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Mr. Frank Dobson (Holborn and St. Pancras) : I congratulate the Evening Standard on its campaign in favour of Asea Brown Boveri's proposal, which was made in the 14 days since I first gave it the information. It has done an excellent job for Londoners. ABB's proposal is eminently sound and full of common sense. Consequently, it does not appeal to the Treasury. ABB recognises that if the Government will not find the money to upgrade any part of the Northern line--whether the permanent way, the signalling, the escalators or the lifts that do not work--they will not find money for new trains either.

ABB--at least, this part of it--is a maker of trains. It is already making trains for the Central line, and it wants to keep its process going to produce similar trains for the Northern line. That makes eminently good industrial sense to ABB and to the skilled people working in Derby, who, when they complete the order for the Central line trains, will lose their jobs unless more work can be found for them. From an industrial point of view, therefore, it would be perfectly sensible to give them the job of providing new trains for the Northern line. If they do not get that job, it is likely that they will be out of work. Indeed, the production line may close altogether.

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If, for some bizarre reason, the Government decide to postpone the purchase of new trains for the Northern line, the works at Derby may go out of business, and when it is eventually decided to order new trains, they may very well have to be procured abroad. That would be economic lunacy, but it would be par for the course for the people currently at the Treasury.

The proposition that ABB has put forward is that, instead of London Underground having to find the money to buy trains, it should lease them from ABB, which would maintain them at its own expense for the next 20 years. There is nothing novel about lease arrangements. I expect that even some Treasury mandarins and Ministers use this means of ensuring that they have up-to-date, working television sets. The proposition that has been put forward is as simple as that. If it is accepted, new trains should be running on the Northern line by about this time next year. All the rotten, stinking, rattling, clapped-out trains currently on the line could be replaced within about a couple of years. That would be good for London passengers, it would be good for ABB, and it would be good for Britain.

We might therefore ask why the Treasury cannot see the sense of the proposal. The answer, apparently, lies in the Treasury rules. I must remind hon. Members that the Treasury rules were laid down, not when Gladstone was First Lord of the Treasury, but when Mrs. Thatcher, as she then was, was First Lord of the Treasury. There is nothing old about the present rules. They are stupid but they are modern. If they could be changed in the early 1980s, we should be able to change them in the early 1990s--indeed, we are approaching the mid-1990s. The rules are stupid and archaic, and they inhibit the development of our country. They need to be changed.

It is worth reminding the House that even before they had the present set of rules the people at the Treasury were a

backward-looking lot when it came to anything practical to do with British industry. Churchill once said that they were like inverted Micawbers, waiting for something to turn down. Nothing gives those people greater pleasure than turning down some practical proposition suggested by practical people to bring some practical help and benefit to others.

We understand that the Chief Secretary to the Treasury has announced that the plan would not be a good bargain for the taxpayer. Presumably he came to that conclusion as he travelled about in his chauffeur-driven car, paid for by the self-same taxpayer. I should have thought that a perfect example of a bad bargain for the taxpayer was having to fund the transport arrangements of the Chief Secretary to the Treasury. Certainly the right hon. Gentleman might have a different point of view if he had to travel to work on the clapped-out ruins that presently shuffle along the tunnels of the Northern line. He, like everyone else with a bit of common sense, might see that it should be a bargain to go ahead with the proposition.

The Minister for Transport in London is an eminently talented chap. Before Christmas, in the space of one short winter's day, he told the journalists from the Evening Standard that the Government would privatise the underground, but before the afternoon was out he told the House of Commons that they would not. In view of the explanation recently given by the Chancellor of the Duchy of Lancaster about the veracity of some of the statements

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made by Ministers at the Dispatch Box, we can probably assume that what the Minister told the Evening Standard was the truth. However, that does not change the position.

