House of Commons Hansard Debates for 13 Mar 1996 (pt 48)

Mr. Norris: Surely the hon. Gentleman has not dealt with the statement in the London First report adequately. He correctly identified the sentence in which the total programme over 15 years was valued, and pointed to the extent of the public contribution that London First assesses might be necessary, but he neglected to mention the balance that London First acknowledges can be provided through various forms of private finance. Is not that figure as large as the figure that London First suggests should come from the public purse? Does not that fact make the point behind the Bill, which would facilitate that large proportion of private finance that London First itself says must be aggregated with the taxpayer's contribution?

Mr. Timms: Consistently throughout my speech I have said that I accept the need for private investment in the development of London's transport, so I agree with the Minister there. However, what I want to emphasise is the fact that London First says that last year's Budget was the first test of the programme and that it

"failed to provide the level of funds called for in our Programme."

Lady Olga Maitland: I have been listening carefully to the hon. Gentleman's reservations about the private finance initiative. He has said that he accepts it, but under something of a socialist scheme. Does he not agree that his party's proposals would make the PFI a sham, because it would be so restrictive that it would drive away investment, and thus would not achieve the real inward investment that we hope will come into the transport system. Labour's proposal simply would not work.

Mr. Timms: I do not agree with that at all. Indeed, as I said earlier, what we saw yesterday was an attempt to shift risk away from the private sector and back into the public sector. The word "sham" could well be used in that connection, to describe the attempts to use private finance in the health service.

I have said throughout the debate that we need private finance in the development of London's transport system, and the hon. Member for Sutton and Cheam (Lady Olga Maitland) can rest assured that that will be successful under a Labour Government.

I have only a few minutes left, so I shall make my final point. I greatly welcome the recent announcement that the Government will support the proposal for an international passenger station at Stratford on the channel tunnel rail link--a project in which the Minister has taken a close interest for many years. I am delighted by the outcome of the Government's decision-making process. The announcement was the best news that east London has had for 50 years. It was also good news for the prospects for imaginative development of public transport in this country.

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The hon. Member for Croydon, North-Eastwas rather uncertain about the prospect of the completion of the Jubilee line, but I welcome it.The decision about Stratford highlights the need for a planned dispersal by London Regional Transport from the channel tunnel rail link.

St. Pancras is already overcrowded and it is not easy to travel from there to the most likely destinations. Crossrail would provide us with the opportunity for people to leave the channel tunnel trains at Stratford, get on to crossrail and travel to their destinations in central London, the west end, Heathrow and elsewhere by rail. Ideally, I would like to see a connection to crossrail from the channel tunnel rail link at Stratford--and an amendment has been tabled to the Channel Tunnel Rail Link Bill to facilitate that.

I emphasise the fact that when the Jubilee line is complete, if the Government simply maintain the level of investment now going into it and use it to build new rail infrastructure, that will be sufficient to build crossrail.I hope that when he replies to the debate the Minister will be able to say something about the prospects for crossrail in the light of the deliberations that I know are already under way.

I have no doubt that private finance will need to be secured to build crossrail, and I am happy with the idea. I hope that we can achieve real progress in giving the scheme the go-ahead quickly.

Finally, I endorse what my hon. Friends have said in the debate and what London First, too, has said: we need an adequate and consistent level of finance. We need both. Investment must be not only sufficient, but stable, consistent and predictable, so that LRT knows where it is and we can develop the transport infrastructure that London needs for the future.

8.57 pm

Mr. Nirj Joseph Deva (Brentford and Isleworth): Madam Deputy Speaker, I am fortunate indeed to catch your eye in this important debate. I am only sorry that so few Labour Members are listening to an important debate that affects the lives of Londoners.

Brentford and Isleworth, my constituency, is blessed with seven tube stations and two tube lines, which I estimate are used by about 8,000 of my 80,000 constituents daily. The tube is the life-blood of my constituents, who use it as a means of reaching the City and elsewhere, and part of their everyday life. I therefore find the Bill an important measure--but a marginal one--in the great improvements that must be made in London Underground.

I should say, as an aside, that often my constituents have written to ask that Turnham Green station be more frequently used by the tube lines, which sometimes do not stop there.

The private finance initiative is an important step in introducing private finance to the process of improving our transport infrastructure. The measure is essentially technical; it is not revolutionary or earth-shattering. It will allow London Transport to take full advantage of opportunities for increasing investment.

Much of the London Underground network is very old--Victorian--and needs substantial investment. Accordingly, the Government have increased investment to record levels in recent years--to £1 billion in 1995-96.

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Much of that investment has been directed to upgrading the Central line, which is now nearly complete, and constructing the new Jubilee line.

The benefit of private finance is that the Government and London Transport will look to the private sector as a source of further substantial investment. The Labour party, however, appears totally unaware of the great changes in capital financing of infrastructure projects that are taking place throughout the world. Labour Members talk as though they are on another planet--another economic environment.

The useless, almost asinine, debate about whether finance should be private or public shows a failure to understand that there is no such thing as public finance. Public finance is drawn only from people in the private sector making enough returns to pay taxes so that the Exchequer can put that money back into the coffers--the investments--of the economy. Public finance is not created uniquely by any group of people--civil servants, Ministers and the like--creating enterprise for themselves. They simply use the private sector's money in a different form.

If we can enable the private sector to put its money directly into improving our infrastructure projects without the interference of Ministers, civil servants and even parliamentarians, so that the return on capital is fair and equitable, what is the sense of that asinine point that the Labour party keeps wheeling out?

I was fortunate to follow the excellent speech of my hon. Friend the Member for Beaconsfield (Mr. Smith) and the earnest speech by the hon. Member for Newham, North-East (Mr. Timms), but I say to my hon. Friend the Minister for Transport in London that we must consider the private finance initiative in the light of the way in which private sector investment is improving the infrastructure of much of the globe.

The world is changing rapidly. One cannot keep capital at home. Capital is global and moves to find the right rates of return. No party--not even the Labour party--can prevent British capital from moving out of Britain to find a better rate of return elsewhere. We are competing with other countries for the capital that is here, which should be invested in our infrastructure projects. That is why, although I may sound rude when I say so, I find the Labour party's argument very muddled. Labour Members do not seem to know what they are talking about.

Today, even the World bank--that great instrument of international development--the International Finance Corporation and our Commonwealth Development Corporation are investors with the private sector in building roads, power stations and water systems with private capital in far-off places such as the Philippines, Indonesia, India and Malaysia. That private capital seeks the highest rate of return, provided that the risks are fair.