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Sir Norman Fowler (Sutton Coldfield): May I first question the manner of this announcement--on a Friday morning in private Members' time? I remind the Secretary of State that the House has been waiting for the statement for almost 12 months, as the underground is of importance not only to London but to the nation. By choosing a Friday morning for the statement, many hon. Members--as is entirely evident in the Chamber--have been excluded from asking questions on it.

The Government's proposals are an unsatisfactory and inadequate compromise. The Secretary of State has accepted the principle of privatisation for infrastructure investment--in total contrast to many of Labour's statements before the general election--but he is content for operations to remain as a nationalised industry, which almost everyone now thinks is an outdated and failed model.

Does the Secretary of State not accept that the split between the public and private sectors is almost bound to lead to in-built conflict, with the public-operated company blaming the private infrastructure companies when things go wrong? If that happens, will not the travelling public lose out?

Does the right hon. Gentleman not realise that one of the great advantages of privatisation is not only the possibility of attracting investment but the way in which it has successfully introduced private sector disciplines into the operation of old public sector organisations? Is that not the lesson of transport privatisations--such as the National Freight Consortium and Associated British Ports--which the Secretary of State personally opposed?

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Can the Secretary of State say which of the models of privatised infrastructure companies he is aiming for? He said that he would accept that one company could run the entire infrastructure, but is that his preference--or does he prefer three separate organisations?

Will the Secretary of State make it clear whether the public money that he announced will go to the underground over the next two years will be new money--entirely separate from money that has already been announced in the Chancellor's statement--or is it money that was announced earlier in the week in the Budget statement?

We have always backed private investment. However, is there not a danger that the system announced today will prove to be the most expensive means of attracting private investment into the system? Will the Secretary of State therefore publish the consultants' reports and the options that were available to him? Will he tell the House today how much the Government have spent on those consultancy arrangements?

Is not the main trouble that the policy on the underground has been determined merely to meet the Secretary of State's aim of avoiding the Labour party's pre-election slogan about "wholesale privatisation"?

The prospect is that today's statement will bring us botched-up privatisation that will not serve the interests of the taxpayer or of London Underground staff, and that, above all, it will not serve the interests of the travelling public.

Mr. Prescott: Clearly the right hon. Gentleman has not fully understood the implications of the statement. First, however--to correct him--we have been in government for only 10 months, so he could not have been waiting for the statement for 12 months. Perhaps he was expecting us to take office earlier than we did--[Interruption.] I made it absolutely clear that we were rejecting privatisation--[Interruption.] May I answer the right hon. Gentleman?

Sir Norman Fowler: Why was the statement on a Friday?

Mr. Prescott: I will deal with that point. [Interruption.] Can we stop this sort of harassment? [Interruption.] Would the right hon. Gentleman like to huff again? It was a very powerful comment. I should like to deal with the privatisation issue, but I shall deal with the Friday point--I would not miss it out.

We made it clear that we would not privatise the underground, and that we wanted a publicly owned and publicly accountable railway. I think that I have justified that decision in my statement. I would not attempt--having been in office for only 10 months--to try to justify the previous Government's privatisation measures, especially when I am trying to deal with the effects of those measures, such as the channel tunnel rail link, the sale of the rolling stock companies and of Railtrack, and underinvestment.

I shall not go into the sorry history of privatisation as operated by the previous Government; that will be for another time. However, that history is not evidence that such privatisations are the best way forward, and we totally rejected it.

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The Government have made the statement today because, as the Chancellor said, statements will be made as a consequence of the Budget. Statements were made on Wednesday and on Thursday, and, today, we are taking the opportunity to make another one. I agree that the underground is a national issue, but it is very much a part of the interests of Londoners and of London Members--as we can see by the number of London Members in the Chamber for the statement. Today was a proper time to make the statement. Moreover, on Monday, I shall be involved in Brussels in negotiations on the Kyoto agreement.