The Minister is trying to do the same sort of double shuffle now. As I understand it, there is a sort of general responsibility ; people who sit on what is called the Treasury Bench do what the Treasury tells them. In this case, that is to turn down ABB's proposal to get new trains on the Northern line. But apparently all that is being blamed on the Chief Secretary to the Treasury, and the Minister is letting it be known that he strongly supports the proposition. He had better sort himself out. He must either go to the Back Benches and support common sense, or stay on the Treasury Bench and stick with the Treasury rules. That is the choice that he must make.

One or two more general points need to be made. The state of the London underground is deplorable. The hon. Member for Surbiton (Mr. Tracey) described the Northern line as though it were a swine among pearls. He implied that the rest of the system was pretty good, and that the Northern line alone was a mess. That is not how large numbers of travellers on the other lines regard their journey to and from work every day. Many of them are discontented. They use stations with lifts or escalators that do not work, suffer from signalling failures and so on.

Just before Christmas we saw the virtual collapse of the whole tube system for a day or two because a 71-year-old cable on the Central line had burnt out. That is unacceptable. The present state of the underground system means that it teeters on the brink of collapse almost every day, and it fell over that brink not long before Christmas.

A vast amount needs to be done to the underground, and one of the problems is that the Government's top priority for investment was not to get the existing system back into good nick so that it could provide a decent service ; their topmost priority was to finance the extension of the Jubilee line, largely to bale out the banks which had taken such a caning over Canary wharf, and also because those self-same banks were finding £300 million towards the cost of the extension.

I may add that when these geniuses, presumably presided over again by Treasury Ministers, negotiated the arrangement with the banks, they made no allowance for inflation, so that the famous £300 million is to be paid out by the banks in instalments over a period of 20 years and, on some of the projections that I have seen, it could cost them all of £19 million at the end of the process if inflation reaches certain levels. The reason why the Government decided to invest in that line was that it would help their friends who are now the newly enhanced speculators at Canary wharf and the small contribution that they were prepared to make.

If the Minister had asked Londoners where the money should be invested, they would have told him to invest it in the Northern line and in the other lines which are already not working and which offer a lot of scope for investment. Even if the Government see sense, accept ABB's proposal and get these new trains on to the Northern line, it will not resolve all the Northern line's problems by any means. The track is in a terrible state. The signalling is in a terrible state. In my own constituency the French escalators at Kentish Town station have never worked properly for the past six years, and Mornington Crescent station is now closed indefinitely because they cannot afford to replace the lifts. Similar circumstances apply all the way down the line.

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This was one way forward, one way in which at least a good part of the investment for improving the Northern line could have been found. The Government could then have been left to find the rest of the money to improve the permanent way, the signalling, the electrics, the lifts, the escalators and the stations. That is what could be done if this is approved.

It ought to be approved. It will be a disgrace if it is not approved. I do not think that in their present humour Londoners will forgive the Government if it is not approved. It makes sense for the travelling public. It ought to make sense for the Treasury. It certainly makes good sense for ABB, which is not some obscure outfit from Derby, after all, but one of Europe's most significant manufacturing companies, with a good track record all over Europe. They are not the sort of people to enter into fly-by-night arrangements with anybody.

The Government ought to accept their proposition, and accept it now, for two reasons. First, the people who travel on the Northern line are entitled to a better deal. Secondly, we cannot allow the rundown of the manufacturing capacity at Derby to proceed much further, or a large number of the skilled work force will disappear to other places and we will never get them back.

11.58 pm

The Minister for Transport in London (Mr. Steve Norris) : We have had a rather good debate. I join the many hon. Members who have congratulated my hon. Friend the Member for Hendon, South (Mr. Marshall) on securing it. I want to put it on the record that he is a tremendously assiduous campaigner for the Northern line. His assertion that he has probably asked more questions and instigated more debates on it than any other hon. Member is likely to be proved correct, and I congratulate him on his assiduity.

