House of Commons Hansard Debates for 14 Dec 1992

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Now more time has passed, and the time for action to safeguard the yard has arrived. Who says these skills are not needed? My hon. Friends have mentioned the offshore industrial possibilities. There is all sorts of potential in research at the bottom of the ocean. There is potential also in energy renewables. It would be possible to convert and apply the engineering skills developed over the yard's 160-year history to projects that meet modern-day needs. They may not include warship construction--let us hope, in many respects, that they never do. Such projects could, however, provide suitable employment for skills that already exist.

In an earlier debate, reference was made to the report recently published by the Parliamentary Office of Science and Technology. Its contents should be studied in the context of Cammell Laird redundancies. We need a driving force, but not of the kind represented by the nonsense produced by St. Quintin. When I first heard that name, I thought that it was a gaol. Perhaps that is where the report's authors should be put.

The report is an extraordinary document :

"The location of companies such as Cammell Laird, Candy, Vauxhall and Unilever has enhanced the strength of the peninsula, with Port Sunlight providing an historic importance."

One does not need too many qualifications to point that out. As my hon. Friend the Member for Wallasey pointed out, the report interestingly includes that the 160-acre site could be used for a retail park. It fails to mention that land of substantially higher acreage under the ownership of Unilever Merseyside Ltd. has been transformed into a retail park--just one and a half miles down the road.

Why did the report make no reference to the major study funded by Unilever and Wirral borough council just a few years ago, following the major redundancies at Van den Berg and Jurgen? Why was such factual information not sought? It is an extremely weak document, and I hope that the Minister will give it the treatment it deserves. There is only one place to file such a report.

If we can create the driving force to which my hon. Friend the Member for Birkenhead referred, and establish a partnership between the area's existing industrial talents, the Government, and the work force, and make proper utilisation of all the higher and further education skills, a future can be found that would be much more worth while than a debate about a £1 share. VSEL have had a fine return on capital invested, if one looks at it in those terms.

VSEL at Cammell Laird is not a lame duck. It has enormous latent talent, and it is the job of the House to exploit that talent not only in the interests of the workers of Cammell Laird and of Merseyside, or even of our country--but in the interests of the revitalisation of the River Mersey and of the trading potential of the whole European continent. I hope that the Minister will tonight give the north-west some confidence that the Government will be part of the campaign to which my hon. Friend referred, and an assurance that VSEL will not get away with it, and that the interests of the north-west will be properly served.

1.38 am

Mr. Jim Cousins (Newcastle upon Tyne, Central) : Those of my hon. Friends representing constituencies in the Wirral and on Merseyside spoke powerfully tonight about the predicament of the Cammell Laird shipyard. Those of us who represent shipbuilding areas, and still

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more those of us who spent part of our working lives in or around the shipbuilding industry, will share my hon. Friend's sentiments. The most powerful sentiment that we share is that we see the shipbuilding industry on Merseyside and everywhere else as a modern industry with a tremendous future. It has at least as good a future as the retail industry. The Opposition consider that shipbuilding has enormous potential : we are currently witnessing a revolution in shipbuilding techniques that is converting the industry into a high-technology, high- added-value concern. As my hon. Friends have pointed out, shipyards can be easily diversified into the energy industries, the creation of sub-sea structures, and oceanic development ; they also provide facilities with important environmental uses.

As my hon. Friend the Member for Liverpool, West Derby (Mr. Wareing) pointed out, important changes in the regulation of ships and shipbuilding throughout the world can create new markets. The elimination of inferior tankers and the upgrading of roll-on, roll-off ferries, for example, have made shipbuilding a modern industry and have turned the facilities at Cammell Laird into an important national asset which must not be lightly set aside. My hon. Friend the Member for Wallasey (Ms. Eagle) spoke of the "deadly embrace" of VSEL, and my hon. Friend the Member for Birkenhead (Mr. Field) described the separation of Cammell Laird from VSEL as an honourable divorce.

Mr. Frank Field : I said that I hoped that it would secure an honourable divorce. That is not what is currently on offer.

Mr. Cousins : My hon. Friend is wise enough to ensure that an equally honourable settlement is included in his project for an honourable divorce.

VSEL is not on the ropes financially ; it has powerful resources. At the last count, its cash reserves were said to amount to some £160 million. It has benefited from the high interest rates of recent years ; its profits are substantial and rising, and currently amount to over £50 million. Our fear--it is a fear for Cammell Laird now, but I suspect that it will also be a fear for Barrow later--is that VSEL will diversify its activities out of shipbuilding, but will not use its enormous resources to enable its work force, and the communities who depend on that work force, to share in its possibilities. That is the Government's task, as my hon. Friends have correctly pointed out.

