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Column 230and its low investment policies in the early and mid-1980s exacerbated the problems that London Transport has today. The result of the failures and follies of the past is that, today, London's transport system suffers from old trains and antiquated signalling. The Northern line seeks to run into the City and the west end. In the short term, that has been of some assistance, because the City was a particular victim of the recession; but just as it was a victim of recession, so will it benefit from the continuing upturn in the economy. It has been said that at least 10,000 new jobs will be created in the City over the next few years. That means that pressure on the Northern line will become greater.
It is a pleasure to see that many more tourists have come to London this year than ever before. Those tourists arrive in the west end and at the south bank complex after the joy of travelling on the Northern line. Business men and tourists will be disgorged at Waterloo from Eurostar, leaving a train designed for the 21st century and boarding one that was designed in the 1950s and runs on a track that was designed for the 19th century. Of course, it may be said that the Northern line will not move people about much quicker than Eurostar, but we must hope that Eurostar will arrive on time and that trains on the Northern line of the future will arrive somewhat earlier than they do today.
Those of us who listen to London News radio occasionally hear the phrase, "On the Northern line, service is back to normal." What does "service is back to normal" mean? It means trains that are 35 years old, which date from 1959, the year of Harold Macmillan's great election victory. It means signalling that is near the end of its useful life, track that is scarcely the most modern and a dot matrix system that is certainly not infallible in the information that it gives customers. It means embankments close to collapse and a drainage system that is scarcely adequate.
Earlier this year, a train was derailed at Edgware, just outside my constituency. That was followed by the collapse of the embankment between Colindale and Edgware and people had to go by bus rather than by train. So we have a system which is tolerable, at best, and which all too often is liable to suffer from one problem after another. Of course, it would be churlish not to admit that there have been some improvements. We have seen the new station at the Angel built at a cost of £70 million and a number of stations are being refurbished at the southern end of the Northern line. Better stations may be a useful start, but they are scarcely enough for the passengers on the Northern line.
We have to look at the problem of London Transport in general. The MMC report said that London Underground Ltd. sees the need for an average expenditure of between £700 million and £750 million a year for the remainder of the decade, excluding the cost of new lines and extensions. We should remember that in 1994-95 expenditure is forecast to be £584 million.
Two issues will be determined in the next few weeks. The first is the level of funding for 1995-96. I recognise that there have been problems on the railways, but I do not believe that the signalmen's dispute should be used as an excuse to raid the budget for London Transport. The signalmen's dispute was an one-off factor--something for
Column 231which the contingency reserve exists rather than an excuse to redirect resources from London Transport to the railways. If we are to have any redirection of resources within the transport budget, the sensible solution would be to redirect resources from road to rail. There is recognition that public transport has an increasing role to play in curbing the problems of pollution and congestion in our cities.
Of course, it is true that London Underground is enjoying a better 1994-95 than anticipated. For example, the proceeds from bus privatisation have been better than expected a year ago. It is also true that London Underground has had success in cost control and detection of fraud, but the Treasury must recognise that most of the improvements have been due to the initiative and hard work of the management and the men and women who work for London Underground. What incentive would there be for those people to produce a better performance if they found that the Treasury took all that money away and gave it to some other part of the transport sector? It would be quite wrong to claw back the money that London Underground has generated for itself back to the Treasury. I accept that where we have enjoyed better receipts from the privatisation of buses there may well be a different argument, but there must always be the incentive for the management of London Underground to improve its performance and those extra resources must be powered into the underground rather than being used to shore up some other part of the transport budget.
The second issue which has to be determined very soon is the future of the Northern line itself. In March 1994, London Transport was invited to go out to tender to discover whether trains could be provided for the Northern line under the private finance initiative. We know that very competitive quotations were received from both GEC and ABB Transportation. Both those United Kingdom manufacturers of trains are short of work and, therefore, have been willing to quote very competitive prices.
The tenders fulfil all the criteria of the private finance initiative. Indeed, the policy of no train, no pay, is at the heart of what is proposed. That can only be good news for the passengers on the Northern line. If both ABB and GEC are told, "If you don't produce a train, you don't get paid for that day," there is every incentive for them to improve the level of maintenance. One of the worst things suffered by passengers on the Northern line is to go to Hendon central station at 10 past 7 in the morning and see the ghastly notice, "First train not in service". They know that that is probably due to a defect in maintenance. If the manufacturers are told that if their trains are not in service they will not be paid for that day, they will ensure that every train runs on time. That will benefit the customers of the Northern line and my constituents. I hope that on Budget day my right hon. and learned Friend the Chancellor will announce, in the public expenditure side of his statement, that he has given the go- ahead to London Underground to sign a deal, be it with either ABB or GEC-- that is irrelevant. It is essential that a deal is signed, as it would give a boost to the private finance initiative; it would give a boost to whichever train manufacturer was awarded the deal--at a time when the industry throughout western Europe is suffering from a lack of orders; it would give a further boost to London's
Column 232economy; and it would mean that many tens of thousands of people who travel on the Northern line every day could look forward to a very much better journey than they enjoy at the moment.
