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Lord Falconer of Thoroton: My Lords, I suspect that we could debate the detail of the Jubilee Line extension at considerable length. At the end of the process, the American contractors, Bectel, were brought in to ensure delivery on time, and they did. That appears to indicate that expert management can often produce significant results in relation to a contract such as that.

The noble Baroness, Lady Hamwee, congratulated the Government on making the structure of public service issues such an important matter. She described in graphic and impressive terms what is wrong with London Underground. We do not dispute the figures that she gave indicating the urgent need for an improvement in the service. She also said that the way forward must be settled so that progress can be made. We agree emphatically with that. A decision has been made to proceed with the PPPs, and the right course is for all the parties involved to make those PPPs work. She said that transparency is important. I could not agree more.

The noble Baroness also had concerns about the structure. She asked what is the Government's alternative—their "Plan B". The answer is that we believe that we can make the PPP work, and we are currently engaged in that. She also said that the issue is too much about personalities. I believe that she is right. We should all be trying to make the solution work.

In his very clear and excellent speech, the noble Lord, Lord Fowler, said that transport should be separated from the Department of the Environment. He will be glad to hear that that is what happened immediately after the last election. He said that it is an important area of policy, and I agree with that.

The noble Lord also said that one must recognise the importance of London Underground. As I said earlier, we regard it as a vital national asset that must be made to work because of the importance of the success of London and the importance of the Underground to the people who use it. He said that ensuring that the Tube service was fit for the 21st century was an urgent task. I agree entirely with that proposition. He stated that there was a need for new investment. Again, everyone would agree with that. The PPP will bring in that investment over 30 years.

The noble Lord also referred to the privatisation option. Again, I have indicated that that was never on the cards. I repeat that the suggestion of breaking the

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company into five separate parts—I am not clear where the noble Lord stands on that—does not sound a very sensible idea. He referred to the bond option. We say that that would not bring about a sufficient change in the management structure. One must focus on improving the management as well as focusing on the issue of where the cheapest money is to be found in the money market.

The noble Lord said that the proposals amount to no more than contracting out. In one sense, he is right. It is contracting one aspect of what must be done in relation to the Tube service, first, to the people who know how to do so and, secondly, those people must have a long-term commitment to the delivery of the result.

He said that the system should be more unified. Perhaps I may deal with that point. We have kept the system together. As my noble friend Lord Faulkner of Worcester made clear, this is quite different from the Railtrack privatisation, which the noble Lord, Lord Fowler, in a moment of admirable candour, indicated that he utterly opposed at all stages. Well done to the noble Lord, Lord Fowler. The same sentiment was put forward by the noble Lord, Lord Peyton. He made clear throughout the process of that legislation through both Houses of Parliament that he opposed the proposals for the nationalisation of Railtrack in 1992 and 1993. It is a unified system, because London Underground retains the whole operation of the system. It is not like Railtrack, where one person runs the track and a plethora of operating companies run various trains.

The third point made by the noble Lord, Lord Fowler, was that operation in one set of hands is important. We agree; that is what we have achieved. We have contracted with the contractors to provide the services needed. He then talked about an opportunity lost. He mentioned a privatisation scheme but did not specify what it was, and therefore gave us no clue what opportunity it was that we lost. As I said, we have thought long and hard; we have taken advice—though I hardly dare mention it—from consultants; this is the solution that meets the problems.

The noble Lord, Lord Brooke of Alverthorpe, gave us the benefit of his experience on the board of National Air Traffic Services and said, as I think that we would all agree, that one size does not fit all. Solutions need to be tailored to the circumstances. He said that the effect of the creation of NATS was to lever in private capital, which meant that investment would flow for the coming years, which is vital.

The noble Lord, Lord Ezra, stressed the importance of certainty of investment, and emphasised that there must be constructive relationships. The noble Baroness, Lady Gardner of Parkes, was slightly dismissive of that point. She said that she did not disagree with the proposition that constructive relationships are important, but they are extremely important when there are several people who must agree on the way forward. The travelling public want agreement so that the way forward can be settled and taken.

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As I said, the noble Lord, Lord Ezra, mentioned under-investment and uncertainty of investment—about which everybody would agree. That is what the PPP is intended to address. The PPP will ensure adequate flow of investment over a period. The noble Lord referred to Treasury money and bond money; I have dealt with both. Obviously, Treasury money would be the cheapest. But where is the certainty over a long period? How would we achieve the necessary change in management?

I have dealt with the question: is divided responsibility sensible? There will not be divided responsibility; there will be unified responsibility. On accountability, infra-cos have a long-term contract with London Underground. After the PPPs are in place, London Underground will report to Transport for London; TfL is responsible to the Mayor of London. How does that relate to the mayor's obligation to produce a safe and efficient transport system for London? He will have political responsibility for TfL; the scheme will be up and running; it will be his responsibility to ensure that it works.

The noble Baroness, Lady Gardner of Parkes, gave an important description of the need for London Underground. She referred in particular to the problem of night life in London; she referred to London as a world city and a 24-hour city with clubs discharging 60,000 people between 3 a.m. and 5 a.m. That is why we need a functioning transport system that runs for 24 hours. We entirely agree with that.

The noble Baroness referred to the evidence of Mr Wilfred Newton, who had been responsible for the mass transit system in Hong Kong, and who pointed out that in the time it took for the British system to go through all the legal proceedings to determine whether permission would be given, they built the whole mass transit system in Hong Kong. I do not know what were the precise times, but there is a widespread feeling that major infrastructure projects in this country take much too long from conception to commission. My right honourable friend the Secretary of State for Transport, Local Government and the Regions made clear in July in another place that he will consult on new procedures to speed up that process. The noble Baroness made an important point.

In an impressive speech, my noble friend Lord Faulkner of Worcester made the argument for the PPP much more eloquently than it has often been made. He gave an impressive and measured account of the arguments in favour of it. It is worth saying that the arguments in favour have not been matched by any detailed argument for an alternative scheme. Like every speaker in the debate, he focused on the two real problems with the Tube: severe under-investment requiring certainty of investment in the long term and a change in management structure to deliver the major repairs, maintenance and infrastructure improvement that are required.

The noble Lord, Lord Bradshaw, said that he did not have the confidence that my noble friend had in the PPP and asked how it will get the management that it

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needs. I agree with him that there are lots of first-class people in London Underground wanting to deliver a good operational service. In terms of maintenance and building the infrastructure, the management will come from the experts in the infra-cos, who have been delivering that service over a long period.

The noble Lord referred to the need for a sure source of money; that is provided by the PPP. He emphasised the need for a first-class service; we agree. He said that it is important that wheel and rail be brought together; I emphasise that they are. London Underground is responsible for them both. He said that the mayor should have money; the right way forward is the way that we set up through the PPP. He said that we promise a great deal and do nothing; we have spent a long time providing a structure that will ensure long-term investment for the Tube and proper management to deliver the infrastructure changes it requires.

We have been consistent in our policy and are driving it through. The best thing for those who use London Underground is that people accept that our policy is the way forward and all work together to try to make it work.

Viscount Astor: My Lords, before the noble and learned Lord sits down, will he answer my question about CrossRail? Will that and other capital projects by funded from the PPP, or will they receive a different form of funding?

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