There has already been a huge reduction in our shipbuilding capacity. We have recently seen major job losses in offshore oil, as well as in shipbuilding itself. At least four shipyards have closed in the past two years ; slightly before that, capacity switched away from shipbuilding to other industries. Surely the Government can legitimately use all those facts to renegotiate the original deal with the European Community : the recent rundown in the capacity of British shipbuilding is very relevant to Europe, and to European directives. The rundown of that capacity has been far greater than that in any other European country. It also exceeds the planned rundown in capacity of the east German shipyards, even

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though those yards are to attract intervention fund support of more than 35 per cent. while Cammell Laird has no access to such support. It is perverse to classify warship yards as they have been classified for European purposes. They must be given a proper opportunity to diversify away from warship building in precisely the same way as the east German shipyards must be given a proper opportunity to diversify away from the markets of the former Soviet Union and the eastern bloc on which they depended and which have now collapsed. The warship yards of Britain--and the yards of east Germany, so heavily dependent on orders from the eastern bloc--should be given a level playing field on which to operate.

In the fading days of their presidency of the European Community, the Government must explain why they have not pressed this matter with the European Community. They must also account for the amazing fact that the reconstruction of the yards cannot attract regional development grant support. They must now start to revise the original deal in connection with the losses of the shipbuilding industry--now a part of ancient history--and state aids, which gave rise to the exclusion of yards such as Cammell Laird from the intervention fund support that is now so critical to securing the future of the yard. In a debate on European aid to shipbuilding which took place as recently as 18 November, the Minister for Industry said that he recognised the

"reality of the circumstances under which the warship yards were privatised and the arrangments entered into with the Commission at the time."

The right hon. Gentleman went on to say :

"it is possible that over time or even fairly soon there may be a change in circumstances and that the situation could be reconsidered."--[ Official Report, European Standing Committee B ; 18 November 1992 ; c. 32.]

The crisis that Cammell Laird now faces is just the sort of circumstances that the right hon. Gentleman must have had in mind. The Government must now reconsider their whole position on intervention funding and on access to regional development grants in the reconstruction of the yards. They should give the British warship yards a chance to diversify from their declining markets in exactly the same way as the German Government have rightly sought to give the east German shipyards a chance to diversify away from theirs. Those are the powerful underlying issues behind the crisis at Cammell Laird. The present owner of Cammell Laird is not short of financial resources, having been given a very favourable deal by the Government of the time to start the yard off. All these are matters on which the Government ought to respond.

1.47 am

The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Neil Hamilton) : Let me participate in the proceedings for the third time this evening.

I congratulate the hon. Member for Wallasey (Ms. Eagle) on initiating this important debate. The sober way in which Opposition Members have spoken-- reflecting the great sadness that we all feel at the predicament in which Cammell Laird now finds itself--has added to the power with which they have been able to advocate their case. I can assure them that I have been impressed by it.

I must apologise for the absence of my right hon. Friend the Minister for Industry, who is chairing the

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Telecommunications Council. I hope that, as a Cheshire Member and as the Department of Trade and Industry Minister responsible for the north-west, I shall prove to be an acceptable substitute. [ Hon. Members :-- "Hear, hear."] I am pleased to have at least some support among my hon. Friends for that unarguable proposition.

Cammell Laird and its work force have made valiant attempts to cope with extremely difficult market conditions. As a Member of Parliament whose constituency is only a short distance away, I have been very struck by the calamity which the workers at Cammell Laird have suffered in recent times.

Cammell Laird merged with VSEL in June 1985, and, as a VSEL subsidiary, was subsequently privatised as a warship builder in March 1986. Of course, the political and economic world was very different six years ago, and the market for defence equipment has greatly reflected that change. It was considered then that many yards would have better prospects if privatised as warship builders. Although the circumstances which caused us to make those judgments at that time have changed, for reasons which I am sure everybody welcomes in general terms, nevertheless we do not welcome the secondary consequences which have produced the difficulty that Cammell Laird faces today.

World merchant shipbuilding capacity was also too high. That has had to be cut as well. It is instructive to look at the experience of other countries. After all, in Germany in the past 15 years, shipbuilding capacity has been cut by more than half, in Belgium by more than three quarters, in Spain by 60 per cent., in France by 79 per cent., and in many other countries in the Community by substantial amounts as well.

