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Mr. Deputy Speaker: Order. I make another appeal for brief speeches, as many hon. Members will be disappointed otherwise.

4.4 pm

Chris Grayling (Epsom and Ewell): I begin by paying tribute to the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), who sadly is not in her place at the moment, for the usual expert way in which she led the inquiry, and for the very fair way in which she chairs the Select Committee.

Perhaps the most telling point made in this afternoon's debate was made in the brief intervention by the hon. Member for Sheffield, Hillsborough (Helen Jackson), who is not in her place either. Recently, she made a number of public accusations, one of which was that I and other Opposition Members had hijacked the Select Committee. It would take a braver person than I am to attempt to hijack the hon. Member for Crewe and Nantwich.

Even so, the fact that the hon. Member for Sheffield, Hillsborough chose to intervene to raise doubts about the proposal reinforces the degree of unanimity in the Select Committee. We heard wide-ranging evidence during the inquiry, and we concluded that the proposal was ill thought out and wrongly focused. The PPP will not work as it is supposed to, and the tragedy is that the ultimate losers will be the passengers.

The Committee's hopes were raised, briefly, when we took evidence from the previous Secretary of State, the right hon. Member for Tyneside, North (Mr. Byers). He made it clear that he was willing to look again at the PPP. Sadly, two months later, he had looked at it again and had not reached a different view. That is why we are where we are today.

I want to raise four issues this afternoon. The first has to do with congestion and capacity on the tube, which is one of the biggest problems with the PPP. Those of us who use the tube regularly know just how full it can be. Last night, I boarded a tube train and people were pressing at the doors. Our underground is bursting at the seams.

Any project to modernise the tube must create additional capacity, yet there is abundant evidence that the PPP, and the Government's other modernisation plans, will not deliver that. The background document to the Government's 10-year plan makes that clear. It states:

That is the Government's own statement about what will follow from the PPP.

The Select Committee took much evidence from people involved in the process more directly than Ministers. Their views on the capacity issue were very clear. Dennis Tunnicliffe said that, assuming that the PPP was delivered

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successfully, the present system would expand its peak capacity by 15 per cent. That means that capacity will remain slightly behind growth.

London Underground admitted that overcrowding on the network would not be reduced, as demand for travel in London overall was at saturation. The practical reality of the PPP is that people of my age travelling to work on crowded tube trains today will probably be travelling on equally crowded trains for the rest of their professional lives. The PPP scheme is not the right one to resolve the problems people face every day.

Mr. Spellar: Has not the hon. Gentleman noticed that London's population has increased by the population of Sheffield in the past 10 years? It is estimated to increase by the population of Leeds in the next 10 years, and there are also a million more people in work in this country now. Has not the hon. Gentleman noticed those pressures on the system?

Chris Grayling: I have, and that is why I am looking to the Government to do something about the problem. The scheme that they propose, according to their own figures and those of London Underground, will not sort out the problem of underground overcrowding. The Minister has no solution to that—although he should, as it is his job to have one.

The second point that I want to make is that the PPP is wrong in developmental terms. The Select Committee took abundant evidence to the effect that the scheme focuses on stations in its early years, and not on tunnels or trains. We were told that PPP would deliver smarter new stations over the first seven years. That is a great idea, and means that we can have lots of new tiled walls, but Bob Kiley offered compelling evidence that we should first invest in trains and infrastructure.

We heard no evidence to suggest that at the end of that seven-year period passengers will have noticed significant improvements to their journeys, apart from smarter stations. Nine new coaches will be delivered in the first seven years. The hon. Member for Coventry, North-West (Mr. Robinson) was lambasting the record of the last Conservative Government but, between 1992 and 1997, they put new trains on the Central line, new trains on the Jubilee line, built the Jubilee line extension and put new trains on the Northern line. I will happily take an intervention from the hon. Gentleman if he wants to tell me how many new carriages this Government have added to London Underground. No? The answer is that there have been none—not one new carriage in the past five years.

The hon. Member for Hampstead and Highgate (Glenda Jackson) was right when she wrote in The Independent five years ago that the priority needed to be channelling investment towards the core of our network. The tragedy is that, five years later, that has not happened.

