Crossrail Bill


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Clause 65

Financial provisions
Question proposed, That the clause stand part of the Bill.
The Chairman: With this it will be convenient to discuss the following: New clause 2—Financial provisions (disclosure of information)—
‘(1) The Secretary of State shall publish all relevant details as to the moneys used to fund the construction and maintenance of Crossrail, beyond those monies as already provided by Parliament and set out in section 65(1).
(2) The Mayor of London shall, not less than 12 months after the granting of Royal Assent to this Act, publish and make available to all who are eligible and registered to vote in the London Mayoral or Greater London Authority elections, a statement indicating—
(a) the agreement he has undertaken and agreed with the Secretary of State for the proposals of building Crossrail, and
(b) the potential financial consequences of this agreement for London.
(3) The Secretary of State, after consultation with the Mayor of London and the Transport Commissioner for London, shall publish an annual statement setting out which bodies shall bear responsibility and liability for any costs associated with the building of Crossrail separately indicating the—
(a) costs to date, and
(b) projected costs to date.’.
New clause 3—Disposal of surplus property—
‘(1) Any land and or property acquired or used for the purposes of this Act, if deemed thereafter surplus to the needs of this Act, shall be disposed thereof.
(2) The proceeds of any disposals under subsection (1) shall be made available only for either—
(a) the purpose of paying compensation as required under this Act, or
(b) the purpose of paying for the construction of Crossrail or any such related purpose.’.
Mr. Harris: The clause is the standard clause that appears in Bills that provide for the expenditure of public money. It simply provides that any expenditure by the Secretary of State under the Bill
“shall be paid out of money provided by Parliament”.
The content of the clause itself is entirely uncontentious.
With regard to the new clauses, the hon. Member for Wimbledon seeks to achieve transparency in the way that Crossrail will be funded. I am happy to say that the Government agree that transparency about Crossrail is desirable, as evidenced by the documentation that we have already made available, to which I referred in an earlier sitting. I can give comfort to the Committee that we intend to more information public in future. Yesterday, a copy of the heads of terms agreed by the Secretary of State for Transport and Transport for London were placed in the Library of the House. Some details have been redacted to protect commercial confidentiality, but the key terms of the deal between the co-sponsors of the project are now in the public domain. We and TfL need to produce the detailed arrangements that will support the heads of terms. That will involve the production of a large number of documents, which we expect to take several months to finalise. Our presumption is that those documents will be made public, again subject to the need protecting commercial interests.
Turning to new clause 2, the publication yesterday of the heads of terms means that the Government have in practice already published the information that proposed subsection (1) would require. May I make it clear that we intend to make public the relevant detailed agreements that will be negotiated over the coming months to implement the heads of terms? I believe that that will deal in large part with what proposed subsection (2) seeks to achieve. The issue of the wider financial consequences of Crossrail for London mentioned in proposed subsection (2) (b) is a matter for the Mayor. I expect that he would want to be very clear with Londoners about that, and he is subject to ongoing scrutiny by the London assembly.
Proposed subsection (3) refers to the desire for ongoing information about progress during construction. Our intention in that respect is captured by paragraph 3.11.2 of the heads of terms, which makes it clear that Cross London Rail Links Ltd will be required to publish information,
“to ensure a high level of transparency as to the progress and cost of the Crossrail Project.”
To conclude, while I sympathise with the sentiment underlying new clause 2, I think that it is unnecessary. I hope that I have made it clear that the Government and the Mayor recognise the importance of keeping the public well informed about the way in which Crossrail is taken forward, and that we are already taking steps to do that. On that basis, I hope that the hon. Member for Wimbledon will not press the new clauses to a vote.
Stephen Hammond: Certainly, we have already had one attempt this morning to introduce finance into our discussions, and the Minister congratulated the hon. Member for Richmond Park on the elegant manner in which she tried to inject the issue into this morning’s debate. I was tempted to speak in the debate on her amendment, but I resisted the temptation to do so, because I expected to have the opportunity to discuss my two new clauses and to speak on clause stand part.
