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Baroness Denton of Wakefield: My Lords, I know that on many occasions in your Lordships' House, the Motion, "That this Bill do now pass", is not spoken to, but I believe that those noble Lords who have spoken are rightly deserving of a reply. This is a very important Bill. I believe that it is necessary to have it on the statute book. I can report that the Republic of Ireland took its decommissioning Bill through its final stages last week. Both governments are committed to finding a peaceful future for Northern Ireland and, indeed, for the island of Ireland.
I understand some of the frustrations which the noble Lord, Lord Fitt, raised. The rest of us can never ourselves live the suffering of someone who has seen so much violence in Northern Ireland and seen friends and colleagues suffer from it. We sympathise with and understand the noble Lord's concerns.
However, there is a balance to be struck between looking to the future and making very difficult decisions. I emphasise the difficulty of those decisions. We must consider the balance of whether it is better to take a weapon out of commission--there must be confidence in decommissioning if it is to be viable--and thus to ensure that that weapon is never again used to murder as against the chances of pursuing the killers. I would not pretend that the decommissioning provisions will not make it more difficult for the police to pursue their investigations. However, I believe that, on balance, we must protect the future. All of us listened with pride to the Lance Bombardier's parents express their concern that their son's death should not result in more violence in Northern Ireland. I believe that this Bill works towards their wishes and that we should follow it through.
The police will not stop pursuing criminals. We are decommissioning no crimes whatever. As prosecutions are often mounted in the absence of the weapon used and as other evidence of involvement in a crime plays a more central role, we believe that other evidence unconnected with the decommissioning process can be used to support a prosecution. The important point to remember is that our aim is to persuade those in possession of unlawful armaments to decommission them. If they feel exposed they will not participate and arms will not be handed over in any other circumstances.
It is a great pleasure both to me and, I am sure, to your Lordships to hear Northern Ireland voices speaking on these matters. I welcome the commitment of the noble Lord, Lord Alderdice, to finding a peaceful solution. It is important to stress that if the republican movement continues to reject the path of democratic dialogue in achieving a peaceful resolution of the problems of political instability in Northern Ireland that dialogue will continue without it. If the republican movement does not make it possible for Sinn Fein to be invited to join the talks process it is essential that the legislative foundations for a suitable decommissioning scheme are already in place. I believe that we would be doing less than our duty if we failed to bring forward this Bill.
The noble Lord, Lord Holme, raised two matters that perhaps fell slightly outside the scope of the Bill. But, as the noble Lord rightly points out, this House has very little opportunity to discuss Northern Ireland issues. It also has very little opportunity to discuss them with so many noble Lords in their places. I am sure that all of us who are involved in trying to find solutions gain a great deal of satisfaction from knowing that there are more people who recognise the needs of Northern Ireland and are working towards meeting them. As the noble Lord said, we have taken the opportunity, instead of making a Statement on the North Report, of discussing it at Second Reading of the Bill. I am sorry
that the noble Lord has not been kept up to date with progress but I assure him that I am aware of considerable efforts on the part of my colleagues in moving forward this matter. We are all well aware that the clock is ticking and that these dates come very quickly. People are being consulted on the formation of the commission. There is no lack of urgency. I hope that this is a matter from which everyone learned a lesson last year. There can be no disguising the fact that there must be a sense of urgency.The noble Lord, Lord Holme, referred to the Northern Ireland Grand Committee. The Government view the existing Northern Ireland Grand Committee as a way of making government in Northern Ireland more accountable and giving MPs from Northern Ireland greater responsibility. The Prime Minister has said that Northern Ireland MPs should be able to question Ministers and scrutinise government policy directly in Grand Committee, meeting sometimes in Northern Ireland. I welcome the opportunity to be directly responsible for answering matters that fall within my portfolio. The Government are likely to bring forward proposed changes in line with recent alterations to the Scottish and Welsh Grand Committees.
We in Northern Ireland work constantly to find movement. We believe that if people are not given responsibility it is difficult to ask them to behave responsibly. We are trying to make progress. It would be wrong to tell your Lordships that it is always easy. But I should like to reassure the House that this is a peace process because that is the way in which the two governments, with the support of the United States Administration, seek to take violence out of Northern Ireland and remove the arms, bullets and bombs. I am sure that if that day arrives everyone in your Lordships' House will celebrate.
