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Public Infrastructure (London)

Volume 455: debated on Wednesday 17 January 2007

I am grateful to Mr. Speaker for his courtesy in granting me the debate, and I thank the Minister for taking time out of her busy diary to respond to it.

At the beginning of every day when I travel to London by public transport, being sufficiently green never to have learned to drive, I come in through Victoria railway station and find many hundreds of my constituents and other commuters waiting outside Victoria underground station. The way that one has to queue to get on to the underground system is a sign that that system is under stress. Further, in the summer, one often travels in temperatures higher than those acceptable for the transportation of live animals in the UK.

Many colleagues think that London is treated far too well in resource terms. I have heard a Member comment in the House that London is a junkie when it comes to the amount of public subsidy and support that it receives from the Government for investment in public transport. I am happy to concede that the Government have been generous in recent years, because in real terms they have at least doubled investment in public transport.

It is important to make the case for further and significant increases in investment in public transport and infrastructure in London. I am keen to obtain from the debate an assurance that the Government understand the points that will be made as the comprehensive spending review is undertaken. Transport for London’s budget and projections have a cut-off point of 2010, and it awaits the results of the CSR.

There has already been a lot of input to the debate on investment in London’s public infrastructure. There has been good work from London First and its publication, “Keeping the UK Competitive”; from the report by the Mayor’s office on investing in London; and from the City of London corporation’s annual report produced by Oxford Economics, “London’s Place in the UK Economy 2006-07”. They all offer good reasons why there should be investment in London’s public infrastructure.

The fundamental point is about the high productivity of London’s economy. Any investment of public funds will secure the highest return on the extra jobs created, because they enjoy the highest productivity rate. There is good value in investing in public infrastructure and in transporting people to those jobs with the highest productivity. Greater London is the only part of the European economy that matches productivity in the United States, and because London has a lower participation rate in its employment market, investors would encounter fewer economic bottlenecks, particularly if extra transport were targeted on London’s deprived areas and combined with effective investment in skills training.

Oxford Economics says that London’s productivity is 26 per cent. higher per head than that of the rest of the UK. London produces 17 per cent. of the UK’s gross domestic product from only 12.5 per cent. of its population. In many ways, London is deserving of the additional investment. There are many different means of economic measurement, and there could be a good deal of academic argument about the following figures, but it is possible to argue that while the UK runs a budget deficit of about £40 billion, London’s economy provides a surplus of between £6 billion and £20 billion to the Exchequer.

In part as a result of strong migration, London’s population also enjoys a younger age profile compared with that of the populations of other parts of the UK. That makes our economy more dynamic, outgoing and likely to generate the additional productivity that would benefit from public infrastructure investment. London benefits from its cosmopolitan nature and the migration it receives.

An analysis published last week showed that the value of Greater London’s housing stock rose by 26 per cent. in the past year to £725 billion. With that amount of money invested in Greater London by the public and private sectors, there is a good argument for making the additional investment in public infrastructure to support such a substantial estate. Economic growth varies greatly from one year to another, but GDP in Greater London is growing much faster than in the rest of the UK, at 3.9 per cent. compared with 2.6 per cent. Investment in the winner that is Greater London would be very attractive.

On the detail of the investment in public infrastructure, we must be cognisant of the fact that congestion in Greater London costs at least £1.6 billion every year. An extra 900,000 jobs until 2025 would yield £180 billion in GDP. Employers’ problems will continue if there is no investment beyond that already programmed, but the time that would be saved by the introduction of Crossrail offers businesses the prospect of a further £4.7 billion in savings.

There is a huge amount of migration to London. Last year, about 125,000 people joined the population, but that is not surprising: London is a world city, competing against Tokyo and New York. The latter is already cognisant of how London has run ahead, because Mayor Bloomberg has initiated an investigation of why London is doing so well. Financial services output has increased hugely over the past five years, while the performance of our continental rivals has stalled significantly.

Politicians often talk about how important it is for London and its businesses to reach out to China, India and Russia, and the number of initial public offerings undertaken in London shows that it is best placed to do the job. But if we secure those extra 900,000 jobs, crowding on our public transport system, which is already bad, will become unbearable.

There is also a climate-change element to investment in London as a world city. Hong Kong lost a lot of its attraction for many footloose businesses because of population challenges. Thus, it is important that we can accommodate the extra 2.8 million journeys likely to be taken every day on London’s transport system—a 28 per cent. increase on the current figure of 10 million journeys. That is a reasonable assumption. Investment in Crossrail is important, therefore, and will make a significant contribution through its gearing effect on the economy.

