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6.31 pm

Mr. Ken Livingstone (Brent, East): It beggars belief that we should be lectured on the neglect of transport spending and infrastructure by the Conservative party. Over 18 years, with all the money that was coming in from north sea oil, we could have transformed Britain's transport infrastructure into something typical of, say, Germany today. The then Prime Minister, Margaret Thatcher, had a deep antipathy to public transport in virtually all its forms. Let us not forget that, for 11 years as Prime Minister, she maintained a record as a point of principle of never once travelling on a train--no doubt because they are driven by filthy trade unionists.

We also saw delay in the construction of the channel tunnel. Why? Because of Mrs. Thatcher's complete antipathy to the idea of dependence on trains driven by trade unionists. She hung on to the very end to the idea that we should build a bridge instead of a tunnel, until civil servants managed to persuade her that the winds across the channel would blow most cars off such a bridge. We saw a consistent pattern of neglect and often a quite malignant approach to public transport spending.

I regret that we did not have the Transport Bill in the first year of a Labour Government. The trouble was that there were far too many demands, such as for Scottish and Welsh devolution. However, the Bill is on stream now. I am very pleased that the Deputy Prime Minister managed to have stipulated in the Act that established the Greater London Authority powers for the mayor to tackle transport problems in London, including the ability to use the congestion charge, which I, unlike the Conservatives, think is central to the task.

We also know of the tremendous backlog of investment in the London underground. When I heard that retread, the right hon. Member for Kensington and Chelsea (Mr. Portillo), lecture us on how he wants new tube lines in his constituency, I remembered the fact that, for 20 years, Labour and Conservative Administrations of the Greater London Council trudged over Westminster bridge to try to persuade successive Governments--primarily those of Mrs. Thatcher and her successor--to allow the GLC to extend the Jubilee line to docklands and to build the Chelsea-Hackney link. If the GLC had been given that permission nearly 20 years ago, the Jubilee line extension would have been working for the past decade, and we

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would most probably have already completed the Chelsea-Hackney tube line, which was of course to go well beyond Chelsea and Hackney.

Mr. John Hayes (South Holland and The Deepings): I know that the hon. Gentleman is a man of great integrity and political honesty. Perhaps he will take the opportunity, while talking about the London underground, to correct the information that the Prime Minister gave earlier in answer to my right hon. Friend the Leader of the Opposition. The Prime Minister said that his Government have invested more in London underground since they came to office than the previous Conservative Government. Figures from the House of Commons Library show that spending during the last three or four years of the Conservative Administration, as measured against the first two years of this Administration and projected spending for the next two years, was greater. The previous Government invested more in the tube than this one. Will the hon. Gentleman take the opportunity to correct--

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. The hon. Member is making a speech.

Mr. Livingstone: I would love to be able to help the hon. Gentleman, but one of the undertakings that I had to make to get through Labour's vetting panel was never again to criticise the Prime Minister.

As somebody who for five years was leader of the GLC, I remember every year trying to negotiate with the Government for money to modernise the tube and invest, yet, year after year, spending was cut. Some people think that the record of problems stems only from when the GLC was abolished and the Government took over London Transport, but it goes back to the mid-1970s, during which consecutive Governments, dependent on Treasury advice, turned down Labour and Tory GLC Administration proposals for increased investment. We have that problem to resolve.

I give credit to both the Prime Minister and the Deputy Prime Minister for beginning to mobilise resources. Nobody denies that there is a debate about the best way in which to raise such money--whether it should be through public-private partnership or bonds--but at least we are having the debate. I suspect that it will be concluded soon--certainly if I have anything to do with it, because I am standing for the Labour nomination on a clear commitment to keep the tube in the public sector and raise financing through bonds. I assume that, if I win, that will be the end of the matter.

Mr. Geraint Davies: Will my hon. Friend explain why, on Third Reading of the Greater London Authority Bill, he voted against the Liberal Democrat amendment, which would have empowered the mayor to raise bonds for the tube, and for the public-private partnership?

Mr. Livingstone: I did so for exactly the same reason as my hon. Friend tends to vote with the Government: because the Whips told me to. I decided over a long period that one should vote against one's party only when every other avenue has been exhausted. Given that public-private partnership is a meaninglessly wide and vague term that can cover a multitude of sins, it seemed rather pointless to make a great row out of the matter.

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I think that the Labour party was wrong; it should have accepted the Liberal Democrat amendment to allow the mayor to raise bonds. I suspect that we shall return to that matter again and again, whoever is mayor.

