My second point is about consultation. The shadow Minister raised important points. Does consultation have to happen independently in each of the CCGs involved in the grouping, or will it be done en masse, in which case, will there be assurances that the consultation

9 Sep 2014 : Column 825

will be balanced across all the CCGs involved? In this case, as I say, we have had quite extensive consultation with patients, but at the meeting I addressed in Victoria park in Stafford on Saturday, one cancer patient raised his concern that he had not been consulted. Members of Parliament from the area have not been consulted; nor indeed have the main providers of acute cancer care in the area—the University Hospital of North Staffordshire and, for the time being, the Mid Staffordshire NHS Foundation Trust. They provide very good cancer treatment and care, although the co-ordination and other services such as psychological counselling, financial advice and so forth could be considerably better in some cases.

There are serious questions about the consultation with all relevant bodies. The Health and Social Care Act 2012 states that the clinical commissioning group

“must make arrangements to secure that individuals to whom services are being or may be provided are involved”

in various ways, including

“in decisions of the group affecting the operation of the commissioning arrangements where the implementation of the decisions would (if made) have such an impact.”

I believe that that has not happened in this case. It must happen, which is why I am asking for at least a suspension of the process until it has happened.

Page 6 of the fifth report of the Regulatory Reform Committee on the draft regulatory reform order refers to

“concerns about possible loss of protection”


“Joint committees would be able to take majority decisions on behalf of their constituent CCGs and NHS England, and so individual CCGs”

might find themselves increasingly concerned during the process, as I know a couple of them are at the moment. They could find themselves still heavily involved, having committed substantial financial resources, but as a result of the consultation and listening to their patients and their members they no longer want to go ahead with the process. They would probably be outvoted.

I conclude by asking the Minister to look very closely at this issue, which was featured in Private Eye this week. I ask that some common sense be brought to bear on the situation, if possible, and I ask for a slowing down or suspension of the process until we have a better health economy in Staffordshire and until we are clearer about the consultation process that needs to happen.

4.8 pm

Graham Stringer (Blackley and Broughton) (Lab): I rise to oppose the order for two primary reasons. I shall attempt to divide the House at the end of the debate.

My first reason relates to the Legislative and Regulatory Reform Act 2006. Right hon. and hon. Members may not be over-familiar with the Act, but its purpose was to allow regulatory burdens to be taken away if it was unlikely that Parliament would find time to debate the issues and if they were not controversial. It provides in the Act—this is why we are debating the order today—that if the Regulatory Reform Committee is not unanimous, there should be a debate on the Floor of the House. If there is a majority against the order, a longer debate in a different form would take place. The Committee did not unanimously support the order—I am not aware why

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one Member voted against it—and that has provided an opportunity to look at the process governed by the 2006 Act and assess whether the order complies with it.

In the simplest, most common-sense terms, an order would be passed if it would remove a burden and was non-controversial. I think that this order is controversial, and I do not think that it meets the conditions in the Act. Those conditions exist because, effectively, the process and the order concerned will relieve the House of the burden and responsibility of going through three Readings in this House and three Readings in the other place, so we have to be certain that this order is non-controversial.

First, there is the question of the consultation on the order. The report states that the Department consulted the better regulation unit, and was told that, as the order would remove only an administrative burden,

“it would be appropriate to conduct a targeted consultation rather than a full public consultation.”

I do not think that that is appropriate. Almost everything to do with the structure of the health service at the present time is controversial. My constituents and, certainly, Members of Parliament have views and concerns about that, but they were not directly involved or consulted about the process, and I think that that is a mistake in itself.

Then there is the claim that the order will remove an administrative burden. When I questioned the Minister earlier about the administrative burden, I tried to explain that, at present, clinical commissioning groups can organise themselves into committees, and can make decisions if those decisions are unanimous. They do not have to report back to anyone, so there is not an administrative burden there. There are other ways in which they can co-operate: they can reach legal agreements, or, indeed, they can report back, as in the example given by the Minister.

I do not believe that there is an administrative burden to be removed. However, I do think that there is the potential for repression of a clinical commissioning group. While it is voluntary to enter into these arrangements, if clinical commissioning groups entered into them in good faith and then encountered a more controversial issue, it would be difficult for them to move out; and if they could move out, that would return them to exactly the position in which they would have been had they been entering into a voluntary agreement with a committee in common, which means that there is no removal of an administrative burden. If that is the case, we do not need the order. If it is not the case, it is possible for a majority of clinical commissioning groups to overrule the interests of other CCGs.

In my view, the Regulatory Reform Committee and the Department have not followed the rules set down in the Legislative and Regulatory Reform Act 2006, and the House should reject the order on that basis alone.

I am not engaging in a theoretical discussion, and I am not going to ask the Minister to listen to a debate that would be exactly the same as our recent Westminster Hall debate about the proposals in Healthier Together. However, a consultation—a very flawed consultation—is currently taking place in Greater Manchester. The health trust that covers Wigan, Wrightington and Leigh in the west of Greater Manchester, and the one that covers south Manchester and Wythenshawe, fear that the proposals

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are unreasonable, and feel unable to support them at present. If the proposals were to go ahead, it would be possible for a majority of the 12 clinical commissioning groups that operate in Greater Manchester to make a decision that would impose changes on the hospitals in those clinical commissioning areas which are not wanted by the clinical commissioning groups.

As I said, the consultation is deeply flawed. It involves upgrading some hospitals to specialist hospital status and in effect downgrading other hospitals. Incidentally, three of the hospitals—those in north Manchester, Bury and Tameside—have not been consulted on the proposed changes in those hospitals.

The local healthwatch team said that the way in which our CCGs are operating is outside the law and that this proposal would put them inside the law. We can see the reason why: they want a majority decision, not a decision that would represent the areas of Wigan and south Manchester. I could talk a great deal about the rest of the Healthier Together proposals, but we debated those details in Westminster Hall. I do not think that the proposals are in the interests of the people of Greater Manchester. They try to jump the gun before the general election. It would be better for the decisions to be made by whichever Government are in power after the general election.

The consultation documents omit to mention the financial situation in which Greater Manchester finds itself—a £1 billion deficit is projected in the next two and a half to three years—and make proposals that could lead to the closure of hospitals, while pretending that they are only small decisions. The consultation paper wanders all over the place—through primary, secondary and tertiary care—but at the core of the consultation is the change in status of a number of hospitals in Greater Manchester. I worry that, if the CCGs work together and make majority decisions, the proposals in the Healthier Together consultation will be used as a blank cheque—health authorities in Greater Manchester will have carte blanche to do what they wish, without taking account of the views of the people of Greater Manchester.

4.17 pm

Mr Andrew Lansley (South Cambridgeshire) (Con): I did not intend to say much about the regulatory reform order but I am prompted to do so to ask some questions and to respond to one or two points. I will not rise to the bait of the shadow Minister, the hon. Member for Leicester West (Liz Kendall), other than to say that I thought it deeply ironic that, in railing against the Health and Social Care Act 2012, she instanced for most of her speech the views of Healthwatch England, a body representing patients that was created under that Act. It remedies one of the greatest failings of the last Labour Government, who demolished successive efforts to give patients a genuine voice.

I was grateful to my hon. Friend the Member for Stafford (Jeremy Lefroy) for instancing the Act’s requirements on CCGs in relation to patient involvement. “No decision about me without me” is at the heart of the principles of reform. They are set out in the primary legislation. This reform order does not in any way reduce the statutory requirements on CCGs, which

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must ensure that any joint arrangements they enter into match up to the requirements under the Act.

Under the Act, the essence of CCGs, compared with primary care trusts, is that they are independent statutory bodies. I will not follow the hon. Member for Blackley and Broughton (Graham Stringer) and discuss the process of the regulatory reform order, but he is right: it is not theoretical; it is practical. There is a practical reason why we are in a better place, with CCGs enjoying statutory authority compared with PCTs. Although they were statutory bodies, they did not have the authority that exists presently under statute to deliver and commission services in the interests of the population they serve, without interference or instruction by others. Therefore, as the Minister rightly says, if they wish to enter into these commissioning arrangements, they do so on a voluntary basis. My view is that in the relatively short intervening period under the Act, they have probably underestimated their capacity as statutory bodies to enter into arrangements voluntarily, exercising their statutory authorities as long as they do not improperly delegate their responsibility.

That takes us back to the practical issue. I remember that in 2006, also in Manchester, as it happens—some Members will recall this very well—there was the reorganisation of maternity and children’s services across the city. I suspect that what is being complained of in relation to Healthier Together is exactly the same kind of complaint as was made against that consultation, which had its deficiencies, of which I complained.

Leaving aside whether the consultation was good, bad or indifferent, the point is it did arrive at a position. I can remember talking to the chief executive of the primary care trust in Salford and also, separately, to the chief executive of Salford Royal, and they were told that, as a consequence of the configuration, although the primary care trust wished to commission maternity services and paediatric intensive care services from Salford Royal and the hospital wished to provide them, they were not allowed to do so because the Joint Committee of Primary Care Trusts was preventing them from doing so. In fact, as they were, in effect, in a hierarchy under the strategic health authority, under past legislation they could have been required—forced—to go down that route, and were forced to do so.

That, in my view, is not the position now, and it still will not be the position under these proposals because they are voluntary. If a CCG takes the view that it is in the best interests of its population to deliver some service, it must take a decision consistent with that view. If that means it enters into a voluntary arrangement to deliver that, that is to be supported. If it takes the view that it has to depart from any such arrangement in order to secure the best interests of its population, it must go down that path as well. It would be wrong, under this order or otherwise, for it not to do what is in the best interests of the population it serves.

Finally I have a question, which in this respect is an important one following on from what the shadow Minister asked. In commissioning—quite often when commissioning, for example, out-of-hospital and community services—it is right that one may well need to co-ordinate across CCG services and NHS England’s responsibility for the commissioning of primary care services or, indeed, other services such as dental care and pharmacy services. That being the case, however, it is also important to

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commission across social care services and some public health aspects of local authorities’ responsibilities. With local authorities having their own statutory authority, and CCGs likewise, it is perfectly possible for them to enter into joint commissioning arrangements, and they do so. I hope the Minister will be able to reassure me that not only are local authorities and the geography of health and wellbeing boards and scrutiny to be respected in terms of the way in which CCGs enter into these kinds of voluntary arrangements, but also that where they enter into joint commissioning arrangements they are able to do so in ways that can mesh together NHS England, CCGs, as necessary, and local authorities.

I urge that at the heart of this is a recognition that CCGs now have statutory authority. That is what is different. They are accountable to their local community, and must set out a commissioning plan and agree it with their health and wellbeing boards. If they try to enter into an arrangement which is contrary to the best interests of their population, as set out in that commissioning plan or by agreement with the health and wellbeing boards, clearly it would be deficient and it should not be able to be pursued.

4.24 pm

Richard Fuller (Bedford) (Con): It is truly a pleasure to listen to my right hon. Friend the Member for South Cambridgeshire (Mr Lansley) and to follow him in the debate. I am a member of the Regulatory Reform Select Committee and it was my vote that enabled the House as a whole to debate this measure, which might, on paper, seem rather arcane. The hon. Member for Blackley and Broughton (Graham Stringer) asked why we are debating it in this way. We are doing so because the core dilemma in much health reform involves the tension between local decision making and common advance. For many people, there is a tension between the priority to localise decision making and the need, as seen by professionals such as the doctors and clinicians whom we trust, for some decisions to be made on a common basis in order to achieve overall advances in health care. It can be difficult to find the appropriate boundaries as we try to resolve that tension.

I felt that it was important to bring this matter to the House so that other hon. Members could have a chance to talk about the experience in their own localities. The issues in Greater Manchester have already been mentioned, and my hon. Friend the Member for Stafford (Jeremy Lefroy) has mentioned the issues in his own area. I also felt that it was important to herald one of the most important attributes of the reforms that my right hon. Friend the Member for South Cambridgeshire introduced, which was to enable, as far as possible, decision making on these issues to take place locally and to ensure that those local decisions were led not by politicians or bureaucrats but by doctors. A concern has been expressed that this change would somehow draw us away from those reforms.

The shadow Minister, the hon. Member for Leicester West (Liz Kendall), asked some extremely pertinent questions, although she perhaps got off to a bad start by taking the political apparatchik line and suggesting that certain problems were the result of the reforms. This is actually about one of the best parts of those reforms, which allows local people to make decisions.

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That was reflected in the widely quoted comments made by Anna Bradley, the chair of Healthwatch England. In her note, she said that

“we are concerned that the proposed reforms could create the conditions for CCG decision-making to become disconnected from the transparency and accountability mechanisms put in place by the Government’s health reforms”.

She recognises, as do many hon. Members, the importance of the tension. She also referred to it in a press release, in which she stated:

“We understand the benefits of commissioners working collaboratively but it remains crucial that local people are involved, asked what they want and understand how decisions will affect the way services are delivered in their area.”

In my own area in Bedfordshire, we have been having a collaborative exercise between two clinical commissioning groups, and they have done an extraordinarily good job of communicating and maintaining local decision making.

Graham Stringer: The House owes the hon. Gentleman a debt of gratitude for bringing the order before us today. Will he tell us whether, in the example he is giving, the order would help, hinder or be neutral?

