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Mr. Norris: Did the hon. Gentleman refer to grant or did he refer to investment? If he is referring to grant, he must acknowledge that to any grant provided must be added the very substantial internally generated investment by London Transport to give a total figure for what actually matters, which is investment in service. He will acknowledge that investment in the service is at a consistent all-time high.
Mr. Hill: I certainly accept that point, but I do not think that there is any point in having a partisan dispute. The Minister is absolutely right about the global figure for investment in the core network and the Jubilee line extension, about which I shall comment in a moment, and it would be foolish to challenge that assertion. It seems highly unsatisfactory, however, that the admirable efforts of London Transport to generate its own funding, which is running at £200 million a year, should be responsible for almost 40 per cent. of its capital investment funding. I doubt whether any public transport system in any major capital city in the western world has such a requirement for self-generated capital funding placed on it.
Mr. Garnier: So that I may understand the hon. Gentleman's point, can he say what level of direct grant he would propose if he were the Minister responsible for London Underground?
Mr. Hill: I will gladly do that. The hon. and learned Gentleman is anticipating my argument; if he will bear with me, I will come to his point.
Mr. Stephen: If a business has the ability to generate a substantial proportion of its own funds for investment, is there any reason in principle why it should not do so?
Mr. Hill: Absolutely not, but the essence of my argument is that there should not be such a heavy burden placed on self-generated funding in the overall capital programme. We ought to be innovative in our approach to possible funding for transport infrastructure programmes. Self-generated funding is one source. Central Government funding is another. Perhaps we should also be considering other sources, about which I shall comment. In principle, of course there is no objection to internally generated funds forming part of the capital programme.
I should like to make two points about the record of investment in London Underground over the past few years. First, the investment is inconsistent, and that is no way to run a railway. It is grossly unfair on policy makers in London Underground, who cannot construct reliable future
investment programmes against a backdrop of the see-sawing profile of central Government grant. It creates a demoralising climate of uncertainty in the company--hopes are raised for the implementation of projects and then subsequently dashed. Such uncertainty also creates its own dis-economies. Time and resources invested in developing projects are wasted when funding ceases abruptly. I am not recommending it, but it would have almost been better for planners at London Transport to have been guaranteed stability at a lower level than to suffer the slings and arrows of such inconstant fortune at the Government's hands.
Secondly, funding for the core network will approximately halve between 1993 and 1998. The original figure suggested by the Monopolies and Mergers Commission of £750 million at current prices was a realistic assessment of what is needed to develop a modestly improving metro system for our capital city. The Government and their successors ought to recognise their responsibility in that respect. I hope that that satisfies the hon. and learned Member for Harborough (Mr. Garnier). We are talking not about megabucks in this context but about making the difference between an underground system that is set on a process of slow decline and one which, in an unspectacular fashion, can continue to meet the needs of London as a working economy and a centre of tourism.
I should anticipate a further intervention by the hon. and learned Member for Harborough by hastily adding that, as a mere Back Bencher, someone of my humble status cannot possibly be construed as offering a spending pledge on behalf of Labour in the lead-up to the next election. I am talking as much to my hon. Friend the Member for Cunninghame, North as I am to the Government, who apparently have neither the will nor the time to make the necessary change, since they are so obviously on their way out, when I say that London nowadays is short-changed in the relationship between its contribution to the national economy and its share in investment in the Exchequer. It generates one fifth of the nation's wealth and gets back one seventh in Exchequer expenditure.
Of course, I accept the principle of redistribution--I do not suppose that I would be sitting on the Opposition Benches if I did not. There are great riches in London, but it also has the greatest reservoir of unemployed persons in the country. Half of the top 25 parliamentary constituencies with the highest level of unemployment are in London--one of them is mine. It is my firm belief that a new balance must be struck to correct the present distortion in the distribution of national wealth. Higher investment in London's transport infrastructure would be one means of doing that. I repeat my belief that such higher investment ought to be forthcoming from the Government and I express my hope that it will be from the next Labour Government.
In any circumstances, either as an alternative or, it is to be hoped, as a supplement to higher Government funding--to address the point to which I referred in response to the hon. Member for Shoreham (Mr. Stephen)--we ought to be ready to consider other sources of financing theLondon transport infrastructure, including the London underground.
For many years, a company levy has helped to develop Paris's massively impressive overground and underground railway system. Remarkably, that is exactly what is on offer from London's businesses as well. Almost six years ago,
in May 1990, the Corporation of London published its far-sighted report on London's transport, "A Plan to Protect the Future". That report contained a proposal for a supplement to the then unified business rate, to be earmarked for transport improvements in London.
The same plan has been taken up by the excellent London First group as part of its transport initiative. Its essential proposal is to invite businesses to vote on whether to contribute to a specific programme of investment in existing and new railway lines--overground and underground--in London. If that were agreed, the contribution would be collected through a surcharge on the national non-domestic rate. The potential of the scheme is obvious. A 10 per cent. addition to the NNDR would yield in London between £300 million and £400 million a year--more than enough to fill the gap between Exchequer funding and the needs of the core underground network.
I regret that Ministers have shilly-shallied about the proposal--I suppose that we can hope for no more--which I repeat has been on offer from London's businesses for almost six years. Ministers have raised concerns about expenditure being counted against the public sector borrowing requirement. As London First has pointed out, routes around the PSBR concept were devised for the community charge, for council tax and for grant-maintained schools, and a route ought also to be found to secure such a remarkable offer.
Mr. Stephen:
The hon. Gentleman makes an interesting proposition. Does he accept that although most businesses do not mind paying tax on money that they have earned, they object to paying tax on money that they have not earned? The problem with non-domestic rates, as with national insurance contributions, is that they do not relate to a business's ability to pay.
Mr. Hill:
That may or may not be the case. Let us suck it and see, test it out, put it on trial and ask businesses, as their representative organisation in London is inviting us to do.
Mr. Norris:
I am grateful to the hon. Member for Streatham (Mr. Hill) for giving way, because I think that my hon. Friend the Member for Shoreham (Mr. Stephen)is making an extremely important point. I must tell the hon. Member for Streatham that government is about slightly more than sucking it and seeing, inviting though that prospect may be. [Interruption.] I do not see what the hon. Member for Lewisham, East (Mrs. Prentice) finds so risible.
If the hon. Member for Streatham suggests the notion of additional taxation for London's hard-pressed business community, and if he accepts the undeniable fact asserted by my hon. Friend the Member for Shoreham--that the national non-domestic rate takes no account of the profitability of an individual enterprise or of its ability to pay--precisely what has the hon. Member for Streatham sucked and seen that the rest of us do not know about? Will he enlighten us? Will he get away from all the hyperbole and vague arm wavings and give us some details of his scheme for a tax on London's businesses? For example, does he think that the small shopkeepers of Streatham would be happy to pay a tax to deliver crossrail? I should be interested if he can give us an answer.
Mr. Hill:
Recoiling from that devastating intervention,I must point out that it is not for me to suck it and see in that
"bizarre to veto a scheme which enables them to do so in an equitable way".
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