As the Minister said, clause 65 provides for the expenditure incurred by the Secretary of State as a consequence of the Act to be paid for out of money provided by Parliament. It is a standard clause and we have no problems with it; we do not object to it. I have no doubt that, subject to commercial confidentiality, the Government are keen, or certainly have proved be keen, to provide details of the Crossrail package. In that spirit, I want to offer my thanks to the Minister both the briefing that he gave to the hon. Member for Carshalton and Wallington, who is a Liberal Democrat spokesman, and me. I thank him, too, for the package that he provided last night for Committee members—that package is now is in the Library. His spirit of transparency and generosity is appreciated. However—as the Minister would expect, there is always a “however”—the Bill gives explanations of the moneys provided by Parliament but not by other bodies. It does not provide, either, for updates to be delivered to Parliament on the subject of funding and costing. That was what I might have said about with the hon. Lady’s amendment this morning: although I thought it an excellent and elegant amendment, it was a one-off, and did not require an annual statement to be made to Parliament.
My new clauses go further than the hon. Lady’s amendment. We appreciate and accept the Minister’s generosity of spirit in making those disclosures, but it would be wrong of us as the Opposition not to ensure that adequate and appropriate protection is available. New clause 2 would provide such protection by making three provisions. First, it would ensure that the Secretary of State makes available to Parliament details of funding arrangements. Secondly, the Mayor of London, whoever that is at the time, will commit Londoners to extra expenditure and potential liability, and it is only right that he should provide them with a statement of the financial consequences. I am not sure that I share the Minister’s confidence that every person elected Mayor would be keen to provide such a statement. Thirdly, the new clause states that the Secretary of State shall, after consultation, provide an annual statement of costs and liability.
The justification for proposed subsection (1) is clear. The provision would allow us to scrutinise the elements of the package, to undertake proper risk analysis, and form a view on the financial probity of the providers, before considering the provisions behind the finance package and the financial model so that we could take taking a view on the associated risk. The Conservatives have said throughout the parliamentary process—I am sure that the Liberal Democrats have done so, too—that we support the principle of Crossrail, but that we would need to see the funding. The Minister has acted in a spirit of generosity and transparency, and it is appropriate that we enshrine that transparency in the Bill.
Proposed subsection (2) is simple. All councils have to provide an annual statement on how they deliver services and how those services are paid for. The subsection would not place any greater requirement on the Mayor of London. He is happy to commit Londoners to potential liability as a co-sponsor, so he should be happy to tell Londoners exactly what the financial consequences of his actions will be. I see no problem with that, and I am sure that Londoners would appreciate it.
Proposed subsection (3) would provide for an annual statement or update. As we embark on the building, maintenance and operation of Crossrail, we do need more than a snapshot in the House; we need dynamics. If there were a problem of overspend or—less likely, I suspect—underspend, or if was a delay, the new clause makes provision for Parliament to be notified of such things, which would be subject to parliamentary scrutiny. I have listened carefully to the Minister. We are grateful that he has deposited information with us, and we thank him sincerely for doing so. At the same time, I hope that he recognises that it is the Opposition’s duty to make sure that his spirit of generosity is not transitory and that it is enshrined in one of the most important parts of the Bill so that it will be available for future scrutiny. I shall therefore seek to divide the Committee on new clause 2.
5.45 pm
New clause 3 is a simple but important housekeeping measure. This is an exceptional project, and it requires exceptional powers and exceptional discretion. We have recognised that spirit throughout. The Secretary of State has been granted powers of compulsory acquisition both within and without the scope of the Compulsory Purchase Act 1965; she has been granted rights of easement and licences; and she has been granted powers of purchase along the deemed route within and without the limits of deviation. We all accept that that is necessary and desirable.
After Crossrail is built, however, there will undoubtedly be land excess to the needs of the Crossrail operation. I am sure that any member of this Committee, particularly those who served on the Select Committee, can think of petitions they have heard where the land that is going to be used for the building of Crossrail will not be necessary for its operation. The Government and the operators of Crossrail will not necessarily want to be a landlord so that excess land should be disposed of. The proceeds from the disposal of the surplus lands should be directed to reducing the overall costs and funding the compensation payments. This is a sensible housekeeping measure and I commend it to the Committee.
