The Chief Secretary to the Treasury (Danny Alexander)
I am grateful to you, Mr Speaker, for allowing more time than is usual for a statement, given the range of announcements to be made today.
Yesterday, my right hon. Friend the Chancellor set out the difficult decisions that the Government have taken to continue the process of restoring our country’s finances. I pay tribute to his work to see the country through these most difficult of times.
Today, I will set out how the British economy can succeed in the global race by creating balanced growth and delivering lasting prosperity. Most past Governments of every colour have prioritised short-term convenience over the long-term national interest. Today, we change that. We are shifting the Government’s policy horizon to match the modern economy’s horizon, because the coalition Government want to make the right long-term choices for Britain.
I therefore announce the most comprehensive, ambitious and long-lasting capital investment plans this country has ever known. We are putting long-term priorities before short-term political pressures. I tell the House in all candour that these are not easy choices. There is no easy way to create jobs and prosperity. It is a difficult path, but the right one.
Today, it is clear that the British economy is moving from rescue to recovery. We inherited an economy in dire straits. Official statistics published this morning show that the recession in 2009 was even deeper than we first thought. We have made painful choices to get our economy back on the right track. We are making good progress—the deficit is down, jobs are up—but as we move from repair to renewal, we need to invest in the fabric of our nation. I can do that because we have chosen to find savings from day-to-day budgets, allowing us to recycle billions into long-term capital spending. That is not the easy choice, but the right one.
We can guarantee £300 billion of capital spending by the end of the decade. Today, I can set out our plans for more than £100 billion of that for the infrastructure of our country: the biggest public housing programme for more than 20 years, the largest programme of rail investment since Victorian times, the greatest investment in our roads since the 1970s, fast online access for the whole country and the unlocking of massive investments in cleaner energy to power our economy forwards, all at a price that we can afford to pay, without adding a single pound to our borrowing forecasts. Investing in stronger communities, in better infrastructure, in new sources of energy—that is how we will build a stronger economy in a fairer society, enabling everyone to get on in life.
At every stage of the process, we have sought to cut waste and inefficiency first, focusing on the back room, not the front line. We should not pretend that that is painless. Back-office efficiencies mean thousands of job losses. Contract renegotiation means rightly asking more for less from our suppliers. But that is the right way to make savings, while improving the quality of our public services.
Across government, we are using our capital budgets to help our public sector become smaller, more efficient and more effective. In 2015-16, we will invest £25 million in the best digital equipment for our police and £100 million in a new prison in north Wales—a scheme that will eventually save £20 million every year. More than £200 million is being invested over three years to increase the digitisation of Her Majesty’s Revenue and Customs’ customer services, a move that will save more than £50 million every year in administrative costs.
I pay tribute to the Minister for the Cabinet Office and Paymaster General and his team for their expertise and insight in unlocking these savings. I am the first Chief Secretary ever to have had this pool of commercial expertise at my disposal during a spending round. They tell me that we can do more to save money for the taxpayer. So, working closely with the Minister for the Cabinet Office, I will conduct a further rolling efficiency review of all Departments to unlock savings to support our economic priorities. I will strengthen the financial management capability in Government, too. We will take action to sell off £15 billion-worth of public assets by 2020. Some £10 billion of that money will come from corporate and financial assets, such as the student loan book, and the other £5 billion will come from land and property.
The Government are the custodians of taxpayers’ assets. When we no longer need them we should sell them back at a fair price and not act like a compulsive hoarder. Too often, local and national Government sit on an area of land that could be put to good use for the economy, housing or schools. Today, we say this to businesses and communities, “If there are any publicly owned sites out there that you can make economic use of, then tell us.” Unless Ministers can be convinced that the site is needed, we will sell that land at a fair price and we will use the proceeds to pay down our debt and invest in our economy.
Let us not forget that the plans we inherited from the previous Government included significant cuts to capital spending in this Parliament. We have added to those plans year-on-year with more money for investment in this Parliament. Some people say that we are not delivering, but since we came to office more than 30 transport schemes have been completed, 150 railway stations have been upgraded and we have built 84,000 affordable homes. However, we need to work more smartly to improve delivery. No single Government infrastructure project in recent memory has been quite as triumphant as the 2012 Olympic and Paralympic games, so we appointed Lord Deighton, the man who oversaw that success, to improve infrastructure delivery across government. He is working his way through Whitehall Department by Department, helping to develop clear delivery plans. Today, the Government are accepting his central recommendation that we take crucial infrastructure delivery out of the hands of civil servants and into the hands of commercial experts.
Our innovative UK guarantee scheme is enabling privately funded projects to go forward, too. It has already provided certainty to investors in the Drax power station and the Northern line extension. I can announce that UK guarantees will be available for two more years to December 2016. I can announce today that we will offer a guarantee of up to £500 million to support investment in the Mersey Gateway bridge and a multi-million pound guarantee to advance the new nuclear power station at Hinkley point, a guarantee that could provide growth in Liverpool and a guarantee that could provide power to 8% of the UK’s homes. These deals are not yet done, but they are a major step forward for our country’s future.
Let me turn to how we will invest in stronger communities. The Government have made a very strong commitment to education. We have protected the schools budget, including the pupil premium. We know what parents want: a good school nearby in a good state of repair, and this is how we will give it to them. First, some buildings simply are not good enough, so we are rebuilding 261 of the worst schools as part of the Priority School Building programme. With the moneys I have committed today, we will complete this by 2017—two years early. There are many other schools in need of repair and investment. The previous Government stopped even checking just how many schools were in need of repair. We have started again. We will put £10 billion behind this, which will be enough to clear the urgent backlog. We are investing, too, to create 1 million new places in a decade across the country, including in Lancashire, Leeds and London—better buildings and a place for every child are the best investment in our future generation.
We will continue to invest in the health of the nation, too. The health budget will rise in 2015, including on capital. That means we can begin redeveloping the Royal Liverpool hospital next year, and I can also announce a further £150 million for health research infrastructure, including facilities for our world-leading work on dementia.
Our new approach to housing is truly transformative. Our Help to Buy scheme is already getting people on to the ladder. But, put simply, this country does not have enough homes that people can afford. The previous Government allowed the number of affordable homes to fall by a shocking 420,000. A good home should not be a luxury for the few, but an achievable aspiration for the many. We are already ensuring that the affordable housing supply increases every year, not decreases, as it did in every year but one under the previous Government. But our housing associations have told me that they can do more. To do that, they need certainty on rents, alongside public investment. So today I can provide both those things: I can guarantee that social rents will be set at the consumer prices index plus 1% out to 2025—the longest period of certainty ever; and I can provide £3 billion more capital over three years from 2015 to deliver 165,000 new affordable homes. On average, that is more each year than in any of the past 20 years; it is more in three years than the previous Government managed in seven. And we can do all that because our approach gets twice as many houses as they did for every pound we put in, getting more for the taxpayer and more for this country. This spending round also funds over 2,500 more new homes specifically designed for older and disabled people, and £160 million for decent homes, mainly in London. I know that issue is important to many MPs, particularly my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes). This is the most ambitious and significant investment in affordable housing for a generation.
Too many Members of this House, on both sides, have in recent years seen the devastation that flooding can cause in their constituencies. We need to work with the private sector to protect families from the threat of flooding, so we will provide £370 million in 2015 and increase that in real terms every year to 2020. More than 400,000 households will be protected over this decade. Insurance also has a vital role to play in helping households deal with the consequences when flooding does occur. I am pleased to tell the House that we have now reached an initial agreement with the Association of British Insurers on the future of flood insurance. The industry wants to do the right thing and so do we. We have always said that we wanted to find a solution that works for households at risk of flooding, wider bill payers and the taxpayer. The industry’s proposed scheme, known as Flood Re, promises to do that by effectively limiting insurance prices for high-risk households. Up to 500,000 households would be helped, with support targeted towards those on lower incomes. Support would be funded by a levy on insurers, something the ABI has promised us will not increase customer bills in general. Importantly, there will be no cost to taxpayers.
There remain many details to work through, so we propose also to take powers to allow us to regulate for affordable flood insurance should that prove necessary. We are seeking these powers in the Water Bill, which we are today introducing to Parliament. The Secretary of State for Environment, Food and Rural Affairs is today launching a public consultation on our proposed approach, and we welcome views on it. He will introduce our final proposals to Parliament as a Government amendment in the autumn.