Britain is not alone in having experienced the traumas of change. In order to tackle the problem within Europe, the Commission, in its 1985 agreement with the United Kingdom Government, insisted that those shipyards which were privatised as warship yards could not gain access to intervention funding.

Of course, the unforeseen change to the European political scene resulted in the Ministry of Defence reviewing its requirements, and subsequently announcing "Options for Change". The defence sector then faced a situation similar to that which the merchant sector had faced previously. There was over-capacity in warship building, accompanied by a steeply declining order book. That meant that Cammell Laird's order book consisted virtually entirely of the construction of diesel submarines for the Ministry of Defence.

Cammell Laird's parent, VSEL, and defence companies, unable to diversify, could no longer maintain the levels of work force that they had previously employed. At the time of privatisation, and in a much more buoyant market, Cammell's work force was 2,100. Therefore, VSEL, following the announcement of "Options for Change" announced, as early as October 1990, that Cammell Laird was for sale. At the same time, a necessary programme of redundancies was to be undertaken at Birkenhead and later Barrow. The United Kingdom Government, in an attempt to help VSEL in its efforts to sell Cammell, informed possible overseas buyers and United Kingdom industry of the availability of the yard through its British overseas posts, and day-to-day discussions with industry.

Part of the VSEL announcement in October 1990 stated that, if a purchaser could not be found for the Cammell

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Laird shipyard, it would close in the summer of 1993 following delivery of the last of the diesel submarines. At that time, it was much hoped that the yard could be sold as a whole.

Due to the shipbuilding market and partly due to the recession, no party interested in the yard could be found. VSEL therefore decided that it might be a better option to sell Cammell Laird in small plots under a zonal selling strategy.

Although there were one or two approaches, still no serious bids were received for any of the plots. At the same time, the Department continued to approach the Commission in order to see whether it would change its mind on the availability of intervention fund for warship builders. My right hon. Friend the Secretary of State for Wales--he is present at this somewhat inconvenient hour of the morning, which reflects our commitment to the workers at Cammell Laird and to Merseyside in general--along with my noble Friend Lady Chalker, as the hon. Member for Birkenhead (Mr. Field), in his usual fair way, acknowledged, gave great support to hon. Members' attempts to resolve what appeared to be an intractable problem.

In 1990, my hon. and learned Friend the Member for Grantham (Mr. Hogg) sought to persuade the Commission that warship builders should have access to the intervention fund. The Commission would not agree to that, but did agree that United Kingdom merchant yards should be allowed to return to unsubsidised merchant shipbuilding. In the following year, my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh), who is also in Brussels today and therefore cannot be with us, made a further unsuccessful attempt to persuade Sir Leon Brittan that warship builders should be allowed subsidy. As recently as November this year, my officials sounded out Sir Leon Brittan's cabinet on the prospects of resuming subsidy. His officials were clear that there was no prospect that the Commission might agree to this. Officials remain in close touch with the Commission, so that if there is a change in attitude, we can ensure that any ministerial approach will produce the most favourable response.

I must tell the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) that, however laudable his aim of securing a change of status for the yard, that does not lie within our gift, unilaterally, to achieve. He is well aware that the regime under which shipbuilding is managed in the Community, particularly in respect of the subsidies available, is the preserve of the Commission. Although we attempt to influence its decisions and press strongly the case for our shipbuilding industry, it is not something about which we alone can take a decision.

Mr. Cousins : During the British presidency the relevant Ministers have held the chair at such meetings. Did our Ministers ever raise the matter of Cammell Laird with our colleagues in the Council of Ministers?

Mr. Hamilton : I cannot give that information off the top of my head, because I was not present at those meetings, but I shall, of course, inquire about it. The member state that holds the presidency must, however, act in the interests of the Community as a whole. That often produces some difficulties for those who have to bear that responsibility. Other Ministers or officials represent the United Kingdom, and I am sure that they put forward

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vigorously those points that benefit our industry. I should be very surprised if we did not take full advantage of any opportunity to discuss the issue.

We are conscious that the EC decision is particularly hard to accept when, as several Opposition Members have said, the former East German yards have been given non-contract-related aid of up to 36 per cent. However, social and economic conditions there were so serious as to lead EC Ministers, in an Industry Council on 17 June 1992, as a whole to accept a special arrangement for those yards.

