Clause 105 - Railways in London: transfers

Railways and Transport Safety Bill – in a Public Bill Committee at 8:55 am on 11th March 2003.

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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 8:55 am, 11th March 2003

I beg to move amendment No. 93, in

clause 105, page 46, line 19, at end insert—

'( ) This section shall only take effect after consultation with organisations with responsibility for, or an interest in, London's transport and in particular the London Transport Users Committee which shall be renamed London's Transport Users Committee.'.

This is a probing amendment to draw the Minister's attention to a matter of concern. The clause is significant. It ensures that the Government are not left in the embarrassing situation of tube assets being lost to the taxpayer if one of the public-private partnership consortiums becomes insolvent. We shall return to that matter during the clause stand part debate.

It is important that a range of organisations are consulted on clause 105. One assumes that organisations such as Transport for London have been consulted on the clause, but others such as the London Transport Users Committee may not have been.

Amendment No. 93 serves a dual purpose. Its second purpose is to flag up to the Minister concerns that the London Transport Users Committee has about its remit and role. LTUC's remit is to represent all transport users in London, which includes pedestrians, cyclists, bus passengers, train passengers and so on. However, its remit also includes car drivers; there is a dilemma as to whether on an issue such as congestion charges the organisation can represent the interests of both car drivers and pedestrians. For that reason, the organisation would like a small change to its name, which is reflected by our amendment. The simple insertion of a comma into the name of the organisation—

Photo of John Randall John Randall Conservative, Uxbridge 9:15 am, 11th March 2003

I would not like the hon. Gentleman to make a mistake: the amendment would insert an apostrophe and an ''s''.

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 hon. Gentleman. The amendment would indeed insert an apostrophe. The move from the position of Whip to the Back Benches has clearly sharpened the hon. Gentleman's mind. The Committee welcomes that.

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

The hon. Lady will see that the amendment would insert an apostrophe, and that it is only my notes that are in error.

London Transport Users Committee believes that the simple insertion of an apostrophe would clarify its

role. It would also make it clear to those who wanted to approach the organisation that it was interested in the generality of transport issues, and not just London transport. Making it clear that it is London's transport users committee would also put the focus principally on transport, and it would be hard to argue that cars are a form of transport according to the way in which the organisation represents transport users. I would like to hear the Minister's views on the amendment. Will he consider meeting the organisation to discuss its remit to see whether it could be more focused on public transport and the needs of pedestrians, cyclist, bus passengers and so on in London, and to discuss whether it could make the extent of its remit clear to those seeking its support?

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

This is an opportunity for the Minister to tell us the role he envisages for the London Transport Users Committee. I shall raise some serious issues later during the clause stand part debate, but I would like the Minister to confirm that the Government expect LTUC to be consulted.

Photo of John Spellar John Spellar Minister of State (Department for Transport)

two issues are contained in amendment No. 93: one is whether the London Transport Users Committee should be consulted on clause 105; the other is the role and remit of that committee.

Nothing in clause 105 changes the role or remit of the committee. Should the organisation want to approach us later to change its role and remit, it would be sensible for the Government to examine that. However, we are aware—particularly at present—that there is a significant cross-over between the role of road transport with regard to both buses and cars in London. I am surprised that the hon. Member for Carshalton and Wallington (Tom Brake) wishes to differentiate to such an extent between various users of road space: they have common interests and we should not try to set up a conflict of interests between them.

The clause is designed to deal with a situation that was not envisaged when the Greater London Authority Act 1999 was passed. At that time, it was anticipated that there would be a seamless transition with regard to the London underground. Unfortunately, that has been slightly frustrated by a series of legal actions by the Mayor and Transport for London, which have had no positive outcomes. They have led to considerable delay and cost to Londoners. I hope that we can now move towards a sensible transition from London Transport to Transport for London for the London Underground and that these schemes can be implemented and can start to deliver benefits for London.

The clause is designed to facilitate that change—and I must say that one consults about policy and not about detailed changes of the implementation of policy.

Photo of Don Foster Don Foster Shadow Secretary of State for Transport

The Minister talked about a seamless transfer of the London underground to Transport for London and the importance of consultation. I wish him to say whether the Government had discussions with Transport for London, particularly about arrangements in relation to British Transport police.

