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10.15 pm
Mr. Richard Caborn (Sheffield, Central): I thank my hon. Friend the Member for Barnsley, Central(Mr. Illsley) for the fair way in which he presented his case. He has obviously mastered much of a complex financial deal. More importantly, he said that South Yorkshire in its totality has borne much of the brunt of the financial arrangements, although it has not had any benefit from the supertram. Supertram runs from one side of my constituency to the other, so I am able to tell the House all about the problems we have had with traffic management since supertram was installed.
As my hon. Friend said, the authority in Sheffield is trying to make sure that, in terms of traffic management, the effectiveness of supertram is maximised. I am sure that everybody welcomes this innovative system, which hopefully will have a beneficial impact upon the environment of the major city of Sheffield.
In a letter dated 2 February to the leader of Sheffield city council, Mike Bower, the Minister quoted from a letter sent by the former Minister of State, Department of Transport, now the Chancellor of the Duchy of Lancaster, to the local authority on 13 May 1991. The quote in the Minister's letter read:
That is true, but the letter of 13 May continued:
One could ask what was the operational date, but it had been interpreted as the date on which supertram was up and running, and October last year is the effective month. Therefore, there are two interpretations of the examples that the Minister gave of the construction period in his letter of 13 May 1991. I hope that the Minister will take that on board, and say that last October was two years after the total construction of the programme.
I hope that the Minister will agree that the letter of2 February would be a way to solve the problems. We all accept that the financial arrangement was complex. In addition, supertram was the first project of its kind in the UK and was built on a green-field site, as it were. The letter referred to a joint working group and said that that might be one way to get at least an understanding of the problems, and probably some pathways out of them.I suggest to the Minister that that joint working group should not just consist of civil servants, but could also involve politicians from the Department of the Environment and the Minister's Department, and representatives from local authorities in South Yorkshire.
The Minister for Transport in London (Mr. Steve Norris):
I congratulate the hon. Member for Barnsley, Central (Mr. Illsley) on having secured a debate on the undoubtedly important subject of the South Yorkshire supertram, and I welcome the contribution to the debate made by the hon. Member for Sheffield, Central(Mr. Caborn).
There is no doubt that the supertram is a highly attractive modern tram system. It provides a real alternative to the car, and I am quite sure that in due course it can be a great success. I have ridden on it. It is comfortable and pleasant, and the people I met whenI rode on the system liked it and welcomed it.
Although the supertram can be a good thing, it is not particularly a good thing yet, as the hon. Member for Barnsley, Central so accurately defined. There is general agreement on a number of ways in which the system can much improve. It has been said that marketing might be a good place to start. It is a matter of record that the public relations department of supertram told the press:
As the hon. Member for Barnsley, Central will know, there is some apocryphal evidence of how a man who was tipped off his bicycle received a letter telling him to get off and push next time. Supertram needs to understand that it is the servant of the public, not the other way round.
To achieve its obvious potential, the operating environment in which supertram works, to which the hon. Members for Barnsley, Central and Sheffield, Central have referred, is important. For example, the park-and-ride sites that the local authorities promised for the tram should be provided. We should ensure that the traffic light priority system works, so that the one feature of a light rail system that should be taken for granted--the quickest way in which to access the city centre--is realised.
It is being found that the private car and the bus are able to make the journey to the city centre more quickly. Journey time is fundamental to the operation of such a system. If one wonders why the system has so miserably failed to meet its operating objectives, I respectfully suggest that that might be the reason. I know that both hon. Gentlemen, for whom I have the greatest respect, appreciate the common sense of that argument.
In Manchester, only trams, buses and taxis have access to whole swathes of the city centre. That will be the case to some degree in Leeds as well. It will have what it calls a public transport box, where only buses and trams will be able to travel. I want to make it clear that it is not my business to tell Sheffield how to pedestrianise its centre if it wishes to do so, but it must consider a co-ordinated transport plan if it wants supertram to be a success.
The passenger transport executive of course invested its funds in obtaining Acts of Parliament giving powers to build and operate supertram. It then submitted a bid to my Department for funding. To make it absolutely clear, the funding was sought under the general heading of the public transport facilities grant available under section 56 of the Transport Act 1968.
I should emphasise that, under the published rules for that funding, the South Yorkshire supertram had to be the most economic way in which to meet the identified transport need; it had to need no operating subsidy;the future income from it had to be sufficient to make a real contribution to its capital cost; and it had to attract enough drivers off the road to deliver wider economic and environmental benefits, thus justifying the taxpayers' investment.
