| Previous Section | Index | Home Page |
Mr. Woodward: We did not ask the Minister to say more about it.
Mr. Hill: The hon. Gentleman may not have done so, but one of his sidekicks on the Liberal Democrat Benches asked about it. Therefore, I shall deal with that point first. We shall deal with other reports in due course. There is a fundamental position on fares on London Underground under the PPP, about which I shall speak shortly.
I have not forgotten the hon. Member for Ruislip-Northwood (Mr. Wilkinson), but I want to comment on the Chantrey Vellacott report first. We do not accept that fares will increase on the scale that Chantrey Vellacott suggested. Its working assumptions were flawed. It is an error to assume that the bulk of initial investment will be financed through borrowing. Neither does Chantrey Vellacott take account of the efficiency savings that will result from London Underground having a stable long- term investment programme. The savings have been variously projected at between 15 and 20 per cent., so they will be substantial.
We have repeatedly stated that we shall award the contracts only if they represent best value. We would not be embarking on a PPP competition if we did not believe that there was a very good chance of achieving best value for the taxpayer.
I thank the hon. Gentleman for his patience; I now give way.
Mr. Wilkinson:
I am grateful to the Minister for his patience, and I appreciate the opportunity to intervene now. Will he assure the House that, when the PPP finally becomes operational, annual fare rises on the London underground will be significantly lower than the inflation-busting increases that Londoners have had to endure since May 1997?
Mr. Hill:
I am glad that the hon. Gentleman raises that point, because I want to come to precisely that issue. The economic modelling on which the PPP proposals have been based has operated on the assumption that fares would increase by no more than the retail prices index plus 1 per cent. in the next two years, and in line with inflation after that. Therefore, I assure him and the wider public, whom he is attempting to terrify, that there is absolutely no question of significant fare increases under the PPP. It will be funded by the efficiency savings achieved by a long-term stable rolling programme of investment.
Mr. Edward Davey:
I am grateful that the Minister has tried to reassure the House--I am not sure that he has succeeded--that, once the PPP is in operation, fare increases will not be of the size that we have just
Mr. Hill:
Rather than sitting there preparing his intervention, the hon. Gentleman should have listened more carefully I made it absolutely clear that, in the first two years leading up to the PPP, the assumption in the economic modelling is that fares will not increase by more than the retail prices index plus 1 per cent. There is no question of huge increases leading up to that point. From spring next year and up to the conclusion of the PPP, the mayor will have a stake in the arrangements for the PPP, including those for the fare levels. I am certain that the new mayor of London will not be in the business of encouraging substantial fare increases.
The hon. Member for Witney (Mr. Woodward) referred to the Deloitte and Touche report and made several accusations. I confirm that we are not aware of any Deloitte and Touche report on the PPP. The hon. Gentleman may be referring to the study that my Department commissioned from PricewaterhouseCoopers, which was concluded last year. We published a summary of it, but we cannot publish it in its entirety because of commercially confidentiality. I am sure that the hon. Gentleman will understand that. It certainly did not say that fare increases would result from the PPP.
Mr. Redwood:
Before the Minister leaves the subject, will he tell the House how much preparations for the PPP have so far cost? What is his estimate of the total cost, including all the expenses of legal and financial advice from inside and outside his Department? Will that be paid for out of the fare box or out of taxation?
Mr. Hill:
The right hon. Gentleman has a bit of a cheek in raising that issue. Few of us will forget that the cost of consultancies and preparations for the deeply flawed privatisation of the railways, which broke up our railway system into a hundred pieces, was about £650 million. The last parliamentary answer provided by the Government in response to a question about the cost of the preparations for the PPP stated that they had cost not more than £20 million to date. There is a massive difference between the extortionate costs that the right hon. Gentleman's Government imposed on the taxpayer and the extremely reasonable and cautious attitude adopted by this Government.
Reference was made to negotiations with Railtrack and to the provision of information. I emphasise that amendment No. 332 is not relevant to the negotiations of PPP agreements, including those with Railtrack. It relates
to periodic reviews of contracts after they have been entered into. Information on the negotiation of PPPs will be made available in the normal way to the National Audit Office. My right hon. Friend the Deputy Prime Minister has also made it clear that details of the public sector comparator, another issued raised by Opposition Members, will be published.
Mr. Woodward:
If the PPP arbiter wishes to review the terms and conditions of a contract with Railtrack once the mayor is in post, will it be possible to disclose that information and make it public?
Mr. Hill:
Yes. New clause 332 restricts the disclosure only of information that is irrelevant to the statutory duties of the arbiter and other statutory bodies listed. That is a reasonable protection to third parties, such as suppliers to PPP companies.
Mr. Brake:
Will the Minister clarify at what point he expects the public sector comparator test for the PPP to be complete, what cost he expects to have been incurred at that point and who will pick up the bill should the public sector comparator test reveal that the PPP is not financially viable?
Mr. Hill:
The hon. Gentleman raises two issues. I am not able--the hon. Gentleman could not reasonably expect me to be able--to speculate about the final costs of the consultancy and preparatory work for the PPP. No one could do that. I think that I have demonstrated clearly, however, that the Government have adopted an extremely prudent and cautious approach to such costs.
The Government have repeatedly made it clear that we will publish the public sector comparator before the conclusion of the PPP. When that occurs--we presume that it will be in 2001--the hon. Gentleman, other Members and the public will be able to judge on the basis of that test. My right hon. Friend the Deputy Prime Minister made it clear that, if the public sector comparator were negative about the PPP, there would be no question of our going forward with it.
Mr. Jeremy Corbyn (Islington, North)
rose--
Mr. Hill:
I see several Members wishing to challenge me on that point, but I saw the hon. Member for Witney first. I give way to the hon. Gentleman.
Mr. Woodward:
I am grateful to the Minister for giving way again. We may wish to divide the House on the amendment, so it must be made crystal clear. Is the Minister saying that amendment No. 332 will not stop the PPP arbiter from obtaining all the background information on the negotiations with Railtrack, the consultation documents and the advice to the Secretary of State, and that that information can be published--yes or no?
Mr. Hill:
I shall revert to that. I had intended to go on to the safety issue. Let me deal with that before I deal with the question about the role of the arbiter. [Hon. Members:
Let me deal with the issue of whether amendment No. 332 covers disclosure affecting functions relating to the Health and Safety Executive and safety provisions. I am surprised that the hon. Gentleman raised the issue. Subsection (2) makes it clear that the provisions of the new clause do not apply
"to any disclosure of information which is made"--
I draw the hon. Gentleman's attention to subsection (f)--
"for the purpose of facilitating the carrying out by the Health and Safety Commission or the Health and Safety Executive of any of its functions under any enactment or of facilitating the carrying out by any enforcing authority, within the meaning of Part I of the Health and Safety at Work, etc. Act 1974, of any function under a relevant statutory provision within the meaning of that Act".
That makes it crystal clear that no matter relating to health and safety on the underground will be subject to any prevention of disclosure under the terms of the Bill.
| Next Section
| Index | Home Page |