Photo of John Spellar John Spellar Minister of State (Department for Transport)

We had a number of discussions with Transport for London: it was able to contain its enthusiasm for some of our measures. We have also been engaged in regular discussions with Transport for London about British Transport police. The Home Office has been conducting discussions and consultations regarding both relations with and operations of British Transport police and the Metropolitan police within London's transport network, and I have no doubt that there will be further discussions on that.

Photo of Don Foster Don Foster Shadow Secretary of State for Transport

I am sure that the Minister will not have this information at his fingertips, but I would be grateful if he would write to me to inform me of the dates when meetings took place between his Department and Transport for London in respect of the aspects of the Bill that relate to the British Transport police.

Photo of John Spellar John Spellar Minister of State (Department for Transport)

I will write to the hon. Gentleman about that.

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 Minister for his response, and in particular for his commitment to meet the London Transport Users Committee if it would like to discuss its remit. I am sure that it would welcome the opportunity to do that. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of John Spellar John Spellar Minister of State (Department for Transport)

I beg to move amendment No. 83, in

clause 105, page 46, line 37, leave out 'or class of right,' and insert

', class of right, provision or class of provision,'.

Clause 105 will ensure that the operation of London Underground's contracts is not affected when they are transferred from one body to another. An unforeseen consequence of the Greater London Authority Act 1999 is that certain provisions given in respect of London Underground's contracts might fall away when contracts are transferred either to Transport for London or subsequently, and it was not the intention that they should do so. An example of that would be guarantees given by London Regional Transport in respect of London Underground's obligations under public-private partnership contracts.

The clause remedies that unforeseen problem by allowing London Transport and Transport for London to exempt contracts that they wish to transfer from those parts of the 1999 Act that cause the problems. It benefits all parties if guarantees and protections already agreed in the contracts can be relied on.

However, as currently drafted, the clause would only allow the relevant 1999 Act provisions to be disapplied in respect of a contract as a whole, or in relation to a specified contractual right. Some of the contracts contain complex arrangements for which it will be necessary to disapply only some of the relevant provisions, and there was doubt about whether the existing drafting could be construed as allowing that. The amendment simply refines the clause to ensure that that can take place.

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

I do not have the benefit of the Minister's background. The amendment would address a situation that was pointed out to the

Government by my hon. Friends and I in the former Select Committee on Transport, Local Government and the Regions. The Minister will be aware that one of the PPP or PFI contracts that is being negotiated concerns Metronet. I wonder whether the Minister recalls the words used at that time of the Select Committee hearing—I should like to draw them to the Committee's attention anyway. They were quoted in the minority report, which was drafted by my hon. Friend the Member for Epsom and Ewell (Chris Grayling) and I in the most extraordinary of circumstances. Committee members know that in most cases a Select Committee tries to reach cross-party agreement, but the words of the rail regulator were particularly powerful in drawing the Government's attention to their error, which is leading not only to a delay in transferring responsibility from the Mayor to London Underground, as the Minister suggested, but which could have other far-reaching consequences.

As was pointed out by Opposition in the Select Committee—the rail regulator found himself in some sympathy with this—what happened to Railtrack with regard to being taken into administration or going bankrupt could happen to one of the companies party to Metronet. The rail regulator was concerned about that, and on page 51 of the minority report of proceedings on Wednesday 7 November 2001 the rail regulator said:

''The Secretary of State said to me that if there were an application for an interim review he had the necessary authority to introduce immediate legislation to prevent the review taking place.''

The rail regulator went on say:

''I pointed out the very severe adverse effects it could and probably would have on the financial markets and investor confidence generally if the Government were to be seen to be taking away the independence of an economic regulator. I said that the effect on transport stocks would be severe, but it would go much wider than that. It would have very serious adverse implications for the constitutional position of independent regulators in other industries, including but not limited to gas, water, electricity and telecommunications, the independent position of the PPP arbiter in the London Underground. (How can an arbitrator in a dispute have to decide the case in favour of one party to the dispute at the direction of that party?) I said it would have severe adverse implications for the market perception of the stability of the regulated privatised industries, investor confidence in those companies and the effect on other companies in the transport and utilities sectors.''

