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Mrs. Eleanor Laing (Epping Forest): My constituents will be disappointed that the right hon. Gentleman has made yet another statement on the future of the underground without announcing that there is to be full privatisation. This afternoon, he has said yet again that the Government do not believe in privatisation. Perhaps he does not realise that he is being rather--you might not allow me to use the word "hypocritical" Madam Speaker. I see that you will not, so I shall say instead that the right hon. Gentleman is being inconsistent when he says that he does not believe in privatisation. Does he not realise that Railtrack, on which the proposals he has announced this afternoon depend, would not even exist had it not been for the successful privatisation of British Rail carried out by the Conservative Government?

Mr. Prescott: Perhaps I could help the hon. Lady with her difficulty with descriptions. I understand that she was an adviser to the right hon. Member for South Norfolk (Mr. MacGregor) when he was the Secretary of State for Transport in the previous Parliament. [Hon. Members: "Distinguished".] He may have been distinguished, but he did not have too many facts about rail privatisation. The stupid ideas then proposed cost the taxpayer millions of pounds, and I am having to deal with the problems that they caused.

It is a bit much for the hon. Lady--who entered Parliament at the last election--to tell us what should be done to improve rail transport. I do not know what she said during the election campaign, but everybody else thought that the privatised railway lacked investment and

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was failing, as was Railtrack. We are seeking to change that situation, and hon. Members will be able to measure our success by the next election.

Mr. John Cryer (Hornchurch): I welcome increased investment in the tube, which is badly needed. What kind of return on that investment does my right hon. Friend envisage the private sector will look for over 15 years?

Mr. Prescott: It will depend on the bids made by different companies. It is argued that, because of its circumstances, Railtrack can borrow much more cheaply than other companies. That is one difference between the different bids and it is one of the reasons why I am glad that Railtrack has agreed not to bid for the deep lines. If it had bid, there would have been a deficit of interest.

Mr. Jenkin: Who wants it?

Mr. Prescott: The signs are clear and stories in today's papers suggest that companies will be pleased to bid. However, I must wait and see. I have announced the pre-qualifying period and, as to the rates of return--which vary between companies--I will wait and see what terms I am offered. Competition will have an effect on those rates, and I will take that into account.

Mr. Edward Davey (Kingston and Surbiton): In his answer to the hon. Member for Leyton and Wanstead (Mr. Cohen), the right hon. Gentlemen said that he could guarantee investment in London Underground from April next year. Has he talked to the Chancellor of the Exchequer about that? If so, what sorts of sums will come from the public purse to ensure that that investment continues?

Mr. Prescott: The first sum from the public purse was the £360 million--

Mr. Davey: Answer the question.

Mr. Prescott: Yes, I am in touch with the Chancellor. We have already announced the investment over the three-year programme. It is true that a year with zero subsidy had been envisaged because we hoped that some of the contracts would be completed before the Greater London Authority is established. We are not prepared to step back and say that that will be a zero funding period, but I am negotiating on PPP contracts at present and we will look for investment. As with the channel tunnel rail link, we may be able to spread investment over time. That is a matter for negotiation, but the House may be assured that there will be investment during that period.

Mr. Clive Efford (Eltham): I welcome my right hon. Friend's statement and draw his attention to the fact that, beyond the Jubilee line extension and the docklands light railway, my constituents and those in surrounding areas do not have direct access to London Underground. They rely primarily on Network SouthEast to commute to and from central London. Further to the question raised by my hon. Friend the Member for Lewisham, Deptford(Joan Ruddock), may I draw my right hon. Friend's attention to the potential that the East London line has to extend to North Kent lines rather than westward

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to Croydon? That would provide a direct link to London Underground in central London for people in south-east London.

Mr. Prescott: I have often asked how we can make the existing infrastructure work more effectively. Sometimes it is a matter of filling in the gaps. There was mention of "mind the gap"; but "bridge the gap" is important for rail infrastructure. We are considering different ways of achieving that.

I have united the national railway and underground systems for the first time, which will create considerable potential. The bid that I have allowed and the agreement with Railtrack--if we can achieve it--will see the union of the national railway system and the underground system. We will want to explore other potentials, but--in view of the timetable--that is more likely to be a matter for the London authority and the London mayor rather than for me.

Mr. Nicholas Soames (Mid-Sussex): I use the underground twice a day, almost every working day of the week--like thousands of my constituents. Anything that can be done to improve the service on the tube is welcome. However, I think there is a danger of painting too black a picture of the tube, which, considering its limitations, provides a first-class service. Although it suffers terrible difficulties--including breakdowns and other problems--by and large, it is a very effective service, and I pay tribute to Sir Malcolm Bates and his staff. What provision will the right hon. Gentleman make to ensure that the feet of the contractors involved are held to the fire more effectively than occurred previously, when one of the greatest civil engineering companies in the world had to be brought in to finish the Jubilee line extension?

Mr. Prescott: I am grateful for the hon. Gentleman's comments about the running of the service. I have tended to react to the introductory comments of the right hon. Member for Wokingham (Mr. Redwood) about the quality and level of service. The staff do a very good job under difficult circumstances and they enable 840 million people to move around that system. That is one of the biggest contributions to the movement of people of any transport system. The hon. Gentleman is right to point out that we need to draw up tight contracts. I shall cite in evidence the contract that I negotiated on the channel tunnel rail link, which he should compare with the one that I inherited, and he will see the difference that I am trying to make to our transport systems.

Mr. Tam Dalyell (Linlithgow): May I contribute to the proceedings as someone who does not care to drive in London or to bring his car here? What is the state of the tunnels, and what advice has the Department been given? Is not it true that tunnels age, like the rest of us, and that the Victorian tunnels are ageing together? The idea that stone lasts for ever is simply not true. What advice has been given about the long-term problems of renovating, and in some cases, rebuilding tunnels that have lasted a century or a century and a half, but which, as I said, are all ageing together?

Mr. Prescott: My hon. Friend makes an important point. A number of years ago, I discussed with the

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chairman of the underground how one deals with investment on that scale. Much of the system, including many of the walls, bridges and tunnels, is 100 years old, and would cost billions of pounds to replace. Because of disinvestment in that infrastructure, the replacement costs would be as much as those for the sewerage system which was built 100 years ago.

One of the advantages of our proposals is that we can consider those assets, as companies need to do, and assess the risks. If public and private money is to be involved in the underground, a judgment must be made about risk. That risk is greatly influenced by the quality of investment and assets.

As anyone who is familiar with the London Underground system will know, there is a considerable amount of water in the system and pumps work all the time just to keep the water at the correct level. The age of the system is a problem, and I cannot kid myself that the proposals that I have announced today address all the fundamental problems of dealing with all the long-term deterioration of the underground's ageing assets.

Mr. John Bercow (Buckingham): Further to what the right hon. Gentleman said about the opportunities for improvement in the future as a result of the invitation to bidders, will he explain the precise difference between pre-qualification and qualification? Secondly, when did he last travel on the Northern line or the Circle line, both of which, I am sure he will agree, have been afflicted by serious problems? What scale and speed of improvement in their services does he anticipate?

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