The Department of Transport is examining options for the multi-billion- pound sale of one of the capital's biggest landowners, and could produce proposals before the general election.
If the election is earlier than the 1 May date favoured by John Major, a firm commitment to privatising the Tube will figure in the Tory manifesto. But a political storm is already brewing, with the Opposition promising to fight the move "every step of the way".
Sir George Young, the Transport Secretary, has been encouraged by the lack of negative reaction to the idea, first floated by the Prime Minister at the Conservative conference in Bournemouth last October. In his famous shirt-sleeves question-and-answer encounter with delegates, Mr Major claimed that rail services had improved since privatisation. "I would like to see if we can apply these principles to London Underground," he said.
Transport Department officials are now working hard on methods of selling the Tube:
t A single, complete sale of the whole system to one bidder.
t Privatising the lines, stations and signalling as a discrete operating company, on the lines of Railtrack, which took over the infrastructure of British Rail. Services would be put out to franchise.
t Selling off whole lines, such the Victoria, or the Northern "Misery Line", one at a time.
The Tube sell-off could be one of the Tories' most lucrative privatisations, because its land and buildings are worth a fortune. Its listed headquarters at 55 Broadway, Westminster, is probably worth "hundreds of millions", and there are 260 stations with hundreds of miles of track and huge maintenance depots. Total asset value is put at pounds 13bn.
The sell-off plan is sure to provoke a political controversy in the run-up to the general election.
Labour is already planning to raise the issue in the Commons tomorrow when MPs return from their four-week Christmas break. Sir George Young is answering transport questions on the first afternoon of the new session, and faces a grilling by Opposition MPs at the Commons Select Committee on Transport which meets on Wednesday.
London Underground is the oldest, largest and most complex system of its kind in the world. It was begun 134 years ago, and carries two and a half million passenger journeys every day. The system makes a small operating profit, but only survives on public funding for investment and upkeep of ageing equipment.
However, in his November Budget, Chancellor Kenneth Clarke announced cuts of hundreds of millions of pounds in the Underground's annual grant over the next three years, forcing the cancellation or postponement of most of the 400 planned improvement schemes. Any potential buyer, whether of the infrastructure or the train services, would demand massive subsidies from the taxpayer.
Glenda Jackson MP, shadow transport minister, condemned the sell-off plan as "an attempt by the Tories to drive the final nail into the coffin of public transport in this country".
She said: "They have abandoned all hope of generating the investment that the capital's transport system so desperately requires. Labour rejects the argument that it is impossible to provide good-quality public transport services and we will fight these proposals every step of the way."
Party sources said that Labour would put the issue high on its political agenda in the South-east, where many marginal constituencies are dependent on the Underground. "We think the Government has made a mistake," said a policy adviser. "This is a vote-winner for us."
Lew Adams, general secretary of the footplate union Aslef, said: "The Government has washed its hands of investment in a proper railway. The property value alone will attract the worst kind of speculator."
The Tube would not be the last privatisation if the Tories retain office. Ministers would like to sell off high-street Jobcentres and there are lingering hopes that the Royal Mail could be privatised.Reuse content