London Underground
3.35 p.m.
The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen): My Lords, with the leave of the House, I should like to repeat a Statement that is being made by my right honourable friend the Secretary of State for Transport in another place. The Statement reads as follows:
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"With permission, I should like to make a Statement about our proposals for the future of London Underground.
"London Underground is the last of the traditional transport nationalised industries and the only major transport operator which is not in the private sector. Since 1979, we have privatised a wide range of transport businesses--for example, British Airways, the British Airports Authority and indeed London Transport's own bus operating companies. All of them have gone on to prosper, raising money from the market to invest in better services for their customers. Only London Underground remains in the public sector--its status becoming increasingly anomalous.
"Most recently, of course, we have privatised the national passenger rail network--a process which has now been completed with the award of the last franchise, for Scotrail. The benefits are already becoming apparent: an increase in passenger numbers; new investment is already taking place or is in the pipeline. Railtrack have plans to spend £4 million a day on maintaining and renewing the rail network, on stations and depots and on network enhancements. By 2001, Railtrack estimate that they will have spent £1 billion more than the regulator expected. In addition, franchisees are committed to investing around £1.5 billion in new rolling stock, and over £100 million in improvements to stations and other facilities. The decision to proceed with Thameslink 2000 and the Channel Tunnel Rail Link show that major new projects can be undertaken within a privatised railway. Benefits for rail users are being achieved at a decreasing cost to the taxpayer. In seven years time, the private sector franchisees will require only about 40 per cent. of the support that British Rail estimated they would have needed to run the same services this year.
"Rail privatisation has shown that the fact that an industry is currently loss-making is no barrier to its successful transfer to the private sector.
"Against that background, my right honourable friend the Prime Minister announced in October that we would be considering whether the benefits of privatisation could be extended to the London Underground. We have now completed the initial stages of that work and the Government have concluded that privatisation is the right way forward.
"The package that I will outline to the House will deliver a higher quality Underground, at an affordable cost to passengers and at no extra cost to the taxpayer. Our purpose is to structure the privatisation so as to ensure that the Underground is brought up to modern standards as soon as possible. Our aim is to complete this modernisation and improvement programme--that is the elimination of the 'investment backlog'--within five years of privatisation.
"Over recent years, London Underground's management have raised customer satisfaction by a sixth, increased scheduled train services to a level not seen in 25 years, increased the Underground's operating surplus from nothing to around £200 million a year, and reduced the investment backlog from £2 billion to £1.2 billion. Despite these great strides, a lot remains to be done if we are to bring about the standards of service that passengers want, at a cost which they and taxpayers can afford. We believe that privatisation is the only means of achieving these goals. Privatisation will enable the private sector to invest in the network and respond to passengers' needs, unconstrained by the restrictions of public expenditure controls, and will create the stable financial environment which is simply not achievable in the public sector, with all the other competing demands on taxpayers' money. We want
- to privatise London Underground as soon as possible so that passengers can start enjoying these benefits without delay.
"In deciding on the detailed structure for the privatised Underground, we shall need to take account of the network's unique nature and operating characteristics, and to obtain further technical and financial advice. Specifically, detailed work will now begin on three possible models: the sale of London Underground as a single business; the sale or franchising of vertically integrated lines, or groups of lines, under which a single operator would be responsible for the stations, track and trains on each line or group of lines; or a structure like the national railways model, with a track authority owning the network and franchisees running trains on individual lines or groups of lines.
"We are already consulting London Transport and the Railways Inspectorate, and we shall now widen our discussions to involve the other key players in the railway industry, or with an interest in London's transport system, such as the London Pride Partnership and the London Regional Passengers' Committee. We also intend to start the process of appointing advisers. Our aim is to publish in the summer a White Paper with our detailed proposals for the best structural option for the future of the Underground.
"As with previous privatisations, there have been a number of scare stories in the media in recent weeks. I want to set the record straight by giving 10 commitments to passengers and employees. On safety standards, safety must always be a top priority. I shall be consulting the Health and Safety Commission in order to ensure that, whichever structural option we adopt, the very high safety standards of the network are maintained.