Richard Fuller: I am not an expert, but in that particular instance I do not think I would fear the joint committee making a different recommendation from the current committee in common, although it has yet to come back with its report. The point is that the hon. Gentleman and others have aired important questions for the Minister to answer. He has answered some of them, and that has been the purpose of the debate today.

Underpinning all this is the fact—whose importance I hope the Minister will emphasise in his response—that people want important health decisions to be taken locally. They can be persuaded of, and they can understand, the issue of common advance, but they want to know that a decision is being taken locally. I think that the Minister dealt with this in his response to the shadow Minister, but I would be grateful if he answered these points quite specifically. First, am I right in thinking that he said that decisions on the part of commissioning groups to go into joint committees were voluntary, rather than compulsory, and that it would therefore remain possible for them to continue to set up committees in common if they so wished? My second question—

Norman Lamb rose

Richard Fuller: I am happy to give way to the Minister iteratively, or he can wait until I have given him the full menu. Which would he prefer?

Norman Lamb: The answer to that question is yes, absolutely; I repeat that this is a voluntary act by any CCG. To address one of the concerns raised by the shadow Minister, let me say that there may well be circumstances in which CCGs want the rules of the game established at the start of the joint committee saying that there will be circumstances in which they can withdraw from that committee. So there are no circumstances in which any CCG needs to feel that it will be oppressed in any way by its neighbouring CCGs, NHS England or anyone else.

Richard Fuller: I am grateful for that clarification. My second question is on the issue of voting on the

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joint committees. To be effective, is it a requirement that joint committees should be based on unanimous voting only and that all CCGs would have to agree, or will joint committees be substantially based on majority voting? Is it open to CCGs to create joint committees with majority or unanimity voting depending on how they wish to set those up?

Norman Lamb rose—

Madam Deputy Speaker (Dame Dawn Primarolo): Order. May I say to the Minister that I know he is trying to be helpful, but he will soon be seeking to answer this debate? We have only one more speaker to go, so to help the flow of the debate perhaps Members could finish their speeches and then he can respond.

Richard Fuller: I am grateful for the direction, Madam Deputy Speaker. My third question relates to the legalities and costs, which were mentioned by the Minister and were in the justification for making this change from committees in common to joint committees. I am still a little at a loss as to what those legalities and costs are. What costs are currently incurred or are anticipated to be incurred, and why would the costs be substantially less with joint committees? I am not looking for a generic answer such as, “There are some legal costs here and legal costs there.” I am looking for something specific, because if we are to make a change, we have to demonstrate that a substantial administrative burden has been taken away.

My fourth question relates to the impact of the change on existing committees in common. I think it would be correct to say that the Healthier Together review in Manchester is proceeding as a committee in common, not as a joint committee. Would that be the case if this change is made, or would it be possible, either automatically or by choice, for existing committees in common to be transferred to joint committees with the same decision rights that joint committees would have? I am not too clear as to the position for committees that are already extant.

My fifth question relates to the Minister’s statement that committees in common somehow place a “burden”. I would be grateful for his clarification that he does not believe that the essence of localism, which was a substantial intention behind the reform introduced my right hon. Friend the Member for South Cambridgeshire, is the burden to which reference is being made. Sometimes one fears that there is tension between localism and common advance. If we allow the people who are on joint committees and their decision making to get further and further away from the people, the burden of having to go back to get local approval is lost. I hope that the Minister can clarify that that is not what is meant in the order’s reference material.

Finally, there has been a lot of commentary about the fact that it is up to committees to change their minds later on and to decide whether it is a joint committee or not. But the Minister can be clear that not all the consequences of what a committee will find can be known at the outset. Can he clarify whether it is possible for CCGs that are already signed up to joint decision making on joint committees by majority voting to change their rules, or are they bound by those rules

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once they have signed up to them? I am very grateful for the opportunity to debate these issues on the Floor of the House, and I look forward to hearing the Minister’s response.

4.34 pm

Dr Sarah Wollaston (Totnes) (Con): I apologise for missing the opening speeches, but I was chairing the Health Committee. I am delighted to have been here to hear my hon. Friend the Member for Bedford (Richard Fuller). I absolutely agree with him, and am grateful to him for raising this issue of the tension that exists between localism and the decisions that are being made in good faith by clinical commissioners. There is a need for us to engage local people in decision making to ensure that we get the best possible outcome for them.

I am sure that other Members have raised concerns about Healthwatch and the possibility of the local voice being squeezed out. Will the Minister address the issue of the time scale that is often given to local people to consider quite detailed proposals? Indeed, detailed proposals will be given to local health and wellbeing boards at Devon county council with only a day’s notice, and there is no obligation to include local healthwatch. We need guidance in that area, especially if we are to have committees in common, which I support.

I will support the regulatory reform order, as it is a good thing. Like my right hon. Friend the Member for South Cambridgeshire (Mr Lansley), I think that we could go further and involve other groups in these permissive arrangements. As he will know, for people living on the boundaries of clinical commissioning groups, such arrangements do not always appear to be logical. This will allow commissioning to take place over a wider area with better outcomes for patients and often with great saving. I absolutely support the measure, but the concerns expressed by Healthwatch, which have also been expressed to me, need to be addressed.

4.36 pm

Norman Lamb: I am grateful to all Members for their contributions to this debate. Regarding the shadow Minister’s contribution, I am pleased to hear that she is supportive, at least in principle, of this capacity to facilitate greater collaboration at a local level. As my right hon. Friend the Member for South Cambridgeshire (Mr Lansley) said, it is rather ironic that this is all about a reformed health system that has much better clinical and democratic legitimacy than the one we inherited from the Opposition. I notice that no one is out there waving banners demanding the return of the primary care trust. Ultimately, that body had no accountability to the local community—[Interruption.] No, it had no accountability. Its accountability was entirely upwards to the strategic health authority and to the national level.

Liz Kendall: That is completely over the top. Sometimes I have had great trouble getting any answers out of my CCG. Sometimes they have been good and sometimes they have been bad. I have also had great trouble getting anything out of the commissioning support unit. The Minister should not paint some super rosy picture of fantastic accountability and patient involvement, as there are still some real issues.

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Norman Lamb: I fully understand that we should always be arguing the case for greater openness and for greater legitimacy and accountability. All I am saying is that the system that we inherited had no local legitimacy at all, and that this is a significant improvement.

The shadow Minister talked about alignment with health and wellbeing boards. I think that that will almost always be the case. In my county of Norfolk, there are several CCGs, but all are operating within a health and wellbeing area and a local health economy. There may be circumstances in which more than one health and wellbeing board area is being considered, and I think that that is the case within the Manchester area and the discussions that are going on there. But in most circumstances, the sort of collaboration that we are talking about will be consistent with the health and wellbeing board area.

The shadow Minister also asked how CCGs will be held to account for joint decisions. When they act in joint committee, they will be subject to the same duties as when they act on their own and the accountability they face will be exactly the same. It is very important to reiterate that point.

The hon. Lady also raised concerns about the issues that Healthwatch England has raised, and I stress that the Department, NHS England and Healthwatch England are working together to ensure that CCGs have the materials and resources they need to support their effective and accountable collaboration and that local healthwatch organisations and others are supported to hold the system effectively to account. Everything on our side is about facilitating accountability at a local level, not undermining it.

My hon. Friend the Member for Stafford (Jeremy Lefroy) raised concerns about the issues in his area. I think that it is fair to say that they are not directly related to the proposals under the order, in that his concerns are about issues under the current arrangements rather than any potential impact of the proposed change. I want to reassure him that nothing in the order in any way undermines effective accountability for changes. I think it would be dangerous for me to go down the route of responding to the points he raises about his local circumstances, and I suspect that you, Mr Deputy Speaker, would rule me out of order if I tried to do so.

Jeremy Lefroy: The point I wish to make is that in our case the group of CCGs that is seeking to put out to tender the commissioning of end-of-life and cancer services appears to be abrogating its responsibilities for commissioning. These are clinical commissioning groups, yet they seek to put out to tender the commissioning of vital services for our constituents for 10 years. One might be concerned that the groupings would seek to do more like that.

Norman Lamb: My hon. Friend expresses a concern about what is happening at present and he is absolutely right as a local Member to challenge, question and hold to account the clinical commissioning groups in his area, but I do not think that there is anything in the order that changes the arrangements about which he is concerned. Indeed, I think that streamlining the system so that there is more effective accountability and less opaque decision making is better for local people.

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Concerns were raised that joint committees might not meet in public. Joint working does not need to mean that it will take place behind closed doors and exactly the same responsibilities will apply to CCGs when they work jointly as when they work on their own or through committees in common. Indeed, I understand that committees in common have already on occasion met in public and I would always encourage accountable organisations to operate in public wherever possible. That is the approach that I seek to advocate.

In response to concerns raised by my hon. Friend the Member for Stafford, let me make the point that the requirements for service change that apply to a CCG regarding any major proposal for change will still apply, including that for appropriate consultation. Joint committees might want to consult jointly to co-ordinate their communications to patients and the public where appropriate, but the duty remains on the clinical commissioning group and it must demonstrate that it is meeting it.

The hon. Member for Blackley and Broughton (Graham Stringer) again raised concerns about the process going on in Manchester and he and I debated the matter in the debate to which he referred. I stress that his concerns are about actions taken under the existing regime, with a committee in common, rather than under the proposals in the order.

The hon. Gentleman expressed worry about the appropriateness of the order under the Legislative and Regulatory Reform Act 2006, but both the Regulatory Reform Committee and the Delegated Powers and Regulatory Reform Committee judged that a satisfactory case had been made for the LRO and that the order met the tests under the 2006 Act, so his concerns are misplaced. Although he has legitimate and genuine concerns about the process in Manchester and whether it is right for local people, I suggest to him that accountability will be encouraged and improved if the new system is less opaque and more clearly set out in legislation than the existing one. All the things about which he worries are happening under the existing arrangements.

It is up to CCGs to set out terms of reference for any joint committee arrangement, such as the scope for decision taking, and arrangements for membership or voting. They may also determine situations in which a CCG would wish to withdraw from a joint committee arrangement. The hon. Gentleman was worried that one CCG might feel oppressed or bullied by others, but it could set the terms of reference so that it could withdraw in defined circumstances, so his concern is misplaced.

My right hon. Friend the Member for South Cambridgeshire spoke about important improvements in democratic accountability and clinical leadership in commissioning, and the benefits that that secures. He asked about collaboration on commissioning not only between CCGs, or between CCGs and NHS England, but, critically, with local authorities and public health bodies. Such collaboration is facilitated, and he and I share the view that we should try to promote a more permissive NHS health and care system within which local arrangements may be put in place to ensure that the resources available throughout the health and care system are used as efficiently as possible. We should encourage such joint commissioning, rather than putting blocks in its way.

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My hon. Friend the Member for Bedford (Richard Fuller) rightly talked about the tension that exists between local decision making and clinical best practice. This approach is all about managing that tension, rather than trying to pretend that it does not exist. He made the vital point, with which I agree, that people want health decisions to be taken locally, and we should try to facilitate open discussion and debate about the difficult choices that we sometimes have to make, rather than taking power away from people, which just undermines confidence in the system.

My hon. Friend asked about unanimity, so I repeat that if a CCG wants to enter into a joint committee arrangement, and protect its position on behalf of its local community, it can insist that unanimity is the basis on which decisions are taken. That is entirely a matter for the participating CCGs.

My hon. Friend asked about the cost and burden of the existing arrangements. We all understand the possibility of legal challenge, and there can be complex arrangements that involve organisations going through hoops to ensure that they meet their legal duties, perhaps by going back to their CCGs so that a decision taken in a committee in common may be endorsed. The more complicated those arrangements, however, the greater the risk of legal challenge, and therefore the cost, so simplifying in law the basis by which CCGs and NHS England can come together to make joint decisions, should they want to, improves accountability, makes the system less opaque and reduces the risk of unnecessary costs. I totally agree with my hon. Friend that this is not about the burden of localism. Localism is a burden worth carrying; it is not to be avoided. The burden is bureaucratic complexity and the involvement of lawyers—I speak as an ex-lawyer. The more we can keep lawyers out of it, the better, and I am sure many hon. Members would agree.

My hon. Friend made the point that not all consequences may be known at the outset and that things may change, but CCGs can set the terms of reference to provide for that if they choose to. The measure is absolutely permissive; it does not impose anything on anyone.

My right hon. Friend—sorry, my hon. Friend the Member for Totnes (Dr Wollaston). I thought something might have happened as a result of her election to the Chair of the Select Committee, but it will happen in time, I am sure. I am delighted that she supports the measure. She made the perfectly legitimate point that we ought to be encouraging and facilitating working across boundaries, both of CCGs and of the different organisations involved in health and care, to get the best possible use of the resource available for any local area.

Finally, I repeat that we take on board the concerns of Healthwatch England. We intend to work with that body to ensure maximum accountability for the decisions taken as part of these joint committees.

Question put.

The House divided:

Ayes 276, Noes 152.

