London Underground

– in the House of Commons at 7:00 pm on 7th February 2002.

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Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions 7:00 pm, 7th February 2002

With permission, Mr. Deputy Speaker, I should like to make a statement on the future of London Underground.

Earlier today, the board of London Regional Transport announced that it was "minded to proceed" with the plans for modernisation of the tube. In coming to its conclusion, the board has undertaken a thorough evaluation of the bids to assess whether they are likely to provide value for money. It is confident that they will do so and that the proposed contracts will provide an appropriate basis for the future maintenance and renewal of London Underground's infrastructure.

The board of London Regional Transport will now consult the Mayor of London and Transport for London under the terms of the Greater London Authority Act 1999. The final decision on whether to proceed will be taken in the light of that consultation.

Last autumn, I announced that I intended to take independent advice from Ernst and Young on the evaluation process that London Underground and London Regional Transport had followed, and on the robustness of their conclusions. Ernst and Young began its work in October, and has kept in close contact with London Underground during the evaluation of the final bids.

Ernst and Young reached the following conclusion. Overall, the methodology adopted for assessing the value for money by London Underground has been robust and appropriate, and London Underground's recommendation that the public-private partnership proposals deliver value for money is a subjective one, which is supported by its analysis. Copies of the report were placed in the Vote Office at 2.45 this afternoon, when I answered a written question on this issue.

I have always made it clear that my approach to the modernisation of the underground would be based on three principles. First, there must be no privatisation; secondly, safety must not be compromised; and thirdly, the contracts must offer value for money.

Under these proposals, there will be no privatisation. London Underground will remain in the public sector and will have control of all operations. It will run the trains, work the signals, control the track and operate the stations. So there will be no privatisation, or part-privatisation, of the London underground. The public sector will be in charge of the safe operation of a single unified network. London Underground will set the strategic priorities for investment, and monitor the performance of the private sector contractors that build and maintain the infrastructure.

Where the contracts differ from current arrangements involving the private sector is mainly in their scope and duration, and in the allocation of responsibility for integrating the various packages of work necessary to upgrade the tube and modernise it properly.

These are long-term arrangements that envisage a real partnership between London Underground and the private sector, which will work together to deliver sustained improvements. That partnership should enable substantial efficiencies to be realised and locked into the long-term process of tube modernisation. In particular, it should prevent the problems of the past, when infrastructure improvements—notably, of course, relating to the Jubilee line extension—have all too often come in over budget and later than originally planned.

The private sector will be contractually bound to deliver specific improvements. London Underground will be empowered to monitor the contracts closely and enforce them rigorously. If the private sector companies fail to perform, they will be penalised for so doing. If that sanction fails, they could lose their contracts. If the private sector does not do the work properly or puts safety at risk, London Underground will have the power to step in, do the necessary work and bill the private sector accordingly.

Secondly, safety will not be compromised. The Health and Safety Executive is currently considering the changes to London Underground's railway safety case to reflect the bidders' proposals for maintaining and upgrading the network. Only if those are accepted will the modernisation plans be allowed to proceed. If they do proceed, the infrastructure controller, London Underground—in the public sector—will retain clear statutory responsibility for safety across the whole of the network. The private sector infrastructure companies will have a contractual safety case with London Underground. They will have to perform to standards every bit as demanding as those required at present by London Underground's own statutory safety case. It will be for the Health and Safety Executive to accept the safety case. That is not a matter for politicians to decide. In my view, it is far better to leave it to the independent experts.

The third test is value for money. I have always said that the tube modernisation plans should not proceed unless they are likely to provide appropriate value for money. In preparing its final assessment of the proposed tube modernisation contracts, London Underground has conducted a full evaluation of value for money. As the National Audit Office has said, value for money is not a simple pass-fail test. London Underground has carried out a thorough evaluation of bids, incorporating both a financial assessment against a public sector comparator and wider factors that cannot be quantified in purely financial terms.

Essentially, the public sector comparator measures the cost of providing the same modernisation of tube infrastructure under current arrangements. It also takes account of two possible funding scenarios: annual grant and bond finance. Hon. Members will be aware that in December 2000 the National Audit Office reported on the public sector comparator that London Underground proposed to use and made various recommendations. Those have been taken into account in the construction of the comparator used for this final evaluation of the bids.

London Underground's evaluation demonstrates that the tube modernisation contracts are likely to deliver good value for money over their 30-year term. Even when tested on a much more demanding seven-and-a-half year basis, the value for money of the PPP remains favourable. The bids look good not just against a public sector option funded in the conventional way through annual grant, but also one funded by bonds, which was, of course, the Mayor's preferred approach.

On the basis of the advice that we have now received, the Government believe that the tube modernisation proposals represent the best way forward. In headline terms, London Underground will receive investment on an unprecedented scale. Now that the actual bids have been evaluated, I am able to report that we would expect investment of about £16 billion in the next 15 years. That figure includes nearly £8.5 billion to be spent on trains and signalling, nearly £4 billion on track, and more than £3.5 billion on stations. By any standards, it will represent a step change in the amount of money spent on the underground and will begin the process of making it a system fit for the 21st century.

The benefits of proceeding with the tube modernisation contracts are considerable. Over the first 15 years of the contract, London Underground will save £2 billion compared to traditional public funding. On any measure, that represents a significant saving to the public sector. What is more, the contracts will mean faster and more reliable tube journeys than the alternatives. London Underground says that those could be worth as much as a further £2 billion to its passengers.

Such savings can be achieved only through harnessing the private and the public sectors together, which is why this partnership is such an important feature of the Government's reform of the delivery of public services. Over the first 15 years of the contracts, £4 billion of the money going into improvements to the tube will come from private finance. Put simply, if that private finance was not forthcoming, it would need to be found within the public sector or not at all, which would mean less money to spend on other priorities such as health, education and other parts of the transport system.

We believe that there is now a clear choice. On the one hand, we can move ahead with proposals that will see the tube transformed, with real year-on-year improvements beginning immediately the contracts are signed. We think that that is the right way forward, subject, of course, to the outcome of the consultation process and to the board of London Regional Transport taking a final decision to proceed with the contracts.

Alternatively, we could look forward to yet more delay while different plans are prepared and a new procurement exercise is put in place. That would condemn Londoners to several more years of the status quo, with a creaking infrastructure that is unable to deliver the efficient and modern underground system that the travelling public rightly deserve.

Our modernisation plans for the tube will unlock £16 billion of investment over the next 15 years, the equivalent of £5,000 for every household in London. There will be no privatisation. The publicly owned London Underground will remain in control and safety will be paramount, which is why the Health and Safety Executive will have the final say.

