Previous SectionIndexHome Page

Mr. Harry Cohen (Leyton and Wanstead): My right hon. Friend is making an impressive speech, as he always does. May I take him back to the issue of current investment levels? I heard what he said about the £1 billion, but my concern is that Treasury has put a cap on the amount that it is prepared to put into the Jubilee line construction and that, as the costs soar above that, London Underground will have to find those additional costs from the amount for running the current network. Is there not a case for the Government to reconsider that point and to ensure that Jubilee line costs do not fall on existing passengers in the rest of the network?

Dr. Reid: The costs of the Jubilee line are kept under constant review by Ministers. They are published from time to time, normally quarterly. Our judgment has to be exercised over that matter and we will continue to scrutinise it, but I assure my hon. Friend that the allocation of funds to London Underground is not being affected detrimentally. We have given some £1 billion over the figure that would have been injected by the Conservative party. If I remember correctly as regards the Jubilee line, at least six delays were announced by the previous Government before we came to power. About £500 million was added to the Jubilee line, so none of us should underestimate the difficulties of a massive project such as that line.

27 Jan 1999 : Column 414

I take only one aspect of it--Westminster station. That is the largest man-made hole in Europe. A third line is being driven between two existing lines on the banks of the Thames, and under and next to Big Ben and the House of Commons. The potential for disaster is obvious. Many people might think that the prospect of the House of Commons disappearing into the largest hole in Europe is not entirely a disaster for the nation, but, seriously, that shows some of the problems of the Jubilee line, with which I shall now deal--I am glad that my hon. Friend mentioned it.

I will not belittle the problems that have faced the project and the challenges that remain. There have been delays. Most significantly, in late 1994 and early 1995, major tunnelling work in the project came to a halt for some months. Those related to safety fears over a similar tunnelling method at Heathrow. There was a significant delay. Most people would agree that halting the tunnelling work was the prudent and cautious thing to do because of the safety consideration, but it caused delays and higher costs. In March 1997, before the present Government came to power, London Transport announced that it was not able to meet the original planned opening date of March 1998.

That is the situation that we inherited, but the Government are determined that the new line will open in time for the millennium. In spring last year, we encouraged London Transport to review the project management's arrangements. Bechtel was appointed project manager to drive through the commissioning stage and to help to ensure that the extension was completed in time.

I assure Opposition Members and others that Ministers are sometimes in daily, and always in weekly, contact with London Underground and with Bechtel. My hon. Friend the Minister for Transport in London and I both take a keen interest in the project, not just because it is a matter of transport for London and a state-of-the-art, modern and complex underground line of which we should all be proud, but because it is an element of national pride that, at the millennium, the millennium dome, the village and the project should be completed.

The hon. Member for Croydon, South and his friends should be careful on that one because I am sure that Londoners want the project to succeed. The Government want the project to succeed. The nation wants the Jubilee line to succeed. It appears that only one group of people wishes the Jubilee line to fail: Tory Members. As has been said, the Tories should be careful about undermining the efforts of the rest of us to have this modern, state-of-the-art and prestigious symbol of London finished this year. The Government are determined to do it. I hope that what is happening on the Conservative Benches is not becoming wish fulfilment as they run down and undermine the line and hope that it will fail.

Mrs. Eleanor Laing (Epping Forest): How can the hon. Gentleman possibly say that Conservative Members want the Jubilee line to fail when it was our Government who started the work and put the money there in the first place? Of course we want it to succeed.

Dr. Reid: I hope that the hon. Lady is the exception that proves the rule. I am sure that other hon. Members and those who read this debate in the morning or hear

27 Jan 1999 : Column 415

it on the media will have cause to consider whether the Conservative party would glory in something that the rest of the country would regard as a disaster--the non-completion of the Jubilee line.

I would not want the House to underestimate the massive complexity of the task on the Jubilee line or what has been achieved so far. I shall tell the House what has been achieved.

Mr. Bernard Jenkin (North Essex): Will the hon. Gentleman give way?