Division No. 49]


4.51 pm


Adams, Nigel

Afriyie, Adam

Aldous, Peter

Amess, Mr David

Andrew, Stuart

Bacon, Mr Richard

Baker, rh Norman

Baker, Steve

Baldwin, Harriett

Barclay, Stephen

Barker, rh Gregory

Baron, Mr John

Barwell, Gavin

Bebb, Guto

Beith, rh Sir Alan

Bellingham, Mr Henry

Benyon, Richard

Beresford, Sir Paul

Binley, Mr Brian

Birtwistle, Gordon

Blackman, Bob

Blackwood, Nicola

Blunt, Crispin

Boles, Nick

Bottomley, Sir Peter

Bradley, Karen

Brake, rh Tom

Bray, Angie

Brazier, Mr Julian

Bridgen, Andrew

Brine, Steve

Brokenshire, James

Brooke, rh Annette

Browne, Mr Jeremy

Bruce, Fiona

Buckland, Mr Robert

Burley, Mr Aidan

Burns, Conor

Burns, rh Mr Simon

Burrowes, Mr David

Burstow, rh Paul

Burt, Lorely

Byles, Dan

Cable, rh Vince

Cairns, Alun

Campbell, Mr Gregory

Campbell, rh Sir Menzies

Carmichael, rh Mr Alistair

Carmichael, Neil

Chishti, Rehman

Chope, Mr Christopher

Clarke, rh Mr Kenneth

Clifton-Brown, Geoffrey

Coffey, Dr Thérèse

Collins, Damian

Colvile, Oliver

Crabb, rh Stephen

Crouch, Tracey

Davey, rh Mr Edward

Davies, David T. C.


Davies, Glyn

Davis, rh Mr David

de Bois, Nick

Dinenage, Caroline

Djanogly, Mr Jonathan

Donaldson, rh Mr Jeffrey M.

Doyle-Price, Jackie

Drax, Richard

Duncan Smith, rh Mr Iain

Dunne, Mr Philip

Ellis, Michael

Ellison, Jane

Ellwood, Mr Tobias

Elphicke, Charlie

Eustice, George

Evans, Graham

Evans, Jonathan

Evans, Mr Nigel

Evennett, Mr David

Fabricant, Michael

Farron, Tim

Featherstone, rh Lynne

Field, Mark

Foster, rh Mr Don

Fox, rh Dr Liam

Francois, rh Mr Mark

Freeman, George

Freer, Mike

Fullbrook, Lorraine

Fuller, Richard

Gale, Sir Roger

Garnier, Sir Edward

Garnier, Mark

Gauke, Mr David

Gibb, Mr Nick

Gilbert, Stephen

Gillan, rh Mrs Cheryl

Glen, John

Goldsmith, Zac

Goodwill, Mr Robert

Gove, rh Michael

Graham, Richard

Grant, Mrs Helen

Gray, Mr James

Green, rh Damian

Grieve, rh Mr Dominic

Griffiths, Andrew

Gummer, Ben

Gyimah, Mr Sam

Hague, rh Mr William

Halfon, Robert

Hames, Duncan

Hammond, rh Mr Philip

Hammond, Stephen

Hands, rh Greg

Harper, Mr Mark

Harrington, Richard

Harris, Rebecca

Hart, Simon

Harvey, Sir Nick

Haselhurst, rh Sir Alan

Heald, Sir Oliver

Heath, Mr David

Heaton-Harris, Chris

Hemming, John

Henderson, Gordon

Hendry, Charles

Herbert, rh Nick

Hinds, Damian

Hoban, Mr Mark

Hollobone, Mr Philip

Holloway, Mr Adam

Hopkins, Kris

Horwood, Martin

Howarth, Sir Gerald

Hughes, rh Simon

Hunt, rh Mr Jeremy

Hunter, Mark

Huppert, Dr Julian

Hurd, Mr Nick

Jackson, Mr Stewart

James, Margot

Jenkin, Mr Bernard

Jenrick, Robert

Johnson, Gareth

Jones, Andrew

Jones, rh Mr David

Jones, Mr Marcus

Kawczynski, Daniel

Knight, rh Sir Greg

Kwarteng, Kwasi

Lamb, rh Norman

Lancaster, Mark

Lansley, rh Mr Andrew

Laws, rh Mr David

Leadsom, Andrea

Lee, Dr Phillip

Leech, Mr John

Lefroy, Jeremy

Leslie, Charlotte

Lewis, Brandon

Lewis, Dr Julian

Liddell-Grainger, Mr Ian

Lloyd, Stephen

Loughton, Tim

Luff, Sir Peter

Lumley, Karen

Macleod, Mary

Maude, rh Mr Francis

Maynard, Paul

McCartney, Jason

McCartney, Karl

McIntosh, Miss Anne

McPartland, Stephen

Menzies, Mark

Metcalfe, Stephen

Mills, Nigel

Milton, Anne

Mitchell, rh Mr Andrew

Mordaunt, Penny

Morris, James

Mosley, Stephen

Mowat, David

Mulholland, Greg

Munt, Tessa

Newmark, Mr Brooks

Newton, Sarah

Nokes, Caroline

Norman, Jesse

Nuttall, Mr David

Ollerenshaw, Eric

Opperman, Guy

Ottaway, rh Sir Richard

Parish, Neil

Paterson, rh Mr Owen

Pawsey, Mark

Penning, rh Mike

Percy, Andrew

Perry, Claire

Pickles, rh Mr Eric

Pincher, Christopher

Poulter, Dr Daniel

Prisk, Mr Mark

Pritchard, Mark

Pugh, John

Raab, Mr Dominic

Randall, rh Sir John

Reckless, Mark

Redwood, rh Mr John

Rees-Mogg, Jacob

Reevell, Simon

Robathan, rh Mr Andrew

Robertson, rh Sir Hugh

Ruffley, Mr David

Russell, Sir Bob

Rutley, David

Sanders, Mr Adrian

Sandys, Laura

Scott, Mr Lee

Selous, Andrew

Shannon, Jim

Sharma, Alok

Simmonds, Mark

Simpson, David

Simpson, Mr Keith

Smith, Chloe

Smith, Julian

Soames, rh Sir Nicholas

Spelman, rh Mrs Caroline

Spencer, Mr Mark

Stanley, rh Sir John

Stephenson, Andrew

Stevenson, John

Stewart, Iain

Streeter, Mr Gary

Stride, Mel

Stuart, Mr Graham

Stunell, rh Sir Andrew

Sturdy, Julian

Swales, Ian

Syms, Mr Robert

Teather, Sarah

Timpson, Mr Edward

Tomlinson, Justin

Tredinnick, David

Truss, rh Elizabeth

Turner, Mr Andrew

Tyrie, Mr Andrew

Uppal, Paul

Vaizey, Mr Edward

Vara, Mr Shailesh

Vickers, Martin

Villiers, rh Mrs Theresa

Walker, Mr Charles

Walker, Mr Robin

Ward, Mr David

Weatherley, Mike

Webb, rh Steve

Wharton, James

Wheeler, Heather

White, Chris

Whittaker, Craig

Whittingdale, Mr John

Wiggin, Bill

Willetts, rh Mr David

Williams, Mr Mark

Williams, Roger

Williams, Stephen

Williamson, Gavin

Willott, Jenny

Wilson, Mr Rob

Wollaston, Dr Sarah

Wright, Simon

Yeo, Mr Tim

Young, rh Sir George

Zahawi, Nadhim

Tellers for the Ayes:

Mr Ben Wallace


John Penrose


Abbott, Ms Diane

Abrahams, Debbie

Alexander, Heidi

Ali, Rushanara

Austin, Ian

Bailey, Mr Adrian

Balls, rh Ed

Barron, rh Kevin

Bayley, Hugh

Beckett, rh Margaret

Begg, Dame Anne

Benn, rh Hilary

Berger, Luciana

Betts, Mr Clive

Blackman-Woods, Roberta

Blomfield, Paul

Blunkett, rh Mr David

Bradshaw, rh Mr Ben

Brennan, Kevin

Brown, rh Mr Nicholas

Buck, Ms Karen

Burden, Richard

Burnham, rh Andy

Byrne, rh Mr Liam

Campbell, rh Mr Alan

Campbell, Mr Ronnie

Caton, Martin

Champion, Sarah

Chapman, Jenny

Clwyd, rh Ann

Coaker, Vernon

Connarty, Michael

Corbyn, Jeremy

Crausby, Mr David

Creagh, Mary

Creasy, Stella

Cruddas, Jon

Cryer, John

Cunningham, Alex

Cunningham, Sir Tony

Dakin, Nic

Danczuk, Simon

David, Wayne

Denham, rh Mr John

Dowd, Jim

Dugher, Michael

Durkan, Mark

Eagle, Maria

Esterson, Bill

Evans, Chris

Farrelly, Paul

Field, rh Mr Frank

Fitzpatrick, Jim

Flello, Robert

Francis, Dr Hywel

Gapes, Mike

Glass, Pat

Glindon, Mrs Mary

Goodman, Helen

Green, Kate

Greenwood, Lilian

Gwynne, Andrew

Hain, rh Mr Peter

Hamilton, Fabian

Hanson, rh Mr David

Hendrick, Mark

Hermon, Lady

Heyes, David

Hillier, Meg

Hilling, Julie

Hodge, rh Margaret

Hodgson, Mrs Sharon

Howarth, rh Mr George

Hunt, Tristram

Irranca-Davies, Huw

Jarvis, Dan

Johnson, rh Alan

Johnson, Diana

Jones, Graham

Jones, Susan Elan

Jowell, rh Dame Tessa

Kane, Mike

Kaufman, rh Sir Gerald

Keeley, Barbara

Kendall, Liz

Khan, rh Sadiq

Lammy, rh Mr David

Lavery, Ian

Leslie, Chris

Lewell-Buck, Mrs Emma

Llwyd, rh Mr Elfyn

Love, Mr Andrew

Lucas, Ian

Mahmood, Shabana

Mann, John

Marsden, Mr Gordon

McCabe, Steve

McDonagh, Siobhain

McDonald, Andy

McDonnell, John

McFadden, rh Mr Pat

McKinnell, Catherine

Meale, Sir Alan

Mearns, Ian

Miller, Andrew

Moon, Mrs Madeleine

Morden, Jessica

Morris, Grahame M.


Mudie, Mr George

Munn, Meg

Murphy, rh Paul

Nandy, Lisa

Onwurah, Chi

Owen, Albert

Pearce, Teresa

Pound, Stephen

Powell, Lucy

Raynsford, rh Mr Nick

Reed, Mr Steve

Reeves, Rachel

Reynolds, Emma

Reynolds, Jonathan

Rotheram, Steve

Ruane, Chris

Sawford, Andy

Sharma, Mr Virendra

Sheerman, Mr Barry

Skinner, Mr Dennis

Slaughter, Mr Andy

Smith, rh Mr Andrew

Smith, Angela

Smith, Nick

Smith, Owen

Spellar, rh Mr John

Straw, rh Mr Jack

Stringer, Graham

Stuart, Ms Gisela

Tami, Mark

Thomas, Mr Gareth

Thornberry, Emily

Timms, rh Stephen

Twigg, Derek

Twigg, Stephen

Umunna, Mr Chuka

Vaz, Valerie

Walley, Joan

Watts, Mr Dave

Whitehead, Dr Alan

Wilson, Phil

Winnick, Mr David

Winterton, rh Ms Rosie

Wood, Mike

Wright, Mr Iain

Tellers for the Noes:

Tom Blenkinsop


Karl Turner

Question accordingly agreed to.

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9 Sep 2014 : Column 838

9 Sep 2014 : Column 839


That the draft Legislative Reform (Clinical Commissioning Groups) order 2014, which was laid before this House on 13 March 2014, in the last Session of Parliament, be approved.

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Transport for London Bill [Lords]

Second Reading

5.5 pm

Bob Blackman (Harrow East) (Con): I beg to move, That the Bill be now read a Second time.

This private Bill is promoted by Transport for London. It was deposited on 26 November 2010, and ordered to commence in the House of Lords. It was read the First time in the other place on 24 January 2011, and it was read a Second time on 13 December 2011, when it was debated. It was a further two years until the Unopposed Bill Committee took place on 28 January 2014. It was read the Third time in the other place and transferred to this Chamber on 4 March, when the First Reading took place. It is therefore fair to say that the Bill has had a long gestation period.

The Bill’s purpose is to provide Transport for London with a broader set of powers so that it can meet its business needs more flexibly and take advantage of more efficient arrangements for the stewardship of its financial affairs. Transport for London has identified various opportunities for maximising the value of its assets, but at the moment they cannot be fully realised unless it acquires new statutory powers or restrictions on the exercise of its current powers are removed. The Bill is also an opportunity to save money for taxpayers and fare payers. It has only four substantive clauses, but its principle is of importance to TfL, not least because the benefits deriving from the Bill will enable TfL to deliver much better value for money for the fare payer and the tax-paying public at large.

The first three clauses broadly concern bringing the Bill into operation. The first substantive clause is clause 4, which allows Transport for London subsidiaries to borrow and grant security over assets and revenue streams, enabling TfL to have cheaper finance for projects and greater flexibility in how it borrows. TfL currently has the power to borrow and it has a borrowing programme, but it may offer lenders only a non-specific charge over revenues, not over properties.

