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6.15 pm

Mr. Simon Hughes: We are offering the Government a way, which I hope they will accept, even at this late stage, of getting off the hook. The great benefit of the public interest company, as in the Chicago scheme, is that it combines democratic accountability--it is run by those who are elected--with having more stakeholders. More people in the community publicly and openly participate, in that their finances feed the system and make it run, but it is controlled by those who are elected to that function.

Mr. Davey: That is absolutely right. Ours is a democratic and transparent option, as well as being the most efficient. It is the best value for money for both passengers and taxpayers. That is why my hon. Friend the Member for Carshalton and Wallington has today written to the Public Accounts Committee asking it to investigate the accounting of the PPP.

The Government will get their way and railroad through their 10 new clauses and the PPP scheme, even though the provisions are ill thought through and we will probably need to make many changes by regulation or by other means. The Public Accounts Committee needs to investigate, because in years to come the scheme will be seen to be an atrocious use of taxpayers' money.

The PPP proposal is the Government's worst mistake since they came to power. It is a total shambles and will be proved to be so in years to come.

Ms Glenda Jackson: I wondered whether the Conservative and Liberal spokesmen had rehearsed their contributions. They have been joined at the hip. I will ensure that the people of London know precisely what approach both the Conservative party and the Liberal Democrats take to the overwhelmingly important issue for London of how we attract sustainable funding to improve our underground.

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We have heard not one word from the official Opposition or the Liberal Democrats on how they would do that. We have heard endless fantasy, misrepresentation and scaremongering. Both parties have clearly failed to familiarise themselves with our proposals on the public-private partnership. The absurdities that have emanated from the lips of Opposition Members have been scandalous.

When in power, the Conservatives proposed privatisation for the underground. The hon. Member for Uxbridge (Mr. Randall) was much concerned about what he considered a wilful waste of time by the Government over the public-private partnership. Is he aware thatthe Conservative Government's privatisation proposals would, by the estimate of the then Secretary of State for Transport, have taken at least four years to be fully implemented, even though they planned to reduce the underground by a third? The then Secretary of State informed the then Chancellor that, even post privatisation, they were looking for at least £190 million a year to be invested in the underground.

Mr. Ottaway: How do you know that?

Ms Jackson: We know that because the notes between the two of them were deliberately leaked. That was one of the reasons why the people of London expressed their total opposition to the Conservative party's proposal to privatise and why they have endorsed the Government's proposal for a public-private partnership.

The hon. Member for Kingston and Surbiton (Mr. Davey) repeated the Liberal Democrats' favourite call about bonds issues, which he says work extremely well in America. He forgets that those major American cities that were brought to bankruptcy and beyond not only by issuing bonds for financing capital investments, but by breaking out of any overarching control over public borrowing for major investment.

We have made it abundantly clear that we believe in true fiscal prudence--and certainly in this area.

Mr. Brake: Will the Minister give way?

Ms Jackson: No. I shall finish my point, if the hon. Gentleman will allow me to do so.

It is absurd to presuppose that a public-private partnership evinced by this Government will do anything other than produce the best possible value for the taxpayer and the people of London by ensuring adequate investment. There will be no massive hike in fares, as the scaremongers on the Conservative and Liberal Democrat Benches have said in an attempt to delude the House and the people of London. There will be the certainty of long-term, sustained investment, which will improve the underground and its services.

Mr. Brake: Will the Minister give way?

Ms Jackson: No.

The representation of the London underground given by the hon. Member for Uxbridge (Mr. Randall) was less than fair. He neglected to mention the programme of investment in which this Government have already engaged. We managed to find an additional £365 million for London underground when we came to office,

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which is improving escalators, tracks and signalling. The sum has enabled the underground to prioritise issues of access at core stations. Over time, such stations will become truly accessible to everybody in London.

If anyone genuinely believes that the deterioration that the hon. Member for Uxbridge described has come about over the past two years, they are clearly as misguided as Opposition Members. Such deterioration does not occur in the space of two years. It is the accumulation of more than a decade of neglect by the previous Administration. I sincerely hope that if Conservative and Liberal Democrat Members are not persuaded to withdraw the amendments, the House will reject them out of hand.