Local businesses, local communities and local authorities know best how to make the decisions to support growth in their area. For decades we have not given them enough chance to do so, but now we are. Yesterday, the Chancellor confirmed that we are establishing a single local growth fund to transfer funding streams to local enterprise partnerships, as recommended by Lord Heseltine, with £2 billion in 2015 and at least that in every year for the rest of the decade. In total, at least £20 billion will be under the control of LEPs to 2020. The details of how that will work are set out in the document published today.
We have also reached agreement with Greater Manchester on its innovative “earn back” scheme, which will allow it to invest in its priorities, such as the Trafford Metrolink and the A6 to Manchester airport relief road. I know that many hon. Members, including my hon. Friend the Member for Cheadle (Mark Hunter), have been campaigning on that for many years—as indeed has the Chancellor, for that matter.
The regional growth fund has also been a fantastic success, thanks to the drive of people up and down the country, led by my right hon. Friend the Deputy Prime Minister. The £2.4 billion in this Parliament is safeguarding half a million jobs, spread across every English region. Furthermore, we are today investing an extra £600 million so that we can do even more to strengthen our communities.
For our economy to grow, however, we need those communities to be better connected. In the last two decades, rail passenger numbers have doubled, and that figure is set to rise by nearly 15% over the next five years. More people are using our railways than at any time since 1927, so we have set out a clear, long-term plan to cope with that demand. Last year, we announced that Network Rail had been funded to deliver the largest programme of rail investment since the Victorian era, and today I reaffirm that commitment. This investment will bring new life to our rail networks, upgrading stations such as King’s Cross, Manchester Piccadilly and Birmingham New Street, improving links from Liverpool to Newcastle through the northern hub and opening up a new line from Bedford to Oxford. We are also electrifying 850 miles of railway. By comparison, the previous Government managed nine miles in 13 years.
My hon. Friend the Member for Westmorland and Lonsdale (Tim Farron) will be pleased to hear that Network Rail is conducting a feasibility study into electrifying the Lakes line between Oxenholme and Windermere. We are going one better in London, and from 2015, we will fund Network Rail to begin work on electrifying the line connecting Gospel Oak and Barking. Nowhere is fast commuter transport more important for our economy than in London, and our investment in Crossrail will support more than 120,000 additional peak-time commuters every day. The Government are committing £2 million to support a funding and financing study into Crossrail 2. The challenge for the Mayor of London now is to determine how at least half of the cost of the scheme can be met through private sources, ensuring that it will be affordable to the UK taxpayer.
Keeping London connected is crucial, but it must not be done at the expense of our other great cities. It is not good enough that the UK has just 68 miles of high-speed rail, compared with 1,000 in Germany and more than 2,000 in France. We want a high-speed line that connects eight of the UK’s 10-biggest cities, making daily commuting between them possible for the first time. Today, therefore, we provide long-term financial certainty for High Speed 2, setting a funding envelope of £42.6 billion for construction costs and £7.5 billion for rolling stock, and we are setting a clear budget for the scheme of £16 billion for the next Parliament.
Yes, that is a higher overall budget than previously put forward. We are learning from our Olympic experience and setting a long-term, realistic financial plan with the right contingencies. This is the longest and largest transport budget the Treasury has ever set aside, and the people running the project will have to deliver within it.This project will change the economic geography of our country, and I urge hon. Members to support it. It is not being built at the expense of a single other rail project. Taken together, we are supporting more than £30 billion of investment in rail, making this coalition the most pro-rail Government in history.
We also need to think of the remote parts of the UK that HS2 will not reach. Air connections are crucial to those regional economies, so to help maintain those connections, I can announce today that we will provide £10 million a year for a new regional air connectivity fund. I look forward to Howard Davies’s report into that and other aviation issues.
Millions of people rely on our road network. We have worked hard over the past three years to protect road users, cancelling fuel duty increases and saving 13p on a litre of petrol, but our road system has been decaying for decades, and without further significant investment now, by 2040, nearly a quarter of motorists’ travel time could be spent stuck in traffic. I can therefore announce today the biggest programme of investment in our roads in 40 years. The Government will invest more than £28 billion over the six years from 2014 in the enhancement and maintenance of national and local schemes. First, we will take action to fix the backlog of maintenance that has left road surfaces crumbling in communities up and down the country. We are committing £10 billion of investment in road repairs between 2015-16 and 2020-21. More than £4 billion of that money will be spent on national road maintenance—enough to resurface more than 21,000 miles of road, which is the equivalent of London to Beijing and back—while the other £6 billion will be spent locally, allowing local authorities to fill the equivalent of 19 million potholes a year.
Secondly, we will deliver all the major projects in the Highways Agency’s pipeline. We will add two lanes to the busiest motorways, bringing another 221 lane miles to our road network, and we will tackle some of the most congested parts of our network, through projects such as the £1.5 billion A14 scheme between Huntingdon and Cambridge. This scheme is of strategic national importance and will unlock jobs, housing and growth in the region, as well as providing key relief for a major freight route. I am delighted to announce that we will be bringing forward the start of construction by almost two years, to 2016.
I can confirm today that there is more: the A19 between Newcastle and South Shields, the A63 in Hull, the M6 junctions between Birmingham and Manchester, the M5 junctions from Bromsgrove to Worcester, the A38 Derby junctions, the M1 junction near Long Eaton and south of Rugby, the A21 between Tonbridge and Pembury, junctions on the M4, the M23 Gatwick junctions and the A27 Chichester bypass.
This money will pay for us to identify and deliver solutions for the most notorious problem spots across the country. Any hon. Member from the Prime Minister down who lives in Cornwall or who has driven there for their holidays will want to see a better A303. Any hon. Member planning a trip to Scotland—Scotland as part of a strong United Kingdom—will want to see a better A1 north of Newcastle. We will also look at the A27 corridor, the trans-Pennine route and connectivity to Leeds airport.
We will ensure that these investments are delivered, because I can also announce that we are transforming the Highways Agency into a publicly owned corporation, an organisation that will have the long-term funding certainty and flexibility to deliver the best possible road network for the UK’s motorists. We are legislating to ensure that these reforms and this investment are guaranteed.
Where our predecessors left the road network on the hard shoulder, we are bringing it into the fast lane. We are not only building the roads of the future but developing the cars of the future. This Government remain committed—[Interruption.]
Mr Speaker
Order. There is a very disorderly atmosphere in the House. Mr Docherty, you are in a very jolly frame of mind, but it would be greatly to your benefit and that of the House if your jollification could be a tad more restrained.
Danny Alexander
Thank you, Mr Speaker.
This Government remain committed to ensuring that the UK remains at the forefront of decarbonising road transport and investing in electric vehicles. In the 21st century, good communications are not just about faster roads and high-speed railways, however; they are also about high-speed internet access. The Government have already committed £1.2 billion of public investment to fixed superfast broadband. I saw at first hand the impact that that investment is having on smaller communities when I visited Rothbury in Northumberland. It is crucial, if we want to rebalance our economy, that it is not just the biggest cities that have access to the fastest broadband.
The UK already has better broadband coverage, usage and choice than Germany, Italy, France and Spain, but we want to go further. I can announce today that we are providing a further £250 million to ensure that fixed superfast broadband reaches 95% of the population by 2017. We will work closely with industry to ensure that at least 99% of the UK population have access to superfast broadband—whether fixed, wireless or 4G— by 2018.
Let me now turn to how we support the private sector to deliver our energy needs. Some Members will know that I was privileged to spend my early years on the Hebridean island of Colonsay. Then, the island had no mains electricity. Unreliable diesel generators powered the island, and regularly broke down. Until mains electricity arrived, we never quite knew when the lights would go out. We do not want any community in our country to face that problem in the future. Our existing power stations are closing, as they are too old or too dirty to continue. They must be replaced and added to as our need for electricity grows. Thanks to the hard work of the Secretary of State for Energy and Climate Change—
Danny Alexander
He is the best ever.