These proposals form the basis of creating a tube fit for the 21st century, and I commend them to the House.

Photo of Eric Pickles Eric Pickles Shadow Minister (Transport)

I thank the Secretary of State for his usual courtesy in giving us sight of his statement before he made it. No doubt he expects us to rant and rave over the fact that the statement was made at 7 pm when the entire world knows exactly what he intends to do, but frankly there are more important things to deal with and I intend to move on, save to say that I congratulate the Secretary of State on making history. Usually statements at 7 pm have been on matters of war or catastrophe. This is the first time that a statement has been made at 7 pm on an impending catastrophe.

In particular, I thank the Select Committee for its splendid work, which has made the Secretary of State's statement understandable, and the many Labour Back Benchers who have briefed me over the past few days warning me about the problems that are to come.

The Secretary of State is enthusiastic about these proposals. Sometimes we are told that savings will total £3 billion, sometimes that they will total £4.5 billion. Now we are told that they will total £2 billion.

The Secretary of State says that the proposals represent best value for money, real improvements and a saving for the public. I almost expected him to produce a piece of paper from the Government's favourite accountants saying that this is the best thing for transport policy since the De Lorean motor car.

Does the Secretary of State understand that the proposals rely on a serendipity of circumstances? Everything has to be lined up to the most favourable of the various variable circumstances for the savings to occur. The PPP is more expensive than the Mayor's bonds. Does the Secretary of State accept that to achieve £1 billion of savings, efficiency savings of 35 to 40 per cent over the public service model would be needed? Given that the projects involve not only infrastructure but day-to-day maintenance does he seriously expect the House to believe that 40 per cent. savings can be achieved?

The proposals also rely on the serendipity of nothing going wrong. The liability of risk for certain events and assets has been shifted from the private sector to the public sector. The liability of risk of contractors will be capped. That is why the Secretary of State was most careful to use the expression, "They will be billed accordingly." According to the contracts they will not pay accordingly because their liability will be capped. Does he agree with London's Transport Commissioner that

"the amount of risk that has been transferred" to the private sector

"is barely perceptible"?

It is little wonder that the Ernst and Young report said that the assessment was "subjective". There has been no independent assessment, as Ernst and Young explains at great length. It said, more or less, "We were asked to do a job and we have done it. We have been asked whether the methodology is okay and we have said that it is. We were asked whether it would work. We have told them that the assessment was subjective." So all that money has been spent and we are exactly where we were to begin with.

Let me briefly read from the Ernst and Young report:

"The contract structure is unique, inevitably meaning that it has not been proven in a commercial environment . . . If the contract structure, in particular the risk transfer and review mechanisms, does not function effectively, either through poor design or operation, then there is a risk that value for money could be eroded."

It seems appropriate in the period that the Secretary of State has given that we should ask the National Audit Office to be brought in to look at the assessment. This is probably the most major piece of infrastructure change in the world and we desperately need an independent assessment.

I wish to ask the Secretary of State about the connection of Ernst and Young with the various contractors who are bidding. I expect such a company to have some connection with many of the main players, but I am surprised that it has entered into a partnership with W. S. Atkins, one of the principal bidders. Did the Department question the partnership? What assurances did the Secretary of State receive? These are matters of probity. I should be grateful to hear from the Secretary of State why it was felt appropriate for Ernst and Young to go into partnership with W.S. Atkins.

The Secretary of State fails to address capacity. All the decisions are pushed to the second quarter of the 30-year period. There will be no new trains for years. There will be no upgrades for years. Ten years from now passengers will notice little or no difference. Will the Secretary of State confirm that the Jubilee line will have no new trains or no newly refurbished trains until 2018? Will he confirm that the Bakerloo line will have none until 2018? Will he confirm that he will be 67 years old before the Bakerloo line sees refurbished trains? I know that the Government are asking us to prepare for retirement, but I do not think that that is entirely what they had in mind.

The PPP will be supported by a combination of fare box and public subsidy. Before the Select Committee the Secretary of State said he felt that the fare box could cover 30 per cent. of the PPP without raising fares above the rate of inflation. Can he now tell us what the level of public subsidy will be over the first seven-and-a-half year period? Given that he has extended the consultation period until 8 March, which coincidentally is the same date as the Health and Safety Executive is due to approve version 3.1 of the safety case, is he confident that by the end of the consultation period we will have the HSE safety case?

This is an off-balance deal. It is so off balance sheet that it would make Enron blush. For five years the Labour Government have neglected the tube. Public investment has been down by 25 per cent. Delays and overcrowding have increased. The measure bears all the hallmarks of the Secretary of State: it is wildly optimistic, it completely disregards dangers and it is made with the certain knowledge that when it is time to give account, others will be carrying the can.

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

The House will be aware that the information was provided by way of a written reply at 2.45 pm when copies of the Ernst and Young report were placed in the Vote Office. We are having the statement now because this was the soonest that I could come to the House to make a statement. Business managers will know that very well.

On the specific points raised by the hon. Gentleman—of which there were many—he said that there would be a long delay before new trains were put on the Jubilee line. That revealed the fact that the hon. Gentleman is not a frequent user of the line. If he would like to go over the road and into Westminster station, he can travel on the Jubilee line. He will see that all the rolling stock is new. It would be rather foolish to try to replace it in five or 10 years' time.

The hon. Gentleman referred to the fact that there would be no extra capacity on the Jubilee line to meet the increased demand. What he has not seen—because he has not yet looked at the papers—is that there will be a 22 per cent. increase in capacity on the Jubilee line within the first 10 years. The reality is that there will be increases in capacity on lines where there is currently significant overcrowding.

As regards the fare box, I shall make the position clear: the assumptions in the papers show that there is no need for an increase above the rate of inflation.

The HSE has no timetable for its report on whether the safety case has been met. The HSE is independent of Secretaries of State. It will take as long as it needs to decide whether the safety case has been met. There is no deadline. No one has laid down a timetable. The HSE will take its time and will arrive at a conclusion when it is ready to do so.

The hon. Gentleman referred to the role of the National Audit Office. That is an important point. We in the House respect the work undertaken by the NAO. However, the view of the NAO is clear: it did not want to publish a report at this stage of the process as to do so would involve it too closely in the decision-making process. In the view of the NAO, that would make it impossible for it to carry out an independent value-for-money assessment after the decisions had been taken. That was the NAO's position. It would have made my job in reaching a decision an awful lot easier if the NAO had been prepared to make a clear recommendation on value for money, but that was not the case.

