Transport for London Bill [Lords]: Revival

Andy Slaughter Excerpts

Monday 16th November 2015 Commons Chamber

[Bob Blackman (Harrow East) (Con)]

This is a private Bill promoted by Transport for London that was deposited on 26 November 2010 and ordered to commence in the House of Lords.

[Andy Slaughter (Hammersmith) (Lab)]

Will the hon. Gentleman give way?

[Bob Blackman]

Perhaps I might make some progress on what has happened and on timescales before I give way.

The Bill was considered by an Opposed Private Bill Committee of this House on 13 January 2015 and one of the clauses was amended. The Bill was subsequently debated on Report on Monday 16 March, but the time allocated for the debate expired before proceedings could be brought to a conclusion. Parliament was prorogued shortly thereafter and the Bill fell.

In accordance with the practice of the House, at the beginning of the present Session the promoters requested that the Bill be revived under Standing Order No. 188B on private business. The revival motion that was subsequently tabled in the name of the Chairman of Ways and Means has continued to be objected to, leading to the necessity for this debate. I stress that this debate is about the revival of the Bill, rather than its substance.

[Andy Slaughter]

The hon. Gentleman has pointed out that a revival motion is needed because the Bill did not succeed earlier this year, but I wonder whether he raises his eyebrows slightly, as other Members do, at the fact that it has taken five years to reach this stage. Will he indicate why he thinks that might be the case?

[Bob Blackman]

Clearly the process in the other place has taken some time, and there were various applications to the Opposed Bill Committee for consideration of amendments, which is why the promoters of the Bill have amended it to allow those who objected to it to see changes that would benefit the overall process.

The purpose of the Bill is to 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. It would allow TfL to maximise the value of its assets and deliver significantly better value for money to the paying public, which is a laudable aim, and one with which I am sure we all agree.

--- Later in debate ---

[Bob Blackman]

I will not give way any more.

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.

One of the key issues that has been identified during the whole process, which I think we all agree on, is the opportunity to maximise the development of assets for housing purposes. If the Bill were finally to become law, TfL would release more than 300 acres of land in London to help create more than 10,000 new homes across London. Sixty-seven per cent. of this phase of development is in travel zones 1 and 2.

[Andy Slaughter]

Will the hon. Gentleman give way?

[Emily Thornberry]

Will the hon. Gentleman give way?

--- Later in debate ---

[Emily Thornberry]

I believe that that is exactly the position. This legal instrument was created in order to help to raise money. However, the difficulty is that we will be raising money on public land—public for the moment, at least. That is land owned by you, Madam Deputy Speaker, by me and by all of us, and we will be handing over some sort of investment in it to organisations that are cloudy, to say the least. Is there anything to stop these partners being offshore companies or being able to establish themselves with £2-worth of capital? Is there anything to stop documents naming certain people as responsible for the company, only for the Russian mafia to take over at a later stage? Are we handing over Caledonian Road, Old Street and potential developments in my constituency to such people? I certainly hope not, but I am worried that this Bill’s revival may allow that to happen.

[Andy Slaughter]

My hon. Friend is asking extremely pertinent questions, but I wonder who is going to answer them. If I get the opportunity to make a speech, I will try to answer them with the aid of the promoter’s statement on the one hand and the legal opinion obtained by the National Union of Rail, Maritime and Transport Workers on the other. The Bill’s sponsor, the hon. Member for Harrow East (Bob Blackman), is now deep in thought, having gabbled through the end of his remarks without taking interventions on any of the substantive matters covered by the Bill. If this Bill is to be revived, does my hon. Friend agree that our questions should be answered tonight?

[Emily Thornberry]

I genuinely think so, because, as the hon. Member for Harrow East (Bob Blackman) has said, we are talking about large swathes of publicly owned land in the centre of our capital. My constituency has the least amount of green space of any in the entire country, and all our brownfield sites need to be looked at very carefully in order to maximise housing. I agree with the hon. Gentleman on the need for housing, but frankly we do not need developments such as that currently taking place on our canal, where a one-bedroom flat is being sold for £826,000. That is not affordable housing for anyone who lives in Islington. We need real affordable housing, but the Bill does not seem to have any control over that.