Borrowing on a secured basis will allow TfL subsidiaries to achieve lower interest rates than can be obtained through the Public Works Loan Board or through issuing bonds—the original aim under the legislation initiated by the previous Government—which are two of the significant debt financing options available to TfL. The clause will allow TfL to borrow money in circumstances where granting security is done predominantly or exclusively on a secured basis, and unsecured borrowing is either not possible or very costly. For example, property developments are usually financed by the lender taking a charge over the land being developed, which accordingly leads to a lower interest rate and means less risk to all parties.

Clause 4 allows TfL’s subsidiaries to borrow for a discrete purpose and to structure security so that a creditor has recourse only against the subsidiary borrowing and not against TfL and its other subsidiaries. That protects the fare-paying and tax-paying public from any liability that arises on TfL debts.

Clause 4 allows TfL to purchase subsidiary companies that already have secured debt. TfL will no longer be required to restructure secured debt when it purchases a

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company with such existing debt. TfL had to acquire Tube Lines Ltd and Tube Lines Finance plc at very expensive rates—I well remember the fiasco, as I was a member of the London assembly at the time. Had clause 4 then been in operation, TfL would have been spared significant costs, which ultimately have been borne by fare payers and taxpayers and resulted in lenders receiving enhanced value for their loans for nil consideration to TfL.

Clause 4 includes important safeguards and limitations. It provides that TfL subsidiaries must obtain the consent of the Secretary of State to grant security, except in respect of categories of property included in the schedule to the Bill, which Members can go through in detail if they are interested. The exempt property may generally be described as property that is ancillary to TfL’s core function of providing passenger transport services and includes such categories as property that is used for the purposes of car parking or retail units, for example. The consent of the Mayor of London is always required, irrespective of the type of property being changed.

Clause 4 provides that the rights of existing TfL creditors are preserved in full. A secured creditor may have priority over an existing creditor only where the existing creditor consents to the arrangement, so all parties are protected. TfL subsidiary borrowings will still be subject to the relevant provisions of the Local Government Act 2003. Borrowings must only be for any purpose relevant to a local authority’s functions or for the prudent management of its financial affairs. TfL subsidiaries will also be subject to existing borrowing limits set by the Secretary of State, so the public sector borrowing requirement is protected and security is granted.

Clause 5 expands TfL’s power to form different types of entities for the purpose of carrying out its functions. I understand that this is the most controversial clause for those who object to the Bill. I understand that the sponsors have had meetings with several of the individuals who are concerned and that undertakings have been given in that respect. Currently, TfL may only form bodies corporate, which includes companies and limited liability partnerships. TfL is seeking a new power to form, or join others in forming, limited partnerships and to invest in those partnerships once formed. TfL would like the option of using a limited partnership when seeking third-party investment, which seems a sensible process.

Pension funds and foreign entities are likely investors, so we are likely to see greater investment in joint arrangements with TfL, which will represent good value for the taxpayer. Those investors often prefer to invest in partnerships, rather than company structures, because of the tax transparency that partnerships afford. If TfL can offer a partnership as the joint venture vehicle, it is likely that there will be increased interest in the investment opportunity and that the maximum value of the asset will be realised. TfL proposes that it may form a limited partnership only for the purpose of carrying out its functions, which prevents speculative arrangements.

There is a limited tax benefit from using a limited partnership, but it is confined to stamp duty land tax, which is payable when land is transferred into a partnership. Stamp duty land tax is levied only on the proportionate share of the land being acquired by fellow partners, rather than the whole part. That benefit is conferred on any partner of a limited partnership irrespective of

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their status and is not unique to TfL. Indeed, many local authorities use limited partnerships for joint ventures and have been supported in doing so by the Treasury.

Mr Christopher Chope (Christchurch) (Con): I am fascinated by what my hon. Friend is telling the House, but surely there is a bigger picture. Would it be better for TfL effectively to be owned by the people of London? They could have shares in TfL, so it would therefore be funded to a larger extent by equity capital without the need to borrow.

Bob Blackman: I thank my hon. Friend for his suggestion. That would be a very radical move away from TfL’s existing capability and the arrangements that are made. I am sure the Mayor of London will be listening to the debate and will consider that suggestion appropriately, but it is beyond the scope of Second Reading, which is limited regarding proposed borrowing changes.

Transport for London’s subsidiary share of the profits generated by a partnership will be liable to tax in the same way as if a company were used instead of a limited partnership, thereby maintaining appropriate tax transparency. Several individuals, and particularly the National Union of Rail, Maritime and Transport Workers, have been concerned about whether the Secretary of State should give permission for such entities to be entered into. I understand that a written undertaking has been given to the hon. Member for Hayes and Harlington (John McDonnell) and the RMT on the basis that an amendment will be introduced in Committee that would require the Secretary of State’s permission for such an organisation to be permitted, which I hope answers one of the principal objections.

Angie Bray (Ealing Central and Acton) (Con): Is there an awareness of concerns that some of my local residents will have about proposals for the increased use of the Acton depot? As my hon. Friend will know, there is a substantial residential community in that area, which will not welcome the further increase in pollution that I suspect some of these activities will lead to.

Bob Blackman: My hon. Friend is a doughty campaigner for her local residents, and she has been at the forefront of the campaign against environmental air pollution and suchlike in her area. One objection to the Bill comes from the hon. Member for Hammersmith (Mr Slaughter), whom we will hear from later, in relation to the Earls Court development. I understand that part of that process is to transfer the depot from the Earls Court area to Acton. Clearly, as sponsors TfL will have to ensure that air and noise pollution is reduced considerably to answer the objections that my hon. Friend has related to the House.

Clause 6 seeks to expand the type of entities through which TfL’s commercial activities must be undertaken. TfL is currently required to undertake profit-making activities through a company limited by shares that is either a subsidiary or a joint venture. The clause amends that restriction to give TfL the option of using any type of entity that it has the power to form. In addition to a company limited by shares, TfL would be able to use a company limited by guarantee, a limited liability partnership, or a limited partnership. Importantly, clause 6 preserves the policy that TfL must undertake commercial activities

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through a taxable entity by requiring that a TfL subsidiary be member of a limited liability partnership, or a partner in a limited partnership. A company limited by guarantee is itself liable to taxation. Clause 6 will enable TfL to conduct its affairs more flexibly and at the same time preserve tax transparency and ensure that the relevant amount of tax is paid to the Exchequer. That will mean that it can use the structure that best suits the opportunity, and net the maximum value for money from its assets in so doing.

Clause 7 amends TfL’s hedging power, responding to changes in the way financial institutions hedge risk away from specific commodity trading to trading by indices—for example, the use of an oil price index as opposed to a barrel of Brent crude oil—which protects the hedging power considerably. It also gives TfL the capacity to enter into derivative investment when exposed to risk by virtue of a contractual arrangement for the provision by others of public transport services. For example, movements in fuel prices, which obviously affect TfL’s costs, would be protected.

Currently, TfL’s hedging power may be applied only to risks to which a TfL body is directly exposed. Clause 7 clarifies that it may use its hedging powers in respect of its liability to any pension fund, for example. It is not proposed that TfL enter into any derivative investments on behalf of the TfL pension fund, so members of that fund will be protected. It is not inconceivable, however, that the fund might decide that a particular risk is acceptable, given that all its liabilities are long term and that TfL effectively underpins the risks through an obligation to increase its contributions, if necessary, and that TfL might believe that the risk needs to be mitigated. Clause 7 provides for that specific scenario only.

In summary, the Bill will assist TfL in securing the most cost-effective borrowing possible. It will give TfL greater flexibility over how it structures its affairs, while preserving the requirement that its profit-making activities be taxed appropriately in the UK. It will improve TfL’s hedging power by reflecting developments in the derivatives market and permitting the hedging of risks that arise through contractual exposure and as a consequence of its obligations to pension funds. It will allow TfL to maximise income and investment in its assets and to deliver better value for money for fare payers and taxpayers, which we, as London MPs, crave every day. I commend the Bill to the House.

5.22 pm

John McDonnell (Hayes and Harlington) (Lab): It is often a tactic in debates such as these to talk at length to delay a Bill as much as possible, to obfuscate and to try to prevent it from becoming law, but we do not need any assistance in that regard for this Bill, as Transport for London has been doing that for us since 2011. It has been a bizarre process.

I reassure the hon. Member for Harrow East (Bob Blackman) that I will not seek to divide the House and vote against the Bill. I am a convener of the RMT parliamentary group and we are assured that clause 7 will assist us in protecting the hedging process for pension funds, so there is one clause that might have a shred of justification.

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The hon. Gentleman mentioned that TfL had offered an amendment inserting a new subsection in clause 5. At some stage guidance must be issued to promoters of private Bills. TfL has been promoting the Bill since 2011; it wrote to the RMT in May when it knew about some of the specific objections and the petitions against the Bill had gone in; we had a meeting on Friday afternoon; and at 3 o’clock yesterday we received notice of an amendment. TfL’s parliamentary or advisory team needs to be examined to see how we have reached this parlous state in debating the Bill.

I would have expected TfL at least to consult everyone who had petitioned against the Bill so far before introducing the amendment. It was obvious that such an amendment would be offered, because the lack of accountability to the Secretary of State in clause 5 stood out, but rather arrogantly it thought it could force the Bill through in the next few weeks without considering the main concerns expressed by the petitioners. Perhaps further advice should be given to TfL about how to behave when promoting proposed legislation. Perhaps the hon. Gentleman could suggest that sending a “peace in our time” letter at 3 o’clock on the day before the legislation is considered is simply unacceptable.

At this stage, I would expect TfL to withdraw the Bill, consult on the amendment and bring forward a properly drafted Bill, but I cannot see that happening, so let us have at least some general discussion today about why people are anxious about it. I think it is a matter of ever having confidence in Transport for London dealing with any property development. The hon. Member for Harrow East mentioned problems with taking over tube lines. Many of us have a long memory of what happened with TfL and its relationship with the public-private partnership, which was a disaster. Time and again, TfL officials and others came forward to advise us that PPP was an excellent way to raise funds and provide services, yet it was a complete disaster, which threatened £3 billion-worth of investment in TfL. When we looked at the figures, we found that £400 million had been spent on consultants, accountants and legal advisers, first to set the thing up and then in some way to try to retrieve it from the disaster it became.

I therefore think that this relatively small Bill of seven clauses has excited opposition among some members of the community and some Members of this House because of lack of confidence in TfL’s ability to go into partnerships with the private sector without either creating a disaster or being ripped off. Many of us worry that TfL will be given new powers to enter into partnerships that are not secure. These are not limited partnerships—they are not limited by guarantee or anything like that—but straightforward partnerships in which I suppose the main balance of interest will be with the private sector. The concern is that, yet again, the public sector will be left with the responsibilities. No matter what has been said about the hedging of some of the investments, those responsibilities could be unlimited.

People have examined the recent escapades of TfL in private sector development, and I am sure my hon. Friend the Member for Hammersmith (Mr Slaughter) will want to raise the issue of Earls Court, which does not inspire confidence. In fact, if this legislation had been in place at that time, it would have been used during the Earls Court development, which has aroused an amazingly sizeable opposition within the community.

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I think it has cost the party of the hon. Member for Harrow East control of the local council, such was the scale of the opposition, and it has subjected local residents to insecurity in their homes as well as raising concerns about the local community and the local environment. The concerns about this Bill are real.

Let me run through some of those concerns. The Bill will enable TfL to sell off or lease out land to developers elsewhere and right across the capital in the attempt to link up with property speculators as a means of gaining significant income—despite the track record of disasters in the past. Discussions with the RMT and other unions involved in TfL revealed their concern that such practices could produce extensive speculation around TfL sites, many of which should be secured for transport operations. Many within the industry raise with us the concern that this rush for short-term gain and short-term profiteering on individual sites will put at risk future developments needed for TfL in the long term.

The Mayor of London has rightly argued that we should be expanding the transport network in the capital, which means that some of the land currently in the ownership of TfL will need to be used. It looks as though individual developments will be allowed to take place, which will take the land away from transport use into speculative development, as we have seen in the Earls Court development. The hon. Member for Ealing Central and Acton (Angie Bray), who is no longer in the Chamber, mentioned that earlier. There is no guarantee that development of land in one area will not have consequences for other sites, and, as the hon. Lady said, it certainly will have consequences in her constituency. There is a real worry that giving Transport for London these powers will result in a virtual frenzy in TfL—certainly under the guidance of the current Mayor—to convert land in central London for uses other than transport.

Ms Diane Abbott (Hackney North and Stoke Newington) (Lab): Is my hon. Friend saying that he believes that the leadership of Transport for London will sacrifice the long-term strategic interests of London’s transport infrastructure for short-term property development gain?

John McDonnell: What those who work in the industry want is a consistent plan for the development of the transport infrastructure, but what the Bill does is give more power to TfL to enter into speculative developments on the sites that it owns, along with developers. In the case of Earls Court—on which I am sure my hon. Friend the Member for Hammersmith will wish to elaborate—we have seen property development for short-term financial gain override the needs of the travelling public and the need for long-term investment in the future of the transport infrastructure. That example illustrates the loss of confidence in Transport for London among the public that will result from its exercise of the new powers, if they are given to it. We may well see a speculators’ charter in relation to properties that are currently in public ownership under the auspices of TfL.

