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Sir Nicholas Lyell: My hon. Friend raises an interesting sociological point. That was not always the

20 Mar 1998 : Column 1536

case. My grandfather, who could probably have afforded to buy a house, never did and always rented accommodation off a large landowner, which tended to be the Harrow Trust or something of that nature. Such a system left people with free capital to look after themselves, which was much more effective than tying it up, as we tend to do now. Perhaps we should not be so ideologically attached to putting so much money into our homes and should try to encourage people to go in a different direction.

Mr. Pound: On a point of order, Mr. Deputy Speaker. Although I realise that the accommodation arrangements of the ancestors of the right hon. and learned Member for North-East Bedfordshire (Sir N. Lyell) are of extreme interest to him and his immediate family, what remote relevance has that to the matter under discussion?

Mr. Deputy Speaker: I agree that we are going a bit beyond the scope of a Third Reading debate.

Mr. Rowe: I of course accept a rebuke, Mr. Deputy Speaker, but the fact is that the Bill seeks to set right an anomaly and, as my right hon. and learned Friend the Member for North-East Bedfordshire (Sir N. Lyell) has pointed out, there is some doubt about whether it will succeed in preventing local authorities from introducing various forms of informal rationing, which will be just as deleterious as the form of rationing that Sefton council introduced.

I am green with envy about this measure because I have never yet won any of the ballots in this House. I have given up subscribing to the national lottery on the basis that my experience in this place suggests that I shall never win anything anyway. I have never had a private Member's Bill in all my time here, so I am deeply envious, but the fact is that, although this is a useful tidying-up measure, the Government have to get a grip on the issue at its heart and have a real shake around because, otherwise, we will not succeed.

I give one further example. One of the reasons why local authorities are under such pressure that they behave as Sefton council behaved is local authority planning restrictions. Many of my constituents, and I myself, frequently applaud such restrictions but, when confronted with a particular dilemma, we start wondering about them. They make it difficult for 60-year-olds who want to look after their 80 or 95-year-old parent to adapt their home in ways that would allow the parent to come and live with them.

That is partly because polices such as the green belt--policies of which I am largely in favour--make it difficult to allow extensions to houses, but also partly because there is a residual, inappropriate anxiety among local authorities that, somehow, by improving their home in that way, members of the younger generation are enhancing the value of their houses, and should not be allowed to do so. That is a real difficulty.

The other great pressure on local authorities is that many of them, as we have heard already from many interventions today, have an extraordinary ideological hostility to private care provision. Quite honestly, the way in which local authorities of that persuasion delay assessments, so that a care home has to carry two or three empty beds, when it may be only a six or seven-bed home

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anyway, until it gets very near to ruin, or the way in which they manipulate the lists in other ways in favour of their own care provision, is an absolute scandal. It all goes back to the core problem: we have a set of contradictory views about the value of people providing for their own care.

Mr. Gray: Is that not particularly disgraceful when county council homes cost significantly more than the private homes that they are competing with, as is the case in Wiltshire? It is even worse when, as in Wiltshire, the county council announces that, ideologically, it is determined to continue to use its own homes unless those homes are sold. Even if they are then sold, they can be sold only to non-profit-making organisations. Is that not a disgrace?

Mr. Rowe: It is a disgrace and it should be made absolutely crystal clear that local authorities that behave in that way are diminishing the number of people whom they can afford to look after and so depriving needy people of care.

There is a real difficulty because people who have been frugal and provident all their lives and who want to provide for their own care and well-being in old age, are terrified of the future. If we cannot do anything else, I hope that the Under-Secretary, the hon. Member for Brent, South (Mr. Boateng), will be able to give ussome assurance--when he has stopped his private conversation--that, beyond the narrow confines of this Third Reading, the Government are seriously addressing the tangle that leaves so many old people, who have done all the things that we applaud in trying to create savings for themselves, in a state of fear, confusion and, in many cases, pretty miserable living conditions.

10.56 am

Mrs. Eleanor Laing (Epping Forest): I congratulate the hon. Member for Bradford, West (Mr. Singh) on introducing the Bill, which I thoroughly support. The one point on which I disagree with him is that he said that

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people do not deal with this subject with passion. On the contrary, at the Conservative party conference a few years ago--

Mr. James Paice (South-East Cambridgeshire): Conservative party conferences are very passionate.

Mrs. Laing: My hon. Friend is absolutely right. I made a passionate speech on this very subject. I found at the party conference that the vast majority of Conservative party representatives throughout the country entirely agreed with what I said. Therefore, I know that I must have been right. It was an excellent example of how democracy works in the Conservative party because, only a few months later, the then Chancellor of the Exchequer announced the changes in the appropriate legislation, which were outlined so well this morning by the hon. Member for Bradford, West. On that day, I urged the then Chancellor to change the limits that are applied when the financial situation of an elderly person is assessed in examining whether their long-term care should be funded by the state, or whether they should have to pay for it themselves.