My hon. Friend is right to say that the Evening Standard campaign on the Northern line has been an effective one. I share with him the observation that it illustrates more than anything else the good humour of our right hon. Friend the Chief Secretary who, I think, has dealt with the concentration of the Evening Standard on his personal role with his usual aplomb and with considerable panache. I am also pleased to see the Member for Streatham (Mr. Hill) here. I appreciated his speech. He has developed considerable expertise on transport issues. I have admired the work that he has done with the Select Committee. He knows the Northern line extremely well and he has devoted a great deal of attention to it. He is noted for knowing what he is talking about, like the other hon. Members who have spoken in the debate, I am delighted to say. I am grateful to him for what he had to say.

My hon. Friend the Member for Surbiton (Mr. Tracey), who is the chairman of the London group of Conservative Members of Parliament, made a powerful speech which, I am sure, will be noted in a number of quarters. He articulated sentiments which I know are widely shared across the Benches. I am sure that he was right to ensure that those sentiments were put on the record.

The hon. Member for Southwark and Bermondsey (Mr. Hughes) is an habitue of these late-night occasions. I did a brief calculation while he was speaking. As far as I can recall, there are 50 stations on the Northern line if one takes accounts of the bifurcations. As my hon. Friend the

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Member for Hendon, South said, 400,000 journeys are made every day on the line. That shows what a massive enterprise the Northern line is. The hon. Member for Southwark and Bermondsey was right to say that there has been a refreshing lack of dogma about the debate about rolling stock, about which I hope to say some more in a moment.

Mr. Peter Bottomley (Eltham) : Before my hon. Friend goes, he ought also to pay a tribute to our hon. Friend the Member for Harrow, West (Mr. Hughes), who was sitting here silently, and to our right hon. Friend the Member for Ealing, Acton (Sir George Young). Those who are not able to speak ought also to get their tributes from the Minister.

Mr. Norris : It is characteristic of my hon. Friend the Member for Eltham (Mr. Bottomley) that he should be kind enough to draw attention to those of our colleagues who are required to be silent. I entirely endorse his sentiments.

I am pleased to see the hon. Member for Holborn and St. Pancras (Mr. Dobson) attend upon our proceedings. He is a Northern line Member. I am extraordinarily grateful to him for his advice on my career path. I shall probably be able to resist most of it. He reiterated some of the usual canards. He referred to the Central line failure. I hope that I am not stealing too much of London Transport's thunder, but Sir Wilfrid Newton has now completed the inquiry into that incident with his usual thoroughness and objectivity. He has made it clear and will shortly publish in terms that neither the age of the equipment nor any question of underfunding was related to that regrettable failure.

The length of the failure was caused more than anything by the singularity of the fault. It was the type of fault that occurs literally on one in a thousand occasions. It was extraordinarily difficult to trace. Once it was traced, it was relatively simple to fix. That is worth putting on the record. I appreciate that the hon. Gentleman might seek to have some fun with the idea that it was all down to underfunding and the age of the equipment. I know that the fact that that is not true is inconvenient from his point of view, but it happens to be the case.

Mr. Dobson : Will the Minister confirm that the bit of cable that conked out was 71 years old ?

Mr. Norris : No, I will not confirm that the piece of cable that conked out, as the hon. Member so elegantly puts it, was 71 years old. I will simply tell him that the whole report will be available for him to see. He will see that Sir Wilfrid has specifically made it clear in his conclusions that neither the age of the equipment nor any question of funding was related to the failure that he investigated. I hope that that is as clear as it possibly can be. The important thing is that the report will speak for itself. It is extraordinary that the hon. Member for Holborn and St. Pancras and his party chided me for months for not abandoning the idea of a private sector contribution to the Jubilee line extension and wanted me to pass the whole cost of the scheme on to the taxpayer. They said to me for months, "Get on with it. There is great regeneration potential south of the river and you must get on with it if you believe in regenerating London." Now the hon. Gentleman says that we did an extraordinarily tough deal with the creditors at Canary wharf.

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Incidentally, it is amusing that the hon. Gentleman has just woken up to the fact that the cash sum is to be discounted. If we are talking about Treasury theory and the brain that exists in the Treasury and if the hon. Gentleman hopes to be a member of a Government, I hope that he will be quicker on the mathematical uptake than he appears to be. Now that £400 million in cash has been taken from the group of banks that are creditors of Canary wharf, he has the temerity to suggest that those bankers deeply wanted and approved of the deal. The expression on some of their faces did not show the approbation that he ascribed to them.

