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House of Commons

Tuesday 29 January 2002

The House met at half-past Two o'clock


[Mr. Speaker in the Chair]


Land at Palace Avenue, Kensington (Acquisition of Freehold) Bill

Read a Second time, and referred to the Examiners of Petitions for Private Bills.

London Development Agency Bill

Order for Second Reading read.

To be read a Second time on Wednesday 6 February.

Mersey Tunnels Bill

Order for Second Reading read.

To be read a Second time on Thursday 7 February.

Oral Answers to Questions


The Secretary of State was asked—

Local Government Deregulation

1. Ms Meg Munn (Sheffield, Heeley): What deregulation he proposes for local government services. [28435]

The Minister for Local Government (Mr. Nick Raynsford): The Government set out their radical and new vision for local government in the recently published White Paper, "Strong Local Leadership—Quality Public Services". It contains a wide range of deregulatory proposals to eliminate unnecessary red tape and to give local councils greater freedom to innovate and to respond to the needs and aspirations of their communities.

Ms Munn: I thank my right hon. Friend for his answer. To be a high-performing council and to benefit from this deregulation, what level of importance is placed on consulting and involving residents and tenants in developing and planning services? What expectations does my right hon. Friend have of comprehensive and meaningful consultation with tenants on housing stock transfer?

Mr. Raynsford: The Government want to see all local authorities striving for excellence both in service delivery and in effective civic leadership. That means engaging

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their local communities in effective partnerships and in talking through issues of concern to individual groups in the community.

Consultation with tenants' groups about proposed stock transfer, consultation with other community groups about regeneration schemes and building together local partnerships that will discuss how the community can best address the problems that it faces are all fundamental parts of our vision for effective local government. I hope that my hon. Friend's authority will adopt this approach, and every other authority too.

Sir Paul Beresford (Mole Valley): I admire the Minister's ability to keep a straight face when he gives such an answer. It is astonishing gall to hear about this sort of deregulation from a Minister and a Government who have loaded local government with volume after volume of regulations. Is it not correct that the Audit Commission has doubled in size because of the inspections that it has to carry out? Some of the deregulation that the right hon. Gentleman talks about will require more regulations so that there can be regulation or deregulation, and the cost will land on the taxpayer, who is already facing a £600 million bill for inspection on best value alone.

Mr. Raynsford: As is too often the case, the hon. Gentleman is wide of the mark. We are introducing a series of deregulatory measures, many of which will sweep away some of the pernicious consequences of the Conservative Government's period in power. In particular, there were the extraordinary centralist controls over borrowing by local government, which were imposed by the Government of whom he was a member. We shall give local authorities freedom to borrow within prudent limits so that they can take responsibility for their decisions. That is all part of a process of allowing decision making to go back to where it should be, which is at local level.

David Taylor (North-West Leicestershire): Is it not the case that for local authorities to benefit from the proposed deregulation, they will need a decent grant settlement? Has my right hon. Friend received representations from especially county district authorities about the extremely disappointing finance which was announced recently? Will he see me in relation to that in my capacity as co-chair of the town and country group of MPs in this place?

Mr. Raynsford: It is a slightly curious perception that there is a disappointing settlement when it involves a 7.5 per cent. increase in grant to local authorities. By comparison with the period when there was a Conservative Government, when local authorities often saw no increases and in some instances cuts in grant entitlement, we have given real-terms increases year on year to local government, culminating in a 7.5 per cent. increase, which is three times the rate of inflation. By any standards, that is a good settlement for local government. We hope that local government will respond appropriately.

Mr. Malcolm Moss (North-East Cambridgeshire): This Labour Government have piled more and more regulations and burdens on to local authorities without

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providing proper funding. Does the Minister agree with what his colleague, the secretary of the county councils' Labour group, recently wrote about this year's council tax rises? He said that

Does the Minister think that 8.9 per cent. looks attractive to the average pensioner?

Mr. Raynsford: No, I do not, and it is not necessary for me to do so. As I have made clear, the settlement put in place by the Government amounts to a 7.5 per cent. increase. Substantial increases will go to county councils, which will receive a minimum of 4 per cent. That is well above the rate of inflation, and is guaranteed by the floors that we have put in place. It compares very markedly with the cuts in grant and in standard spending assessments introduced by the previous Government. It is not surprising that the Opposition are nervous about council tax increases. The Government are giving a decent settlement to local authorities, and we expect them to respond accordingly.

London Underground

2. Harry Cohen (Leyton and Wanstead): What recent decisions he has made in respect of the future of London Underground. [28436]

The Secretary of State for Transport, Local Government and the Regions (Mr. Stephen Byers): London Transport is responsible for the implementation of the plans for the modernisation of London Underground. Given the importance of ensuring that the contracts provide value for money, I decided in October last year to obtain independent advice from Ernst and Young on this issue. I intend to publish this report next Thursday, 7 February, which is the day we expect London Transport to make its in-principle decision on whether the contracts achieve value for money.

