process be accelerated and completed in about 18 months; secondly, that a top-level suite of standards be provided that was appropriate to London Underground Ltd's need to control standards of workmanship and associated safety under PPP

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contracts; thirdly, that the issue of non-compliance be reviewed to ensure that the concessions process was not open to abuse; fourthly, that a single authority for all standards be set up and led by LUL, but include infracos and third parties, to maintain consistency of standards across the system; and fifthly, that PPP contracts contain owner-variation and directive rights to permit LUL to change standards when warranted by the public interest. Do the Government propose to respond to those recommendations?

I come to the question of what levels of investment should be implemented and by whom. At the Labour party conference, the Chancellor categorically said:

That was in the context of public spending on public services. The Department for Transport, Local Government and the Regions has diluted that commitment. The Under-Secretary told me that 20 per cent. of that £13 billion would

Is he saying that the Chancellor was incorrect at the Labour party conference? What does the reference to £13 billion of public funds mean? Does it mean that 20 per cent. will come from the private sector?

On fares, the Minister told me in a parliamentary answer that the value-for-money evaluation that London Underground is carrying out on PPP bids assumes that fares will do no more than keep pace with inflation, whether tube improvements are financed under PPPs or by direct government borrowing.

A value-for-money exercise is not the same as actuality. Will the Minister write to me indicating his Department's estimate of the maximum contribution of fares income to the investment programme without fares having to rise beyond inflation? The arrangements for paying the infracos from the public purse need to be clarified. Will London Underground or Transport for London have a role? Will either of them be an agent for handing over the capital to the infracos? Will they be able to hold back payments if they are dissatisfied with performance, or have any capital of their own that they can use independently for the tube?

It is known that the private sector often makes careful "accounting for profit" judgments before releasing investment money. What arrangements are proposed to avoid the investment hiccups and delays that that might cause?

I understand that, by now, the PPP contracts should have been completed and the final bids submitted, and that all these things should now be on the Minister's desk for assessment and decision. Is that so? If that is the case, can the Minister give us his first impressions of the bids and contracts? Will he explain what process the Government are adopting to ascertain whether they represent value for money or constitute an unacceptable risk? Will such an assessment consider the implications for the public sector of being committed to a specific contractor for 30 years, and what could happen at the reviews at the seven-and-a-half-year intervals? What information about the bids and contracts does the Minister think can be released into the public domain before the contracts are signed? How will the London Mayor get a look in on the process?

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The Minister will know that Bob Kiley has complained about the complexity of the contracts, which involve 135 documents, many more than 2,800 pages, thousands of cross-references, close to 2 million words, and a web of hundreds of complex formulas. The performance regime, by which the Government set such great store, is not even in a single volume. It can be accessed only by extensive cross-referencing of lengthy and complex schedules, models, tables and codes. It seems to be a bureaucratic nightmare and a lawyer's dream. Worse still, it looks unworkable. Mr. Kiley has observed that the performance regime is riddled with loopholes and rife with opportunities for the infracos to play the system. They can delay being held accountable for any incident, go into protracted disputes over contracts and be paid bonuses despite service failures, as well as being tested using performance criteria that they have the ability to influence to their advantage. In some instances, those situations are worse than the current criteria.Will the Minister consider those points in his assessment of the contracts?

At Transport Questions in November 2001, the hon. Member for Brentwood and Ongar (Mr. Pickles), the Opposition spokesman, talked of £90 million of bonuses being paid to contractors regardless of whether there are any tube improvements. My right hon. Friend the Secretary of State for Transport, Local Government and the Regions told him to await the final outcome of the negotiations. If the contracts are now at the Department, a response on whether they include such gratuitous payments would be of interest.

In his letter, the Under-Secretary of State stated:

He added:

In that case, will the Minister please explain it? Risks arising from a discriminatory change of law, terrorism or the rising water table remain with London Underground. I remind the Minister that it was a major structural problem—the Austrian tunnel collapse—that contributed to the Jubilee line extension cost overrun, and that that led to the Government's policy of paying the private sector to take on risk. Who would be responsible for a similar unforeseen major structural problem? If London Underground and the public sector would be responsible, the raison dêtre for the policy would collapse. I hope that the Minister will set out clearly and specifically who takes what risk.

Management is a crucial issue. In the debate in October, the Under-Secretary said:

He concluded his letter to me by stating:

Will the Minister provide his estimated time scale for the handover? Will the infracos remain autonomous or be integrated in the overall management? If the latter, how is that envisaged? When will London Underground come under the control of Transport for London? Once

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the contracts were signed, what reason would there be to delay the transfer? Is there concern that because the Secretary of State sacked Bob Kiley from the London Underground board at the behest of its directors, he would sack them if he took over? Delay of a takeover would divide and damage the management of the tube. How do the Government propose to deal with the conundrum to which they have contributed? Have they discussed with the Mayor the subject of appointees running the service on behalf of the public sector?

The most important issue is that described by Bob Kiley as "management obfuscation". Is there to be an integrated system of democratic control, or a fractured one where no one has overall control and in which different, perhaps competing, policies are set by different groups of institutional managers? If the Government insist on the current form of PPP, with contracts and infracos beyond the reach or influence of the Mayor, they should address how the system can be coherently and accountably run, rather than saying that the matter is for a Mayor whom they have made powerless.