Thanks to my right hon. Friend’s hard work, we are ready to unleash the energy revolution that our country needs. Today’s news from the British Geological Survey of 1,300 trillion cubic feet of shale gas—double the previous estimate—confirms its huge potential for the UK. That is almost as much hot air as the shadow Chancellor produces in a year—[Interruption.] And if they would stop fracking around on the Opposition Front Bench, they might learn something. The plans that we are setting out today provide the framework to kick-start this industry in a way that protects the environment and supports local communities.
As well as revolutionising the way in which we get our energy, we are transforming how we generate and supply it. As we face the challenge of climate change, we need to bring forward investment in low-carbon technologies. This country has massive potential in wind, wave and tidal. We need to harness it. We are putting in place a comprehensive energy policy through the Energy Bill that is in front of this House. This is an approach that we know will work for consumers and investors alike. Last year we made the unprecedented decision to set out funding plans for low-carbon generation all the way to 2020, providing up to £7.6 billion in real terms.
Now we can set out what this means for investors. We do this through setting strike prices. If future prices are below this level, we will guarantee a price to the generator, giving them the confidence to invest now. But if they rise above it, we will claw back money for consumers. We were planning to set strike prices next month, but we have been able to make faster progress so, today, I can announce that we are publishing the prices for renewable generation ahead of schedule. Prices have been set for key renewable technologies, including onshore and offshore wind, tidal, wave biomass and solar. The prices are broadly similar to those we would have to pay under the renewables obligation. We will set the price at the level we need to bring forward sufficient investment, but not a penny higher. As these technologies develop, costs will fall, so we will reduce the price too. For instance, next year we will guarantee generators £155 per megawatt hour of offshore wind. By 2018 this will fall to £135. We expect our reforms to bring forward 8GW to 16 GW of offshore wind capacity. Industry asked for certainty; we have given it. Now industry needs to get on with it.
Yes, this approach has costs now but, in the long term for consumers, they will be more stable than they would otherwise have been. In fact, when this investment goes alongside our plans for energy efficiency, overall our policies could save an average of £166 per household by 2020. We are taking the right decisions now for the good of our country.
In addition, we need to guarantee that capacity will be available at short notice to meet spikes in demand, for instance through gas-fired stations. Today we can provide details on a new regime that will achieve this. The first auction for this new capacity market will run next year to provide certainty for the winter of 2018. But there is financial risk for construction, too. That is why we have set up a Green Investment Bank to back green energy projects. It has committed over £600 million already; for instance, it has invested in the Walney wind farms off the north-west coast of England, which are expected to provide energy to the equivalent to 300,000 households. We have already pledged to provide £3 billion for the bank and, today, I can announce that we will provide an additional £800 million so that it can expand further. Crucially this will include, for the first time, the power to borrow half a billion pounds in 2015-16 from Government. This is a real milestone in green investment, delivering a key promise we made in our election manifesto, unlocking over £100 billion of private investment into our energy networks, and supporting jobs, growth and prosperity for years to come. Our energy policy is a win for consumers, a win for investment and jobs and a win for our climate; the greenest Government ever.
In the last three years we have re-secured for this country a very precious commodity: credibility. No one doubts that the coalition is serious about sorting out the economic mess that we have inherited. People have the right to know that we will continue to work hard to repair the economy, that interest rates will stay low and that we will get our country back on an even keel. But repair is not all we do, because people also have the right to expect that Britain stays one step ahead in the world, that we ease congestion on our roads and deliver faster broadband to make sure businesses in every corner of this country can serve their customers—[Interruption.]
Mr Speaker
Order. There is a lot of noise in the Chamber. I think that the Chief Secretary is nearing his end.
Danny Alexander
I am certainly nearing the end of this statement.
People expect us to ease congestion on our roads and deliver faster broadband to ensure that businesses in every corner of this country can serve their customers, and that we make sure all parts of Britain keep going. They expect that we will invest in a modern railway so that commuters get to work on time and home in the evening to see their kids. People have the right to expect that we keep spending serious money on the schools and hospitals on which all families rely, and that we make sure that the lights stay on in our homes, even when the demand on energy is surging.
The plans I have set out today deliver all that and more. This is an ambitious plan to build an infrastructure of which Britain can be proud and, in doing so, to help build a stronger economy in a fairer society where everyone can get on in life.
I commend this statement to the House.
Chris Leslie (Nottingham East) (Lab/Co-op)
What a lot of hot air from the Chief Secretary. Haven’t we heard it all before? Plenty of empty promises. But I must ask: when will the Government pull their finger out and actually start to build some of these things?
The Chief Secretary to the Treasury has been sent out with this long-winded statement to talk and talk and talk about infrastructure investment, but all the evidence shows that the Government are failing to deliver. As John Cridland, the director general of the CBI said yesterday:
“While the Government talks a good game on infrastructure”—
and I think even that is a bit doubtful—
“we’ve seen too little delivery on the ground so far.”
It is no wonder that the director general of the British Chambers of Commerce has described the Government’s plans for infrastructure as
“hot air, a complete fiction”.
Should not the Chief Secretary be listening to his leader—not the Prime Minister, but the Deputy Prime Minister, who said this week:
“The gap between intention, announcement and delivery is quite significant”?
A little more action and a little less Tory from him would not go amiss. Why is the Chief Secretary neglecting the health of our flatlining economy, and why was there nothing—I repeat, nothing—in yesterday’s spending review to kick-start a strong and sustainable recovery?
Will the Chief Secretary confirm that this Tory-led Government have spent £5.6 billion less in capital investment over the last three years when compared with the plans they inherited from Labour? No wonder that their plans for construction and growth have been such a total flop. Is he not just a little embarrassed that the infrastructure activity in the British economy collapsed by a staggering 50%—it has halved—in the first three months of this year? Does he not realise that three years of economic stagnation means that this is the slowest recovery for over a century, with just 1% growth compared to the 6% that the Chancellor promised when he started his cuts programme?
The Treasury’s performance on capital infrastructure is lamentable. Just one project has been supported by the Government’s supposed emergency guarantees legislation, which should have underwritten up to £40 billion of infrastructure. Two years ago, the Chancellor told us—I do not know whether he remembers this—that a further £20 billion would be leveraged in from pension funds, yet in March he let slip that only £1 billion had been committed and that no investments had yet been made. Of the 576 projects in the Government’s existing infrastructure pipeline, just seven have been completed and 80% of them have not even started. All the while, the construction sector has lost 84,000 jobs since this Government came to power.
When the Prime Minister said, over 18 months ago, that he would go on
“an all-out mission to unblock the system and get projects underway”,
what happened? All that chillaxing has been at the expense of the recovery that should have been well under way years ago.
Let me ask the Chief Secretary about the detail of his statement. Will he confirm that the Government’s plans for housing construction are stagnant and that no Government have presided over such a low peacetime level of new housing completions since the 1920s? Will he confirm, too, that the local government capital budget, which includes housing, is being cut by over a third—35%—in yesterday’s spending round announcements for 2015. Will he confirm that particular figure? It looks, from the Chancellor’s face, that that is in fact the case. What action is he taking to tackle the lengthening time for both major and minor planning applications to be decided, despite his promise two years ago that they would improve on the 13-week time scale? What happened to that?
On transport, will the Chief Secretary now tell us when he is going to publish the three long-awaited national policy statements on ports, transport networks and aviation? I hope that somebody is keeping an eye on the High Speed 2 budget, which seems to have leapt overnight by £8 billion. It was good that he gave the go-ahead to the Mersey Gateway bridge—again. In fact, he also re-announced the A14 funding, which I think the Chancellor announced two years ago in the November 2011 autumn statement—and in exactly the same words.
On energy and carbon reduction, is not the Renewable Energy Association right to describe the decision to undermine the feed-in tariff rates as “a horrendous strategic mistake”? On shale gas, would it not be sensible to be led by the evidence rather than by political antipathy to renewables? If the Chief Secretary really wants to encourage new investment in our energy infrastructure, should he not have a decarbonisation target to clean up our power supply by 2013?
On flooding, it was noticeable that the Chief Secretary said that the devil was in the detail and there is still a lot to be worked out, but will he stand up and confirm that these changes might need primary legislation? If so, when is that going to happen?
On schools, does the right hon. Gentleman not now regret scrapping Labour’s Building Schools for the Future programme? On “Newsnight” last night, the Education Secretary did not seem to realise that his capital budget was being cut in real terms, perhaps because his so-called Priority School Building programme announced three years ago has so far seen construction start on only one school building.