People are worried not only about the desire to gain income, but about the fact that the current property developments are based largely on the selling off of land for the building of residential properties. Transport for London, as a public body, might well want to enter

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into a partnership with, in particular, local authorities, in the hope of combining the advantages of improving the transport network with the provision of residential homes. However, it seems from the examples that we have seen so far—notably in Earls Court—that the residential homes will not necessarily be for local people: in fact, that applies to a relatively small percentage. Most of the sites are being used for speculative development, and many are being bought by overseas landlords with a view to letting properties at extremely high rents.

People fear that if TfL is given these powers, it will go on a development binge with the private sector throughout London, without taking into account either the needs of the transport infrastructure in the long term or the needs of local communities. The Bill seems to take no cognisance of the need for TfL to bear in mind the social criteria or social objectives relating to any future development when using the powers.

As the hon. Member for Harrow East pointed out, there also seems to be a lack of accountability in the case of some of the partnerships. We received that letter on Friday specifically because concern after concern had been raised consistently over the years—for instance, regarding the fact that even the Secretary of State did not have the authority to be consulted about the exercise of some of these powers. We have now been told, in a letter that we received at 3.30 yesterday afternoon, that an amendment will be tabled to deal with that. It would have been helpful to have seen at least a draft of the amendment; all that we have is a letter of comfort, or discomfort, depending on people’s judgment of it .

If we look at TfL’s record of participation in developments with private sector entities, we see that it is the commercial entity that has gained the profit and TfL that has been left with the responsibilities and, often, the liabilities. In the case of some of the partnerships that have already been entered into, ownership of some of the sites is so diffuse that it is difficult for the public, in particular, to hold anyone to account when it comes to some aspects of the deals.

Mr Chope: I am listening with fascination to the hon. Gentleman. Does he agree that the whole purpose of Transport for London should be to concentrate on its core business—providing transport infrastructure for the people of London? It is unlikely that Transport for London will be capable of doing things that are not its core business as well as they are done by specialists in those alternative businesses.

John McDonnell: The concern that many of us have is that Transport for London is not a property developer. It is not a developer with expertise in developing sites for high-value residential properties, yet that is the venture that it seems to want to enter into across London on most of its sites. There is an in-built lack of expertise in Transport for London. Many of us think not only that Transport for London is putting sites at risk by removing the possibility of their being used to develop transport infrastructure, but that Transport for London as a whole will be at risk from some of the liabilities that it will take on as a result of going into limited partnerships, which are not protected, with developers. The Bill has consequences not just for specific site development but for the stable funding of TfL in the long term.

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I say to the hon. Member for Harrow East that the Bill seems to be an attempt at a quick fix by an organisation that does not have the expertise to enter the activity that it wants to enter. I would be more convinced that it had that expertise if the progress of the Bill had been more efficient and effective. The legislation has been hanging around since 2011. At this late stage, the clauses have still not been drafted properly. Clause 4 has been redrafted three times in that period. We have just received the letter of comfort on clause 5, but no amendment. That does not inspire confidence. This organisation could sit down with some of the most rapacious developers in the history of property development and secure deals without satisfying not just community interests but the long-term financial security of the sector.

I agree with the hon. Member for Christchurch (Mr Chope): when an organisation is called Transport for London, it should concentrate on providing transport for London, rather than go into property speculation in this way. The argument may be that Transport for London is under financial pressure from the Government or others and needs to look at other ventures, but we must take into account its record of working with the private sector to gain additional income or increase efficiency.

There was the debacle of the public-private partnership under the last Government—this is not a party political point. That demonstrates an inherent lack of expertise—I put it no more strongly than that—in the organisation; it lacks the expertise to be able to do deals with the private sector that deliver the service and that avoid the scale of liabilities that we saw under that partnership. It was extraordinary. Members who were here may recall that throughout that period the House was not kept informed. On both sides of the House there was shock at the scale of the incompetence and risk that TfL ventured into in those developments.

Those are the main concerns. The organisation is strapped for cash, by the sound of it, although the Government advised us earlier in the year that it received a significant grant. However, TfL says that it is strapped for cash and needs another source of income. It is looking at developing its sites to provide that and it wants to do it through partnerships with the private sector. As a result there are concerns that the overall operation of TfL will be put at risk. Those are the general concerns.

Let me turn to the individual elements of the Bill. I advise Members to go to the minutes of evidence taken before the Unopposed Bill Committee in the other House under Lord Sewel. TfL, with the Department for Transport present, took the noble Lord through the details of the Bill. As the hon. Member for Harrow East has said, it went to clause 5 in particular, and it said:

“Clause 5 would allow TfL subsidiaries to borrow and charge against assets and revenue streams. This will provide TfL with greater flexibility on how it borrows. Under secured borrowing, TfL subsidiaries may borrow for a discrete purpose, and the security could then be structured so that the creditor has recourse only against the subsidiary borrowing and not against TfL or other TfL subsidiaries.”

It went on to say:

“TfL subsidiaries may not grant security without the consent of the Secretary of State, other than in respect of those matters that are specified in a new schedule proposed to be included in the Bill.”

The hon. Gentleman referred to that.

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Let me take Members to that new schedule. This is not a delaying tactic; I would like TfL to come back with some clarity on all this. The schedule means that it can, without the Secretary of State’s approval, enter into agreement with regard to subsidiaries to borrow and charge against assets and revenue streams. As I have said, it can do that with regard to activities identified in this schedule without Secretary of State approval. Let me give a selection of them. It can borrow against assets including

“property related to a tolling scheme…property related to the generation of power…property related to sponsorship activities being carried out by third parties”.

It can also borrow against

“property related to the use of land for commercial letting”.

I have no idea of the scale that is envisaged, but it means that TfL, without Secretary of State approval, can become a sizeable landlord with commercial lets and borrow against those revenue streams. I would like TfL to say what is meant by this and I would welcome some clarity as we move into the next stages. What is the scale of operation that it is looking at?

The schedule also refers in sub-paragraph (n) to

“land which is not operational land”.

Again, it would be useful to know from TfL what its definition of “not operational land” is and what the scale of that is in its portfolio.

I raise this because many of our individual constituencies will contain pieces of TfL land which are set aside for future transport developments, and it looks as though this will enable TfL to raise revenue or borrow against those pieces of land without any Secretary of State approval whatsoever. It would be useful to know the scale of that and to have some form of report setting out where these pieces of land are. They could be fairly sizeable.

Again, I would welcome clarity about the purpose of this particular venture in this particular case. As Members have said earlier, we all have sites in our constituencies that TfL may want to borrow against and therefore develop with a private sector subsidiary. If it then removes a transport operation from that site, it will have a knock-on effect on other sites because of the shift of functions, as is planned at Earls Court. I am concerned that there seems to be a lack of clarity from TfL in its dialogue with the petitioners on some of these issues with regard to the supply of information.

In the presentation to the Unopposed Bill Committee in the other House, clause 6 was explained as follows:

“Clause 6 of the Bill will allow TfL to form or join with others in forming limited partnerships. TfL would like to be able to use partnership structures to seek third-party investors in its property estate, and to manage secondary income generated from the estate.”

TfL mentioned, I think to reassure the noble Lord in charge of the Committee, that

“Pension funds and development partners are identified as likely investors, who often prefer limited partnerships to other legal structures to invest in.”

I am sure that we will deal with this matter in Committee, but I would like to ask Members to look—if not today, then in Committee—at some of the concerns raised by the petitioners about the concept of limited partnerships and, in particular, at a petition from Mr Richard Osband and other parties. Mr Osband was with us on Friday when we met TfL. He is a knowledgeable person who has done a large amount of research in this area.

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He admits that he is not a lawyer, but he has vast experience in property development and commercial activities. He tried to explain his concerns, which I now share, to TfL regarding limited partnerships.

The issue that Mr Osband raised was that a registered limited partnership may not carry out any activities at all. The partnership is between one partner and a general partner, and the general partner largely bears the main liabilities. If the other partner becomes active in some way in the management of the process, it will then become part of the definition of the general partnership and will bear liabilities. Mr Osband argued that the limited partnership concept was opening up TfL to bearing almost unlimited liabilities as a result of the process that the legislation will enable it to enter into. On Friday, we were mystified as to why there was a need for limited partnerships. The legislation itself provides for the ability to enter into partnerships with companies and others. These would be proper legal entities and they would ensure that the burden of risk was shared with the partner rather than falling significantly on to TfL.

We are now at a late stage, and the petitioner has made his position clear. On Friday, he was simply inviting TfL to get further legal counsel’s opinion, because he and a number of others had contested the original counsel’s opinion that TfL had brought forward. I have yet to hear a convincing argument from TfL as to why it would want to enter into limited partnerships, given the element of risk involved. TfL said on Friday and in some of its other discussions with Mr Osband that this was the preferred route of the developer. I am afraid that that does not inspire confidence that any public investment in these developments would be secure.

Ms Abbott: I think Transport for London would argue that that arrangement would be preferable to the one-off sale of a freehold asset because it would guarantee a continuing revenue stream.

John McDonnell: Yes, that is one argument, but the point of the legislation is to enable TfL to enter into not only limited partnerships but proper partnerships. Clause 4 will enable TfL to enter into partnerships that are limited by guarantee, so why do we need a mechanism that is novel for TfL, that requires new legislation and that heightens the risk to TfL when there is already a vehicle available that will protect it? This mechanism appears to have been included purely and simply at the behest of some of the development companies that have approached TfL. That cannot be right. Surely the public purse needs to be protected in the best possible way.

I understand what my hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott) is saying, but it does not mean that the sole way in which TfL can raise income streams is simply by a sell-off; it can enter into proper partnerships with limited companies. The hon. Member for Harrow East mentioned, on a grander scale, the ability to have shareholders and so on, but that is the normal way of protecting one partner and another: having a common shareholding in that way.

I came at this on Friday afternoon, and I find it mystifying that although Mr Osband’s petition and further detailed notes had been received, we had not been given by today, even in the last throes of the briefings that were flying around yesterday, some form of assurance about the legal protections that would be provided as a result of introducing the availability of limited partnerships to TfL.

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Mr Osband quoted to the TfL representative the issues raised by the Law Commission on this matter. It said:

“The essential feature of a limited partnership is that the liability of the limited partners for the debts and obligations of the partnership is limited to the amount of their contributions. This protection is lost if a limited partner takes part in management.”

So as soon as TfL gets involved in the management of any element of the partnership and the development—I interpreted that, as did Mr Osband, as meaning any form of management of even the individual site or some asset on it—it is no longer limited in its liabilities; it becomes a general partner open to unlimited liability.

I find it extraordinary that we have got to this stage in the Bill—three years on from its original promotion by TfL, nearly six months since the petitions were submitted on this issue and following a meeting on Friday—yet we still have not had a response in any detail on Mr Osband’s valid criticisms of what has taken place in terms of the development of a concept of limited partnership at the behest of the private developers.

Let me quote from the briefing note that Mr Osband provided for TfL on Friday, although I will not use the names of TfL officers, as to do so would be invidious. He said that one of the officers dealing with this

“seems oblivious to the fact that it would be TfL’s Limited Partner that would be at risk of unlimited liability by virtue of TfL’s participation in the management of the General Partner. Would TfL really want to enter a Joint Venture with no management control?”

This is like choosing between the devil and the deep blue sea. One can enter into a limited partnership and one’s liabilities are limited if one is not part of the management of that, but as soon as one enters into the management one’s liabilities are unlimited, yet a public body such as TfL would be expected to have some form of management responsibilities for the venture that is taking place. So it automatically gets caught, as this is a Catch-22 situation. I cannot see what benefit there is for TfL, although there must obviously be benefits for the individual developers who want to enter into these limited partnerships with TfL, because I fear that they will seek to ensure that the liabilities are placed on TfL and not themselves.

Again, let me cite what the Law Commission said, which was quoted by Mr Osband on Friday. He provided the quote directly to the TfL officers and still has not had a response from them. The Law Commission said:

“We understand this lack of clarity is considered a major defect in the law of limited partnerships in the United Kingdom.”

Again, a structure has been proposed in the Bill which even the Law Commission now considers relatively opaque in its operation.

I urge TfL, at this late stage, to reconsider the Bill and whether or not the legislation—certainly the clauses up to clause 7—is actually needed, given the facilities that TfL has for forming partnerships under the existing structures, which are flexible. My hon. Friend the Member for Hackney North and Stoke Newington has said that until now TfL has relied upon the sale of land to gain income, but that is no longer the case. It is able to enter into wider partnerships and does not have to rely purely on such sales. This concept of limited partnership is introducing a real vulnerability to the tax payer—the London council tax payer in particular—and the Government who fund Transport for London. I do not understand why TfL wishes to persist with this clause of the Bill.