I emphasise that the maximum figure of 36 per cent. cannot be directly compared with the 9 per cent. at present available to shipbuilding in the rest of the Community for aid to specific contracts. Where there is no competition from outside the Community, east German prices must not fall below the level quoted by other Community shipbuilders. The original provisions of the directive already ensure that such action can be taken where there is competition from outside the Community. The Commission has also been instructed to ensure that those companies which have bought east German yards do not increase their capacity during modernisation. Despite the unavailability of intervention fund subsidies, there was still some hope for Cammell Laird with the proposed development of an oil and gas terminal at Point of Ayr by the Hamilton brothers--no relation--who had applied for planning permission. However, Wirral borough council objected to that application, which is now awaiting a decision following a public inquiry. That was a significant factor in triggering VSEL's announcement on 2 December, reconfirming its 1990 announcement to close the yard.

The announcement was therefore not unexpected, but it still represents very sad news, and it was received with much regret both on Merseyside and elsewhere. Both management and work force have sought to secure a future for Cammell Laird, but it has not proved possible in the circumstances.

While this is a decision essentially for VSEL, the Government have repeatedly sought to help the extremely difficult market conditions. However, as a development area, Birkenhead already qualifies for the full range of DTI support measures. Cammel Laird, the local TEC and the Wirral task force have established a joint fund to assist retraining of redundant Cammell Laird employees--more than 800 have benefited so far. Some £37.5 million has been made available over five years under Wirral's city challenge programme. The newly designated freeport and associated maritime development zone form the cornerstone of the local regeneration initiative.

Ms Eagle : I asked whether the Government would be willing to support the local community's proposal to maintain Lairds as a shipbuilding area. The Minister is talking, quite properly, about what would happen if the catastrophe came about and the yard closed. I should be interested in his comments on the local community initiative that my hon. Friend the Member for Birkenhead (Mr. Field) and I mentioned, so that we can offer workers some hope that they may have a future if we can get the yard out of VSEL's grip.

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Mr. Hamilton : I well understand the hon. Lady's desire that shipbuilding should continue at a site where it has been carried on for many generations. If she and the local community can put together a viable scheme that convinces investors that shipbuilding can continue, no doubt it can be put forward. I am sure that she appreciates that, as it is not my direct responsibility, I cannot give a personal opinion, but I shall ensure that my right hon. Friend the Minister for Industry gives the closest consideration to her proposal.

It is very sad that circumstances have conspired in such a way that it is not possible to undertake profitable shipbuilding at Cammell Laird. It is particularly sad because no one has striven harder than the yard's management and work force to make the yard a long-term success. Submarines are still being built at Cammell Laird, but when the contracts are completed, the yard will, on present plans, be put on a care-and- maintenance basis in readiness for better times, which we hope will come. The over-capacity in world markets does not make it easier to put together the viable plans to which the hon. Lady has referred.

Mr. Wareing : Does not the Minister understand that it is not a matter of waiting for somebody else to come along with a viable plan ? Surely the Government should now declare their firm commitment to help by actively intervening to achieve such a plan. After all, they must bear in mind their responsibilities for the balance of payments, and the loss of the Cammell Laird yard will make us more dependent on shipbuilding in other parts of the world. There is also the dire social cost of allowing people to lose their jobs.

Mr. Hamilton : I appreciate the hon. Gentleman's point, but he will know that we are not masters in our own house. We have to justify our decisions about subsidies and intervention to the European Commission and have to fit our schemes with those set out in Brussels. Otherwise, the level playing field for which Opposition Members have so eloquently called will be perceived differently by other member states of the Community. These matters must be discussed and agreed. It is not possible for us to take the kind of unilateral action that the hon. Member suggests.

Mr. Frank Field : The Minister talks about us not being masters in our own house, and there could not be a truer statement about the plight of Laird's at the moment. Earlier, he said that Laird's had been unsuccessful in bidding for orders to keep the yard going. The crucial clause that he omitted from that sentence was "under the current ownership". One of the points that we have made this evening is that VSEL clearly does not believe that it is in its interests for Laird's to succeed. When we tried to win orders for frigates, VSEL marked up tenders in a way that made it impossible for us to win. It is important to register that fact--but as the Minister said earlier that attempts had been made to sell some of the land, it is also important to register the fact that in the weeks leading up to the announcement that the yard was to be butchered, the Merseyside development corporation attempted to buy from the shipyard vacant land which nobody thinks will be used for shipbuilding, yet it was impossible for a sale to be agreed. Several people have reported similar reactions from VSEL, which seems to suggest that the company has a long-term strategy for the

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yard vis-a-vis its value for VSEL's books, but not a long-term strategy for building ships and keeping the workers employed.

Mr. Hamilton : I hear what the hon. Gentleman says, and again, I shall draw it to the attention to my right hon. Friend the Minister for Industry. It is not possible for me to comment on it now because I am not in possession of the facts.

