Prescott: radical changes

Prescott defends funding plans for London Underground on BBC Radio Duration: 5'09"

Prescott Seeks Private Money For London's Tube

Despite Labour's election pledge against the "wholesale privatisation" of the Tube, the system could be funded by a public-private partnership where the private sector is the majority shareholder.

The programme will disclose documents, including a draft letter from the Deputy Prime Minister John Prescott to Paymaster-General Geoffrey Robinson, indicating that financial advisors will soon be appointed to consider "options for public-private partnerships for the London Underground".

Mr Prescott is deeeply unhappy about the programme: "I regret that the BBC, having stolen a draft document from my department chose to use it to sensationalise their programme.". The BBC insisted there was "no question" the documents had been stolen from Mr Prescott. The letters had been returned to the Department of Transport as soon as it became clear what they were, a spokeswoman indicated.

One option set out in the letter is that the London Underground would be separated into two companies, rather like British Rail. Another proposal being considered would be for a single company to control both trains and tracks.

But in both cases the companies would be public-private joint ventures, with the private partner having the "majority shareholding", the programme says. The letter, it says, describes the timing of the process as "urgent".

Deputy Prime Minister John Prescott tells the programme, in an interview conducted before the documents came into the hands of the Panorama team, that he wants to make "radical changes" to fund the estimated £1.2 billion investment deficit in London's Underground system.

"I am quite prepared to move out of the old argument of public and private and find new ways of financing," he says. Mr Prescott continues: "Well, let's face it, the Underground, if you don't start to finance its investment, I think there will be more water in the Underground than we've got in the Thames. That's the scale of the problem we're going to get. Politicians have to concentrate their minds on priorities. I intend to do that."

The Tube: in urgent need of funding

Asked where the money would come from, Mr Prescott says: "Well, £1.2 billion is an awful lot of money and we can't simply adopt the old tradition of going along to the Treasury...But there are other ways of advocating and finding finance with public sector industries."

London Underground chairman Peter Ford tells the programme that he does not believe that the Private Finance Initiative, introduced by the Tories, is "capable of coping with the crumbling infrastructure of the Underground".

Mr Prescott later issued a statement claiming: "I regret that the BBC, having stolen a draft document from my department, chose to use it to sensationalise their Panorama programme on the London Underground."

"However, nothing in the draft document is inconsistent either with any of my interview or my intention to explore all forms of public-private partnerships which I have long advocated," he explained.

"Our over-riding purpose is to secure the long-term investment needed to achieve a modern, efficient, publicly accountable London Underground fit for the new millennium."