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Lord Clinton-Davis: My Lords, I am much obliged. Before the Minister leaves that point, can he give me a specific assurance that that provision could not be used for the purpose of a privatisation measure?
Viscount Goschen: My Lords, I believe that I can give the noble Lord that assurance. As the Notes on Clauses to the Bill explain, the new Section 31B would enable the Secretary of State, by order, to provide that certain of London Transport's statutory functions are to be exercisable by a contractor for the purposes of
carrying out agreements under Section 3(2) and 3(2A) as I detailed earlier. However, subsection (3) of the new clause explicitly excludes--I emphasise "excludes"--the transfer of statutory functions under the 1984 Act. Therefore, as an example, an order could not transfer LT's general duty under Section 2 of the 1984 Act to provide or secure the provision of public passenger transport services. Similarly, an order could not transfer LT's duty under Section 8 of the 1984 Act to control the level and structure of fares, the level of frequencies and so on; indeed, those would remain the functions of LT. I believe that that explanation fully addresses the noble Lord's specific point.The noble Lord also made somewhat disparaging, although perhaps supporting, remarks about the private finance initiative. It is worth making the point that the actual actions predate the name; indeed, there were a number of such projects going on, the most noticeable of which was the Channel Tunnel, where private finance was so involved.
I do not accept for a single moment that PFI has not been a success or that the Government have failed to provide guidance on its implementation. Over 1,000 potential projects have been identified with government departments by the Private Finance Panel with a capital value of some £25 billion. With the panel's help, detailed guidance was issued by the Treasury last November and entitled, Private Opportunity, Public Benefit. I hope that I can reassure my noble friend Lord Mountevans that the Treasury is indeed receptive to the needs of the private sector. Indeed, as my noble friend Lord Bowness pointed out, private finance schemes have been around for a number of years. I believe that that emphasises my earlier point about the Channel Tunnel and about the Dartford-Thurrock crossing.
My noble friend Lord Bowness gave impassioned support to the private finance initiative. I believe that that is wholly accurate and very worth while. The use of the scheme to identify projects where the private sector can contribute its own investment, and indeed its own management skills, to public sector projects has revolutionised the way that we have looked at such projects. I see that the noble Lord wishes to intervene again. I give way.
Lord Clinton-Davis: My Lords, I thank the Minister for giving way. The problem is that the attitude of the construction industry in particular is one of great dissatisfaction based upon a number of points that I made in my speech; namely, a lack of prioritisation, a complex and very bureaucratic system of tendering and an inability to understand what the Government's national and regional objectives are with precision. Therefore, will the noble Viscount concede that such problems exist? If he does not understand the situation, he will not begin to address the anxieties felt by the construction industry which I am sure both he and I want to try to resolve.
Viscount Goschen: My Lords, I certainly accept that nothing is perfect. However, we are talking about very substantial projects which entail partnerships between the Government and the private sector. I am afraid that it is
necessary for certain procedures to be followed and for Treasury rules to be satisfied. Indeed, we are talking about large sums of money and about ensuring that the rules of the Treasury are fully complied with. My experience derived from my exposure to the relevant industries involved has been that industry--whether it is the construction industry or any other industry taking forward PFI projects--welcomes the initiative, recognises considerable value in it and finds an opportunity to participate in a fuller way than would otherwise have been the case. I believe that that provides value for money for the taxpayer and access to funding and investment which would not otherwise have been available.I certainly would not have wanted to intervene in the little dispute between my noble friend Lord Bowness and the noble Lord, Lord Clinton-Davis, about the GLC, save to say that I am sure my noble friend is right, rather than the noble Lord. However, that might be seen as taking sides on the issue.
My noble friend Lord Mountevans also made some points on the PFI. I hope that I have managed to reassure him that the Treasury is sensitive to taking on board the various comments which are made in that respect. Of course, the PFI is in its early days. However, it has been a success and I believe that it will continue to be so; but that is only because it will be a proper partnership between government and industry which means that the Government must listen to the points that are made both in this House and, indeed, outside it. I give way to my noble friend.
Lord Mountevans: My Lords, I am most grateful to my noble friend for giving way. I believe that he answered many of the points put forward by the noble Lord, Lord Clinton-Davis. However, I used the word "risk" in my speech. Can my noble friend tell me what is the Treasury's attitude towards risk? Obviously, the private sector sees an opportunity and takes a risk. But, on the other hand, I believe that the Treasury sees such matters in a very different way, and that is a constraint.
Viscount Goschen: My Lords, the key to analysing such projects correctly and assessing whether they are proper and should go ahead largely depends on the risk against reward balance highlighted by my noble friend. We must look at all such schemes on their merits to assess whether a sufficient quantity of risk transfer has taken place. It is on that basis that the Treasury assesses the various schemes.
My noble friend Lord Mountevans also talked a good deal about the importance of buses. I would certainly have no difficulty in agreeing with him in that respect. Indeed, the bus is often an under-utilised asset. I believe that the recent transport document on London aptly realised the benefits that bus transport can have for the capital.
My noble friend asked about Westminster Bridge. I can confirm the date that he gave of about June 1997 for the completion of the works. We obviously hope that the project will manage to keep to its timetable.
The final subject on which I wish to comment is funding and investment. I imagined that the noble Lord, Lord Clinton-Davis, for one, and others, would open a debate about London Underground financing. I certainly
argue that the Underground is not underfunded. Even allowing for inflation, investment in the core Underground in the 1990s has been twice as high as in the 1980s and three times higher than in the 1970s. On top of that around £2 billion is being spent on the Jubilee Line extension. The real underfunding of the Underground took place during the 1960s and 1970s when much of the present backlog built up.I realise that we shall continue to have arguments about the level of funding of the London Underground. We believe that it is at an appropriate level. We certainly believe that the provisions of this Bill will enable London Underground to make fuller use of the private finance initiative to make sure that it obtains the full benefits, and that that provides maximum value for money for the taxpayer and the best service for the travelling public. Those must be our aims. I commend the Bill to your Lordships.
On Question, Bill read a second time, and committed to a Committee of the Whole House.
Deregulation (Motor Vehicles Tests) Order 1996
8.11 p.m.
Viscount Goschen rose to move, That the draft order laid before the House on 1st April be approved [17th Report from the Delegated Powers Scrutiny Committee].
The noble Viscount said: My Lords, the draft order amends the Road Traffic Regulation Act 1984 to remove the requirement for parking equipment and devices used by local authorities to be approved by the Secretary of State.
This requirement for approval is a cost to the parking industry and a disincentive to innovation. For a supplier with ideas for a new type of parking meter or ticket machine, it is not enough to find a customer local authority; under present arrangements he or she must also obtain the approval of the Department of Transport. Although the approval process has been made as straightforward as possible, it is not always understood by outsiders, and can be a significant bureaucratic obstacle. The approval requirement also involves a small but significant administrative cost to central and local government.
When parking meters were first introduced some 30 years ago the requirement for approval gave motorists a degree of protection against being charged with an offence based upon faulty equipment. We believe this measure has now outlived its usefulness. A range of British Standards for parking equipment is now available, and local authorities have wide experience of parking control. Meters do go wrong from time to time, but faults usually arise from poor maintenance or vandalism, which the approval process cannot protect against. All things considered, we have concluded that the approval process is now redundant and can safely be removed. I commend the order to your Lordships' House. I beg to move.
Moved, That the draft order laid before the House on 1st April be approved [17th Report from the Delegated Powers Scrutiny Committee].--(Viscount Goschen.)
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