I think that it would now be appropriate to speak to Government new clauses 37 to 46. I was surprised by the astonishment expressed by the hon. Member for Kingston and Surbiton on these new clauses because I announced in Committee that the Government would be tabling amendments on Report to facilitate the establishment of an arbiter. I explained to the Committee that the mayor and PPP contractors would need to review future underground investment from time to time. The PPP contracts will therefore set out the procedures for periodic reviews, which will be held every seven and a half years or so.

The scaremongering of the hon. Member for Kingston and Surbiton, who says that such reviews would lead to excessive and overweening costs, is unfounded. It is abundantly clear that the need for an arbiter will arise only if there is any basic disagreement between the mayor and the contractor. We expect the reviews to be conducted in a spirit of partnership, but it is inevitable that two parties may not always be able to agree. Therefore, it is necessary to provide for an arbiter. The parties to the contract will be able to refer unresolved matters to the arbiter, who will give a direction that is binding on both of them--unless both agree not to give effect to it.

I sent Members who served on the Committee an explanatory note which gives a brief summary of the new clauses. Copies have also been placed in the Library. It may, however, help the House if I describe the general purpose and effect of the new clauses.

New clause 37 provides for the appointment of the arbiter by the Secretary of State. The Government's intention is that there should be one arbiter for all three PPP contracts. Subsection (6) is therefore particularly important, in that it requires the Secretary of State to consult such persons as he considers appropriate before making an appointment.

New clause 38 makes provision concerning the terms of appointment and dismissal of the arbiter. New clause 39 deals with the appointment of staff and their ability to discharge functions on behalf of the arbiter. New clause 40 sets out the arbiter's powers to give directions on matters referred to him by the parties to a PPP agreement. As I have mentioned, such directions are to be binding on the parties unless they both agree not to give effect to them.

New clause 41 gives the arbiter a power to give non-binding guidance to the parties where they jointly refer a matter to him. The purpose of the new clause is to encourage the parties to reach agreement between themselves, in the light of the arbiter's guidance, without relying on a binding direction.

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New clause 42 sets out the arbiter's duties when making directions or giving guidance. New clause 43 sets out further powers of the arbiter, including one to inspect relevant assets. New clause 44 empowers the arbiter to collect information that he considers relevant to the discharge of his functions. New clause 45 removes the liability of the arbiter and his staff for any acts or omissions, unless they can be shown to have been committed in bad faith. New clause 46 provides for the funding of the arbiter by the Secretary of State and for the recovery of costs from the parties concerned.

These are important new clauses. They are intended to ensure that future investment needs of the London underground can be reviewed in the knowledge that the parties may call on an independent third party to issue binding directions when there are unresolved differences. The new clauses give the arbiter the necessary powers and duties to carry out such a task in a way that should be reassuring both to the mayor and Transport for London, and to PPP contractors.

The new clauses are yet another example of the care and attention to detail that the Government have brought to bear not only on the PPP, but on the Bill. So far from the shallow and fantastic criticism that hon. Members have levelled at the Government to the effect that the PPP project is some shambles, the Government will ensure, via the PPP, adequate, sustainable, long-term funding so that when the underground is transferred to the mayor, it will be able to deliver the modern underground services that the people of London so desperately need.

We have been meticulous in assuring ourselves that the model on which we base the definition of PPP contracts will deliver the best possible value to the taxpayer and, of course, to the underground itself. We have made it abundantly clear that, unlike the previous Administration, we will not be driven by empty ideology, or labour under the burden of an artificially imposed time scale. We will not be tinkering with Liberal Democrat proposals on financing the underground. I have serious difficulty in believing that the Liberal Democrat proposals could adequately fund a toy train over a long time, let alone cope with the complexities of the London underground.

It is this Government, with their imaginative and innovative approach not only to local government but to genuine partnership, who will deliver for London the democratic voice that it has so long desired and the means of ensuring that the underground will be properly and adequately funded in the long term. I commend the new clauses to the House.

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