In spite of the sad story that I have catalogued, I am especially pleased to be able to announce that the Under-Secretary of State for the Environment, my hon. Friend the Member for Hornchurch (Mr. Squire) has just approved a £2.45 million city grant towards a £7.2 million scheme of industrial development in the challenge area at Valley road in Birkenhead. The project involves the reclamation of 11 acres of derelict land and the building of 173,000 sq ft of industrial and warehouse units, which will provide space for 400 new jobs.

I know that, in the midst of recession, from which we hope we are emerging- -there are now signs which give us grounds for optimism--this may all seem like rather cold comfort. I appreciate that, in the context of the difficulties that we have experienced in recent months and years, what is happening will be hard to take, but we have to look to the future.

The Government are firmly committed to the regeneration of Merseyside. It is a massive task, and it will not be achieved overnight. Industrial change is always painful, and when Labour Governments were in power they had to face similar traumatic changes. We are committed to cope with those changes and to ensure that as far as possible the pains of transition are diminished, if not eliminated.

Although I do not know what future is in store for Cammell Laird, for its employees and for the site that it occupies, I can say that the Government take seriously everything that has been said in the debate, and that we shall do our level best to ensure that the Wirral constituents of hon. Members on both sides of the House are given the best future that it is within our power to give them.

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London Transport

2.7 am

Mr. John Marshall (Hendon, South) : There is a tradition in the House that if one has an interest in a topic one ought to declare it, so it is only appropriate for me to declare that I have an interest in the improvement of London transport because I am a frequent user of it. I am a frequent user of the Northern line, which is all too often described as the "misery line". A former chairman of London Transport, Sir Keith Bright, once described it as an abomination, and I do not believe that the quality of the service has improved sufficiently for that description to cease to apply.

My fundamental belief is that the only answer to London's traffic problems is to increase investment in public transport. It is clear that there can be little additional road building in London, because Londoners' resistance to such developments is great, the costs are huge, and the benefits are slight in terms of relieving traffic congestion. One of the lessons of building urban motorways has been that all too often the better road immediately generates increased traffic, and at the end of the day there is no less congestion. Road building in cities is a wonderful example of Say's law, with supply creating its own demand.

The only road that offers much hope for improving traffic flows in London is the M25, London's ring road. The widening of the M25 and perhaps eventually the building of a "son of M25" offers some hope for Londoners. What we must also recognise is that, while there will be little additional road building, car ownership in London is likely to increase by a further 50 per cent. over the next 20years. It is up to the Government and to others to decide what can be done to stop London grinding to a complete halt.

As I see it, the solution is a massive increase in investment in public transport. It is true that my hon. Friend the Minister has approved a number of red routes, but they merely delay Armageddon. They may speed up the flow of traffic into central London, but they can do nothing to provide parking spaces in central London. There are others who see road pricing as a panacea for the problems of traffic in London. We have still to discover whether it is technically feasible, and at the very best it is only a medium-term solution. I believe that, ideally, any road pricing should be introduced after public transport has been improved, rather than before.

It is common ground in the House that London Transport was starved of investment in the early 1980s. The Greater London council, the demise of which is unregretted in London, made a deliberate decision to subsidise fares rather than to improve services. The Livingstone years were the locust years for London Transport. Investment in rolling stock was at £60.6 million in 1980-81. By 1984-85, it had fallen to £17.7 million.

The hon. Member for Brent, East (Mr. Livingstone) was responsible for a massive decline in investment in rolling stock by London Transport. That inadequate investment was used so that there could be cheaper fares on London Transport for American tourists. The GLC should have produced a better service for Londoners rather than cheaper fares for visitors to the capital. The task facing London Transport and my hon. Friend the

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Minister today is to make good the neglect of the past, to invest in new routes and to provide the services that will be necessary once the recession is over.

I will talk for a minute about the Northern line, the London Transport service that I endure all too often. On the Northern line, we have an information service which was once described as being at the frontiers of technology, but it is far behind those frontiers today and is frequently regarded as unsatisfactory by those who use it. The trains of the Northern line are frequently graffiti-ridden, uninviting and not as clean as one would like. It is true that London Transport has sought to improve the quality of the stations. I pay tribute to those who work on London Transport for the amount of refuse that they collect at the stations, but it is a poor reflection on those who use the stations that London Transport has to remove so much rubbish day in and day out.

