London Underground

Thank you, Madam Deputy Speaker. I will try to limit my remarks, although one could easily take the rest of the time available to go through the issues. A number of hon. Members have said that there are lessons to be learned from the financial fiasco. The real tragedy is that the lessons were known and talked about right at the beginning, when PPP was first considered. Before I come on to those lessons, let me say that my position is that if capital is scarce, and if one can transfer risk, fine: introduce PPP, but make it transparent, know what is going on, and make sure that it is the vehicle that works best. The same goes for the public sector: when it is used, one should make sure that it is the best vehicle for the occasion. On 15 July 1998 and 12 July 2000—right at the start of the process, when PPP was being considered—the Select Committee on the Environment, Transport and the Regions asked all the questions that appear in the recommendations in the Transport Committee's January report. We said that risk must be transferred, that there must be a process for resolving disputes, that the amount spent on consultants must be limited, that there must be an arbiter who can take action, and that the infrastructure companies should not be able to renegotiate their contracts. Those are all issues that came up when we discovered that the process had been a disaster. What was the Treasury's response? Ministers refused to come before the Select Committee to discuss the issue and refused to release the PricewaterhouseCoopers report on what went on so that it could be properly assessed. If the Treasury had listened to the recommendations, a better method of financing the much needed improvements to the tube may well have been used.