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Ms Jackson: I have tried to shield the hon. Gentleman from the painful truth, but it is highly unlikely that anyone other than a Labour candidate will be elected as mayor for London. It is impossible to conceive of any Labour candidate not endorsing that imaginative and productive policy.
Mr. Ottaway: If a Minister ducks a question three times, it is clear that she does not know the answer. Frankly, she should not come here unless she knows the answers. She should brief herself better before she comes here. It is almost as bad as yesterday, when she said that a passenger in a taxi could order a taxi driver to put out his cigarette. There seems to be no evidence for that; she has not produced any. She just makes statements off the top of her head without thinking about it and without any background, support or information whatever.
Mr. Eric Forth (Bromley and Chislehurst): Does my hon. Friend conclude that what the Minister has now confessed publicly is that the form of the Bill that the Government are offering the House will not cater for some of the most likely outcomes of the election?
Does he agree that that puts London in a most dangerous and unpredictable position, and means that we cannot now sensibly deal with the future of the underground?
Mr. Ottaway: My right hon. Friend is right. We have absolutely no idea where the Government are going. London underground is not a tin-pot organisation; it is a substantial part of London's economy. The Government have no vision, no idea, and no future for London underground which is coherent in any sense.
In our judgment, the mayor should have the last word. What the Government are proposing, with their interim transitional plans, is to negotiate a PPP, and then to dump it on to the people of London and walk away from it. As I have said, it is a £7 billion millstone hanging from the neck of the people of London.
There is a fourth way. The Government should consider pursuing a long-term leasing arrangement for London underground as an integrated operation with one private sector firm. There is a precedent for that: Eurotunnel has a lease on the channel tunnel until 2086. That was not negotiated by a Conservative Government; it was agreed by the present Government in December 1997. It is a model that would work admirably on the underground, with the authority as the landlord imposing terms in the lease, and with a regulator to keep an eye on performance. That is one of the many ways in which the potential of the private sector could be fully realised for the benefit of London underground. Best of all, that solution would impose no financial burdens on the new authority, it would satisfy the Treasury and would benefit London as a whole.
Mr. Harry Cohen (Leyton and Wanstead):
The hon. Member for Croydon, South (Mr. Ottaway) started by talking about ideology and then exhibited a great deal of it. He wants to scrap the Government's proposals, which are really about countering the chronic under-investment in London underground during the Tory years. His solution in the amendment is wholesale privatisation, which simply negates the public service nature of the London underground. Only profit would matter. A few choice lines would run and the rest would be scrapped, regardless of public interest. The system would be unreliable and decline. Privatisation has already been thoroughly rejected by the London public, especially the travelling public.
Only last week, the right hon. Member for Hitchin and Harpenden (Mr. Lilley) said that the Conservative party wanted to change the public perspective of it as being about privatisation, particularly in terms of essential public services. Like that famous lager, he has not reached all parts, certainly among the shadow Transport spokesmen. At their first test, the London underground, their solution is wholesale privatisation. The hon. Member for Croydon, South should speak to his right hon. Friend on that point.
I want to take this opportunity to read into the record some serious points made by the Capital Transport Campaign, to which I hope the Minister will respond. Louise Hudson, a campaigner and researcher for that good organisation, referring to the Greater London Authority Bill and the London underground, said:
I welcome the Minister's statement that the Government would not let London underground fall into a black hole. I should like the Minister, if not today at some other point, to expand on that and give greater assurances.
Reference has been made to the article in The Guardian today which spoke of Railtrack possibly putting in a bid for London underground. The same article states:
I asked the Minister of Transport about the cost of the Jubilee line extension. He replied that the new estimate for the final cost of the project was about £3.2 billion. Set against that is £2 billion ring-fenced by the Government and directly funded by Government grant. In addition, there are some private contributions, but they are quite small--£135 million already paid by the Canary wharf developers and £7.5 million from British Gas, and another £400 million is to be spread over 25 years. That is a small sum. The final cost of the Jubilee line will be about £3.2 billion and there will be a Government grant of £2 billion. If one adds another £0.2 billion from private amounts, there is still £1 billion to come from the DETR's budget.
The Minister of Transport told me that the Government were providing an extra £365 million for investment in the underground system, which means that a total of about £1 billion will be in the core network in 1998-99 and 1999-2000. That is for two years. As the Jubilee line extension is not being funded properly, the gap is £1 billion, and we are seeing the possibility of no Government grant subsidy from 2000 onwards. That is a serious problem for London Transport.
"Capital Transport Campaign has become increasingly concerned during the past few months that the current proposals for the funding of London Underground will not meet the funding requirements of London's most heavily used public transport service. In addition, the proposals have not taken into account the findings of the Environment, Transport and Regional Affairs Committee's investigation into London Underground published in July 1998.
I am sorry to have had to read that submission into the record, but those are important points that need to be addressed. I would be interested in the Minister's response. As the letter says, the Select Committee on the Environment, Transport and Regional Affairs said that the mayor could come under pressure to combine a cut in services with a hike in fares should there be a gap between income and fares, and payments to contractors. It called for fare increases to be capped and for the Government to clarify whether, in the event of a funding gap, they would make money available.
The Government grant to London Underground ceases in April 2000. The proposal is that the public-private partnership will provide over £7 billion over 15 years. That is less than the Underground is getting now. In addition there is the question of what will happen when the Government grant ceases. This will occur prior to the securing of extra revenue through the PPP.
The deal for the Underground will be struck between the Government and the private sector. This will happen prior to the establishment of the Greater London Authority. Fifty one per cent of respondents to a recent London First business survey said that the Underground was the most important transport issue for the GLA. With this in mind the Mayor is likely to be judged on whether he succeeds in delivering an improved Underground service. Capital Transport Campaign is concerned that under present plans the Mayor will be scapegoated. The Mayoral candidates will have no idea of the nature of the contracts being negotiated. However, the Greater London Authority will have to pay back the private contractors their £7 billion, plus interest. The only way to raise this money is:
1. Through raising fares
2. Through road pricing
Since most people who travel to work in central London travel by public transport, often those using the car do so out of necessity. They will ultimately pay for the public-private partnership along with the fare paying passenger who has already endured above inflation fare increases for a number of years.
With all this in mind we believe that if the PPP does go ahead then the Mayor and Transport for London should have access to Government funds. This will enable them to secure revenue for the Underground when the Government grant ceases or if the PPP is likely to make unnecessary demands on the Mayor's revenue stream. If extra revenue is not forthcoming then it is unlikely that enough money will be available for projects such as the step free access programme for the Underground. High road charges, above inflation fare increases and an inaccessible public transport system will ultimately lead to social exclusion."
"Mr. Prescott had originally planned to let the private sector take over the Underground's track and signalling systems by next April, and no subsidy was set for 2000-2001."
The article also alleges that the Secretary of State for the Environment, Transport and the Regions
"has been told by the Chancellor . . . that next year's £350 million maintenance costs for the Underground will have to come out of the department of transport's budget."
The financial situation is of concern to Londoners.
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