"Secondly, on a fully integrated network for passengers, including through-ticketing and freedom of interchange between lines, there is no question of 'breaking up the network'. Passengers will be able to use different lines for a journey and to choose the most suitable route, using one ticket in exactly the way that they do now.
"Thirdly, on the London Travelcard, regular Tube users attach great value to the Travelcard, which allows people to use the same ticket to travel by Underground, rail or bus, without any restriction on the number of journeys they make. It is used by around a million people a day and accounts for over two-thirds of Underground journeys. Our proposals will explicitly safeguard its future.
"Fourthly, on concessionary fares, the existing London-wide concessionary fares arrangements, which are of critical importance to many elderly and disabled people who rely on public transport, will not be affected by our proposals.
"Fifthly, on wider share ownership, we shall seek ways of encouraging employees and passengers to acquire a real stake in the privatised Underground.
"Sixthly, as far as the employees are concerned, pensions and travel concessions at the time of privatisation will be safeguarded. Again, depending on the option that we choose, we will be seeking to encourage employees to participate in management or employee buy-outs.
"Seventhly, on service levels, we shall ensure that the private sector will be required to provide a guaranteed level of service broadly safeguarding the existing level of provision. The regulatory authority supervising the privatised Underground, which will be independent of the train operators, will agree to changes in service levels only after carefully considering the benefits to passengers. Again, this is a wholly new safeguard.
"Eighthly, on station safeguards, we shall retain strong and effective statutory procedures to deal with any proposals to close stations. These safeguards will be just as rigorous as those which already apply to London Underground and to the national rail network.
"Ninthly, on fares, we shall introduce controls on fares. The guiding principle will be that, for at least the first four years after privatisation, average fare rises will be no more than inflation. This is a new safeguard--previously, Underground fares have not been capped. We also intend to restrain fares in the run-up to privatisation, by capping average fare increases to inflation plus 1 per cent. a year. Again, there has been no such explicit protection in the past, and in practice fares have tended to rise faster than this. The House will recall, for example, that fares increased by 45 per cent. in real terms between 1974 and 1979. Which brings me to the tenth commitment.
"On investment, in the recent debate about the future of London Underground, a consensus has emerged on two key principles with which I believe that the whole House can agree: first, that it must be a top priority to accelerate investment in the London Underground so as to bring the network up to the standards which passengers can reasonably expect for the 21st century; secondly, that this goal can only be achieved if we create a stable funding regime which enables investment to be planned ahead with confidence.
"We are therefore developing a special funding regime for recycling privatisation proceeds into investment which recognises the unique situation and needs of the Underground. Receipts from privatisation will be recycled in order to ensure that the modernisation of the Underground's infrastructure is completed as quickly as possible, building on the work that London Underground is already doing. Our aim is to achieve this within five years of privatisation, with the private sector operator committing himself to modernising the assets for which he is responsible, in return for a guaranteed level of government support to supplement the investment funds which he himself will raise.
"After recycling privatisation proceeds to complete the modernisation of the Tube network, the majority of any remaining surplus will be channelled into
- additional support for London Underground or for transport investment elsewhere in London or other parts of the country.
"As far as modernising the Underground's basic infrastructure is concerned, the House will appreciate that there is a maximum level of annual investment beyond which it is not practicable to go. At a certain point, for example, disruptions to services from renewal works across the network would become too great, or beyond the capacity of the supply industry. Subject to these practical constraints, we aim to privatise the Underground in such a way that the network is modernised as soon as possible.
"London Underground estimates that the upper limit for sensible investment in the core Underground each year is around £750 million. Of course, passengers are interested in the results of investment--punctual and reliable services--not the amounts. I believe that the private sector will be able to deliver the results that passengers want, but more efficiently. Privatisation and the new regulatory regime will be focusing on the results of investment. But if we assumed that annual investment was around £750 million, about £350 million a year would be needed to maintain the network and renew assets as they become too old. The remaining investment would be aimed at eliminating the results of the under-investment in the Underground in the 1960s and 1970s. Sustained annual investment of around £750 million in the core Underground would be significantly above what has been managed before--in real terms, over four times what was achieved in the 1970s, about three times more than in the 1980s, and 50 per cent. more than so far in the 1990s. I do not believe that this rate of progress would be possible if London Underground were to remain in the public sector.