It is important to this debate on the precise meaning of the various elements of correspondence that have been exchanged to understand that the South Yorkshire PTE made the case that all those requirements were met. My Department certainly probed, argued and queried the case, but in the end it was not for my Department to produce research analysis and forecasts of South Yorkshire's transport needs. The PTE was responsible for that, and made the case for it, and we in central Government in due course accepted it.
I have already said that future incomes from supertram have to be made available to contribute to the capital cost. Again, the House will be aware that, in Manchester, for example, the operating concession for the metro link was sold up front, so a capital contribution was attracted immediately, and the revenue risk was with the private sector. That is also the case in the west midlands. Frankly, the same approach is planned in every other light rail scheme in the country.
As is occasionally the case, South Yorkshire did it differently. Ironically, so confident was the PTE of its forecast profit that it decided to build the scheme first, operate it itself and sell it later at what it no doubt believed would be a good profit, which meant that the only way that future supertram incomes could be made to contribute to the capital cost of the system was for the PTE to borrow against those future profits.
Now, the hon. Member for Barnsley, Central tells me that the profits are not sufficient to repay the borrowing. He asserts that the people of Barnsley have to repay it.I quite understand his concern on behalf of his constituents, but I hope that he will recognise that, while that may be an issue for the people of Barnsley, it is arguable as to whether it should be an issue for the wider taxpaying public. The PTE made this proposition, advanced it, and argued the case that was ultimately accepted.
I must make it clear that I do not run day-to-day transport in metropolitan areas, and there would be a great deal of criticism if I tried to do so. On that basis, it is not for me to interfere in how the project is managed. Ultimately, it is for those constituent authorities--here is the point that I must underline and which thehon. Member for Barnsley, Central made--to sort the matter out. There is the germ of a solution to the problem.A considerable rethink about the management and operation of the system is required, and that cannot start too soon.
On the impact of having to underwrite the costs on the financial arrangements of the local authority, and on the capping arrangements, the hon. Member for Barnsley, Central knows that the Department has consistently made the case to our colleagues in the Department of the Environment that it is an issue that ought to be considered sympathetically. Obviously, I regret the fact that there has
been an impact, and equally, that the constituent authorities spend so close to the cap that they are under that risk. None the less, without making a cheap party political point on a serious occasion such as this, we have been sympathetic on the matter.
On the promises made by my predecessors that supertram would be fully funded, I know the letter to which the hon. Member for Sheffield, Central referred--indeed, I have a copy here in my hand--and I understand the quotation. The hon. Gentleman was kind enough to show me the wider context of the original quotation from my right hon. Friend the Member for Kettering(Mr. Freeman).
I must make it clear that, as far as the Government are concerned, we have delivered every commitment made by my predecessors about supertram. We have said that the capital cost, net of the future revenues forecast by the passenger transport authority, would be provided for by 50 per cent. section 56 grant and 50 per cent. credit approval. It ought not to have been necessary to underline that fact, because it is the standard advice on the issuing of section 56 grant. But it has been spelt out, and the way in which the funding system works is that future revenues from major transport schemes such as this are put towards the capital cost, in this case by the PTE undertaking borrowing, to which the hon. Member for Barnsley, Central referred, with the remaining capital cost paid for partly by grant--paid by the Department--and partly by credit approval, supported by the Department of the Environment through the revenue grant system.
Judging from the analysis, it is clear that the system was and is fully funded. Now that there is no revenue to support that element of the scheme that should have been self-generating, the problem--one that I understand perfectly well--is that the authorities are saying that it is a burden that they did not contemplate. In all honesty,I hope that they will appreciate that it was not us, but the PTE, that made the case. The authorities are jointly responsible for the PTE, and it is to them that we must all turn in the first instance.
I hope that the hon. Member for Barnsley, Central will understand that we have felt it necessary to be fairly firm on the timetable, not least because I do not believe that allowing any laxity in it would necessarily have the desired result. I believe in keeping to the firm timetable--it has been on the table for some time. Frankly, I am concerned that, even at this stage, there may not be sufficient urgency behind the process. In the present climate, I do not envisage the position getting any better if we start to indicate any laxity in the system.
"'No authority to continue capitalisation is likely to extend beyond the construction period'".
"ie, later than a year or two after entry into operation of the Supertram system."
"the people of Sheffield are just a load of whingers".
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