Gordon might need to change some of his numbers, don\’t you think?
Taxpayers will have to pay £2 billion to rescue the failed privatisation of London Underground, the Government admitted yesterday.
Ruth Kelly, the Transport Secretary, had to raid the Government’s contingencies fund to settle the debts of Metronet, which ran nine of the twelve underground lines but went bust in July.
The scale of the public liability for Metronet’s failure will be a severe embarrassment to Gordon Brown, who forced through the controversial Public Private Partnership of the Tube when he was Chancellor.
The payment also exposed the fallacy of the Government’s claim that it was transferring risk to the private sector. The five companies that owned Metronet – Balfour Beatty, Thames Water, EDF Energy, Bombardier and Atkins – had to pay only £70 million each towards the debt because they had won guarantees from the Government that limited their liability.
There\’s an awful lot of PFI and infrastructure spending that has such guarantees but which is not counted as part of the public debt. For, we\’re told, the claims are purely theoretical, will never be called upon.