--- Later in debate ---

[Emily Thornberry]

Certainly, the way things seem at the moment is that the property market in London only goes upwards. We will see what happens in the future. There has to be, in the end, a limit to it, and there may be some form of risk. One risk has to be, for example, finding asbestos. If asbestos is found at a development site, what happens then? Again, the risk is nationalised and the profits are privatised.

[Andy Slaughter]

My hon. Friend mentions asbestos. The site that begat all this nonsense in the first place is the Earls Court exhibition site, which is coming down at the moment and is absolutely full of asbestos. There are huge risks here. The brakes are being taken off. It seems ironic that Transport for London should think it needs to do something to ease up the London property market. The London property market is out of control as it is. Only TfL, with its lack of commercial acumen, could really think that it should prioritise building more luxury flats with whoever turns up to build them and make it as easy as possible, with no questions asked.

--- Later in debate ---

[Emily Thornberry]

If we do not use public land to build affordable housing, what land will we use? If we sell off the land, and it ends up in the hands of private property speculators, that will be the end of it, in terms of its being within the reach of Londoners.

Again, perhaps someone can enlighten me, but there has been talk that TfL could set up a subsidiary to insulate itself against risk. I do not understand what TfL has said about that, but, on the face of it, if it continues to own the land, or at least to manage it, it seems that a court would say, “The legal instrument might say one thing, but the reality is quite clear”, and strike it down. The project is being built on the never-never, and on very dubious grounds. We are asking serious questions about the risk this public body is being put under. What is TfL going to be doing with our land? What does it mean for the future of London? There are so many questions. I appreciate the Bill has a long history, but that makes it even more disappointing—to say the least—that these questions cannot be answered. They have been asked of TfL many times, yet we still do not have answers. In the absence of such answers, it does not seem correct to revive the Bill.

[Andy Slaughter]

I will attempt to answer my hon. Friend’s question, although, again, it would be better if the sponsor did. Counsel’s opinion, on exactly this point, expresses doubt about whether such an approach would be within the vires of TfL and lawful and that, even if such a subsidiary was formed, it might also give rise to the issue of vertical liability for TfL. It seems that, if that is what TfL is attempting, it has failed to do so in the Bill.

[Emily Thornberry]

That is very interesting. If that is counsel’s opinion, why can TfL not allay our fears? It is a pretty fundamental question. As I understand it, attempts have been made over several years to progress the Bill, yet there are still no answers to these important questions. It is not enough for TfL to say to the House, “Please revive the Bill. The Chancellor is going to take £700 million away from us, and we need to sell off our assets to fill the gap.” Economically, it makes no sense; socially, it is appalling; and, politically, it is extremely short sighted and not the sort of thing the House should allow.

--- Later in debate ---

[Emily Thornberry]

I am very grateful to my comrade for bringing me back from the brink. In those circumstances, there is nothing more to say about that.

[Andy Slaughter]

I wonder whether I can help my hon. Friend by putting it slightly differently. As London MPs we are very grateful for the support from great engineering and great railway towns around the country, such as that of my hon. Friend the Member for York Central (Rachael Maskell). I think the nail was hit on the head in the answer to the point raised by the hon. Member for Enfield, Southgate (Mr Burrowes), who is no longer in his place, about whether there is a balance between Londoners who want access to housing and Londoners who want reasonable fares. The answer is that everybody is losing out under this scheme. The cover on this Bill has been blown by the revelation that money is going to be sucked out of London and that TfL is going to have to scrabble around, selling the family silver simply to pay the fares bill over the next year or two. That is a disgraceful way to run the economy.