The concern is about the form of PPP, not the principle of PPP. In The Observer on 23 December, the Mayor pleaded with the Government to reinstate the rebuilding of Wembley Park station into London Underground's long-term business plan and the PPP contract, from which it was dropped. It is needed to accommodate the plans for a new national football stadium at Wembley, which he supports. A system that incorporates private sector involvement is reasonable, but it must be under full public sector control so that priorities are clearly set and achieved, there is no management division or obfuscation, and the money is properly invested and not wasted. The Government still have to provide evidence of strategic command of the problem, and to give answers to the many unresolved questions. Time is running out. In our second term in office, we must ensure that the Government deliver a first-class underground system for London.

Dr. John Pugh (Southport): The hon. Gentleman has made several astute technical points. His point about fares was especially pertinent, and would carry some weight with all users of the underground. Is he aware that the current level of fares exceeds projections of income from London Underground fares? The take-up of fares is declining, as are the sums that London Underground collects. Is it not critical that the Minister makes what will happen to fares clear when the PPP takes off, if it ever does so?

Harry Cohen : The Minister told me that the evaluation of PPP compared to direct Government borrowing was made on the basis that fares would not rise above inflation. Can the Minister confirm, as far as possible, that fares will not rise above inflation over the period of this investment? Our fares are among the highest for capital cities in Europe. Although the great demand for the tube persists, fares are too high.

Mr. Eric Pickles (Brentwood and Ongar): The hon. Gentleman has considerable expertise in these matters. Having considered fare revenue, does he agree that little or no leeway is given by fare revenues for significant

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improvements to be made to the tube network? The income would not be sufficient even if a decision were taken to increase the level of fares above inflation.

Harry Cohen : That is a reasonable point. Fares are already very high. There is no objection to the existing income being used for the ordinary operation of the system and investment purposes, when that is possible, but Londoners would look askance at the notion that fares might rise further.

It is important that in their second term of office the Government deliver a first-class underground system for London. We must ensure that Londoners get what they want, and it is in the national interest that we have a first-class London underground.

9.51 am

Mr. John Wilkinson (Ruislip-Northwood): May I associate myself with the words of condolence to the Chancellor so movingly expressed by the hon. Member for Leyton and Wanstead (Harry Cohen)? I thank him, too, for his diligence in representing the interests of his constituents and Londoners in general on the question of the future of the London underground.

It is noticeable that the hon. Gentleman is yet again isolated, being the only Labour Member present apart from the Minister and the Minister's Parliamentary Private Secretary. It would seem that the Labour party has abandoned hope for the London underground and is, rightly, ashamed of the Government's performance. The Labour party's 1997 manifesto unequivocally supported the idea of a public-private partnership, modernising the London underground system and improving the service for Londoners. The manifesto commitments have still not been honoured and in the intervening years the service has steadily deteriorated in terms of fare increases, reliability and overall service to the public.

The situation is wholly shameful, and cannot be justified in any way. The Secretary of State should have returned from India to attend the debate, because he is ultimately responsible. Of course, it is nice to see the Minister of State here; he must regard his time at the Ministry of Defence as a happy experience when compared with the woeful responsibilities that he now has to face, not least over the London underground. Clearly, however, the buck stops with the Secretary of State.

Londoners expect manifesto commitments to be honoured and expect to have a system of public transport that lives up to the standards of other systems in the world. I have just returned from Chile; the underground system in Santiago is infinitely better than London's. It is clean and reliable and the standard fare costs about a fifth of that for central London. The perpetual increases in fares above inflation are hitting living standards in the capital but are also symptomatic of a failure to deliver the integrated transport strategy that would provide a cost-effective improvement in transport for Londoners. It was the Government's strategic promise to put in place an integrated strategy under the overall political command of the Mayor. To date, neither the Mayor nor the Government have been able to deliver, and London is very much the worse for it. Business is suffering—that is the constant refrain of

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business organisations in London, including the London chamber of commerce. The tourist trade is also suffering. It is intolerable that visitors to our capital should have to endure the current standards of unreliability and squalor on the tube. In addition, the environmental damage to the capital is profound.

The Government's approach should have been to improve the public transport system first and then set in place road-user charges. Instead, the Mayor proposes that, from next year, Londoners will suffer the additional misery of road charges, which can only make a very unsatisfactory situation on the tube worse, as people who have previously used their cars take to the tube in ever greater numbers to exacerbate the problem of overcrowding. We have the worst of every possible world.

Today's Metro newspaper says:

A cost of £1.60 to get from one tube station to another just down the line in central London is intolerable. From the outset of the mayoralty, there should have been a much more imaginative fare structure. The Mayor should have introduced early-bird and night-owl fares to encourage passengers to use the tube system outside peak hours. Such fares have not been introduced. There is a new all-day travelcard, which can be used before 9.30 am, but it costs £1.20 more than its off-peak rival.

In short, the Government's approach has been bedevilled by their blinkered adhesion to the public-private partnership. The evidence is clear that the public-private partnership approach is wrong. There must be a clear political and managerial chain of command, and that can be brought about only by maintaining the London underground in the public sector or by privatising it in its entirety. Either of those courses of action would be clear and logical and would lead to the single management control that is essential if the safety standards to which the hon. Member for Leyton and Wanstead referred are to be maintained, if confidence in the system is to be enhanced and if the advantages of modernisation—a more cost-effective and reliable system—are to be produced.