The rail regulator was supporting our point in the most powerful way possible. How far would the Minister's amendment, taken with clause 105, resolve a situation in which a PPP proceeded under the present company? I gather that one favoured bidder is Metronet, but there are several other smaller companies. Meanwhile, there is the backdrop of a war being declared in Iraq—perhaps imminently—the wide-ranging ramifications of that, the effect that that is having on the stock market, and the volatile state of the construction industry. Does the Minister believe that amendment No. 83 and clause 105 will deal with failure of the PPP and the reversion of a contract to the public sector? What would be the implications for the public purse?

My understanding is that, as of today, the cost to taxpayers of Network Rail is currently off balance sheet—it is scheduled on a year-on, year-off basis—and is deemed to be £21 billion, although it could increase. In the worst-case scenario, would the implications for the public purse also be deemed to be off balance sheet, or have the Government made provisions?

The Committee will recall that I have been a Railtrack shareholder since its inception. Many constituents have written to me on finding that they are in the small investor category. I have been reading the City pages—I am interested and concerned for my constituents—and precisely what the rail regulator said would happen regarding the demise of Railtrack, following its going into administration, is happening. That is coming home to haunt the Government. There is not the flood of investors from the financial institutions into the PPP contract that they expected and they are faced with a real-case scenario. I am deeply concerned and I wish the Minister to put my mind at rest by saying that clause 105 and amendment No. 83 will deal with the situation. I understand that subsections (1) to (3), as amended by amendment No. 83, would allow contract operators who intended to transfer from London Regional Transport to Transport for London to do so. I am concerned that it is not just a matter of Railtrack's situation; investors' confidence has also been hit by the Government's handling of British Energy.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North 9:30 am, 11th March 2003

I am rather confused about whether the hon. Lady is talking about the public purse or the interests of shareholders. In my simple world, public borrowing is much cheaper, because the Government take the risks. Long-term interest rates have rarely been lower than they are now, so if there were any reversion to the public sector, there would be a saving to the public purse. That view is shared by some of my colleagues. However, the hon. Lady seems to be talking about the interests of shareholders and confusing that with the public interest—they are not the same thing.

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

I am talking about both things, but I am grateful to the hon. Gentleman for giving me the opportunity to clarify matters. In the first instance, shareholders take the risk and make the investment. There may be insufficient shareholders, especially from financial institutions of the magnitude required to make such investments, and the PPP may not happen. There is no power in the clause as it stands—without amendment No. 83—regarding reversion to the public purse. Perhaps the hon. Gentleman is not aware of that. The Select Committee took evidence from Bob Kiley and from those in charge of Transport for London; they made that point and confirmed it.

The Library research paper notes:

''As the GLA Act did not contemplate the possibility of a significant delay between completion of a PPP agreement and transfer of the London Underground to TfL, there was no provision for ensuring the return of the assets of London Underground to the public sector in the event of a PPP company defaulting on a contract before London Underground transfers to TfL Nor was there provision for the insolvency provisions to come into effect if a

PPP company became insolvent before the transfer of London Underground to TfL.''

I am not sure that the present law, even as it will be amended by clause 105 and amendment No. 83, answers the point satisfactorily. We met such matters head on with Railtrack, and we may have to do so again in the event of a PPP going into default.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

The hon. Lady referred to legislation as it stands. Does she agree however that some components of society and the economy are so vital that the Government must always take such a risk? If there were a default or a financial collapse, they would have to step in. Measures would be introduced at that time to accommodate such matters.

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

To make a brutal point, the Government cannot afford to take such action at the moment. They are committed to meeting the Maastricht criteria.

Photo of Mr Alan Hurst Mr Alan Hurst Labour, Braintree

Order. The debate is becoming too wide.

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

The Government are trying to control public expenditure. If clause 105, along with amendment No. 83, came into effect, I am not convinced that the problem would be dealt with. I seek confirmation from the Minister about that. The hon. Member for Luton, North (Mr. Hopkins) said that money would be set aside for such matters. If that were the case, where would that money come from and would it be on or off the balance sheet?