Such a decision would be welcome on both sides of the House and I look forward to the hon. Member for Streatham confirming virtually everything that I have said this evening.
Mr. Keith Hill (Streatham): I congratulate the hon. Member for Hendon, South (Mr. Marshall) on his success in introducing this vital debate for Londoners. I am grateful to him for inviting me to speak. It may never happen again, especially after some of his rather provocative remarks earlier this evening. However, it should be recorded that he and I have fought shoulder-to-shoulder in this long campaign on behalf of 1.25 million Londoners. I am sure that we all hope that it is now close to a favourable decision. I want to put on record the stalwart support given to the campaign by my hon. Friends the Members for Hampstead and Hampstead (Ms Jackson) and for Hornsey and Wood Green (Mrs. Roche).
I want to make three brief points. I congratulate all the parties that have contributed to the progress so far in this project. I include in that the Treasury, which, after a certain amount of pushing and pulling, gave the go -ahead to this innovative approach. We all sense that the Department of Transport has consistently given a fair wind to the scheme. The British train builders should also be congratulated on the way in which they have risen to the challenge. I especially congratulate London Underground Ltd. on the extraordinary efficiency with which it has dealt with the procurement and evaluation process. It processed four tenders and whittled them down to two in just four weeks, which is no mean feat and would bear emulation elsewhere.
I strike a cautionary note. We all know that we shall shortly see the benefits of the private finance initiative. However, its value would be negated if London Underground were to suffer any commensurate loss in its non-PFI funding in the aftermath of a positive outcome. To take away with one hand what has been given with the other through the PFI would be to rob the public sector of any future incentive to participate in such initiatives. It would be helpful to have the Minister's assurance that there is no such intention in the Government's approach to the project.
Thirdly and finally, I recognise that the Minister is unlikely to tell us the outcome this evening. It would be nice, but unlikely. But in anticipation of a favourable decision, I hope that when the good news comes it will be regarded not as the end of the process but as the beginning of a continuous series of improvements on the Northern line. The real win for the PFI is not simply that we have a project that is value for money, but that it can be the impetus for wider benefits for all Northern line users. That means more and better services, attracting more passengers and generating the higher revenues needed for further investment--further investment especially, as the hon. Gentleman said, in track and signalling which are in such urgent need of renewal on the Northern line, but also, dare one hope, in extensions of service, not least to my own dear constituency of
Column 233Streatham where the extension of the Northern line was first promised us as long ago as 1926 and is still anxiously awaited. 10.20 pm
The Minister for Transport in London (Mr. Steve Norris): I join the hon. Member for Streatham (Mr. Hill) in congratulating my hon. Friend the Member for Hendon, South (Mr. Marshall) on having secured his fourth debate on the prospects for and future of the service delivered by the Northern line. He is a doughty chairman of the all-party friends of the Northern line group which, in itself, is a unique achievement. I do not know any other line that has managed to attract such amity, affection and support.
You may not know, Mr. Deputy Speaker, what I fear I know only too well: that my hon. Friend is also good at getting me out at ungodly hours of the morning to enjoy the delights of Golders Green station. I fear that the only disappointment that we have ever experienced on such occasions is that the service has always been perfect. He has been dying to have something fall out of service or break down, but the service has always behaved impeccably.
My hon. Friend is indeed a good friend, but I do not want to underestimate his real contribution to the service on the Northern line. As the constituency Member of Parliament for a number of the stations and many thousands of Londoners who use the line, my hon. Friend has constantly harried and chivvied, argued for and supported the service that his constituents get. He has been a strong advocate of its improvement, as, on the other side of the river, has been the hon. Member for Streatham, who I am delighted to see in his place. As the hon. Gentleman suggested, the credit for a tremendous improvement in the way that the Northern line currently operates goes not to me or to the Department, but to Dennis Tunnicliffe and the team at LUL who have done a superb job during the past few years in getting rid of the misery line tag that was always attached to the Northern line.
