Award of Crossrail franchises to public-sector operators

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

The explanatory notes for the clause state that it disapplies the prohibition in section 25 of the 1993 Act on public sector operators being a franchisee in respect of passenger rail services. Section 25 of the 1993 Act effectively privatised British Rail and introduced, or was the forerunner of, today’s industry structure and provides that certain public sector bodies cannot be franchisees. Those bodies include Ministers of the Crown, local authorities and passenger transport authorities. For better or for worse, depending on how we look at it, it is a competitive system whereby private sector companies bid for and operate rail franchises. The question is, therefore, whether that system is working.

If the Department for Transport believes the system to be working elsewhere in the country, why should Crossrail be different? We all know the answer to that. The clause is so worded so that Transport for London can operate Crossrail, post-construction. That raises the question whether it is intended that the bidding process will see TfL as the sole bidder.

We all understand that that is what is intended by the Mayor, with his megalomaniac tendencies, writing blank cheques from Londoners’ bank accounts. Not necessarily every Londoner would agree with that statement. Perhaps we will hear this from the Minister, but as we understand it, the Mayor has just bankrolled the construction phase of Crossrail. However, should that automatically give him the right to operate it? After all, are we convinced that the Mayor is a good operator and are we clear that that would be in the public interest? Can we be sure that health and safety standards will be properly met?

If one examined the record of TfL in operating the underground, it would at best be described as patchy. TfL management likes to blame the infracos and everyone else, but the operating statistics of the underground show that some 40 per cent. of the delays are due to TfL and its inability to operate efficiently. Do we really want the major national project of Crossrail to operate with 40 per cent. inefficiencies? I am not sure that anybody wants that. Surely even the Mayor, who at best is economical with the truth at times, does not want that or wish to publicise it. [Interruption.] Hon. Members should read the June edition of “The Londoner” and they will see what I mean.

Can we be sure that it is in the public interest to have TfL as the constructor and the operator? Where are the checks and balances? If TfL, which blames anybody but itself for faults, has both roles, who will it blame? Would it not be amusing to see the operation arm of TfL blaming the construction arm? No, it would not, because the only people to suffer would be those who travel on Crossrail. The public purse would also suffer.

It looks as though the clause has been written in so that TfL will have the right to bid for this franchise. Is it to be an exclusive franchise? How long will it run for? Who else may bid? The franchise system that the Government have created allows for franchises of seven to 10 years. Is it intended that the Crossrail operating franchise will be of the same length? I suspect not.

I ask all those questions because the shadow Secretary of State for Transport, my hon. Friend the Member for Chipping Barnet (Mrs. Villiers), has intimated that we favour some reintegration of the network. TfL being the owner, if not the manager of the network and the operating model, could fit into a model of reintegration later on. However, it would not fit in with the Government’s current model of operation for the railways. I ask the Minister, is that what is intended in the clause? Is he now saying that he accepts that a degree of reintegration is viable, possible and desirable? In terms of this contract, is the clause just a Trojan horse for TfL? Is this an exclusive bidding procedure and for how long is the franchise intended to run?

I find that speech fairly fascinating because the Conservative Front-Bench team are trying to have it both ways. They want to talk in terms of much greater integration in the system and to propose that there should be barriers to integration. I also say to the hon. Member for Wimbledon that he should not be afraid. I honestly believe that the hon. Member for Henley (Mr. Johnson) will never be in a position to run this system.

For the sake of clarity for the hon. Lady, I did not propose one thing or the other. I merely asked a number of questions. She should not infer any position from those questions.

I thank the hon. Gentleman for that clarification, which I find extremely curious, but let us move on. One of the most attractive features of Crossrail is its potential to integrate with London’s overall public transport provision. TfL has many flaws, but it has certainly delivered some significant improvements, notably the new London overground network.

While the hon. Lady’s constituents may think that that has been of benefit, mine would not agree, because of the Mayor’s failure to deliver the east London line to Wimbledon.

I hope that the hon. Gentleman will get the services that he seeks in the Wimbledon area in future. With the London overground, there was a pattern whereby an extremely poor service provided by Silverlink was taken back into TfL control for a holding period while it was revamped, then refranchised to a private sector operator. I see no reason why those strategies cannot be responsibly used by TfL to provide Londoners with the most appropriate and effective service. The hon. Gentleman will know that the way in which TfL’s services are provided are a complete mixture; the buses, the docklands light railway, the overground and the tube all have different kinds of arrangements.

The hon. Member for Wimbledon’s fascination with private operators is somewhat questionable, given the hideous Metronet experience that we all have been through. Private operators can play an important role, provided that integration oversight and a general pattern of regulation are in place. To suggest that it is inappropriate to introduce a clause that allows such measures to proceed for Crossrail strikes me as extraordinary. Londoners will be fascinated by the implication that the new service should be exclusively in private hands, and not part of the broader TfL family as an integrated rail service in London.

The hon. Lady is being party political and seems to have inferred all sorts of things from what I said—I wish that I had been as clever as she suggests. I actually asked whether the bidding process was going to be exclusive to TfL, and was really asking nothing more than that.