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I am extremely worried that the general public will not be able to scrutinise development deals if limited partnerships are established, and, even with the Secretary of State’s approval now being floated by TfL as an amendment, that there will not be sufficient political accountability. My hon. Friend the Member for Hammersmith will cite the example of what happened at Earls Court. On the examples that we have so far, this issue of commercial confidentiality has prevented, without resort to law in many instances, the ability of members of the community or individuals who are affected by developments from gaining information on the partnerships —their purposes and their operations. When redacted documents have been offered, they have been redacted in such a way to make them virtually meaningless. I worry that this Bill offers the potential for a whole series of disastrous ventures by TfL on site after site.

The hon. Member for Harrow East also mentioned taxation. At the meeting on Friday, representatives of the National Union of Rail, Maritime and Transport Workers said that they were concerned about ensuring the transparency of the operation not just of the partnership itself, but of the individual partners who have participated so far under existing structures. They were concerned about their willingness to abide by and adhere to tax legislation in this country and also to some of their responsibilities. At least one company that was mentioned on Friday and that TfL entered into a partnership with is based in a tax haven and is seeking to avoid taxation as a result of its established structure. Again, that is not uncommon, but it is not something that a public body such as TfL should be encouraging. Furthermore, it is not something that we should be seeking to facilitate even further by putting forward this limited partnership proposal.

The concern is that if such a company is willing to operate from a tax haven to avoid taxation, it is quite likely and quite able to walk away more easily from the liabilities on risks if any venture becomes problematic in the future. Again, it provides us with another example of questionable judgment by TfL. Going into a partnership with a company that is based in a tax haven and that is seeking to avoid its taxation responsibilities does not inspire confidence in the ability of TfL to develop future deals. Such practice may not be unlawful, but it is immoral, and that point was put to TfL on Friday.

Those are many of the concerns that have been raised in the discussions so far. My hon. Friend the Member for Hammersmith will go into some detail about what has happened at Earls Court. If Members want an example of what could happen under this Bill because of the lack of protection within it and because of the structure that has been put forward with regard to the limited partnership, Earls Court is a classic example. In fact, this Bill was designed to enable TfL to go into a limited partnership specifically with regard to Earls Court. TFL was not able to do that, because the legislation had been delayed for so long, but it went into another form of partnership that has exposed the local community to devastation, almost, and that has exposed TfL to being ripped off for the development.

Overall, in that example we have seen a complete lack of transparency about the discussions with the limited company. The potential issues with that site and the safe

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operation of the rail transport network have been raised and, as I have mentioned before, there is an increasing threat to social and affordable housing. Indeed, there is even a public health threat because of the air pollution caused by the increased activity around that site, and a threat to some of London’s cultural heritage.

Concern has been expressed about the lack of an independent economic impact assessment on the development and a lack of accountability to local people and the elected local authority in its current form. This is a shining example of how TfL, although I am sure it has the best of intentions, can be driven by political motives. I know that there have been statements about the nature of the people that some politicians want to live in the area. Mr Greenhalgh, in particular, wanted to remove working-class people from the area and to populate it with wealthier people. That was one of the statements he made publicly, but, regardless of that, TfL seems unable to defend itself against such political diktats from above and demonstrated extreme incompetence in its negotiations with developers and extreme ruthlessness in preventing local people from having a say in the development. That has resulted not just in a degrading exploitation of public assets but a debacle.

That is the example we would give of Transport for London’s incompetence in dealing with a major strategic site and with speculative property developers. If this legislation goes through, developers in London will binge at the expense of the public sector and TfL in particular. The land assets of TfL have been developed over nearly a century and they are land holdings specifically for development of the transport infrastructure. They are not there for speculative development by TfL to gain some short-term income at a long-term cost to Londoners. The Bill will risk the long-term planning of our transport infrastructure, increase the risk of the liability for property speculation falling on TfL and have an impact on the public purse.

We gave these warnings on the public-private partnership and we were ignored. We were ignored by the previous Government and, in fact, we were derided for those warnings that came from the RMT, the TSSA and the other unions that were working on the ground on London transport. They warned us and we had report after report that TfL was being ripped off in its dealings with the private sector and that there would be a catastrophe, and that is exactly what happened. The PPP became a disaster: the companies had to be brought into public ownership and control, we lost at least £400 million through payments to advisers, accountants, lawyers and so on and we put TfL at risk. I think that this is what will happen in this case.

The work force, with their expertise, and those who work deep within the heart of TfL are warning that the property speculation promoted by the Bill will put the long-term infrastructure of transport in London at risk. As I say, I will not oppose the Bill this evening because there is at least one clause on the hedging of protection for pensions that is supported by some elements of the work force, but I hope that by the next stage of our debate TfL will either withdraw some of the clauses, making the Bill workable, or at least provide some form of accountability and set objectives and parameters about the speculative developments that can be undertaken as a result of the powers that TfL will be given. Unless we set those parameters, London’s transport infrastructure

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could be put at risk, and we might face significant costs and burdens. I hope that the House will fulfil its responsibilities by not taking Transport for London’s assertions at face value, but will be looking at the expert evidence with which we have been provided.

I advise hon. Members to read some of the petitions against the Bill submitted by individuals with expert knowledge of the operation of Transport for London and the consequences of its developments so far. Given that TfL has brought forward, at this late stage, its letter of comfort, it would be useful if we advised it that the petitioners should be not only contacted, but invited to petition again, if they wish, specifically with regard to the amendment to which the letter refers. Although we are yet to see that amendment—we have received only the letter—I would welcome the petitioners’ views on that proposal. I have so far received only a couple of e-mails from those who attended Friday’s meeting, although I know that others have an opinion, and their view is that the amendment proposed in the letter would not save the Bill. They believe that the Bill should be opposed, despite TfL’s assurances. As I said, I shall not oppose the Bill today, but unless we get a definitive view from Transport for London on some of the questions raised in the debate, unless we have clarity about some of the Bill’s provisions and unless we understand how to set parameters for TfL’s operations in this speculative area of development, we will oppose it at a later stage.

I treat the Bill with real scepticism. It could be a speculator’s charter for the Mayor of London, whoever that might be in the future, and that may well be at a cost to London’s council tax payers. I warn the House that, as was the case with the PPP, the Bill could be a disaster for the taxpayer overall, and if it goes through, I fear that the Mayor and Transport for London will place a sizeable bill before us in a couple of years because we will have to bail them out for the losses that they have incurred due to speculative development.

To echo what was said by the hon. Member for Christchurch, TfL should concentrate on providing transport for London. It is not a property developer. If there was the expertise in TfL to carry out negotiations on such matters, an element of confidence might be inspired in us, but its track record, especially at Earls Court, demonstrates not only that such expertise is lacking, but that it does not even understand that it lacks that expertise. Property speculators run rings around it time and again, and those speculators then go off to international festivals to market sites that were once owned by the public of London. It is scandalous that speculators can make vast profits out of public asset in such a way because of either the connivance or gullibility of the people responsible in TfL.

I urge hon. Members to pay more direct attention to the Bill. There are few Members in the Chamber today, which I understand, given events in Scotland and elsewhere, but the Bill could be as catastrophic for London as elements of what might happen following the referendum in Scotland. We might not only be presented with an extraordinary bill in the future, but lose considerable assets on which we were hoping to build a modern network for transport in London. While the Bill is in Committee, I hope that we can find sensible amendments that will allow us to set parameters in the Bill to assure us that this leap in the dark will not lead to a future disaster.

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6.9 pm

The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill): I congratulate my hon. Friend the Member for Harrow East (Bob Blackman) on moving Second Reading of this private Bill that will enable TfL to expand its financial freedom to use practices and mechanisms it cannot currently access. We recognise that it will allow TfL to release greater value from its financing arrangements—a principle we welcome at a time when we are continually seeking efficiencies and value for money in public spending.

The outcome of the 2013 spending review was a 25% cut in TfL’s operational funding from central Government, and we have been clear that the Government’s aim is to reduce TfL’s operational funding over time to zero. That, on top of earlier reductions in TfL’s operational grant, will require it to deliver £16 billion of savings over the period to 2021. TfL has implemented a savings and efficiency programme that will allow it to continue to invest in infrastructure while at the same time holding down fares. TfL has already identified nearly £12 billion of savings to 2020-21, but it still needs to identify further savings. I understand from TfL that the private Bill could realise in excess of £50 million in immediate benefits by improving its hedging power, enabling it to borrow money cost-effectively, and allowing it to make more of its assets.

We believe that giving TfL greater financial flexibility will give it the opportunity to run its business more efficiently, but in doing so we expect it to adopt a responsible approach in the use of its new powers. I am pleased that the controversial clause on the disposal of operational land, which was a matter of concern to their lordships, has been dropped from the Bill. I understand that the hon. Members for Hammersmith (Mr Slaughter) and for Hayes and Harlington (John McDonnell) still have concerns, but I hope that they are reassured to know that TfL has agreed to table an amendment in Committee to clause 5 that will require TfL to seek the Secretary of State’s agreement when it wishes to form a limited company for commercial property development purposes.

Subject to what I have said and taking into account the fact that the measure will deliver real savings and efficiencies for council tax payers and fare payers in London, I hope the Bill makes progress today, enabling us to explore in Committee some of the highly pertinent points made by the hon. Member for Hayes and Harlington.

6.12 pm

Lilian Greenwood (Nottingham South) (Lab): We have already heard some important contributions to today’s debate, but may I begin my speech by saying that it is a pleasure to see my hon. Friend the Member for Hammersmith (Mr Slaughter) in his place—well, almost in his place—this afternoon? I know he has followed the Bill’s progress closely and that it affects a matter of great concern to his constituents. It is important not only that Hammersmith has a Labour MP, but that Hammersmith and Fulham is now a Labour-run local authority. It was supposed to be the Prime Minister’s favourite council. Well, the people of Hammersmith delivered a resounding verdict on that project last May.

The Earls Court development in my hon. Friend’s constituency is close to the heart of many people following today’s debate, and I will discuss it in more detail

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shortly, but first I want to say a few words about Transport for London and its current legal framework. The Greater London Authority Act 1999 was one of the longest pieces of legislation passed to date, containing 35 schedules and more than 400 clauses. It was also one of the most important Acts passed in the first term of the last Labour Government. For too long, London’s political governance had been subject to sudden changes imposed by Westminster. Since the second world war, the general pattern was of political interference, and by 1997 there was a serious investment backlog. The transformation since then of the underground, London’s buses and the overground rail network is there for all to see.

It is to Transport for London’s credit that under devolved management it has risen to the challenge of meeting the rapid rise in demand for public transport. It is also overseeing the successful delivery of Crossrail, and just yesterday a new consultation was published on proposals to extend the Gospel Oak and Barking line to Barking Riverside. It should be acknowledged that over the past 15 years TfL has delivered substantial service improvements.

As we have heard, this private Bill has a long history. There have been some changes since it was first introduced in 2011, but the current proposals can be summarised as transferring additional borrowing powers to TfL’s subsidiaries and allowing them to enter into limited liability partnerships under clause 5. We are not opposed to the principle of allowing greater commercial freedoms to Transport for London, but it has to be recognised that there are particular sensitivities around the Earls Court development, especially as Hammersmith and Fulham council is now seeking discussions with the developer and carrying out a review of its contractual commitments.

TfL is the freeholder for Earls Court exhibition centre. The history of that planning application, which the Mayor of London granted last year, is well known. In this climate, the powers contained in clause 5 have attracted a great deal of scrutiny. It is therefore reasonable to ask that in this development and others, TfL should seek to gain the best value for taxpayers’ money while maintaining a commitment to provide decent, affordable homes and take all other social and environmental factors into consideration, including the future needs of the transport network, as my hon. Friend the Member for Hayes and Harlington said in his detailed and knowledgeable speech.

Ms Abbott: Is my hon. Friend arguing that the Bill will have an effect on Earls Court? My understanding is that the deal in relation to Earls Court, whether it was a good deal or a bad deal, has already been done.

Lilian Greenwood: My concern is that the Earls Court development is one of the issues potentially affected by this Bill. I think there are further discussions to be had. Perhaps that provides a bit of a precedent, or an example of why concerns are being raised about this Bill.

It is also reasonable to ask that TfL’s subsidiaries maintain a commitment to those public service values even when they are acting in partnership with commercial developers under the terms of the Bill. Where local

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authorities and other representative groups have dealt directly with TfL, they need to have confidence that past agreements will not be rendered void just because a limited liability partnership has been formed.

Given the concerns that my hon. Friends have rightly raised, Labour Members expect further reassurances from Transport for London and the Secretary of State. The way in which these powers are used must be subject to scrutiny. It is vital that TfL fully engages with communities and local councils as this Bill progresses through Parliament.

6.17 pm

Mr Christopher Chope (Christchurch) (Con): As the hon. Member for Nottingham South (Lilian Greenwood) said, these extensive powers must be subject to scrutiny and any safeguards in relation to their being exercised must be included in the Bill. We do not want things to happen in future that we had not expected, because, perhaps, we did not think that Transport for London or its subsidiaries would behave in a particular way. That is why I welcome the fact that we have a full Second Reading debate on this Bill. The promoters of a lot of private Bills that come before this House get agitated because some of us think that such Bills should be subject to scrutiny, but an increasing number of our colleagues now recognise that without such scrutiny we and our constituents can be taken for a ride.