It was an extremely good deal for Londoners and an excellent deal for the taxpayer. Thanks to my right hon. Friend the Secretary of State sticking out for the contribution that he insisted must come from those financial institutions, the taxpayer was saved £400 million in cash over more than 20 years.

We are here tonight to talk about the Northern line, and I hope that my hon. Friend the Member for Hendon, South will forgive me for diverting slightly to deal with the wide-ranging speech of the hon. Member for Holborn and St. Pancras. I want to give the context of the proposal. The line has been a favourite butt of jokes--many of which were doubtless deserved.

I completely accept that the line is in need of modernisation. As has been said, most of its trains and signalling need to be replaced. However, such a decision is ultimately for London Underground, which has to balance the books and live within the resources available. The line is next on the list for modernisation once the £750 million Central line project, which is currently under way, is completed next year.

I want to pick up an issue raised by my hon. Friend the Member for Surbiton. It is true that the line has shown great improvements in performance over the past few years, largely through the positive steps taken by the line's management. Indeed, the Monopolies and Mergers Commission report of 1991 on London Underground, with which hon. Members are reasonably familiar, singled out the Northern line for special praise. It stated :

"the Northern Line management team has . . . achieved a remarkable improvement in performance, by management action to identify the causes of train cancellations and to tackle them directly. Staff absence has, in particular, been dramatically reduced."

That was the clearest evidence that, if improvements in service are to be attained, investment has a place, but management also has its place. I am sure that the House would wish to place on the record its appreciation for the excellent work that successive managers of the Northern line have done to help transform its performance. The improvement has continued. In the current financial year, the average figure for scheduled Northern line trains in passenger service stands at about 98.6 per cent., making it one of the best performers on the system. The line is currently performing ahead of its target, in terms of both headways between trains and delays. If a "misery line" tag was once attached to the Northern line, it is not attached to it now.

Having said all that, I am not suggesting that nothing needs to be done. I am as keen as anyone for an early start to be made on the wholesale modernisation of the line, but it is important to remember that there are other measures

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that London Underground has already taken, or is already planning to take, which are delivering improvements both to trains and stations on the line.

The single most important scheme is the £72 million virtual reconstruction of Angel station. That was one of the biggest projects of its sort ever undertaken by London Underground and involved the replacement of the infamous single-island platform, which used to serve both northbound and southbound trains. That platform was replaced by the more conventional arrangement of two separate platforms for northbound and southbound traffic. It meant replacing those four aging lifts, which were the major means of access, with new banks of escalators. It meant constructing a brand new ticket hall. That station is now safer and less congested and provides a cleaner and more comfortable travelling environment. The escalators, after initial teething troubles, have worked extremely well. It cost £72 million to renovate one station. That is a vivid indication of the scale of costs that are involved when one takes on the tasks of reforming a major piece of infrastructure such as the Northern line.

Other schemes are under way and there are programmes for the near future. They include the much-needed substantial remedial works to the 10 stations on the southern end of the line, to which the hon. Member for Southwark and Bermondsey referred. He was right about that. I think that the hon. Member for Streatham knows the need all too well. I pass those stations every day on my way from Camberwell. I do not believe that they look satisfactory ; I do not think that they operate satisfactorily. I am glad that London Underground's programme includes urgent remedial works to those stations. Let us now turn to the ABB proposal. The House knows that London Underground and ABB are pressing hard for a Government announcement on the project. I know that it has the support of many of my hon. Friends. Although the hon. Member for Holborn and St. Pancras appears to be seeking to divide me and my colleagues in the Treasury, I believe that I would not be doing my job as Minister for Transport in London properly were I not an enthusiastic advocate of the idea that we should subject the deal to all the scrutiny necessary to see whether it can be available to the people who use the Northern line. That is straightforward.