When will Transport for London take over London Underground? We asked that question during debates on the Greater London Authority Bill. We received no answers then and we seem to be further away from receiving any answers now. It is fair to ask why the expert brought in as Transport Commissioner for London—Mr. Kiley—has been treated so atrociously by Ministers. Mr. Kiley has spent the greater part of his career bringing into effect significant transport improvements in New York and has greatly enhanced the reliability of the underground system there. Yet all his criticisms and advice have been set aside by the Government in their petty spite and malice, which they continue to display towards the Mayor just because he happened to be directly elected by the people of London in a process that, unlike that used to select Labour's candidate for the mayoral election, was transparent and clear.

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In short, the London underground is daily showing Londoners, and those who have the misfortune to visit our capital and use the system, all that is worst in new Labour. The Government are demonstrating an unwillingness to take political responsibility, an inability to fulfil manifesto promises and a tendency to put their own political interests first by trying to blame the Mayor because he has moved away politically from the Labour party. Last, but not least, the matter demonstrates the Government's inability to prove themselves trustworthy.

When manifestos are brought before the public at election time, the public have an entitlement to expect them to be carried through into action. When a Parliament elapses in which a key manifesto commitment is not met, and when we find ourselves almost a quarter of the way through the succeeding Parliament without any change on that commitment, its honouring being as remote as ever, Londoners have no alternative but to seek redress at the ballot box. It is my hope that they will do so, at least at the borough elections in May. They must do it in the mayoral elections thereafter.

In the meantime, the Government have an obligation to explain to the House, as I trust the Minister will shortly do, what on earth they are going to do to restore public confidence in their proposals. That confidence has evaporated. The Government seem to be more in thrall to the unions—if the dispute between the RMT union and South West Trains is anything to go by—and their own dogmatic ideas than to sensible policies such as those put forward by the Transport Commissioner for London, Mr. Kiley. Londoners deserve better.

The Minister for Transport (Mr. John Spellar) : I am sure that the hon. Gentleman is aware that the unions in London do not support Government policy on the PPP. We think that they are wrong about that and I will explain why in my main response. On South West Trains, the dispute is a matter for the company and the RMT union. The hon. Gentleman will have seen the comments made by the Prime Minister's official spokesman yesterday, which indicate that the Government are not in thrall to the unions. He should get out of the old rhetoric and deal in contemporary arguments.

Mr. Wilkinson : I am grateful to the Minister for his intervention, because the arguments are all over the press and the boss of South West Trains has spelt them out in a full-page advertisement. We were led to believe that new Labour's relationship with the unions was one of amity and mutual trust—that the bad old days of the unions holding the public to ransom would be gone for good. That is clearly not the case, as the rail dispute shows.

In my constituency, as in many parts of London, it is impossible for people to commute to London by rail if there is a dispute on the tube. There are no rail stations at hand. In other parts of London, such as the south-west, the tube services are inadequate. It is crucial that there be a good relationship between London Underground and railways management and the trade unions and between the Government and the unions. That does not seem to be the case. We had thought that the bad old days had gone for good under new Labour,

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but they have returned with a vengeance and I am sure that the public will seek redress at the ballot box at the earliest opportunity.

10.5 pm

Mr. Mark Field (Cities of London and Westminster): I congratulate the hon. Member for Leyton and Wanstead (Harry Cohen) on securing another debate on this important issue. I fill in my slips on a week-by-week basis and never seem to have any luck. I will have to get some advice on lottery numbers from the hon. Gentleman.

Often, people in politics are criticised for not using public transport. With that in mind, I display my moth-eaten annual zone 1 ticket. It is one of the disadvantages of representing my constituency that, unlike Members whose far-flung constituencies permit them large first-class allowances to go to all parts of the country, my constituency is entirely within zone 1 of the underground system.

There is little doubt that, as my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) pointed out in his excellent speech, things have got worse since 1997, and I shall explore that in a moment.

If animals were herded into carriages on the underground as human passengers are, that would be considered a national disgrace. The way in which passengers are herded into carriages, not only at the height of rush hour but often in the middle of the day, is a disgrace. I do not say that to make a narrow point, because the underground has had substantial problems for many years. However, when it works, the tube, considering the confines and difficulties that it faces, works reasonably well. It simply has insufficient capacity to do the job well, particularly in central London.

London is the economic powerhouse of the United Kingdom. It is disgraceful that there has not been sufficient investment. I am sure that the Minister will point out that the picture was not entirely rosy before 1 May 1997, but only in the early 1990s was significant investment made, as we headed into recession. The last Conservative Government were brave not to slash the budgets immediately in the period 1991 to 1993, when it might have been easy to do so.

However, there is no doubt that the London underground requires substantial investment. It needs long-term vision. There are no short-term solutions. I have been concerned for the past five years that no strategy has been put in place. There was great talk in the 1997 Labour manifesto of an integrated transport policy. However, that soundbite was simply repeated endlessly, year on year.

In London we now face—I feel strongly about this, as I represent the centre of the city—the introduction of a congestion charge within the next 13 months. It is clear that there will not be a sufficient increase in capacity on the underground or the buses to absorb the notional increases that will occur in the use of those public services if people are taken out of private cars. The policy will work only if there is a prolonged economic downturn, which will cause demand in the transport system generally to fall. That does not seem a sensible way of developing a congestion charging system that will be seen as the vanguard for similar systems throughout the United Kingdom.