Although I had the full support of the many thousands of Conservative party members who were there on that day in Blackpool, and the support to a certain extent from the then Chancellor who made those changes, the great importance of this subject to the lives of almost every family has not been fully recognised. It is unfortunate that there is a need for such a Bill, but the hon. Member for Bradford, West is brave and courageous in introducing it.

The need arises because of the disgraceful attitude of certain local authorities that have continued to employ a policy of envy against people who have worked hard, saved and built up their resources, which they are entitled to retain to pass on to their families. It is sad that some local authorities continue to disregard the wishes of the people in their local communities who elected them. Unlike my hon. Friend the Member for North Wiltshire (Mr. Gray), I can commend my local council--Essex county council--on its attitude--

It being Eleven o'clock, Mr. Deputy Speaker interrupted the proceedings, pursuant to Standing Order No. 11 (Friday sittings).

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London Underground

11 am

The Secretary of State for the Environment, Transport and the Regions (Mr. John Prescott): With permission, Mr. Deputy Speaker, I wish to make a statement about the London Underground.

The underground is part of the lifeblood of London. More than 800 million journeys will be made on the underground this year. London Underground has made great strides since the King's Cross fire 10 years ago.Its management systems have been overhauled, its employment practices modernised, and productivity improved. All that reflects great credit on everyone who has worked for London Underground, but, for many years, investment in the underground has simply been too low to ensure that the worn-out assets are properly replaced. Without the necessary investment, operational efficiency is constantly undermined by old and unreliable infrastructure.

For a very long time, funding plans for the underground have been chopped and changed every year, both under the Greater London council and under the previous Government. I might add that all Governments have been involved in making cuts in investment in the underground at different times. Our analysis shows that such uncertainty and short-termism generally increases the cost of completing the underground's investment programme.

According to London Transport, there is now an "investment backlog" of some £1.2 billion. Despite that, the previous Government in their last Budget announced sharp reductions in the funding available to London Transport for the next two years. Combined with the cost overruns on the Jubilee line extension project, those cuts led to London Transport's planned investment being cut by almost a half.

In our election manifesto, we rejected privatisation and we promised that we would implement a new concept--a public-private partnership--to modernise the underground, to safeguard its commitment to the public interest and to guarantee value for money to taxpayers and passengers. I can now tell the House how we plan to deliver on that commitment.

Over the past 10 months, we have undertaken a thorough and careful analysis of all the options for developing the public-private partnership. We have examined a wide range of options, and have taken advice from a number of expert sources, including financial and engineering advisers, the Health and Safety Commission, the passengers committee and London Transport itself. A summary of the key facts and analysis will be placed in the Library of the House. I also want to mention the expertise that my hon. Friend the Paymaster General has contributed to our work, along with his Treasury colleagues. Their support has been much appreciated.

Our solution represents an entirely new approach--a third way. It is not a privatisation--or even partial privatisation; nor is it an old-style, publicly funded nationalisation. It is a publicly owned, publicly accountable model to get the best from both the public and the private sector.

Our solution has three main elements: first, operation in the public sector; secondly, infrastructure investment in a public-private partnership; and, thirdly, an extra

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investment now. First, we believe that the operation of London Underground services should remain as a single, integrated entity. We are also convinced that the operations should be firmly and securely a public sector responsibility. The underground network, integrated ticketing, travelcard, the tube map and logo--all the key features of the underground system--are valued by tube users and will remain the responsibility of London Underground, acting in the public interest, publicly owned and publicly accountable. We are convinced that that will be best for reliability, safety and public confidence.

The second element of our plans is to involve the private sector by awarding one, two or three contracts to finance, maintain and modernise the underground's infrastructure. There will be a competitive bidding process. We shall seek expert advice on the best way to structure that competition, including the best length of contracts. We will choose the contractor or contractors and the set of arrangements that will deliver the best value for money. If the best value can be obtained by having a single contractor, that is what we will have.

The infrastructure contractors will be under an obligation to eliminate the investment backlog, and to maintain and modernise the underground's trains and other assets, such as track, signalling, stations and escalators. There will be a performance regime with incentives and stiff penalties. That way, the operating company will be able to ensure that the contractor performs to the required standards. The freehold ownership of the assets will remain with the public sector. At the end of a contract, the assets will be returned to the public sector, in a much improved condition.