I have also said that that does not mean that we abandon financial prudence and throw all the rules of good housekeeping and husbandry out of the window--as I fear the Labour party would do, were it to be confronted with a decision. For the Labour party, "new sources of finance" means abandoning all the rules on expenditure controls. That is a seductive path to go down- -there always are jolly good reasons why one should spend public money on all types of desirable schemes--but it is an invitation which I believe it is proper for the Treasury to remind all Governments they must resist unless they have been able to satisfy themselves that the important financial criteria involved have been satisfied.

Simply because we have not yet reached a conclusion, 14 days may seem a long time to the Evening Standard between hearing of the proposal and concluding on it. It might appear that we have been sitting still, but I think that hon. Members recognise what an achievement it has been for us to have undertaken the intensive analysis of the financial technicalities of the proposal and several rounds of complex negotiations in the relatively short time in which the Department has been aware of the deal.

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I make it clear to the hon. Member for Holborn and St. Pancras that I first became aware that this proposition was on the table in very general terms at around the turn of the year. I think that he knows from his experience of Government that it has been dealt with extraordinarily rapidly and urgently. Incidentally, that is also a reflection of the fact that the deal that we were originally offered was not in any sense a complete deal, as ABB will confirm. The deal started very much as a back-of-an-envelope suggestion, pretty much as the hon. Member for Holborn and St. Pancras outlined it. As I hope that other hon. Members and especially my hon. Friends will appreciate, one cannot do deals of that type involving £0.5 billion on the back of an envelope. They are immensely complex negotiations. They have been undertaken with goodwill and they are continuing.

If I may recap, late last year ABB offered to supply London Underground with 100 seven-car trains similar to those currently being supplied for the Central line. The proposal was a form of sophisticated leasing over 20 years, and obviously it has taken some time for us to establish the exact details of the proposal and to evaluate it in its own right and against other options for the future of the Northern line's rolling stock.

The hon. Member for Streatham referred to some of the available options. He said that he felt that this option was the most attractive ; I understand that point of view. He was kind enough to recognise that it is not the only game in town and that we have to satisfy ourselves that it is, on every sensible criterion, the right deal. To try to come to that conclusion, our assessment has focused on two sets of issues : first, whether the deal would satisfy the Government's published criteria for such deals under the terms of the private finance initiative and secondly, whether it would offer value for money.

The proposals are being considered under the terms of the PFI, whose object is to find new ways in which to mobilise the private sector to meet needs that have traditionally been met only by the public sector and to enable the private sector to provide facilities in addition to the existing public sector plans. The whole concept is to encourage a closer partnership between the public and private sectors ; an essential plank of the initiative is that the private sector must genuinely assume much of the risk attached to such projects. I say that simply to underline a simple truth.

If the only "advantage" of introducing private finance is that the taxpayer has the dubious privilege of paying finance house rates of interest rather than gilt rates of interest, there is, the House will recognise, little value in the proposition. Too often, leasing is seen simply as a way in which to circumvent inconvenient Treasury spending totals. Yet every Government, of whatever complexion and at whatever time in their life, need to set firm spending totals if they are to control overall Government economic growth. There is no difference between that proposition and the proposition that would be advanced if any other party in the House were sitting on the Government Benches.

The reality is that we have to do a lot more than simply find someone who is prepared to lend the Government money. It is not difficult to find people who are prepared to lend the Government money, because the Government

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tend to be a fairly good risk. The important point is that, for the taxpayer to get a benefit out of taking on board private sector finance, there must be a genuine transfer of risk to the private sector so that the taxpayer's risk in the matter is defrayed to offset the increased cost of financing the project.

The practical application of that policy to particular schemes is extremely complicated. However, I hasten to say that we endeavour to apply the conditions in a flexible and deal-driven manner. We do not seek to impose unnecessary constraints on private sector ventures by inventing a mechanism of arbitrary rules and we always welcome ideas such as those from private companies that are prepared to bring their enterprising approach to public sector projects.