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

The hon. Lady is confusing capital and revenue. We must know whether borrowing would be within the terms of the Maastricht agreement, which her party supported. I personally dissented from that, although I was not in the House at the time. We must bear in mind the level of public borrowing and the revenue costs of financing it. That will be lower in the public sector because the Government can borrow at much lower interest rates than can be done in the private sector.

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

Let us deal with the current position. The Government have to prove that they can raise the money on the market against the backdrop of a total lack of consumer confidence. Because of Railtrack, the financial institutions lost a fortune. The impact on the pensions and insurance markets has been massive.

Photo of John Spellar John Spellar Minister of State (Department for Transport)

Will the hon. Lady specify the way in which companies lost a fortune?

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

The Minister conveniently forgets that the right hon. Member for Tyneside, North (Mr. Byers) put Railtrack into administration and people lost a substantial amount of money. I do not believe that the compensation was anything like the value of the shares. The proof of the pudding is in the eating. The Government are inviting the same financial institutions to invest in the company to form the part of the PPP that will fall directly under clause 105.

Photo of John Spellar John Spellar Minister of State (Department for Transport)

Can the hon. Lady tell us the share price when Railtrack was put into administration because of its grievous failures? Will she say how much the market in general has fallen since then and the level of payment that has been made to shareholders? Can

she justify her statement about the fortune lost by the companies?

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

I am sure that I can drop the Minister a line about that. He must be aware that there was a total loss of confidence in the financial institutions, given how the Government handled the administration of Railtrack. The rail regulator did not wish to put Railtrack into administration at that time. In fact, he recommended that there should be an interim review. I shall not go into that now because it is not appropriate.

Photo of John Spellar John Spellar Minister of State (Department for Transport)

Surely it is not the role of the regulator to recommend that there be an interim review; it would have been for Railtrack to approach the regulator and request an interim review.

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

That is precisely the scenario that the rail regulator put to the Minister. The regulator's independence was taken away, and the Minister said that if such a scenario happened, he had the legislation ready to go. The right hon. Member for Tyneside, North would not even tell the Select Committee when that legislation would be in place. We are where we are, and the Government have now gone to the market and are asking for money to be raised for a PPP.

Photo of John Spellar John Spellar Minister of State (Department for Transport)

The Government have not gone to the market; the consortia and infracos will approach the market. For someone who claims to have great knowledge, the hon. Lady is getting into an awful lot of difficulties with the details.

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

I am grateful to the Minister for his assistance. As the hon. Member for Luton, North pointed out, the Government may well have to pick up the pieces further down the line. We are humbly asking the Minister how the clause and amendment No. 83 allow for that. It is not just that the legal framework has to be put in place; Bob Kiley, who is not unconnected with what will happen, is deeply concerned that insolvency provisions will not come into effect if a PPP company becomes insolvent before the transfer of London Underground to TFL.

Will the Minister say how we will prevent, both before and after the transfer of London Underground to TFL, the situation that the Government found themselves in at the demise of Railtrack? That is not such a difficult question. I hope that the Minister will answer the question asked by the hon. Member for Luton, North, too. I would like to know which budget the Government have in mind if something happens, and how far the clause and amendment No. 83 will meet the situation and prevent what happened with Railtrack from recurring.

Photo of John Spellar John Spellar Minister of State (Department for Transport)

The Tories certainly cannot let go of Railtrack, but I suppose that we should not be too unhappy about that, because we will make sure that they do not forget all its lamentable failings and the mechanism that they set up that so badly failed the rail industry and the country.

We are making heavy weather of the clause. The insolvency of the consortia is extremely unlikely, but the Greater London Authority Act 1999 provides

protection. Unfortunately, that protection does not come into effect until the transfer of London Underground to Transport for London. The purpose of the clause is to provide interim cover that brings those provisions into force before the transfer. We hope that London Underground can be transferred in good time.

The hon. Lady mentioned the views of Bob Kiley. I get on pretty well with him, but the views that he, Ken Livingstone and Transport for London have advanced a number of times have been comprehensively overturned in the courts on several occasions at considerable cost to London taxpayers and to no great benefit to London Underground, PPPs or the travelling public.

