I remind hon. Members that there have been changes to normal practice in order to support the new hybrid arrangements. We do not have anybody participating virtually in this debate. I remind Members who are here to clean their spaces before they leave the room. I also remind Members that Mr Speaker has stated that masks should be worn in Westminster Hall other than when you are speaking.
I beg to move,
That this House has considered Government funding for the Bakerloo Line extension.
It is a pleasure to serve with you in the Chair, Mrs Miller, for the second time—it might be the Minister’s first, but it is my second. We are limited in time and very limited in number today, but it is quality that counts—I am speaking about the Minister, rather than myself. Many colleagues have sent apologies, including my neighbours, my hon. Friends the Members for Vauxhall (Florence Eshalomi) and for Lewisham, Deptford (Vicky Foxcroft) and my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman), the Mother of the House. Well they might send apologies, because the Bakerloo line extension was first mentioned in 1913, so our constituents have been waiting more than a century for this debate and for Bakerloo line trains to arrive a bit further than the Elephant and Castle, where they end currently.
I start by thanking the Secretary of State for Transport and the wider Government ministerial team for the safeguarding work. The land above and below ground for the Bakerloo line extension has been protected. I am grateful that the Government acted swiftly on the safeguarding directions, in response to my question in December, and I was glad to see that published on 1 March. This is a decisive milestone for the project. It is important that the time and resources already spent on the extension are not wasted and that the Government remain committed to the next stages of development for this vital and hugely popular scheme to progress.
I say it is hugely popular, because there is so much evidence to back that up. The Transport for London public consultation saw a tiny fraction—less than 3%—of the people who responded objecting to the extension. The public overwhelmingly see the benefits of the scheme, and more than 20,000 people have signed the “Back the Bakerloo” petition online, including many of my constituents.
The project has the backing of the leaders, mayors, councillors and councils of five London boroughs. Southwark Labour has campaigned collectively on it for years. The planning and preparatory work is already well under way and delivery for the extension is embedded into the local development plan for the borough. In Southwark alone, it is estimated that the extension will help deliver more than 2 million square feet of employment space for a range of new work. It also features heavily in Lewisham’s local development plan. The BakerLewisham extension campaign was a brilliant success for Damien Egan, the mayor, and outgoing councillor Joe Dromey. It is a fantastic campaign with lots of public support.
I and eight other local MPs whose constituencies are directly affected by the extension have all been campaigning together to see it delivered. It is a cross-party campaign. The hon. Member for Bromley and Chislehurst (Sir Robert Neill) is a prominent backer of the Bakerloo line extension and, of course, the former Mayor of London, now the right hon. Member for Uxbridge and South Ruislip (Boris Johnson) and the Prime Minister, has backed the campaign for some years. The Bakerloo line extension formed a major part of his 2011 London plan and, since then, it has been embedded in successive London plans, highlighted as an integral piece of infrastructure within the economic, environmental, transport and social framework for the development of all London. Indeed, in 2015, the Prime Minister said:
“The extension of the Bakerloo line will provide a vital new transport link for people living and working in south London…We’re now firmly on track to get construction on this major project underway by 2024 and have it up and running by 2030.”
He now holds the key to unlocking all the benefits that the extension could bring. He flagged up today at Prime Minister’s questions that the Government are spending £640 billion on national infrastructure—an amazing sum. I am genuinely impressed. It is good to see infrastructure coming forward. We need nuclear investment, we need other infrastructure investment and the Bakerloo line extension should form part of that infrastructure development.
One reason the extension is so universally popular is all the benefits it would bring. It is not just about transport—it is about regeneration, the delivery of housing, jobs and the post-covid economic recovery, and tackling the climate emergency. Of course, it does have transport benefits. Improved transport links and reduced journey times would benefit my constituents and hundreds of thousands of people across south London. It would bring capacity for 87,000 more people every morning in peak time. It would mean that a tube train every two to three minutes between Lewisham and central London is possible.
It has environmental benefits. The Bakerloo line extension would help reduce air pollution and congestion on the roads by increasing capacity on the tube and taking many journeys off our congested streets, including the Old Kent Road. Improving and expanding public transport options is also central to the Government’s plans to tackle the climate emergency and meet our carbon emission targets, a priority that is particularly significant given that COP26 is rapidly approaching in Glasgow later this year.
It also has significant housing benefits. The extension of the Bakerloo line from Elephant and Castle would mean 20,000 new homes for the Old Kent Road alone, including 7,000 genuinely affordable homes in my constituency and that of my right hon. and learned Friend the Member for Camberwell and Peckham. Across London, it would mean the development of 110,000 new homes, which would be a significant contribution to the Government’s commitment to deliver 300,000 new homes a year. This is and should be seen as a partnership between national Government and the devolved authority in London.