The new Angel station on the Northern line is substantially better than the previous station. Building new stations and improving other stations is essential if we are to get the increased traffic that is expected. However, although we can see some clean stations and some new stations, many of the other stations on the Northern line and elsewhere suffer from inadequate investment. Only one escalator out of three at London Bridge station was working today. We frequently find that lifts are not working. The saga of Highgate station is well known in other parts of London. Many of our stations need a radical overhaul ; the clocks do not work and there are far too few automatic ticket gates. There is also a need for massive modernisation. The autumn statement affects London Transport in two respects. The first is that conditional approval was given for investment in the Jubilee line. That was warmly welcomed by all who are concerned about the future of London. The Jubilee line extension will benefit docklands and certain parts of south London that currently lack adequate public transport. However, many of us are concerned about the reluctance of the banks to cough up. Today's--or was it yesterday's--edition of the Evening Standard suggests that the banks were somewhat reluctant to cough up their share of the Jubilee line money. What happens if the banks do not cough up? Will the extension then be doomed? What will happen to the £1.4 billion that the Government were committed to spending on the Jubilee line extension? If the Jubilee line extension is cancelled because the banks refuse to pay their part of the bill, I hope that the rest of the money will be spent elsewhere in London. The need is there. People who travel on the London underground know that it must be improved. However, much more importantly, my right hon. Friends the Chancellor of the Exchequer, the Chief Secretary to the Treasury and the Secretary for Transport, by agreeing to the extension to the Jubilee line, have told the House and the country that the £1.4 billion in available for investment in the line.

If, for reasons created by the banks, that money is not going to be spent on the Jubilee line, my hon. Friend the Minister for Transport in London should use that good local government term "virement" and say that the money that my right hon. Friend the Chancellor of the Exchequer

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said would allocated to transport in London should benefit from virement from the Jubilee line to other services in London Underground.

The second feature of the autumn statement which affects London Transport is the reduction from £752 million to £530 million in the external financing limit of London Transport's core business for 1993-94. There were other reductions for 1994-95 and 1995-96. I remind the House that that compares with a recommendation by the Monopolies and Mergers Commission that we should spend £750 million on London Underground. I realise that the 1993-94 figures are set in concrete, but I ask my hon. Friend the Minister and his colleagues to consider the figures further out. Just as they were willing to change the figures agreed in 1991, I hope that they will be willing to change the medium-term figures agreed in 1992.

I would also like my hon. Friend the Minister to consider his budget for transport in London and see whether he can seek virement from road building to public transport. The return to Londoners will be much better if he does that. We must also consider new ways of financing investment in public transport in London. Today's Financial Times reported that the Government, the Confederation of British Industry and London Transport should be looking at new ways of financing the necessary investment to improve our transport facilities.

I hope that we can consider the role of the private sector as several stations, including Hammersmith and Mansion House, have been improved by property developers. Today, I recognise that not many property developers are trying to improve anything ; they are merely trying to survive. At some stage in the next two to three years, however, the developers will come back to town. I hope that London Transport will be encouraged to use the skill, the know-how and the cash of private developers to improve stations, because improving stations is essential if we are to get better services within London.

I should like my hon. Friend the Minister to examine the possibility of private sector leasing. We have allowed British Rail to lease rolling stock for some of the south-east train lines. If British Rail is allowed to lease rolling stock, there is no logical reason why London Transport should not be allowed to do the same. I should also like my hon. Friend and the Confederation of British Industry to examine the possibility of industry making a greater contribution to London Transport. It is essential for the prosperity of shops, offices and the tourist industry in London, to have a decent underground network. We should consider whether those important sources of employment in London can provide extra money to revive London Transport.

As the theme of my speech, I draw my hon. Friend's attention to the editorial in the Financial Times which summarises the argument in one sentence :

"If London is to maintain its international competitive position, the government needs to think urgently about how it is going to cope with the strains on its infrastructure."

My hon. Friend is capable of that thought, and I believe that he will put forward many positive proposals in the next few months. 2.22 am

Mr. Simon Hughes (Southwark and Bermondsey) : I am grateful that the hon. Member for Hendon, South (Mr. Marshall) chose this subject for his ballot.

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I wonder whether the House would first bear with me for a moment. I would like to preface my comments by sharing with the House a considerable sadness to my Liberal Democrat colleagues. About 6 o'clock last evening, the senior parliamentary researcher for the Liberal Democrats here in the House of Commons died. He was aged about 30 and had for the last couple of weeks fought pneumonia and cancer. He had worked in the House for several years, and led the team to research people who back us up here. His name was Ewan Cameron. He was an extremely bright and able and greatly respected young man. He worked for me and other colleagues before he came to his most recent job. The parliamentary staff and my colleagues are devastated. Often, we go without saying how grateful we are to the people who, do the work, unseen and unsung, to keep us well informed, well briefed and well equipped with arguments from both sides of the House. It would be unfair and unreasonable of me tonight, and I would not have wished, to begin without paying the greatest tribute to Ewan, whom we will all miss greatly. We send our love and wishes to his parents and family.

