Transport for London Bill [Lords]: Revival

Ian Lavery Excerpts

Monday 16th November 2015 Commons Chamber

[Ian Lavery (Wansbeck) (Lab)]

I am not a London MP—

[Claire Perry]

No? You’re kidding!

[Ian Lavery]

I think the Minister has recognised that fact from my accent.

I am not a London MP, and I believe it is really important to understand that it is not just London MPs who have a view on this serious issue. Although I live 300 miles away, I can smell a rat. This is not just about meandering on about Transport for London; it is much more detailed than that. It involves the housing crisis. It involves housing that is really unaffordable. Coupled with the issue faced by TfL, this is about the casino world of property development rather than a conscious decision by that wonderful public service to improve the transport infrastructure of our great capital city, and that really does pose a great threat. The deal being sought under clause 5 of the Bill could expose huge swathe of public finance to unlimited liability.

The Minister has said on more than one occasion that Transport for London is doing a fantastic job and that it is one of the best companies in the world, operating one of the finest transport systems in the world, but is it not a fact that the Government reduced its operational funding by 25% in the 2013 spending review? That has put a huge financial burden on TfL.

[Mr Gareth Thomas]

In the light of what my hon. Friend has just said, does he understand the surprise felt by London Members on hearing the Minister talking about the benefit of lower fares that the Bill will bring? Part of the context for the Bill is that fares for journeys between outer London and central London—from Harrow to Baker Street or Westminster, for example—have risen by 60% under the present Mayor.

[Ian Lavery]

I fully agree. The fares issue was absolutely outrageous. Does anyone really think that, if this Bill is passed, the impact will be a reduction in fares in central London or the outskirts? By the way, I am part of this as well, Madam Deputy Speaker. Just because I come from a different part of the country and do not live in London does not mean that I should not have a say.

[Mr Thomas]

My hon. Friend should not feel intimidated because he is not from London. He would be very welcome to come to Harrow, particularly to use Harrow on the Hill station, which is crying out for investment and for the sort of lifts that my hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) has plenty of in the Caledonian Road station—she has four and we do not have any. My constituents have been waiting for an extremely long time to have that sort of accessible service. I do not see this Bill delivering that service—I hope I am wrong, but at the moment I do not see it. I hope that my hon. Friend might be persuaded to come not just to central London where we are now but out to Harrow to see for himself the sort of investment that we need in Harrow on the Hill.

[Ian Lavery]

I thank my hon. Friend for his intervention. Of course I welcome the opportunity to visit his constituency to see what he has described.

[Emily Thornberry]

While my hon. Friend is doing a tour of London’s stations, perhaps he could visit Angel tube station, which has the longest escalator in the country, but no lifts. In fact, a Norwegian student skied down the escalator, which my hon. Friend can see on YouTube. Disabled people are unable to get to the Angel, because there are no lifts available for them.

[Ian Lavery]

I have never had so many kind invitations in my life. I will enjoy the two visits that have been lined up. I wonder whether there is a third such visit.

[Catherine West]

My hon. Friend could not possibly fail to come to Finsbury Park, because that leads into the Stroud Green part of my constituency. Indeed, we have a problem with step-free access. Perhaps I will use this opportunity to lobby the Minister on that matter. We have long been promised step-free access at Finsbury Park. We have also been promised proper ticket barriers; ours is the only station in London without proper ticket barriers. My hon. Friend is welcome at any time to join us in Finsbury Park.

--- Later in debate ---

[Ian Lavery]

I am pleased that you said that, Madam Deputy Speaker, rather than me making that determination. Of course I will go to Finsbury Park station on my visit in the not too distant future. I have listened to all the experts—the people who live in the city and the Members of Parliament who discuss this issue with constituents. It has just been said by colleagues that there is a huge underinvestment in the transport system in London, and there is no doubt about that.

I mentioned the fact that there had been a 25% reduction in operational funding, which was announced in the 2013 spending review. Some £16 billion of savings were also identified to be made by 2021. That is enormous, and will have a hugely detrimental effect. How can we fix the stations to which my hon. Friends refer if Transport for London has not got the finances to do it? That is what the Bill is about. It has been mentioned that the spending review next week could see a further cut of £700 million from the Transport for London budget. That will be a disaster. This is a world class city in which people live. The tourists who come to this fantastic city have to use a system that is totally and utterly underfunded. That does not portray us as the best capital city in the world.

What is the history? TfL promoted a Bill in the last Parliament that would give the organisation new financial powers. The Opposition could live with parts of this Bill, following, of course, more debate and discussion. Parts of it are vaguely acceptable, but the main problem—the crux of the matter—lies in clause 5.