Does the Chief Secretary not understand how dangerous it is to ignore the warnings from the International Monetary Fund, which says that Britain should bring forward capital infrastructure projects because we need a significant near-term stimulus now, in 2013, not several years away? Why does he not listen to the advice of the IMF? Why does he not come clean and admit that he is cutting the capital investment budget overall, in real terms, by 1.7% for 2015-16, as it says at the bottom of page 11, table 2 of yesterday’s spending review, should anyone care to look at the detail? Is it not the truth that there is no new money for infrastructure? He is spinning a line, rolling multiple years together to make the figure sound big, reheating old announcements in his microwave statement, which should have turned into action long ago.
The House can at least agree that the Government have been negligent with the health of our economy and that the deficit is not falling as a result. The scandal is that they are still ignoring the urgent need to kick-start growth when they should bring forward projects without delay. We are seeing no delivery for three years, no infrastructure brought forward and, for all the hype, real terms cuts to long-term infrastructure in 2015. Something has got to be done about this lot, because so far they are not capable of delivering the goods.
Danny Alexander
What a pathetic response to a very serious long-term and detailed plan for this country’s infrastructure. We heard no admission of Labour’s 13 woeful years of delivery of infrastructure. Given some of the hon. Gentleman’s questions, he obviously had not listened to my statement.
On borrowing, our deficit is falling as a share of GDP, which is the proper measure, but only the Labour party could claim that new figures showing that we borrowed less in previous years are bad news for the country—the Labour party is addicted to borrowing— and that is on the day when we learned that the hole that Labour left in our economy was even deeper than previously said. Today’s figures show that the 2008 recession shrunk our economy by 7.2%, not the 6.3% of previous estimates. As the first shadow Minister to respond since the new figures came out, the hon. Gentleman made no apology for the mess the Labour party made of the economy. We are clearing up its mess, and he ought to have shown a little humility on that point.
On delivery, let me give the hon. Gentleman the facts about this Government’s record. Since 2010, 30 major road schemes have been completed. Of the 24 major projects announced since 2010, eight are under construction, and eight more start this year. Of the 56 local road schemes announced, 28 have been completed or are under construction, and 15 more start this year. Some 150 stations have been upgraded across England and Wales, including Blackfriars and King’s Cross. Some 190,000 school places have been completed for the next school year, and 81 free schools have been built. Some 84,000 houses have been completed, and 59,000 houses have been protected from flooding. Crossrail is employing 8,000 workers with six boring machines—more than the Opposition Front Bench.
On investment, we have added £20 billion of investment at every fiscal event since the 2010 spending—
Mr Speaker
The length of the Chief Secretary’s answer is improper, regardless of its content. The way in which a Minister replies to questioning is a matter for him, and he is at liberty to refer to material, but he must not dilate in his answer. If it were to become effectively a second statement, he might have some difficulty retaining the attention of the House.
Danny Alexander
Thank you for that advice, Mr. Speaker. I was merely attempting to respond to the inaccurate account of our investment given by the hon. Member for Nottingham East (Chris Leslie). In fact, investment as a share of GDP will be higher during the current decade than it was during the 13 years for which Labour was in office. We are spending more and underspending less than Labour did. Ours is a record of delivery and a record of action, and today I have given the House our promise of more.
The hon. Gentleman asked about the private sector. We have been listening to the private sector, which is why we are setting out the long-term plans that it wants. He asked about the planning system. We have reformed the planning system, and he voted against that reform. He also asked about flooding. As I said in my statement, my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs will be announcing amendments to the Water Bill. The hon. Gentleman will know from the spending round document which was published yesterday that the forecast for local government self-financed expenditure is up, not down. I am sorry to hear that he opposes investment in shale gas. His Building Schools for the Future programme was expensive and inefficient, which is why we have introduced the Priority School Building programme.
I should very much have liked to hear from the hon. Gentleman that he supported our detailed and ambitious plans, and so would the country. I am sorry that we did not hear that from him, and I hope that he will reflect on it in the days to come.
Miss Anne McIntosh (Thirsk and Malton) (Con)
I congratulate my right hon. Friend on his statement. I thank him for his announcement about flood defences, which will pave the way for a flood insurance agreement, but will he please give careful consideration to maintenance spending as well? The Environment, Food and Rural Affairs Committee took evidence from the Association of British Insurers about the subsidy issue. There is a fear that a subsidy will be paid by all households that take out insurance, which would have implications for their spending. We want insurance to be available, yet affordable.
Danny Alexander
I know that the hon. Lady has taken a great interest in this subject. Maintenance spending constitutes a major part of the DEFRA resource budget that was announced yesterday. DEFRA has made considerable efficiencies in flood resource spending, and will continue to have a significant budget. I have been assured by the Association of British Insurers that the proposed levy will not add to people’s bills overall.
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
I am afraid that the Chief Secretary’s statement was an insult to the intelligence of the British people. We have established, have we not, that in 2015 we as a nation will be spending £10 billion less on infrastructure than we spent in 2010. How can the Chief Secretary allow infrastructure and structural investment funds from Europe to be protected in Scotland and Wales while they are being cut by two thirds in England, at a time when English local government is being asked to cut its day-to-day spending on essential services by a third, allegedly to allow funds to be invested in infrastructure?
Danny Alexander
The Prime Minister secured an extremely good deal on structural funding for the United Kingdom at the recent European summit. There will be a fair allocation of the small reductions in funds between the four constituent nations of the UK, and I think that is the right and proper approach.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
I congratulate the Chief Secretary on his excellent statement, but perhaps he will forgive me if I do not share his enthusiasm for HS2. I am delighted to learn that there is to be a new prison in north Wales, because I have been asking for one for eight or nine years, but I am sorry that the statement made no reference to Wylfa.
More important is the question of airport capacity in the south-east. We cannot duck that Howard Davies report for much longer. We must have it well before the general election, otherwise we shall be building HS2 in completely the wrong place.
Danny Alexander
I am aware of my right hon. Friend’s views on HS2, as is the House. She should know that Hitachi is considering the Wylfa power station as part of its acquisition of Horizon. As for her last point, I will certainly take it up with her.
Alan Johnson (Kingston upon Hull West and Hessle) (Lab)
I was pleased to hear that the Government intend to upgrade the A63 at Castle street in my constituency, in accordance with the last Government’s 10-year highways plan. However, the road currently cuts the city off from the waterfront. Will the Chief Secretary agree to work with the Secretary of State for Transport and the right hon. Member for Tunbridge Wells (Greg Clark), the cities Minister, to ensure that the Castle street project includes an iconic land bridge that will enable us to fulfil our economic potential by connecting the city with the waterfront?
Danny Alexander
I am grateful to the right hon. Gentleman for his comments and of course I will do that. That is why we have funded the local growth deal under the Heseltine recommendations, and this road investment will also help to unlock port facilities for greater use, for renewables among other things.
Stephen Williams (Bristol West) (LD)
My right hon. Friend has made a sweeping series of announcements that will be felt in every community around the country, in particular the investment in rail infrastructure. As well as that renewal of Victorian infrastructure, however, does he agree that his announcements on science, superfast broadband and low-carbon energy are paving the way for the hi-tech, low-carbon future?
Danny Alexander
I agree very much with my hon. Friend. The commitment on broadband in particular, with fixed broadband in 95% of the population and superfast broadband—mobile, 4G and so on—to 99% or more of the population, will be welcomed in every corner of the UK, no matter how remote.
Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)
The biggest problem facing the north-east of England is the need to strengthen the region’s private sector employment base. How will today’s statement help to do that?
Danny Alexander
I would refer to two things. First, the single local growth fund, which we have worked on with the North East local enterprise partnership in particular, will be very welcome news in the north-east. I also hope the commitment to the A1 north of Newcastle will promote significant investment in the north-east economy.
Sheryll Murray (South East Cornwall) (Con)
I particularly welcome the money earmarked to tackle flooding, as there was a fatality in my constituency earlier this year. Can my right hon. Friend confirm this should help people in places like Looe, which is still suffering from road closures due to the horrendous situation we had earlier this year?
