Transport for London Bill [Lords]

Daniel Zeichner Excerpts

3rd reading: House of Commons & Report stage: House of Commons & Report stage & 3rd reading
Tuesday 12th April 2016 Commons Chamber

[Mr Goodwill]

Her Majesty’s Government believe that, rather than strengthening the Bill, the hon. Gentleman’s amendments have the effect of watering down the Bill’s provisions or making it more difficult for TfL to use them.

I also note the amendments tabled by my hon. Friend the Member for Harrow East (Bob Blackman) to remove clause 5. The clause would have enabled TfL to join with others in setting up limited partnerships. However, it had been amended, following scrutiny of the Bill by the Opposed Private Bill Committee, to provide that the Secretary of State must consent to the formation of the limited partnership by way of an order debated by both Houses. Given the burden that that would have placed on both Parliament and my Department, and the fact that it would have made it difficult in practice for TfL to enter into any limited partnerships, we support the principle of these amendments. I understand why they have been tabled and support them, perhaps slightly reluctantly.

We have already spent a lot of time talking about these amendments—indeed, we have spent a lot of time talking about this Bill altogether. I will therefore quickly conclude my remarks so that we can make progress.

[Daniel Zeichner (Cambridge) (Lab)]

I think it is fair to say that this Bill has had an arduous journey through both Houses; a petition to introduce it was presented to Parliament on 29 November 2010. Plenty of people have aged during its passing—some of us visibly. One who has not is my hon. Friend the Member for Hammersmith (Andy Slaughter); I pay tribute to him as he has clearly improved the Bill during these lengthy discussions. I also pay tribute to my hon. Friends the Members for Harrow West (Mr Thomas) and for Brentford and Isleworth (Ruth Cadbury) for their contributions tonight.

Let me take a little time to deal with the amendments that my hon. Friend the Member for Hammersmith has tabled, as they deserve detailed responses. New clause 1 would ensure that neither TfL nor any subsidiary of TfL would be able to

“lease land to third parties which:

(a) has been used in the preceding 10 years,

(b) has been considered by TfL in the preceding 10 years as suitable, or

(c) is adjacent to land in use or in use in the preceding 10 years,

for the provision or maintenance of transport services for passengers.”

That would safeguard significant, useful land from being leased to developers for private profit at the expense of public transport passengers—those who rely on London’s transport system in their everyday lives. However, it would not prevent land from being sold; TfL already holds the power to do that.

The new clause would also compel TfL, or any subsidiary of TfL, to carry out “a public consultation” before entering into a contract involving the development of land for anything other than the provision or maintenance of transport services for passengers. A process of consultation before using TfL’s land for anything besides transport services is very important, to make sure that local communities have their views and voices heard. The development of land should come from the bottom up, rather than the top down, and with the backing of local people. One need only look at the Earls Court development, for which TfL leased out its assets, to see why my hon. Friend believes that prior consultation before lease and development is so important.

Let me turn to clauses 3 and 4. An insertion to subsection (1) of clause 4 that the consent of the Mayor may be granted to a subsidiary of TfL only after the Mayor has consulted, and published a report of such consultation with, a variety of bodies, including the London Assembly and the London boroughs, is surely welcome. Discussion and collaboration with a range of stakeholders will ensure that a balance between public and private interest is retained. Similarly, the insertion into clause 3 that TfL must consult the Greater London Assembly and publish the report provides greater accountability and transparency. That is important, although we must also beware that the measures imposed on TfL do not become draconian.

A balance must be struck between scrutiny and freedom, and while TfL must act in the public interest, it should also not be restricted more unfairly than other public and private sector bodies. We are sympathetic to the aims of my hon. Friend the Member for Hammersmith. He, along with other Members, has campaigned tirelessly to ensure that this Bill provides the best outcome for Londoners. We are grateful that these amendments will give Ministers and the Bill promoter the opportunity to discuss further provisions in the Bill and to alleviate any remaining concerns, and I welcome their thoughts on that.