The hon. Gentleman asked about the capping of liability and where risk would be transferred. Because we are publishing the Ernst and Young report and because London Transport will publish details in due course, people will be able to see those details. The important point in the contract is that liability for the issues that worry the travelling public will be transferred to the private sector.

I shall give the House three examples. If a train breaks down for 10 minutes during the rush hour at Victoria, the private company will be fined £21,000. If an escalator at Oxford Circus is out of action for a month, the private company will be fined £45,000. If a signal on the Jubilee line is out of action for a day, the private-sector company will be fined £300,000. Those are the penalties that will be imposed if the companies do not perform as they should.

I was disappointed by the hon. Gentleman's response. However, it shows that the Conservatives are thoroughly divided on their approach to the public-private partnership. Steve Norris, the Tory candidate for Mayor of London last year—and probably the Conservative who knows most about transport—said that the public-private partnership was, in reality, the only game in town and that to imply that we can just go back and have another negotiation was naive.

So that is the reality—[Interruption.] Opposition Members do not like it when I reveal that their candidate for mayor holds a completely different view. We did not hear a word from Mr. Pickles about the Conservative approach to the underground, but we know what it is, because it is on the record. The Conservatives have said, "We should transfer the underground into the private sector"—[Hon. Members: "Where?"] In "The Common Sense Revolution".

We have ensured that we shall put investment into the London underground. The system has been denied investment for generations. The time has now come. If one talks to people travelling on the underground, they do not want political arguments—they want money to go into the system. This Government will deliver the investment of which the underground has been starved for far too long.

Photo of Gwyneth Dunwoody Gwyneth Dunwoody Labour, Crewe and Nantwich

My right hon. Friend will know that London, as a capital city, is desperately in need of a modern and efficient transport system, and that its underground has been neglected for many years. Could he tell me, in fairly simple terms, why he is persisting with a scheme that is manifestly unworkable, when there is a volume of evidence that says that it is not value for money, that there is no control on the costs after seven and a half years, and that what he is doing is opening up the viper's nest of exactly the contractual problems that destroyed Railtrack? Frankly, it seems to many of us that, although his intentions are excellent, the result of today's decision will be more delay, more confusion and—very sadly for all of us—a system that will be indefensibly incompetent.

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

I read with great interest the report of the Transport Sub-Committee of the Select Committee on Transport, Local Government and the Regions—which my hon. Friend chaired—that was published on Tuesday. That obviously will have informed our thinking and will inform the thinking during the consultation period that has just begun.

It is worth noting that this is not just the largest public-private partnership that the Government have entered into; it will also be the most open and transparent, because the public will be able to see in detail the basis on which we have arrived at our decision and there will then be a real debate during the consultation period about the merits or otherwise.

On the specifics that my hon. Friend raised, she is right to point out that there are 30-year contracts with a periodic review after seven and a half years. I believe that that strikes the right balance between introducing a degree of flexibility into the contractual arrangements and having some long-term certainty. London Underground and London Transport will have the opportunity, in that periodic review, to address issues such as capacity on individual lines, because that will be a real priority as far as they are concerned.

However, I have to say—this is a crucial issue—that I, of all Ministers, am not going to repeat the mistakes of Railtrack and the railway system. The crucial difference is that London Underground will remain publicly owned and publicly accountable. There will be no shareholders in London Underground. The priority for London Underground will be ticket holders, not shareholders. That means that it must concentrate on ensuring that the private sector delivers as far as the ticket holders are concerned. There will not be a great fragmentation of the system, because there will be a unified structure, and that unified structure will be London Underground. There will be three private contractors working for London Underground, but the unified structure will be provided by London Underground itself.

Therefore I do not believe that this is a repetition of the mistakes that the Conservative party imposed on the railway network. Instead it is a new way of securing private investment while ensuring that London Underground remains in the public sector.

Photo of Tom Brake Tom Brake Opposition Whip (Commons), Shadow Secretary of State for Communities and Local Government, Liberal Democrat Spokesperson (Communities and Local Government), Liberal Democrat Whip

I thank the Secretary of State for giving me an advance copy of the statement, although I doubt that, when I received it, it contained anything that I did not know already, given that he had announced its contents yesterday and earlier today.

The right hon. Gentleman's statement does prompt some questions. First, does he stand by the Deputy Prime Minister's figure of £4.5 billion-worth of savings, and why is he so confident that this represents value for money? He has himself said that the criteria are subjective. Ernst and Young has said that they are subjective. His statement has said that the PPP is likely to represent value for money. Mr. Wilkes, who is a PFI expert, has said that what tends to happen in this sort of deal is that extra costs are loaded on to the public sector model simply to tip the balance in favour of PPP.

What has happened to the reputational externalities that have been referred to in the past? There is only one reference to those in the Ernst and Young report, and that is in the glossary. There is no other reference to them throughout the document. Those were supposed to show that £700 million extra was going to be loaded on to the public sector model. Where have those gone to?

Can the right hon. Gentleman guarantee that the consultation to which he refers will be genuine? Perhaps he will allow Labour Members the opportunity of a free vote to express what they feel about the proposals.

Finally, on the Health and Safety Executive, the right hon. Gentleman says that there is no given date by which the report must be delivered, but will he guarantee that if there is any uncertainty about whether the safety case is valid he will throw out the PPP? There is clearly uncertainty about whether the PPP represents value for money, yet he is proceeding with it. Will he do so if there is any doubt about the safety case? I believe that this PPP represents the Labour party's poll tax on wheels, and that it will haunt them for 30 years.

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

The safety position has been absolutely clear throughout—it will be decided by the Health and Safety Executive; it is not right for politicians to decide whether a safety case has been made. Independent safety experts—the Health and Safety Executive—will decide whether they agree with the safety case. I have said several times before that if they do not agree, we will not proceed with the PPP. I said that months ago; I continue to say it, and I say it again in the House this evening.

The Deputy Prime Minister suggested that there might be indicative savings of about £4.5 billion—I read his precise words today. There are savings of about £4 billion, which is significant. [Interruption.] It is £2 billion, and £2 billion indirectly. Hon. Members should read the report that the National Audit Office produced in December 2000. I have looked at it in detail and, as those who follow such things closely will know, the NAO makes it very clear that the benefits of a value-for-money assessment are not just the direct financial benefits but the indirect financial benefits, and people should consider that if they want to look at the issue in the round.

The NAO also said in its December 2000 report that value for money will not be a pass-fail; there will always be a subjective test. That is why I felt it was important that, rather than having a report to me that is not made public, I will publish the report and people can then judge the steps and decisions that I have taken. I am happy to do that; it is part of being accountable. There will be a row and a disagreement, and people will pick up certain aspects of the report, but as Ernst and Young says in its conclusion, on balance—it is a subjective view—it believes that value for money has been achieved.