I do not represent a London constituency, although many years ago I was the leader of a London borough, so I take an interest in what happens in London—and of course I am resident in London during much of the week. I go along with the hon. Lady in giving a lot of credit to TfL for the improvements in transport in London over recent years. There have been enormous improvements in the reliability of the services provided, the extent and range of those services, and the sensitive way in which the Mayor and TfL have responded to the developing needs of the populace of London. That is all the more reason for us to ask why, given that TfL has made such an enormous amount of progress, we should want to encourage it, through this Bill, to move its focus away from its main task and responsibility, which is to provide transport for the people of London.

My hon. Friend the Minister set out the financial context and made it clear that, ultimately, Transport for London will need to be self-sufficient and not dependent on grants from the national taxpayer. I am sure my constituents will be pleased with that objective, because it will save them money as national taxpayers and TfL will have to fund its future operations from the income it receives from fare payers, its investments and operational efficiencies. I am all in favour of that.

I was interested to hear my hon. Friend say that, of the £16 billion saving that TfL needs to find by 2021, £12 billion has already been identified. He then said, however, that he thought the Bill might save TfL £50 million, which is of a rather different order from the actual gap between the two figures, namely £4 billion.

TfL should try to save some money. It has a lot of assets and if some of them are not core assets that it requires for its operations, the first port of call should surely be to try to sell off those surplus assets so that they can be utilised by other people. This Bill, however, seems to be designed to discourage TfL from selling off

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its surplus assets. It encourages it to put them into vehicles such as subsidiary companies and limited partnerships, which are not open to the same public scrutiny as TfL through its annual accounts. Obviously, that raises public accountability concerns.

The Bill’s promoters have a heavy burden of responsibility and they will have quite a job to persuade the hon. Member for Hayes and Harlington (John McDonnell) and me. We do not always agree on political issues, but the fact that we are both expressing concerns from different angles should cause TfL to think what can be done about it.

Ms Abbott: Will the hon. Gentleman give way?

Mr Chope: It is a delight to give way to the hon. Lady.

Ms Abbott: I am grateful to the hon. Gentleman for giving way. The fact that he and my hon. Friend the Member for Hayes and Harlington agree on something is a sign either that it is absolutely the wrong thing to do or that it might be absolutely the right thing to do. I do not understand why the hon. Gentleman is so opposed to TfL attempting to create arrangements for a long-term revenue stream rather than a one-off profit from simply selling the asset. As the taxpayer subsidy goes down, surely it is prudent for TfL to try to ensure long-term revenue streams for itself, which is what the arrangements are all about. They may not be perfect, but how can the hon. Gentleman deny that that is a reasonable aspiration for TfL?

Mr Chope: The short answer to the hon. Lady’s intervention is: once bitten, twice shy. I think that most of us in this House—certainly those of us who have served for a certain time—feel that we were bitten by the enthusiasm of successive Governments for the private finance initiative and the public-private partnership. We were told that they were new ways of financing our public services and public infrastructure and that they could only be good news for everybody. I speak as a member of the Conservative party, which promoted PFI, but what a disaster some of those PFI projects have turned out to be, largely because people thought they could get something for nothing and that, instead of saving on revenue expenditure, they could start borrowing and use rather obscure vehicles and arrangements to do so. Then, however, after reading the small print, we found out that, instead of being transferred, the risk—that was the principle the Treasury kept talking about in relation to PFI: it said it was not possible to have PFI unless there was a transfer of risk—had actually been retained.

As a London Member, the hon. Lady will be all too well aware of the problems in London associated with PFI/PPP projects in the health service, which have been a disaster in many respects. The people or the patients whom we should have helped are finding that the services they want are not now as good as they would like because of the costs of those projects, which in some cases continue to be a millstone around the necks of quite a lot of hospital trusts.

I have answered the hon. Lady by referring to a different sphere, but as soon as people start talking about new practices and methods, as the Minister did when he began his remarks about how the Bill will release a lot of revenue and capital, we need to be

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suspicious. At the end of the day, the only way to get better quality transport in London is by investing in it, which means using money from fare payers or taxpayers, or encouraging Transport for London to reduce its costs and find alternative revenue streams. Of course, one way would be to sell off surplus assets, and we should use the provisions of the Bill to encourage that, rather than to discourage it.

I do not know about the situation in Earls Court exhibition centre. I have no specialised knowledge about it, and I look forward to hearing from the hon. Member for Hammersmith (Mr Slaughter), who represents the Hammersmith and Fulham interest in it. As a result of the last London borough elections, the issue of political risk has once again raised its head. The people engaged in that project thought that the council was benignly supportive of their proposal, but now that there has been a change of council, the new democratically elected council has said that it wants to revisit it all. I do not know the extent to which the council can do that, or whether the contract was already a done deal.

Mr Andy Slaughter (Lab) (Hammersmith): I have resisted intervening because I want to get my full whack of time, but I have to come in on that point. There was always going to be a political risk in relation to that massive site—it covers two boroughs, with the mayoralty and various other interests, such as that of TfL—because it was a 20-year project. TfL signed up to a 20-year project, and tied its hands. It, above all people with political masters, should have known that that was the case.

Mr Chope: That is fascinating. I am glad that I gave way to the hon. Gentleman. When there is talk about reducing risks—the statement from the promoters states that the Bill will reduce risk and the costs of interest—we need to look at such assertions with quite a lot of scepticism.

To finish my point about TfL as the freeholder of Earls Court exhibition centre, let me ask why it is still the freeholder: why does TfL need to own Earls Court exhibition centre, and why does TfL not sell it? I do not know whether it could sell it to Hammersmith and Fulham council. In my view, TfL’s core business should not be to own an exhibition centre. If that had been the situation in my days in Wandsworth, we would very much have regarded it as one of those things to sell and get rid off to benefit local taxpayers, on the basis that if a freehold asset is sold, the receipts from it can be utilised immediately for the vendor’s top priorities. If TfL did not own the freehold of Earls Court exhibition centre, would it think of buying it? That is the sort of question that should be asked by those people who become star-struck by the idea that they are charged with developing some great property.

There has always been a glamour associated with owning assets. Municipalisation, whether of race courses or arts and entertainment centres, was often associated with the desire of the mayor and councillors to be able to get free tickets and hospitality by using what they saw as their role in looking after those important assets. My philosophical view is that they should never have had those assets in the first place. They should have sold them off and then enjoyed going out, paying for a drink themselves and saying, “Great. We’ve reduced the size

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of the local state and its apparatchiks in our area.” I am suspicious and sceptical about all of this. There are some fine people working for TfL, but if they think that they have skills that can be deployed in the property sector, they should go and get a job in the property sector.

I am particularly concerned about clause 4, which is the first clause of substance in the Bill. It proposes that what TfL cannot do itself should be allowed to be done by its subsidiaries. Members often speak of their concern about Henry VIII clauses, and this clause is the private Bill equivalent. It would allow TfL to set up subsidiaries at its own behest without any accountability, and those subsidiaries could then be used to do what TfL itself is not allowed to do. Why are we countenancing that? Why should the original safeguards, which were written into primary legislation—section 164(a) of the 1999 Act—be removed? My hon. Friend the Member for Harrow East (Bob Blackman) said that if one had to go to the Public Works Loan Board or get bonds, one would have to pay higher interest rates than those one could get using these new subsidiaries as vehicles, but I think that is an unproven assertion. Let us consider other ways in which those things could be done.

Clause 5 would extend the power to invest in subsidiary companies to include limited partnership vehicles of one sort or another. Why are we doing that? Surely it would be much more transparent for TfL to set up a limited company that is properly accountable and then ensure that it produces accounts so that people can keep an eye on what it is doing. As soon as we get into the murky waters of partnerships and deal making that is not subject to public scrutiny, the people are not well served. It might be that among the well-paid employees of TfL there is a group of people who are much better than the directors of British Land at making deals to enhance the value of land in their ownership, but I somehow doubt it. Rather than encouraging TfL to aspire to set up subsidiaries that are like British Land, we should say that if it wants to set up subsidiaries, they should be proper companies that, as under the existing law, are subject to limited liability and open to public scrutiny.

We know that when we allow public organisations effectively to engage in devices to get themselves out of a short or longer term financial fix, it often results in tears. I remember when Hammersmith and Fulham was mortgaging all its lamp standards. It sold them—was it to a Japanese bank? I cannot remember—and it then leased them back because it obviously needed to have lamp standards. Those were the early days of what one might describe as a sort of barmy behaviour by Labour councils—that was one of the things that ultimately contributed to Hammersmith and Fulham becoming a Conservative-controlled authority.

There are examples of councils selling their assets then leasing them back and paying a lot more for them in the long term, but in the short term it looks good on the accounts. The council has a capital receipt from the sale of the asset, although local taxpayers will have to pay for the next 50 years for the consequences. That was at a time when the Department of the Environment, as it was then, made clear to the banks that we would not guarantee those assets. The banks thought, “Fantastic. We will buy all these lamp standards from Hammersmith

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and Fulham, and because we are buying them from Hammersmith and Fulham, if there are any difficulties, the money it owes us will be guaranteed by the Government.” The Department had to make clear to those foreign banks that if Hammersmith and Fulham, or any other council, defaulted on its obligations, the Government were not going to stand behind it.

I fear that some of the same thinking is creeping into this Bill, which is that in order to get over the problem of the £4 billion shortfall we should allow the proliferation of these vehicles. As the hon. Member for Hayes and Harlington pointed out, if one couples clause 4 with the schedule, the mind boggles at all the things that could be charged by a TfL subsidiary without the consent of the Secretary of State—always remembering, of course, that under its existing powers TfL is not allowed to subject those things to a charge. If that measure were to go through unamended, it would create the potential for enormous mischief not just to London taxpayers, but to people who use TfL facilities. If Transport for London gets strapped for cash, it will have to put up its fares, reduce staffing or whatever, so the situation would not be without consequences.

I have a number of concerns about the Bill and I hope that some of them can be ironed out during the opposed Bill Committee. Underlying them all is the fact that I think it would be better if Transport for London concentrated on its core business and sought more equity investment—in other words, shareholder investment. Why does Transport for London not set up a subsidiary company, as it can do at the moment, and say, “We are going to sell shares in this limited company to the people of London”? Why not sell shares to users of Transport for London services? Why does it not raise that sort of money and, for good measure, say, “As an incentive, we will throw the assets of the Earls Court exhibition centre into the subsidiary company”? People who enjoy going to exhibitions at Earls Court could buy into that subsidiary company and perhaps get discounted entry prices, or whatever.

There is a lack of imagination in some of this, possibly because this process has been dragged out for so long that people have got into a tramline way of looking at it. Why do we not think more radically? Why do we need to be stuck with TfL, however good it is, and the same structure? Why do we not allow British taxpayers and property owners to buy shares in TfL, instead of using this sort of device, which will probably give the benefits to sovereign wealth funds, foreign banks, Russian oligarchs and whoever? They will be benefiting at the expense of the people of London. As somebody who was born in London, has spent a lot of time in London and had the privilege of leading a London council, I have the interests of the people of London at heart.

6.41 pm

Mr Andy Slaughter (Hammersmith) (Lab): I thank my hon. Friends the Members for Hayes and Harlington (John McDonnell) and for Nottingham South (Lilian Greenwood) and the hon. Member for Christchurch (Mr Chope) for their excellent contributions, not least because they will allow me to be more succinct.

I was impressed by the knowledge of the hon. Member for Christchurch of landownership in west London. I do not have the same knowledge about Christchurch.

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Without wishing to go off on a tangent, however, I must say that his knowledge of politics in west London is not so good. Though other councils did, I do not think that Hammersmith and Fulham council ever engaged in the selling off and buying back of lamp posts. It indulged in capital market swaps, which is perhaps more historically famous, but that began under a Conservative council, as I know because I was chair of finance and was involved in unravelling all that, and we were granted, as a privilege for doing so, 15 years of glorious rule thereafter. He has conflated political events, therefore, but I forgive him because his summation of the arguments against the Bill was so good.

I would be interested in this Bill in any event, being a London MP and given the many concerns, which I will not repeat, raised by my hon. Friend the Member for Hayes and Harlington and the hon. Member for Christchurch, who from their different political perspectives have put their finger on the issues at stake, but I have an additional and perhaps more specific—some might say parochial—interest. I can demonstrate that the origin of the proposals lie in the Earls Court-West Kensington development in west London and might well end there, unless things happen.

I shall say more about that development in a moment, but first I want to resolve the point raised by my hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott) about, “Hasn’t the Earls Court deal already been done?”. Yes, part of the deal—concerning the exhibition centres—has been done, to the extent that the partnership agreement has been entered into, but the other major part of the site, also owned by TfL, the Lillie Bridge depot, is a minimum of five or six years down the line.

In any event, what happened at Earls Court is highly relevant to the Bill, and had the developer not pushed to get on with the proposals and had TfL not delayed the Bill, I suspect that the original idea would have been exactly the sort of vehicle envisaged in clause 5 and that the clause would have been used for the first part of the scheme.

John McDonnell: For the record, I can confirm that point. On 6 May, TfL and Sir Peter Hendy CBE wrote to the RMT that TfL

“may only use a company limited by shares as the joint venture vehicle”.

