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Mrs. Dunwoody: I do not have any mandate to defend Mr. Kiley, but I want to address this particular point. If my hon. Friend would like to look carefully at the evidence that we took, in not one but two Select Committee reports, he will find that Mr. Kiley not only spelled out what he wanted to doand why and how he wanted to do itbut gave clear evidence to us that he knew what he was talking about. Frankly, that was quite refreshing.
Mr. Robinson: Well, Mr. Kiley certainly talks a good fight, but if we ask, in modern parlance, whether he can "walk the walk", I do not think that we will ever know, because I hope that he is not going to be given the opportunity. My hon. Friend the Member for Crewe and Nantwich referred to the minutes of the Select Committee evidence; I have read them all.
What Mr. Kiley is saying, if we boil it down, is that Ken and Kiley together can do the job, but they cannot do it on their own. No whizz kid could do that. They are going to be dependent on London Underground managementas it was then, and as it is nowto do the job with them and for them. They are saying, "Because it is us, we'll get it done." But where is the evidence for that?
I pay tribute to London Underground management. Given that they have been so constrained financially, and given the difficulties and pressures under which they have worked, they do a good job in running the systemparticularly the public-facing operations. I regret to say, however, that they do not have experience of spending on and controlling major projects, and their track record on that is one of fiascos. They have never had the opportunity to do that in a sustained way, because of the way the finances were runprincipally by the Conservativesand, whenever they have been confronted with such a project, it has proved a failure.
We have only to look at two examples to see that what I am saying is correct. Let us take the construction of the docklands light railway. That was in such a mess by the end that the management had to call in the private sector
Lord Levene intervened in both cases. If you have to bring Lord Levene in to intervene, you are in a pretty bad state. The idea, therefore, that all we have to do is give the money to Ken and Kiley Inc. and they will magically transform the ability of London Underground management to invest in, control and successfully bring to a conclusion the major projects that need to be implemented, is just wishful thinking.
Ms Buck: My hon. Friend is making a powerful case against the former management of London Underground. Why, if we had no confidence in them to manage those projects, do we have confidence in the very same people to manage the contract procurement for the PPP?
Mr. Robinson: They were not managing the contracts well. On a point of general relevance, it was London Underground management who were managing the projects, splitting them up into many separate contracts, making a mess of it and not finishing itthey were failing to do the job. The point is that they had to bring in Bechtel to finish the job. It is no good trying to blame Bechtel, just because it happened to have one part of the contract but could not finish it all. It was brought in to finish the job because London Underground could not. That is London Underground's track record.
When it came to the failure to complete the Jubilee line extension, and the need to bring in Bechtel, one of the greatest protagonists of leaving it to the tubeprior to Mr. KileyMr. Dennis Tunnicliffe, finally agreed. We all felt, "Let's go for this split whereby we can have infrastructure companies that are specialists in those areas doing that particular work, and London Underground can run the tube operations and the trains as London Underground, which it does well."
Tom Brake: I thank the hon. Gentleman for giving way, but I urge him to continue his speech afterwards, as he is revealing some very interesting facts. I hope that before he sits down he will give us the names of the four business men who decided how the PPP should be structured, for instance. He has revealed another interesting fact, however: he has said that Bob Kiley will not have an opportunity to run the tube. Is he saying that there will be a veto on Bob Kiley keeping his post after the handover?
I shall return to certain other aspects of the Mayor's position shortly, but first let me say a few words for the benefit of members of the Transport Sub-Committee, many of whom are my hon. Friends. All the Labour Members are my hon. Friends, of course, as are many from the Opposition. I believe that they are sincere in their opposition, and I think they have made some good points. Indeed, I consider that the Committee may have improved some matters. I part company with the Committee on its continuing insistence on esoteric, pseudo-scientific calculations as the be all and end all of its assessment of the PPP.