Dr. Reid: In a moment.

On the Jubilee line, all the tunnelling is complete, all the track has been laid and all the trains have been delivered. The new stations are structurally complete and, as we speak, trains are being tested under signal control on the line between Stratford and north Greenwich. We are now into the crucial commissioning stage. As I have said, we do not underestimate the task, but we assert the simple fact that, when the Government inherited this project, it needed remedial action. The Government have provided that remedial action.

I have been honest with the House tonight--the Minister for Transport in London has been equally honest on previous occasions--in facing up to the formidable challenge of overcoming our inheritance from the previous Government. Sterling efforts are being made to give this great capital the underground system that it deserves. As a Scotsman, I am proud to be part of that effort because this is the capital city of the United Kingdom, not just of England.

The staff at London Transport are soldiering on. They are coping with the dilapidated infrastructure bequeathed to them. Despite that inheritance, during the last financial year, passenger journeys on London Underground reached record levels. Over 800 million passenger journeys were made last year and, this year, we expect to see a record 860 million journeys.

The Government want those journeys to be something to look forward to, not something to be dreaded. We want passengers to travel in comfort and to have a reliable service. As I have said, the Tory motion does not even mention the word "passenger". I believe that that says a great deal about their attitude to tonight's debate.

It is imperative that we modernise our essential tube system and I am glad to say that, by strengthening the management, bringing in new projects, new technology and new trains and putting in new resources, we have begun to make a successful start on tackling the underground's problems. However, I am the first to acknowledge that we have a long way to go. I hope that we will soon see our proposals for the public-private partnership implemented, but we would rather have them right than have them rushed. When we have them, we can make a real start on improving the infrastructure and, at long last, we will be able to give the citizens of our capital--our premier city--not only the capital investment but the premier performance on the underground that they surely deserve as we enter the new millennium.

27 Jan 1999 : Column 416

8.24 pm

Mr. Tom Brake (Carshalton and Wallington): I have a sense of deja vu tonight as it is exactly a year since the last Tory Opposition day debate on the tube. This is another opportunity to remind Londoners that the Conservative party has primary responsibility for the chaos on the tube today. It was the Tories who organised a fire sale of the tube. They wanted a miserable £800 million for it at a time when it had £13 billion worth of assets. Of course, they hastily dropped that plan when it was leaked to the newspapers. It is the Tories who have left a backlog of repairs--the equivalent of £170 per Londoner.

That is not a partisan view; it is the view of the business community. London First said that

The Confederation of British Industry said that

    "there has been a serious under-investment for a long time".

This is an opportunity to consider the Jubilee line extension project--it has been discussed at length. The Tories condemn the Government for their handling of the completion of the line, but what about their record? A number of hon. Members have referred to that record tonight. In October 1993, the original cost was expected to be £1.9 billion. That had increased to £2.76 billion by 1997. In other words, it was 45 per cent. over budget.

When the Tories claim that the Government's inaction jeopardises reliability on the underground, they are right. Their Government's inaction over nearly two decades has left the underground with record levels of breakdowns and under-investment.

Before Labour Members get too excited about what I have been saying, I must now say that, for the sake of Londoners, I wish that, since the election of the new Government, it had been "all change". I am afraid that under-investment in the tube has not changed. In fact, the Labour Government will have invested, on average, 11 per cent. less over the period 1997-2000--the latter being the last year for which figures are available--than the Tory Government spent on average after the 1992 general election.

I will give the Tories credit for the fact that, between 1992 and 1997, they spent more on investment on the underground than the present Labour Government will have spent. In case anyone wants to challenge them, I can tell the House that I obtained the figures today from London Transport's finance director. The figure is about £494 million for the Tory Government and £440 million for the Labour Government.