Mr. Don Foster: Does the hon. Gentleman at least take comfort from the knowledge that the right hon. Member for Holborn and St. Pancras (Mr. Dobson) only three weeks ago was quoted as saying:

Mr. Livingstone: I find that there is virtually no disagreement among the Labour candidates. Any mayor who looks at the need for infrastructure works in London must be attracted to issuing bonds, if only because of the success of the New York system.

Much disinformation has been put about, comparing and confusing the disaster of New York's issuing bonds to pay the wages of teachers at the end of the 1960s and in the early 1970s--that could not happen here because it would be illegal for local government to borrow money in any form for revenue spending--and the state of New York's beginning, in 1981, to issue bonds through the metropolitan transit authority in order to transform the underground system.

I can remember everybody in New York telling me in 1978--all tourists were told--not to use the underground because I might never come out again; it was too dangerous and unreliable. At one disastrous point, a third of all rolling stock was out of commission. Now, the New York underground is world class. It has been transformed by the consistent use of bonds, which have raised $14 billion.

Mr. Ottaway: Is the hon. Gentleman aware that, in addition to bonds--I made this point in my speech--the Metropolitan Transit Authority required a $1.7 billion subsidy? Where does he think such money would come from? Is he saying that the bond issue would still have to be backed by Government subsidy?

Mr. Livingstone: New York's metropolitan transit authority had a sum of money to raise. It raised it in different component parts. It got what it needed from the markets and found the rest through public subsidy. There is nothing to prevent a Labour Government deciding to pay for the modernisation of the tube by issuing bonds and by raising some of the rest from fares--as well as, perhaps, from congestion charges. One would consider all sources of revenue streams in order to raise the total sum. Let us not forget that the metropolitan transit authority has done much more than simply modernise New York's underground.

Mr. Ottaway: Does the hon. Gentleman realise that the Greater London Authority Act does not allow the underground to be subsidised through a congestion charge?

Mr. Livingstone: A series of revenue streams comes into a British local authority--the Greater London Authority is such an authority--and, under British local

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government law, the first call on the budget of a local authority is the repayment of debt. That is why British local government has such a good credit rating. Even when Derek Hatton ran Liverpool, that local authority never missed a debt payment to the moneylenders. That fact was not regularly spread around Militant at the time, but the authority always paid up. No British local authority has ever defaulted on debt. If the Government did not want the Treasury to raise the bonds, there would be no problem in giving the mayor and the Assembly the power to issue them.

It is bizarre that the debate was intended to censure the Deputy Prime Minister. That was forgotten a couple hours ago in view of Conservative Members' lacklustre performance. There has been much gossip in the press, suggesting a conflict between the Deputy Prime Minister and the policy unit at No. 10. It is said that the Deputy Prime Minister has been scaring the policy wonks with his desire to introduce congestion charging and his pro-public transport policies. In any conflict on those issues between the Deputy Prime Minister and the pinheads in the policy unit, the former has the overwhelming backing of the majority of Labour Members. His commitment to public transport is the first such commitment for 20 years. He will be backed solidly by Labour Members in proceeding with the programme that he has unleashed. We shall do everything possible to encourage it to progress more rapidly.

There has been much disinformation about bonds. I begin with a briefing note for Members of Parliament produced by the Labour party, called "Working for London". It makes several points to try to show that bonds will not work. It states:

That is nonsense. London Underground currently spends approximately £300 million a year on maintaining the track and improvement works.

When people talk about borrowing £7 billion to catch up with the backlog, they refer to work that is going on from day to day. It includes work that should have been done years ago, as well as work scheduled for the end of the 15-year period. My hon. Friend the Member for Hackney, South and Shoreditch (Mr. Sedgemore) claimed that the markets would not raise £7 billion, but we must remember that that sum is to be spent over 15 years. The whole sum would not be granted at the same time, kept in a piggybank and doled out over 15 years for a maintenance programme. It would be allocated in a series of tranches.

The second point that the document makes is that

and would reduce the money available for health and education. Yet again, that is an arbitrary decision by the Treasury. In the western world, only this country would consider that an investment programme in the infrastructure of transport should count against the public sector borrowing requirement, or whatever we now call it. That is nonsense, and means that we take a shortsighted approach to the infrastructure work that Britain needs.

I sometimes wonder whether the Treasury is on Britain's side, because it has consistently displayed short-term thinking about the programme of public investment that we need to create a modern society. Yet members of the London business community say that the

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worst problem that they face is doing business in a city where roads and public transport are in such a disgraceful state. That is a major hindrance to their ability to make a profit, to employ people and generate wealth. We must start to impose our priorities on the Treasury.

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