London Underground

I do agree with that, but there is another point. I have given many speeches on PPP in this Chamber and Westminster Hall, and I am not opposed to a public-private approach provided that the public have control of the situation. That certainly did not happen here. This model was a catastrophe. Metronet shareholders' risk is far less than that of the taxpayers; it is limited to £70 million for each of its five corporate shareholders. It has in any case already made £130 million over its four years in pre-tax profits. The individual corporations get away virtually scot-free, because they are still able to secure, and make profits from, all sorts of other Government contracts. The failure is not held against them in any way. My hon. Friend the Member for Liverpool, Riverside said that the tube upgrades are already well behind what was promised, but my concern is that they will be delayed a lot further. The briefing from the National Union of Rail, Maritime and Transport Workers said that the upgrades will be delayed by at least two years. I suspect that the delay will be much longer as the bills bite and the Government look for ways for them to be paid. I spoke against the PPP model when it was going through this House. I asked countless oral and written questions, and I sponsored and led three specific Westminster Hall debates. I pointed out that PPP was not value for money, that it was risky in cost terms and in dividing maintenance and infrastructure from the operation of the rail network, and that it was front-loaded—a point that still applies in relation to Tube Lines. The contracts are front-loaded, so there is less risk at the beginning; the companies do the less risky work from which they can obtain the profit at the beginning and leave the complex, high-risk work undone. That remains a problem. I come to the PPP auction. London Underground made 15 proposals, listing them in order according to which it thought could work. It put the one plucked by the Government 14th out of 15. It has not been applied to any other metro system in the world. The choice was foolhardy and we are paying the price for it by not getting the value for money that the Government said we would get. The assumption that accompanied the PPP model was that the private sector would automatically be better than the public sector. It was an ideological obsession. When the Industrial Society, an independent body headed by Will Hutton, examined the matter, it found that the supposedly more efficient private sector was given performance targets that were 5 per cent. lower than what London Underground was delivering. That is how much confidence the Government had in the private sector's ability to do better. That is the flaw in the ideological obsession with the private sector's ability to run things better than the public sector. The public sector had run the system for many years with a shortage of money, yet it was still doing a relatively good job in the circumstances. What could it have done with the sort of money available to these private companies? The Transport Committee found that a more than 20-fold increase had taken place in respect of the funding available to the consortiums—we are talking about £44.1 million in 1997-98 as opposed to £1.048 billion in 2004-05. As I said, that was set against a performance benchmark that was 5 per cent. below London Underground's standard. A 2005 Transport for London report stated:"““In short, performance is not good enough and is less than what was promised.””" I fear that the taxpayer, the council tax payer and the fare payer will pay for this debacle in years to come. The commuter will suffer as maintenance performance declines and work is left undone. That is extremely serious in my part of the world—east London. It will hold the Olympics, and the Government must get a grip on the situation or there will be a transport safety problem in the build-up to the games. That cannot be allowed to happen. The Treasury is still exposed to further financial risk from the Tube Lines contract. If Tube Lines is so good, why cannot the guarantee in respect of 95 per cent. of the bank debt be taken away? Why has the taxpayer still got to guarantee 95 per cent. of that debt? Tube Lines deals with Jubilee line maintenance, but that is a new line and loads of money was put into building it, so the job is easy relatively. A lot of investment was also put into the Northern line before it was taken over by Tube Lines. I forecast that the front-loading will mean that when the difficult and expensive work comes up in later years of the 30-year contract, Tube Lines will walk away. The work should be taken fully back in-house. That division between the maintenance and infrastructure, and the operation of the London Underground did not make any sense at the time and certainly makes no sense now. We cannot give any more blank cheques to private consortiums. Despite that, a briefing issued today by London First, the business community organisation in London, states:"““The modernisation programme is likely to cost more than the funds available—in this situation, the programme will have to be scaled back””." I suspect that that is true, but there is no apology for the failure of the private sector and business, despite a great deal of money having gone in. It also states:"““A private sector client—like Tube Lines or London and Continental Railways—is more likely to bring commercial discipline and accountability, fresh thinking and contract management than a public sector one””." That is almost laughable in the context of the Metronet failure. It is almost as though that never happened. London First's position is unbelievable, and it is peddling the same failed ideology. I repeat that the division of responsibilities is awful, inefficient and potentially dangerous. The situation is not Mayor Ken's fault. He warned against it and is making the best of a bad job. It is a private sector failure and it was the Government's mistake in choosing the system. Mayor Ken is the best hope of putting it right. The Government should not be seduced a second time by the nonsense of putting the contract out to the private sector. That will not do. They should take the whole lot back in-house and put it under the control of the Mayor and Transport for London. I agree with my hon. Friend the Member for Liverpool, Riverside that there must be full transparency and accountability. Serious costs have flowed from the Metronet failure, and the matter must be out in the open. The Government must not compound the problem by covering things up and continuing with the failed system of putting unwarranted faith in the private sector.