Danny Alexander
The precise details of where the money will be spent will be for the Environment Agency to develop, but the purpose of announcing this funding now is precisely to help communities such as my hon. Friend’s to ensure they are not in danger of flooding in future.
Mr Ben Bradshaw (Exeter) (Lab)
My constituents in Exeter saw under the last Government five new high schools, several new primary schools and a new medical school, but so far, in more than three years, they have seen absolutely nothing of what this Government have promised on infrastructure. Why should they believe anything the right hon. Gentleman has said today, given his appalling record at delivering what he has already promised?
Danny Alexander
If the right hon. Gentleman were giving a balanced account, he would also have referred to the flood defences we are investing in, and the local road project around Exeter that has been completed.
Mr Nick Gibb (Bognor Regis and Littlehampton) (Con)
I welcome the capital for the A27 Chichester bypass, for which my hon. Friend the Member for Chichester (Mr Tyrie) and I have been pressing for a number of years. I also welcome the initial agreement the Government have reached with the insurance industry based on the Flood Re proposals, and the new powers they are contemplating, which may help to tackle the refusal by a minority of insurance companies to insure houses that have suffered flooding, such as the company that has just written to one of my constituents withdrawing cover because the boundary of his property suffered flooding in June last year, despite neighbouring properties being insured by other companies. Will my right hon. Friend look into the practices of companies that are refusing to abide by the current statement of principles?
Danny Alexander
First, every insurance company will have to sign up to the Flood Re deal in order to be valid, and as I said in my statement, we will bring forward amendments to the Water Bill to take backstop regulatory powers in case that does not happen.
Hugh Bayley (York Central) (Lab)
Some of my constituents cannot sell their homes because when they, or the new buyer, seek flood insurance, it is completely unaffordable; one person was told the excess would be 20% of the value of the home. When will this initial agreement become a substantive agreement, so as to allow these people to get on with their lives?
Danny Alexander
As part of the proposed arrangements, excesses would be capped to deal with the problem the hon. Gentleman mentions. We will bring forward the amendments to the Water Bill in the autumn.
Pauline Latham (Mid Derbyshire) (Con)
I particularly welcome the announcement about the A38 in my constituency, as there is a huge problem there for both local and long-distance traffic, because it is the one place where drivers have to stop at two roundabouts. I therefore know everybody locally will welcome that. May I also welcome the house building measures? We do need that to get the economy going locally; we need more houses, and we certainly need more affordable homes.
Danny Alexander
I agree with both my hon. Friend’s points. We need to invest in the road networks to support growth and the economy and this is the biggest plan for road investment since the 1970s. Affordable house building by housing associations accounts for 40% of all new housing starts this year. It is very important we maintain that record and build on it in the years to come.
Helen Goodman (Bishop Auckland) (Lab)
Yesterday we learned that of the £530 million the broadband delivery unit had been allocated, only £3 million had reached local authorities. Today, the Chief Secretary said that beyond 2015 he was allocating £250 million to broadband roll-out, but previously we were told that the BBC licence fee would be top-sliced to the tune of £300 million. What has the Chief Secretary done with that £50 million? Has he cut it or has he lost it?
Mr Jonathan Djanogly (Huntingdon) (Con)
The investment of £1.5 billion in the A14 and the bringing forward of the project will be welcomed by my constituents and many people and businesses throughout the east of the country. Will the Chief Secretary say a little more about how the requirement for money will be split between central Government, the region and local businesses?
Danny Alexander
The Department for Transport will make an announcement on that in due course. The point I am making today is that we have set aside the funding for delivering the project as planned, bringing the start date forward by two years to 2016. The road is one of the most important and clogged up economic arteries in our country and we need to invest in it to ensure we get our economy moving.
Mr Mike Weir (Angus) (SNP)
Publication of the strike price for renewables today is very welcome, but as yet we have had no mention of the strike price for nuclear. Indeed, the only mention of nuclear in the statement was a multi-billion pound guarantee to build Hinkley Point. How does that stand with the promise for no public subsidy for new nuclear?
Danny Alexander
It stands completely alongside that promise. First, I welcome the hon. Gentleman’s positive remarks about strike prices and he will see in the document we published today strike prices for all the other forms of renewable energy. Of course, in the case of nuclear, there is a detailed and ongoing commercial negotiation. I am sure that he would think it right for us to drive a hard bargain in those negotiations, because of course these prices will have to be paid by consumers for 50 years to come.
Margot James (Stourbridge) (Con)
I very much welcome the shift from entitlements and consumption to capital investment that will create jobs now and underpin our future prosperity. It represents a crucial part of the Chancellor’s rebalancing of the economy strategy. Will my right hon. Friend the Chief Secretary comment on the benefit of the plans to regions outside London and the south-east, such as my own area of the west midlands? Will we see more projects like the excellent new transport interchange opened in my constituency of Stourbridge last year?
Danny Alexander
I welcome that project, which is another example of projects being delivered by this Government during this Parliament. Of course, the plans I have set out today on roads, on energy and on rail will directly benefit every part of this country, including the west midlands. The hon. Lady is right that even at a time of austerity we are squeezing spending wherever we can to realise more resources for investment in the long-term infrastructure needs of this country. That is the right strategy and it is a shame the Opposition seem to oppose it.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
I welcome investment in transport, but can the Chief Secretary tell us how much extra he has announced today in addition to ongoing programmes and projects that have already been announced? That includes the Mersey Gateway, which has already had its go-ahead.
Danny Alexander
Today I have announced the guarantee for the Mersey Gateway bridge, which is necessary to enable that project to go forward because of the private funding. That is a new announcement of a guarantee. We are setting out tens of billions of pounds of new investment in roads until 2020. I know that the hon. Lady in particular has argued in the past for longer-term certainty on funding for road projects to allow us to get better value for money for those investments. That is precisely what we will do.
Duncan Hames (Chippenham) (LD)
This must be the most substantial and, dare I say, lengthy commitment to a stronger economy made by a Liberal in government from that Dispatch Box since Lloyd George. How much less could we have afforded to invest in our future had the Government not taken the decisions necessary to ensure that the interest rates at which we borrow are kept low?
Danny Alexander
My goodness! I am not sure quite how to respond to that one—I am blushing slightly, but I am grateful for the positive remarks from my hon. Friend. He makes a very important point. If we had not entered into the process of clearing up the economic mess left by the Labour party, we would not be able to invest any of this money at all.
Derek Twigg (Halton) (Lab)
The Chief Secretary has confirmed what the Chancellor told us on 20 October 2010, at column 963 of Hansard, that financial support would be available for the Mersey Gateway in my constituency. However, the devil is in the detail. Will the Chief Secretary meet me to hear the concerns of my constituents? The funding package given to Halton borough council restricts its ability to give discounts or free travel across the currently free Widnes to Runcorn bridge when the Mersey Gateway opens.
Danny Alexander
My hon. Friend the Financial Secretary, who is also responsible for cities policy within the Treasury, will be pleased to meet the hon. Gentleman to discuss precisely those concerns.
Craig Whittaker (Calder Valley) (Con)
Constituents in the Calder Valley who cannot get flood insurance for their homes and businesses after the three devastating floods that we experienced last summer have contacted my office. Can my right hon. Friend tell the people of Calder Valley, after the announcements today, how long they will have to wait before the initial proposals become actual proposals, and when all of them will be able to get flood insurance and at an affordable price?
Danny Alexander
The existing statement of principles, which was due to expire this month, will be continued for the next year or so until this arrangement is fully in place. I hope the hon. Gentleman will welcome the long-term commitment to capital investment in flood defence, which of course will be of benefit to his constituents, along with those of many other hon. Members.
Mr Clive Betts (Sheffield South East) (Lab)
Not one mention was made of local councils in the statement or of the role they can play in helping to rebuild our infrastructure. Why does the Chief Secretary continue with the ridiculous mortgage guarantee scheme, which the Treasury Committee, the International Monetary Fund and the Governor of the Bank of England have all said is more likely to add to housing demand than increase housing supply? Why does he not use the billions of pounds available to allow local councils to build homes that people can afford to rent and put thousands of constructions workers back in work?
