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Mr. Andrew Mackinlay (Thurrock): That is not true.

Sir Norman Fowler: Well, we shall find out. I am grateful for the help of the hon. Gentleman--I call him my hon. Friend. We shall see whether Ministers confirm that.

According to the report, another option would be a public-private joint venture for the whole of the underground business, and a further option would be the taking on by companies of individual lines or groups of lines, running track, stations and trains.

The draft letter in which all those options were set out--and which has evidently been seen not only by The Guardian, but by a range of newspapers--described the timing of the decision process as "urgent." It added, in terms which are becoming sadly typical of the Government, that the Department of the Environment, Transport and the Regions would

[Hon. Members: "Oh."]

Regardless of our opinion about anything else, we do not believe that that is the way to make policy or to make announcements. Such announcements should be made on the Floor of the House of Commons, not to selected friendly journalists. That is basic; it is entirely non-negotiable. I hope that the Minister will say this afternoon that that is his policy--and, moreover, that that is his Department's policy.

This afternoon, the public need to know what is happening. What are the Government up to? What are their plans for the London underground? Above all, what specific options for the future of the London underground are the Government examining?

We have seen this whole process before, in the air traffic control saga. In October 1996, when talking about National Air Traffic Services, the then Labour transport spokesman,

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the right hon. Member for Oxford, East, declared that Labour was totally opposed to privatisation. He said:

    "Labour will do everything we can to block this sell off. Our air is not for sale."

That was in October 1996.

By April 1997, according to the right hon. Member for Derby, South (Mrs. Beckett), now President of the Board of Trade, the policy had become:

A few days later, no less a figure than the right hon. Member for Sedgefield (Mr. Blair), now the Prime Minister, said that it was to be the subject of--you have guessed it, Mr. Deputy Speaker--a review, which is characteristic of the Government. It is, of course, entirely a coincidence that the right hon. Member for Oxford, East, the then shadow Transport Minister, now pursues his ministerial career in the Department for Education and Employment.

We want to be told on the Floor of the House the Government's policy on London Underground. We want to know that, because the London underground is, by any measure, a vital service for millions of people in the capital and millions of people who come to this city. If we are to make practical sense of persuading people out of their cars in London, it is crucial that London Underground works well.

Mr. Livingstone: I am glad that the Opposition spokesman wants the London underground to work well. When I was leader of the GLC and led a deputation to see the Minister responsible for transport at the time--the right hon. Gentleman himself--and asked him to allow the GLC to give London Transport enough funds to tackle the backlog of work and build the Jubilee line, why did the right hon. Gentleman say that no Government funds would be forthcoming? Indeed, he barred the GLC from using its own rates income to restore the fabric of the tube.

Sir Norman Fowler: I think that the hon. Gentleman has answered his own question. I can think of no worse advocate for the London underground than he was at the time he came to see me. Given his record of spending money, it would have been a brave Government who gave him any. I respect and understand the hon. Gentleman's views, however.

I believe that the opportunity now exists to take a radical step forward, to improve the service and to move away from the inadequate system of public finance and public control. There is scarcely a commentator or observer who believes that the system is working well or that it cannot be improved. I believe, further, that Conservatives are entitled to say that, when in government, we successfully showed how the policy of privatisation could benefit transport: the ports and docks, freight, the railways, British Airways. No one wants to change those services back--unless the Government are about to undergo a complete change of heart.

Sir Robert Smith (West Aberdeenshire and Kincardine): The right hon. Gentleman did not touch on the success or otherwise of bus privatisation and deregulation. Does he really feel that it was a success?

Sir Norman Fowler: Yes, it was. The coach deregulation which I carried out was also a great success,

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although opposed by the Liberal party. In fact, the Liberals have an even worse record than the Labour party of opposing most of these advances in transport.

Mr. Mackinlay: To this list of want-to-knows, I should like to add one more. The fare-paying public received repeated assurances from the right hon. Member for North-West Hampshire (Sir G. Young) and from Steve Norris to the effect that the network card and similar concessions would be safeguarded following privatisation.

However, the right hon. Gentleman will have seen that 430,000 people who use the concession on the railways and the underground will face a 50 per cent. increase in fares as a result of franchising and privatisation. The railcard will be able to be used in fewer places; the intention is to kill off the concession altogether. That will increase congestion on the roads, and hit the poorest hardest. It will also diminish the revenue of London Underground.

Sir Norman Fowler: No, the hon. Gentleman is wrong. My right hon. Friend's statement about the underground clearly listed 10 commitments. One concerned concessionary fares, another was about fares more generally. I think I am right in saying that such a commitment had never been made by any Government before. The commitment was that, in the coming years, fares would not rise faster than the retail prices index.

The privatisations that we carried out have been highly successful. They have been to the advantage of the staff and companies concerned; most of all, they have been to the advantage of the public. If Labour Members do not believe that, why do they continue to pursue the policy? Labour has done a U-turn, and no longer is there any chance that they will reverse the privatisation policies that we pursued when in office. They know, in short, that we were right.

Privatisation has certainly had the effect of liberating transport companies, whether big or small, from the necessary restraints of the Treasury. That is clear and right, and is undoubtedly one of the advantages of privatisation.