On the public sector comparator, we have ensured that there is a fair judgment. We have considered more than 200 situations in the public sector comparator. We did not include those that involved, I hope, unique large cost overruns—for example, the Jubilee line's cost overrun was about 67 per cent.—because I believed that they would distort the overall figure. The cost overruns in the 200 situations that we considered came to about 20 per cent. on average, and that figure has been included in the public sector comparator.

Several hon. Members:

rose

Photo of Michael Lord Michael Lord Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. Hon. Members can see how many Members are seeking to catch my eye, so unless questions are brief—by brief, I mean one question—an awful lot of hon. Members will be disappointed.

Photo of Mr Andrew Bennett Mr Andrew Bennett Labour, Denton and Reddish

I congratulate my right hon. Friend on the brave face that he has put on the statement, but that does not disguise the fact that this is a pig in a poke. Will he go back to the Chancellor and tell him that there were two cases for the PPP—first, that it was value for money and, secondly, that it transferred risk from the public sector to the private sector? Does he not accept that the Ernst and Young report does not show that the PPP is value for money? It certainly does not transfer risk from the public sector to the private sector. The contract management risk will be horrendous. The risk to the passengers of a declining service with no penalties still exists, and there is the health and safety risk as well. My right hon. Friend says that the Health and Safety Executive is totally independent, but will he confirm that it is his Department's responsibility to make available to the HSE sufficient resources to enforce the highest standards of safety in the contract?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

I believe that value for money has been achieved in the terms outlined in the Ernst and Young report. I also believe that risk has been transferred, as I outlined to the House in the examples that I just gave.

I ensured that the Health and Safety Executive received a substantial increase not just in its own resources, but in the number of people it can employ specifically to inspect the railway system, which includes the London underground. It has the resources, which is why it can do a comprehensive job in judging whether it is prepared to agree the safety case. The HSE will be given the time to do that. There is no rush; there is no timetable. It will proceed at its own pace and arrive at its own conclusion. In my view, that is exactly how it should be.

Photo of Mr John Wilkinson Mr John Wilkinson Conservative, Ruislip - Northwood

Does not the Secretary of State realise that a consultation has already taken place on the scheme that he proposes? I refer to the consultation through the ballot box in the Greater London Authority elections. Was not the proposal thrown out overwhelmingly by the electorate of London because they had no confidence in it?

How will the Secretary of State meet the capacity demands? Over the past 11 years, passenger journeys increased by 25 per cent., or 200 million. How will that be met in the next few years by this cockshy scheme in which no one has any faith?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

I think the hon. Gentleman knows, because he served on the Standing Committee, that the provisions of the Greater London Authority Act 1999 were clear: the terms under which the transfer took place would be determined by the Government. We are determining those, as laid down in statute.

Capacity is a key issue. That is why, under the modernisation proposals, capacity on the Jubilee line will increase by 22 per cent., on the Victoria line by 15 per cent. and on the Metropolitan and Circle lines by 17 per cent within the first 10 years. We are addressing capacity improvements within the first 10 years.

Photo of Harry Cohen Harry Cohen Labour, Leyton and Wanstead

I have spelt out in the House my opposition to many worrying aspects of this scheme, not least the fractured management and its consequences. It was interesting that the Secretary of State kept referring to the public sector as London Underground but did not mention the Mayor and Transport for London in that context. I limit myself to one brief question: who is accountable under the system—the Mayor or the Minister?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

Until the transfer, we remain responsible. The Greater London Authority Act allows us to take these decisions. When the proposals are in place, we will talk to the Mayor and Transport for London about a timetable for transfer. They will then take responsibility. Those are the provisions laid down in the 1999 Act. I know from conversations that I have had with the Mayor that they will be constructive in ensuring a smooth transition and transfer.

Photo of Sir Sydney Chapman Sir Sydney Chapman Conservative, Chipping Barnet

Given that the Government have taken more than four years to produce this proposal to put investment into London Underground, is the Secretary of State aware that the amount of investment since 1997 has been considerably less than the comparable period before? When he talks about an investment of £16 billion over the next 15 years, does that take inflation into account, because that will be considerable over that period? If it does, will not the costs of the contracts have to be increased? Taking all things into consideration, the more one looks at the figures, the more one must conclude that the level of investment over the next 15 years will not be more than it was just before 1997.

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

That is simply incorrect. If the hon. Gentleman looks at core investment he will see that the improvements under our proposals are considerably in excess of the core investment proposals that were implemented between 1991 and 1997. The significant blip upwards was due to the cost overruns on the Jubilee line extension. The Conservatives talk about the great investment that took place, but they should look at the figures, as I have done. They show that the blip was a result of a failure to control the costs of the Jubilee line extension. If Members look at core investment, which is what we are dealing with, they will see a huge difference—greater investment each year for the 15 years covered by the proposals that we are putting to the House this evening.

Photo of Mr Clive Soley Mr Clive Soley Labour, Ealing, Acton and Shepherd's Bush

The Secretary of State will be aware that the public know that failure to invest for decades is the reason that we are in a mess now. They also know that we need money put in, and we need it fast. To be frank, if anyone messes around with this and delays it, they will not be easily forgiven. Yes, the public want it done safely and efficiently, but they want it done, and they expect the Minister and the Mayor to get on with it, and soon.

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

That is the important message. We have the plans, which are ready to go, and we have the money, which is ready to be invested—some £16 billion over 15 years. The message, not only from my hon. Friend but from London's travelling public, is clear: they have had enough of politicians arguing; now, they want us to get on with the job and invest the money. That is what we want to do. We have a plan, we have the money, and now we want to get on with investment in the underground.

Photo of John Randall John Randall Opposition Whip (Commons)

The Secretary of State will know that Metropolitan line rolling stock is the oldest on the system. Will he confirm that it will still take between 10 and 15 years for that to be replaced? Will it also take 10 or 15 years to modernise the system, and are there any plans to extend the network?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

Full details will be produced by the contractors tomorrow. Offhand, I am not sure of the specific details regarding Metropolitan line rolling stock, and I apologise for that. The information will be published—

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

No, it is not the Circle line but the Metropolitan line that is being discussed. The information will be available tomorrow. What I do know about the Metropolitan line is that there will be a 17 per cent. increase in capacity on it in the first 10 years.

