---

Crossrail Bill

My Lords, I am delighted that the rules of the House are sufficiently flexible to allow the noble Lord, Lord Berkeley, to make those points despite the expertise and interest which he has. I have not addressed the argument about freight access and other points he mentioned, but he has raised some very important issues. I join others in welcoming the Bill but, as many have said, it is long overdue. I recollect a meeting held, I think, 20 years ago with the then chairman of Crossrail, Sir Christopher Benson, when he was struggling from a small office just off Victoria Street to try to get the show on the road. It seems to be a recurring feature of major infrastructure projects in this country that they take decades for even the most desirable and much needed developments to move from concept to completion. I mention the Channel Tunnel Rail Link, which took from 1987 to 2007 to complete—20 years for something that had been planned to follow on immediately after the building of the Channel Tunnel. I shall refer to the CTRL again in a moment. However, here we are today with the Crossrail Bill. Crossrail has been in contemplation since the early 1980s and is due to open in 2017. I only hope that the Bill does not have to spend as long in the Select Committee of this House as it did in another place. I know the feeling when one has a long involvement in such a project. An honourable Member of another place who, having spent all those years in its Select Committee, said that he felt compelled to volunteer to serve on the Standing Committee as well, and had to be restrained. I want to concentrate the rest of my contribution on what is not in the Bill; namely, the financing arrangements. I am encouraged to do this because both the Minister and my noble friend on the Front Bench had something to say about them. I am extremely grateful to the staff of our Library, who have made available to me some of the documentation of what appears to be a hugely complex package, many of the details of which still have to be worked out; the Minister frankly conceded that. Indeed, I was told when being briefed by Crossrail yesterday that the lawyers are still hard at work putting the detailed flesh on to the heads of terms, and especially on important agreements such as the agreement between the Department for Transport and the Mayor of London’s office, and the agreement between both of those bodies and CLRL, which stands for Cross London Rail Links Ltd, the prospective nominated undertaker. Referring again to the Channel Tunnel Rail Link, there is one remarkable contrast. Ministers have been pleased to cite the CTRL as a precedent for this Bill, but in one respect it was anything but. In the case of the Channel Tunnel Rail Link, the finance package was agreed before the Bill actually got into Parliament at all. With Crossrail, the Bill was introduced nearly four years ago, while the Minister, Ruth Kelly, did not announce the heads of terms until 26 November last year, less than two months ago. She did so in a Written Statement which starts, if I may say so, on an unhappy note: "““I am today placing in the House Library a copy of the ‘Heads of Terms for Crossrail’””." The librarians have told me that no paper copy was deposited in the Library either at the other end or in this House. Where it is deposited is on the department’s website, so the staff have been able to run it off and make copies for me—it is a formidable document. But I find it slightly off-putting when a Minister can put something in a Written Statement when in fact it is not going to happen. Maybe the librarians and I are both wrong, in which case I will apologise, but that is what I was told. The substance of the package shows that not only is it complex, but it is also clear that to take effect, further legislation will have to go through Parliament. In other words, the Bill before us, although very substantial, is actually only part of the story. The finance is envisaged as coming from a variety of sources. As the Minister told us at the beginning of the debate, the cost at 2016 prices is estimated at £16 billion. Of that, the Department for Transport grants will be £5 billion, but the department is also going to, "““be responsible for procuring contributions from the City Corporation and BAA””.—[Official Report, Commons, 26/11/07; col. 4WS.]" I should like to look briefly at those, bearing in mind that it is the Department for Transport which is to be responsible for procuring their contributions. Last October, the City Corporation offered £200 million from its own resources, which by any standards is a very substantial sum. Furthermore, the corporation has agreed to lead—here I quote from a briefing note I have received— "““an exercise which aims to raise a further £150 million in private contributions from the financial City””." The first question I have to ask the Minister is: how far has the City got in raising that £150 million? It has already given £200 million of its own resources; has it been successful in raising this further sum from other sources? I understand that the BAA contribution is linked to the extension out to Heathrow, the Heathrow spur; I do not want to add to what has already been said about that. The question about that contribution is: what is it actually going to be? Has it yet been quantified and agreed, and can one now assume that it is firmly on the table, as it were? The second major slice of the funding, which is put at £7.7 billion, is to come from the Mayor of London through Transport for London and the Greater London Authority. But I turn again to the Written Statement from the right honourable Ruth Kelly: "““The Mayor … has indicated that he would raise this from a combination of debt raised on the back of a new levy on National Non-Domestic Rates in London, TfL prudential borrowing, developer contributions along the Crossrail route and other sources. A letter from the Mayor setting out how he envisages doing so is also being placed in the House Library””." I have a copy of it but it was not in the Library. The Statement continued: "““For TfL to raise this funding, there will need to be changes to existing legislation—both to allow the NNDR levy and to facilitate the planned contribution from developers through a new planning charge””.