London Underground

This has been an interesting debate, and I am sure it would have been even more lively if my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) had been present. We all wish her a speedy recovery, but my hon. Friend the Member for Liverpool, Riverside (Mrs. Ellman) did a very good job in leading off the debate in her place. I wish to reiterate what my right hon. Friend the Secretary of State for Transport said to the Transport Committee in November last year: she welcomed the Committee's consideration of the tube public-private contracts and, in particular, of the background to the failure of Metronet. My hon. Friend the Member for Liverpool, Riverside set out the Committee's views and asked that the Government learn lessons from the failure of Metronet. I assure her that it is of great importance to the Government that we understand why Metronet has failed so we can learn the appropriate lessons for the future. As many Members have said, the underground is central to London's economy, carrying approximately the same number of passengers per day as the entire heavy rail network of Great Britain. The hon. Member for Hammersmith and Fulham (Mr. Hands) talked about the increase in demand. That is true: since 1993, there has been approximately a 65 per cent. increase in people travelling on the underground, and London Underground expects demand to grow to 1.5 billion journeys a year by 2020. When this Government came to power in 1997, the underground had suffered from decades of under-investment. As my right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford) said, improvements to the Central and Jubilee lines had run both late and significantly over-budget. Given that backdrop, it was right that a Government committed to sustained investment in the tube should ask what structure was most appropriate to ensure successful delivery of the infrastructure work for passengers, at best value to all taxpayers. In arriving at their solution, the Government were guided by what had been learnt about effective public-private partnerships in others sectors and in other countries across the world. As the hon. Member for Wimbledon (Stephen Hammond) said, at the core of the tube PPP was the desire for the parties operating, maintaining and improving London's underground network to focus on what they did best. That meant London Underground focusing on operating and setting strategic priorities for the network's development and bringing in private sector project managers to oversee the delivery of essential maintenance and upgrades, with appropriate transfer of risk. Pointing to the Transport Committee report, the hon. Member for Lewes (Norman Baker) and my hon. Friend the Member for Manchester, Blackley (Graham Stringer) asserted that those principles were not tested. However, I can assure the House that those principles were rigorously tested as the PPP proposals developed. Considerable time and effort were expended in understanding the comparative value for money of the PPP versus conventional public sector-led procurement. That work, based on the public sector comparator, was independently scrutinised by KPMG and Ernst and Young, and subsequently the National Audit Office. Both found the methodology to be robust and fit for purpose. The Government certainly recognise that Metronet has failed and that that has had a very real impact on the underground network and on passengers. They were, however, the corporate failings of Metronet and not failings of the entire PPP concept, as my hon. Friend the Member for Eltham (Clive Efford) said. Tim O'Toole, the managing director of London Underground, stated in July 2007:"““This is more about Metronet's structure than it is about the PPP.””" Metronet did not deliver satisfactorily on its track renewal and station upgrade contracts, and that failure to control costs is what ultimately led to its collapse.