We have also sought the advice, as the House knows, of the private finance initiative panel, led by Sir Alastair Morton, which was recently formed for the purpose of assisting the Government to promote and appraise initiatives such as these. We are grateful to the panel for its helpful comments.

Crucially, we must not lose sight of the need to ensure that whatever we do for the Northern line offers proper value for money to the fare payers who use the line and to the taxpayers who provide, and will continue to provide, substantial support to LT's services. We should remind ourselves that we do not want to jump into a deal, no matter how attractive it appears on the surface, if it leaves major risks and major costs for the public sector to face, whether this year, or in five, 10 or 20 years' time. That is the substantial obligation, and no Government should lightly undertake it.

Mr. Dobson : Will the Minister confirm that the Government have come to a leasing deal for the Networker trains for Kent ? Will he also confirm that the Treasury is seeking harsher criteria for this new leasing proposition to satisfy--harsher than those that applied to the Networkers ? Is that simply because they are obstructive, or is the Minister saying that the Networker leasing deal was a bad deal ?

Mr. Norris : The answers to the hon. Gentleman's two questions are yes and no. Yes, the Government are contemplating a leasing deal for Networker trains on Network SouthEast-- [Interruption.] I am grateful to the hon. Gentleman for confirming that we have done that. And no, the Government are not applying more rigid criteria to that proposition.

Mr. Dobson : ABB says that the Government are.

Mr. Norris : It may not understand, and clearly the hon. Gentleman does not understand, that the difference is that, now that the Railways Act 1993 is safely on the statute book, an aftermarket for rolling stock on the heavy railway is in prospect, allowing the Government to take the view that those trains will be hired by train-operating companies for a period and then transferred to new owners. That is the difference between an operating lease and this lease, which is for 20 years to a single lessee with, at this stage, no prospect whatever of an aftermarket--[ Laughter .]

The hon. Member for Holborn and St. Pancras obviously finds all that terribly difficult to come to terms with. The hon. Member for Streatham is a bit brighter about those matters and has already overtaken the hon. Gentleman. He accepts that, if we are to introduce private

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sector capital into the system, one of the great advantages of a franchising concept is precisely that it allows us to contemplate the same kind of aftermarket as exists with BR.

I suspect that the mirth of the hon. Member for Holborn and St. Pancras masks his embarrassment. Once one goes beyond the first chapter of the most elementary economics manual, the hon. Gentleman's ability to flap around and miss the point is legendary. Although I wish him well in his present position, if he seriously aspires to sit on the Government Benches he must do a lot better than simply laugh to drown out the common sense that he hears from these Benches, which is so massively inconvenient to him.

Clearly, there is a tremendous advantage to the Government having decided to broaden the scope of investment in the railways

Mr. Dobson : What broadening ?

Mr. Norris : It is kind of the hon. Gentleman to ask that, because I was about to tell him. Broadening so that we look beyond merely the taxpayers and fare payers. They are ever the butt of the Opposition's ire and ever the easy target for those like the hon. Gentleman, whose sole answer to these issues is to shout, "Please write bigger cheques on the public purse," and to point to governmental meanness as the reason why those facilities are not available. We must look beyond that.

The last Labour Government were pathetically inadequate in their funding of London Underground. When the hon. Gentleman was in the House, before the hon. Member for Greenwich (Mr. Raynsford) arrived, he was part of a Government whose annual funding

Mr. Dobson : I was not.

Mr. Norris : Well, he supported that Government. I admit that, in those days, they had a few people bright enough to occupy their Front Bench, but things have moved on in the Labour party. The hon. Gentleman was here when his party was in office, and its funding of London Transport, at 1993-94 prices, was the princely sum of £120 million a year. If he cares to check the record, as I suspect he has done, he will see damn well that that is the case. He may like to have a bit of a laugh about that, because it contrasts embarrassingly with the £470 million which the hon. Member for Streatham rightly said was the present funding level at 1993-94 prices, and the amount in excess of £1 billion a year this year, next year and the following year, which will be invested in the system as a whole.

