CBI lashes Mayor for putting politics before people

Digby Jones, the director-general of the Confederation of British Industry, has launched a scathing attack on Ken Livingstone, the London Mayor, over his transport policies.

Speaking on the eve of the CBI conference, which starts in Manchester tomorrow, Mr Jones attacked the Mayor's attempts to derail the London Underground PPP, saying: "The Mayor is letting wealth creation and job creation in London down."

Mr Jones added: "On the Tube he is letting political ideology and a political scrap get in the way of delivering for London. He is playing a political game and the tennis ball is the ability of people to get to work and the ability to move goods around.

"He's done more about pigeons than people," he added, referring to Mr Livingstone's attempts to rid Trafalgar Square of pigeons.

The attack by Mr Jones comes as the Mayor threatens further legal action in his attempt to stop the £14bn Tube PPP going ahead. Having failed with two previous court actions, he has said he may appeal to the European Court of Justice to overturn a ruling by the European Commission that assistance to the two preferred bidders for the part-privatisation was not state aid.

However, senior Department for Transport officials have dismissed the threats as an attempt by Mr Livingstone to get up to £200m more a year out of the department in his settlement to pay for transport in London.

And the pressure on Mr Livingstone to give up his attempts to block the deal will intensify this week when London Underground will let it be known it is willing to complete part of the PPP deal next month.

Tubelines, the consortium backed by Bechtel, Amey and Jarvis, has already signed off on all the commercial points in its deal to buy the Jubilee, Northern and Piccadilly lines – the equivalent of exchanging contracts on a house purchase.

It will be ready to close the deal financially next month, the equivalent of completion. London Underground has agreed that Tubelines can do this even though Metronet, the consortium that is taking over the rest of the Tube, is not ready to complete its deal.

Indeed, Metronet has yet to reach commercial closure, though it may be able to do so in the next few days.

Metronet, which is backed by WS Atkins, Balfour Beatty, Thames Water and Seeboard, still has to raise about £2.5bn in bond finance to pay for its deal, and the uncertainty has cast a pall over the financing.

The delays have caused massive problems among the bidders, with Amey, WS Atkins and Jarvis being hit by profits warnings and share falls.

Metronet said last month that it would be able to reach commercial closure by the end of this month but would not be able to launch its bond to finance the deal until next year.