Harry Cohen: Are not the final bid contracts shaping up to be a potential disaster, for London Underground, for London's fare and council tax payers, and for public control over the system? Will not the private contractors be completely in the driving seat? They will be able to perform worse than they do now and still get big bonuses, to tap the public purse for cost overruns and 30 years of profits, and to renegotiate after seven and a half years from a monopoly position. They will also be able to set their own priorities, not the public's. If my right hon. Friend is so confident about the contracts, will he put all the relevant data in the public domain, and have a debate in the House before he signs on the dotted line?

Mr. Byers: The modernisation of the tube will bring in some £13 billion of investment over 15 years. I hope that my hon. Friend will recognise that what London Underground desperately needs is that level of investment. There has been chronic underinvestment in the London underground for generations, and we are going to change that. However, we must ensure that we get value for money. We are talking about billions of pounds of investment, and we must get a return for every pound that we spend on the underground.

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I assure my hon. Friend that London Underground will remain in the public sector, and publicly controlled. The private sector will work for a publicly controlled London Underground, so our modernisation proposals do not include any privatisation.

As for holding a debate on the modernisation plans, I assure my hon. Friend that all the relevant information will be put into the public arena. London Underground has agreed to do that next Thursday, 7 February. There will then be a three-week consultation period, involving the Mayor of London and Transport for London, and all of us will have the opportunity to take part. If you are agreeable, Mr. Speaker, I hope towards the end of next week to be able to make a statement to the House on how the Government intend to take matters forward.

Sir Sydney Chapman (Chipping Barnet): Will the Secretary of State confirm that, in opposition, the Labour party was critical about the level of investment in London Underground under the previous Conservative Government? Will he confirm that investment since 1997 has been far below that achieved in the equivalent period before 1997?

Mr. Byers: I think that the issue is whether—[Hon. Members: "Answer."] I shall answer the question in my own terms, as the House would expect. The choice is between a future made up of all our yesterdays, with people blaming each other, and £13 billion of investment going into London Underground. As Secretary of State for Transport, Local Government and the Regions, I want the latter, and ensuring that it happens is my obligation and responsibility. My duty is not to try and rewrite history, but to look forward and deliver the investment that London and Londoners so badly need.

Dr. Vincent Cable (Twickenham): Does not the future of the underground depend on good industrial relations? Are the Government committed to the view, which is attributed to the Prime Minister's press secretary, that they should in future support compulsory and binding arbitration in public transport disputes?

Mr. Byers: The Prime Minister's official spokesman—indeed, the Prime Minister himself, which is probably more important—[Interruption.] The Prime Minister has said very clearly at the Dispatch Box that we believe that arbitration is the best way forward in these continuing disputes. For that simple reason, it is in no one's interest, whether we are talking about London Underground, South West Trains or any other company, to have strike action. Passengers will look for alternative modes of transport, which would be bad for the railways and for the underground. Arbitration is about the justice of a case; strike action is just about strength. It is about time that both parties put the interests of the travelling party first. That is what the Prime Minister has said, and it is what I say.

Mr. Eric Pickles (Brentwood and Ongar): May I take it that the answer to the question of my hon. Friend the Member for Chipping Barnet (Sir S. Chapman) is that the Government have underspent, underestimated and underperformed by some 30 per cent. in relation to the underground? The right hon. Gentleman talks about what will be produced next Thursday. Will he produce plan B?

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He will recall that he said to the Select Committee that he was working on a plan B to use if the public-private partnership did not work. He said that they were working on it, they had time available to them and referred to the middle of January or thereabouts. Will he, in his statement, tell us what the alternative is to PPP? Will he confirm that the B in plan B stands for Lord Birt?

Mr. Byers: This is a serious issue, about how we can secure the £13 billion of investment in London Underground. I will meet the obligation that I gave the Select Committee about ensuring that there will be a plan B ready in case we need to use it. Unlike the Conservative party, we are approaching this not from a position of dogma, but with regard to what is in the public interest. That is why we have said clearly that these contracts will need to satisfy the value-for-money test because the public interest must come first. I want to see a good deal for Londoners. That means getting the £13 billion of investment going in over the next 15 years. It means seeing a level of improvement that the tube has been crying out for years.

Next week, people will have a choice. Those who block the modernisation proposals will be the wreckers, while the reformers will want to go ahead with modernisation and change. We must ensure that safety is not compromised, there is no privatisation and there is value for money. Then we will see the investment in the London underground that is so badly needed.

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