Danny Alexander
Local authorities were mentioned in my statement, particularly in relation to the single local growth fund. The money goes to local enterprise partnerships, which as the hon. Gentleman knows bring private sector businesses and local authorities together to spend the money. Part of the money going into the single local growth fund comes from the new homes bonus, so it will enable LEPs to invest in housing if that is what they choose as part of their local economic priorities. As for the mortgage guarantee scheme, it is important that, when it is hard for young people to put together the deposit they need to buy a house, we support them. That demand will also bring forward additional supply. That is the view of the Home Builders Federation, and I agree with it.
Tim Loughton (East Worthing and Shoreham) (Con)
I, too, am delighted that the Chief Secretary has named the A27 as part of the road works, but he mentioned only the Chichester by-pass. Will he confirm that the study will include a holistic study of both the bottlenecks at Worthing and Arundel? Otherwise he will just create two bottlenecks further down the A27, which is the longest car park in West Sussex.
Danny Alexander
I can confirm that we are getting on with the Chichester by-pass, one of the Highways Agency schemes that is already worked up. We will be conducting further work across the corridor, including Worthing and Arundel, to invest across the corridor between now and 2020.
Ms Karen Buck (Westminster North) (Lab)
The housing investment that the Government have announced must be set against the halving of the affordable housing programme inherited from the previous Government, which led to a halving of social house completions last year. Is it not true that the right hon. Gentleman’s affordable rent model is based on higher rents, that higher rents mean higher housing benefit, and that housing benefit will cost his Government £13 billion more in this spending period than it did under the previous Government, and can he explain how that makes sense?
Danny Alexander
I think the hon. Lady was giving a back-handed welcome to the commitment that we made to affordable housing today. On rents, the policy that we have set out of CPI plus 1 for 10 years for uprating of rents saves the Government a growing amount of money in housing benefit payments for the simple reason that tenants rents will increase less fast than previously. That is good news for those individuals, and will save the Government money, as was announced in the costings document yesterday.
Mr Alan Reid (Argyll and Bute) (LD)
I am delighted by the broadband announcement, but Scottish Government money is also required. In the current round, the Scottish National party Government reduced this Government’s target of 90% to only 75% in Argyll and Bute. Can the Chief Secretary please persuade the Scottish Government to put in their fair share of money so that the new targets can be met in Argyll and Bute?
Danny Alexander
I will certainly do my best. I should say that the additional £250 million will need local matching, including in Scotland from the Scottish Government, to get to 95% of my hon. Friend’s constituents and, I hope, to 99% in due course. I remind the House that this is one of the areas in which we are better together as one united kingdom.
Albert Owen (Ynys Môn) (Lab)
I genuinely welcome the announcement of a new prison in north Wales, for which I and many colleagues across the House have been campaigning. However, in the future—even after a projected Bill has been passed—can we expect all big energy announcements to be made by the Treasury? Is that not a further downgrading of the Department of Energy and Climate Change, where we have a part-time Minister from the Department for Business, Innovation and Skills with the Secretary of State? Is not the Chancellor doing this for self-serving Treasury purposes?
Danny Alexander
I am grateful to the hon. Gentleman for his comments about the new prison. I think my right hon. Friend the Secretary of State for Energy and Climate Change welcomes the fact that he has full and wholehearted support from the Treasury for his policies to bring forward the low-carbon investment this country needs.
Mr Rob Wilson (Reading East) (Con)
Having been an early applicant for a university technical college, UTC Reading will open in September. May I welcome the 20 UTCs and 180 new free schools announced in today’s statement? Does the Chief Secretary agree with me that those innovative new schools are essential to raising educational standards and providing the skills this country will need in the global race ahead?
Danny Alexander
I certainly agree with the hon. Gentleman that the innovative UTC model offers real benefits to the Government’s strategy on raising educational standards across the whole schools system. That is why we have invested in more UTCs, and I am delighted to hear that the one in his constituency is working so well.
Geraint Davies (Swansea West) (Lab/Co-op)
The vast majority—some 80%—of investment announced is in London and the south-east, and there was virtually no mention of Wales. Why is there no investment in an M4 relief road, a high-speed rail link to Wales, superconnectivity status for Swansea or a reduction in the Severn bridge toll, so we are not taxed for our infrastructure in Wales, or more money for the Welsh Government? Where is the cash for Wales?
Danny Alexander
There are projects and programmes announced today, including on energy and broadband, which will be of huge benefit to the hon. Gentleman’s constituents, and I hope that he would welcome them, as well as the new prison in north Wales, which his hon. Friend the Member for Ynys Môn (Albert Owen) welcomed just a moment ago—[Interruption.] A prison for English people? I am sure there will be some Welsh people in there too, if that is what the hon. Member for Swansea West (Geraint Davies) would like. As for the M4, this is closely connected to the discussions, which are in their final stages, on our response to the Silk report, which we will publish very shortly. I hope that he will, in due course, have news that he will wish to welcome.
John Glen (Salisbury) (Con)
I warmly welcome the £10 billion investment in roads, in particular the mention of investment in, I assume, the dualling of the A303. Will the right hon. Gentleman confirm that representations from residents around Amesbury and Stonehenge will be heard and that economic benefits will also accrue to Wiltshire from the investment announced today?
Danny Alexander
Those representations certainly will be heard as the Department for Transport and the Highways Agency develop their plans for that important route.
Jack Dromey (Birmingham, Erdington) (Lab)
The £3 billion investment in affordable house building will not make up for the cuts in 2010 that led to a 29% collapse last year, will do nothing for affordable house building this year or next, and therefore mean five wasted years under this Government. May I ask the Chief Secretary this question: is it true that the amount announced today is less than in the last two comprehensive spending reviews?
Danny Alexander
As I said in my statement, and the hon. Gentleman should welcome this, we will through this announcement be building more homes on average every year than in any year but one under the previous Government. Frankly, he should be ashamed of the fact that the number of affordable homes in this country fell by 420,000 during his party’s time in office—a total disgrace.
Andrew Percy (Brigg and Goole) (Con)
The announcement about the A63 is good news for the sub-regional economy in Humber and for my constituents in Brigg and Goole, and comes on top of other investments which have already been delivered, such as the Humber bridge, the Get Moving Goole project and the A160. We are doing very well on roads, but can I ask the Chief Secretary to continue to listen to representations about the electrification of rail services on the north and south banks of the Humber?
Danny Alexander
There has been a strong cross-party campaign on the A63, and I am pleased to have been able to make the announcement today. We will certainly to listen to the hon. Gentleman’s representations on the other subjects he mentions.
Mr Jim Cunningham (Coventry South) (Lab)
We should obviously welcome any investment in the economy, but the Government should not have cut it in the first place. The Chief Secretary has mentioned on one or two occasions, as have other Ministers, that some of that investment will be financed out of efficiency savings. Are there any efficiency savings left?
Danny Alexander
This is the first Government who have made a serious effort to look for efficiency savings. I mentioned in my statement the excellent work of the efficiency and reform group in the Cabinet Office under my right hon. Friend the Minister for the Cabinet Office, which has yielded up a view that there are more savings yet to be had in Departments. That is why I announced today a rolling programme of efficiency reviews across major Departments to unlock yet further savings over the next two years.
Andrew Jones (Harrogate and Knaresborough) (Con)
I particularly welcome the announcement on the new regional air connectivity fund. Aviation capacity is often described as a south-east issue, but it applies right across the country, especially in Yorkshire. May I urge my right hon. Friend to continue to focus on connectivity between modes of transport and on the fact that this issue applies right across the country?
Danny Alexander
I very much agree with my hon. Friend’s point. As the Member of Parliament for Inverness, I am all too aware of the importance of air connectivity for remote areas of the country. This fund will help to ensure that for all parts of the UK there is support available when those projects can be justified.
Mr William Bain (Glasgow North East) (Lab)
Given that the Chancellor has had to admit that the spending round did not bring forward a single penny of new public capital investment for 2015-16, can the Chief Secretary tell the House when we will have the judgment of the Office for Budget Responsibility as to whether his statement today will make any difference whatsoever to growth this year, next year or the year after?
Danny Alexander
The OBR will publish a new growth forecast at the time of the autumn statement. At the Budget this year we allocated an additional £3 billion of capital in 2015-16 and for the remaining years of the decade, and the announcements today are partly about how we will use that money.