When it comes to value for money, social cost benefit analyses and so forth, I can speak on the basis of some experience given my time in the Treasury. The whole thing is rather like a grand prize fight. In one corner we have the public-private partnership and its accountants PricewaterhouseCoopers, seconded by KPMG; in the other corner we have Transport for London. I cannot remember which accountants it went for, but I think it was Deloitte and Touche. It is seconded by a host of academics. The Government have appointed Ernst & Young as the referee who will try to find a way through the middle.
All those people and organisations will have been commissioned at enormous cost, and each will of course come up with broadly the view that those doing the commissioning wanted to hear. Anyone with any experience of business, contracts or courts, from whatever walk of life, will know that if a consultant, an economist, an accountant or a lawyer is paid and given a brief, he will give the answer that whoever has paid him wants to hear. That is all that has been going on here.
It is funny that Transport for London's advisers, seconded in the ring by the Select Committee, say that the PPP would be a disaster. It is equally funny that those commissioned by the PPP say that it represents value for moneythat it will save £2 billion, £4 billion or whatever. Not surprisingly, the chap in the middle, the umpire, will say "It is a subjective judgment, but it is based on an objective assessment." I do not quite know how the circle can be squared.
Mr. Andrew Dismore (Hendon): Exactly the same criticisms could be made of Ernst & Young, which was employed by the Government to justify the PPP. My hon. Friend describes Ernst & Young as an umpire, but in fact it is there to advocate a course on the basis of only half the available information. As more facts emerge, Ernst and Young's analysis becomes increasingly dubious.
Mr. Robinson: My hon. Friend should have listened to what I was saying. I said that there were two sides, the PPP and its lot doing their stuff and Transport for London and its lot doing theirs. The Government then appointed Ernst and Young and gave it pretty independent terms of reference, and it came down somewhat in favour of both sides.
Issues such as this cannot easily be resolved in a matter of nice calculations. I do not really believe that this is what makes Londoners anxious. If we organise the partnership properly and devolve responsibility for delivery of infrastructure improvements to the private sector, we are more likely to obtain value for money than if we choose a route that has proved disastrous in the past.
What is of real concern to Londoners? They fear that by making a division and handing responsibility for the infrastructure to the private sector in the hope that it will produce the goods, we will create another Railtrack. Indeed, many have assiduously fomented precisely that impression, perhaps because they believe in it or perhaps because they are irresponsible. Let me say as objectively as I can, however, why I think that we are not doing that.
To understand why we are not doing that, people must first understand what went wrong with Railtrack and why. Railtrack was part of a botched, rushed privatisation, which meant that it was quoted on the stock exchange and subject to the disciplines not of the need for investment and services, but of the need to produce profits to justify a high share price enabling high dividends to be paid. There was clearly an inherent tension in the situation, to which Gerald Corbett drew attention after his resignation. Having tried to balance investment and safety needs with the pressure for profits, Railtrack was driven in the wrong direction by the three-monthly reporting systems of the City and the requirement to show ever-increasing profits, at the cost of safety and investment in services and infrastructure.
That is not what is happening with the infrastructure companies, which have not been privatised. First of all they must provide a service. Their only remuneration relates to the service, and to the number of passengers they carry. If they do not meet the required service levelthat will improve with timethey are penalised. If they do, they are rewarded. There has been talk of sanctions, which is already a big sanction. Those companies are rewarded only if they succeedthat is, if they carry passengers at least as well as is being done at present. Improvements should be built in, and the most importantwhich can only result from modernisation and investmentis a 20 per cent. increase in capacity, and in the number of passengers carried, over the next five or six years. If they do not achieve that, they will not be rewarded. It is as simple as that.
Opposition Members shake their heads because they do not want to hear the facts. The sanction is this: if the companies do not provide the service, they will not be paid. If they do not improve the service, they will not be paid. If they do not increase capacity, they will not be paid. They can do all those things only by investing, which is why they have £3 billion lined up for the purpose in the City.