Susan Kramer: I will be very brief. Obviously I was sad that those on the Conservative Front Bench could not see their way to supporting my amendment because it gave the advantage to the House of being able to give its assent to the final package on Crossrail. I, too, am very impressed by the generous amount of information that has been provided by the Minister. However, there is an issue of underlying principle that is worth establishing. We have noticed that every time there is an issue here, reference goes back to the channel tunnel rail link and no doubt future Bills will all talk about what was in this Bill. Establishing the ongoing principle on the face of the Bill that information should be disclosed on a regular basis is probably no bad item to have.
Again, although we all have a great deal of confidence in this Minister, the project runs way out into the future. It would be sad to give leeway to others to provide less disclosure than the current Government are willing and able to do. Although I shall support the new clause tabled by Conservative Members, if for some reason it should fail, will the Minister consider these matters and reflect his own attitude towards transparency in a clause that he might bring forward at a future date to ensure that providing information is an ongoing principle?
Mr. Binley: I apologise to the Committee for detaining hon. Members for perhaps longer than they might have hoped, but financial accountability and especially annual reporting are vital matters. I want to talk briefly about why I believe them to be so important. Most people know that my background is in a business environment. Annual reporting creates a discipline that simply is not created in any other way. It creates an accountability that gives credibility to a project.
The second thing that annual reporting provides is the ability to put things right if they are not going right. We have seen too many projects from Governments of all political persuasions that have gone wrong because they have not been properly managed. It is all very well seeing a problem, putting money into it, and, finally, setting targets, but that is not the secret of management. The secret of management is managing the process thereafter. Very often it does not mater whether the decision made about a specific issue falls within a set of parameters, but it clearly matters if it is managed, fine tuned, tweaked and the subject of drastic effort in a way that changes a process that is clearly going wrong. Financial reporting allows a process to be looked at in a clearer way than almost any other mechanism.
As I said, a company would have to proceed along the lines that I have described, but it is not clear that that applies in this case, even if we bear in mind the constitution of the package that we are talking about with regard to Crossrail. I want to ensure that it does apply. Putting the new clause into the Bill offers a protection not only for respective Governments—because it is likely that this process will be undertaken by respective Governments as it goes on into the future—but for the taxpayer, who will contribute sizeably to the project. It is not only the taxpayer in London who will contribute, but also those throughout the rest of the country.
I therefore urge the Minister, whom I know to be keen on transparent government, to consider the process, even if on this occasion he does not accept it. At the very least, will he come back on Report with a mechanism that would accede to this request, which I am sure that he feels in his heart is sensible?
Mr. Field: Just for once, let us be wise before rather than after the event. The Minister and I have been in Parliament for exactly the same time, six and a half years, and there is a sense of d(c)j vu as I consider many of the Bills on which I served on the Committee.
For example, the first Bill Committee that I sat on was the Proceeds of Crime Act 2002; we pointed out, time and again, the enormous costs that would go into setting up the associated agency. On the Enterprise Act 2002, we repeatedly talked about the risk of allowing too many 20-somethings to become bankrupt, but all that came to pass. On the Licensing Act 2003, I talked endlessly about the notion of 24-hour drinking and the risible idea that bringing in more flexible licensing laws would somehow lead to a Parisian drinking culture on the streets of London and of the country. Likewise, on the London Olympic Games and Paralympic Games Act 2006, we endlessly talked about the spiralling costs, and, of course, they are precisely what have come to pass.
Our biggest concern in relation to Crossrail is not the idea of it, as the project is something that we very much support, but the notion of blight if the proper funding is not put into place. I fear that, notwithstanding the assurances made by the Minister and the Prime Minister over the last six or seven weeks, the funding package for Crossrail is a good deal less robust than we would like it to be. It is for that reason that I totally support new clause 2, and my hon. Friends have put forward robust reasoning for it. I fear, however, that if we do not get this right and we do not get the proper funding in place, there will in years to come be a sort of half-Crossrail that will not do anything like as much as it is planned to do at this stage; there will be a phase 1, with phase 2 or 3 deep in the future, which will never come to pass because of the enormous, spiralling costs.