George Freeman (Mid Norfolk) (Con)
I welcome this major package of investment, which contrasts with the record of gridlock under the previous Government. I particularly welcome the investment in science and research and development infrastructure, the investment in broadband for the rural economy, and the A14, which will help to unlock Britain’s fastest-growing city, Cambridge. With respect to the eastern region, may I ask that priority be given to the A47, which is a strategic artery linking east-west and linking the offshore energy cluster and the life science cluster with Cambridge? What reassurance can my right hon. Friend give us that in this £28 billion roads package, the A47 may yet be able to receive funding?
Danny Alexander
I am grateful for the welcome and I will certainly pass on the point about the A47 to the Secretary of State for Transport.
Chris Bryant (Rhondda) (Lab)
Even the Chief Secretary must admit that the Government completely and utterly bungled the west coast rail franchise. The way that they are now implementing the roll-out of superfast broadband is exactly the same bungle. It is working out as a bung to BT. Is it any coincidence that the chief executive of BT is to become a Trade Minister, so it will get yet further bungs?
Danny Alexander
What a pathetic comment. There was a proper competition for all the contracts in every county in England, as well as in Scotland and Wales. The hon. Gentleman should welcome the fact that the Government are making a serious financial contribution—the first Government ever to do so—in the roll-out of superfast broadband across the country.
Mr Ben Wallace (Wyre and Preston North) (Con)
Assuming that 10% of shale gas is recoverable, Lancashire and Yorkshire are sitting on $440 billion worth of gas. Will the Chief Secretary ensure that the communities that live closest to this potential development are generously compensated, and that a sizeable proportion of those revenues, which could potentially go to the Treasury in London, are used to improve and develop those great counties of England?
Danny Alexander
As the hon. Gentleman will see when he looks at the document that we published today, part of the announcement states:
“Operators will commit to provide £100,000 in community benefits at exploration phase, per well-site where hydraulic fracturing occurs. They will commit to sharing their proceeds with communities, providing one per cent of revenues to communities that host them.”
Kevin Brennan (Cardiff West) (Lab)
May I echo the Chancellor’s praise yesterday for the Chief Secretary for the great job that he has done as the Tory election strategists’ little helper? Beneath the hilarious hyperbole in today’s statement, is not the truth, as per the Chief Secretary’s own document, that gross investment is falling by £1 billion next year—by 1.7%—or is the document wrong?
Danny Alexander
We set out the plans for capital investment in 2015-16 and beyond yesterday and in the Budget last time. We have set aside £50.4 billion in 2015-16. That is £3 billion more than was previously promised, which we added to at the time of the budget. Those comments are ludicrous when we have not yet heard an apology from Labour for the mess they made of the British economy.
Neil Parish (Tiverton and Honiton) (Con)
I welcome the Chief Secretary’s statement. Affordable flood insurance for all is essential. Also, the A303/A30, which runs from Honiton up into Somerset and Wiltshire, is absolutely essential for the visitor experience in the west country and for its businesses. One final plea is for new school buildings for Tiverton high school and a new school building for Mrs Ethelston’s primary school in Uplyme.
Danny Alexander
I agree wholeheartedly about the importance of the A303 and those road connections. The south-west is a vital part of our economy and needs to be properly connected to the rest of the country, and this investment will do that. With regard to the specific points on schools, I will ensure that they are brought to the attention of the Secretary of State for Education.
Katy Clark (North Ayrshire and Arran) (Lab)
Is it not a shocking indictment of this Government that since 2010—[Interruption.] I suggest hon. Members listen to what I have to say before responding. Is it not a shocking indictment of this Government that since 2010, 84,000 construction workers have lost their jobs and construction output is down by 12%? Is not this statement just another example of smoke and mirrors that will do nothing to improve investment before 2015?
Danny Alexander
The hon. Lady is right to highlight the problems in the construction sector, but those problems started in 2008 when her Government were in office. They saw a major drop in output. By investing more in affordable housing, in both this Parliament and the next, we are giving companies in the sector certainty so that they can plan for the future and we are providing Government investment to help ensure that jobs are maintained in a vital part of our economy.
Dr Julian Huppert (Cambridge) (LD)
There is much to welcome in the statement: increased funding for affordable housing, science and green investment—it is all excellent. The announcement on the A14 will be welcomed by many. There is a long history of schemes for that road coming and going, while the poor design continues and the Huntingdon viaduct is well beyond its design life. Can my right hon. Friend confirm whether it will be a toll road? I certainly hope that it will not be. Can he be clear on that point?
Danny Alexander
The road will be taken forward according to the plans set out previously. That will include some tolling for new capacity.
Roberta Blackman-Woods (City of Durham) (Lab)
The north-east leads the way in the British export industry, so can the Chief Secretary tell us what percentage of infrastructure spending will go to the north-east, and by when, to support the expansion of our manufacturing export base?
Danny Alexander
The hon. Lady is absolutely right to highlight the fact that the north-east is the only region in the country that is a net contributor to the UK’s exports. The infrastructure investment announced today, for roads, broadband and so on, will help those industries. I cannot give her a precise breakdown, but I urge her to encourage the local enterprise partnerships in the area to take a full part in the local growth fund, which is a huge opportunity for the north-east.
Mr David Nuttall (Bury North) (Con)
I warmly welcome the announcement of further investment in high-speed broadband. Nearly two years ago almost £1 million was awarded to the Labour-controlled Greater Manchester authorities to procure improved broadband. Today, thousands of my constituents in Bury, Ramsbottom and Tottington are still waiting and have seen no improvement whatsoever in broadband speeds. Will the Chief Secretary please undertake to speak to whoever it is, whether in Broadband Delivery UK or local government, to ensure that my constituents will at last see a real improvement in broadband speeds?
Danny Alexander
I am sorry to hear about the experience of the hon. Gentleman’s constituents. The Greater Manchester Combined Authority is actually one of the most innovative in the country. The earn-back deal, which we have confirmed agreement on today, will give those authorities a real incentive to invest in the local economy. I will certainly pass on his specific concerns to BDUK.
Heidi Alexander (Lewisham East) (Lab)
I am afraid that half an hour of windy rhetoric from the Chief Secretary does nothing to make up for the dreadful, short-sighted decisions that this Government took when they first came to power three years ago. If investing in schools and homes is so important to them, why was one of their first actions to axe the Buildings Schools for the Future programme, and why did they cut the national affordable housing programme by 63%?
Danny Alexander
If investing in schools and houses was so important to the previous Government, why did they preside over a fall in affordable housing stock of 420,000 and cancel the survey to evaluate the maintenance needs of our country’s schools? It is also about getting the best value for taxpayers’ money, which, frankly, Building Schools for the Future was failing to do in a big way.
Glyn Davies (Montgomeryshire) (Con)
I greatly welcome the Chief Secretary’s announcement of investment in road infrastructure. I particularly welcome the reference to M4 improvement in the Chancellor’s statement yesterday. However, the mid-Wales economy depends on other improvements on the Welsh-English border at Llanymynech. The cost-benefit on the Welsh side is huge, but on the English side it is very weak. Will my right hon. Friend ensure that mid-Wales does not lose out on transport infrastructure improvement because of the way in which devolution works?
Danny Alexander
Many of these matters are devolved to the Welsh Assembly Government, and so it is for them to take them forward. I have regular and friendly discussions with the Finance Minister of the Welsh Assembly Government, and I will draw my hon. Friend’s concerns to her attention in my next conversation.
Huw Irranca-Davies (Ogmore) (Lab)
As regards capital spending that creates jobs, it would be wrong to say that this is a “jam tomorrow” statement; it is a case of jam in a couple of years and then only perhaps and not very generously. Can the Chief Secretary confirm that in 2014-15 flood capital spending will be £344 million less than we spent in 2010? If he is not sure, he can turn to the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Newbury (Richard Benyon), who is on the Bench next to him and who should have been making that statement today.
Danny Alexander
In 2014-15 spending will be £358 million, rising to £370 million in 2015-16.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
May I give my heartfelt thanks to the Chief Secretary for mentioning the improvements to the A303 for which I have campaigned for the past 15 years? How long does he estimate that it will take for the dualling to become a reality?
