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London Underground

[Relevant documents: The Seventh Report from the Environment, Transport and Regional Affairs Committee, Session 1997-98, on London Underground (HC 715-I) and the Government's Response thereto (CM 4093).]

Mr. Deputy Speaker (Sir Alan Haselhurst): We now come to the debate on the London Underground. The Speaker has selected the amendment in the name of the Prime Minister.

7.15 pm

Mr. Richard Ottaway (Croydon, South): I beg to move,

That this House condemns the Government's delay in the financial restructuring of London Underground; calls on it to put forward plans, as soon as possible, for the private finance and operation of the Underground; condemns its handling of the completion of the Jubilee Line; and abhors the abolition of financial support from 2000 with no alternative sources of funding in place.

There is widespread and growing concern that London Underground is failing--[Interruption.]

Mr. Deputy Speaker: Order. Will hon. Members who are not staying for the debate please conduct conversations outside the Chamber?

Mr. Ottaway: There is widespread and growing concern that London Underground is failing to provide the expected quality of service. Despite substantial investment in the core network in the 1980s and 1990s, delays and service interruptions are routinely reported on news bulletins. Complaints regularly feature in newspaper letter columns, and public displays of customer anger and frustration are becoming more frequent.

Under the headline, "The Tube service no one in power cares about", the columnist Simon Jenkins recently wrote in the Evening Standard that London has two tribes: those who travel on the tube and those who do not. He described the former as

"a tribe of moles, bruised, pasty-faced and lost to the call of the clock."

He continued:

"For millions of working Londoners, the Tube is their only experience of Third World squalor. They may not visit London's prisons, mental hospitals or sweat-shops. They may not frequent the ghettos of Hoxton or the tenements of Walworth. They live in tidy homes, work in neat offices and eat in clean restaurants. But they use the Tube. It is the nastiest thing they do."

Notwithstanding the writer's licence to produce a few artistic flourishes, there is a grain of serious truth in those remarks.

Mr. Mike Gapes (Ilford, South): Will the hon. Gentleman confirm that such an article could have been written at any time in the past 18 or 19 years under the Conservative Government?

Mr. Ottaway: Some would say that it could have been written at any time in the past 50 years, but it happens to have been written 18 months into this Government and it had not been written before.

In his statements on the underground last year, the Deputy Prime Minister ignored the level of investmentof the past decade, which dwarfs anything that the

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Government are spending today. Instead, he apportioned blame for the current state of affairs on the former Greater London council and the previous Government. It must be said that one can never invest enough in the underground, as the Minister of Transport is only too aware, but, whatever the merits or otherwise of the Deputy Prime Minister's statement and despite the lack of investment by Governments in the 1960s and 1970s, it is clear that this Government must now shoulder responsibility for the present situation and, in particular, for their failure to provide any hope of improvement in the foreseeable future.

The delay in any policy development is utterly regrettable. After 18 years of Labour preparing its policy in opposition and as we approached the last general election, the then shadow transport spokesman, the right hon. Member for Oxford, East (Mr. Smith), urged a future Labour Government to get moving straight away with a public-private partnership. Admittedly, that was the same speech in which he said that he would not privatise air traffic control, but he gave the impression that Labour was raring to go with its plans for London Underground.

During the Opposition day debate in June 1997--after the election--the Government moved an amendment applauding their

"swift action on options for public-private partnership to improve the Underground".

The then Minister of Transport kept up a brisk pace, saying that he would not be paying his financial advisers much because,

"we shall be using them for only a few months".--[Official Report, 25 June 1997; Vol. 296, c. 866-9.]

I am sure that he now regrets those words.

In January 1998 the tone changed. There was no talk of "swift action", just a great deal of self-congratulation; but our hopes were raised in March last year when the Deputy Prime Minister announced that he was going to make a statement on London Underground. What did he say after 10 months' of brainstorming on a new policy? Wait for it, Mr. Deputy Speaker--he said that he was going ahead with the public-private partnership for London Underground, and that is all he said. However, our worst fears were realised when he said that it would take him at least until the new Greater London authority was launched in May 2000 to put his plan in place. That is three years after the general election--but it did not stop there.

During the Second Reading of the Greater London Authority Bill, the Deputy Prime Minister caught us all on the hop--he said that he was not going to be rushed. Well, that is one pledge that he has kept. Supported by inspired leaks, he implied that it might be towards the latter part of 2000 before any public-private partnership was in place. Here we go--this is the brave new world for London Underground: not a single step taken by the private sector for three and a half years after Labour came to office, and when anything happens, it will be only a few engineers turning up in Ruislip or Cockfosters. By the next general election, there will be no tangible improvement to the underground.

It is also becoming increasingly apparent that there is a black hole in London Underground's finances. The Minister needs to tackle three fundamental issues. The

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first is the financial situation in April 2000. The Government's comprehensive spending review makes it clear that all Government grant to London Underground ceases in April 2000. That is just 14 months away, and the House and London Underground are entitled to know what the Government's funding plans are from then on.

The second issue that the Minister has to tackle is the grave doubts about London Underground's ability to be self-financing. In its evidence to the Select Committee, London Underground said that it would need an operating surplus of at least £400 million a year to meet investment requirements and to stop the backlog in investment getting any larger. Based on a surplus last year of £265 million, it said that it believed it could get its surplus up to the required £400 million in three ways: a 13 per cent. volume increase in passengers, a 13 per cent. reduction in unit costs, and annual fare increases of 1 per cent. in real terms. It defies belief for the Government to argue that that is achievable.

A 13 per cent. volume increase in passengers means another 100 million passengers on the tube each year. At the same time, no extra capacity is planned. What does the Minister think the reaction to that would have been in Baker Street, Bond Street and Green Park stations, where last week, passengers were jammed into trains like sardines? At peak times, the tube is already fullto capacity--the hon. Member for Brent, East (Mr. Livingstone) knows that because he was stuck in a tube at the time.

Does the Minister really think that a 13 per cent. reduction in unit costs is achievable, when the Government are having to bribe construction workers on the Jubilee line with bonuses just to do the job that they have been contracted to do? The one thing that we know the Government are capable of doing is putting up fares--they have just increased fares by twice the rate of inflation.

The Minister of Transport (Dr. John Reid): Is the hon. Gentleman against bonuses in principle? If so, why, during the 18 years that the Tories were in government, did he never once complain when huge bonuses were paid in the City, especially in the privatised utilities? Why is it all right for the fat cats to get bonuses, but no one else?

Mr. Ottaway: If that is all that the right hon. Gentleman can come up with, this is going to be a pretty rum debate. The truth of the matter is that the electricians on the Jubilee line have a contract, but they have been holding the Minister to ransom and he has given in to their demands because they are the union paymasters.

As I was saying, the one thing that the Government have done is to put fares up. Indeed, they have just put them up by twice the level of inflation. It is interesting to compare that with the situation on the railways. On the underground, there are fare increases and break-even investment. On the privatised railways, there are fare cuts and a level of investment that the underground would die for.

The third problem that the Minister has to address is whether London Underground can become self-financing. It is its inability to be self-financing that is undermining the Minister's plans for the public-private partnership.

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