The hon. Lady was in some confusion about the operations of the financial market side, and was in great confusion about the difference between shareholders and bondholders in the schemes. A number of companies are involved in the consortia. As the hon. Lady will be aware, there was a question with one of the consortia about the viability of one of the partners, and the other partners said that they would assume those responsibilities.

The hon. Lady's comments on sentiment in the City seem to reflect the views of the Tory party and its supporters in the City rather than those of the bankers who are getting on with their jobs. She talked as though negotiations with regard to the Tube Lines consortium were still going on but they were completed on 31 December 2002: it has already gone to the markets and raised finance, and it has done so without difficulty.

It may be in the Conservative party's interests to try to whip up a scare about this matter, but in the hard-headed business world what people are interested in is whether the projects work and offer a return. This clause, along with the Government amendment, provides a copper-bottomed security against an extremely unlikely eventuality. It enables the companies to go to the market satisfactorily, so that they can obtain finance and put much-needed investment into refurbishing the London underground.

We have made a considerable excursion around various areas of the Tory psyche and the problems that the Conservatives created for public transport. However, the measures are sensible.

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport) 9:45 am, 11th March 2003

It is gratifying to think that my party still has so many supporters in the City; that was not the impression that I had.

The Minister did not satisfactorily respond to the concerns that were expressed about the outstanding contract for Metronet. I appreciate why he is sensitive about that; many of his right hon. and hon. Friends think that the PPP was botched. It is obvious that that is why he has tabled the amendment. We can argue about such matters in the clause stand part debate.

Amendment agreed to.

Question proposed, That the clause, as amended, stand part of the Bill.

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

This clause might represent the final chapter of the sad and costly saga of PPP, but it is probably the final chapter of the first book, as I am sure that many volumes will be written about PPP over the coming 30 years.

The Secretary of State announced in an offhand way during a Select Committee sitting that PPP had cost £500 million so far. That money has not bought a single escalator, let alone a new train. We are six years into the PPP process and millions of words have been written into contracts that are several feet high, but we still do not know how PPP will work in practice. The Minister rightly said that the Tube Lines deal was signed at the end of last year but we do not know how that will work and whether we will get value for money from it. We know that there are complicated formulae with algorithms to work out whether litter will be within acceptable limits, but we do not know whether there will be new tube trains, if there are to be new trains, when they will be introduced, or when passengers will see significant improvements and feel that PPP has delivered value for money.

While justifying the inclusion of this clause in what is, after all, a Bill that deals with rail and transport safety, the Minister said that it could never have been envisaged that we would reach this point in relation to PPP. However, he must have realised that any negotiations involving his friend the Mayor would be fraught with difficulties.

It was clear early on that contingency plans were not in place for PPP with regard to a failing contractor. The Minister said that insolvency was very unlikely—

Photo of John Spellar John Spellar Minister of State (Department for Transport)

Can the hon. Gentleman tell me whether the Liberal Democrats have supported the Mayor in his campaign against the PPP and the Labour Government?

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 hardly think that the Minister needs me to answer that question. Clearly, he knows that we have supported the PPP. Perhaps the Minister would have been happier if I had said, ''our friend the Mayor''.

The Minister is seeking to divert attention from the fact that he could have foreseen this problem. He said that insolvency was very unlikely. However, would he admit to losing sleep in recent weeks over the apparent viability of a key player in one of the consortiums? The particular firm has featured regularly in the business pages of most newspapers, and there is a question mark over how long that firm will survive. If the Minister were truthful, he would accept that it has been touch and go.

Photo of John Spellar John Spellar Minister of State (Department for Transport)

On a point of order, Mr. Hurst. Is it in order for the hon. Gentleman to cast the aspersion that the Minister might not be truthful?

Photo of Mr Alan Hurst Mr Alan Hurst Labour, Braintree

Members of the Committee will follow proper parliamentary procedures, which predominantly involve courtesy to other hon. Members and not stretching words.

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 am happy to withdraw the comment; it was inappropriate. I suspect that the Minister is a little touchy on the subject of PPP and one can

understand why. The enormous gap that is left in the Government's contingency plans must be plugged, so, clearly, we will support the clause. However, there should never have been a gap. It was such a glaring hole in the Government's legislation that it is astonishing that we have managed to get so far down the line. Despite the discussions and bitter arguments, only now, six years into the process, are we plugging a loophole that many hon. Members saw in the early stages.

