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Demand for transport links is often underestimated. When the docklands light railway first came to Woolwich 18 months ago, Transport for London estimated that 2.4 million journeys would be made annually to or from
Woolwich Arsenal station. Yet in the first year of the DLR's operation to Woolwich, actual usage was 5 million-more than double the estimated number of users. That demonstrates the huge demand for improved services and the potential for Woolwich to serve as a strategic transport hub, bringing hundreds of thousands of homes within commutable distance of Canary Wharf and the City of London.
The huge benefits to business and the economy from Crossrail explain how the funding package for the project is heavily supported by business contributions. Business organisations such as London First have passionately advocated the scheme, and the business community is supporting Crossrail in two distinct ways.
Mr Mark Field (Cities of London and Westminster) (Con): As the right hon. Gentleman is coming to funding, does he agree that, although we all appreciate that these are difficult and constrained economic times, in many ways we are beyond the point of no return? I very much agree with what he and other Opposition Members have said about the benefits that would extend beyond south-east London through to the country, and as he has rightly pointed out, the business rate supplement is already in place. Huge amounts of money have been raised, both from Canary Wharf Group and the City of London. We always talk about the £16 billion package, but in fact the central Government sum is considerably smaller, at around £5.5 billion, of which £2.5 billion has already been spent-I think of the areas in my constituency around Tottenham Court road, Hanover square and Bond street in Mayfair. Does the right hon. Gentleman agree that, in essence, we are beyond the point of no return? Money has already been spent, but the central Government sum to be spent from this point on is very small in the general scheme of things.
Mr Raynsford: I agree very much with the hon. Gentleman on both points. First, the funding package involves a range of contributions. Although the contribution from the Government, and Transport for London and the Mayor is important, the business contribution is also critical in supporting the scheme. It would be absolutely wrong if the scheme were put in jeopardy by the withdrawal of any element from any of the parties. Secondly, I agree with the hon. Gentleman that so much work has gone into the scheme already that it would be a total tragedy if its continuation were to be questioned at this stage.
Stephen Pound (Ealing North) (Lab) rose-
Mr Raynsford: I shall give way very briefly, as my time is running out.
Stephen Pound: This is a subject to which my right hon. Friend brings his usual expertise and passion. I agree with the hon. Member for Cities of London and Westminster (Mr Field) that there is no possibility of a U-turn on the permanent way. Linked to Crossrail is High Speed 2, a matter of great importance to those of us in west London, and we need clarity on this. We need the issue to be resolved once and for all, because people in my part of the world, in Perivale, are terrified about what might or might not happen; they just do not know. I urge my right hon. Friend, in pressing the Minister, to seek clarity on the funding for Crossrail, because this is not just about Crossrail; it is also about HS2.
Mr Raynsford: I hear my hon. Friend's concerns about HS2, but I shall not be diverted on to that issue, because the debate tonight is about Crossrail. However, I certainly want to see the clarity that he has called for in his usual trenchant way.
As the hon. Member for Cities of London and Westminster (Mr Field) rightly said, business is contributing to the construction of Crossrail through a supplementary business rate, as well as through direct contributions from the City of London, Canary Wharf and, in the case of Woolwich, from Berkeley Homes, which reached an agreement in 2008 under which it would take responsibility for building the station box. It has already undertaken some £5 million of design work on the station. My understanding is that Berkeley Homes and Crossrail are still discussing the precise terms that will enable the work to be carried through successfully, but that they are near to agreement.
Against this positive background, it has been a cause of concern to hear less than wholehearted support for Crossrail being voiced in recent months by some spokespersons for the parties now in government. In a radio interview during the election campaign, the Conservative spokeswoman for London, the hon. Member for Putney (Justine Greening), repeatedly refused to commit to Crossrail. Since the formation of the coalition Government, there has been repeated media speculation that the Government might seek substantial cuts to the Crossrail scheme or delay its implementation. I am well aware that one should not necessarily believe everything one reads in the press, but when one of the sources expressing concern about the Government's intentions is the Conservative Mayor of London, Boris Johnson, it is hardly surprising that speculation is rife.
For that reason, I wrote to the Secretary of State for Transport on 20 May, and I was pleased to receive a reply this morning-no doubt prompted at least in part by the knowledge that the subject would be raised this evening in the House. I welcome the Secretary of State's confirmation in his letter of the Government's support for Crossrail, and his recognition of the substantial benefits that will flow from the scheme for the whole of the capital and specifically for south-east London. I imagine that the Minister will want to re-emphasise some of those points this evening.
I also welcome the Secretary of State's acknowledgement of the efforts that have been made over the past year to make the Woolwich station more affordable to the developer, and the constructive role that the London borough of Greenwich has played in this process. Nor do I in any way disagree with the Secretary of State's wish to ensure that the scheme is delivered cost-effectively and that it delivers value for money. Rob Holden and his team at Crossrail, who I believe have performed exceptionally in bringing the scheme to its current stage, are rightly looking at options for value engineering and for cost savings through good project management and risk management.