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What is the way forward? The hon. Member for Leyton and Wanstead made a valid point about risk being the key issue. If too much risk is transferred back to the public sector, the very raison d'être of a PPP is undermined. Politically, it is not a saleable option. Given the events since 7 October, when Railtrack was put into administration, a PPP system would not be right. Conservative Members want to see the London underground succeed, and we want to play our part in supporting the long-term investment that is the key to a successful transport system.

It is blindingly obvious that if PPP were implemented in its current form and there were a Railtrack mark 2, not only Opposition Members but powerful, high-profile trade unions and a raft of consumer and passenger bodies would argue against it. If PPP were implemented in its current form it would not work, not least because of the risk issue. Given the continuing debacle in relation to Railtrack, City investors would be willing to take a punt only if a large premium were paid in relation to risk, which would not make sense for taxpayers in the medium to long term. We must build a structure for the next three decades, but it would be a disaster if we made that decision with our sight fixed only on what has happened in the past three months.

Like many Conservative Members, I am concerned about the elected London mayor. I did not want to see a London mayor, but the people of London have spoken by electing an individual who has a long-standing commitment to and involvement in London politics. As has been pointed out, he has brought in at great expense Bob Kiley, who has a track record of success in Boston and New York. It is now incumbent on all London politicians in the House of Commons, who have little authority in this matter except in relation to strategy, to exert whatever pressure we can on the Government to ensure that Mr. Livingstone and Mr. Kiley are given the tools to get on with the job. However, I recognise the point raised by both the Treasury and the Minister's Department that the Government must set parameters if we are to hand authority to Transport for London.

The current position is difficult. It would be no use giving the Mayor full authority and enormous amounts of cash because he would have an eye on his re-election in two and a half years' time. There would be short-term, high-profile fare cuts and other gimmicks, which would return us to the mid-1980s position when he was leader of the Greater London council. We must ensure that public money put into the underground system is invested for the long term. As five years have been wasted since mid-1997, things will get worse before they get better whatever investment decisions are made now—whether a PPP is implemented or power is passed to Transport for London, which must be a temptation for the Government. Mr. Kiley has made it clear that for at least the next three to four years the nature of the long-term infrastructure project will ensure longer delays, greater safety concerns and larger areas of the network out of commission.

Many hon. Members are concerned that London has had a raw deal, which is something that has become evident in recent years, but the roots of the problem go back many years. Decision making must be diversified if devolution in London is to mean anything. We must devolve financial powers to regional representatives such as the Mayor of London, the Greater London

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Authority and local authorities. The Mayor of London is a high-profile figure—admittedly he has limited powers—and we have devolved government in London. If one compares devolved government in London with that in Scotland, which has its own Parliament, it is clear that Londoners are in a difficult position. Although they have a high-profile figurehead, he has one hand—if not both hands—tied behind his back. The financial wherewithal is lacking with which to make necessary long-term investment decisions.

As my hon. Friend the Member for Ruislip-Northwood pointed out, London is, and must remain, the economic powerhouse of this country. There is a real fear that we will lose some of the international investment that has helped to ensure London's pre-eminence in the past decade and a half, particularly in respect of financial services. Our city is of global importance, but it has a third-world infrastructure, and that cannot be right.

I encourage the Minister to tell his right hon. Friend the Chancellor of the Exchequer and all those in central London who are playing a part in the matter that we must get people round the table and put in place a sensible, long-term solution. Such a solution must also be politically saleable, and for that reason alone I fear that the PPP proposal simply will not wash, because it will be seen as no more than Railtrack mark 2. Every day's delay in committing ourselves to the major investment that the London underground requires is a kick in the teeth for those unsung heroes of the economy, many of whom work in central London and depend on the tube system to travel to and from work.

10.16 am

Tom Brake (Carshalton and Wallington): I congratulate the hon. Member for Leyton and Wanstead (Harry Cohen) on securing another debate on this subject, and I echo his words of condolence to the Chancellor. The hon. Gentleman is doing an excellent job in single-handedly representing Londoners in the debate on PPP and the tube. I wish that his colleagues would offer such support, although I suspect that he offers his at the expense of a future ministerial career.

I welcome these debates because they allow us to question Ministers. I shall not dwell on the history of the underground—30 years of under-investment by Conservative and Labour Administrations—which is set out in Lord Birt's report. There is no point wasting time discussing a subject that we know well, and given that the purpose of Adjournment debates is to allow hon. Members to put questions to the Minister, I hope that he will use his time to focus on those that have been asked this morning.

The hon. Member for Cities of London and Westminster (Mr. Field) made what I think was a plea for first-class carriages on the London underground. However, he also had some interesting things to say about the need to devolve financial responsibilities, and in that respect I support him entirely. Given that we have set up a Greater London Authority, with a Mayor and elected Assembly Members, it should surely take much greater financial responsibility. That is what devolved government is supposed to be about.