Photo of John Randall John Randall Conservative, Uxbridge

It is a great pleasure to speak about the clause. As I have often told the Committee, I am a simple person. I am fascinated to see in the explanatory notes that

''This Part extends to England, Wales and Scotland.''

Are there plans to expand the Metropolitan line along the line of the A40 to Wales, or the Northern line to Scotland? Perhaps the Minister will tell me that Wales and Scotland are included in case one of the companies is based there. In that case, if one of them is based in Northern Ireland, it will be outside the remit of the clause. That is the first point on which I would like clarification.

I remember well the consideration of the Greater London Authority Bill. It was the first Standing Committee on which I served—the hon. Member for Enfield, North (Joan Ryan) was also on the Committee. It was fascinating and went on for weeks. I seem to remember that, despite having many hours on that delightful Committee—before fancy guillotining and falling knives came into play—we did not have sufficient time to discuss everything and the Government introduced many of the provisions relating to the London underground at a later stage. Those of us who served on that Committee can be excused for not examining those matters in detail because they were not included in our consideration.

Although I will not go too far down the line of happy reminiscences, I remember that Mr. Ken Livingstone often sat outside the Room on the Committee Corridor and did not always take part in the Committee. I can remember him sitting outside into the small hours of the morning, offering Committee members a choice of whisky or brandy. Perhaps the fact that he was not taking a full part in some our proceedings showed that his thoughts were elsewhere.

I speak on behalf of a constituency that has the underground at its heart. We have three stations, which are on the Piccadilly and Metropolitan lines. I hope one day finally to persuade the authority, whoever it may be, to extend the Central line from Ruislip Gardens to Uxbridge. There is already a siding at Ruislip Gardens, and it need only be extended a couple of metres. That would be a marvellous opportunity for lots of people, not least those in the commercial centre of Uxbridge, in which I have a personal interest.

Photo of John Randall John Randall Conservative, Uxbridge

Yes, a financial interest, although as anyone in retailing knows, it is often a very marginal interest.

Londoners are, by and large, fed up with all the arguments about the London underground. The Government went down the wrong line and—to use a furniture term—made a cock-up of the matter. [Interruption.] I see that there is disbelief that the expression relates to furniture. I shall explain it to hon. Members after Committee, if they are interested in the derivation of the expression.

The time has come for us to get on with sorting out the London underground. I have already said how not to deal with the issue. Londoners would not thank anyone for holding up the processes any further. Although I have strong reservations about the matter—I am sure that my hon. Friend the Member for Vale of York will go into much greater detail—it is time to sort it out, for the sake of my constituents, other Londoners, including those who use the Central line, and those going to Essex and places such as Theydon Bois, which I always thought was the name of a candidate for the Referendum party. We have a duty to sort that out.

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

Obviously, it is in all our interests that my hon. Friend the Member for Uxbridge (Mr. Randall) enjoys the best parts of the underground. I hope that the Minister heard his special plea. As my hon. Friend rightly pointed out—this will be of special interest to the hon. Member for Greenock and Inverclyde (David Cairns) and other hon. Members—there might soon be a tram north of the border. That, as can be seen on the Order Paper, is the subject of an early-day motion. Also, under clause 105, we might shortly be able to enjoy the benefits of the London underground on our holidays in Scotland.

Photo of David Cairns David Cairns Labour, Greenock and Inverclyde

I am not sure whether it was the intention of the draftsmen, but has not the Minister been far too generous to the Mayor of London? Not only has the Mayor squandered London taxpayers' money, but by holding up much-needed investment in the tube that is central to the economic operation of London and therefore the whole of the UK, he has squandered taxpayers' money in England, Wales, Scotland and Northern Ireland.

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

I am sure that the Minister of State heard the hon. Gentleman's remarks and will comment on them. I look forward to the introduction of trams and the London underground to Scotland, and to chain ferries in Plymouth; I will have a very busy summer. I understood it to be a personal invitation, but I am sure that the Minister would wish the whole Committee to enjoy the benefits of chain ferries in his constituency.