"The 10 commitments that I have given today show our determination to protect and enhance the aspects of the Underground which are valued by Tube users and Londoners generally. At the same time, privatisation will introduce private sector capital, ideas and energy to increase investment and raise standards. This is an outstanding package for Tube users and Londoners. I do not believe that anything as attractive would be possible under continued public ownership. I commend to the House the principle of privatising the London Underground."
3.48 p.m.
Lord Clinton-Davis: My Lords, I thank the Minister for repeating the Statement made by the Secretary of State in another place concerning the 10 commitments, which are unlikely to be tablets of stone. Is it not somewhat ironical that this Statement should have been made in the very week of the misery caused to thousands of commuters by the negligence of South West Trains and the inordinate gains made by the directors of Eversholt, which the Minister characterised when I mentioned them as the politics of envy? It is
not the politics of envy but the politics of inevitability under many of the privatisation schemes which have been launched by this Government.This Statement is made at the very time that the chairman of London Transport has complained about the news of reduced government funding, leading to £700 million of cuts affecting trains, signalling and track systems. The Minister did not deal with those immediate issues.
Is it not unusual for a government to make a Statement in Parliament, not on what they propose for this Parliament but on what they intend to include in their election manifesto? Are we now to expect that a whole series of Statements will emanate out of the ragbag of ideas that this desperate and bankrupt Government propose as to their suicidal intentions? Why do the Government find it necessary to issue with such haste, despite its length, such a flimsy imprecise Statement which, upon their own admission, is not based on expert opinion--they have not taken expert opinion--and does not even declare the shape of the proposed privatisation? Will the Minister explain that blinding ray of darkness? Why was it necessary at this time?
If, as the Government assert, this will be wildly popular with the electorate, how does he reconcile that with the assessment made by Mr. William Waldegrave that London Underground will be a very difficult privatisation to sell to the public, and even, to use the words of the Secretary of State, that:
- "it may be necessary for the Government to pay somebody to take it off their hands."?
There is not one mention of that in this very long Statement. Therefore, is this not yet another example of this Government living not by reality but by make-believe? The reality is that for Londoners it will prove to be about as popular as Sir Edward Heath is with the Conservative Party at present. Can the Minister comment on the projected proceeds and subsidies and the question raised on page 6 about surpluses?
- "After recycling privatisation proceeds to complete the modernisation of the Tube network, the majority of any remaining surplus will be channelled into additional support for London Underground or for transport investment elsewhere in London or other parts of the country".
How much is that majority? Is it to be 51 per cent.? Where does the rest go? How is it to be apportioned? There is not a word; just an assertion.
What assurances is the Minister able to give that the proceeds of sale will amount to perhaps £600 million--he says perhaps a little more--knowing full well, based on past experience, that there is likely to be another grotesque give-away of some £13 billion-worth of public assets and that the subsidy to be provided--the carrot--might well exceed the net sale proceeds? That comes from the Secretary of State's own lips. What happens in that event?
Does the Minister agree with the view expressed by the Centre for Policy Studies--the Right-wing think-tank--that privatisation could lead to "the commercially advantageous" closure of stations outside Zone 3?
Yes or no? What guarantees can he give that the present PFI, with all its imprecision, failure to allocate risk and huge and wasteful tendering procedures, and with the absence of national and regional transport objectives, can deliver the goods? That was the precise question raised by the chairman of London Transport.Our belief is that the whole system needs to be restructured. It is right that private sector skills and capital should be injected, but that should be done on the basis of a much more sensible system that we have devised--the public-private partnership scheme--thereby giving real value to taxpayers. That also involves ensuring that we have national and regional transport strategies, which, perhaps conveniently for the Government because they do not wish to talk about it, are missing from the Statement.
The Government's transport policy, if one can dignify it by that term, like so much else, is in a huge mess. In their pretence to be magicians, they resemble a somewhat humourless Tommy Cooper, with all the blunders for which he was famous, but which were at least harmless. We are content to join issue with this Government on the means that they have chosen in principle--they have dealt with the issue only in principle--to deal with under-investment and the future of London Underground. We will put them before the electors and we are confident that we, rather than they, will be required to deal with these vital matters.
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