One thing has changed and that is the prevailing dogma. The Minister mentioned the Conservative ideological antipathy towards public services, but that has been replaced with Labour's obsession with public-private partnerships--the Government's alternative to wholesale privatisation. In July 1997, the Government commissioned a report into the future of the tube from Price Waterhouse. It looked at the various financing options for the tube and would, therefore, have looked at the public-private partnership. The findings of Price Waterhouse have not been made public, in spite of a

27 Jan 1999 : Column 417

request from the Environment, Transport and Regional Affairs Transport Sub-Committee in its seventh report on London Underground, which recommended that

    "the Report from PW, which evaluated the possible financing options for modernising the Underground and the advice submitted by London Transport, should be made public."

Why has that report not been made public? Accordingto the Government's response to the Transport Sub-Committee's report it is because it is

    "not in the best interests of the taxpayers and passengers."

Is that really the case? Many would argue the exact opposite. It is in the taxpayers' interest that the information be made public immediately. Only then will we be able to judge whether the public-private partnership proposal is best value.

If the Minister answers just one of the points I have raised tonight, I should like him to say at what point the Government will accept that PPP is or is not best value. If the Minister accepts in a year or two that PPP is not best value, four or five years will have elapsed without any further progress on the tube. I hope that the Minister will respond to that point.

Many other people feel that the information should be in the public domain. For example, I suspect that Peter Ford, the old chairman of London Transport, would have liked it in the public domain. He told the Transport Sub-Committee that the Government's method of breaking the infrastructure into between one and three privately managed concessions would cost £1 billion to £3 billion more than retaining a single, publicly owned organisation.

That view is supported by House of Commons Library research, which estimates an extra capital cost of £70 million for every percentage point that the cost of private capital exceeds the cost of public capital. It is easy to arrive at Peter Ford's figure of £1 billion. If we assume that private money costs about 10 per cent. more than public capital--that is not an unreasonable figure; I have information from the National Audit Office on the extra costs of the Skye bridge project--we arrive at an extra cost of £700 million per year.

That figure is valid if all the money is borrowed up front and is spent on day one, but that will not happen--it is impossible to spend £7 billion on day one. If the £7 billion that the Government have referred to is for the duration of the contract, the additional cost of borrowing the money in the private sector will be about £1 billion, according to Library figures.

The Government's response to the Transport Sub- Committee report suggests that a substantial sum will be spent up front:

not over the duration of the contract, but quickly--

    "to eliminate the backlog and modernise the Underground's infrastructure".

It is fair to assume that a high proportion of that £7 billion will be spent in the early stages of the contract.

The Minister must tell us how much extra this will cost. Will it cost £1 billion extra over the duration of the contract, with the spending spread evenly, or will it be £700 million extra, with the £7 billion spent early in the contract? Where does the true figure lie? Londoners

27 Jan 1999 : Column 418

would like to know, because that would help them to establish whether the public-private partnership proposal is best value.

The Government's blind faith in public-private partnership and their belief that it is a panacea that will fill all financial gaps is leading towards a financial solution that will cost the taxpayer and Londoners dear--if the PPP proceeds. The hon. Member for Croydon, South (Mr. Ottaway) has referred to the story, in Construction News, that half the contractors bidding for the PPP do not believe that it will proceed.

If that were not enough bad news, there are also problems with the Government's timing of the public-private partnership proposals. London's mayor and assembly will be elected in May 2000. They will have had no say over the London Underground contract, so they will be able to hide behind a "Not me, guv" attitude on tube cancellations, delays and overcrowding. The Minister is naive if he thinks that they will not respond like that. When overcrowding continues at current levels--no new lines are going to be built as a result of the PPP proposals--the mayor and assembly will deny all responsibility for the deal if their signatures are not at the bottom of the document.

The public-private partnership proposal is either an expensive or a very expensive means of financing improvements to the underground. It may never see the light of day and it will enable the mayor to pass the buck when things go wrong. The hon. Member for Croydon, South has already quoted from the Transport Sub-Committee's report, but it is worth reminding Labour Members that the Committee said of the PPP proposals:

In the meantime, the backlog of repairs grows.

Next Section

IndexHome Page