Byers may abandon Tube sell-off

Transport Secretary Stephen Byers came out fighting today with the strongest hint yet that he will scrap the part-privatisation of the Tube.

Mr Byers, for the first time, revealed that when he was given the transport job by the Prime Minister last summer, he was told that if he felt the public-private partnership (PPP) was not going to work, "we need not go ahead with it".

The Transport Secretary said he will publish early next month an independent assessment of the private-sector bids to take over the Underground being carried out on behalf of the Government by City accountants Ernst and Young. If the bids fail to pass the value-for-money tests compared with a taxpayer-funded alternative, then PPP faces the axe. This could mean all or some of the contracts to run the Tube, which are about to be agreed by the Government, being handed over to London Mayor Ken Livingstone and his transport commissioner, Bob Kiley.

Last month, the Evening Standard revealed that ministers were looking at the value-for-money tests as a way of scrapping the controversial PPP scheme without having to admit to an embarrassing U-turn.

PPP was first considered when Labour came to office as a way of partprivatising the Underground and using private-sector cash while at the same time denying a full-scale privatisation. It has been strongly promoted by the Treasury but fiercely resisted by Mr Livingstone and the vast majority of transport experts in Britain.

Meanwhile, as public clamour increased over the appalling state of the national network, Mr Byers laid his job on the line, promising "real improvements" by the next general election.

Earlier this week the Transport Secretary had said he would be in the job for years to come, but there is a questionmark over his political future because of the continuing poor state of the railways and his personal decision to put Railtrack into administration.

Mr Byers reiterated today that he expected to stay in his post until the next election "when people will judge whether I have been a successful Secretary of State for Transport". He said: "I think people realise that there are no quick fixes in transport but what they need to know is that the money is going to be there, that there is a real sense of direction and that the difficult decisions will be taken."

In an interview in The Times today Mr Byers said he planned to spend hundreds of millions of pounds patching up the railway to keep his promise. His retaliation of stinging criticism made about his role so far comes just before the Strategic Rail Authority is due to publish on Monday its crucial report on rail strategy covering the next ten years.

Compiled by Richard Bowker, the new SRA chairman and former joint chief of Sir Richard Branson's Virgin Trains, is expected to show that Mr Byers has won a partial battle with the Treasury and secured an additional £4.5 billion in funding for the railways. This will be spent over the next 10 years, taking the total to £33.5 billion.

Mr Byers said the SRA document would unveil "the first long-term plan for expanding the railway network for nearly 50 years.

"It has got a vision about where we should go. It's vital for the travelling public to show them that there are practical, very specific proposals which people can see this is going to affect this line and their travelling experience."

In The Times article Mr Byers admits there was a political dimension to his decision in forcing Railtrack in to administration.

He says: "It's rolling back the Thatcher-Major legacy of privatisation because this was a privatisation which had clearly failed.

"Why people have a go at me is that it was high politics ... New Labour will involve the private sector in the provision of public services where they can improve the quality of those services.

"But the decision on Railtrack showed that for the first time, if they fail in the delivery of public services, we will take the private contractor out." The rail drivers union Aslef has offered a return to national pay bargaining to prevent a repeat of the current pay disputes.

In a move that will present a dilemma to rail companies and the Government, Aslef 's general secretary-Mick Rix has contacted the Department of Transport to propose the possible solution to the present "merry-go-round" of rail strikes and talks disrupting services across the country.

Mr Rix says the train operating companies are competing with each other to attract staff, such as drivers, who are in short supply and believes his proposals offer the golden opportunity for a "new era" of industrial relations and rejuvenation of the rail industry.

"That will lead to a renaissance across the industry and will also lead to conflict prevention in terms of industrial relations," he said.

However, some observers believe that while averting localised strikes Trains and ScotRail national pay bargaining could herald a return to national rail stoppages.

Meanwhile, the prospect of more strike action on the Tube increased today as London Underground management said the pay offer would not even "come close" to the 5.7 per cent demand being made by the unions. On mainline South West Train, which is already facing the third 48-hour stoppage - to take place in two weeks time - management further infuriated union leaders by drastically axing staff overtime.

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Comment: A viable alternative