Photo of Karen Buck Karen Buck Labour, Regent's Park and Kensington North

Everyone welcomes the commitment to additional investment in the underground to be delivered through a public-private partnership, but because the Government have chosen a model of public-private partnership in which the public have lost confidence, they will need to win the safety and value-for-money arguments not only today, but every day for the next 30 years. The Ernst and Young report says that value for money is

"part art, part science and involves a blend of subjective judgements and fact-based analysis"— in other words, a highly educated guess. The report says that over the seven and a half years, it is

"less likely to support value for money".

How can a convincing value-for-money case be made when after seven and a half years there is no pricing structure and no contractual guarantee to deliver value for money?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

The important point is the periodic review. As is only right and proper, London Underground will be in a position to negotiate changes and improvements to meet the needs of the system at that time. That is the important aspect.

Value for money is always a subjective test. I do not regret Ernst and Young's openness in expressing its concerns about the process. I believe that there should be a debate on the issues, and I will not run away from that debate. However, having looked at all the considerations in the round, Ernst and Young reaches the conclusion, based on the figures available to it, that value for money has been achieved.

Photo of Angela Watkinson Angela Watkinson Conservative, Upminster

In view of the serious doubts expressed on all sides about the likely success of the scheme, what arrangements will the Secretary of State put in place now to ensure that there is no further disruption or deterioration in tube services to the travelling public, such as my constituents in Upminster, who live at the end of the District line, before, if, or when any noticeable improvements are made?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

The hon. Lady makes an important point about the disruption, cancellations and delays that people experience daily on the underground at present. As soon as one looks for the underlying reason for that, one finds the chronic lack of investment over generations. Now, we need to get the money invested. The money is there and we have a plan that will secure improvements. Now, we just have to get on with the job.

Photo of Diane Abbott Diane Abbott Labour, Hackney North and Stoke Newington

The Transport Sub-Committee under the distinguished chairmanship of my hon. Friend Mrs. Dunwoody has systematically dissected the proposal technically, but I put to the Secretary of State the democratic argument. Whatever the terms of the Greater London Authority Act, the fact is that Londoners have said again and again, using every means available to them, that they have no confidence in the PPP. Londoners' support for PPP was tested to destruction in the campaign for the London mayoralty, and Labour's candidate was humiliated. Londoners do not want this; London's Mayor does not want it; and London's Transport Commissioner does not want it. Does it not make nonsense of regional devolution and does it not show a breathtaking arrogance to force that misconceived scheme down the throats of Londoners, who have said over and over again that they have no confidence in that way of proceeding?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

When the Committee reported, it had not seen the details of the contracts. Now that it has the opportunity to do so, no doubt it will consider the position.

On the democratic points, the position is clear in the Greater London Authority Act, for which the House voted and which Opposition Members opposed. It is for the Government to determine the details of modernisation, which is then transferred to the Mayor and Transport for London.

Photo of Dame Cheryl Gillan Dame Cheryl Gillan Opposition Whip (Commons)

My constituents are meeting right now in Chesham town hall with officials of London Underground to look at the appalling service on the Metropolitan line. They will not have been heartened, either by the Secretary of State's disgusting answer to my hon. Friend Mr. Randall, or the right hon. Gentleman's lack of knowledge about one of the worst London underground lines. Can he give my constituents a guarantee that Chesham station and the branch at the end of the Metropolitan line will remain open with a full service? Can he also confirm that it appears that anybody who is 45 or over in my constituency will have ended their working life before there is any real improvement to the Metropolitan line under his plans?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

They will know that the reason for that is that we had 18 years of a Conservative Government who did not invest in the underground; denied improvements to the hon. Lady's constituents in Chesham; and did nothing about the Metropolitan line or the District line. That is the legacy that we are seeking to deal with. The Opposition have no solutions to the problems; it is we who are prepared to take tough decisions and ensure that investment goes into the underground.

Photo of Barry Gardiner Barry Gardiner Labour, Brent North

My constituents in Kingsbury, my right hon. Friend will know, have endured speed restrictions to Wembley Park tube station for far too long. They will be as delighted as I am that one of the first things to be undertaken in the first year of the programme is the renewal of the southbound track, which will ensure that the speed restrictions are lifted. When they get to Wembley Park station they will, unfortunately, come out on a dilapidated, bankrupt station. Is the Secretary of State aware of the letter that I have received from Transport for London, which states that in its programme it has already identified £100 million for the refurbishment of the station? Does he agree that it is vital that money is spent to make sure that the station can safely control the crowds visiting Wembley and the new national stadium?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

Members will have an opportunity to see the improvements that will be delivered. The speed restrictions to which my hon. Friend refers are an example of the difficulties that will be addressed in a major track renewal programme. I am aware of my hon. Friend's concerns about Wembley Park station, and discussions are taking place at the moment about the issue.

Photo of John Redwood John Redwood Conservative, Wokingham

We wait four years for a PPP to come along, then this shambles arrives late on a Thursday night after newspaper reports have been written, so little confidence does the Secretary of State have in the PPP. Does the right hon. Gentleman not understand that Ernst and Young has refused to put its name to his fantasy figures? Does he not realise that he will go down in history as the man who thought that the third way meant destroying a private sector company, Railtrack, then, to be even-handed, destroying a nationalised company, London Underground?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

I hope that the right hon. Gentleman did not waste too long coming up with those comments. Of course, he failed to reveal his own views, which we heard when he was shadow Secretary of State. He said clearly, as Hansard on 15 July 1999 shows, that he would privatise the tube.

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

Yes, Conservative Members all agree. That is where they want to be. Speaking to the Conservative party conference on 23 September 1999, Mr. Redwood said:

"We will transfer the Underground into a series of privately-run, vertically integrated, publicly limited companies."

He did not mention that in his comments. That is probably understandable. [Interruption.] It is always interesting to know the right hon. Gentleman's views, which are usually far more interesting than the views of the hon. Members for Maidenhead (Mrs. May) or for Brentwood and Ongar. [Interruption.] I would never get personal with the hon. Gentleman. The right hon. Member for Wokingham reveals what lies at the heart of the modern Conservative party—privatise anything. That is the reality. [Interruption.] David Maclean should be mindful of his blood pressure.

Photo of Steve Pound Steve Pound Labour, Ealing North

While bids are being submitted, I could mention that we are still waiting for a down escalator at Greenford station, and we have been waiting since 1943. Most of my constituents and I could live with an integrated system where safety is taken out of the political arena. What we simply cannot live with is more time standing on a platform watching the cancellation board, while people play petty party politics with such a vital issue. Will my right hon. Friend give us some idea of the timetable for implementation? We cannot keep on waiting.

