Transport for London Bill [HL]

Baroness Grey-Thompson Excerpts

Monday 8th February 2016 Grand Committee

[Baroness Grey-Thompson (CB)]

My Lords, I declare an interest as a board member of Transport for London, which is a public body constituted under the Greater London Authority Act 1999, as listed in the register of interests.

The first part of the Motion of the noble Lord, Lord Dubs, asks the Committee to note the delay in the progress of the Bill. I thank the Minister for giving a brief history of the slow transition of the Bill. Following the debate on 16 March 2015, time ran out to debate all the amendments tabled by opposition MPs, and the debate was adjourned. At that point, TfL asked the House authorities to table a revival Motion following the State Opening of Parliament. This was tabled and the Motion was blocked. TfL subsequently asked the House authorities for a debate on the revival Motion in order to overcome the blocking Motion. Time was allocated on 16 November 2015, when the Commons voted to revive the Bill. On 30 November 2015, the revival Motion in the House of Lords was withdrawn when the noble Lord, Lord Dubs, asked to speak to the Bill, leading to this debate before the revival Motion on the Bill can be tabled again. The revival Motion is tabled for 9 February, after this debate, and only at that stage can the Bill progress through its next stages in the Commons.

Although the Bill has had a long passage through Parliament, it remains relevant and important as it will provide TfL with additional powers, so that it can meet its business needs more flexibly and take advantage of more efficient arrangements for the stewardship of its financial affairs. London’s growth is relentless. It is driving up demand for our services. There is record ridership on the Tube and on the roads. To keep London working and growing, TfL has to invest just to keep assets in good repair, modernise the rail and road networks and continue to improve reliability. TfL’s £11 billion capital funding settlement from government covers the period from 2015-16 to 2020-21, and includes a total of £5.8 billion in investment grant, £1.4 billion in general grant from the Department for Transport, alongside £3.8 billion in borrowing powers. This allows TfL to continue to invest some £1.7 billion a year to modernise London’s road and rail networks. The Circle, District, Hammersmith & City and Metropolitan lines will be the next four Tube lines to be upgraded.

From 2019, TfL’s objective is to cover all the operational costs of running the Tube and bus networks in London through non-DfT grant sources of income. It has planned for some time to achieve operational breakeven by running its business more effectively and efficiently. As part of a continuous savings programme, TfL has already taken 15% out of its costs.

Following the spending review in November, TfL must now accelerate and build upon its cost reduction programme because the revenue grant is being cut faster than anticipated, reducing its overall income by £2.8 billion over the period to 2020-21. The Bill will help TfL with this task by providing it with additional powers so that it can run its business more flexibly and take advantage of more efficient and economic financial arrangements. This will allow TfL to maximise the value of its assets, bear down on fares and deliver significantly better value for money to the public.

The second part of the Motion of the noble Lord, Lord Dubs, asks the House to note,

“the case for land disposed of under the provisions of that Bill being used to increase social housing”.

The provisions of the Bill do not give TfL any new or additional powers to dispose of an interest in or develop its land, contrary to assertions made. TfL has had powers to dispose of land since it was created in 2000 and the Bill makes no reference to them nor does it expand them in any way.

Under its existing powers, TfL must obtain the consent of the mayor to dispose of an interest in its land by sale or granting a long-term lease. If that land is operational, or has been operational land in the past five years, the Secretary of State must also give his or her consent. The Bill does not affect these arrangements.

Using these existing powers, TfL has already begun to undertake development on its land, and will be developing more than 300 acres of land to help create more than 10,000 new homes across London using its existing powers. TfL is working with the mayor, London borough councils and the commercial property development sector to bring forward developments in an innovative and creative way. TfL is committed to ensuring that it can achieve the right balance between providing affordable homes, delivering revenues to reinvest in the transport network and delivering local transport improvements. Local authorities set the levels of affordable housing in their areas in accordance with local policy. TfL currently works closely with local authorities, and will continue to do so, at each of its sites and engages in active discussions on a site-by-site basis to ensure that development plans reflect local borough priorities and needs.

TfL has established a commercial development advisory group which provides non-executive guidance to its commercial development programme. The group includes experienced advisers who have expertise in social and affordable housing provision. TfL has recently submitted three major planning applications which will deliver £100 million in revenue for investing in the transport network, a new step-free Tube station and 600 homes with affordable housing levels ranging up to 40%.

The proposed development above the new Nine Elms Tube station will deliver 362 new homes—around 25% of which will be affordable—2,318 square metres of office, 550 square metres of retail, a new public square, play space, pedestrian and cycle connections, cycle parking, and disabled car parking. Revenue generated from the new development will support the funding of the Northern line extension.

The proposed development at Northwood will deliver 127 homes, around 20% of which will be affordable, as well as a new Tube station with step-free access and a new bus and train interchange. It will also deliver a new public space and 300 parking spaces, as well as 1,300 square metres of retail floor space. TfL is exploring options to accommodate existing tenants in the development and is providing relocation options to assist them in continuous trade.

I thank the noble Baroness, Lady Jones, for her contribution—her comments about Parsons Green have been noted. The proposed development is on the site of a former London Underground depot adjacent to Parsons Green Tube station, which is currently used as workspace. The scheme will deliver 119 new homes, 40% of which will be affordable, as well as over 4,000 square metres of retail, workspace and restaurants. The development will also support around 300 jobs and enable the opening of three arches for commercial use.

The Motion of the noble Lord, Lord Dubs, raises a wider issue of policy concerning the disposal or development of land by the public sector generally, not just TfL. However, the discrete scope of the Bill should be taken as indicative of a desire by TfL to meet its business needs more flexibly and cost effectively. The provisions of the Bill will impact on TfL’s ability to manage its financial affairs more efficiently and flexibly, which will assist it in being able to operate effectively and bear down on fares, while still being able to provide a world-class transport network.

To summarise the Bill’s provisions, Clause 4 will give TfL subsidiaries the ability to access cheaper finance, subject to the consent of the mayor and, in respect of core operational assets, the consent of the Secretary of State. Clause 5 would have allowed TfL to form limited partnerships subject to the consent of the Secretary of State by way of order debated in both Houses of Parliament. However, TfL took note of the strength of feeling in the House of Commons during the revival debate about this clause. TfL recognises that, notwithstanding the amendments which were made to that clause by the Opposed Bill Committee, concerns remain about the possible future exercise of the powers which would be conferred by Clause 5. Accordingly, if the Bill is revived in the House of Lords, amendments will be tabled in the House of Commons at consideration stage to remove Clause 5 and references to limited partnerships from the Bill.

Clause 6 expands the list of entities through which TfL can undertake commercial activities to include limited liability partnerships and companies limited by guarantee, thus enabling TfL to conduct its affairs more flexibly and net the maximum value from its assets. Clause 7 gives TfL greater flexibility to mitigate its risks through hedging, including by allowing TfL to hedge commodity prices when it is exposed to fluctuations as a consequence of a transport contract and TfL’s contribution risk to the pension fund. In view of the significant benefits that it will bring to TfL, it is essential that the Bill becomes law as soon as possible.