[Emily Thornberry]

That, in summary, is my objection to the Bill. It seems to me that we need to call out its true intentions. I am afraid that, supporter as I am of TfL—I have written to its director to praise him, but I have to criticise other things—I have to say that TfL is making a mistake about this. I suspect that the reason it is trying to make this terrible mistake is that it is being pushed by the Government who are looking to entirely short-term gain. This is not in the interest of Londoners, so the Bill should not be revived.

--- Later in debate ---

[Claire Perry]

I want to make some progress.

TfL is an organisation that manages, extremely effectively, more than £9 billion of revenue every year. It has delivered incredible increases in reliability and efficiency since 2008. Labour Members are displaying a great lack of confidence in our nation’s transport systems.

[Andy Slaughter]

The Minister does not represent a London constituency. That is not her fault; we all have our cross to bear. However, those of us who have put up with 30 years of incompetence from TfL—both financial and operational—would beg to differ with her. Will she confirm that, as was stated in the Financial Times on 12 November, the London transport network is facing a loss of £700 million a year in state subsidy as a consequence of the comprehensive spending review?

[Claire Perry]

I am delighted that the hon. Gentleman has mentioned the Financial Times, but he will have to wait until next week to hear about the spending review. I did not quite catch his other comment, but I think he said something about our not using the tube. I suspect that I have been using it for many more years than he has. Let me return to the point, however. We are trying to find flexible ways—

--- Later in debate ---

[Claire Perry]

Thank you, Madam Deputy Speaker, and, to be clear, I am afraid that we heard all sorts of rather pointless interventions earlier, and what we would like to do is make some progress, I think, so we can understand what this Bill is all about.

So let me put some numbers in front of Opposition Members to give them some facts, rather than having them shroud-waving. I understand from TfL that this private Bill could immediately generate savings in excess of £50 million by improving its hedging power, enabling it to borrow money in a cost-effective way and make the most of its assets. If Opposition Members do ever take the tube, they will see the money the tube generates is reinvested in investment programmes, delivering the sorts of transport investments their constituents need.

The Department supports TfL’s commercial programme. We want TfL to better maximise its unique commercial position. We want it to generate the maximum potential from the public assets that it will continue to own, and we believe—

[Andy Slaughter]

Will the hon. Lady give way?

[Claire Perry]

I have given way once to the hon. Gentleman.

We believe that giving TfL greater flexibility—

--- Later in debate ---

[Ian Lavery]

Of course. I could not put it better myself and I fully agree.

Let me get back to the issue. The Bill is about property developments that have contained very low levels of affordable housing. It has been suggested that the likes of the now infamous Earls Court development potentially contain only 10% affordable housing.

[Andy Slaughter]

The master plan for the Earls Court and west Kensington area shows the construction of 8,000 properties, which will include no social rented housing additional to that currently on the site, of which only 11% will be affordable housing. However, as my hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) said, “affordable” can mean 80% of market sale or rental value. I am afraid that in central London, that is unaffordable to anyone at all.

[Ian Lavery]

That is the point, really. The Bill is about the fact that Transport for London has been totally underfunded. It has undergone a huge reduction in funding and there will be more reductions in the spending review. The Minister let the cat out of the bag when she said that we will have to take difficult choices. As far as the Conservative party is concerned, that means taking money away. Wait until next week and see what the reduction in the spending review will be.

[Andy Slaughter]

We all noticed that the Minister did not deny that £700 million might be withheld from TfL, but it is also the case that in any of the proposed developments in zone 1 or 2, about which the sponsor of the Bill talked, TfL has no intention of providing any affordable housing at all.

[Ian Lavery]

Again, that is extremely concerning. I am not from the area, but I am sure that such cases have been experienced many times in many constituencies in the city. If any of my hon. Friends wanted to give any examples, I would be interested. The House should be prepared to listen to past experiences and to what has happened, as that is what we are likely to see if clause 5 is agreed to.

--- Later in debate ---

[Ian Lavery]

Are not people right to be jaundiced? They are sick to death of austerity. When the Government close fire stations, police stations, public buildings and public toilets, they always give the excuse that it will result in a better service for the public purse, and on every occasion the opposite is the case. That is why we need to ensure that this issue is discussed and that the people involved—not just the politicians, TfL and the developers, but everybody—understand what is likely to happen if the Bill is passed.