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

That is the important message, which I know the travelling public in London are expressing loudly and clearly. Provided no external factors cause a delay and we can proceed—people are threatening a legal challenge to the process, which clearly will mean a further delay—the intention is that towards the end of May or the beginning of June we will see the investment going in. It can start as soon as the contracts are signed, which we expect will be at the end of May or during June.

Photo of Nicholas Soames Nicholas Soames Conservative, Mid Sussex

Does the Secretary of State accept that his credibility, already broken-backed, has been destroyed tonight? He dismisses the report of Mrs. Dunwoody, the Chairman of the Select Committee, which has many experienced members who know a great deal about the subject, and which is highly critical of his proposals. He dismisses all the objections raised by Labour Members, and most damning of all, the words of Ernst and Young in the conclusion of the executive summary:

"London Underground's recommendation that the PPP proposals deliver value for money is a subjective one which is supported by its analysis."

After what he has done to Railtrack, the right hon. Gentleman has a nerve to come to the House of Commons to try and sell us this pup.

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

The hon. Gentleman will always defend Railtrack. That is a position that he and his party have adopted. We know that £1 billion of compensation to the Railtrack shareholders is the Conservative party position. With regard to London Underground, I repeat that the subjective approach is one that the National Audit Office said will apply to the value-for-money test. That will always be the case, because in making a value-for-money test, one must consider a number of factors—not just the financial ones, but the benefits that will accrue to the travelling public.

Photo of Bridget Prentice Bridget Prentice Labour, Lewisham East

Those who are less than enthusiastic about the scheme need only look at the Jubilee line, which my right hon. Friend described at length and which I have to use every day. It would be a great service if it worked and if the signalling worked from time to time. They should also look at the docklands light railway and the service that it provides for my constituents in Lewisham and others. The docklands light railway is a good example to show why the scheme is the one that we want to go forward.

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

My hon. Friend makes a very important point. We have an example in London of a public-private partnership that is delivering day in, day out—the docklands light railway. When people see that it can be successful, they will recognise that we are taking the right way forward.

Photo of Edward Davey Edward Davey Shadow Chief Secretary to the Treasury, Shadow Minister (Olympics and London), Liberal Democrat Spokesperson (Olympics and London), Liberal Democrat Spokesperson (Chief Secretary to the Treasury)

Given the Secretary of State's experience in applying for the administration of Railtrack, what provision has he insisted that the contracts should include for orderly termination if one of the consortiums fails to deliver? Which person or body will be responsible for terminating a contract on behalf of the taxpayer and the London commuter if one of these underground Railtracks fails to deliver?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

The situation is not at all like that which applies to Railtrack. I shall keep saying it: it is not at all like that. The reality is quite different. There will be a contractual relationship between London Underground and the three private-sector contractors. There are financial provisions underpinning the viability of each. If the hon. Gentleman looks at the companies that are involved, he will see that they can call on huge financial support. London Underground will have the power to terminate if there is a failure to deliver on the contracts and it is only right and proper that it should be able to do that. Most importantly, London Underground, which is publicly owned and accountable, will be the body with that responsibility, and when the transfer has occurred, the commissioner, the Mayor of London and Transport for London will have those powers.

Photo of Glenda Jackson Glenda Jackson Labour, Hampstead and Highgate

While Londoners are indeed tired of politicians squabbling about the underground, does my right hon. Friend agree that it would be helpful to allay Londoners' fears that the Mayor and his Transport Commissioner have been deliberately excluded if they could be re-engaged by the Government during the consultation period? The scheme, which is the only way of attracting the relevant amount and gives a clear guarantee of safety, could then be brought into being with rather more support from Londoners than is being expressed by Opposition Members, who would, as we know, simply have sold off the whole underground.

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

My hon. Friend makes an important point about the position of the Conservative party, which would simply privatise the London underground. It is right to recognise the concerns expressed by people in London and others about our proposals. We must take people through the arguments to show that this is not a privatisation or part privatisation, that safety will not be compromised because the Health and Safety Executive will take the final decision and that it is value for money. It is £16 billion that will deliver real improvements. The Opposition would not match the investment; they would take it away. We are ensuring that we invest in the London underground so that real improvements can be seen not in the distant future, but in the near future.

Photo of Richard Ottaway Richard Ottaway Conservative, Croydon South

The Secretary of State indicated in his statement that £4 billion of investment over 15 years would come from private finance. He said earlier today that the rest would come from fares or Government grants. The taxpayer and farepayer will not be expecting their money back, but private finance will. How will the £4 billion be repaid—or is this a debt that will be dumped on the people of London?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

It is certainly not a debt that will be dumped on the people of London. It is a commercial agreement that will secure the level of investment and guarantee the significant improvements in the London underground that we want. In the process, we will get the £4 billion of private finance, and there will be a return, provided that those private companies deliver the very significant improvements set out in their contracts. If they fail to do so, they will not receive the financial return that they would otherwise get. That will be one way in which we can ensure that they deliver on the commitments that they made in the contracts. It will be not a burden on the farepayer, but a balance between the responsibilities of Government through grant and our commitment, which we have made very clearly, which is to say that there is no need for a real-terms increase in the fares being paid by passengers.

Photo of Jim Dowd Jim Dowd Labour, Lewisham West

May I welcome my right hon. Friend's statement on the north London underground and reiterate what my hon. Friend Ms Prentice said about the DLR, which is not only working efficiently, but was completed on budget and two months early, in contrast with the debacle of the Jubilee line? Will he confirm that he will stick rigidly to the tests of no privatisation, value for money and safety? Once those tests are satisfied, the argument should be about product, not process, and ends, not means. The end should be a better service for the people of London, for which they have waited for far too long.

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

My hon. Friend is right. The first key issue is that safety should not be compromised, and it will not be. The Health and Safety Executive—the independent experts—will make the decision on whether the safety case has been met. Secondly, there will be no privatisation or part-privatisation. London Underground will remain in the public sector. Thirdly, in the light of the reports that we have received today, I believe that value for money will be achieved. So we can satisfy all three criteria.

The choice for people now is whether we make progress and get the investment in, as the Government want to do, or whether we find further reasons to argue and delay, and have a political row about the way forward. I happen to believe that if we delay further, we shall be condemned by successive generations of Londoners, so the real message—and the choice for me and the Government—is to get on with the job, put the bickering behind us and invest in the London underground.

Photo of Derek Conway Derek Conway Conservative, Old Bexley and Sidcup

The Secretary of State's self-confidence is wondrous to behold, and I congratulate him on that, at least. Will he, however, explain to the House the following comment in section 1.4.3 of the executive summary of the Ernst and Young report? It states:

"The contract structure is unique . . . Whilst the exercise is unprecedented and provides some assurance over the contract, it remains unproven."