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I am one Member who, for his sins, travels almost daily not just on the tube but by train, and I am afraid to say that the transport system is absolutely and totally pathetic. There is no other way to describe it. This morning, the trains were in complete chaos. The train that I intended to catch was supposed to arrive at 8.22, but it was running 12 minutes late. The earlier service—the 7.38—had also yet to materialise, having been delayed who knows where along the line. When I arrived at Victoria, the tube station gates were closed because of overcrowding, so no one could get on to the platforms. That, I am afraid, is the commuter's daily experience.

Belatedly, the Government are waking up to this crisis. In his new year message, the Prime Minister said:

I am concerned that the Prime Minister seems to have prejudged the outcome of the Ernst and Young report into value for money. Is he saying that the Government are committed to the PPP whatever the conclusions in that report? Perhaps the Minister will explain how there can be a full examination of the PPP's value for money when the report was started before contracts had been finalised. We know that a lot of work was still being done on the detail of the contracts in December.

Will the report take account of the changed financial climate for private investment in transport? According to Lord Birt, the decision to put Railtrack into administration has had an impact on the financial attraction of transport for private investment. If the Ernst and Young report has not taken that into account, its validity must be questioned. The Secretary of State promised the Select Committee on Transport, Local Government and the Regions that the report would be delivered between 10 and 14 January. Can the Minister confirm that that is so?

The hon. Member for Leyton and Wanstead spoke at length, rightly, on safety, which is a matter that I took up with the Minister. I wrote to him on 7 August and received a reply dated 28 December, which may suggest how much thought he had to give to my original question. During those five months he had a long time in which to consider the issues. The letters referred to the impact of Lord Cullen's inquiry on the PPP contracts. The inquiry made a number of recommendations on maintenance contracts and changes to them. Have those recommendations been taken into account in relation to the PPP contracts? Lord Cullen's report also made a number of recommendations on accident investigations. Have those issues been taken up and worked into the PPP contracts?

Hon. Members will have read in the newspapers during the past few days that the Jubilee, Northern and Piccadilly lines may be given to Ken Livingstone to run because Tubelines' bid is too expensive. That was reported in The Independent on 4 January and The Times suggested yesterday that all the network could be handed over to Mr. Kiley. Can the Minister confirm whether that is so? It would be the best late Christmas present that Londoners have ever received. If the Government intend to give responsibility for part or all of the tube to Transport for London, will it be bound in the same way as private consortiums to specific targets? Will it be fined if it fails to reach its targets? Will it be

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allowed to issue bonds to finance the chunk of lines that it may be given? Will it be allowed to use congestion charges to put money into the contracts?

If the Government can already say that Tubelines' contract does not provide value for money even before contracts are signed—that is the message that is leaking into the newspapers—hon. Members may wonder how Londoners can be certain that the other contracts, if they are signed, will represent value for money in practice. The Deputy Prime Minister has promised that huge savings will arise as a result of PPP, and I have tried to get the Government to confirm that. Will the Minister do so today? Will he also confirm whether those savings will be increased or decreased if part or all of the contract to run the system is handed over to Bob Kiley and Transport for London?

A further matter that the Government have been unwilling to discuss is how much cost will have been incurred if PPP does not proceed. We know how much has been spent on consultants, but how much has been spent through the involvement of other Departments and outside bodies such as Transport for London? The figure for consultants is around £100 million. Can that figure be, say, doubled if one takes into account the time that the Government have devoted to PPP? Londoners and hon. Members are entitled to know how much has been spent on the project and how much will have to be written off if the Government pull the plug on it. If Ministers do not know, why not?

I hope that the Minister will take this opportunity to inform hon. Members about the current timetable for PPP. Many deadlines have gone past. I was told in a meeting that the Tubelines contract was due to be signed on 4 January, but that clearly has not happened. When will the contracts be signed? When will the Ernst and Young report be handed over? When will the decision on whether PPP contracts provide value for money be taken?

Does the Minister agree with Lord Birt, who said in his leaked report that a more realistic funding regime for London Underground required an adequate and predictable contribution from the public purse? I have attempted to extract from the Government exactly how much public money they are committing to London Underground over future years, but I am afraid that the figure is not forthcoming. When I approached Ernst and Young, I was told that that information was for the Government's eyes only. Will the Minister reveal the figure?

There has been so much in the newspapers recently that it is hard to know what to believe.

Dr. Pugh : As my hon. Friend said, in a recent quote the Prime Minister appeared to prejudge the matter in favour of PPP, yet when the Secretary of State appeared before the Select Committee he seemed to display a genuine open mind. Is it not important that the Minister should clarify precisely who is determining transport policy—the Prime Minister, the Secretary of State or Lord Birt?

Tom Brake : I thank my hon. Friend. I was about to come to that.

Is the Chief Secretary to the Treasury—who, when in opposition, was well known for saying, "Our air is not for sale"—lined up to take over the Secretary of State's

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job? Are the Government trying to bring in someone who supports PPP, as, coming from the Treasury, the Chief Secretary presumably does? Neither the Secretary of State nor the Deputy Prime Minister is terribly keen on PPP, so are the Government trying to firm up support for it in the Department?

There have been numerous debates on the subject and unfortunately many questions have, all too often, been left unanswered. As the deadline approaches, stonewalling seems to be more, rather than less, pronounced. I hope that the Minister will give some specific responses, rather than tell us how many people travel on the London underground daily. Otherwise, we will leave the debate knowing full well that Labour has let Londoners down, and that will not be forgotten.

