The Parliamentary Under-Secretary of State, Department for Transport and Home Office (Lord Ahmad of Wimbledon) (Con)
My Lords, first, I join other noble Lords in congratulating the noble Lord, Lord Dubs, on securing this important debate. I have listened with interest to the contributions that have been made by noble Lords.
As we have already heard, the Bill will enable Transport for London to use financial practices and mechanisms which will allow it to release greater value from its assets and financing arrangements.
Before I come to that, the noble Lord, Lord Dubs, and others raised the issue of the time it has taken for the Bill to reach this stage. It is not often during my five years or so in your Lordships’ House that I have taken up a Bill which was commenced prior to my joining, but this is one such.
If we look into the history of the Bill for the record, it is appropriate to note that it was read for the first time in the House of Lords on 24 January 2011, and received its Second Reading on 13 December 2011, when it was debated. As noble Lords may recall, the Bill was petitioned against by the West London Line Group. This petition was withdrawn when TfL agreed to delete a clause, and an Unopposed Bill Committee took place on 28 January 2014. The Bill was then read for a third time on 4 March 2014, and transferred to the House of Commons, where it had its First Reading that day. The Bill’s Second Reading took place on 9 September 2014, and the Opposed Bill Committee eventually took place on 13 January 2015. However, the Bill was blocked when it came up for consideration on 12 February 2015; that necessitated a debate, which was held on 16 March 2015. Time then ran out to debate all the amendments tabled by opposition MPs, which included the honourable John McDonnell and the right honourable Jeremy Corbyn.
We are back, however, in this Committee today to debate the use of financial practices and mechanisms which will allow TfL to release greater value from assets for financing. This is a principle that I welcome, especially given the Government’s continuing commitment to finding significant efficiencies in public spending, in the interests of both the taxpayer and the travelling public.
The noble Lord, Lord Dubs, raised the issue of the settlement. As the Minister responsible for London at the Department for Transport, I am acutely aware of the challenging budget discussions that we have had with Transport for London, but they have been held in a very co-operative climate, including those meetings we have held with the Mayor of London.
For information, as noble Lords may well be aware, TfL will receive about £11 billion of government support for the next control period, which runs from 2015-16 to 2020-21. This is a good settlement for London, and will enable TfL to continue to deliver the biggest ever investment across London’s roads and streets. TfL has confirmed that the settlement will ensure that it can continue the modernisation of the capital’s networks across transport, support thousands of jobs and the creation of new homes and promote economic growth across the UK.
I concur with noble Lords that London is an important city—indeed, it is the capital city of our great country—and therefore requires support and investment. The Government have underlined their commitment. I continue with other colleagues to work very closely with TfL to ensure the delivery of the infrastructure required so that London not only sustains its position on the global stage but strengthens it.
I understand from TfL that the Bill could realise in excess of £50 million in immediate benefits by improving its hedging power, enabling it to borrow money in a more cost-effective way and allowing it to make the most of its assets.
The department supports TfL’s commercial programme, and we want it to maximise its unique commercial position to ensure its assets are generating revenues to their greatest potential. We believe absolutely that giving TfL greater financial flexibility will provide it with the opportunity to run its business in a more efficient way.
I know that we will be hearing from the noble Baroness, Lady Grey-Thompson, shortly on some of the matters relating to revised amendments to the Bill but, in principle, for all of the reasons I have given, the Government continue to support this Bill and hope that, after the long delays it has suffered in its passage through Parliament, it can soon be enacted.
Lord Dubs
My Lords, I am extremely grateful to all noble Lords who took part in this debate. I repeat my thanks to all those who provided me with help in preparing for the debate today. I also thank my friend in the House of Commons, Andy Slaughter MP, who was very useful in giving me helpful advice in preparing for today’s discussions.
One or two things puzzle me a little. I have heard words such as “hedging power”. I am not an expert in finance, and am grateful to the noble Baroness, Lady Grey-Thompson, for the detailed exposition she gave us, but I do not know what hedging powers are, frankly. I do not have a clue what that means. I am suspicious of it, as it seems to be some sort of financial services device.
Lord Ahmad of Wimbledon
I am a former financial services professional. In essence, it is about mitigation of risk—lowering risks and ensuring that you can use the markets to minimise your risks in any investment decisions taken.
Lord Dubs
I am most grateful. I have learned something that is going to stand me in good stead in the future. In giving the TfL position, the noble Baroness said that revenue had been cut faster than anticipated. That is really the clue. Transport for London has taken a bigger hit in its finances that it had expected. We all want more housing in London but we also want housing that people can afford, not in the Government’s definition of affordable housing but in the common-sense definition: housing that ordinary people can manage to buy or afford to rent. The temptation in a debate like this is to range widely over housing policy. Clearly that is a temptation I have to resist because it would not be proper to do so. However, the temptation is very strong indeed.
I hope that when the Bill is revised and goes to the Commons, the Commons will have another good look at it and deal with some of the other concerns that have been alluded to. I also hope that TfL will reflect on the concerns expressed in both Houses of Parliament about the possible danger in its proposals of reducing the possibility of developing social housing for ordinary Londoners. That is the real risk. I hope Transport for London will take that on board. Of course, it is in difficulty. It is caught between two opposing forces and has been put in an almost impossible position, for which I have much sympathy. I hope, nevertheless, that Transport for London will do its best and maybe a new Labour Mayor of London will move things on in a better way. I beg to move.