Geraint Davies: Is the hon. Gentleman aware that the Jubilee line has been started since 1997 and that it might have a few carriages?

Chris Grayling: I admire the hon. Gentleman this afternoon; he is clearly after a job on the Front Bench. I offer him my best wishes, and hope that he gets one. He might remember that it was the last Conservative

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Government who started building the Jubilee line. No new infrastructure project has been started on London Underground since 1997.

My third point in relation to the Select Committee's investigation is about the role of the Treasury. The hon. Member for Crewe and Nantwich referred to this in her opening remarks. A number of pieces of evidence about the Treasury's role in the project gave rise to concern. We need to bear in mind the Treasury's motivation for this project. As the hon. Member for Coventry, North-West was honest enough to say, the Treasury had difficult financial choices to make, and it chose to spend the money elsewhere. That remains true to this day. The fundamental reason for pursuing PPP is to keep the debt off the balance sheet. It is to be able to make investment without it appearing under public borrowing.

The total amounts that the Government are talking about are deceptive. As always, they have taken everything including the kitchen sink—every maintenance budget that London Underground has had—lumped it all together and multiplied the result by 10 to create a stunning figure for the next 10 years. In reality, the amounts of money going in to the underground are comparable to—and, in many cases, slightly less than—what was being invested in the early 1990s and certainly when the Jubilee line was being built.

One of the most disturbing things about the evidence taken by the Select Committee was the regular indication that the Treasury had intervened in the project to ensure that its phasing meant that the expensive projects took place in the later years while the cheaper projects took place in the early years. We heard evidence from a number of people that the Treasury had intervened during the process to ensure that not too much money was pushed upfront in the project. That is reflected in the fact that the focus in the early years is on smarter stations rather than on new trains or radical changes to the infrastructure. As a consequences, passengers will again have to wait for the improvements that they want.

It is scandalous, though not untypical, that no Treasury Minister was willing to appear to discuss the project. I give credit to the Transport Ministers for their assiduous attendance at the Committee and their willingness to talk to it on request. We can have no complaints about their behaviour in that respect. In stark contrast, their counterparts at the Treasury refused and continue to refuse to participate in debates on areas such as these, even when it is palpably clear that they are pulling many of the strings from behind the scenes.

Mr. Edward Davey: Is the fact that the Treasury intervened to make sure that the investment is backloaded, not frontloaded, evidence that public sector money will be used to invest, and that the route chosen will impose more of a burden on the taxpayer without producing value for money? The backloading proves that the taxpayer will pick up the bill.

Chris Grayling: The hon. Gentleman makes a good point. This exercise is uncosted beyond the first seven years. If the more complicated projects are shoved into

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the second, third or fourth seven-and-a-half-year-period and not costed in the early stages, we have no idea who will pick up the bill in the end.

Mr. Davey: We will.

Chris Grayling: Well, it will be the taxpayer, as the hon. Member for Kingston and Surbiton (Mr. Davey) says. The contracts for the private sector contractors are, as we would expect if they are looking after their interests properly, quite tightly phrased. There is no evidence that the private sector is taking on a huge risk. As the weeks have gone by, it is clear that the Government have been taking on more and more risk but pretending that the opposite is the case, in much the same way as happened over the setting up of Network Rail.

The Government have made great play in the past few months of the work done by Ernst & Young to assess the viability of the public and private sector options and which represents the best value for money. The former Secretary of State announced in February that he had decided to go ahead with the scheme, that he had looked at the Ernst & Young report and decided that the scheme represented value for money. Not only did the Select Committee take evidence that London Underground had not even concluded the contracts at that point and had asked the Secretary of State not to make a statement, so that he compromised London Underground in the negotiations with the contractors, but the great report upon which the right hon. Member for Tyneside, North based his judgment started with the most extraordinary health check. Ernst & Young said:

In other words, Ernst & Young had simply checked that the sums added up. It is rather as if I said to the Minister, "I have six sweets in one pocket and six in the other. I think that I have 12—could you check that for me?" The Minister could get out his calculator and add six to six to make 12, but he has no idea whether I can count or whether I have three sweets in that pocket or 10. That is the problem. The consultants did not check the detailed assumptions but simply that the baseline sums added up.

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