Other types of public transport in Greater London are important as well, particularly cross-suburban transport, and I am grateful to my hon. Friend the Member for Croydon, South (Richard Ottaway) for joining me in this debate. We both know about the problems with commuting across south London—sometimes known as the “banana” owing to the shape of the boroughs that extend from Bexley to Richmond and around outer south London. The lack of proper, effective public transport routes across south London is a problem because it results in too great a reliance on car usage.

Furthermore, I and other representatives of south London note the significant problems resulting from being unable to proceed with Thameslink 2000; I am not sure whether it is still called that, as we are seven years further on. The investment in Thameslink and the provision of extra capacity for south London rail commuters are vital, particularly in dealing with the London bridge bottleneck.

Increased investment in London’s public infrastructure is needed also in housing—house prices in London are very high. Croydon council is very enthusiastic about building more social housing and was very grateful for the recent Government grant for initiating council house building again.

Investment in our water infrastructure is important too. As a member of the London assembly, I chaired an investigation of water provision. I enjoyed my trip down London’s main sewer, although it is fair to say that my colleagues did not find it a funny experience and thought that I should not have imposed it on them. An extra 800,000 or 900,000 people will need water, so it is an important area of investment.

Croydon has also enjoyed important investment in the tram system, which has performed well except, perhaps, financially, although I regret that the only communication between Transport for London and the tram operators goes through the courts. I have been happy to support the Mayor’s provision of additional buses from Croydon, particularly in areas of great deprivation in New Addington in my constituency, where a reduction in transport provision would risk compromising residents’ access to jobs.

The tram system has provided better access to jobs and has had a fantastic regenerative impact, helping to turn Croydon from an area of high unemployment into one of average unemployment—a testament to the value of investing in public transport infrastructure.

I started my speech by referring to the experience of my constituents at the beginning of the commuting day at London’s Victoria underground station. At the end of the day, as a commuter passes through London Bridge station, they will find that the First Capital Connect trains, operating the ex-Thameslink services, are full or overcrowded until 9 o’clock. That is their reward for working late at the office or perhaps having a drink in a City bar at the end of the day.

Investment in Thameslink 2000 is important, and I hope to hear from the Minister that the arguments for such investment in London’s public infrastructure have been heard and understood.

I congratulate the hon. Member for Croydon, Central (Mr. Pelling) on securing this Adjournment debate on spending on London’s transport infrastructure, and also thank him for his generous comments and acknowledgment of the Government’s considerable record of investment for the benefit of Londoners, including his constituents.

The topic of the debate is crucial. London is a dynamic and successful city and key to the UK’s economic, cultural and social success. That point, which the hon. Gentleman raised today, has been made to me constantly and strongly by London First, the London Chamber of Commerce, the Mayor and everybody and anybody concerned with London. They are right to do so. I assure the hon. Gentleman and the Chamber that the Government support fully and recognise the role of transport in London’s growth.

Since 1997, the Government have focused on the two fundamental weaknesses impacting on London’s transport network: the poor governance and accountability of London’s transport networks and the sustained underinvestment in those networks over previous years, which we have been reversing. One of the first steps in this process was passing the Greater London Authority Act 1999, which set up the governance structures necessary to ensure the long-term success of London’s transport system.

Investment decisions are now made by a single, integrated transport body—Transport for London—with oversight of its investment decisions carried out by the Greater London authority, of which the hon. Gentleman is a member. The Government made a decision to increase investment in TFL significantly. Its grant has risen from £700 million between 2000 and 2001 to more than £2.1 billion between 2005 and 2006. In the 2004 spending review, the Government agreed a ground-breaking, five-year deal with TFL, which has allowed it to implement a substantial investment programme through to 2010.

To date, the record investment agreed at the spending reviews in 2000 and 2004 has brought some impressive results. Since 2000, we have seen a 4 per cent. shift from car to public transport in London, despite a rising number of journeys overall. The level and quality of bus provision in London has been transformed. Patronage has increased by 40 per cent. since 2000 and some 1.8 billion passengers were carried between 2005 and 2006—the highest number since 1965.

Furthermore, investment in the bus network has allowed for new routes and much improved frequency and quality levels. Accessibility, too, has improved considerably with nine out of 10 Londoners now living within a five-minute walk of a bus stop. Since December 2005, essentially, the entire fleet has been accessible to wheelchair users and other passengers with mobility difficulties.

The five-year funding deal is helping to facilitate the expansion of the bus network by 4 per cent. over the next three to four years. It is also allowing TFL to introduce the new iBus communications system, which will improve real-time information for the benefit of all passengers.

For London Underground, the Government are committed to continuing to provide long-term and stable investment, reversing decades of neglect, the results of which we still see. The hon. Gentleman rightly described some of the challenges that London Underground faces. However, the huge investment that has been brought about by the public-private partnership since 2003—more than £1 billion of Government money a year, as well as private finance—is addressing the tube’s investment backlog, improving reliability, cutting delays and boosting capacity.