So that facility is open to it. He wrote:

“The new powers will be of most relevance to joint ventures with the private sector involving property development”,

and he

“anticipated that any such projects will be done using a partnership structure. Indeed, the choice of joint venture vehicle for the Earls Court development would have been different if TfL had the powers it is now seeking.”

Mr Slaughter: I am juggling a lot of papers here, so I am most grateful that my hon. Friend had that letter to hand to confirm the point.

It is important to note the ideas and the opportunity that came out of the Earls Court scheme. Let us be clear that this scheme is the Tennessee Valley authority in all of this: it is not just a scheme; it is a magic scheme—an £8 billion development and currently the largest site

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under planning development in London. It will remain so until the High Speed 2 site, also in my borough, comes along.

As to the history, it has been pointed out that the legislation for the scheme was presented to Parliament on 29 November 2010. It had an uneventful Second Reading on 13 December 2011, largely because it was below the radar for many people. Before I come on to the current petitioners, I must thank the then petitioner Mark Ballaam on behalf of the West London Line group, which is a fantastic organisation. It would be absolutely wrong to call it an amateur group. It had such a degree of professional expertise that it became the de facto guardian of the railway system in west London, doing a huge amount to promote it.

The group spotted what TfL was up to and got its petition in. Were it not for that group, I am not sure whether we would ever have got the first major concession. The Bill came before the Unopposed Bill Committee of the House of Lords, which my hon. Friend the Member for Hayes and Harlington has mentioned. It is peculiar when we go back and look at these documents: there had to be a corrected transcript because the first entry in Hansard showed that there was no debate or discussion at all. In fact, we have quoted from the quite substantive debate that took place.

There is a slight confusion because the clause numbers have changed. What was discussed in the earlier debate as clause 5 is now clause 4. As my hon. Friend the Member for Hayes and Harlington rightly pointed out, what appeared to be a major concession was not quite such a concession because of the schedule that lists all the circumstances under which TfL can continue to dispose of land.

It was said to the Chair of that Lords Committee:

“My Lord, I would mention that following discussions with DfT, TfL has proposed certain amendments to Clause 5”—

now clause 4—

“which are contained in the filled-up Bill before the Committee today, and those amendments provide that TfL subsidiaries may not grant security without the consent of the Secretary of State, other than in respect of those matters that are specified in a new schedule proposed to be included in the Bill.”

Yes, there was a concession, but it might have been more apparent than real. It was to deal effectively with the objections at that stage in January this year. The issue limped on until it arrived here, with no urgency or hurry at all as far as I can see—until very recently when things take on a frenetic aspect.

With the petitioners, I have had three lengthy meetings with TfL, the last of which was attended by my hon. Friend the Member for Hayes and Harlington last Friday. That is good; I am glad that it is prepared to put in that time. It is an important Bill to TfL and it has been courteous throughout the process. That is true, but it concerns me that, having allowed things to drift for four years, it has now taken on this extraordinary degree of urgency. Similarly, it concerned me when the hon. Member for Harrow East (Bob Blackman) said that we should support the Bill because it would make public-private partnerships run rather more smoothly. I do not think we want anything like PPP to be run more smoothly. There are lessons for us to learn that we do not want to be repeated in the context of this Bill.

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Yesterday, the letter arrived, as has been said, following the Friday meeting. It said:

“We have considered the comments made at the meeting regarding clause 5 and the concerns expressed and, consequently, TfL intends to propose an amendment to clause 5. The amendment will insert a new sub-clause in clause 5 which will provide that TfL must obtain the Secretary of State’s consent to form, promote or assist a limited partnership when the purpose for it doing so is to carry on the development of land otherwise than for the purposes of TfL’s functions.”

Well, so be it. That is another attempt to deal with the objections that have been received in an emollient way, albeit at the eleventh hour. The concession has been made, and it is right that it should have been made, just as it was right that it should have been made in relation to what is now clause 4. However, it misses the point of our objection—at least, my objection, and what I understand to be the objection of the petitioners—which is that we do not think that this is the right approach for TfL to take. The fact that there will be a check is helpful, but we would prefer the clause not to be included in the Bill at all.

John McDonnell: During the meeting that my hon. Friend and I attended on Friday, one of the points raised—and it has been raised by the hon. Member for Christchurch (Mr Chope)—concerned not the principle of limited partnership, but the need to establish some sense of the scale of these operations. In July, my hon. Friend had a meeting with a Mr Graeme Craig of Transport for London, during which Mr Craig said that TfL had 5,700 acres of land across London, and approximately 800 archways. There was a list of schemes involving South Kensington, Baker Street, Old Street, Oxford Circus, Victoria, Golders Green and Northwood stations. Whether we look at the schedule, which relates to charges against land, or whether we look at clause 5, which provides for developments by a limited partnership, we are talking about a huge property portfolio for potential development with the private sector.

Mr Slaughter: Absolutely. I do not know whether I am right in suggesting that Earls Court was the fons et origo of that, but in any event the potential for it across London is huge. Moreover, as the hon. Member for Christchurch pointed out, the potential for it to go wrong is huge, and I think that that is what is going to happen.

Mr Chope: I am grateful to the hon. Gentleman for complimenting me earlier on what I had had to say. May I ask whether he thinks that TfL should sell off many of these surplus assets, rather than risking the setting up of vehicles for their development?

Mr Slaughter: I am coming to that point. I have given the House the benefit of what could be described as my knowledge of how things have progressed so far and what concessions have been made, but it is clear that clause 5 is intended to enable such vehicles to be set up, along with deals with pension funds and development partners for the management of secondary incomes to create income streams.

Obviously—this brings me back to the point that I think my hon. Friend the Member for Hackney North and Stoke Newington was making—if TfL manages its

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property portfolio in the best interests of the farepayer with the aim of keeping fares down and, indeed, reducing them, I do not object to its finding ways of establishing the best return on assets, provided that those ways are legitimate and sound. In some cases, that might involve not selling an asset and investing the money at what would possibly be a low rate of return, but embarking on some form of joint venture. However, let me now deal with the rest of what I am against. I promise that, before I finish, I will respond to the hon. Gentleman’s specific point about whether sales per se are simply a better option, and whether we trust them.

There is a sense in which I would say yes to that. I do not want to be rude to TfL’s management, because I think that many of them are very good at what they do, particularly on the technical side. On the whole, however, they are no match for the major property developers of London. I am afraid that the same could be said about local authority regeneration and planning officers. Property developers see them coming and fleece them for everything they have, which is very unfortunate. It is particularly unfortunate because it is our money. What is presented in the first instance as a way of maximising return for the farepayer ends up with the poor old farepayer— and the taxpayer—picking up the major share of the bill. I think that when I say a little about Earls Court the House will understand exactly what I mean, because that is the best example.

It surprised me to learn that, unlike local authorities and other public bodies, TfL does not have a duty of best value under section 123 of the Local Government Act 1972. It says that it still tries to obtain best value for a site—presumably from a commercial point of view as much as for any other reason—but for a public body such as TfL this is a balancing exercise.

Of course we want TfL to maximise the return on its assets in the interests of its core business, as my hon. Friend the Member for Hayes and Harlington said, but we also want it, as a public body under democratic control, to behave responsibly in environmental, social and economic terms. I fear that we are getting the worst of both worlds. We are getting poor-quality development, poor-quality decision making and poor-quality financial return. Therefore, the point about TfL’s area of competence is a serious one. I do not make it as a debating point to have a go at TfL. I wish it every success. But I have seen the evidence with my own eyes over many years.

Another reservation is to do with the collateral effects. Again, I will be brief on those, because they have been dealt with. According to the committee minutes, there will be some tax benefits in avoiding stamp duty, at least for TfL—it is a moot point whether we think that is a good thing to do or not—but when the benefits of avoiding tax go to the partner, that is a concern. As is the case with the Earls Court partner, major multinational property companies are avoiding paying UK tax by being registered in Jersey. TfL is facilitating that. That is plain wrong. A lack of transparency comes from the limited partnership model, rather than the limited liability partnership model. That is also plain wrong.

I also think, to put it crudely, that TfL is getting into bed with some dodgy characters. If they are not dodgy characters, then the people those people are getting into bed with are certainly dodgy. Capco, developers of Earls Court, has a partnership with the Kwok brothers, who are on trial for fraud in Hong Kong. When I put it

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to TfL last Friday that it should not be in that company, it said, “We have no association with the Kwoks”, but they signed a section 106 agreement for the site they were developing.

Let me give this example because it makes the point. The Earls Court area is subject to a masterplan. That was devised by Capco and everyone fell into line: the Mayor of London fell into line, as did TfL and the two Conservative-controlled boroughs. Therefore, we had the obscenity of a planning framework being designed around a planning application and of allowing a developer to act as predator on almost 80 acres of prime land in central London without any competition. The developer dictated its terms over a period of years, feeling that it had such pliant partners that it could do whatever it had to do.

As the hon. Member for Christchurch, who is long in the tooth and rather shrewder than a lot of politicians, said, that may work for a year or two or even five, but it will not work for longer than that and sooner or later there will be a change of regime in Hammersmith and Fulham and the apple cart will be upset. Possibly, in a year and a half, there will be a change of control at city hall and these schemes will still be in their infancy. Yet TfL has signed up to that masterplan, which I can evidence is not just a terrible scheme for the whole of west London but a terrible financial deal for the public sector partners.

All that land is being lost. Those premier exhibition centres in London contribute 16% of exhibition space in the UK and 30% of exhibition space in London. We will lose over 750 good-quality affordable homes, which will be demolished to make way for unaffordable homes. We will also lose the main engineering and maintenance depot for TfL and even TfL admits it does not know how it will cope without it. The first I heard about the move to Acton was when the hon. Member for Harrow East mentioned it today. It may have been a surprise to the hon. Member for Ealing Central and Acton (Angie Bray). It was certainly a surprise to me.

At the Friday meeting and previously, I was told by TfL that there were no plans, and that the operational decisions had not been taken and probably would not be taken until 2020. However, it is a question not only of manufacture and maintenance but of the stabling of the trains. At the moment, TfL says that they have nowhere else to go. Therefore, we have a peculiar situation in which TfL has signed and voluntarily bound itself up to that masterplan, a terrible financial plan, a terrible social deal for my constituents and a terrible deal for the economic life of west London even though it is not in a position to deliver on it and does not look as if it ever will be. I cannot believe that by 2020 there will not have been some change in political control that would rule that out entirely. That is what I mean by the naivety, for want of a better word, in the way it has operated these schemes.

We have some of the players from the earlier debate here. The Minister and the shadow Minister and myself are present, and I wish we still had my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson), because we had a very similar debate about the plans for HS2. As was largely not the case with Old Oak Common but is largely the case with King’s Cross, they involved going into an area that was already populated and

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already had housing that people wanted to live in and jobs that people wanted to do, and they were sold on the belief that it was a good commercial deal for the owner of that site. In my view it is simply unacceptable for that to happen. It is unacceptable that there should be that loss of homes—affordable, good-quality homes that people have occupied for 40 or 50 years—and their being demolished simply to hand over a site.

Yes, TfL got a terrible deal, but Hammersmith and Fulham council got an extraordinarily negligent deal that has to be investigated. It sold 23 acres of prime residential land for a net sum of £50 million, except within that £50 million it has to pay for the relocation and the purchase of the properties on that land, and with every month that property prices rise, that net sum is decreasing. Hammersmith and Fulham council—under its new Labour ownership, but gifted by its previous Conservative administration—could end up actually owing money for having given away 23 acres of prime land and having to displace 2,000 people who did not want to be displaced. That is what is happening in west London at the moment but it is on the basis of that strategy and plan that TfL wants to go forward with this kind of proposal. Can you wonder, Madam Deputy Speaker, that I am not terribly happy by it pursuing this course of action?

Mr Chope: What the hon. Gentleman has said is fascinating. Does he accept that what he has just described is available to us because of the transparency of the existing arrangements? However, if this Bill goes through, it may not be so easy in the future to be able to describe exactly what happens because there will not be that transparency.

Mr Slaughter: I have to say that I agree with the hon. Gentleman, although it has not been that transparent: it has taken rather a lot of work, over the last six of seven years and I am probably prematurely grey as a consequence. It has been like getting blood out of a stone, and so much work has been done, not primarily by me, but by the residents, the RMT, and people like my colleague my hon. Friend the Member for Hayes and Harlington and the petitioners. They have worked day and night on this and have harried these people who are so irresponsible with the public assets that they hold—all public land at Earls Court, all being squandered and given away to developers, for losses of hundreds of millions, if not billions, of pounds.

John McDonnell: The greyness becomes my hon. Friend, by the way, but on the point he is making, the issue is that a limited liability company will lodge its accounts at Companies House, whereas a limited partnership has no responsibility to do that, so even then there will be complete opaqueness about the financial transactions of that limited partnership.

Mr Slaughter: I am grateful to my hon. Friend for that intervention.

I was going to talk more about the formal instrument, but we have heard quite a lot about that already and I hope we will have more time to look at it in Committee. I also hope that if this Bill does go ahead we will at least remove this pernicious clause 5.