Let me turn now to the vexed question of the removal of clause 5, which I understand will happen and which we advocated. Undoubtedly, it was the most controversial element in the Bill, which in our view would have risked TfL entering into opaque limited partnerships. It is quite understandable that, although the clause has been withdrawn, some of my hon. Friends still have reservations about certain elements of this Bill, which is why they have a continuing desire to tweak its text—not least because of the bitter experience of the Earls Court development, to which frequent reference has been made tonight.

With TfL potentially morphing into the role of property developer, I quite understand why my hon. Friends remain concerned and seek reassurance on how new powers will be used. Even without clause 5, these are still significant changes, with significant implications for local councils and communities as TfL comes to exercise these new powers. However, we are pleased that, following the strong objections from Labour Members expressed in previous debates, clause 5 is to be withdrawn.

I must also mention the context against which this Bill has come to fruition. Transport for London recently said that, from 2019, its objective is to cover all of the operational costs of running the tube and bus networks in London through non-Department for Transport grant sources of income. It says:

“We have planned for some time to achieve operational breakeven by running our business more effectively and efficiently.”

That operational independence—for want of a better word—is happening far sooner than anticipated. TfL says that its overall income is being reduced by £2.8 billion over the period to 2020-21. Its resource grant from central Government, worth around £700 million annually, will be completely wiped out by the end of the decade. I would like to stop momentarily and point out, as I have done previously, that this means that London will be the only major European city transport network that will operate without an operational subsidy from Government. The Campaign for Better Transport put it succinctly:

“Almost nobody anywhere in the world runs a sizable public transport network without”

subsidies.

It could well be said that this Conservative Government are cold-shouldering our capital’s transport system. TfL is keen to limit the damage.

[Mr Goodwill]

The hon. Gentleman is talking about subsidies from the Government. Does he not agree that these are subsidies from taxpayers? They are paying for the subsidies.

[Daniel Zeichner]

That is a fine distinction. Most of us understand that the reason we pay our taxes is for exactly the kind of high quality transport system that a capital city such as London needs, and it is a huge risk that this Government are taking. The Government are forcing TfL to limit the damage, and they are using ingenious means and utilising existing assets to do so. The Budget indicates that there will be a move towards the full retention of business rates by local authorities, and we welcome the ability of local councils to have control over funding, but this is uncharted territory and we should be in no doubt about the risks to our transport system in London—risks that are a direct consequence of the political choices of this Government.

We want TfL to be modernised and to become a highly efficient public sector organisation. TfL has been making savings, some very difficult and controversial, but in its annual budget in 2014, TfL said that it is

“becoming progressively more difficult to achieve this without compromising our core services.”

This pattern of cuts is visible not just in the capital, but across the country. Cuts to local authority budgets have been extreme, leading the Local Government Association to point out that even if councils stopped filling in potholes, maintaining parks, closed all children’s centres, libraries, museums, leisure centres and turned off every street light they would not have saved enough money to plug the financial black hole they face by 2020. Department for Transport resource funding has been cut by 37%, from £2.6 billion in 2015-16 to £1.8 billion in 2019-20, representing a real terms decline of 71% since 2009-10.

Let us consider the fact that last year a record 8.6 million people were living in London. By 2030, that figure is predicted to reach 10 million. That is the pressure under which TfL finds itself. We are not ideologically opposed to TfL’s maximising the value of its assets to increase the revenue seized by the Treasury. They do what they have to do, and using resources efficiently is important to keep our capital city running.

On Second Reading, my hon. Friends and I expressed concern about certain measures in the Bill, including clause 5, which we have discussed. We are happy with the principle and understand the necessity of TfL’s having greater commercial freedoms, but the implications of those so-called freedoms were problematic. The controversial Earls Court development, a joint venture between TfL and the private developer Capital & Counties, set a worrying precedent for further public-private partnerships. Clause 5 would allow TfL to enter into limited partnerships with private property developers. Those partnerships are vague in legality and opaque in accountability.

I said on Second Reading that we must consider carefully the long-term impact of introducing powers to enter into those partnerships. We are reassured both by the fact that TfL has noted those concerns and by its decision to table amendments to remove clause 5 and references to limited partnerships from the Bill. It is encouraging that our opposition to that problematic part of the Bill was taken into account, and we are pleased with the outcome.