There have been many arguments about this issue. It has been suggested that TfL should not be able to enter into these partnerships until it proves that it can manage them properly, and I think that is fair. Why should an organisation—a first-class organisation, as the Minister called it—that was created to look after transport infrastructure be allowed to go into property development without proper accountability? I think that is a fair and reasonable question. The Bill would give TfL more power to enter into speculative developments on the sites it owns. We have discussed whether the property prices for these developments are affordable. That needs to reflect what people in the city actually need.

There is also an argument about whether TfL should be getting involved in these limited partnerships, and whether it has the financial competence to do so, because the people it will be getting into bed with under clause 5 are no mice or shrinking violets; they will be used to delivering development projects not just in this country but around the globe, so they will be shrewd cookies. We want to ensure that, whatever happens, the people of London get the best deal.

[Andy Slaughter]

My hon. Friend is absolutely right that we need to be very suspicious of those partners. He said that he thought it might be a slight exaggeration to say that we are dealing not only with people who might take commercial advantage, but with actual fraudsters. That is not so. In relation to the Earls Court development, TfL’s partner, Capco, went into partnership for another part of the site with the Kwok brothers, one of whom is currently serving a five-year sentence for corruption in Hong Kong. If they are the sorts of people who will be involved in the deals, frankly we should have nothing to do with them.

[Ian Lavery]

I think that it is really wise counsel to scrutinise the qualifications of the people involved with TfL, to see whether they have any nous at all with regard to this. Somebody mentioned gangsters earlier, and perhaps gangsters are getting involved in this. I am sure that more than one has ended up with a five-year prison sentence. Who knows what has been happening behind the scenes, and who knows what is likely to happen if the Bill goes ahead?

--- Later in debate ---

[Ian Lavery]

I fully agree with my hon. Friend the Member for Harrow West (Mr Thomas). I wonder whether he could repeat exactly what he said. [Laughter.] I am sorry, Madam Deputy Speaker; I was taking liberties and it was said merely in jest.

In conclusion, it is widely accepted by many of the British public that Transport for London needs to be saved from itself. It faces financial challenges that we had all, in the main, hoped would be different.

[Andy Slaughter]

I know my hon. Friend is about to conclude, but Transport for London is being saved from itself by the process of scrutinising this Bill. The Minister, who has become garrulous now that she does not have to take interventions, should have added that the only reason the Secretary of State’s consent is needed on clause 5 is that that concession was achieved in the Bill Committee.

[Stephen Pound (Ealing North) (Lab)]

Madam Deputy Speaker isn’t happy.

--- Later in debate ---

[Rachael Maskell]

I thank my hon. Friend for sharing that fact. Those figures were not quite on the tip of my tongue, but it does show that the level of overseas investment in the city is pricing everybody else out, leaving the centre of the city void of community life. People are spotted around the city, but do not actually live in a community.

We are not looking at the infrastructure needed to support these developments—social areas, additional staff, schools and other facilities—because that is not part of the legislation either. One concern is this: we talk about limited partnerships being agreed, but what happens after that agreement? Plans and proposals can change. Ultimately, we could end up with a very different animal from what we started with.

[Andy Slaughter]

We know what happens, because TfL has given the game away: a 100% market housing development in zones 1 and 2. The only guard against that are councils—Labour councils, principally—insisting on affordable housing. The provisions in the Housing and Planning Bill will remove that guard. This is the dirty little deal between the Government and TfL to ensure there is no affordable housing.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. Talking about housing tangentially to the Bill, because it has an effect on property and the owning of land, is in order. Having a debate almost entirely about housing and the provision of social housing is not in order when discussing the Bill.

--- Later in debate ---

[Daniel Zeichner (Cambridge) (Lab)]

I acknowledge, as have others from both sides of the House, that TfL, like many other public bodies, is trying to deliver savings against a tough backdrop. We recognise how difficult that is at a time of deep spending cuts, and we all want TfL to be able to utilise its unused assets, but we think it should be done without damaging future transport provision and in a way that works with local communities.