Londoners probably spend as much time talking about London Transport as about the weather. That does not apply only to those who use the buses, trains and tubes. The subject of London Transport is raised fairly regularly in the House, and it is a dominant issue during transport questions. It has a far greater proportion of political interest than the 15 per cent. of us who live in London might justify, or even the greater percentage of those who work here and visit here.

We are grateful that a Minister has responsibility for London Transport. I pay tribute, as others have done and I expect will do, to the Minister for Transport in London for his interest and knowledge. Inevitably, once he saw that the subject had been selected, he would expect several questions about what is going on. I want to ask several questions. The opportunity is timely, given that it is only a matter of weeks since the autumn statement, which obviously had a severe impact on London Transport funding, the subject of tonight's debate.

Madam Deputy Speaker, I do not know whether you noticed the comments of London Transport in response to the Chancellor's statement on the funding of transport in the years ahead. The chairman of London Transport was not pleased with the result. That is not surprising. There was effectively a 30 per cent. cut in funding, according to London Transport, as a result of the autumn statement. That came as a disappointment to London Transport and London Members of Parliament after last year's statement and commitments of considerable extra investment.

I shall quote what the Secretary of State for Transport said last year, and the response of the chairman of London Transport this November. Last year the Secretary of State said :

"By 1993-94, London Underground investment in the existing railway should be over £700 million a year. This takes full account of the conclusions of the report by the Monopolies and Mergers Commission earlier this year, which noted the need"--

this is important--

"for an average expenditure of £700 to £750 million a year in order to provide an acceptably modern network."

The response to this year's figures by Mr. Wilfred Newton was : "We now face the real prospect of deteriorating services, and the loss of some 7,000 jobs in supply industries

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Twelve months later we are facing savage cuts : 30 per cent. next year, 31 per cent. the year after and 26 per cent. in 1995-96. This returns us to the weary stop-go cycle we had every reason to believe was behind us. Higher fares next year and lower wage increases are dwarfed by the severity of today's swingeing cuts."

Of course, we could go back into history and have an interesting and relevant debate about the level of investment during the time when the Greater London council was in charge of London Transport. We rehearsed much of that debate when we discussed the Bill which set up London Transport. I served on the Standing Committee which considered that Bill, and the Bill which abolished the GLC. I might add that I did not support either Bill. However, such a historical debate would not be particularly helpful now.

The key issue is the future and future levels of investment. It is clear that, unless something changes, expenditure on London Transport will be in difficulty as a result of the Government's commitment to cutting public expenditure. We shall lose a great deal in the years ahead--not this year but in the years from next April on. I am sure that the Minister and his colleagues do not rejoice in that. They have had to take their share, like everyone else, of the brunt of a decision made by the Government about cutting public expenditure. However, we must ask some appropriate questions. First, what will be done about the reduced investment ? What chance is there of those cuts being reversed ? What chance is there of a return to the increased levels of investment which the Government accepted should be made ? What chance is there of the public investment which many Members of Parliament--not only Opposition Members--have argued is necessary if the London transport system is to be equipped to deal with the demands of the decade, let alone the decades ahead ? Mr. Wilfred Newton went on to say :

"cuts in investment will mean worsening service quality in order to maintain safety. Last month, the Underground met every Government service quality objective, five months ahead of schedule. That progress has been torpedoed today."

He also said that many of the basic infrastructure projects would be at risk. He dealt with specific matters of anxiety, such as plans to relieve congestion of overcrowded stations, and provide public information--all measures for which the public are asking and would find useful. He ended by saying that probable--I accept that it is probably--London Transport would not be able to proceed with the new escalators between Bank and Monument, and would certainly have to recommend the closure of Aldwych station. That is not an encouraging prospect.

Against that background, what will happen to the level of investment and to the need for security of investment year on year ? Transport planners, like any other team of experts or engineers, need to know what money will be available this year and the year after, because transport planning is a medium to long-term exercise. When one develops new underground lines or improves busy stations, one cannot suddenly bring people on site or take them away. The key question is, what will happen next April and what can we do about it ?