Of course, it brings many jobs: 10,000 new jobs in the immediate area of the extension, but 130,000 jobs across London. It would create a new work space along the whole route, generating a growth corridor from the Elephant and Castle right out to Kent. That route takes the extension through some of the most disadvantaged parts of London. Parts of south Bermondsey and north Walworth have 40% child poverty. There is a reason why the Old Kent Road is the cheapest square on the classic Monopoly board.
The next steps to success are to reach a single preferred option, and all of it is contingent on funding. Since 2016 Sadiq Khan has been an excellent Mayor for London. He has stabilised Transport for London’s finances, reduced the operating deficit by 71% and increased the cash balance by 30%, while delivering the Hopper fare, which has benefitted more than 200,000 people on routes through Southwark. All Londoners—millions of people on routine journeys—have benefitted from the fares freeze, but we cannot ignore the last year, which has been devastating for Transport for London’s finances.
The pandemic has meant a 90% drop in passenger revenue in 2020, meaning a loss of £2.4 billion in fares and rendering Londoners entirely reliant on Government for funding for future capital projects of this scale and for smaller projects. I hope that we are not going to see the Minister try to pass the buck for these costs on to Londoners. In his letter to the Mayor of London in October, the Transport Secretary acknowledged that Transport for London will need support for capital projects even when Transport for London becomes self-sufficient in running costs again under Heidi Alexander’s excellent leadership. That self-sufficiency target is set for 2023-24.
The Government could help by returning the annual operating grant to the capital city. The last payment in 2015 was £700 million, before the previous Mayor gave away the operating grant, which was perhaps a foretaste of his negotiating abilities. That money would go a long way to meeting the projected costs for the extension from Elephant and Castle to Lewisham, which are estimated to be between £4.7 billion and £7.9 billion. The range of cost reflects the contingency and uncertainty that a major capital scheme like this requires at this stage of the development.
No other major city operates on this system. In Paris and New York fares account for just 38% of revenue, in Hong Kong for 37% and in Singapore for 21%. Londoners are being asked to shoulder far more cost for their underground system than people in any other major city. That system, built on uncertainty, has been added to in the last year by covid. On Monday, the Government agreed another short extension to the Transport for London funding deal, on the same conditions. This temporary extension will now end in May, with a new agreement needing to be negotiated by 18 May, following the mayoral election.
The Minister may wonder why the Government’s candidate is languishing in the polls in London. It is partly because Londoners are not stupid. They have seen the contrast between being punished with a deal for Transport for London, which has restrictions and a cost imposed for Londoners that we did not see in any other deal for any other part of the country, and rail companies being provided with £3.5 billion of public money with no conditions. Londoners were told to stay at home to protect the NHS. They did their bit and they are losing out through a deal with terrible conditions attached.
As part of the current negotiations, Transport for London is making the case for continued funding to close out the current stage of design, to protect the Bakerloo line extension safeguard from challenge, and to develop a single preferred option that would be shovel-ready. That would put the scheme in a position where it would be ready to be taken forward to planning, if and when funding was identified. Transport for London hopes to provide an update on that by the end of May, by which point the next funding deal should have been agreed.
We obviously cannot ignore the context; we all know what has been happening. The vaccine is providing a jab in people’s arms, but the whole country needs an economic shot in the arm. We need an economic boost and the Bakerloo line extension would deliver just that for the whole country. By supporting London, the Minister would support the whole country. When London is operating at full capacity, it delivers a net contribution to the Treasury of £39 billion a year. The Government need that money coming in and Londoners want to get back to work. The Bakerloo line extension helps to rebuild post-covid, and by investing in London’s infrastructure the Minister and the Government would support regeneration across the United Kingdom.
I will give just one example of how the Bakerloo line extension would contribute to the national recovery. The Prime Minister has visited the Siemens plant in Goole up in Yorkshire—more than once, I think. That site is the expected place of manufacture of the trains and carriages that would run on the Bakerloo line in London. Investing in the Bakerloo line extension provides a boost for London, but it also provides jobs in Goole.
Of course, the Government talk a lot about levelling up. Levelling up does not just apply outside London. Ministers must not just talk the talk; they need to walk the walk, or better still take the tube, perhaps. I hope that the Minister will agree that the Bakerloo line extension is an excellent example of levelling up. I invite her to come and see these sites, to see where these jobs, housing and transport infrastructure would be. I hope that if she made such a visit, I and others who support the extension would be able to prove to her that the best way to level up is to get the Bakerloo line extension track down. That would be a fantastic opportunity for her to see.