The Minister delivered a eulogy on the joys of travelling in London that I am not sure all our constituents would recognise, so I make her an offer—she referred to a white van: would she like to join us on our pink bus for a tour of London so that her eyes might be opened to these very joys? [Interruption.] We’ll stick with the pink bus.

In 2013, TfL’s operational funding was slashed by a quarter, which, combined with earlier funding reductions, has required it to identify £16 billion of savings by 2021. We have asked the Government for an insight into what is going to happen next, but they are keeping shtum about next week. It is no great secret, however, that the Department for Transport’s budget is facing another deep cut—perhaps about 30%. We do not yet know what the consequences will be for TfL, but it is hard to see how they might be positive. So we appreciate the difficult background against which the Bill is being brought forward—it has been coming forward for a long time—and we understand TfL’s desire to maximise the value of its assets and to increase its revenue to reinvest in the capital’s transport network, but we are deeply concerned about some aspects of the Bill and are disappointed by the lack of progress made during the long period that has elapsed since it began its slow progress in the last Parliament.

TfL, caught, like so many bodies across the country, between a rock and a hard place, faces difficult spending decisions. With some 5,700 acres of land and more than 500 major potential development sites, it is one of the capital’s largest landowners. As we have said, Labour supports TfL earning revenue by utilising its underused facilities, but we have to be absolutely sure that such activities do not risk having an adverse impact on the current provision of transport services and, importantly, on TfL’s ability to expand transport services in the future. We do not want it rushing to sell its assets, given that we have to build a future transport system for the city. We saw the same issues in my city of Cambridge: had we rushed into the same decisions a few years ago, some of the excellent initiatives there would not have been possible because the land would have gone.

The changes must allow us to meet increasing demand. I heard your warnings, Madam Deputy Speaker, about discussing housing, but Labour Members’ points about the desperate need for affordable housing in our city are real. When we have a public landowner with so much resource, it is hardly unreasonable for us to raise these issues, and it is right that we demand a commitment to maximise affordable housing in developments in which TfL has a stake. For goodness’ sake, if TfL is not going to do it, who in this city is going to do it, if people on the public side are not going to stand up for our citizens?

[Andy Slaughter]

My hon. Friend is making a very considered speech. He identifies first that we expect TfL to run a proper transport system and, secondly, that if TfL as a public body is quite properly going to develop land, it must be done in the public interest. That is not what the Bill provides. Given that neither the Minister nor the sponsor was able to justify the Bill in any terms, does my hon. Friend agree that it should not be revived in this Parliament?

[Daniel Zeichner]

My hon. Friend is, of course, absolutely right that at the heart of this debate is the issue of whether public bodies exist just to make a quick buck or to act in the public interest. On the Labour side, we understand that public bodies need to exercise some responsibility in the long-term interest of our citizens.

Let me return to my point. It is TfL’s proposal to enter into limited partnerships with private companies in order to develop its land and increase revenue that is at the heart of tonight’s discussion. That is the aspect on which I shall focus most of my comments.

Let me first reflect on the controversial developments at Earls Court, to which several Members have unsurprisingly drawn our attention. It exemplifies the problems that clause 5, which would allow TfL to enter into limited partnerships, would bring about. The dismantling of Earls Court exhibition centre to make way for, exactly as we have heard, totally unaffordable flats in what some have described as London’s worst major regeneration scheme, is the result of an agreement between TfL and a private developer, Capital & Counties. Our concern is that aspects of the Bill make it more likely that TfL will use limited partnerships more extensively for more ventures, based on the model of the Earls Court development. Let us reflect for a moment on what that might mean.

