Blair gives signal to put the Tube back on track

Tony Blair yesterday committed a Labour government to modernising the London Underground network in partnership with the private sector, and attacked Conservative plans to privatise the system.

During a speech on Labour's plans for a modernised, integrated transport system, Mr Blair said Labour would keep "strategic control" of the Underground, whilst allowing the private sector to provide trains and maintain tracks.

Responding to leaks of the Government's plans to sell off London Underground, which is valued at up to pounds 13bn, for only pounds 600m, the Labour leader told a meeting of industrialists in London: "They [the Government's plans] offer the prospect of windfall gains for private shareholders but no new investment to improve services for passengers until, at the earliest, 2001. Tube fares will rise each year until privatisation, but once privatised, there would be no guarantee of service levels being maintained."

The Government appeared last night to have postponed its plans to announce the privatisation of the Underground this week after the memorandum by Sir George Young, the Transport Secretary, setting out the options to the Prime Minister, was leaked.

The leak was one of the most comprehensive disclosures of Cabinet discussions in recent years. In the memorandum, Sir George disclosed that the Cabinet had agreed to privatise the Underground at the meeting held at Chequers to consider plans for the manifesto.

"We agreed that we should announce our intention to privatise London Underground at an early date. You may like to make the announcement, perhaps at one of your prime ministerial press conferences.

"Alternatively, I could do so, perhaps next week, to link in with the privatisation theme which EDCP (Cabinet committee on co-ordination and presentation of policy) has recommended.

"I would be grateful for your views and those of the business managers [whips] on handling, particularly on whether we should volunteer a parliamentary statement.

"I believe that we should aim to move quickly in order to maximise the impact of the public announcement."

Sir George said he had subsequently met William Waldegrave, Chief Secretary to the Treasury, over his concerns that it would be difficult "to sell to the public". Sir George said: "I believe that he is now content with my proposals ..." The issue of fares was "arguably the most damaging area of criticism during the railways privatisation," he added.

"I believe that, as a minimum, we need to give a commitment to no real increase in average fares for at least the first four years after privatisation".

Mr Blair said Labour planned to keep ownership of the Underground in the public sector, whilst allowing more private sector involvement, from refurbishing stations to laying new track. "Across the whole range of London Underground's activities there is scope to bring in private-sector capital and skills," he said.

"There could be new `design, renew and operate' schemes where the private sector would refurbish and maintain the tracks and tunnels. Train manufacturers could be contracted to provide trains to meet the service level set and run by London Underground itself.

"It would mean we could make a start on improving the underground within months of the election of a new Government." Mr Blair's speech was delivered to a business and transport conference organised by the Industry Forum, the party's consultative body given the task of forging closer ties with the business community.