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Linda Perham (Ilford, North) (Lab): As chair of the all-party group on Crossrail, I warmly welcome the Secretary of State's announcement and accept his warnings about costs. Will he think about the costs of congestion and overcrowding if the system does not go ahead, and the delivery of regeneration to east London? The completed Crossrail scheme might bring £20 billion to the UK economy as a whole and we cannot afford to pass that by.

Mr. Darling: I agree that Crossrail could bring huge benefits to London in the future and relieve a lot of pressure now. However, the situation for Crossrail and other rail schemes throughout the country is exactly the same: we must ensure that we are far better at controlling costs in the future than we have been in the past so that we get £1-worth of benefit from every £1 that we spend. The case for Crossrail and many light rail schemes is strong, provided that we get the sums right.

Mr. Eric Pickles (Brentwood and Ongar) (Con): Crossrail starts in my constituency, so the announcement is welcome. I understand what the Secretary of State says about consulting on the formula for funding, but surely by now he has a clear idea of the balance among public and private funding, the fare box and the Mayor. Will he give us an indication of that balance and tell us whether risk will be determined on the basis of it? Does he envisage Transport for London being a prime mover behind raising funds for the project?

Mr. Darling: I refer the hon. Gentleman to the business case for Crossrail that I published this morning—I know that he will not have had time to read it—which examines all those issues. My answer to him is the same as that which I gave to the hon. Member for Cities of London and Westminster (Mr. Field) a few moments ago. The Montague report recognises that there are complex issues to consider and huge challenges to overcome. It is important to have the right mix of funding and to organise things in the right manner. I have agreed proposals in the document with the Mayor on the future organisation and delivery of the project.
 
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Mr. Graham Stringer (Manchester, Blackley) (Lab): I hope that my right hon. Friend will accept that his decision on light rail in Manchester will be met by anger and disbelief. I, and virtually everyone in Greater Manchester, I am sure, think that stopping the scheme at this stage is unacceptable. Does he accept that the National Audit Office report gave the Metrolink a clean bill of health and that the cost-benefit analysis of the scheme was positive? Does he also accept that if the Deputy Prime Minister had not dithered four years ago, the scheme would have gone ahead at much less cost? Will he look forward to getting the scheme going as quickly as possible because it is good for the environment and the travelling public, and essential to the economy of Greater Manchester?

Mr. Darling: I fully recognise the disappointment that will exist in Manchester. I accept that the Manchester metro has been successful and that it got a good assessment from the NAO, but there is no getting away from the fact that the cost of the extension has increased dramatically over the past few years. As I said earlier, no Government can accept such escalating costs—there is no guarantee that they have peaked yet. We were being asked to pay more money for the scheme. The situation applies not only to Manchester, but to the schemes in Leeds and south Hampshire. I suggest that we need to sit down with local authorities to determine whether there are ways of making such schemes affordable. As I have said before, and as the strategy document makes clear, light rail is important, but we cannot find ourselves in a situation in which annual payments rise at such a dramatic rate over a short time. No Government could sign up to that. I understand what my hon. Friend says, and I hope that the measures I have announced on further discussions, franchising and so on will help to resolve what is undoubtedly a difficult problem, but we have to ensure that if we spend all this money, we get value for money.

Mr. John Redwood (Wokingham) (Con): I welcome the Secretary of State's realism on new tram schemes. They are heavy loss makers and cost overruns are big. Is he saying, as I would, that they should not be subsidised, or is he saying that there is a level of subsidy that he would negotiate, but it should be much lower than the current level?

Mr. Darling: Nearly all public transport is subsidised to some extent. I am certainly not against the principle of the public contributing; the question is the degree of subsidy. I was happy to agree a contribution two years ago. What concerns me is that costs have risen again since then. There comes a point when we have to say, "Hold on. Are we doing this the right way?" My hon. Friend the Member for Manchester, Blackley (Mr. Stringer) was right: the NAO said that the Manchester metro is a good scheme. It was critical, however, of how Governments of both parties procure such things and ensure that they are done properly. Frankly, if we are to build light railways, we have to ensure that we get the sums right in the first place. I understand the disappointment in different parts of the country, but the bigger folly would be to proceed with something when the costs are not nailed down.
 
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Mr. Andy Reed (Loughborough) (Lab/Co-op): For the one third of my constituents who rely on buses, it is great that there will be specified circumstances for the new quality contracts. Will my right hon. Friend give examples of the specific circumstances in which they will be allowed for local authorities? Will they include places such as Loughborough? It has a good quality bus initiative, but it needs to go much further because passengers are seeing bus services slashed almost overnight. For the two thirds of motorists in my constituency, can he guarantee that there will be clean fuels through biomass, biofuels and fuel cell technology in the near future?

Mr. Darling: I like the way in which my hon. Friend divides up his constituents so neatly.

On the latter point, the White Paper has a lot to say on the need to promote cleaner fuels. On bus franchising, I deliberately said that we are making proposals in specific circumstances. For example, last week I said that I wanted to devolve power to passenger transport authorities in relation to rail travel. If a PTA makes sensible decisions about heavy rail, light rail or buses, it might be able to implement them only if it has some control of the buses, and we might consider that request. Similarly, if we establish a pilot scheme on the measures relating to road pricing, bus franchising would almost certainly have to be part of the scheme. The London scheme showed that there needs to be overall control. However, I shall not approve schemes when nothing is happening to improve public transport. The evidence up and down the country is that when councils and bus companies work together, they can achieve a great deal. The proposal is specific, but it is welcome as an extra power that we need to make transport work.

Mr. Mike Hancock (Portsmouth, South) (LD): The people of south Hampshire will obviously be disappointed, but they will accept that the announcement was fairly predictable because of the cost escalation. However, several million pounds have been spent over 15 years on trying to create an affordable light railway system. Will the Secretary of State expand on his statement that the Government will look urgently at how light rail could be made more affordable, including the best approach to procurement, because we have been trying to do that with his officials for the past 10 years?

Mr. Darling: I welcome the hon. Gentleman's realism on the decision and the problem with costs. It is only in the past two or three years that there has been a real problem with costs, and account must be taken of the amount of risk that investors are willing to take and the cost of that risk. I have said before that I have spoken to the banks that are investing in the scheme. They said that the business is marginal to them and they are upping their costs. One memorably said to me in private, "If you pay, you're daft." We have to ensure that we have a sensible way of procuring such schemes and it must provide value for money. That is not the case with the current system, as the hon. Gentleman recognises. I am afraid that time after time, light rail, heavy rail and road schemes cost a lot more than the original proposal. That has to stop.
 
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Mr. Colin Challen (Morley and Rothwell) (Lab): I am naturally disappointed, as I think my other colleagues from Leeds will be, about the announcement on the Leeds supertram. As my right hon. Friend has left the door open on discussions to find creative ways to finance it, will he meet representatives from Leeds, which is, after all, the north's most successful city after 24 years of a Labour administration, to discuss those creative ways and see how creative the Government can be in financing the Leeds supertram scheme?

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