[Cat Smith (Lancaster and Fleetwood) (Lab)]

As a fellow non-London MP—

[Cat Smith]

It is a shame, as my hon. Friend says.

Does my hon. Friend the Member for Wansbeck (Ian Lavery) share my concern? As Peter Hendy, who was perhaps the architect of the Bill when it began its journey at TfL, has now moved to the position of chairman of Network Rail, the provisions in the Bill, which would immediately affect London, might go on to affect his constituency and mine in the north of England.

[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.

[Catherine West]

Will my hon. Friend accept as an example what happens now in the private rented sector, as opposed to the possibilities we might have had under a social housing deal? An income of £75,000 is needed for a household to rent in Finsbury Park. This is not Chelsea: in Finsbury Park, a family with three children wanting to rent in the private sector needs an annual income of £75,000. Is not that why we have such a desperate need for affordable homes? TfL has proved severely wanting as regards the Earls Court scheme and other schemes and that is why we are so desperate to stay in the Chamber at this late hour debating this important matter.

[Ian Lavery]

I thank my hon. Friend for that intervention; £75,000 is a king’s ransom to many people. It is not affordable in any way, shape or form.

[Emily Thornberry]

I can give my hon. Friend another example of public land that has been frittered away by the Mayor of London: Mount Pleasant, which used to belong to Royal Mail. It was privatised and has since been used for luxury flats. There are no affordable homes there for Islington residents. It is a disgrace. The Mayor of London railroaded that change through, in the teeth of united opposition from local people who are desperate for housing.

[Ian Lavery]

I thank my hon. Friend for that fine example. It appears that there is huge potential for land development in central London. Property developers snap up public sector properties for luxury homes, driving those who cannot afford to buy them out of central London. This will keep going, believe me; that is what is happening in the capital. She mentioned that in her constituency alone, there are 21,000 people on the housing list. How will the proposal help any one of them, in any way, shape, or form? How many children are associated with those 21,000 people? How many people just want a decent property to rent? Many people cannot even afford to rent these properties, but big property dealers snap them up. Someone mentioned gangsters, I think with tongue in cheek, but international corporations and individuals with money to burn will buy these properties in the city. They will be snapped up in seconds. That land, which is really owned by, and should be for the use of, the public—constituents—in London, will be lost for ever.

[Mr Gareth Thomas]

With the exception of my hon. Friend the Member for Eltham (Clive Efford), who is no longer in his place, I think I am the only Labour Member from outer London taking part in this debate. [Interruption.] I beg the pardon of my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury). There is a further concern for those of us from outer London who have an open mind about development on TfL sites. I think that the Harrow on the Hill site might benefit from development, but my worry is that if the Bill goes through without further assurances, it will concentrate TfL’s mind purely on developing zone 1 and 2 sites. Development of outer London sites, where investment in access and other things is needed, might be delayed even further, because the Bill will be seen as a gold mine so long as there is a focus on zones 1 and 2.

[Ian Lavery]

I fully agree with my hon. Friend. Gold-diggers with money to burn will buy the properties, and will not use them at all.

[Andy McDonald]

We talk about outer-London MPs, and there are no more outer-London MPs than those from the north-east and Scotland. This is not just a matter of London votes for London laws; it is a matter for everybody. What we have been seeing in this capital city are safety deposit boxes in the sky, with nobody living in them. Those properties could provide proper housing for the population of London, rather than investments. Does my hon. Friend agree that that is indicative of the way the Government are going? I do not know whether it is true, but I strongly suspect that a contractor might be able to get away without even putting proper finishes on such properties, because nobody is ever going to live in them.

[Ian Lavery]

I thank my hon. Friend. That is the point that I have been making from the outset. The essence of communities in the capital city and elsewhere across the country is affordable properties. Nobody would disagree that we also need private properties. The right balance is needed, and the right balance is different in different areas. But if a huge swathe of properties without the proper finishes is bought up by property developers who live across the globe, what will that contribute to the local economy? Nothing. It will lead to the development of ghost towns in this wonderful city. That is something we must all try to avoid.

The main point of contention, as I mentioned, is clause 5, which refers to limited partnerships. Clause 5 would give Transport for London a new power which would enable it to enter into limited partnerships with private developers and to incur unlimited liabilities. That is a huge gamble with public funds. It is a casino-type economy, which we cannot afford when the economy generally is not at its best. Not only that, but if the Bill is passed, Transport for London could undertake wider activities than it is permitted to undertake now.