10.30 am

Mr. Eric Pickles (Brentwood and Ongar): I, too, congratulate the hon. Member for Leyton and Wanstead (Harry Cohen) on his remarkable luck in securing yet another one and a half hour debate on the London underground system. I associate the Opposition with the hon. Gentleman's kind words about the sad plight of the Chancellor of the Exchequer and his wife.

Against that background, it might seem churlish to disagree straight away with something that the hon. Gentleman said, which was that there had been under-investment in the rail for 30 years. That is not correct. As you recall, Mr. Olner, you and I served on the Select Committee that examined the tube system, and it was clear that there had been under-investment for 50 years. The only time when there was significant investment was during Mr. John Major's Administration.

My hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) is right to point out that we are having yet another debate about the London underground system and yet again, with the honourable exception of the hon. Member for Leyton and Wanstead, there are no Labour Members present—the Minister is here because we called him. They have no concern about the tube. Their constituents are crying out for a solution and complaining daily about the inadequacies of the system, yet none of those hon. Members can be bothered to turn up. It is left to the Conservative party and Liberal Democrats to try to make sense of the matter.

My hon. Friend referred to travelling on the Santiago underground. I had the opportunity to travel on it a couple of years ago and can confirm that it is an efficient system. To take another extreme, the Moscow metro is run considerably better than is the London underground system. My hon. Friend the Member for Ruislip-Northwood is right to talk about the petty slights directed against Mr. Kiley, a distinguished public servant, and Mayor Livingston. My hon. Friend the Member for Cities of London and Westminster (Mr. Field), brandishing what he described as his tatty underground pass, is also right repeatedly to talk of the transfer of risk in the public-private partnership and to refer to the large premium that will have to be raised. It may be possible to raise £13 billion, but a considerable amount will be spent on premiums and interest payments. He was right to say that the situation of the London underground is a kick in the teeth for those trying to earn their living in London.

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The hon. Member for Carshalton and Wallington (Mr. Brake) said we should not talk too much about how many people travel on the underground. However, it needs to be emphasised that the number of people travelling on it per day is about 3 million. That is the number of those on the rest of the railways combined, so we are talking about a significant part of our country's infrastructure. We know that 80 per cent. of people coming to work in London travel by public transport and that that figure increases to well over 90 per cent. within the City. Those good folk are travelling not because they think that the underground or other public transport is wonderful, but because no other forms of transportation are viable. In effect, they are trapped into using public transport.

I cannot think of a better way to describe the situation than what was set out in the editorial of yesterday's Evening Standard. It refers to the underground and railways, and is headed, "Blame Labour for the railways". The story is easy to spot on the page, as it is next to an article by Professor Anthony King entitled, "Why there are so many duds in Cabinet?". Despite the fact that the Minister is at the centre of the accompanying picture, I am sure that Professor King did not mean to refer to him directly. The editorial refers to the condition in which passengers travel by rail and asks:

That seems a most reasonable way to express the dilemma that faces the tube.

While the unseemly argument between the Government, London Transport and the Mayor continues, delays on the underground have risen sharply during the past year after an upsurge in track and signal failures. The failure rates on some lines have almost doubled. A good example is the District line, on which I frequently travel. It has roughly 600,000 users a day. Compared to the 1999 figures, track defects rose by 116 per cent. Delays of 15 minutes or more increased by 35 per cent., while investment levels have been heavily cut. The average annual investment in the tube since 1997-98 has been less than during John Major's years in office.

Transport for London, which was set up as part of the Government's commitment to devolution, has found that Labour's control freakery stifles its efforts to improve the tube. The Government even went to the High Court to suppress the Deloitte and Touche report that said that the PPP gave poor value for money.

According to the annual report of London Underground, which was published in August, seven clear performance targets were set. It is sad to say that every one was not met, including those on safety and security. Investment is not the only area in which there has been a decrease, and nor is performance. Industrial disputes have increased, and absenteeism is worse than it has been for five years. That is the backdrop against which we are considering the PPP. To be blunt, the PPP is nothing more than a glorified leasing deal that offers little or no help to passengers.

Various Members have referred to speculation in the press about whether the Mayor will be offered the Jubilee line, the Northern line or the entire network, and

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whether there is value for money. I shall put my neck on the line: I suspect that the stories have no truth. If they do, the Government are acting in bad faith. From other press reports, we know that intense negotiations are taking place between the various bidders, and that the Government are considering different conditions to protect them from the Mayor and Mr. Kiley. I cannot believe that we have arrived at a position in which the Government would be able to act. I suspect that the stories are about the fact that the Government said, before the election, that no one should worry and that the PPP deal would not take place. They said that they would consider ways to involve the relevant people in a much greater way and that the matter would be put off until after the borough elections, when the PPP deal would be put through.

The hon. Member for Carshalton and Wallington raised an important point about Ernst and Young. He talked about the time scale. I think that the time specified was the middle of January, but that is what the dates he gave amount to. He said that the Ernst and Young review would be made available for a period of wide-ranging consultation, after which a final decision on value for money would be taken. If that is so, we had better be given the Ernst and Young report now. If it is to be anything like the contracts, which are 2,000 pages long, it will take a little time to read it and to put something together. Is the report on the Secretary of State's desk, and when does he intend to publish it?