Mr. Dobson rose

Mr. Norris : If we are to argue about who is the better funder of the system, I shall take on the hon. Gentleman's arguments any day, as I am about to now.

Mr. Dobson : I invite the House to attach as much credence to what the Minister has said about investment in London Transport as I attach to his recollections of my record as a Member of this House. I have never been a Member when there has been a Labour majority--I was elected in 1979--but I will be.

Mr. Norris : It is a great tribute to the hon. Gentleman that I thought he had been here from the year dot. I readily accept that I was wrong. I hope that he will accept my apologies ; I did not mean to misrepresent his length of

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service. Admittedly, very few people ever want to associate themselves with that Labour Government, but, given the disparity in funding levels under the two Governments, it comes ill from the hon. Gentleman to lecture me or the Government on the subject. The hon. Gentleman was, however, right about the two conclusions of the Select Committee, which were--in the first paragraph of its report on London--that the Government are spending record amounts on the system, and that they are still not enough. The legacy of half a century of underfunding will now have to be dealt with. This is a serious and good debate about how to augment the funding for the system. The answer of course is to bring in private capital. That does not mean accepting a cheque on any terms, however. We do not accept any deal merely because it is put to us. We have to be rigorous about ensuring that these private finance initiatives fit into a sensible financial matrix.

Mr. John Marshall : It was perhaps too much to hope for that this debate could be conducted in non-partisan terms, given that the hon. Member for Holborn and St. Pancras is taking part in it.

Does my hon. Friend agree that the real locust years for LT followed 1981, when the hon. Member for Brent, East (Mr. Livingstone) was in charge of the GLC and when the investment in London Transport was much lower than it is today ?

Mr. Norris : You might chide me, Mr. Deputy Speaker, if I strayed too far into the locust years. The idea might find more favour if there is a debate on agriculture later tonight.

The House will have noted what my hon. Friend said. If we had a prolonged debate on the impact of the "Fares Fair" policy on London Transport, I would point out that, however well intentioned that proposition was--and it was--it was a disaster for London. The experience pointed up some uncomfortable lessons. I note the arrival of the hon. Member for Lewisham, East (Mr. Dowd), who I know takes an interest in these matters.

One lesson was that a whole lot of additional journeys were generated, but they did not displace journeys made by private car ; they were known as additional opportunity journeys. More costs are created for the system, but the revenues flowing into it are massively reduced. Reductions in ticket prices are not compensated for by increases in ridership--which was never more than 8 or 9 per cent. The result is a huge reduction in the net funding of the system--a gap that then has to be filled by the taxpayer. The gap was usually several hundred million pounds.

A second false premise is that the only way to attract people to public transport is to lower its price. The fact is that we need to use both the carrot and the stick. We certainly have to make public transport more attractive. My own view is that fares are the last thing to look at. Londoners always say that they will regard the system as representing good value only provided that it works. That is the key : above all, we want a reliable system.

Mr. Dobson : Just to get one or two facts straight, will the Minister confirm that the limit on capital investment in London Underground when it was the responsibility of the GLC was set by the Tory Government ?

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Mr. Norris : So far as it goes, that is an accurate statement. However, I fear that the conclusion that the hon. Gentleman is asking the House to draw may not be what he suggests.

That was not the only source of capital funding available to the GLC at that time. Had it wished to do so, it could have augmented the amount of capital spent. There is no evidence that the GLC wanted to do that. At the time, it thought, as so many Administrations, both Labour and Conservative, had thought over the previous half century, that one could simply postpone the necessary investment to the next year because the system would always last just a little longer. The hon. Member for Holborn and St. Pancras and I agree that that is no longer acceptable. He and I and others in the House are responsible for dealing with that historic backlog of

underinvestment. We have to be creative about how we address it. Having already spoken about the various strictures that apply to the financing of the deal, we must not neglect to ensure that the proposal represents good value for money when we compare it with other options such as refurbishment, option to which the hon. Member for Streatham referred. There are a variety of subsets of refurbishment from major refurbishment through to essential refurbishment, which provides one-person-operated trains and not much more.

