PPP backlash from angry Labour MPs

The Government was hit by a major backlash from its own MPs today as they warned the PPP decision will backfire heavily on both Tube users and Labour at election time.

Gwyneth Dunwoody, Labour chairman of the Commons transport committee which published a highly critical report last week, said the scheme was "indefensibly incompetent" and "manifestly unworkable".

John Cryer, Labour MP for Hornchurch, warned of the "risk that the Labour party is going to be associated with something Londoners don't want".

Left-wing MP Diane Abbott said the Government was guilty of "breathtaking arrogance" in overriding public and expert opinion. She warned the PPP had already contributed to a humiliating result for Labour in the mayoral elections.

The scheme's most outspoken critic, Mayor Ken Livingstone, led warnings of a repeat of the "folly" of rail privatisation, including the risk of major disaster with loss of life.

The Mayor, who is considering a further legal challenge, said: "'Every genuinely independent analysis of the PPP, most recently by the House of Commons transport select committee, shows this is outrageously expensive, not value for money, sets the wrong priorities and is unsafe."

Mick Rix, general secretary of the train drivers' union Aslef, said: "London Underground has been handed over to the real wreckers - accountants, lawyers and building site bosses who have all but destroyed the railway industry.

"Londoners will pay for this catastrophic decisions for generations."

Conservative shadow transport secretary Theresa May said Labour's "flawed PPP" will bring no relief to Londoners, while Susan Kramer, Liberal Democrat former mayoral candidate, said it committed the private companies to provide only "minimal improvements".

However, there was support from former Tory mayoral candidate Steve Norris. He said: "This is not time for further wrangling. It is time to accept that there is no plan B, and that this is a perfectly safe deal."

Many commentators accused the Government of "fixing" the value-for-money test and pointed to the Ernst & Young report passed yesterday as evidence.

Will Hutton, chief executive of the Industrial Society, said the decision had been "politically fixed" by £3.3 billion added to the "base case" of the public sector alternative, including an assumed cost overrun of £1.2 billion.

Tony Travers, local government expert at the London School of Economics, said it will be impossible to judge how successful the PPP will be as the contracts "lack specific targets".

The man supposed to make the PPP work, transport commissioner Bob Kiley, said the contracts were a "horror show" that will result in "tense and adversarial relationships" within the new system.

Even the City showed mixed feelings over the decision. Chris Waites, a consultant specialising in Private Finance Initiatives, said: "For any PFI to work well there has to be clear lines of accountability if something goes wrong.

"If a train is late whose fault is it? I fear enormous amounts of time and money wasted in unproductive debate sorting this out."

Michael Roberts, head of transport at the CBI, said the decision "sends a signal that the private sector has an important role to play helping delivering public services".

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