However, I am concerned that the Secretary of State's letter leaves room for uncertainty on a number of counts, and I would welcome clarification from the Minister-either tonight or by letter, if that is easier-on the following points. First, are the Government committed to the whole Crossrail scheme, comprising the central London line and the links through to Maidenhead in the west, Shenfield in the north-east and Abbey Wood in the
south-east? There has been speculation that those links might be cut off to save money, which would be an entirely false economy as the scheme only makes sense as a whole. Indeed, a former Conservative Transport Minister, Steve Norris, put it well when he said:
"If you are going to cut Abbey Wood or Maidenhead, you might as well shelve the whole lot. It only makes sense to dig the tunnel if you do the whole scheme. It's like planning to buy a new car without an engine".
Does the Minister agree with her predecessor?
Secondly, there has been speculation that the Government might seek to cut costs by reducing the scope or specification of the Crossrail scheme. I hope that the Minister can go further tonight than the Secretary of State, who was able to say in his letter only that
"no decisions have been taken on any such options".
As I am sure the Minister will understand, it would give a great deal more comfort and confidence if we were assured that no reductions in the scope or specification of the scheme were under consideration.
Thirdly, on Woolwich station, will the Minister confirm that, providing Berkeley Homes and Crossrail reach agreement on the basis for Berkeley to build the station box within the principles agreed in 2008, the Government will ensure that this station is included in the scheme?
Finally, while I understand that there may be a case for re-phasing some of the works within the overall timeframe for construction, can the Minister assure me that the Government remain committed to the 2017 completion date for the whole scheme and will not seek savings by delaying or deferring any parts of the scheme?
It is in everyone's interest to see this hugely important project delivered as planned, on time and within budget. I hope that the Minister is able to set our minds at rest by giving the clear assurance I am seeking that the new Government are as committed as their predecessors were to Crossrail and will work tirelessly with its co-sponsor, the Mayor of London, to secure this outcome.
6.15 pm
The Minister of State, Department for Transport (Mrs Theresa Villiers): I congratulate the right hon. Member for Greenwich and Woolwich (Mr Raynsford) on securing a debate on this very important topic. I first became a supporter of Crossrail around 10 years ago in my former role as one of London's Members of the European Parliament, but my involvement has been brief in comparison with the right hon. Gentleman's long track record. I am sure that everyone will join me in paying tribute this evening to his long and distinguished record of campaigning for Crossrail in general and for Woolwich station in particular.
It is a great honour for me to address the House from the Government Dispatch Box for the very first time. I also count it an honour that my debut here today gives me the opportunity to focus on a project that is so important not just for south-east London but for the capital as a whole, and, as has already been pointed out, for the whole of the UK economy. I reiterate, and warmly welcome, the right hon. Gentleman's statement on the benefits of Crossrail, which he so eloquently set out this evening.
Crossrail received support from both the coalition partners before the election. That support has been carried through to the formal coalition agreement setting out our programme for government, and the new Secretary of State has made it clear that we are committed to Crossrail. Crossrail is under way: it is happening, it is being built, spades are in the ground, and no decisions have been taken to change the scope of the project.
Our challenge is to deliver an affordable world-class railway. I can assure the right hon. Gentleman that the Department for Transport is working hand in hand with Transport for London, the Mayor and the leaders of the Crossrail project to secure that result. That is why Crossrail Ltd, the company tasked with delivering the project under the leadership of Terry Morgan and Rob Holden, is undertaking the full range of work to ensure that the scheme remains affordable, on budget and on time.
On the right hon. Gentleman's question about the timetable, I am sure that he would not expect me to take the pressure off those delivering the project; it is my job to hold their feet to the fire and ensure that they deliver on time. It is vital to ensure that each element offers value for money. Indeed, hon. Members familiar with basic project management techniques, as I well know the right hon. Gentleman will be, will appreciate that this work is essential good practice for all construction schemes-and Crossrail is no exception.
I can assure the House that real progress is being made on Crossrail. There are already around 2,000 people working on the project. Last month saw the first anniversary of the commencement of construction work on the Canary Wharf station, which is now progressing ahead of schedule. Enabling work, as I think we all know, is very visible at numerous sites around London, including at Tottenham Court Road, Paddington, Liverpool Street and Bond Street stations. Further work is about to start on the ticket hall at Farringdon. Much of the land needed for construction has already been purchased. Less visible-but, I say to the House, no less important-are the efforts Crossrail Ltd is making to develop detailed designs and plans for different parts of the project. Work is also under way on how services will be operated and how best to integrate them with the rest of the capital's transport network.
In these difficult times it is more important than ever to ensure that every element of the scheme is tested and retested for value for money. To put it simply, we owe it to all those funding the project, to the business contributors and taxpayers of today and to the fare payers of tomorrow to do all we can to keep this project affordable and to deliver the best value for money. Working closely with the Mayor and the Crossrail team, it is the Government's duty to ensure that every pound invested is well spent and delivers maximum value.