Competing demands are made on the time of Secretaries of State, and I apologise if a Friday statement has caused any inconvenience to hon. Members. Nevertheless, it is quite proper for the Government to have made a statement on Friday. I do not think that Londoners will worry whether the statement was made on a Monday or a Friday--they will just be pleased that someone now has a future and a vision for London Transport, which is what I shall now deal with.

The right hon. Gentleman asked whether our proposals on splitting the underground would cause conflict. The advisers have told us no; as I said, the reports and the analyses of the reports are in the Library. The private sector can make a contribution by providing capital, but our proposals will not result in privatisation.

Although private capital can be invested--and we shall seek such investment--we believe that the model that we have chosen will be the best way of ensuring that taxpayers get the best value. That is our judgment. Once people examine the advice that we have received, and listen to the debate that will follow my announcement, they will make their own judgment. No doubt there will be debates in the House on the Greater London authority Bill and the changes that we may well have to make to meet those requirements, but, at the moment, our judgment is that it is the best way to proceed.

The right hon. Gentleman asked whether I believed that there should be one contractor or three contractors. If I can get the best value out of one contractor, that will be the best way to proceed. However, the choice through competitive bidding of one, two or three contractors will allow us to make a judgment on the best value. It is called the competitive bidding process, and I did not think that it would be challenged by the Opposition. Once we have received the bids, we shall make a judgment; that is the best way to use the taxpayers' resources. We want to get the best value and provide a good underground system.

The right hon. Gentleman asked whether new money was involved. As I said, £300 million of the £365 million was included in my right hon. Friend the Chancellor's statement of £500 million over three years. We have also taken into account money that London Underground was holding back because of the cuts in its investment programme imposed by the previous Administration. If we include the PFI, we shall now be able to invest something in the order of £1 billion over the next two years. The £360 million or so also takes into account the cuts that would have been imposed on London Underground by the previous Administration. It is extra money and it will be very welcome.

I do not believe that it will be the most expensive way to proceed. Checks and balances will be built into the negotiations. It is an excellent opportunity for London

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Underground. It is a publicly owned and publicly accountable solution, but, above all, it will give Londoners the chance to have a decent underground system.

Mr. Tom Brake (Carshalton and Wallington): I welcome the additional funding that has been secured for the next two years. Will the Deputy Prime Minister clarify how much of the additional £365 million will be spent on privatisation consultancy fees? Will he confirm that safety will be a top priority if Railtrack is successful in bidding for the infrastructure? After all, just over a month ago, Railtrack was criticised for persistently failing to resolve poor track conditions.

Does the right hon. Gentleman believe that an opportunity has been missed to introduce environmental taxes such as congestion charges, which could reduce pollution in London, as well as giving Londoners a first-rate underground?

Finally, does the Secretary of State believe that Londoners will be prepared to wait at least 15 years for the misery on London Underground to be addressed?

Mr. Prescott: I am starting immediately by investing the extra resources. One of the major constraints will be the speed at which we can implement the investment programme without causing massive disruption on the underground. It is a matter of that, just as much as it is a balance of resources. We are investing the money that London Transport says that it requires, and I am aiming to provide the resources. The hon. Gentleman mentioned 15 years. It will take two years to negotiate the contracts and I have already announced the money.

The right hon. Member for Sutton Coldfield(Sir N. Fowler) asked how much was being spent on consultancy fees. We have spent only about £100,000 on such fees, but, considering the sums of money that are involved, it is only right that we should take proper advice. Although it will not be the hundreds of millions of pounds that were involved in previous privatisations and the selling off of under-valued assets, we do not yet have an estimate of how much the contracts will involve. I shall have to discuss that with London Underground. If there are one, two or three companies that will make a difference to how much is involved. Having established the principles in the statement, we will now need to enter discussions with London Transport.

I do not know who the bidders will be or whether Railtrack will be one of them. We shall wait for the bids, examine them thoroughly and consider which will provide the best value.

As to whether we might consider parking charges, environmental taxes and so on, such matters are part of an integrated transport system. We shall publish a White Paper which will address those issues. We are dealing with the problems on the underground immediately and in an effective way which will be welcomed by Londoners.

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