Whatever approach we take, we must always ensure that the proposition is exposed to sufficient competition so that we get the best deal available. I am grateful for the understanding of the hon. Member for Streatham and other hon. Gentlemen.

Bearing in mind the perfectly sensible comments made by the hon. Member for Holborn and St. Pancras about

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employment prospects at ABB in Derby, if we decided that a scheme on the lines of the ABB proposal was worth taking forward, the next step would be for London Underground to invite proposals in open competition. As my hon. Friend the Member for Hendon, South said, and the hon. Member for Streatham confirmed, in this day and age we want ultimately to ensure that the taxpayer gets good value for his or her investment in new rolling stock.

As the hon. Gentleman knows from his previous incarnation, ABB, albeit an excellent manufacturer of trains, is not the only manufacturer of trains, and no doubt others in the Community will wish to know that the competition for the supply of trains on the terms ABB has proposed will be made available if the scheme goes ahead.

I understand that a competition advertised in the Official Journal will be able to attract interest from the European Community. I also understand that the hon. Member for Holborn and St. Pancras is fully signed up to the idea of Community participation, and I am sure that that does not cause him any grief.

We fully recognise that much remains to be done, including rolling stock modernisation on the Northern line. We are considering the ABB proposal entirely on its merits against the criteria established by the private finance initiative and the need to demonstrate good value for money. We must not lose sight of the fact that very substantial amounts of public money are involved.

I assure the House that we are evaluating this complex proposal as a matter of considerable urgency. We have reached the final stages of discussion, and I hope that the Government will announce its conclusions within the next few days.

Column 1147

London (Government)

12.33 am

Mr. Neil Gerrard (Walthamstow) : Perhaps it would be appropriate to start by putting the debate in context. We are having the debate shortly after the Secretary of State issued a consultation paper last November with the setting up of London First and the London Forum. Of course, it is roughly 10 years since the abolition of the Greater London council and the loss of any strategic voice for London. I welcome the Government's belated recognition of the need to have a dialogue with Londoners and the consultation that is taking place. It is regrettable that the Secretary of State has made it clear already that he is not interested in responses that suggest a need for a strategic authority. If he is not prepared to listen to views that conflict with his on the structure of London government or the role of national government in London and the resource needs of London, the exercise that is being undertaken will remain fundamentally flawed.

It is perhaps interesting to look back approximately 10 years to what was said at the time of the abolition of the GLC about what systems of government London would have and compare that with what is happening now, and where we stand. If we look back at the Department of the Environment paper entitled "Streamlining the Cities", we find statements such as :

"The abolition of these upper-tier authorities"

of course, it was not just the GLC

"will streamline local government in the metropolitan areas." The paper goes on to say :

"It will also provide a system which is simpler for the public to understand, in that responsibility for virtually all local services will rest with a single authority."

The Department of the Environment paper entitled "After the GLC" says :

"Local government should be as close as possible to local people if councils are to be properly accountable and to provide services local people want efficiently and economically."

The question was asked in that same paper :

"Will responsibility for GLC services be split up between a range of unaccountable organisations and quangos' ? Is Whitehall taking over ? No."

If we compare that to where we are now in terms of who governs London and makes the critical decisions, the contrast is immediate. London now has a vast number of appointed unaccountable bodies, or bodies made up of representatives from the boroughs, usually one per borough. In many aspects of London services, we have government by appointment.

I have seen estimates recently showing that more than 270 bodies or quangos spend money in London. The rights of people in London to question and to attend the meetings--even to know of the meetings of some of those bodies-- are often virtually non-existent, yet huge amounts of public money are spent on services such as health, training, urban regeneration, further education, museums and transport, not all of which are post-GLC.

The variety of services that are covered is growing all the time. I suggest that it would be appropriate to include, for instance, housing action trusts, one of which partly covers my constituency ; its budget this year is some £34 million.

On education and grant-maintained schools, a growing number of schools are moving out of local authority control. The list is enormous. It includes the London residuary body, further education colleges, which are

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