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Mr. Norris: My hon. Friend is absolutely right, and that investment of £300 million by the British Airports Authority has set a considerable precedent in the provision of privately owned railways. The project is

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intended massively to improve the public transport rail link between all the Heathrow terminals and central London. BAA is investing some £300 million in that large and imaginative project, and I am delighted to be able to tell my hon. Friend that in my most recent conversation with BAA, it confirmed that it hoped that the trial running of trains would begin next year, in 1997. Obviously, regular scheduled services will follow on from then.

As I understand it, the major restraint is the time it has taken to finish tunnel work into the airport terminals. The idea behind the scheme is that passengers and their baggage will have direct access to the rail link from the airport terminal at which they arrive. They will not be required to change terminals or to go outside in all weathers. Such seamless transfers will be attractive to every class of traveller, including the business user. In the past, some business users have chosen to use private cars or other forms of personalised transport, especially if they are going into the City--although that can be a very long and arduous journey. It does not take as long as it takes to get from Narita airport to the centre of Tokyo or to make a similar journey in New York or Paris, but it takes a very long time. The project will provide a high-quality link to the centre of London that will be attractive even to those business users who are met by chauffeur-driven limousine, because that will not have to be at Heathrow. It will be a tremendous benefit to other road users and the communities in that area.

Mr. Simon Hughes (Southwark and Bermondsey): As somebody who served his time during the consideration of the London Regional Transport Act 1984, I return to the question asked by the hon. Member for Newham, South (Mr. Spearing). His question expressed the key concern about the Bill, although we support the other aspects of it.

Clause 3 would add a new section--31B--to the 1984 Act, which would provide that

"the Secretary of State may by order provide for any functions of London Regional Transport under any statutory provisions to be exercisable by that person",

"that person" being the agent. Does that section, when read together with section 3 of the 1984 Act--irrespective of the Minister's intent--permit the wholesale transfer of functions, either bus or rail or tube, to another body?I understand that the Minister says that that is not the intention, but what can he say to persuade us that the Bill would not permit that?

Mr. Norris: As the notes on clauses show, the new section 31B(1) would enable the Secretary of State

"to provide that certain of LRT's statutory functions are to be exercisable by"--

a contractor--

"for the purposes of carrying out agreements"

under section 3(2) or (2A) of the London Regional Transport Act 1984. That means that the obligations laid on London Transport to provide services will not alter. What will alter is how LRT can procure such services so as to allow it to get the best value from the private finance initiative. On occasion, it will have the power, in a given commercial eventuality, to carry out such functions for itself.

The hon. Members for Southwark and Bermondsey (Mr. Hughes) and for Newham, South have both asked the important question in this context. I can tell them that

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nothing in the Bill extends the powers of London Transport in the exercise of its functions. Nor does the Bill extend its field of responsibilities. They remain as defined in the 1984 Act.

Mr. Hughes: I understand that exactly. Section 3(2) of the 1984 Act gives LRT a statutory duty to provide an underground service, for instance. Although LRT may retain that statutory duty, what is to stop it contracting out wholesale any or every line of the network? Nothing on the face of the Bill would seem to prevent that. If the Bill becomes law, LRT could immediately give the private sector responsibility for running every tube line across Greater London.

Mr. Norris: The answer is that the powers given to LRT in the 1984 Act permit it to do precisely what the hon. Gentleman suggests--we should be under no illusions about that. Opposition Members will seek to draw out from me a commitment not to privatise; that is basically what their reasoned amendment is after. In due course I shall come to that point in my speech. I must repeat, however, that nothing in the Bill adds to the general powers that LRT possesses.

The specific power to which we are all referring is the power to provide or procure services in the context of public transport. The Bill represents no increase in that area of responsibility. London Transport is not being allowed to move outside the provision of public transport services. Moreover, there will be no change to LRT's ability to extend the involvement of contractors in its business--save only what is in the Bill.

Neither this Bill nor the 1984 Act provides for LRT to wind itself up. My advice is that further legislation would need to be brought before the House for that to happen. The hon. Member for Southwark and Bermondsey would no doubt want to make his own contribution on that occasion.

In short, a great deal of what the hon. Gentleman has suggested is already possible under LRT's current powers. The Bill deals with some practical areas for which its current powers are manifestly deficient. The deficiencies were brought to our attention by LRT. When it first told me that it needed more powers, my reaction was to ask it to go away and carefully justify the need for additional legislation. LRT did precisely that, and has furnished me with some examples with which I believe the hon. Member for Southwark and Bermondsey will be satisfied. I know that, throughout the years he has represented a London seat, he has always been a great supporter of London Transport. Like him, I want LT to deliver the best possible value for money. The central message is the acceleration of the improvement in services that all hon. Members want to see.

On that basis, I hope that the hon. Gentleman will be assured that nothing in the Bill extends LT's current power to proceed further with contracting. The Bill simply facilitates what hon. Members wish to achieve.

Mr. Spearing: In reply to the hon. Member for Southwark and Bermondsey (Mr. Hughes), the Minister has partly answered my question. As he is contemplating a contract for a power supply company under the current powers of the Act, surely it will be possible for, say, Wisconsin Central to lease the Central line to run trains or provide some of the line's functions and for the District line to have a management buy-out. If that is possible

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under the Act, all he is saying is that the Bill will make it simpler under the PFI. Will he assure the House that that is not the intention and that London Transport will not be privatised on the pattern of British Rail, Railtrack and the present operators?

Mr. Norris: I can give the hon. Gentleman that assurance. LT may wish to enter into a power supply contract to improve the quality of its power supply.Hon. Members will recall the power supply failures of18 months or a couple of years ago. Power supply failures account for a substantial proportion of total failures in the system. Much investment, therefore, is clearly necessary. It is likely that the most efficient contract would involve LT purchasing power from a contractor that may wish to sell additional power supplies to third parties. That is perfectly reasonable. It would represent an excellent deal to LT and a perfectly sensible deal to the contractor.We wish to put in place arrangements to allow London Transport to take over the contractor's function and to continue the commercial arrangement without disadvantaging Londoners. That is a perfect example of how the Bill will work sensibly and very much in the public interest. It will procure good value for money and sensible commercial bases for the contracts into which LT will wish to enter.

Mr. Simon Hughes: This will be my last intervention on the Minister's speech; I am grateful to him for giving way.

Clause 2 deals with land and its disposal. Will the Minister help the House by saying what is permitted under the clause? Quite a lot of LRT's land is not used for transport operations. Will it be possible under the Bill--it could not do this otherwise--for LRT to enter into a contract with an hotel or leisure chain to build and jointly operate an hotel, as some water companies did after privatisation?

Mr. Norris: We are having almost a Committee debate on technical points, but as the Bill is broadly technical in nature I see no reason why I should not attempt to give the hon. Gentleman as full an answer as I can.

Let us take the example of a contractor who acquires land that LT would need at the end of a contract. It might involve land on which a power sub-station is to be built, the power project having some limited life. Clause 2 ensures that the freehold could be acquired in LT's name, albeit that the land would have been identified by the contractor, who would be responsible for its development. The purpose is to minimise the possibility of disputes over ownership at the end of a contract. If we did not frame the Bill in that way, when a contractor's relationship with London Transport had ceased, the contractor would then have a sub-station on land that was not technically owned by London Transport, and London Transport would therefore encounter some difficulty in offering a re-tender to another party. We are providing a more flexible basis for London Transport to enter into such contractual arrangements without altering the basis of the powers that it exercises.

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