Interestingly, the hon. Member for Greenock and Inverclyde said that the Government had been squandering money—

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

Oh, the Mayor. A previous Labour Member has been squandering money, and we are all friends together.

The explanatory notes were no doubt written by the same person who wishes to extend clause 105 to cover Scotland and Wales. Paragraph 159 of the explanatory notes states:

''The railways in London measures will not require any additional public expenditure over and above that envisaged in LRT's/LUL's contracts, or entail any additional public sector manpower burden.''

I admit to being confused because if the Government have to put the contract back into the public sector, that will create cost to the taxpayer. Are the explanatory notes misleading?

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North 10:00 am, 11th March 2003

By parallel, Network Rail is taking back in-house contracting in the Paddington to Reading area. It will save money, not lose it. We cannot assume that, when a service goes back into the public sector, it will create cost. It may be beneficial to the public purse.

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

I do not know how far down that path you will allow me to go, Mr. Hurst. However, at present, money is being raised through bonds on the market. If it were no longer raised on the open market, it would have to be raised by the taxpayer. A charge would be made on the public purse. It is interesting that paragraph 160 of the explanatory notes states:

''The amendments to the Greater London Authority Act 1999 do not appear to involve any human rights implications, so the provisions of the Bill concerning the Greater London Authority Act 1999 are compatible with the Convention.''

Presumably, a bondholder who is deprived of his holding for any reason could plead that he has lost enjoyment of his property and the right to hold the bond. It will be interesting to know whether that is the case.

Subsections (1) to (3), along with amendment No. 83, will amend the Greater London Authority Act to allow contracts to operate as intended on the transfer from London Regional Transport to Transport for London and any subsequent transfers between Transport for London subsidiaries. My hon. Friend the Member for Uxbridge said that, when he had the honour to sit on the Standing Committee that considered the Greater London Authority Bill, pre-knives were not in operation. Despite discussing that legislation for a considerable time, the Committee did not get it right, which is why such matters have to be rectified under the Bill.

Photo of John Randall John Randall Conservative, Uxbridge

It may be of interest to note that at least two of the members of the Committee who were on the Government Front Bench have now returned to the Back Benches. There may have been more. Perhaps the present Ministers were not on the Front Bench when that Bill was being considered.

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

I do not know whether my hon. Friend was referring to the calibre of those members of the Committee. I am sure that he would not wish to do that.

Photo of John Randall John Randall Conservative, Uxbridge

I would not dream of it.

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

Subsection (5) relates to the insolvency of a PPP, how it would be wound up and the assets returned to the public sector. Will the

Minister explain what would happen? From which budget does he propose that the Government fund the reimbursement of that investment if such a regrettable situation arose?

Given the background of Railtrack passing into the hands of the administrators and re-emerging as Network Rail, the only beneficiary seems to be the accountants who charged millions of pounds in fees for the privilege. Clearly, such an aspect is exercising many minds and it is one about which we wish to receive further clarification.

The Minister said that the Tube Lines deal was completed on 31 December 2002. My understanding is that Metronet has not yet concluded, and is facing the difficulty of further collapse and erosion of confidence in the equities market. I am sure that the Minister agrees that the issuing of bonds is part of that process and is fraught with difficulties. Perhaps if the scheme had been launched three months previously, or were launched in three months' time, we would not face such difficulties.

Photo of John Spellar John Spellar Minister of State (Department for Transport)

Can the hon. Lady explain why a lowering of the value of equities automatically means that investors are less likely to invest in bonds? In many cases, quite the reverse happens: if equities become less attractive, more money is often available to invest in Government or other bonds.

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

It is not incumbent on me to explain why the Government are having difficulties issuing bonds.

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

Indeed, they are. I am sure that we can return to the matter during the later parts of the Bill.

Photo of John Spellar John Spellar Minister of State (Department for Transport)

I have already explained that Tube Lines went to the market and was financed, and that Metronet has already made its announcement. I am surprised that the hon. Lady is making such heavy weather of this.

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

It is the City pages of the newspapers that are making heavy weather of it.

