Selecting Frank Dobson shows just how desperate Labour has become

LAST WEEK in Bournemouth as I passed Frank Dobson I congratulated him on resisting the pressures to throw his hat in the ring for mayor. I was rewarded with a wonderful facial gesture that looked as though someone had put something unmentionable under his nose. Still, as Harold Wilson said, a week in politics is a long time.

LAST WEEK in Bournemouth as I passed Frank Dobson I congratulated him on resisting the pressures to throw his hat in the ring for mayor. I was rewarded with a wonderful facial gesture that looked as though someone had put something unmentionable under his nose. Still, as Harold Wilson said, a week in politics is a long time.

After months of one Millbank candidate after another launching their campaigns only to be hammered in the polls, the leadership has decided that there is no alternative but to go for Frank. I assume - though of course no one has confirmed it - this means I will be allowed to go forward to the membership ballot, giving the lie to the flurry of stories last week that I would not. The fact, that Frank has finally entered the fray represents a huge shift in the thinking of the Millbank Tendency. Originally their preferred choice for mayor was Bob Ayling of British Airways. He even went on the BBC's Question Time to get an airing where he sank without trace.

In desperation the party machine has finally had to turn to Frank Dobson. But the idea that somehow Frank is new Labour and I am old involves rewriting history on a monumental scale. When I was elected to Camden Council Frank had recently stood down as Labour leader where he had created the best level of public services and the highest rates of any council in Britain.

At my first meeting with London Labour MPs after I took over as leader of the GLC in 1981 Frank went out of his way at the end of the meeting to tell me "I wouldn't worry about all this fuss about getting rid of the old leadership. They were useless and never did anything for the movement. I'm really looking forward to working with you." I remember this exchange so clearly and warmly because it was in marked contrast to the comments of so many Labour MPs who were lining up to denounce me.

The polls show that Archer is ahead of every Labour candidate except me. Even his own Mori opinion poll puts me at 40 per cent, as opposed to 23 per cent for Archer. The same poll showed that if I am excluded from the race Jeffrey Archer comfortably beats Glenda Jackson and Trevor Phillips. He has a stunning 28 per cent lead over late-comer Nick Raynsford. If I am Labour's candidate we gain 12 full percentage points. That's the difference between winning with 51 per cent or losing with 39 per cent. The choice facing the London Labour Party is whether to stand its strongest anti-Archer candidate next May. The polls demonstrate that, if I am the candidate, Labour will not end up fighting the election with one hand tied behind our back.

Londoners remember that the only time public transport improved in the last 40 years was during the last Labour GLC administration under my leadership, which is one of the major reasons for my poll lead. In contrast, Archer has made it clear he will not bring back conductors on the buses which is essential if we are to get people out of their cars and back on the buses. He is also opposed to raising the millions of £on offer for public transport via congestion charges. Consequently, he is unable to offer to freeze fares for four years as I propose - but motorists will not switch to public transport unless they can be sure that the annual fares increases are at an end.

Last week at Labour Party conference - even before the entry of Nick Raynsford and Frank Dobson - the debate between the three Labour candidates had got down to serious politics. There is clear water now between those candidates who agree with the partial privatisation of the tube, and those like myself and Trevor Phillips who do not.

For example, last week Glenda unveiled her manifesto with this commitment: "I do not believe that public private partnership is the best way of securing the long-term investment the tube requires - I believe it is the only way." This support for a more expensive package and my commitment to the better value policy of allowing the mayor to issue bonds to pay for modernising the Underground presents a clear choice.

Public private partnership - which is really private finance initiative with a new name - will cost more than the alternatives. The House of Commons Select Committee on Transport concluded: "The government must demonstrate that its proposals for the Partnership represent the best deal for passengers and taxpayers."

A report by the London School of Economics was even clearer: "The Government's plan... is flawed in principle and impractical." The London Evening Standard editorial in June concluded that the "most plausible and workable" option for the Tube is "to remain within government and, in due course, mayoral control, but the Treasury rules could be changed to enable London Underground to raise money through borrowing or bonds." The Tube unions' Listen to London campaign points to New York, where the Metropolitan Transport Authority was allowed to issue bonds secured by revenue, and to sell tax credits, which provided two thirds of the necessary funding for modernisation.

The LSE's report concluded: "The attempt to make PPP work at any price will be both costly to the fare-payer and the taxpayer, and damaging to the GLA." Last week I spoke to the former Deputy Comptroller for the State of New York. She confirmed that, since 1980, New York City has raised $14bn using bonds to invest in the underground system. Contrary to what has been argued by the Treasury, the bonds issue has been a brilliant success.

Despite the consensus ranging from Simon Jenkins to Jimmy Knapp, and via the most respected of local government and transport academics, there is a stubborn refusal to look at the issue of best value for money in how we modernise the tube. We should approach this subject without ideological prejudice and with as much cool-headed pragmatism as possible. Bond issues are the internationally tried and tested method of funding capital expenditure on public transport.

Bonds would allow the mayor to secure long-term investment and can guarantee that the loan can be repaid. Bonds will be hugely cheaper for commuters and Londoners - they can be issued at around 4.5 per cent whereas the interest on PPP will be closer to 12 per cent. Why should every man, woman and child in London pay £1,000 extra when there is a cheaper and more successful way on offer?

If Frank Dobson intends to speak for London he needs to make it clear that he agrees with Trevor Phillips and myself that bonds are the best way to modernise the tube.