That investment means that London Underground is delivering record service levels and passenger numbers. More than 1 billion passenger journeys are likely to be made during the current financial year, which is more than 30 million more than the previous record, in 2004-05. The PPP will also deliver billions of pounds of extra investment over the next 10 years, resulting in an overall increase in capacity of 25 per cent. by 2016. I hope that that gives an indication of how some of the points that the hon. Gentleman rightly raised will be tackled.

We are also acutely aware that delivery in some areas has slipped, particularly in respect of Metronet, which must raise its game. However, I am satisfied that TFL, using the appropriate contractual means, will ensure that Metronet raises its game and meets its obligations.

Today’s theme is increased investment, so I would like to mention light rail. There have also been extensions and capacity increases in the docklands light railway. By September 2005, the line was used by some 2 million passengers. A series of further improvements is planned on the DLR over the next five years, which will mean a step change in the service provision in east and south-east London, which I very much welcome.

The hon. Gentleman has an interest in schemes that affect his constituency. He referred to Croydon Tramlink, which has brought great benefits to the people of Croydon and Wimbledon, and to the areas of south London that it serves, carrying more than 24 million passengers a year. I am aware of the disagreement between TFL and the operator of Croydon Tramlink, to which he referred, regarding service provision. I regard that as extremely unfortunate, but I hope that the Mayor and TFL will be able to resolve the matter rapidly. In the meantime, I was glad to receive the assurance, which the hon. Gentleman also mentioned, that TFL is providing additional bus services, with the interests of passengers in mind.

Good progress is being made on the east London line extension for heavy rail, which will link Dalston junction with West Croydon and Crystal Palace. Phase 1 is due to open in 2010, opening up an area of London that is in particular need of regeneration.

Commuter services into London have also benefited from investment—for example, the southern region new trains programme has been in service for a couple of years. There has also been significant improvement in new rolling stock, and daily services for many London commuters have continued to improve. Going forward, we shall soon see capacity enhancements as part of the new South Western and Thameslink/Great Northern franchises. There have also been capacity enhancements on the Chiltern route, with extra platforms at Marylebone station. In two years’ time, we shall see high-speed domestic services on the channel tunnel rail link. Meanwhile, the complete link will open this year, with trains going from St. Pancras international station from November.

All the past and planned investment discussed to this point will bring huge benefits to London and Londoners. It has also helped to bring the Olympic games to London, which will generate considerable new investment in east London and leave a lasting legacy for all Londoners.

With regard to the Thameslink project, we are now in receipt of the Transport and Works Act 1992 powers. That decision gives the full legal powers and planning consents for the construction of Thameslink 2000. A final decision on Thameslink and other rail capacity increases will be made this summer, following the conclusions of the Government’s comprehensive spending review and the development of the new high-level output specification for the industry.

My response to the hon. Gentleman would not be complete without mentioning another major rail project to which he referred, Crossrail. As he said, Crossrail will also increase capacity, relieve congestion and overcrowding on the existing networks, and provide support for London’s growth. The Government are committed to Crossrail. Good progress has already been made on the Crossrail Bill, and more than £250 million has been committed to fund work to develop the detailed Crossrail plans.

However, success for rail and all other modes is not just about investment. Management is also crucial. Later this year, we shall hand control over Silverlink Metro to TFL. The new London overground model will help to realise the Government’s more integrated approach to transport delivery in London. The new structure will also allow TFL to invest more effectively in new trains, improvements to stations and increased service frequency.

Investment in London’s roads is also being sustained at high levels, with planned investment of more than £1.3 billion over the next four years, and recent developments such as the Coulsdon bypass in the hon. Gentleman’s constituency. We are also working with TFL to consider demand management solutions on roads, as we do throughout the country. In London, congestion charging is a key part of that approach. It is also a great contributor to tackling climate change and air quality issues, as well as quality of life in London. We gave the Mayor the powers and the funding support to introduce the charge in 2003, and I believe that the majority of Londoners now see the benefits that it has brought to London.

To look ahead, the comprehensive spending review is now under way. It will consider London’s long-term funding requirement to support and enhance its transport networks. The Eddington study, TFL’s “Transport 2025” document and other commentators have all advanced strong cases for continued investment in London’s networks. Those must be considered carefully, alongside the claims of other regions, to ensure that the successes of the past few years can be sustained and developed.

The hon. Gentleman will be disappointed that I did not bring a cheque book today, but I cannot pre-empt the result of those considerations. However, I assure him and the Chamber that the Government remain committed to supporting the growth and prosperity of London and Londoners, and recognise the pivotal role that transport has to play. We shall continue to work hard with TFL to achieve that.