The provisions for interoperability standards will relate to England, Wales and Scotland. In relation to the question of the hon. Member for Bath, I wonder whether it will help to know who sets the technical standards that will presumably apply to the London underground under clause 105. I recall saying on another question that if I knew the answer, I would not be sitting on the Opposition side of the Committee; I have no immediate plans to move, but that could change in two years. However, homework over the weekend revealed who will set the TSIs—technical specifications for interoperability. I thought that it would be appropriate to share the information with the Committee, including the hon. Member for Bath and the Minister, who can read it at their leisure. The European Association for Railway Interoperability, which goes under the French acronym AEIF, was designated as the joint representative body in the directive's framework. I am sure that the Government are negotiating as we

speak the technical standards for the London underground.

Photo of Don Foster Don Foster Shadow Secretary of State for Transport

I am grateful to the hon. Lady for supplying that information to the Committee. However, I was not particularly interested to hear that answer, as I already knew it. The question that I asked, which the Minister and the hon. Lady have clearly been unable to answer, is what happens in the event of conflict between the industry standards set in this country and the TSIs set through the bodies that she has mentioned?

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

I imagine that the technical standards will be resolved in the usual way. In the past, some British participants have been reluctant to engage in the use of standards. We have had the discussion about the three-pin plug. My hon. Friend who used to sit for Southend, East but whose constituency now has a slightly different name took a great interest in that.

Photo of John Spellar John Spellar Minister of State (Department for Transport)

The lesson of the three-pin plug is that we managed to maintain that standard, which is not, as far as I am aware, under threat.

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

The point that the Minister has missed is that we are not selling many three-pin plugs elsewhere in Europe. With regard to technical standards for interoperability on the trains, it would be to our advantage to have not only the Orient Express but as many other trains as the Government might wish. They have not denied that they want London Underground to operate in England, Wales and Scotland—although I am hard-pressed to understand how the Minister expects that to happen—but the London Underground might also have a future in Brussels, Frankfurt and Lille.

Photo of John Spellar John Spellar Minister of State (Department for Transport)

It is surprising that the hon. Lady complained about knives on the guillotine and then filibustered.

Photo of Don Foster Don Foster Shadow Secretary of State for Transport

The Minister is gathering his notes. In view of the hon. Lady's interest in whether London Underground will operate in Brussels and elsewhere, he might be interested to learn that I recently visited Sweden—as Committee members know—and that Connex, which is, by a roundabout route, part of one of the consortiums that is bidding for the London Underground, is currently operating the underground in Stockholm.

Photo of John Spellar John Spellar Minister of State (Department for Transport)

On the other hand, it is remarkably difficult for other countries' companies to operate in France. Several European countries are taking a keen interest in that.

Photo of Don Foster Don Foster Shadow Secretary of State for Transport

I must disabuse the Minister. I am sure that he will be delighted to know that when the Secretary of State for Defence recently made a statement about the new aircraft carriers he repeatedly pointed out that one of the companies, British Maritime Industries from Bath—

Photo of Mr Alan Hurst Mr Alan Hurst Labour, Braintree

Order. It is clear that the Minister will not respond to that.

Photo of John Spellar John Spellar Minister of State (Department for Transport)

I was not aware that that was a transport company or that it operated in the railways sector.

It is right that the provisions of the clause extend to Scotland because the Greater London Authority Act 1999 extended to England, Wales and Scotland. It is my understanding that that was the practice for all London legislation before devolution. However, the Mayor has assured me that he has no further territorial ambitions.

The hon. Member for Uxbridge referred to the Mayor dispensing whisky and brandy in the Corridor during the passage of the 1999 Act. We hope that he did not go on to a party afterwards because that might have subsequently appeared in the London Evening Standard.

We have had a series of expeditions around the clause, and I now wish to get back to what it is intended to do, which is to ensure that the insolvency regime that will be in place post-transfer, and which is envisaged in the PPP contracts, will also operate pre-transfer. The explanatory notes state that the clause will not require any additional public expenditure than that which is envisaged in London Regional Transport's and London Underground's contracts.

This is a straightforward business-like way to deal with an immediate problem.

Question put and agreed to.

Clause 105, as amended, ordered to stand part of the Bill.

Clause 106 ordered to stand part of the Bill.