—[Official Report, Commons, 26/11/07; cols. 4-5WS.]" Therefore, there is much to be done there. I turn to the mayor’s letter dated 4 October addressed to Ms Kelly, from which I note several points. First, the mayor assumes that the new statutory powers will be needed to raise a supplement to business rates across London, not merely on the line of the route but throughout the whole of London. At 2p in the pound on properties with a rateable value above £50,000, he assumes that that will raise £3.5 billion. Secondly, he assumes that this new legislation will need to be in place so that, as my noble friend has already said, the money can be raised no later than April 2010. There is not a lot of time if all the machinery is to be put through by then. Thirdly, the mayor assumes that if the new powers are delayed or prove insufficient, the Government will step in to tide over the GLA with grants and guarantees. However, here the small print is rather important. The copy that I have has very small print indeed and I hope that noble Lords will forgive me if I hesitate over it. Number (iv) of the assumptions says: "““In the event that this””—" that is, the NNDR— "““is delayed for any reason, or that the legislation provides insufficient powers, then provided that the Government is satisfied that appropriate funding from this source will still be forthcoming, the Government will provide an additional grant to the GLA equal to the equivalent amounts that would have been received from such a supplement, and will provide temporary guarantees””," and so on. I hope that noble Lords noticed the proviso, which I shall read again: "““provided that the Government is satisfied that appropriate funding from this source will still be forthcoming””." The obvious question is: when will the Government bring forward the legislation for the extra 2p in the pound levy for the NNDR? However, what will happen if that proviso cannot be satisfied and if the funding from the supplementary rate turns out not to be forthcoming? We must have an answer from the Minister on that. Will there be a further charge on the general taxpayer? I note that this part of the package has already aroused strong opposition—not surprisingly, as people do not like paying extra business rates. The Federation of Small Businesses, the British Chambers of Commerce and the Institute of Directors have declared their opposition to the supplementary business rate in principle, although I think it is fair to say that the British Chambers of Commerce, which is a very responsible body, has recognised that there may be a case for a supplementary rate in special instances. Mr David Frost, the director-general of the BCC, said: "““If, however, Local Authorities are given the flexibility to introduce a Supplementary Business Rate it is essential that businesses are given a vote. If a Supplementary Business Rate is to provide funds for an infrastructure project that business believes is necessary””—" Crossrail may be a very good example of that— "““and if there is a clear project plan with ring-fenced funds tied to the scheme with the money raised being wholly additional, then the business community may well vote yes in a ballot””." Therefore, I have another question for the Minister. Will the legislation make provision for businesses to vote on a proposed supplementary rate? Finally, some of the finance is to come from specific entities that will benefit directly from Crossrail—for example, Canary Wharf and Berkeley Homes in Woolwich—and from developers through a new community planning charge. I thoroughly support that; it seems to be absolutely right. Some years ago, I saw a presentation in Tokyo by one of the banks with substantial property investments. It produced a graph showing the value of land in the vicinity of new railway stations. The graph was astonishing, with very high peaks wherever the buildings were within walking distance of a station. Therefore, it is entirely right that developers with plans neighbouring the new line should pay a significant development charge. It should be linked to the benefit, and no doubt that will happen in due course. I have put several questions to the Minister and I hope that he will have answers to them. I apologise for going on but, in conclusion, I draw the House’s attention to a very interesting publication, which I read last year. I refer to a notable booklet produced by the Institute of Economic Affairs called They Meant Well: Government Project Disasters. It is written by Professor David Myddelton and is a study of six large-scale government, quasi-commercial projects over the past 85 years starting with the R101 airship and finishing with the Dome. In each case, Professor Myddelton describes in detail how serious mismanagement, combined with a lack of clarity about objectives and an unwillingness to be held accountable, led to a great waste of taxpayers’ money. They Meant Well should be compulsory reading for everyone involved in this major Crossrail project. There are many lessons to be learnt. At this point, I would not dream of quoting any of them but they are there to be studied. Crossrail is long overdue. It is an enormously important addition to London’s transport infrastructure. We know that a great deal of care has been taken over the planning, that the skills of the tunnellers and engineers who will build it are being honed and advanced and that new technology for the tunnelling will be used. The detailed complexity of the heads of terms, to which I referred, suggests that very careful forethought is being given to the project. It would be very sad—I hope that it will not happen—if the verdict on Crossrail was ““They meant well””.