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Ms Glenda Jackson: The public-private partnership.
Mr. Jenkin: It is not surprising that I am confused. The game was given away when the Minister of Transport gave evidence to the Transport Sub-Committee of the Environment, Transport and the Regions Select Committee. Instead of referring to the public-private partnership of the National Air Traffic Services, he inadvertently referred to privatisation, which is the one word that he was not meant to say.
The public-private partnership is part of the new Labour third way and is an extraordinary mixture of old and new Labour. The sub-committee described the Government's proposals for the tube as "rather a convoluted compromise". That has led to dither and delay and left the Secretary of State with no policy at all.
The order of events has been curious during the run-up to the Greater London authority, particularly as regards congestion charging and transport policy. Usually, Governments produce a consultation paper, then a White Paper and then a Bill, before the funding is put in place if that has not been done already. However, the third way--that mixture of old and new Labour--meant that we began with manifesto commitments that bore little relation to reality. Then there was a year's delay, and then the funding was rather unfairly settled when the Secretary of State lost his battle in the comprehensive spending review. The tube subsidy is to be cut by 2000, as the Secretary of State confirmed today. The revenue subsidy will be phased out and new revenues of up to £1 billion a year from non-residential parking charges, congestion charges and road tolls are assumed by 2005.
After the funding came the transport White Paper in July. Then there was the U-turn on the tube, and then came the Greater London Authority Bill, which contains powers for congestion charging and non-residential parking charges. Finally, the Government produced a consultation paper to prove that they had not made up their minds on how the money should be collected, who should pay, who should be exempt and how much people should pay. All that is yet to be decided, and the most important city in the United Kingdom is to be the guinea pig for an experiment.
The financing of transport in London--particularly that of the tube--is in a state of chaos. The Secretary of State did not help to resolve the confusion when he spoke this afternoon. He first admitted that it was assumed that the public-private partnership would replace tube funding by 2000. How can that be? How can capital raised from the private sector replace a revenue subsidy provided by the public sector? It is a complete mystery.
The interesting word in the Secretary of State's speech was "assumed". He spoke in the past tense. He obviously no longer makes that assumption. He was at great pains to emphasise that there was no deadline for the public-private partnership of the tube. I believe that he was conducting a negotiation with someone not in the House, and that person must, of course, be the Treasury. By agreeing to the abolition of the tube subsidy by 2000, the Treasury has set a deadline. What will the Secretary of State do to replace the funding? Is the tube really expected to become self-financing in 2000? Perhaps the Minister can tell us.
When the Secretary of State said that there was no deadline, he meant that the Treasury had already set one. The Treasury has him over a barrel. Once again, the Chancellor has stitched up the Secretary of State. That explains the Government U-turn on the transfer of the tube to the Greater London authority. The Financial Times was briefed by an un-named Minister as follows:
All that explains the urgency of using London as the test bed for the congestion charging experiment, which is the Secretary of State's fall-back position. It is the only option that the Chancellor has left the Secretary of State. The new revenues are to replace cuts in subsidy on the tube.
Mr. Jenkin:
If that is wrong, I look forward to hearing the Minister's explanation. The whole question of hypothecation of revenues remains open.
Mr. Wilkinson:
My hon. Friend is making a most important point. What the Government are doing is central to their approach and typical of new Labour. They propose to clobber the motorist and the employer with their new charges rather than making London's transport the fantastic service that it could have been with proper privatisation that would have given people an incentive to use it. We are getting the worst of both worlds.
Mr. Jenkin:
My hon. Friend is right. He was also right to point out that parking charges will place an extra burden on employers. Those are extra taxes, which the Confederation of British Industry has roundly condemned. Again, it is new Labour: old Labour. New Labour is meant to be friends with the CBI, but old Labour, which raises taxes, is rapidly falling out with that organisation.
That raises the question of hypothecation, the constant claim of the Secretary of State since he produced the White Paper in the summer, but it is completely at odds with parts of the document "Breaking the Logjam", which was produced earlier this week, and with parts of the legislation.
The Bill is clear. We have already discussed schedules 13 and 14. It includes a provision
The Bill does not conform to what the Government are saying. If they are serious about their pledge, let them put it in the legislation. Of course, they cannot do so because they have lost the argument with the Treasury. They protest and cite the 10-year pledge. That pledge, which is in "Breaking the Logjam", reads:
Interestingly, paragraph 3.16 of the document, gives the value added tax implications. We read:
Mr. Gapes:
Will the hon. Gentleman confirm that it was a Conservative Government who made it possible for the European Commission to talk about VAT in that way? Before the Conservatives took that action, it would not have been possible.
Mr. Deputy Speaker:
Order. We are not debating that subject. We should return to London.
Mr. Jenkin:
I shall carry on with my speech, Mr. Deputy Speaker.
