Tories accused of double standards: Downing Street denies leasing plan similarities

THE Government was accused of applying double standards yesterday over Ministry of Defence plans to lease some of its 95,000 non-fighting vehicles, while the Treasury is blocking Ministry of Transport proposals to lease new rolling stock for London Underground's so-called 'misery line'.

Downing Street yesterday denied there was any similarity between leasing military hardware and Underground trains. 'They are different in nature and different in kind,' the Prime Minister's Office said.

That is unlikely to satisfy the travellers on the Northern Line and Tory MPs backing Steve Norris, the Minister for Transport in London. He is engaged in an inter-departmental battle with Michael Portillo, Chief Secretary to the Treasury, to overcome the Treasury resistance to leasing rolling stock.

The rolling stock, worth pounds 500m, is being offered by the Derby trainmaker ABB to replace 30-year-old Underground trains.

Mr Portillo, the minister responsible for controlling public expenditure, said the Northern Line leasing plan would need to be a good financial deal 'not a financial dodge'. Private finance was not intended as a substitute for public expenditure, which could undermine the public spending controls, he said.

'I don't accept that it is not going forward. We haven't made a decision,' he said. The decision is imminent after weeks of bargaining. Meanwhile, Malcolm Rifkind, Secretary of State for Defence, is preparing a radical programme of leasing of MoD vehicles, including lorries, cars and Land-Rovers, from the private sector.

Downing Street insisted yesterday that the MoD had not made any firm plans. Defence sources, however, regard the leasing plan as one of the key elements in the Front Line First package of savings in military support services to be announced in the summer.

Mr Rifkind is carrying out the review of support services - the most far-reaching conducted for decades - to save money and ease the pressure on his budget which has been cut by the Treasury in the wake of the ending of the Cold War.

Defence sources are confident that leasing will save substantial sums and bring the MoD more up to date. It is not intended to lease tanks or frontline weapons systems, and defence ministers are not expecting trouble with the Treasury, which has given its blessing to the search for savings.

'The Government does appear to be applying double standards. We have given our total support to the leasing plan for the Misery Line,' a Labour spokesman said.