I was slightly confused by the remarks of the hon. Member for Carshalton and Wallington about Lord Birt's position. While the hon. Gentleman was struggling to get to this debate, I heard the Secretary of State say, on the "Today" programme, that Lord Birt was studying not the matters that the hon. Gentleman was considering, but problems of railways and transportation 15 years from now. Perhaps the Minister will tell us why Lord Birt has strayed from his mandate to examine the present contract.

I shall try to leave the Minister time to answer in full the questions that he has been asked. I have counted 27, so the first of mine, which has been asked before, is number 28. When do the Government intend to transfer London Underground to Transport for London? What rate of return do they think would be acceptable for the private infracos? That is relevant to the earlier points about value for money. What steps were advocated by Mr. Kiley to ensure that safety under the PPP has been incorporated in the proposed contracts?

We would like to know what general advice the Government have received from the Health and Safety Executive and the National Audit Office with regard to the PPP. More important, however, in the context of the question of fares raised by the hon. Member for Leyton and Wanstead, is the level of Government support through the PPP. What level of Government grant or revenue support would be invested during the period of the PPP?

It would be useful to know what efforts London Underground is making to improve its performance. It failed its operating targets. Given the fate of the Jubilee line, it would be good to know the average number of trains operating on the Jubilee line between Green Park and Stratford from January 2000 to date. What is the average number of speed restrictions that apply for longer than seven days, for the whole of the

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underground, for each of the past five years? I should happily accept that information in writing if the Minister does not have it now.

What Government targets were set for London Underground in 2000-01? How widely were those published, and were they met? Where is the money to pay for the current London Underground "Your Tube" advertising campaign coming from? When did London Underground last conduct an audit of its assets? When are we going to see the merger between London Underground and Transport for London?

If we had suspicions last year about a lack of direction on the part of London Underground, the troubles over the Christmas period and the new year confirmed them. The problems of the underground are many and varied. Our capital city is sinking under its core transport difficulties; and the Government seem transfixed, like a rabbit caught in a car's headlights, and unable to make a decision.

10.45 am

The Minister for Transport (Mr. John Spellar) : First, I congratulate my hon. Friend the Member for Leyton and Wanstead (Harry Cohen) on securing a further debate on London Underground. Secondly, like all other hon. Members, I echo his condolences to my right hon. Friend the Chancellor of the Exchequer at this sad time.

It is self-evident that the future of transport in London, and of London Underground in particular, is of great interest to the people of London and to the many people who visit the capital or work in it. That is especially so because, as the hon. Member for Cities of London and Westminster (Mr. Field) said, London has a significant role as a world city. It is also a topic of considerable interest to hon. Members, which is demonstrated by the number of times that it is debated.

Today's debate threw up some interesting points. For example, Opposition Members expressed the wish to dissociate themselves from Railtrack and said that they did not want Railtrack mark 2—an appropriate comment on a system set up by a Conservative Government. They also dissociated themselves from public-private partnerships, but that underestimates the success of the PPP on the Northern line, where reliability and other improvements should be noted. Opposition Members have found previously undiscovered merits in the Mayor of London, which were not noticed in his previous incarnations. I am sure that he will appreciate the irony, if not the conversion.

The Under-Secretary of State for Transport, Local Government and the Regions, my hon. Friend the Member for Plymouth, Devonport (Mr. Jamieson), apologises for not being able to add today to the considerable number of adjournment debates to which he has replied. In response to the previous adjournment debate initiated by my hon. Friend the Member for Leyton and Wanstead in October last year, my hon. Friend noted that far from being required to offer his commiseration, he was pleased to have an opportunity to explain the Government's plans.

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My hon. Friend the Under-Secretary reminded hon. Members that the Government have invested almost £1 billion more in the tube than was planned by the last Tory Government. He explained that a new approach was needed to improve the tube's infrastructure, and to avoid the cost and time overruns of the Jubilee line extension. Hon. Members should remember that when examining the need for a new approach. My hon. Friend made it clear that our approach was not driven by dogma, but was the result of a careful examination of all the options for modernising the tube.

London Underground has been working to ensure a better service for today's passengers, but we must recognise the pressures under which it operates. It now carries 1 billion passengers a year. That is the most ever, and it represents an increase of more than 25 per cent. over the past four years. The hon. Member for Cities of London and Westminster alluded to that when he said that we could relieve the tube of some of that pressure if we had an economic downturn. Indeed, much of that pressure, particularly at rush hour, is associated with a considerable increase in economic activity. One has only to look at London's skyline, and the number of cranes, to see that. As the Mayor of London consistently points out, London has seen a sizeable increase in its population over the last decade, which is a reversal of previous trends. And, as the hon. Member for Brentwood and Ongar (Mr. Pickles) said, as many travel on the underground as on the whole of remainder of the rail network.

We recognise that the quality of service declined noticeably last winter. However, London Underground has actively been tackling the key issues that affect service quality and reliability. Measures taken by London Underground—for example, on the availability of train operators—have resulted in some improvements, but more needs to be done. The Government are keen that those achievements should be built on and that further initiatives to improve performance and customer service should be introduced.

I mentioned the considerable improvements on the Northern line. When I last checked, the figure for reliability was 98.5 per cent. under the PPP. Furthermore, peak-time train cancellations this year are the lowest on the network and, at just 1.1 per cent., the rate is half that for last year. I do not want to be complacent, but we should offer the management of London Underground some congratulation on that, although we look to it to do better.

