The Minister of State, Department for Transport (Mrs Theresa Villiers)
I congratulate the right hon. Member for Greenwich and Woolwich (Mr Raynsford) on securing a debate on this very important topic. I first became a supporter of Crossrail around 10 years ago in my former role as one of London’s Members of the European Parliament, but my involvement has been brief in comparison with the right hon. Gentleman’s long track record. I am sure that everyone will join me in paying tribute this evening to his long and distinguished record of campaigning for Crossrail in general and for Woolwich station in particular.
It is a great honour for me to address the House from the Government Dispatch Box for the very first time. I also count it an honour that my debut here today gives me the opportunity to focus on a project that is so important not just for south-east London but for the capital as a whole, and, as has already been pointed out, for the whole of the UK economy. I reiterate, and warmly welcome, the right hon. Gentleman’s statement on the benefits of Crossrail, which he so eloquently set out this evening.
Crossrail received support from both the coalition partners before the election. That support has been carried through to the formal coalition agreement setting out our programme for government, and the new Secretary of State has made it clear that we are committed to Crossrail. Crossrail is under way: it is happening, it is being built, spades are in the ground, and no decisions have been taken to change the scope of the project.
Our challenge is to deliver an affordable world-class railway. I can assure the right hon. Gentleman that the Department for Transport is working hand in hand with Transport for London, the Mayor and the leaders of the Crossrail project to secure that result. That is why Crossrail Ltd, the company tasked with delivering the project under the leadership of Terry Morgan and Rob Holden, is undertaking the full range of work to ensure that the scheme remains affordable, on budget and on time.
On the right hon. Gentleman’s question about the timetable, I am sure that he would not expect me to take the pressure off those delivering the project; it is my job to hold their feet to the fire and ensure that they deliver on time. It is vital to ensure that each element offers value for money. Indeed, hon. Members familiar with basic project management techniques, as I well know the right hon. Gentleman will be, will appreciate that this work is essential good practice for all construction schemes—and Crossrail is no exception.
I can assure the House that real progress is being made on Crossrail. There are already around 2,000 people working on the project. Last month saw the first anniversary of the commencement of construction work on the Canary Wharf station, which is now progressing ahead of schedule. Enabling work, as I think we all know, is very visible at numerous sites around London, including at Tottenham Court Road, Paddington, Liverpool Street and Bond Street stations. Further work is about to start on the ticket hall at Farringdon. Much of the land needed for construction has already been purchased. Less visible—but, I say to the House, no less important—are the efforts Crossrail Ltd is making to develop detailed designs and plans for different parts of the project. Work is also under way on how services will be operated and how best to integrate them with the rest of the capital’s transport network.
In these difficult times it is more important than ever to ensure that every element of the scheme is tested and retested for value for money. To put it simply, we owe it to all those funding the project, to the business contributors and taxpayers of today and to the fare payers of tomorrow to do all we can to keep this project affordable and to deliver the best value for money. Working closely with the Mayor and the Crossrail team, it is the Government’s duty to ensure that every pound invested is well spent and delivers maximum value.
Mr Mark Field
I entirely endorse what the Minister has said about the need to secure maximum value for money—we would all agree with that—but has not one of Crossrail’s difficulties been caused by the publication of headlines referring to £15.9 or £16 billion, when in reality the central Government element of the expenditure has been considerably less than that? Earlier in her speech the Minister talked about spades in the ground, but as she will recognise, it is rather more than that. Over £2.5 billion has been spent on compulsory purchase and on works already undertaken. Does she agree that, although this does not detract from her central argument about the need to ensure that there is good value for money in the future, we are, in a sense, beyond the point of no return?
Mrs Villiers
My hon. Friend has made a strong point. We need to concentrate on the work that is going on, rather than on the speculation and scare stories that have appeared in parts of the London media.
The work under way at Canary Wharf station already provides a clear example of innovative engineering techniques that have offered significant savings without compromising delivery. We need to learn from that example when delivering other key elements of Crossrail. I know that Crossrail Ltd is committed to the highest standards of procurement practice to bear down on costs and ensure that the project remains affordable, and that must continue to be a key goal for the Crossrail team as progress is made towards letting contracts later in the year.
Jim Fitzpatrick
I welcome the Minister to her new position, and congratulate her on her appointment. Some of us expected to see her as Secretary of State—but hey, she has plenty of time, and I am sure she will get there in due course.
The Minister referred to the building of the station at Canary Wharf. My understanding is that Canary Wharf undertook the funding of that development. This reinforces the point made by the hon. Member for Cities of London and Westminster (Mr Field). The private sector has put its money where its mouth is. The question that my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) and other Labour Members have been asking is whether the Government are as committed as the private sector.
Mrs Villiers
As I have said, we support Crossrail and are committed to it. The project is going ahead. It is vital to ensure that all assumptions about the risk that the scheme involves are tested rigorously by Crossrail Ltd to ensure that those risks are properly identified and reflected in cost estimates, and so that sensible steps can be taken to reduce them. The latest innovative value engineering techniques have the potential to reduce costs significantly, and Crossrail Ltd has already been able to identify 18% savings in overall indirect costs through measures such as reducing administrative and staff costs and renegotiating IT contracts.
