Transport for London Bill [Lords]: Revival

Daniel Zeichner Excerpts

Monday 16th November 2015 Commons Chamber

[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.

[Catherine West]

My hon. Friend has made a valid point. Conservative Members are making light of what is the most important issue in London. Does he agree that it is outrageous that people need an annual income of £75,000 to be able to afford to rent a property in Finsbury Park—not Chelsea—for their families? [Interruption.]

--- Later in debate ---

[Daniel Zeichner]

My hon. Friend is absolutely right. I hear Conservative Members saying, from sedentary positions, that these are spurious points. I must tell them that for the hundreds of people who marched through my city of Cambridge at the weekend, it is not a spurious point that people cannot afford to live in our great cities. It is not a minor point in terms of our future economic prosperity either, because unless people can afford to live in our great cities, that future prosperity is not assured, for Cambridge or for London. These things really matter.

[Richard Burgon (Leeds East) (Lab)]

Does my hon. Friend agree that the lack of concern shown by Conservative Members for the consequences of the Bill may be explained by the fact that, during Prime Minister’s Question Time a few weeks ago, the Prime Minister said that an appropriate price for a starter home was up to £450,000?

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. The hon. Gentleman was not in the Chamber when I made it very clear that we were not discussing housing. We are discussing Transport for London, and housing is tangential to that. The hon. Member for Cambridge (Daniel Zeichner) is absolutely in order when he is talking about clause 5.

[Daniel Zeichner]

Thank you, Madam Deputy Speaker.

Our worry is that, as a major landowner in London TfL, has a real responsibility. That is why Opposition Members have made it so clear that we feel that once that land is gone, it is gone forever, as my hon. Friend the Member for Hornsey and Wood Green (Catherine West) put so well. That is a very powerful point. She also pointed out that we have a deep unhappiness about these limited partnerships. She put that very well, too—partnerships with who knows who; the risk being nationalised, the profit being privatised. That point is absolutely right.

I enjoyed the contribution of my hon. Friend the Member for Wansbeck (Ian Lavery), whose ability to smell a rat at 300 miles is legendary. He, too, has spotted exactly what is going on in this Bill.

I also endorse the comments of my hon. Friend the Member for York Central (Rachael Maskell). She pointed out that the financial consequences of this Bill are very poorly explained, which gives us yet further cause for concern.

We appreciate that TfL needs to be looking at a long-term strategy for London’s transport infrastructure. It is absolutely right to do so; it is its job. But there is a real fear, which has been raised by many of my hon. Friends as well as by trade unionists and London residents, that elements of this Bill would lead not to a long-term investment strategy, but to profiteering in the short term on property development, an outcome which is totally unacceptable.

As a number of my hon. Friends have said, we do not feel the way the powers provided in this Bill would be used has been scrutinised adequately, and we are not assured that local councils and communities will be properly protected.

I think we all recognise that this Bill has been on something of an odyssey through Parliament over the years, but we are not persuaded the proposals in clause 5 should ever make it to Ithaca—that is a reference for the good Mayor to pick up. Given the bad feeling generated over this Bill for years, it is now time for TfL to reflect, go back to the drawing board and bring forward new legislation in this Session that we trust will command greater consensus and confidence and genuinely allow TfL to utilise its assets in ways that are consistent with the wider long-term public good.

[Bob Blackman]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.