[Andy McDonald]

My hon. Friend rightly focuses on clause 5. Does he agree that the reason there is such freedom in the arrangement, as opposed to the return that is going to be made, is self-evident? If somebody is given the maximum possible return, it is because of the freedoms that that delivers. There is a lack of transparency and a lack of accountability in that arrangement which is utterly dangerous. Does my hon. Friend agree?

--- Later in debate ---

[Ian Lavery]

Indeed. Although the Bill is not long, it lacks transparency. A limited partnership differs slightly from a limited liability partnership. A limited partnership is a form of agreement between parties, not a distinct legal entity, with unclear consequences for public transparency measures, such as the Freedom of Information Act. In the other form of partnership, the general partner assumes unlimited risk, whereas the secondary or limited partners are liable only for the value of any investment they make. The limited partner may not be involved in the management of the partnership.

Although it is assumed that Transport for London would primarily take the role of a limited partner, the Bill would not prevent the organisation from acting as a general partner. If it assumed the role of limited partner, Transport for London would not be able to end the arrangement without the agreement of the general partner, as has already been mentioned.

[Catherine West]

Does my hon. Friend agree that those on the Labour Benches would feel much more generous towards the Bill had there been examples of Transport for London achieving what Londoners want, which is 50% affordable housing on all such deals? We got that in the case of Earl’s Court, rather than 10%. We need genuinely affordable homes—not the current definition of “affordable”, which is 80% of the market rate. We know that 80% of the market rate in London is completely unaffordable for the average earner, who is on about £28,000, £29,000 or £30,000 a year.

[Ian Lavery]

That is another excellent intervention that explains what a lot of people in this city are experiencing.

[Mr Gareth Thomas]

May I underline the concern that my hon. Friend the Member for Hornsey and Wood Green (Catherine West) raised? For those who read the proceedings, as one or two poor souls in Transport for London will have to do, it is important that they take full note of the concern, at least among Labour Members, about the lack of appetite from Transport for London for genuinely affordable housing. If they gave us some reassurance on that point, perhaps the Bill would have a chance of making progress. Old Oak Common, as my hon. Friend the Member for Hammersmith (Andy Slaughter) so ably demonstrated, is a huge factor that hangs over the Bill and is responsible for many of the concerns that we are hearing from the Labour Benches.

[Ian Lavery]

I am not sure I would be comfortable with assurances from the likes of Transport for London on the split between private and public. I have the simple view that Transport for London, as its name suggests, should look after the transport systems in London. It should involve itself in upgrading and updating the transport infrastructure in London, and perhaps not in property development. I would draw the line there. Perhaps my view is wholly different from that of other people on that issue.

[Emily Thornberry]

That is a point well made, but if there is land that can be developed, I, for one, would not stand in the way of that. If we get a promise from TfL that half the property will be social housing—that, frankly, is what affordable housing means in inner London—it may well find that it has more friends than it thinks it does. At the moment, we are nowhere near that. In fact, we have the exact opposite. We are told that zones 1 and 2 will not even have what is laughably called affordable housing.

[Ian Lavery]

That is interesting. It shows that Labour Members are open to the potential development of land, as long as assurances are given by Transport for London that guarantee the split of the asset. I am not sure whether I would accept such guarantees, but it is important that people recognise that if guarantees were given, there would be room at the table for much more consultation and discussion.

[Ian Mearns]

A question has to be posed if there is no guarantee from Transport for London. There is no doubt that London has a housing crisis, particularly in the affordable housing sector. If not Transport for London with its property portfolio, who will provide the land for the much needed affordable housing that must be provided for the workers of London?

[Ian Lavery]

That raises a whole new question that has not been discussed by anyone on either side of the House. It is a valid question that needs answers.

[Ms Buck]

I, like a number of colleagues, am keen to see land released for development, as long as it is fair and balanced, includes affordable housing and does not substitute for significant cuts in spending on services. Does my hon. Friend agree that a number of people are very jaundiced by the sale of police stations by the Mayor of London? Two police stations in my constituency were sold off, but that did not provide affordable housing; nor did it lead to an investment in front-line policing, which we were told would be a guaranteed consequence of the property sale. We are therefore very jaundiced at the idea that the experience with Transport for London will be any different.

[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?