Stephen Pound
I am grateful to the hon. Lady for giving way. She has been extremely generous, and I echo others in welcoming her to her post. I think that the least we could do is consider opening a new station adjacent to Charing Cross, perhaps in Villiers street.
Does the hon. Lady agree with one of the central points made by my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford)—that Crossrail is not just about London but about the south-east, and the national economy? Does she agree that it is a driver for economic growth and expansion?
Mrs Villiers
I entirely agree that Crossrail will be a hugely important driver for economic prosperity, not just in the capital but throughout the United Kingdom economy.
Energetic work is continuing to find more efficiencies, and I am sure all Members will accept that the principles I have described are basic elements of good project management and simple good housekeeping.
Let me now turn to the important issues raised by the right hon. Member for Greenwich and Woolwich about Woolwich station. I am well aware—as, I am sure, are all who have followed the twists and turns of Crossrail’s long history—of the pivotal role that he has played. He fought a long and successful campaign to add a station at Woolwich to the Crossrail Act 2008. As he said, such a station could deliver significant regeneration benefits to his constituents and to south-east London more widely.
Let me make absolutely clear that I recognise the importance and magnitude of those benefits, that I hope we can find a solution, and that the Department and I are working hard with Transport for London in trying to find a way forward. However, a clear agreement was reached that the costs of building and fitting out the station would be borne by the private sector. That agreement limited the taxpayer contribution to the money saved because a station at Woolwich would reduce costs, given that some of the work originally included in the overall project would no longer be necessary.
In short, the plans to include a station at Woolwich have always depended on contributions from the developers who stand to benefit most from it. That was the case when the last Government took the decision to add the station to the Crossrail Act, and it remains the case under the new Government. It is abundantly clear that the debt crisis left by Labour has placed intense pressure on the public finances, so we cannot default to a position where a shortfall in the promised private sector funding for the station simply pushes up the costs for the taxpayer.
Mr Raynsford
While I understand entirely the basis on which the agreement was reached in 2008, does the hon. Lady recognise that what has happened subsequently in the housing market has inevitably impacted on Berkeley Homes, the developer, whose contribution is critical to delivering this? While not asking for public contributions, I did specifically encourage flexibility on the part of the Government, to make it possible to reach an agreement with Berkeley Homes that is affordable for the company. The Secretary of State agreed in his letter to me that that was the Government’s objective. Will the hon. Lady tonight confirm that they will try to get an agreement on that basis?
Mrs Villiers
I want to set this out very clearly. The private sector contribution was pivotal to the station getting the go-ahead when the decision was made to add it to the Act, and it remains so. The Government cannot offer additional taxpayers’ money over and above what has been agreed within the current funding programme to replace the shortfall in the private sector contribution that Berkeley Homes promised to provide. However, we can seek flexibility in other areas, as the Secretary of State outlined in his letter.
Both the Department for Transport and Transport for London stand ready to help broker an alternative solution among interested parties to try to address the funding problems. Both the sponsoring bodies have been in extensive discussions with Berkeley over the past year, to seek a way to enable the company to honour its commitments. They have written to me only today with more constructive ideas. Naturally, one of the most significant of those interested parties is the London borough of Greenwich. In this regard, it is important to assess whether development opportunities around the station and the alternative funding that they might generate have been fully explored.
I know that Greenwich council is actively engaged in the issues that we have discussed this evening. It is now important for all of us who care about Crossrail to assess thoroughly the possible alternative funding sources that could be available between the interested parties if Berkeley Homes does not step up to the plate and deliver what it promised. Therefore, while I cannot promise additional funding from the Department and the taxpayer, we do stand ready to try to help the interested parties find a solution to enable Woolwich station to go ahead. The right hon. Gentleman can have my absolute assurance on that.
I would like to mention briefly some of the wider issues that the right hon. Gentleman raised about transport in his constituency. He warmly welcomed a number of the recent improvements, and it is worth noting that several important programmes in recent years have benefited his constituency, such as the refurbishment of the East London line as part of the London overground network, new interchanges with the tube and bus networks, and the extension of the docklands light railway, which the right hon. Gentleman described with such eloquence.
I thank all Members who have taken part in the debate, especially the right hon. Gentleman. I believe that it has provided a valuable opportunity to consider important issues around the Crossrail project in general and its impact on his constituency in south-east London in particular. After long years of waiting, the commencement of work on Crossrail was warmly welcomed, particularly within the business community, where Crossrail has always enjoyed strong support. The CBI recently made it clear to the Secretary of State that it is pleased to see progress continuing under the new Government.
I should like to take this opportunity, on behalf of the Government, to thank the Canary Wharf Group, BAA plc, the Corporation of London and its members for the considerable financial contributions that they are making. I am sure that we would all like to express the same gratitude to the other businesses in the capital whose rate supplements are providing a hugely important element of the funding package.
This project has the potential to deliver significant economic, social and environmental benefits for the capital and for the country. Those benefits will be felt well beyond the areas directly served by the new line and its stations. The challenge facing all of us who are interested in Crossrail is to ensure that costs are kept down. That means engaging in an active, energetic pursuit of best value for money procurement processes, urgently seeking ways—