Just looking at this development within the Earls Court project area, facing prospective demolition are the Gibbs Green and West Kensington housing estates, containing 760 homes. Labour Members continue to watch closely the discussions about the future between Capital & Counties and Hammersmith and Fulham council. According to the council’s own consultation in 2012, a huge majority—80%—of residents oppose demolition. Hammersmith and Fulham’s Labour leader Stephen Cowan has described the scheme for the redevelopment of the estates, which was agreed by the predecessor Conservative administration, as

“a bad deal for residents”—

and it seems that the residents agree.

The issue goes beyond housing. Just a few weeks ago, the 1,300 tonnes roof of Earls Court exhibition centre was removed and there have been justifiable fears about asbestos exposure and worsening air quality in the area as a result. The consequent health impact of the proposed demolition on nearby residents is clearly a cause for concern. Let us be clear: we want improvement and regeneration, but with the consent of local people, not at their expense and not while private property developers obstinately stick their fingers in their ears and wilfully ignore local objections.

[Andy Slaughter]

I would like to thank my hon. Friend for highlighting the issue of Earls Court. I have the fortune to have both the Earls Court development site and the Old Oak site—the two sites most mentioned today—in my constituency. What is being proposed by TfL and Network Rail amounts to a terrible deal for residents, but also for TfL itself. Despite being the freeholder of the land in Earls Court, it is ending up with a 37% stake—evidence that TfL does not do good deals and that the developer always wins.

[Daniel Zeichner]

My hon. Friend makes a very good point that a number of other Members have made: we are not convinced that TfL gets good deals, so why should we make it easier for it to make even less good deals in the future? We worry about that.

Our fear is that the really contentious clause 5 will make it still harder for local people to have influence over major decisions that affect their community. Our view is that regeneration is much better done from the bottom-up, with the assent of those who will be most directly affected—not top-down. Given that the land has already been sold off, the Earls Court development seems to be a bit of a done deal. What we seek to prevent are further lopsided private-public agreements that steamroll over neighbourhoods in the name of regeneration. We understand that TfL wants greater commercial freedoms, but those freedoms cannot come at the cost of denying a voice to ordinary people in London.

The core of the issue is the imprecise nature of the limited partnership itself. A partnership of that kind is not a distinct legal entity, and a lack of clarity surrounds the roles that would be played by each party in the partnership, where responsibility and accountability would lie, and who would really benefit most, the private developer or the public. We are advised that a limited partnership is able to change its general partner, but the partnership agreement would be unlikely to be made public, and its terms would not be open to public scrutiny. To be in the public body interest, genuine partnerships need far more transparency and accountability.

Furthermore, unless it is agreed for a fixed term, a limited partnership will be at will. A limited partnership at will may be dissolved on notice by a general partner, but, unless the agreement provides otherwise, not by a limited partner, which TfL is likely to be. Limited partnerships clearly vest a large amount of risk in their ventures, and we do not believe that these issues have been properly addressed. There is a real danger that TfL would be taking very large risks—indeed, unlimited risks. We do not think that it has considered carefully enough the long-term impacts of introducing powers to enter into such partnerships. For those reasons, we are cautious about the potential precedent, and we believe that the Government should also assess very carefully the appropriateness of other public transport authorities’ entering into limited partnerships.

Some of my hon. Friends have made powerful points. Much of what was said by my hon. Friend the Member for Islington South and Finsbury (Emily Thornberry)—who is no longer in the Chamber—hit the nail on the head. She was particularly critical about the prospect of a partnership’s changing at some future stage. It was telling that, when she challenged Conservative Members to explain how the process might work, they looked thoroughly uncomfortable and were unable to provide any reassurance.

I think that what my hon. Friend said about the price of a flat being £826,000 was one of the most telling comments that we have heard tonight. It told us so much about the current crisis. I feel deeply about that crisis, being an almost outer-outer London Member. Cambridge, which I represent, reflects all the attributes of the London housing market nowadays. [Interruption.] These are serious issues. Conservative Members are chuntering away as though it did not matter that people cannot afford to live in our great cities, but it does matter. The point that we are making is that if public bodies like TfL do not take this seriously, we are not relying on anyone else to do it.