We need to get this right, and the worst of all worlds, as I have said, is that countless numbers of constituents, not only in my constituency, but in dozens across London and the south-east, will have their lives blighted by being on the Crossrail route, with very little prospect of the project coming to fruition, unless we get the funding right. Therefore, I hope that the Minister will give serious consideration to ensuring that, for once, we are genuinely wise before rather than after the event.
Mr. Harris: I have already made some comments about new clause 2. Shortly, I would like to make some comments in response to the comments by the hon. Member for Wimbledon about new clause 3.
First, I would like to respond to what the hon. Member for Richmond Park has said. I do not feel that a commitment in the Bill to the kind of reporting that she is looking for would be appropriate in this case. I understand why she and other members of the Committee have belittled the notion of always using the precedent of the Channel Tunnel Rail Link Act 1996 to justify a particular clause in this Bill, but let me suggest a corollary of that. Can she, or indeed any other member of the Committee, name a piece of legislation about a large infrastructure project where this kind of reporting, aimed at creating the level of transparency that we all want to see, has been included in the Bill? It is a rhetorical question; I would be very surprised if there was an answer.
Mr. Binley rose—
Mr. Harris: We may actually have an answer.
Mr. Binley: The Minister challenged us so may I ask him whether he thinks that, although there is no precedent, it is time that we set one? That is the point about this new clause. We want to improve government and I am sure that he also wants to improve it. On that basis, and in the spirit of going forward to ensure that we have more transparent government, surely he would accept that point.
Mr. Harris: There is a good reason why such commitments have not been included in previous legislation. I must say to the hon. Gentleman that I am not about to make political history and create a precedent with the Crossrail Bill.
On the comments of the hon. Member for Cities of London and Westminster, I am clearly far more optimistic than he is about the robustness of the financial package that has been put together. Time will tell, but I think that the amount of work that has been put into creating that financial package will show in time that that package is extremely impressive and, I must say, robust.
The purpose of the hon. Member for Wimbledon in proposing new clause 3 is to ensure that
“Any land or property...if deemed thereafter surplus to the needs of this Act, shall be disposed thereof”
and the proceeds will be used for Crossrail-related purposes. I can assure him that this new clause is unnecessary. The Secretary of State has already given a number of undertakings on the matter of the land disposal policy. These form part of the environmental minimal requirements and she has given undertakings to Parliament on the enforcement of those requirements. The relevant paragraph in that policy is as follows:
“Where any land which has been acquired and used for the construction of Crossrail is:
(i) no longer required for the satisfactory completion of the Crossrail works;
(ii) not required in connection with the operation of Crossrail;
it will be sold subject firstly to the Crichel Down Rules 2004 and to the extent that this does not apply, then in accordance with this policy”.
As I am sure the hon. Member for Wimbledon will recall, those rules provide for the circumstances in which land acquired under threat of compulsion but no longer required for public purposes will be offered back to the former owner. The requirement under the rules to offer land back is not unqualified.
The terms of the Crossrail land disposal policy were published in advance of the Select Committee’s consideration of the Bill. Therefore, they have formed the backdrop for many agreements reached with persons whose property would be subject to compulsory purchase as a consequence of the Bill.
On the question of the use of the proceeds, I assure the hon. Member for Wimbledon that it is integral to the funding package announced by my right hon. Friend the Prime Minister last month that the proceeds will be applied for Crossrail purposes. As the hon. Gentleman will appreciate, however, the timing of those receipts is unlikely to marry with the timing of payments of compensation and therefore they will go towards the repayment of Transport for London borrowing to finance the project.
Question put and agreed to.
Clause 65 ordered to stand part of the Bill.
Clause 66 ordered to stand part of the Bill.
 
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Prepared 28 November 2007