It is important to understand, however, that privatisation is not simply a financial device; it is also about achieving better and more responsive management. One of its great advantages is that it gives freedom to management, allowing them to manage without for ever being second-guessed, and allowing them the opportunity to develop the business. That is what a transport undertaking is all about, and it is what businesses are all about.

There is no joy for a transport undertaking of whatever size to have Ministers and civil servants peering over its shoulders telling it what to do. That was the badge of the 1970s and the years leading up to them. That was the position that, step by step, the Conservative Government successfully reformed.

I said that I would be brief, for the obvious reason that this debate has been truncated. London Underground is the last major transport undertaking still constrained in that old-fashioned way. The challenge for the Government is to take radical action to reform the whole structure of London Underground for the benefit of the travelling public. Sadly, the vacillations of the past few weeks give the Opposition no confidence that that will be the final outcome.

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4.40 pm

The Minister of Transport (Dr. Gavin Strang): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:

I am pleased that the right hon. Member for Sutton Coldfield (Sir N. Fowler) has taken this chance to debate the future of the London Underground. It is brave of him. I welcome the chance to debate the issue, and to take this early opportunity to affirm that an improved service by London Underground is a high priority for the new Labour Government.

We set out our policy for London Underground clearly in our manifesto, which said:

We stand by that. Nothing that we have done or said since is inconsistent with that manifesto commitment. It will continue to be the framework within which our policy develops.

Let us have a bit of history--[Interruption.] I mean history--not the version of the right hon. Member for Sutton Coldfield, which did not even carry credibility with Conservative Back Benchers. The London underground has suffered from decades of under-investment. That is widely accepted, and the results are seen and experienced regularly by millions of Londoners and visitors to the capital. The underlying problem has been the level and uncertainty of funding under the previous Government, who delayed the investment needed to improve the network. Their record shows that they had no genuine commitment to the underground network. They increased or reduced funding as a matter of political expediency.

I shall not go back over 18 years of Tory rule; I shall go back just 10 years. The 1987 autumn statement left Government funding for the core network at its lowest level since the Conservatives came to power in 1979. It took the tragic King's Cross fire of November 1987 to produce a re-think of the Tory Government's attitude to London Underground. The Fennell report into the disaster was followed by a separate Monopolies and Mergers Commission report. In the face of that evidence, the Government could not deny the Monopolies and Mergers Commission's conclusion that

In response, the Government increased funding in the 1991 autumn statement, before the general election, but cut it substantially in 1992, after the general election. There was then a small increase in core funding in the 1993 autumn statement, followed by a succession of reductions in successive spending rounds. As a result,

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investment in the core underground has not been sufficient to remove the underground's backlog. The current investment backlog in the core network is more than £1 billion. According to London Transport's figures, which take into account the previous Government's public spending plans, the investment backlog in three or four years will reach £1.5 billion.

The House will be aware of the problems that London Underground has been experiencing with the Jubilee line extension project, which have resulted in cost overruns of over £300 million. London Underground is responsible for managing the project, but it has had to do so within a budget set by the previous Government. Given the overspends that almost always occur on such major projects, we are entitled to ask whether the contingency which the previous Government allowed in the original budget for the project was adequate.

The effect of those cost overruns is a reduction of more than £300 million in the amount available for investment on the core network. Each pound of overspend on the Jubilee line extension is a pound less for much needed renewals of track, signalling, stations, escalators and structures on the existing network. London Underground's management has advised us that a cut of that magnitude in investment in the core network will, in a few years, inevitably mean even slower journey times and even more disruptions.

During last year's spending round, the Conservatives knew both that existing levels of funding were already below the levels that London Underground said it needed, and that there were substantial Jubilee line cost overruns. What was their response? A cut in funding for the core network of £373 million for the two years, starting next April. There was no transport case for those cuts. They were utterly indefensible.

Against that background of consistent under-investment, a backlog of over £1 billion and further planned cuts of almost £400 million, the Conservatives announced that, if they won the general election, there would be a wholesale privatisation of the underground.

We have only to look at the situation that we have inherited on the national railway network to know what that would have meant. On the railways, taxpayers were robbed, as assets were sold off at knock-down prices. The network has been fragmented, and services have been threatened. That must not be the future for the London underground.

The truth is that we have inherited a wholly unsatisfactory situation with regard to London Underground. I and my colleagues are being bombarded with letters from irate tube users complaining to us about the problems that we inherited from the previous Administration.

We are determined to address the underground's investment needs, so that it can play its full part in a properly integrated public transport network for the capital. Our aim is to secure an affordable, reliable, clean and modern network. Despite the best efforts of its management and workers, the underground's quality of service is below that which passengers can reasonably expect. That also affects the prosperity of London as a city.

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However, we cannot simply tax and spend to sort out London Underground's problems. My right hon. Friend the Deputy Prime Minister has therefore asked officials to examine a wide range of options to see which can deliver the world-class underground system that we all want. We have ruled out the Conservatives' plan for the wholesale privatisation of the network, but all other options will be considered.

I am happy to provide the House with details about the review of options that we are undertaking, but I stress that we are at a very early stage in the policy-making process. When we have a preferred option to announce, we shall do so, and I assure the right hon. Gentleman that we shall announce it to the House of Commons. However, it is only sensible that we should first study all options, apart from wholesale privatisation, in a calm, considered way.

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