I had some figures just the other day which showed that in the year to date the Northern line has topped the league for the number of scheduled trains in customer service during peak hours--98.8 per cent. in service. That is very good and it is against the background of the acknowledged difficulties in the service in terms of the age of the rolling stock and, more particularly, the delicacy of some of the signalling and power supply equipment. It is a tribute to a management who have got down to the task and to every single one of the men and women who work on that line and who have done very well in turning it round.
One gets little of the flavour nowadays that the real reason why the first train is out of service is that no one bothered to get out of bed. I do not get that feeling any more. It was sometimes the case on the old nationalised railways, but it certainly is not here. The line's history is as my hon. Friend pointed out. The decades of under-investment are embarrassing to both sides of the House. The schedules for London Transport generally and for London Underground show that, in 1970, investment
Column 234in LT as a whole at 1994-95 prices was £59 million. By 1979, the outgoing Labour Government were spending at the rate of £195 million a year.
That sounds a lot, but, as the hon. Member for Streatham has often pointed out, it is nowhere near the amount needed then and doubly needed now, to keep the system in an adequate state of repair and to ensure the continuance of the concept that Dennis Tunnicliffe defined as a decently modern metro. That is an incoherent description in some respects, but we all know exactly what he means.
The investment levels of the past few years in London Transport and London Underground have been staggeringly high. In 1992-93, it was £832 million; in 1993-94, £846 million; and in 1994-95, it will be £999 million. The Government are doing their best to remedy the deficiencies of previous decades, but no one is in any doubt that the mountain to be climbed is extremely high.
In short, that is our challenge. Investment is three times what it was in the early 1980s, and allows us to effect real improvements in certain parts of the service. My hon. Friend the Member for Hendon, South was right to consider the Angel, but that one station cost £72 million--and we have not touched on the stations at the southern end of the Northern line. I see in his place my hon. Friend the Member for Wimbledon (Dr. Goodson-Wickes), who takes a great interest in these matters on behalf of his constituents. He knows the state of some of the stations from the Oval southwards, which are in great need of repair--but against the background of more important priorities.
By common consent, the taxpayer is making a record contribution on the basis of historic comparisons. Once the sale of London Bus subsidiaries is completed, the proceeds will allow London Transport to invest in excess of £100 million this year. That figure is more than LT anticipated because, as my hon. Friend said, the sale proceeds so far have been extremely encouraging. We have not quite reached the end of that exercise.
Also, fares cover costs. As far as I am aware, we are recovering a higher proportion of system costs than any other metro system in Europe--which means that every penny contributed by the taxpayer goes straight into investment rather than funding a shortfall on profit and loss. It is clear that if we want further to accelerate investment, we must look to the only other source of substantial capital--the private sector. My hon. Friend was right to look to the private finance initiative to make even further progress. In that regard, I cannot properly speculate on the outcome of the present competition. The two bidders are in the course of having their individual bids assessed by LT, and it is important that that exercise is conducted with the utmost even-handedness. That is clearly as it should be. The Department, myself and London Underground are making every effort to ensure that that process is completed and we await a final proposal from LUL.
I must enter the sole cautionary note that approval will be given only if the deal that is presented to the Government represents good value for money and transfers a significant risk to the private sector. The Government never have been in the business simply of borrowing money from other institutions in the United Kingdom. The one thing that any Government manage fairly competently in comparison with the private sector generally is borrowing money at pretty fine rates. What
Column 235has to be present in such a deal is far more than merely an arrangement for leasing. That is what the participants in the exercise and the bidders fully understand.
I am confident that the private sector will be able to deliver a package which will be to the benefit of all. That will mean, of course--I hope that there is all-party agreement on the desirability of this--that, assuming that the outcome were favourable, we would certainly see replacement of the nearly 40-year-old rolling stock on the Northern line many years before it would otherwise have been affordable by a Government of any complexion, if we are to be realistic and as we are able to speak in a sense of all-party agreement on such matters.
We should look for ways in which we can use the private finance initiative further to advance the cause of accelerating that re-investment in a system in which decades of under-investment are presently in evidence.
Column 236Therefore, I am happy to confirm to my hon. Friend that the private finance initiative never has been seen by my right hon. and learned Friend the Chancellor merely as a substitute for public finance. Of course, there might be occasions when it would be entirely appropriate for that to be the case, but we have a marvellous opportunity which will serve the interests of manufacturers and of London Underground, the operator, and, perhaps most importantly, the users of the line and the taxpayers who fund its investment and improvement. It is surely a very rare event when that juxtaposition can take place.
I welcome the debate and the opportunity to put those remarks on the record. I trust that the House will join me in hoping that the outcome will be favourable.
Question put and agreed to.
Adjourned accordingly at twenty-eight minutes to Eleven o'clock.
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