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Mr. Livingstone: Hear, hear.

Mr. Dobson: My hon. Friend is a strong supporter of a bonds issue.

Mr. Jenkin: Will the right hon. Gentleman give way?

Mr. Dobson: I will not give way at the moment.

One of the arguments of my hon. Friend the Member for Brent, East (Mr. Livingstone) in favour of a bonds issue is that it would cost less--he thinks--to raise some of the money, but people would be willing to take a lower return on their investment because, through a bonds issue, they take not a scintilla of risk; the public and passengers take the risk. Therefore, as I say, we have to come up with a system where private sector suppliers of finance take the risk. If we have just a bonds issue, they will get their money, whether every project is five months or five years late, whether there is a cost overrun of 5 per cent. or 500 per cent.--it is risk-free investment. Therefore, they will take a lower return. I do not think that that is the best way of proceeding.

Mr. Tom Brake (Carshalton and Wallington): Will the right hon. Gentleman give way?

Mr. Dobson: No, I shall not for the time being.

As I say, we have the example of the success of the docklands light railway. We also have--I refer to my previous incarnation a few months ago as Secretary of State for Health--the example of the private finance initiative for hospitals, which has financed the start of work on 19 major hospital projects in just about as many months. That is working.

Uniquely in the history of the health service, instead of hospitals being six months, a year or two years late, some hospital managements face a unique challenge as a result of PFI: they may have to take over some of the hospitals that have been built before the original scheduled date. That shows that, if we can tie in the sources of finance with the risk of the construction, they will ensure, in a way that no one has ever done by placing a public sector contract with the private sector, that they deliver what they promised. That is why I support that approach.

Mr. Brian Sedgemore (Hackney, South and Shoreditch): I am following my right hon. Friend's remarks and I think that he is going down the right road. Does he agree that, although there may be a case for issuing bonds in certain circumstances, there can be no case for issuing bonds of £7.5 billion at the same time as imposing a fares freeze for four years, there by making it impossible for there to be an income stream to pay back the bonds? People in the City may be stupid, but they are also greedy. It is inconceivable that they could agree to such a programme. Does he agree that London Transport's current profit, or surplus, of some £300 million per annum would be wiped out by a fares freeze and that it would be impossible to finance the thing at all?

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Mr. Dobson: There is much truth in what my hon. Friend says.

I make another point before sitting down and giving other hon. Members the opportunity to speak. Even when the existing underground system has been fully renewed--I think that it is likely to happen under the Secretary of State's proposals--all that will do is provide the people of London with a decent, reliable ride on the existing system.

We also require additional capacity. That is why I strongly support the crossrail project, for which the City has put together a package. I welcome that package, but deplore the fact that, when the previous crossrail project was proposed, Conservative Members--who were then in government--did not lift a finger to help it. If they had supported the project--in their capacity as Transport Minister, as Chief Secretary to the Treasury or just as an oddball Cabinet member--and put their backs behind it, crossrail would now be well on its way to being built, rather than having to be started almost from scratch.

Many people who live in one part of outer London work in another part of outer London, and they find it almost impossible to get to work by public transport. I believe, therefore, that we need to have something like an outer Circle line, which will probably be a surface railway. Furthermore, some of the line could be provided fairly quickly--by connecting parts of the current system, making the system more systematic, and making a real effort to encourage people to use such a system.

In the long run--I admit that I am now engaged in describing only a wish list, rather than firm plans--there is scope in London for an outer, outer Circle line, joining up the outer boroughs, Heathrow and channel tunnel connections and increasing people's capacity to reach Gatwick and Stansted, so that we have a modern system that genuinely meets the needs of Londoners. We need a new approach to transport in London--an approach that moulds the system to meet the needs of Londoners, rather than forcing Londoners to fit in with our currently ill-shaped and outdated system.

In the short term, however, we shall not be able to make those improvements, as they all depend on long-term projects that will involve digging holes in the ground and improving the current tube system. In the short term, we shall have to make the bus system work far more effectively. We shall have not only seriously to enforce current restrictions on bus lanes and red routes, but to extend those restrictions, to give priority at junctions to buses. If we really want people to move in buses, buses will have to have advantages over other forms of road travel.

Such proposals will upset some people, but--there we are--they will have to be upset. I think that the bulk of people in London will welcome the proposals.

The Government have provided in the Greater London Authority Act 1999 for the introduction of congestion charging, which has been welcomed by almost all sensible people. Such charging will have to be done sensitively. Although it will also take time to introduce a properly effective system, when we do, it will raise money to spend on public transport.

On that matter, I differ slightly from my colleagues on the Treasury bench. We cannot introduce a congestion charge and say to people, "This is part of an effort to get you out of your car and on to better public transport",

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unless better public transport is already available. Ultimately, therefore--so that work will be done early, and people will benefit straight away from that work--the Greater London Authority will have to be able to borrow against future income from congestion charging. Providing that we take those approaches, we shall be able to make some progress.

I commend the activities and hard work done by my right hon. Friend the Deputy Prime Minister and the Ministers in his team. They have been subjected to shameful and disreputable attacks, for which most of the attackers should be deeply ashamed.

5.9 pm

Mr. Don Foster (Bath): I welcome the conversion of the right hon. Member for Holborn and St. Pancras (Mr. Dobson) to Liberal Democrat policy on congestion charging and the need to have up-front improvements in public transport before its introduction. However, I hope that he will not object if I do not immediately refer to some of his other comments. I shall come to them later. I very much hope that the hon. Member for Brent, East (Mr. Livingstone) will shortly catch your eye, Mr. Deputy Speaker, so that we shall have an opportunity to compare the speeches of two protagonists in the forthcoming battle for the mayoralty of London.

There can be little doubt about the outcome of the battle between the Front Benches today. I was amazed to hear an intervention on the right hon. Member for Wokingham (Mr. Redwood) from a Conservative Back Bencher who referred to his continuing parliamentary effectiveness. I saw little sign of that during his speech. The Deputy Prime Minister rightly questioned whether it had been worth his while coming back from India. I may not agree with everything that he said, but I agree with his conclusion that it was not worth his while. With the customary generosity that the House affords to hon. Members on both sides, I am sure that we are prepared to acknowledge the current illness of the right hon. Member for Wokingham and put his damp squib of a speech down to it. The Deputy Prime Minister has had a bad press over the past couple of weeks, but many of us expect tomorrow's headlines to read, "Prescott wins on points," or, even more likely, "Redwood saves Prescott's job." I fear that that will be the abiding memory of today's debate.

The right hon. Member for Wokingham's speech was bad not just because of what he said, but for what he did not say. There was not a scintilla of apology or humility in it. Not once did he acknowledge that much of the mess in our transport system is due to the actions of the Conservative Government. The record is clear. In each of the Conservatives' 18 years in office, traffic levels went up, despite the biggest building programme since the Romans. During those 18 years, buses were deregulated and, as a result, the number of people travelling on our buses went down. That correlation is proved by the example of London, where the same deregulation did not take place and the number of people using the buses went up. The Conservatives also presided over the disastrous sale of our railways and the fragmentation of the system into 100 parts. Despite all that we heard from the right hon. Member for Kensington and Chelsea (Mr. Portillo), when the Conservatives left office, there was a £1 billion backlog of repair and maintenance work for the tube system.

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That was the Conservatives' record. What did they offer for the future? The right hon. Member for Wokingham told us that they were offering bold and innovative ideas--their so-called common-sense revolution. In my book it is not common sense to have policies that will leave motorists in even longer traffic jams. It is not common sense to propose removing traffic calming measures and speed cameras. It is not common sense to suggest that we can build our way out of the current road chaos.

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