Given what Ernst and Young says, and given what Mrs. Dunwoody, the Chairman of the Transport Sub-Committee has said, does the Secretary of State not understand why hon. Members on both sides of the House doubt what he says, just as our constituents will doubt him? My constituents will simply have to avoid the right hon. Gentleman's trains and tubes, but if they drive down the A2, they will see another monument to the Government's proven track record, because they drive into London past the dome.

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

The hon. Gentleman's solution would be to privatise, whether it be the railways and Railtrack or the London underground. It is little wonder that the voters of Shrewsbury showed him where to go. I do not know whether he left by rail or road. [Interruption.] The hon. Gentleman used to be a resident of Tyneside, so we can have this sort of banter.

Of course this exercise will be unique, because there has never been a public-private partnership on this scale before. It is therefore a truism to say that it is unique. But what it represents is £16 billion of investment in the London underground. Would the hon. Gentleman delay that? Yes, he would. He would not put the investment in; we will.

Photo of John Martin McDonnell John Martin McDonnell Labour, Hayes and Harlington

May I return to the powers of the Secretary of State and the Mayor? This public-private partnership creates an enormous dependency on a limited number of companies because of the scale of the contracts. If one or more of those companies nears financial collapse in the same way that Railtrack did, will the Secretary of State—or the Mayor—have reserve powers to bring that company into public ownership, or to take direct action in the way that my right hon. Friend did with Railtrack?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

The situation is quite different, as I tried to explain earlier. This arrangement involves the private sector working for London Underground in a contractual relationship. That is quite different from the situation that applied to Railtrack, so the remedies and the powers are not the same. But, under the contractual arrangements, the Mayor and Transport for London will have the power to terminate contracts—these are normal contractual relationships—and to re-let the contracts to someone else in the private sector.

Photo of Chris Grayling Chris Grayling Conservative, Epsom and Ewell

As is common with many Ministers, the Secretary of State is conveniently misrepresenting the policy of the Conservative party, the views of independent observers and of other people in the House right across the spectrum that we should entrust responsibility to the Mayor and the Transport Commissioner, and not to the Secretary of State. I am particularly distressed by the way in which the Secretary of State has dismissed the Transport Sub-Committee report. We took evidence which showed that the most significant improvements in the scheme would be back-ended to its later years. We also took evidence that passenger growth would rise in line with capacity, which means that overcrowding will not be reduced. Yet we now hear that the Secretary of State is not taking the word of that Select Committee

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. The hon. Gentleman can see that a considerable number of Members still wish to make a contribution. He should get to the point of his question.

Photo of Chris Grayling Chris Grayling Conservative, Epsom and Ewell

Will the Secretary of State confirm that he is ignoring the recommendations of the Select Committee and listening to a report that says

"We have not sought to verify . . . the information . . . provided by management"?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

I said earlier that the Department will make a full response to the Select Committee in due course, but the hon. Gentleman ignores an important point: within the first 10 years, there will be capacity increases of 22 per cent. on the Jubilee line, 15 per cent. on the Victoria line and 17 per cent. on the Metropolitan and Circle lines. Those are real improvements. The important point is that the seven and a half year periodic review will give London Transport and London Underground the opportunity to renegotiate capacity provision. They are able to do that and I understand that it will be a priority for them. The lines with most overcrowding will be dealt with sooner rather than later.

Photo of Mike Gapes Mike Gapes Labour/Co-operative, Ilford South

I welcome the statement as the beginning of the end of the uncertainty, particularly for my hard-pressed constituents who have to use the overcrowded Central line. Does my right hon. Friend agree that a failed legal challenge will lead only to further unnecessary delay? It would be another factor for Londoners to take into account in 2004—part of the cost of Livingstone.

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

My hon. Friend is right to say that we must end the uncertainty hanging over the London underground. Today's decision, subject to the consultation, will do precisely that. Of course, it is for Londoners to judge who is delaying the investment and who wants it to be made, such as those of us on the Labour Benches.

Photo of David Burnside David Burnside UUP, South Antrim

The Secretary of State is well aware of the increased industrial action that has affected and inconvenienced the general public in London and the south-east especially. Will he incorporate in these rather loose financial projections the cost between the board, the management and the unions of a no-strike deal to protect commuters in London and Greater London?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

In the Government's view, those issues are best left to the trade unions and management concerned. We know from history that Government interference in such issues is often not helpful. It is far better to have a properly negotiated agreement between the trade unions and management. That is the view that the Government support. We say to all parties involved that negotiation is often the best way forward.

Photo of Mr Nigel Beard Mr Nigel Beard Labour, Bexleyheath and Crayford

I congratulate my right hon. Friend on introducing the scheme, which will not only bring substantial private investment to modernising a long-neglected public service, but motivate contractors so that they stay on budget and on time. That was shown in the last Parliament when the Treasury Committee examined the history of private finance initiative projects, which are very similar. Furthermore, the service will stay in public hands, which gives reassurance. However, does he accept that Londoners are tired of checks, reassessments and litigation? Can he assure the House that those will be minimised and that work will begin without too much delay?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

That is the important message—we want to get on with the job and get the money invested. My hon. Friend is right to point out the good work done by the Treasury Committee on the role of the PFI and public-private partnerships and the benefits that they can bring. I am confident that, when we have the opportunity to make the investment in the London underground, tangible benefits will result.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

We have heard a lot about the potential financial viability of the right hon. Gentleman's programme. I am more concerned with its political viability. Does he genuinely think that he will convince Londoners that it is somehow a good thing?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

We will convince Londoners by ensuring that there is no privatisation, that the system is safe and that real improvements are being achieved. I believe that the plan we have outlined today will do precisely that.

Photo of Neil Gerrard Neil Gerrard Labour, Walthamstow

Does my right hon. Friend recognise that it would be generous to describe support for the proposals among the people of London as minimal? What will be the political consequences of that?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

I understand the concerns that have been expressed, but people will see that safety is not compromised, because the Health and Safety Executive will have responsibility for it; that there is no privatisation, because London Underground will remain in the public sector; and that there will be value for money and the investment will go in. The real test will be whether there are real improvements in the London underground, and I believe that there will be.