I also have a short and fairly straightforward list of more immediate questions. I suppose that the Minister would not expect me to do otherwise than to begin the list with a question about the proposed extension to the Jubilee line. The hon. Member for Hendon, South mentioned it, and quoted from Monday's Evening

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Standard , which suggested that there was not going to be a green light for the line this side of Christmas. I do not know what sort of light the line has so far had--perhaps it has been one of those Christmas tree lights, which has been flashing on and off. But where, oh where is the green light for the Jubilee line ? I hope that it will come soon. I have made no secret about it--I have not spent hours in the House and elsewhere lobbying for the Jubilee line to give up now. I know that the Minister and the Government are equally committed, but commitment and conclusion are as yet apart. I hear mixed noises. I would be grateful if the Minister could update us and give us some encouragement that the Jubilee line will go ahead, and that everything is being done to bring together and work on those people who have an interest in it, to get a decision as soon as possible. The project team and the engineers are in the wings, waiting to go, much of the preparatory work has been done with Parliament square and Bridge street having been dug up as part of that work. I am not complaining about that, but we are now waiting for the real thing. The sooner the holes are dug, the sooner it will all be over.

I declare an interest, as my constituency will have the largest part of the Jubilee line extension. My constituents look forward to the end product, but they will have to put up with a lot of disruption, spoil removal and noise in the meantime. Their plea, and mine, is "let us get on with it." I should be grateful to find out whether that is going to happen. If there is no specific news yet, what do we have to do to bring it about, where do we have to go, whom do we have to see, and which bankers' doors do we have to bang on to get a decision ? Please, could we have a decision for Christmas ? It would be a jolly good Christmas present, and I promise that I would close my eyes and go to bed early if there was a prospect of Father Christmas delivering that commitment at the end of the week. Secondly, can we do anything to ensure that we do not lose the Thames riverbus ? The Minister was good enough to come to my constituency to relaunch the service, from Greenland pier in the Surrey docks, earlier this year. The riverbus had a difficult beginning, but since its management changed hands it has done better and carried more people. The private sector has subsidised it to keep it going but, judging by the reports, it seems shaky, and a potential competitor seems to have received ministerial endorsement. I have a simple view of the riverbus. The Thames is the least congested, most central and most pleasant transport route in London, linking many of the most important transport interchanges. If we could have a riverbus that intersected London Transport's infrastructure rail and tube networks, if it could appear on the tube map and if we could have an integrated ticket system we would be well away. I should be grateful to hear about the Government's commitment to ensuring that the riverbus remains afloat in some form--and for a sign that they will try to ensure that the service does not sink but is increasingly available to and used by Londoners.

Next, what is the effect of the cuts announced in the underground service on the modernisation and works needed at many crucial stations? Obviously, I have an interest, with four stations in my constituency : London Bridge, which is very busy ; the Elephant and Castle,

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Northern and Bakerloo lines, which are very busy ; and the two stations on the East London line--Surrey Quays, or "Surrey Docks" as local people still prefer to call it, and Rotherhithe.

The other day I was with the Under-Secretary of State for the Environment, the hon. Member for Hornchurch (Mr. Squire), the leader of Southwark council, the chief executive, Uncle Tom Cobbley and all at the Elephant and Castle, unveiling the next stage of the murals in the underpass, which are part of a programme supported by Government funding to make the Elephant and Castle safer, more commercially viable and more encouraging and welcoming to users.

However, the Northern Line station entrance is still grim and has put off some investors. Additional work on it was started some years ago but remains unfinished. Bare concrete spalling on the outside makes one think that one could be entering anything from a construction site to a urinal. It is important, because it serves an area in which a lot of effort has been made on a partnership basis between the local authority, the Government, the private sector and residents to try to bring the Elephant back to life. The owners painted the shopping centre pink to try to make people feel that things were brightening up. People may not like it, but at least they notice it. It has brought business and other investors back to the Elephant.

My final question is about buses, particularly the concessionary fares scheme. There has been a round of negotiations, as there is bound to be under the present system, to consider whether the concessionary fares scheme is to be continued in future. That requires all the local authorities to decide their position. Under legislation, there is a fallback position, which is less good if local authorities do not agree.

My constituents over state retirement age ask me most often, "Will we still have our concessionary fares scheme?" It matters enormously to them. I appreciate that many colleagues from other parts of the country may be jealous of London Members because they do not have a similarly generous scheme. It is worth keeping in London, however, irrespective of whether such schemes are less generously funded in other parts of the country, because in areas with less car ownership, it provides mobility and access, and makes London theirs. Thanks to this scheme, many of our citizens who might otherwise be imprisoned by physical or financial circumstances are enabled to travel round the city.

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