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Lord Steel of Aikwood: My Lords, I thank the Minister for his reply. He will appreciate that this Question was tabled before the statement by the Deputy Prime Minister in the other place, which has been widely welcomed. Since it is now the determination of the Government to secure more housing on urban land and less in the countryside, surely it would make sense for the Treasury to review its policy requiring the highest possible price from the MoD regardless of other circumstances? Does the Minister agree that when land is already held by the state housing should be the priority for it?

Lord Hoyle: My Lords, there is co-operation between government departments, as I have said, at official and ministerial level. In disposing of surplus property the Ministry of Defence seeks to work closely with the local authorities and regional government offices to try to accommodate the local plan itself as far as possible. As regards the Treasury rules at the moment, they allow each case of disposal to be considered on its merits. However, the issue will be examined again by the DETR research project.

Lord Dean of Beswick: My Lords, is the Minister aware that there is a precedent for a government to give

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priority to local authorities to purchase some of the properties which have been government-owned? For example, under that policy Manchester purchased a large disused armaments factory and turned it into a very successful building components factory. Can the Minister give an undertaking that he will look into examples of that kind in order to try to carry out part of the policy enunciated by the noble Lord, Lord Steel?

Lord Hoyle: My Lords, I agree with my noble friend when he refers to what occurred in Manchester. I can assure him that part of the review that is being considered will look at the best way forward. As I say, in the meantime we try in the MoD to work very closely with local and regional authorities in order, wherever possible, to meet the demands of the local population.

Lord Marlesford: My Lords, is the Minister aware that there has been a number of instances where the Ministry of Defence has been remarkably inept at disposing of land? I give one example of RAF Bentwaters in Suffolk, where two false attempts were made to sell property, but in each case the person with whom the deal was agreed did not have the money? Is not the real answer to the point raised by the noble Lord, Lord Steel, for the Ministry of Defence, once it has decided that it does not need public property, to transfer it to the Department of the Environment, Transport and the Regions which, in disposing of it, could take into account the wider requirements of public policy, particularly that of the environment?

Lord Hoyle: My Lords, those matters will be considered in the review. We are well aware of the need to use brownfield sites wherever possible for housing development, as was discussed the other day in your Lordships' House. It is estimated that there are enough brownfield sites in MoD possession which may be disposed of to provide 26,000 houses. It is important that such points are borne in mind. As I have said, we are awaiting the results of the review.

Lord Burnham: My Lords, I understand that estate agents handling MoD redundant property are not allowed to give any indication of the price. Will the Government review that situation?

Lord Hoyle: My Lords, again I am sure that that point will be considered by the review. We want to see the best use being made of MoD land, taking into account the needs of the local authority and the content of the local plan.

London Underground: Investment Policy

2.50 p.m.

Lord Brabazon of Tara asked Her Majesty's Government:

    What plans they have for investment in the London Underground.

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The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Baroness Hayman): My Lords, we are in the final phase of developing proposals for a public private partnership to provide the Underground with the funding it needs to increase investment and modernise the network. We shall shortly be in a position to make an announcement.

Lord Brabazon of Tara: My Lords, I am grateful to the Minister for that Answer, but is it not the case that the need for investment in the Underground is urgent and was stated as such by the Labour Party, both before and after the last election, yet 10 months since the Government took office we have still not heard anything? Is it not also the case that everyone in Whitehall is running round and round trying to find a new word for "privatisation" which will not offend either the Deputy Prime Minister or Mr. Jimmy Knapp? Can the Minister give me an assurance that any proposals coming forward will not result in an alteration of the definition of what is "public expenditure" or "public sector borrowing"?

Baroness Hayman: My Lords, the issue is urgent--and it is the more urgent and deeper-rooted because of the number of years of under-investment in London Underground and the horrendous scale of backlog that we inherited. This is a complex issue because we ruled out the crude and wholesale privatisation suggested by the party opposite. That means that we have to consider very carefully the options by which we can maintain the public accountability of the Underground while harnessing private finance and skills, and build on the Underground's public service record. That is what we are seeking to do. As I said earlier, we hope to make an announcement very soon.

Lord Marsh: My Lords, does the Minister agree that the history of public/private partnerships in organisations and undertakings as large and as complex as London Underground has not been totally happy, and that the weakness usually is that wherever the Government become involved in such an undertaking or joint venture, historically the continuity of the investment programme has been lost because all governments always change investment programmes? Is there any likelihood that the Government might rethink the possibility of privatisation?

Baroness Hayman: My Lords, the simple answer to the noble Lord's second question is "no". However, I take the noble Lord's point that some of the private finance deals that the House has discussed only recently have not been the happiest of examples. That is another reason why we are looking carefully, with our advisers,

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Price Waterhouse, at the different ways in which such a partnership for London Underground could ensure continuity of investment.

Lord Gisborough: My Lords, can the Minister say why privatisation was ruled out, out of hand and without consideration, and why it could not be given equal consideration with other solutions?

Baroness Hayman: My Lords, it was ruled out because we did not believe that it would give the guarantees about service and safety that we considered essential to run an Underground system safely and well in our capital city. We thought that it reflected more a dogmatic commitment to privatisation rather than a rational analysis of the problems of the Underground and a flexible and pragmatic approach to meeting them.

Lord Ezra: My Lords, on the question of continuity, does the Minister recall that the previous government at one stage agreed to meet the reasonable requirement of the Underground for increased investment, but that within months and in a subsequent Budget that was withdrawn? Can the Minister give us an absolute assurance that such a situation will not arise again? If there is likely to be any further delay in devising a public/private strategy for raising the additional investment, could the Government not provide at least a bridging loan so that the work can start?

Baroness Hayman: My Lords, as I said earlier, I hope that we shall be able to make an announcement soon. I take the noble Lord's point both about the history of this matter and about the urgent need for investment. As part of our work to develop a PPP, we are considering ways of increasing investment in the Underground in the short term, as well as developing a solution which will quickly eliminate the Underground's investment backlog.

Lord Evans of Parkside: My Lords, if by any chance any members of Her Majesty's Government are still harbouring any thoughts of privatisation along the lines suggested by the Conservative Party, will my noble friend invite them to study what happened to British Rail and the absolute disaster that that privatisation has been for the nation?

Baroness Hayman: My Lords, I encourage all noble Lords to attend, and perhaps participate in, our debate later today on the state of the railways.

The Earl of Lauderdale: My Lords, has the noble Baroness any reason to say that there will be a decision "soon"? I understood that it would be "very soon". Which is it, "soon" or "very soon", and when is either of them?

Baroness Hayman: My Lords, I am afraid that I do not have my Civil Service lexicon with me which explains the difference between "soon" and "very soon",

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but I hope that noble Lords will not feel disappointed at the length of time that it takes to make an announcement.

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