I shall make a brief contribution to probe the Government’s thinking. I am not a great defender of the Mayor, but he has been vindicated in many ways by what has happened on the underground. To a large extent he has been a passenger—perhaps it is the wrong time to say that. The public-private partnership exercise for the London underground has unravelled, and I am afraid that that is what the Mayor had in mind at the outset when he made his complaints about the nature of the exercise. Obviously, we hope that he is in the last 22 weeks of his mayoralty, but he has made the rather important point that we should not view transport, policing or any other area only through the prism of a particular Mayor. We have to look at the powers that should be in place for London governance and at the importance of ensuring that proper services are available for all Londoners.

Does my hon. Friend agree that one of the most important things for the running of Crossrail, whether by TfL or any other body, is that it should not suffer from the same problems that affect London underground, where passengers, including my constituents—I am sure yours as well—have to travel in conditions in which it would not be legal to transport animals?

Not mine!

I am sure that there are plenty of people from Congleton who use the underground. My hon. Friend’s point was well made. My fears in relation to Crossrail are twofold. First, I fear that there will be a repeat of the “fares fair” problem that plagued us in the early 1980s, and many of our London constituents, if not necessarily businesses, would not regard themselves as benefiting directly from the Crossrail project. Secondly, if Crossrail is to work, and become a great success, it must have spurs well outside greater London. That is something else about which there is increasing concern. It is at the heart of the matters raised by my hon. Friend the Member for Wimbledon, and I hope the Minister can respond to those concerns. The biggest fear of many residents of Kent, Essex, Berkshire, Surrey and beyond is of the Mayor taking control of their railway services because he is unaccountable through any electoral process to people who live outside greater London. The focus is on the present incumbent of the mayoralty, but this is a sensible probing amendment and it will be interesting to discover where the Minister is coming from.

I disagreed with much of what the hon. Member for Richmond Park had to say, but in Mayor Livingstone’s defence, I think that his transport policy includes some sensible integration measures. My biggest worry, especially in relation to buses, is that it is the economics of the madhouse. We are losing hundreds of millions of pounds a year on that budget, ditto for congestion charging. I accept that Livingstone had the courage to go ahead with the congestion charge, but I suspect that whether or not he is re-elected it will be difficult to row back on what has been done. We have to accept the reality of the situation.

My biggest concern is about the sheer cost of the operation but, as the hon. Lady rightly pointed out, to integrate the overground elements with the system in east London in Hoxton and Haggerston is a positive step forwards. I suspect that she views the Silverlink line with rose-tinted glasses, given that she represents Richmond in west London where the service operates rather better than it does out in the east. I have been down to Silvertown and to North Woolwich, where the service is ramshackle and requires enormous investment to make it worthwhile. The population in that part of London is relatively small, although City airport could allow North Woolwich station to become a hub and, as we discussed in relation to Crossrail, a further station on the other side of the river in Woolwich itself would integrate the entire process. That is a sensible way forward but it would impose a great cost on London council tax payers now and, I fear, in many decades to come. I hope that the Minister will give serious thought to what we have said. As part and parcel of integration we need not just one template but the potential for openness to a broad range of different operators.

I wondered how long it would take for party politics to raise its head in this long-running debate on Crossrail and I am disappointed that it has done so in the form of an ungracious attack on the London Mayor by the hon. Gentleman. I will not ask for your indulgence, Lady Winterton, as you would probably rule me out of order if I were to suggest that the hon. Member for Henley is far too busy to spend his time on a Public Bill Committee dealing with the largest infrastructure project that London has ever seen.

Order. I suggest that the Minister does not go down that track.

That is a very wise ruling, Lady Winterton. I do not intend to do so.

The hon. Member for Wimbledon referred to the franchise system created by the Government. I was not a Member of the 1992 to 1997 Parliament, but from my recollection a Conservative Secretary of State invented the franchise system for the purposes of running down the rail system which, however, has been rescued, modified and made fit for purpose by this Government. It is simply not the case that we invented that system. Clause 35 disapplies the prohibition in the 1993 Act on a public sector operator acting as a franchisee, which helps to provide the necessary flexibility to accommodate a public sector operator of Crossrail passenger services. I do not want to give my hon. Friends any undue hope that the Government have any plans to renationalise the rail industry by the back door, as this is a purely practical measure.

It may be useful to use public sector franchisees during the phasing-in and stabilisation period. During the stabilisation period, service levels and performance will be fully tested and optimised. Until that has been done and, for example, the required performance level is set, it would be difficult to hold a conventional franchise competition. All franchises that are put out for competition operate on the basis that the network and services are already in place. We know passenger numbers and the pathways that are available, but that will not be the case at the outset of the provision of Crossrail services. Such a competition could result in franchise bids factoring in at least some element of project risk, and that may be better managed as part of the project delivery.

Several options are open at the moment, and one was mentioned in glowing terms by the hon. Member for Wimbledon. A decision has not been taken, as a significant amount of detail will need to be worked through in the coming years between the Mayor of London, the Department for Transport and train operators as to how exactly Crossrail will be integrated with national rail services, and will interact with London Underground. As I have said before, Crossrail is a unique railway in the UK, and it is essential to retain the flexibility to deliver every possible option if we are to operate services efficiently and effectively.

Question put and agreed to.

Clause 35 ordered to stand part of the Bill.