Mr Mark Field:
I entirely endorse what the Minister has said about the need to secure maximum value for money-we would all agree with that-but has not one of Crossrail's difficulties been caused by the publication of headlines referring to £15.9 or £16 billion, when in reality the central Government element of the expenditure has been considerably less than that? Earlier in her speech the Minister talked about spades in the ground, but as she will recognise, it is rather more than that. Over £2.5 billion has been spent on compulsory purchase
and on works already undertaken. Does she agree that, although this does not detract from her central argument about the need to ensure that there is good value for money in the future, we are, in a sense, beyond the point of no return?
Mrs Villiers: My hon. Friend has made a strong point. We need to concentrate on the work that is going on, rather than on the speculation and scare stories that have appeared in parts of the London media.
The work under way at Canary Wharf station already provides a clear example of innovative engineering techniques that have offered significant savings without compromising delivery. We need to learn from that example when delivering other key elements of Crossrail. I know that Crossrail Ltd is committed to the highest standards of procurement practice to bear down on costs and ensure that the project remains affordable, and that must continue to be a key goal for the Crossrail team as progress is made towards letting contracts later in the year.
Jim Fitzpatrick: I welcome the Minister to her new position, and congratulate her on her appointment. Some of us expected to see her as Secretary of State-but hey, she has plenty of time, and I am sure she will get there in due course.
The Minister referred to the building of the station at Canary Wharf. My understanding is that Canary Wharf undertook the funding of that development. This reinforces the point made by the hon. Member for Cities of London and Westminster (Mr Field). The private sector has put its money where its mouth is. The question that my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) and other Labour Members have been asking is whether the Government are as committed as the private sector.
Mrs Villiers: As I have said, we support Crossrail and are committed to it. The project is going ahead. It is vital to ensure that all assumptions about the risk that the scheme involves are tested rigorously by Crossrail Ltd to ensure that those risks are properly identified and reflected in cost estimates, and so that sensible steps can be taken to reduce them. The latest innovative value engineering techniques have the potential to reduce costs significantly, and Crossrail Ltd has already been able to identify 18% savings in overall indirect costs through measures such as reducing administrative and staff costs and renegotiating IT contracts.
Stephen Pound: I am grateful to the hon. Lady for giving way. She has been extremely generous, and I echo others in welcoming her to her post. I think that the least we could do is consider opening a new station adjacent to Charing Cross, perhaps in Villiers street.
Does the hon. Lady agree with one of the central points made by my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford)-that Crossrail is not just about London but about the south-east, and the national economy? Does she agree that it is a driver for economic growth and expansion?
Mrs Villiers: I entirely agree that Crossrail will be a hugely important driver for economic prosperity, not just in the capital but throughout the United Kingdom economy.
Energetic work is continuing to find more efficiencies, and I am sure all Members will accept that the principles I have described are basic elements of good project management and simple good housekeeping.
Let me now turn to the important issues raised by the right hon. Member for Greenwich and Woolwich about Woolwich station. I am well aware-as, I am sure, are all who have followed the twists and turns of Crossrail's long history-of the pivotal role that he has played. He fought a long and successful campaign to add a station at Woolwich to the Crossrail Act 2008. As he said, such a station could deliver significant regeneration benefits to his constituents and to south-east London more widely.
Let me make absolutely clear that I recognise the importance and magnitude of those benefits, that I hope we can find a solution, and that the Department and I are working hard with Transport for London in trying to find a way forward. However, a clear agreement was reached that the costs of building and fitting out the station would be borne by the private sector. That agreement limited the taxpayer contribution to the money saved because a station at Woolwich would reduce costs, given that some of the work originally included in the overall project would no longer be necessary.
In short, the plans to include a station at Woolwich have always depended on contributions from the developers who stand to benefit most from it. That was the case when the last Government took the decision to add the station to the Crossrail Act, and it remains the case under the new Government. It is abundantly clear that the debt crisis left by Labour has placed intense pressure on the public finances, so we cannot default to a position where a shortfall in the promised private sector funding for the station simply pushes up the costs for the taxpayer.
Mr Raynsford: While I understand entirely the basis on which the agreement was reached in 2008, does the hon. Lady recognise that what has happened subsequently in the housing market has inevitably impacted on Berkeley Homes, the developer, whose contribution is critical to delivering this? While not asking for public contributions, I did specifically encourage flexibility on the part of the Government, to make it possible to reach an agreement with Berkeley Homes that is affordable for the company. The Secretary of State agreed in his letter to me that that was the Government's objective. Will the hon. Lady tonight confirm that they will try to get an agreement on that basis?
Mrs Villiers: I want to set this out very clearly. The private sector contribution was pivotal to the station getting the go-ahead when the decision was made to add it to the Act, and it remains so. The Government cannot offer additional taxpayers' money over and above what has been agreed within the current funding programme to replace the shortfall in the private sector contribution that Berkeley Homes promised to provide. However, we can seek flexibility in other areas, as the Secretary of State outlined in his letter.
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