I also spoke on Second Reading about the importance of putting public needs above private profit. Property development to increase TfL’s revenue must not happen without the backing of local communities—those who are affected most directly. Those who bankroll projects should not subsequently be able to steamroller over local people. TfL is obliged to obtain the consent of the Mayor to dispose of an interest in land by sale or by granting a long-term lease. If that land is operational or has been in the previous five years, the Secretary of State for Transport must give his or her consent. It must be noted, however, that that did not prevent the unhappy saga around the developments at Earls Court from unfolding. The balance between the provision of affordable homes on the one hand, and maximising revenue to reinvest in transport, is an extremely significant and fine political judgment. We will be watching closely to ensure that proper balance is secured.

In conclusion, as clause 5 has been shelved, I think we are all hopeful that TfL can now move forward. We are keen to see how TfL uses its commercial freedoms to develop and improve the transport network that keeps our great capital city moving, but we will be watching closely to ensure that profit is used to benefit the public, and not the other way round.

[Bob Blackman (Harrow East) (Con)]

I support amendment 1, and consequential amendments 2 to 6, which I tabled on behalf of the promoter.

This is a private Bill promoted by Transport for London, as has been said. It was submitted to the House of Lords in November 2010, and reached this House on 4 March 2014. It took rather a long time to get through the other place. The Commons gave the Bill a Second Reading on 9 September 2014, and it was considered by an Opposed Private Bill Committee on 13 January 2015, where clause 5 was substantially amended. I shall come on to discuss that briefly.

A debate on the consideration stage took place in the last Parliament on Monday 16 March, and those of us who were Members then remember that as an epic occurrence. Many amendments were tabled, and the time allocated for debate expired before proceedings could be brought to a conclusion. Following the agreement of both Houses to the revival of the Bill in this Parliament, consideration was first proposed on 22 February 2016, but there was an objection, resulting in the need for today’s debate.

The promoter, TfL, has considered carefully the strength of feeling expressed in the previous debate in the House about clause 5. If the clause was introduced, it would allow TfL to engage in limited partnerships. TfL recognised, notwithstanding the amendments to the clause made by the Opposed Private Bill Committee, that serious concerns remained about the possible exercise of powers conferred by the clause and about the lack of transparency arrangements, which was raised by objectors. Accordingly, TfL took the decision not to press for clause 5 to stand part of the Bill. The amendment to which I am speaking would leave out that clause, and the further minor amendments grouped with it are consequential upon the removal of clause 5. I understand that that is accepted across the House.

--- Later in debate ---

[Daniel Zeichner]

You will be pleased to hear, Madam Deputy Speaker, that I do not intend to repeat the substantial points I made in my earlier contribution—[Interruption.] That is no doubt the biggest cheer of the night. There is always a but, however, and I shall reiterate one or two minor points. Let me first put on record the thanks of Labour Members for the sterling efforts of our hon. Friend the Member for Hammersmith (Andy Slaughter), who has staged a heroic fight over many months and years on this issue. As a consequence, we end up with a better Bill.

Let me return to my earlier point: the pressure on TfL is clearly a consequence of the substantial cut in support from the Government in the recent Budget. That has caused a significant shift in the way in which TfL operates. I hear what others have said about its capacity to use resources well and make the best possible use of its assets, and we hope that their confidence is justified, but we also share the misgivings expressed by my hon. Friends about some of the potential bedfellows whom TfL may seek out. This becomes a much wider and more complicated debate about the role of public authorities such as TfL at a time when so many people in our city are experiencing such acute housing problems. Labour Members, certainly, feel that TfL’s most important role is to keep our capital working and moving successfully.

Nevertheless, we have a better Bill, not least because of the withdrawal of clause 5, which, in our view, would have led us down a dangerous route. On the basis that we have secured some improvements, let us end the evening on a positive note. We hope that TfL will be able to take the opportunities that some Members have described, although we ourselves still have some reservations.

Question put and agreed to.

Bill accordingly read the Third time and passed, with amendments.