Photo of Joan Ryan Joan Ryan Labour, Enfield North

It may be worth reminding ourselves that the largest poll of Londoners' views was taken in last year's general election, at which Labour once again swept to victory in London with by far the greatest number of seats, and that PPP was a manifesto commitment. It is privatisation that Londoners do not want. My constituents tell me that they want London Underground to stay in public ownership, with safety paramount and no more delays. They want us to get on with the investment and the improvements. The only other issue of concern to them is that the underground remains affordable. Will my right hon. Friend comment on that?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

My hon. Friend is right: the issues are safety; ensuring that there is no privatisation; and getting the investment in. I understand the concern about fares, which is why all the work that has been carried out has been based on the assumption that they do not need to be increased above the rate of inflation—so there will be no real-terms increase in fares as a result of our proposals.

Photo of Clive Efford Clive Efford Labour, Eltham

In answer to my hon. Friend John McDonnell, my right hon. Friend said that if contracts were terminated, they would revert to London Underground, which would be free to re-let them. In the interests of accountability, so that Londoners can know who will be making the important decisions about the long-term future of the underground, does that mean that London Underground then ceases to pay the infracos that are being engaged under the PPPs, and if not, in what circumstances can those payments be terminated? Will London Underground have the right to step in at any time if the infracos fail to deliver the improvements, and not only if there is a deterioration?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

The situation will be the one that applies under normal rules of contract. If the private sector contractors fail to deliver their contractual obligations, they will be in either a breach or a fundamental breach of contract, depending on the seriousness, and Transport for London will be able to impose penalties according to the nature of the breach. TFL will have responsibility. If there is a safety issue, it has immediate step-in rights and can remove the contractor and do the work itself, billing the contractor for any work that is necessary. If there is a breach of contract, the remedies, which depend on the seriousness, are there under the normal law of contract.

Photo of Andrew Dismore Andrew Dismore Labour, Hendon

I agree with my right hon. Friend when he says that performance is important, but let me remind him of the paragraph in Ernst and Young's report that says:

"Performance Payments included in the analysis are only expected levels, bidders are not contractually bound to these levels, and therefore performance and subsequent payment levels could vary."

Bearing it in mind that we have seen barrow loads of documents wheeled into London Underground today, and yet we still do not have a contractually binding arrangement, what guarantee can he give that contractors will deliver what they promise and that the penalties will achieve what he says they will?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

In a lengthy reply that I gave earlier today, I said that one of the conditions that we have attached to our approval is to ensure that there are no material changes in the contracts between the position today and the time of financial closure. That was one of Ernst and Young's recommendations.

Photo of Ms Linda Perham Ms Linda Perham Labour, Ilford North

I agree that after years of neglect and threats of privatisation from the Tories, we need the investment in London Underground, and I welcome the refurbishment of my local station, Hainault, planned for October next year, but does not my right hon. Friend agree that my constituents and other London underground users would much prefer priority to be given to improvements in track and signalling, and more trains? Does he also agree that, as other hon. Members have said, there is, unfortunately, a credibility gap with the PPP, particularly among party members and the trade unions?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

When my hon. Friend has had the opportunity to examine the plan in detail, she will see that the bulk of the investment—£8.5 billion, I think—is going into track and signals. That will make a significant difference. Moreover, it is false to say that investment in stations will not improve the service. In many parts of the network—including places that most Members will know, such as Victoria, Oxford Circus and King's Cross—stations are closed at certain times of the day because of overcrowding. One of the ways in which we can change that is by changing the design of the stations, so it is wrong to portray work on stations as merely a superficially attractive approach. There are good reasons, in terms of capacity, reliability and performance, why it should be a priority.

Photo of Mr Iain Coleman Mr Iain Coleman Labour, Hammersmith and Fulham

It is with considerable sadness that I have to advise my right hon. Friend that in my view, the overwhelming majority of the thousands of my constituents who struggle to work and back every day using the 11 underground stations in my constituency have to use a service that is dirty, chronically unreliable and expensive. It is their view that the worst possible way to try to turn the service round is to hand it over now to the Mayor and the Commissioner for Transport for London, who genuinely believe that the service is massively overcomplex, expensive and intrinsically unsafe. May I urge—indeed, beg—my right hon. Friend, even at this very late stage, to reopen negotiations with Mr. Livingstone and Mr. Kiley, so that there can be an agreed settlement between the parties, which Londoners can support? They will then be able to have the service that they deserve. I have to tell my right hon. Friend that they certainly do not support this—and they do not deserve it, either.

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

The Commissioner for Transport was charged by the Prime Minister last year with the responsibility of trying to negotiate a deal with the private contractors, and was unable to do it. That is regrettable, but that was the situation. It is wrong to say that the new system will be unsafe. I know that allegations have been made, but it will be for the Health and Safety Executive to determine whether the safety case is made. This is not a repeat of Railtrack on the underground. There will be no shareholders in London Underground; the travelling public will come first. I say to my hon. Friend, with his 11 underground stations and his many constituents who travel on the underground, that I recognise that the present level of service is unacceptable. The choice is: what we are going to do about it? Are we to continue with constant political bickering about a solution, or shall we get on with the job? I think that for the travelling public in London, the issue now is who is going to get on with the job—and the Government intend to do that.

Photo of Mr Roger Casale Mr Roger Casale Labour, Wimbledon

I welcome my right hon. Friend's statement, because although there is a time to debate such issues, there is also a time when it is the job of the Government to decide. I believe that I speak on behalf of the majority of people in my constituency who use the District and the Northern lines when I say that that time has now come. My constituents will judge my right hon. Friend's decision not on the quality of debate tonight but on the results of putting the investment in. They know that we will not get results by privatising the tube, as the Tories want to do, and they are not unrealistic enough to believe that an extra penny on income tax would produce those results, either. As my right hon. Friend will be aware, we have a very viable public-private partnership in the Merton to Croydon Tramlink. Will he continue to put the arguments about why the proposed public-private partnership is in the public interest—but, most important of all, will he please get on with the job?

Photo of Stephen Byers Stephen Byers Secretary of State, Department for Transport, Local Government and the Regions

My hon. Friend speaks for many of the travelling public in London when he stresses the importance of learning from success stories such as the Croydon Tramlink, which is a good example of a public-private partnership. There are other examples in London's transport system, too, and the important message is that our proposals for London Underground will ensure that it remains in the public sector—there will be no privatisation—safety will not be compromised, and we will unlock £16 billion of investment in the London underground. That is the equivalent of £5,000 for every household in London. That is the scale of investment that the Government want to see and those who delay or block it will be condemned by generations of Londoners in the future.

Photo of Eric Pickles Eric Pickles Shadow Minister (Transport)

On a point of order, Madam Deputy Speaker. I seek your guidance on how we may record the fact that of the 21 Labour Members who asked questions on the statement, only five were in favour of the PPP—

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. That is not a point of order for the Chair.