Parking levies and congestion charges are just another tax. Tube financing is in a mess. There is no certainty or time scale, there are no deadlines and the money will run out in 2000, so the new taxes are the only option. If I am wrong, perhaps the Minister will guarantee at the Dispatch Box that none of the new revenues will be used to finance the tube, which has always been the responsibility of central Government. I shall give way to the hon. Lady if she would like to give that guarantee. No, it appears she will not take up that offer.
That is why the new taxes are destined to be unpopular. In Oslo--
Ms Buck:
I am slightly confused. The hon. Gentleman makes a point about the new taxes but, as I said earlier,
Mr. Jenkin:
I am not responsible for Westminster council. Given the way in which the Government have ripped the grant away from that council, totally unjustifiably, it is understandable that it should want to raise resources elsewhere. The hon. Lady should be under no illusions: it is the loot that the council wants to get its hands on. That is its main priority.
The new taxes are destined to be unpopular. In Oslo, road charges were introduced with a clear and visible link, so that those paying them could see the benefits that they were gaining. When Austria attempted to introduce road pricing without such a clear link, a successful campaign called "Road pricing? Nein danke!" stopped the proposals in their tracks.
The real question is how much will be paid in London. The Leicester experiment suggested that motorists would have to pay £6 a day to be sufficiently deterred in order to get out of their cars and use public transport. In London, the figure would have to be higher because the distances are greater; everything is on a greater scale. That underlines that this is just another tax.
It adds insult to those who have to travel by car that fuel duties have been increased by £9 billion on top of Conservative plans over the lifetime of this Parliament. The motorist already pays £31 billion in motoring taxation, and hardly one fifth is spent on transport. That proportion is set to fall. Now the Government produce yet more taxes and burdens on the motorist. This would truly be a poll tax on wheels--but to call it that is unfair, because at least the primary legislation gave the poor an exemption from the poll tax. The increased costs of motoring hit the most vulnerable driver groups the hardest. Those are also the fastest growing driver groups: low-paid workers; women with second cars; disabled people; and pensioners, for whom a car is one of the last luxuries that they want to have to give up.
By tackling urban congestion, the Government are tackling the wrong target. To reduce traffic growth, they would need to tackle inter-urban congestion. Inner urban traffic is hardly growing and suburban traffic is growing a bit. The main growth is inter-urban traffic, from where the main increase in pollution and congestion will come. The proposals hardly bother with that.
The problem with London traffic, especially in central London, is that it has long been at saturation point. To a certain extent, congestion is self-regulating. Charges can change its nature--there would be fewer Metros and Citroen 2CVs for the convenience of people who can pay with impunity, and more Jaguars and Rolls-Royces--but it is most likely that there would still be saturation. That may mean that congestion in Hampstead high street remains much the same.
The charges are simply new taxes. They have nothing to do with congestion or the environment and everything to do with politicians wanting to get their hands on the loot. In the Secretary of State's case, it is about rescuing him from his own incompetence in his negotiations on the tube and with the Treasury in the public spending round.
The solution to the problem of the tube is to privatise it, which would raise serious capital. Instead, the Government are going in for the most desperate sort of
briefing. The Sunday Telegraph suggested that the Secretary of State is planning a £5 billion integration of the tube and the railways. What an irony it would be if the most hotly disputed privatisation of all, rail privatisation, ended up with the newly privatised Railtrack riding to the rescue of a Government who oppose privatisation in principle and continue to oppose it for London Underground.
"The chances are that candidates would campaign on a platform of blocking the sale. That would have been a disaster."
Note the word "sale". It is not the correct word. It should have been "public-private partnership".
"requiring a charging authority to pay a prescribed proportion of the net proceeds . . . to the Secretary of State",
and any sums received by the Secretary of State will be paid into the Consolidated Fund.
"The Government therefore proposes that local authorities which bring forward pilot road user charging schemes should be able to retain 100 per cent. of the net revenue generated for at least 10 years".
The operative word there is "should". The Treasury prevented the Government from putting in "will" because it has not agreed. The explanation is given a little further on in the document:
"This is because there could be poor value for money if low priority transport projects were undertaken simply because of restrictions on the use of revenues."
There we hear the silky voice of the Treasury mandarins, who are determined to ensure that the principle of hypothecation is a buck that they do not pass.
"Action is currently being taken by the European Commission against the UK . . . for not levying VAT at the standard rate . . . on road and bridge tolls."
We read this in a document produced by a Government who deny that tax harmonisation is on the agenda of the European Union. It also underlines the fact that, when they lose that case--as they probably will--a large proportion of the revenues from congestion tolls, charges and parking taxes will go to the Treasury, at least in the form of VAT. If that is to be denied, why do they not put that provision in the Bill?
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