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Mrs. Gwyneth Dunwoody (Crewe and Nantwich) (Lab): The right hon. Gentleman skipped rapidly over the issue of school transport. Are we to assume that he is in favour of local authorities extending their provision for school transport, or not?

Mr. Curry: I was illustrating the degree to which the Queen's Speech was imposing new obligations upon local authorities. I am sure that the environmental implications of those measures on school transport will become clear during the winding-up speeches.

The Deputy Prime Minister: The right hon. Gentleman has been generous in giving way. The financial situation for local authorities during the period in which I have been responsible can be compared with a similar period—1992–97—when he was the Minister responsible. Does he accept that the financial resources given to local authorities were cut by 7 per cent. in real terms during his period and that they have increased by 29 per cent. in real terms under this Administration?

Mr. Curry: First, the obligations on local authorities are infinitely greater now than they were then. Secondly, alongside his table showing the grant increase, the right hon. Gentleman should set another table showing the council tax increases equivalent to those earlier years. He will find that, under the last Conservative Government, the council tax was under nothing like the strain that it is under now as a result of the massive increase in public expenditure. For every increase in spending that the Government require but do not meet, local authorities must increase council tax by 4 per cent. to raise 1 per cent. of the deficit in funding.

That has been the heart of the problem for the past few years. It is the Government's demands that have put local authorities under such pressure, and which have caused local taxpayers to feel such a strong sense of resentment.

This Queen's Speech is a bit of a rag-bag. It does contain some sensible measures that we welcome, and where we do welcome them, I shall not hesitate to say so. Where the detail requires examination in order to find out how a particular Bill will work in practice, we will focus on such scrutiny. There are, however, some measures that we oppose, not because of any ideological concern, but simply because they are daft, will not work and are unnecessary. There are other measures that we

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oppose because they are ill-conceived and will do nothing but damage. I look forward to having that debate with the Government.

This Government are losing their way and the Prime Minister is losing his grip. The Deputy Prime Minister even referred to the Administration as being his. I knew that there was one other contender for power; I did not realise that there were two.

3.40 pm

Mrs. Gwyneth Dunwoody (Crewe and Nantwich) (Lab): This Queen's Speech is widely regarded as one of the most important, and possibly the last entire Queen's Speech that will address the Sessions before the next general election. Frankly, I hope that that does not prove to be the case, because I rather approve of Sessions that run until a reasonable point at which we can get on to the statute book all the changes that we require. But given that it could prove to be the case, it is remarkable that this Queen's Speech contains very little about transport. That may be a sensible acknowledgement on the part of Her Majesty's Government that they have committed large sums of money to reorganising the rail industry, to road building and to changes in other forms of transport; however, there are some aspects that concern me greatly.

I hope to discuss school buses and buses in general, but perhaps I might begin by dealing with private finance initiatives, particularly those relating to transport. In Whitehall today, we were informed that the Gershon review is looking to all Ministries to implement considerable savings in the next spending round. That concerns me, not least because public transport is becoming an increasingly large part of the budget. That is understandable, because as anybody in their right mind knows, major infrastructure projects will always have to be funded by the state. It is quite ridiculous to suggest that bankers or those who speculate will make large long-term investments in infrastructure if they are not to be guaranteed a considerable rate of return—one greater than that which they normally receive—or if they cannot protect their investment in some way.

In the past five to 10 years, it has increasingly been suggested that private finance can inject enormous change into major transport structures, not just in the culture of how we plan and anticipate the creation of new and efficient transport systems, but in terms of how we look at transport. The reality is, I am afraid, rather sadder. It is vital that we know, for example, why the Gershon review does not include PFIs. If we want to make savings right across Whitehall, why are we not looking at the money that the Government are currently spending on underwriting PFIs? If it is true that we have had a clear demonstration of the initiative, brilliance and lateral thinking of private finance providers in creating new transport schemes, I am afraid that I must have missed it. Somewhere along the line, those schemes seem not to have arrived.

Let us look at what happened with the channel tunnel. In the final analysis, when considerable difficulty arose, public provision was made. My Select Committee identified difficulties with the PFI for the London underground. There were very real problems, and clear

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indications emerged that PFIs require more monitoring, rather than less. Does what happened with Railtrack and the provision of monitoring for contractors on the overground railway constitute a clear demonstration of a successful system, or of the fact that the railway industry has been pushed into losing total control of its overheads? In the meantime, private companies walked away with increasingly large sums of money, and the railway system did not benefit.

Indeed, the acknowledgement by firms such as Jarvis that it was necessary to pull out was not just a matter of saving the face of the directors, whoever they might be. It was really an acknowledgement of the fact that firms could not provide a history of efficient operation of high-quality services or a clear pattern of development that would have enabled them to prove that private finance initiatives were the only way forward. Why, then, are we not examining in today's debate what private finance initiatives are costing the taxpayer, which would be an extremely revealing exercise?

Mr. Geoffrey Clifton-Brown (Cotswold) (Con): Would the hon. Lady admit that PFI is a good idea, but needs two things to make it work properly? First, it needs a clear brief from the public procurer who administers it and, secondly, it needs to pass risk to the private sector, so that failure to conform to the brief will hit the contractors' pockets. That is how to make it work.

Mrs. Dunwoody: I would be happy to know that sanctions were available to the public sector that hit the contractors in the pocket for not achieving results as efficiently as they should. However, the history of these arrangements shows that the public sector loses out irrespective of whether it is a big problem for the private sector to pick up the entire bill, a medium-sized problem for it to pick up half the bill or even a small problem to pick up the major part of the arrangement.

For example, last winter the contractors providing services failed disastrously in their task of gritting the roads. They failed to provide even a minimal standard that was acceptable in respect of either road safety or protecting motorways. What happened? My Transport Committee discovered that the Highways Agency had absolutely no sanctions to apply to these people who were responsible for performing such a disastrous service. Indeed, we were told that the contractor had many people working for him and that he had no way of reaching them himself because the radio system that he used was out of action. The Department had no way of dealing with the contractor's responsibilities and did not conduct day-to-day monitoring. In the final analysis, large numbers of people ended up sitting on motorways for up to 11 hours doing nothing. What sort of efficiency record is that? If the hon. Member for Cotswold (Mr. Clifton-Brown) is looking for further examples, I could introduce him to my well-known friends Virgin Rail, to whom I devote larger amounts of my time than I do to any other man in the world—and, frankly, with even less profit than I usually obtain. If he is not worried about that, I could take him through virtually any other PFI arrangement in the transport sector.

Certain factors always prove central in respect of PFI. First, the initial contracts always provide a much higher rate of return than they should. Secondly, whenever

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there is a problem, the PFI provider almost inevitably comes back to the taxpayer or the ratepayer, asking them to underwrite the fact that the contractor is not operating properly. Thirdly, the total benefits to taxpayers, ratepayers and passengers are infinitesimal and almost impossible to see. So why are the costs of PFI and the supposed advantages not being properly examined in the debate?

Mr. Kenneth Clarke (Rushcliffe) (Con) rose—

Mrs. Dunwoody: I shall give way to the right hon. and learned Gentleman, whom I hope I may call my friend.

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