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To return to my thread, it is equally ludicrous to describe as privatisation our proposals for London Underground. They will leave the new public sector London Underground with responsibility for operations and safety, and they mean that a modernised London Underground will return to public ownership at the end of the PPP period.
Mr. Clifton-Brown: I am grateful to the Minister for letting me have my moment of glory. Does he agree with the report of the Select Committee on the Environment, Transport and Regional Affairs? It says:
Mr. Hill: On the hon. Gentleman's first point, we do not agree with the judgments expressed in the report of the Select Committee on the Environment, Transport and Regional Affairs. We found them ill considered and ill thought out. On the question of support for the amendment carried in another place, our position is
Mr. Syms: A second amendment carried by the Lords was designed to protect the pensions of NATS employees and to include provision for doing that in the Bill. Do the Government intend to overturn that amendment, too?
The public-private partnerships that we are putting in place for London Underground and NATS are neither privatisations nor, as the motion would have it, remotely inspired by dogma. After all, by what stretch of even the Liberal Democrats' lurid imagination could the Labour party and this Government be charged with a dogmatic commitment to privatisation? On the contrary, those PPPs represent carefully devised, appropriate and pragmatic solutions that deliver the best possible outcomes for the underground and NATS. They are the solutions that the Government's amendment commends to the House.
It is indisputable that the British Rail privatisation was flawed. The Labour party spelled out its alternative approach in its general election manifesto--and we have delivered in government. We have set up the shadow Strategic Rail Authority to provide leadership and direction. The Transport Bill will establish the SRA proper and provide for stronger accountability and enforcement. Our 10-year plan provides the resources for massive investment in the railway: £49 billion over 10 years, including £7 billion of public money for a rail modernisation fund.
In the past few weeks, the Rail Regulator has published the results of his review of Railtrack's access charges for maintenance and renewal, including necessary expenditure on safety improvements. By the end of this year, Railtrack's industrywide safety responsibilities will be separated from its commercial operations. Next year, Lord Cullen will publish his report on the Ladbroke Grove accident and on the culture and management of railway safety. Those initiatives herald more investment, more public accountability and a better deal for passengers--including a safer railway.
Mr. Öpik: On a non-confrontational point, the Minister is describing how he will try to make rail privatisation work. One very common and specific problem arises when companies such as Northern Spirit and Virgin Trains abandon passengers at stations other than their final destination. Customers often have to haggle with
Mr. Hill: In a non-confrontational way, I entirely agree with the hon. Gentleman that a very dissatisfactory situation all too often prevails in our railway system. Frankly, the train operating companies ought to be improving their act right now. We inherited some flawed franchising agreements. We are in the process of refranchising and certainly expect to wrest from those contracts much higher standards of customer care along the lines that the hon. Gentleman has outlined.
I think that we can all agree on the scale of the financial problems faced by the underground, and the need for urgent measures to deal with them. The previous Government left a huge investment backlog on the tube, and their public expenditure plans envisaged still further cuts in funding.
We set about dealing with the underfunding immediately. In March 1998, we announced an additional £365 million of funding for London Transport over and above existing plans. In July 1999, we announced that we were allocating £517 million of additional resources to London Transport over two years, to help it deliver real improvements to passengers in the run-up to the PPP. In the Budget this year, we announced that a further £65 million would be allocated to London Underground in 2000-01--plus an additional £40 million to deal with claims on the Jubilee line extension.
The extra funding still does not provide a long-term solution to the underground's funding problems. Even with the increases, London Underground is left with changes every year to its funding arrangements, making it impossible for it to plan its investment efficiently. That is what the PPP is designed to transform. It is quite wrong to suggest that the PPP is in some way like rail privatisation, and that it will somehow undermine safety. In fact, the whole point of the London Underground PPP is to learn from the mistakes of previous privatisations, not to repeat them.
That is why the PPP structure is so different from a privatisation. It is based on fixed-term contracts rather than permanent transfers to the private sector. So assets will return to the public sector in a much improved condition. The PPP structure retains clear public sector accountability from the outset. Statutory safety responsibility for the whole underground remains with public sector London Underground. Indeed, the recent Industrial Society report that was commissioned by the Mayor of London on the PPP said that it
I return to the question of the proposed PPP for London Underground. Unlike on the privatised railways, there will be no separation between train and track infrastructure maintenance. London Underground will retain responsibility for all operational matters--from switching signals to driving trains and staffing stations. So it will be a far more unified system.
The PPP will also be subject to two key validation tests: safety and value for money. On safety, we have consistently made it clear that the PPP will not proceed unless it can be shown that it will make a substantial contribution to improved safety. As I have said, the safety regime for the PPP retains a structure in which statutory responsibility for safety of the whole network remains with public sector London Underground.
The transition to the new arrangements for the PPP requires three sets of changes to London Underground's safety case--to ensure that safety is maintained and improved both in the run-up to the PPP and when it is under way. Two of those revised safety cases have already been approved by the Health and Safety Executive. The transition process also requires a safety audit, which will begin shortly, and the submission and acceptance of the third set of changes to the safety case.
I am not making any new political commitment when I say that the PPP will not proceed unless and until the HSE has taken an independent view and has stated that it is satisfied with the revised safety case. I am simply stating the legal position. Our plans will deliver a network that is publicly run, publicly accountable and properly financed. It will reverse the increase in serious injuries that we have seen on the tube over the past 10 years.
The second key test for the PPP, after safety, is value for money. As the House will be aware, London Transport and its advisers have been devising a public sector comparator against which the bids for the PPP will be judged. Bids will be considered against not only traditional funding methods but a public sector bond option. We have published the methodology for that comparator, which has been independently audited by KPMG.
Most importantly, in August, the National Audit Office--Parliament's public expenditure watchdog--announced that it would bring its scrutiny of the comparator forward so that it could report on it before contracts were signed. That will ensure that the comparator represents a fair and rigorous test of the PPP bids.