[Claire Perry]

I always enjoy the hon. Gentleman’s speeches, but I just want to reassure him on a couple of points. First, for TfL to participate in one of these limited partnerships, the Secretary of State’s consent must be sought, and that has to be done through the affirmative resolution procedure. Secondly, before the House gets carried away vilifying limited partnerships, let me point out that the Electoral Commission suggests that since 2010 the Labour party has accepted donations of £3.1 million from limited companies and limited liabilities partnerships—about 5% of its donations. Let us not get carried away vilifying a corporate structure that is used perfectly legitimately right across the country, and, indeed, that has raised funds for the Labour party. The hon. Gentleman should accept the reassurance that the Secretary of State has to sign off any of these partnerships that are put together.

[Ian Lavery]

I thank the Minister for that intervention. I am not criticising limited partnerships but the potential for bad limited partnerships, and I am wondering whether it is in the best interests of people in the capital city for transport in London to become part of these limited partnerships. She mentioned the donations that the Labour party has received from limited partnerships. I wish I had done my homework to find out exactly how much the property developers, rather than limited partnerships, have donated to the Conservative party.

[Andy McDonald]

Is there not also a concern about the stamp duty arrangements that are made on these potential transfers down the track? As I understand it, if those are transferred to the limited liability partnerships there will be an exemption from stamp duty. Does my hon. Friend share my concern that before this debate is out we should hear from the Minister the assessment made of the loss of stamp duty as opposed to the returns that will be got on this deal?

--- Later in debate ---

[Ian Lavery]

I am sure that the Minister will have heard what my hon. Friend says about stamp duty and respond accordingly.

[Claire Perry]

Again, I would like to give some facts. I cannot answer on stamp duty, which is a good point, but let me gently point out that the sector that has donated the most to the Labour party after the trade unions is the property sector, with £2.1 million raised from individuals or companies involved in that business. If Labour Members would stop scaremongering and consider the benefits that these sorts of flexibilities could bring to their constituents, we might make some progress and get this Bill sorted.

[Ian Lavery]

I am not sure whether that was an intervention or another speech, but I thank the Minister.

[Catherine West]

This is not about the private sector per se, but the track record. In a large investment such as Earls Court, 10% affordable homes is not acceptable. The fire station in Clerkenwell closed because the Mayor of London was keen to see posh flats instead of services. Muswell Hill police station closed and is about to be sold for half a dozen posh flats. There is the continual sense that we are being ripped off. Transport providers are not necessarily the best people to be running property developments.

[Ian Lavery]

That point was made by my hon. Friend the Member for Westminster North (Ms Buck), who mentioned that ordinary people in London are jaundiced by the experiences they have had before. The police station or the fire station is bulldozed, there are the luxury flats that people do not live in, and then we have ghost towns, which means that there is a downward spiral in the local economies. The only people who make anything from it will be the property developers.

[Emily Thornberry]

My hon. Friend is making a powerful point. The fact is that our communities are being hollowed out. We do not object in principle to people coming from all over the world to live in London, as they always have done, so long as they do live here—it is buying properties and leaving them empty that is the problem.

[Ian Lavery]

That is a good point. London is a fantastic multicultural community, and we welcome people from all corners of the globe. We welcome them coming here to spend their money—of course we do. What is unacceptable is what the people of London could face if this Bill goes through. Property developers will be coming in, snapping up the land, and giving money to Transport for London that it should have had in the first place if it had not had these huge cuts, with more to come. That is the real issue.

[Mr Gareth Thomas]

My hon. Friends and I have dwelled on the experience of Old Oak Common. One would think that TfL would have learned from that experience and sought to reassure Members about its commitment to building affordable housing in future. In actual fact, it has created an advisory board to drive its property development, and no one on that advisory board has experience of building, developing and owning social housing—

--- Later in debate ---

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. There are several Members who still wish to speak. The hon. Gentleman knows that that was too long for an intervention. He is seeking to catch my eye, but if he makes a very long intervention, his chances of catching my eye go down considerably.

[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.

--- Later in debate ---

[Madam Deputy Speaker]

I did not think so.

[Ian Lavery]

I fully agree with my hon. Friend the Member for Hammersmith (Andy Slaughter). This great city cannot afford TfL’s being speculative and gambling on the property market, which will only benefit people who have the money to buy hugely luxurious properties. Simply put, TfL needs proper funding, not the projected cuts of £700 million. I hope the Minister will say that there will be no further reductions in central Government funding to TfL. It will be interesting to see whether that actually happens.

We need to look after the people we represent. I and the Labour party firmly and clearly believe that this dangerous Bill should be opposed, for the simple reason that it is not about enhancing the lives of people in London or of people who use the capital city, or about enhancing transport infrastructure, whether it be tubes, trains or buses. It is about underfunding a great service and putting strains and pressures on Transport for London to look elsewhere to raise finances so that it can keep its head above water.