Across the network, the problems that emerged with escalators last year have been vigorously tackled. Unplanned station closures have been reduced, and extra station staff have been brought in to help customers. There have also been considerable improvements in targeting by the British Transport police, which will make for a safer underground. Further improvements are under way, and hon. Members will have seen publicity for the modernisation of ticketing and revenue-collection systems on the underground and, incidentally, on London Transport buses, under the Prestige PFI project. Measures will include the introduction of new automatic ticketing machines to reduce queuing.

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The hon. Member for Cities of London and Westminster referred to integrated transport. There has been a considerable improvement in the bus service in London, a substantial increase in the use of buses and considerable investment. We should also bear in mind the light rail systems, and I pay tribute to the previous Administration for starting the Croydon tram link system, which is extremely successful. There have been several improvements in integrated transport, and we are considering how it can be developed further. Many other initiatives are in hand, and the overriding aim is improving service to customers.

We are all aware that many of the current problems with the underground are the result of three to five decades of under-investment, although there is some argument among Opposition Members about that period. However, we all recognise that decades of under-investment have led to a deterioration in the quality of the infrastructure. Equally, we all recognise that London Underground needs a massive investment programme to bring it up to scratch and a new way to manage the work.

Mr. Pickles : When did the Minister last travel on the underground during peak hours? Did he enjoy the journey?

Mr. Spellar : I cannot remember when I last travelled during peak hours, although I travelled off-peak about three or four weeks ago. I used to travel on the underground and on Southern region services; indeed, I used to go to school on Southern region services. We have heard about the halcyon days of uncrowded transport in London, but there have always been difficulties with travel in London at peak hours. If anything in the system goes wrong, the problem quickly snowballs. We have identified that issue, and the hon. Member for Carshalton and Wallington (Tom Brake) referred to the need to close the gates at Victoria for a short period when there are pressures there.

I think that we all agree on the need for additional investment, and we are considering the most efficient and effective way of managing it. As I said, the Jubilee line demonstrates that London Underground can be well focused on running trains, which is its core competence. However, it has demonstrated serious deficiencies when it comes to enhancing the infrastructure and, in particular, managing all the infrastructure contracts. That is precisely why we considered the possible mechanisms to harness the skills and abilities of the private sector and introduce private capital into the London underground system.

Contrary to allegations made by Opposition Members and by some in the media, the various consortia have managed to secure the necessary finance for their proposals. That is the best way to enhance the infrastructure of London Underground. We want to ensure that the improvement works are completed on time and to budget. We want to ensure also that essential maintenance work is not overlooked and that the resources required to provide the public service are not diverted to pay for more massive cost overruns, such as those that were incurred in connection with the Jubilee line extension.

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That is why London Underground has developed modernisation plans whereby three companies will be dedicated to fixing and improving the infrastructure. Those companies will work for the public sector.

Tom Brake : The Minister has been speaking for 10 minutes. He has only five minutes in which to complete his speech, yet he has not answered any of the questions raised by hon. Members.

Mr. Spellar : I thought that I was dealing with many of the questions that have been posed, not least why we believe that there is a need for increased infrastructure for the tube. There are several transport priorities throughout the country relating to rail and other modes of transport. Even in London, there is considerable pressure from the Mayor for additional investment in buses and pressure from elsewhere for investment in light rail. However, we believe that substantial investment in infrastructure, including investment for maintenance of the current tube infrastructure, is required. Having decided that such investment was necessary, we adopted the mechanisms to which I have referred to ensure that we achieve the most cost-effective and timely method of delivery. Those points relate to important questions raised by hon. Members, who have questioned the basis of the PPP, as well as the timing.

Mr. Wilkinson : On the question of timing, will the Minister say whether the Government will honour their manifesto pledge of 1997 to transfer London Underground to Transport for London? Will they do so before or after the fifth anniversary of their election in 1997, especially as that anniversary more or less coincides with the May elections?

Mr. Spellar : Yes, I am looking forward to commercial close on the project before the end of the financial year, although I had hoped that it would happen slightly sooner. The Department is putting in a great deal of work, and is putting pressure on all concerned to sort out the details, which it is important to get right. Equally, we want to secure close on the arrangements, following consultation and publication of the Ernst and Young report on value for money. That information will be put in the public domain before a final decision is taken. Then, under the Greater London Authority Act 1999, the intention is to transfer the running of London Underground to the Mayor and Transport for London. Like the hon. Member for Ruislip-Northwood, we hope that that will happen as soon as possible.

I shall move back to my main theme of London Underground and the development of modernisation plans whereby three companies will be dedicated to fixing and improving the infrastructure. These companies will work for the public sector. The operation and management of the system will be in the hands of London Underground. The public sector will monitor that work and payment will be linked to results. The companies will be required to deliver the improvements demanded by the public sector. Many commentators overlook the fact that several private sector companies already work for London Underground. We believe that this scheme will ensure a more efficient method of managing those contracts, ensure a better connection between the installation and

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maintenance of services, and, therefore, ensure the ultimate delivery of a successful scheme. At present, there is a considerable gap between the companies that put in the service and the final output.

The reality is that about 80 per cent. of the investment work already undertaken—

Mr. Bill Olner (in the Chair): Order. We must move to the next business.

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