Danny Alexander
The A303 is one of the most notorious transport bottlenecks in the country, and these improvements will have a major impact on the economy in the south-west of England. The Highways Agency will be developing the detailed plans, so we will need to consult on those, including, no doubt with my hon. Friend. This is part of the funding that was set out for between now and 2020 to deliver improvements on that route.
Kate Green (Stretford and Urmston) (Lab)
I welcome the encouraging news about the Trafford Park extension of the Metrolink. Will the Chief Secretary comment on new Homes and Communities Agency regulatory powers that appear to be restricting housing associations’ ability to open up new and commercial income streams, with a knock-on effect on their ability to build more homes?
Danny Alexander
I am grateful for the hon. Lady’s comments on the Trafford Park Metrolink extension. On her question, I will certainly look into that, because I do not want the Homes and Communities Agency to be doing anything that holds back housing associations from engaging in appropriate developments. I will take up her point with my right hon. Friend the Secretary of State for Communities and Local Government.
Guy Opperman (Hexham) (Con)
Northumberland residents will welcome the good news about the A1, flood defences, and the potential school rebuilding programme. Greater funding for broadband is key to England’s least densely populated county. I know that my right hon. Friend has visited Northumberland. Will he give more details about the expanded broadband plans?
Danny Alexander
There is a broadband plan in Northumberland that has been negotiated by the local authority with the supplier, funded partly by national Government and partly by local government. Today’s announcement is about extending broadband to reach 95% of the population of Northumberland and to work with the industry to find ways to get broadband, whether mobile or 4G, to 99% of the population. We will keep my hon. Friend updated on that.
Sheila Gilmore (Edinburgh East) (Lab)
I fear that the Chief Secretary does not really understand housing finance. The homes to be built from 2015 have a subsidy level of under £20,000 per unit, and that is how he is able to announce that there are suddenly double the number that there might otherwise have been. The problem with that, as he knows full well, is that it requires much higher rent levels, and that will have a knock-on effect on the housing benefit budget for years into the future. Is that sensible?
Danny Alexander
The move from social rents to affordable rents for homes newly built by housing associations is a right and fair way to ensure that there is a balance between the subsidy given to the individual and the capital subsidy given to the builder of the house. It allows us to build many more houses for the amount of money that we have available, and the hon. Lady should be grateful for that.
Jessica Lee (Erewash) (Con)
I thank my right hon. Friend for his statement, particularly the announcements about my constituency, notably the improvements on the M1 at the junction at Long Eaton. I add to that the nearby work on the A38 at Derby and the campaign that I have been leading for many years to secure the reopening of the train station at Ilkeston, now agreed by the Department for Transport. Does he agree that all those points link together to bring great improvements and opportunities for the people of Erewash, as well as encouraging businesses to invest in the area?
Danny Alexander
It is clear that the hon. Lady’s campaigning is a model of parliamentary effectiveness and I urge her to continue with it to the further benefit of her constituents.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
In response to my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown), the Chief Secretary spoke of his “commitment to the A1”. What he actually said in his statement was:
“Any hon. Member planning a trip to Scotland…will want to see a better A1 north of Newcastle.”
Is that really his idea of a commitment? If he can say nothing more credible—I hope that he can—is it any wonder that he inspires so little confidence in the country?
Danny Alexander
I am sorry to hear such a curmudgeonly response to what I thought was a very positive announcement. [Interruption.] The point that I was making in my statement was that there are a number of long-standing issues on our highways network that have never been addressed. We have set aside the funding and will bring forward the plans to ensure that the improvements to that route take place between now and 2020.
Mr Speaker
My sense is that there is nothing unparliamentary about the use of the word “curmudgeon”. It is very much a matter of taste.
Paul Burstow (Sutton and Cheam) (LD)
I congratulate the Government on the announcements about social care spending and the health service. I draw my right hon. Friend’s attention to a capital project that will serve my constituency: the commitment to an investment of £219 million in St Helier hospital. However, that project has been stuck in the mud for the past three years because local NHS managers have been blocking its progress. Will he intervene with Ministers at the Department of Health to unblock that project and provide the much-needed investment?
Danny Alexander
I agree with the first part of what my right hon. Friend said. The massive reforms to health and social care that we announced yesterday are hugely important for the future of this country. I am proud to be part of a Government who are taking those matters forward. Much of the credit for that must go to him for the work that he did in government and for his campaigning outside government. On the latter point, I will certainly raise that matter again with Ministers at the Department of Health.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
It was quite reasonable for my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) to try to find out exactly what the Chief Secretary has announced about the A1, so I will try again. Is he making a commitment to the dualling of the A1 from Newcastle to the Scottish border? If so, when will the work start? If he is not making that commitment, what is he announcing today?
Danny Alexander
I am committing to undertaking the improvements that are necessary to bring that road up to a proper standard. There is clearly the need for a detailed feasibility study to consider precisely what is needed at every stage of the route. The money is set aside for that investment between now and 2020, so it will take place.
Julian Smith (Skipton and Ripon) (Con)
Superfast North Yorkshire is about to make North Yorkshire one of the first counties in England to deliver 90% broadband coverage, but we need a bit more help to get to 95%. We also have the Tour de France coming next year, and there is a big risk that the cyclists will come a cropper on our potholes. Can we have a conversation soon about how North Yorkshire can get the cash quicker?
Danny Alexander
I am sure that Ministers at the Department for Transport would be happy to have that conversation. As the hon. Gentleman will know, in the autumn statement last year, we set aside additional funds this year and next year for road maintenance and dealing with pinch points. I dare say that some of that money could be used to ensure that the Tour de France passes off without pothole-caused incidents.
Diana Johnson (Kingston upon Hull North) (Lab)
Is not the A63 announcement more about news management than road management, given that the work is due to start no earlier than has been planned for many years? Is this not another case of jam tomorrow, while Hull continues to have traffic jams today?
Danny Alexander
As we are the first Government to have committed to undertake that work, I thought that the hon. Lady would have welcomed it.
Roger Williams (Brecon and Radnorshire) (LD)
There will be a broad welcome for the certainty that is brought by the Chief Secretary’s announcement of a new prison in north Wales. However, any announcement on infrastructure spending by Departments whose responsibilities are devolved to Wales will have Barnett consequentials. Will he give a flavour of the consequentials that will accrue to the Welsh Government?
Danny Alexander
The Barnett consequentials of the 2015-16 public spending round were set out in the Chancellor’s statement yesterday. On the resource side, the Welsh Assembly Government will see a small reduction in their budget and, on the capital side, a small increase. I am sure that they will work with him to ensure that the money is used wisely for the benefit of the people of Wales.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
I welcome the A14 construction phase starting two years earlier, but I am particularly pleased by the publication of the draft strike prices. That should encourage SSE and ScottishPower to go ahead with their investment decisions in Galloper and the East Anglia Array, making Suffolk truly the green coast of the country.
Danny Alexander
The hon. Lady and I share a passionate commitment to green energy, and I hope that the strike prices now complete the picture for energy companies looking to invest. My message to the energy companies is, “You have the certainty you need, now bring forth the investment that the country needs.”
Mr Marcus Jones (Nuneaton) (Con)
I welcome the announcement on superfast broadband and hope that Arley, in my constituency, will benefit. Will my right hon. Friend seek to ensure that far more priority is given to providing superfast broadband on our industrial estates that are, at times, being overlooked in the current roll-out?
Danny Alexander
The hon. Gentleman makes an important point. I will say two things. First, I will draw his point to the attention of BDUK. Secondly, specific funding has been set aside to ensure that enterprise zones have the best broadband in the country. Broadband is a crucial part of those zones being able to attract the investment they need.
Stephen Gilbert (St Austell and Newquay) (LD)
Despite the welcome news on capital spend on flood defences, there remains the very serious issue of flood insurance. As my right hon. Friend will know, the current agreement with the insurance industry runs out in just three days’ time, yet he is not promising legislation until the autumn. What can be done in the meantime to maintain affordable and available flood insurance, so that people can protect, mortgage and sell their homes?
Danny Alexander
I am grateful to my hon. Friend. Let me repeat what I said in my statement. The existing statement of principles will continue until such time as the new arrangements that I described in my statement are put into place. The new arrangements will last a very long time and will protect his constituents. Alongside the extra capital investment we have announced today, they will ensure that we keep people safe from the risk of flooding.