In conclusion, I look forward to hearing how the Minister will ensure that her Government meet their housing targets, environmental agenda, infrastructure plans and levelling up agenda, and I also look forward to hearing how we will work together to deliver this project to boost the national economy.
It is a great pleasure to serve under your chairmanship for the first time, Mrs Miller. I am extremely grateful to the hon. Member for Bermondsey and Old Southwark (Neil Coyle) for securing this debate on Government funding for the Bakerloo line extension. I agree with him—I think the debate is definitely about quality. He has demonstrated that in his remarks, in which he set out his passionate case to represent his constituents. I commend him on that wholeheartedly.
Of the 270 operational London Underground stations, only 29 are in south London. As I am sure the hon. Gentleman already knows, there are more underground stations in Hertfordshire and Buckinghamshire than there are in his home borough of Southwark. We agree that transport infrastructure is critical in ensuring that communities can work together to achieve their ambitions of having prosperous, safe and vibrant places to live. Indeed, it has never been more important than in the period of recovery from the covid-19 pandemic.
The proposals for the Bakerloo line would extend the route from Elephant and Castle to Lewisham. Transport for London’s plans include new stations along the A2 Old Kent Road and at New Cross Gate, a new Bakerloo line ticket hall at Elephant and Castle, and an improved interchange at Lewisham station. It is important to note, as I know the hon. Gentleman already understands, that this is a Transport for London project and Transport for London is devolved, so this is the responsibility of the Mayor of London and Transport for London, whose responsibilities include capital projects. Therefore, it is for the Mayor of London and Transport for London to assess the merits of capital projects and make decisions on investment.
As the hon. Gentleman has discussed already, the Secretary of State has recently issued safeguarding directions for the proposed extension route. Safeguarding does not represent a Government commitment to fund the project, but it does ensure that the route is protected for the future, because without safeguarding the project’s costs could become significantly higher over time.
Safeguarding directions have been issued because the Government agree with the hon. Gentleman that the Bakerloo line extension has the potential to unlock housing and economic growth. Therefore, it is key to understanding the opportunities that the Bakerloo line extension, and other projects in London and across the country, present for our goals on housing supply.
The hon. Gentleman will know that Transport for London is yet to secure the funding required to progress this project and Transport for London’s commissioner confirmed to the London Assembly earlier this month that the extension is on hold for the time being. We believe that safeguarding has provided Transport for London with the opportunity to take the extension forward at a future time.
I will use this opportunity to briefly reflect on the broader context in which we are having today’s debate. The hon. Gentleman has referred to some of these matters. Our focus right now remains on responding to the pandemic, and there are significant challenges facing the whole country, including the transport network. In London’s case, the Department for Transport is continuing to work closely with Transport for London to ensure that the transport network can support the restart and recovery of the city. The Government have already shown a significant commitment to supporting London’s transport network and Londoners throughout the pandemic, including more than £3 billion in emergency funding since May 2020. That is a significant amount of money that has been provided to help Transport for London keep the essential networks going. On Monday, the Government agreed an extension to the current Transport for London funding deal, which had been due to expire on 31 March.
I am keen to explore the future funding specifically. from the, Point 5 of the letter from October from the Transport Secretary to the Mayor of London says:
“In relation to any long-term plans, HMG define financial sustainability as TfL’s ability to cover, from sources available to it (including, the consideration of potential new sources of income but excluding government grant): operating expenditure; capital renewals; servicing and repaying debt; and capital enhancements. For major capital enhancements and major renewals (i.e. replacement of life expired rolling stock and signalling), TfL would not be expected to solely finance these from operating incomes; as is consistent with other transport authorities.”
It is about that next step, rather than the immediate temporary measures to carry the capital through the covid crisis. I am keen for the Minister to move on to that agenda, if possible.
I fully understand the hon. Gentleman’s desire to move on to the future of the project. What I wish to say on that point is that, obviously, the Government will be working very closely with Transport for London on the future funding settlement, so that we can continue to ensure the sustainability of the transport network. I very much encourage him to continue his work and his communications with my noble Friend in the other place, Baroness Vere, who is intimately involved in the discussions, and with the Secretary of State for Transport, because the Government absolutely wish to ensure that there is a sustainable transport network for London and the whole country.
I thank the hon. Gentleman for securing the debate on this topic; it is a very important matter. The issuing of safeguarding directions has protected the proposed route for the future, which is a very positive step. It provides Transport for London with more time to put together a funding package without the cost of the project significantly escalating. That is a very important step in the right direction. I also encourage the hon. Gentleman to aim his questions about funding at the Mayor of London and Transport for London following May’s election.
Question put and agreed to.