The contractor or contractors will be responsible for financing the investment that the underground urgently needs. They will be free to borrow the sums needed from the private sector capital markets, and will not be constrained by the annual public expenditure plans. As a result, they will be able to use their capital much more efficiently. Their constraint will be a practical one of how much work can be done without causing unreasonable disruption to passengers.

I have already paid tribute to the hard work of the London Transport and London Underground work force. The fact that the system runs as well as it does is a tribute to their efforts and, frankly, their efforts alone. Most underground staff will remain employees of London Underground, but it will make sense for staff who currently work on the procurement, installation and maintenance of hardware--track, signalling, escalators and rolling stock--to transfer with their work to the contractors. All this will be subject to detailed future negotiations. A small nucleus of engineering staff will be needed in the operating company to administer the contracts with the infrastructure companies and to ensure that they deliver.

I am today writing to every member of staff in London Transport to explain our policy and the commitments we are giving to reassure them. I will place a copy of the letter in the Library. I want to reassure staff that the rights they have under their contracts of employment--covering pay, hours, union recognition, and so on--will be protected as we move into the new structure. Existing staff will continue to benefit from concessionary travel. We will work with London Transport, the London Transport

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pension scheme trustees and the Inland Revenue to ensure that staff have the right to remain in the London Transport pension scheme as contributing members.

We want to make a start on modernising the underground, in preparation for its return to the people of London. On 7 May, Londoners will vote in a referendum, in which they can choose to establish a strategic authority for Greater London to put it on a par with other great capital cities around the world. When the Greater London authority is established, the underground will, with the rest of London Transport, transfer to it. It will then be not only publicly owned, but properly accountable to the people of London, through the mayor and the assembly. Mrs. Thatcher nationalised London Underground: we will return it to the people of London. [Interruption.] That is a statement of fact.

Over the next two years, my Department will work closely with London Transport in restructuring London Underground and managing the transition to a public-private partnership. That will involve a lot of work, and I will meet London Transport very soon to agree a programme for implementing our plans. I will also look to set London Underground demanding efficiency targets to achieve over the next two years, before it transfers to the GLA.

London Transport already has extensive powers to let contracts of the kind I have described, but should any additional legal powers prove desirable, we shall invite Parliament to consider giving them as part of the legislative arrangements to establish the Greater London authority.

Safety is, of course, a top priority and we have already consulted the Health and Safety Commission. The commission has confirmed that it believes that it will be possible to implement our proposals in a way that maintains and develops the underground's safety performance. The Health and Safety Executive will take that work forward, and I am writing formally to the chairman of the commission today to ask him to advise me on the outcome as soon as possible.

Our proposals will take a little time to establish and deliver. However, during the period of transition, we cannot allow the situation to deteriorate further. Therefore, as the third element of our policy--thanks to the prudent management of our public finances in the past year, as indicated by the Chancellor in his Budget--I can now announce that the Government will be providing an extra £365 million over the next two years. That additional money is over and above the money that the previous Government planned to provide and will be used for core underground investment, preparing the public-private partnership. By promising London Transport that money now to spend over the next two years, it will be able most efficiently to plan its investment programme.

The additional money will mean that, in the two years from April, total investment in the core underground--including private finance initiative investment--will be £1 billion. The extra funding that I have announced will enable more investment projects to go ahead in the next two years. Such projects will enable us to perform additional track works on the Victoria and Northern lines; to convert the old Jubilee line trains for use on the

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Piccadilly line--with 10 new trains available by 2001--helping to increase the line's capacity by over 10 per cent; to replace about 15 more escalators, including ones at key stations; and to refurbish 30 stations.

Our public-private partnership plans are based on long-term investment programmes--worth more than £7 billion in today's prices--over 15 years, aimed at creating a first-class underground for London. The investment will bring further benefits for passengers, such as track and civil works to remove speed restrictions, leading to faster journey times; increased train service levels as new signalling systems are introduced; and refurbished and modernised stations.

It is, however, not enough only to have a modern, refurbished, underground: it must be available to everyone, including disabled people. That objective will take time to achieve, but I am asking London Transport to examine how its current plans can be accelerated by the extra funding that I have announced today. I want to involve disability groups in considering our priorities, and will begin with my own advisory group--the Disabled Persons Transport Advisory Committee.

Earlier this week, I announced our plans for a £21 million river boat service for the new millennium and beyond. Today, I am announcing our plans for a £7 billion investment programme over the next 15 years for the Underground. I want London to become a showcase for a modern, integrated public transport system. We have produced a radical, modern and imaginative solution to achieve that goal. I shall be proud to return the underground to the people of London. I commend our plans to the House.

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