Crown Estate Transfer Scheme 2017

Lord Adonis Excerpts

Thursday 23rd March 2017 Lords Chamber

[Lord Wallace of Tankerness (LD)]

My Lords, as the Minister indicated, I moved an amendment on Report, and possibly also in Committee, on the Scotland Bill, which the noble Earl, Lord Kinnoull, has already referred to. The Minister has already answered one of the questions I was going to ask, which was whether it was still government policy to have a statement after six months. I am delighted to hear that it is, and we look forward to the statement.

The noble Earl has asked the second question, which is a request for a bit of colour and flavour to the commitment made by the noble Lord, Lord Dunlop, when he was replying to the debate on my amendment and said that the Government would continue to press the Scottish Government to deliver what was promised to the island communities and other communities in the Smith agreement: some detail as to what the Government have been doing to “hold the feet of the Scottish Government to the fire” on this matter, which I think were the words used during the debate. This is a welcome first step in fulfilling the intention of the Smith commission and we hope that onward devolution will become a reality sooner rather than later.

[Lord Adonis (Non-Afl)]

My Lords, I am sorry to add to the questions that have been posed to the Minister, but could she tell the House a bit more about the relationship between the income from the Crown Estate that is being devolved to Scotland and the sovereign grant? Under the Sovereign Grant Act, a substantial proportion of profits from the Crown Estate go to fund the monarchy, and that proportion is rising significantly with the arrangement that the Government have entered into for the refurbishment of Buckingham Palace. The agreement in respect of the Crown Estate profits in England is for 25% to be used that way. Will a similar share of the profits from the Crown Estate in Scotland be allocated to the sovereign grant from the profits of the Scottish Crown Estate under this arrangement? If not, are the Scots making any contribution to the monarchy at all?

[Lord Davies of Oldham (Lab)]

My Lords, I have no wish to pile Pelion upon Ossa, because the Labour Opposition of course fully endorse this instrument. It would be surprising if we did not, as after all we were closely associated with the development of the Smith commission. We are very much in favour of devolution of income tax to Scotland and of course see the benefits to the Scots of them being able to obtain financial advantage form the Crown Estate in Scotland, so I am very much on the Minister’s side. She has been asked some interesting questions, which I am sure she will answer in a moment or two. I have only one, very general question, which was asked by a colleague in the other place, to which I think we have had no indication of an answer subsequently. On the question of resolving disputes between the UK and Scottish Governments, there has been a substantive change since the publication of the original draft seen by Parliament in October 2015.

Will the Minister say a little about the negotiations with Scottish Ministers, particularly as the process seemed to involve the resolving of disputes through determination by independent experts? We do not know who those experts might be, nor do we know how they will be chosen. That seems a very important point, to which the Minister should address herself in the context of this instrument.

--- Later in debate ---

[Baroness Neville-Rolfe]

To all noble Lords, of course.

[Lord Adonis]

The Minister says my question was detailed, but in fact is it not a quite fundamental one? One-quarter of the profits of the Crown Estate in England are going to fund the monarchy. Under this arrangement, are one-quarter of the profits of the Crown Estate in Scotland going to fund the monarchy or not? If not, is the inference to be drawn that it is only the English who will be funding the monarchy henceforth?

[Baroness Neville-Rolfe]

In the absence of expert advice, I would rather write to the noble Lord and engage if the need arises.

[Lord Adonis]

I am very sorry to detain the House but, given how important a point of principle this is, if the House is not even aware of what the situation is, is it reasonable for us to agree to the order today with no knowledge at all of how the funding of the monarchy is going to continue henceforth?

[Baroness Neville-Rolfe]

If I may, I will answer the other questions that have been raised, and we will see if we can get an answer for the noble Lord.

The noble Earl, Lord Kinnoull, asked a number of questions following on from the debates in this House at an earlier stage. Devolution, as he knows and as I have said already, is a matter for the Scottish Parliament to determine. The Scottish Government are currently consulting on the long-term management arrangements.

On the question of whether Scottish Ministers will adopt the Treasury Crown Estate framework, particularly regarding the independence of the Crown Estate commissioners, Scottish Ministers will make their own arrangements for the oversight of Crown Estate Scotland interim management, consistent with the Scotland Act and the Smith commission agreement. The Crown Estate commissioners will not be involved in the management of Scottish assets once they are transferred. This will have no impact on the independence of the Crown Estate commissioners, who will continue to manage Crown Estate assets in the rest of the UK.

The Scotland Act 2016 will enable the Scottish Parliament to legislate for the management of Scottish assets. Section 1 of the Crown Estate Act will not apply since this makes provision for the giving of directions by UK government Ministers to the Crown Estate commissioners. Scottish Ministers are currently consulting on the long-term management arrangements, as I have already said. On the management of assets, the ownership will remain with the Crown.

To respond to the noble Lord, Lord Adonis, we will ensure fiscal neutrality by making a block grant adjustment, ensuring that the Scots do not profit from the transfer.

Finally, the noble Lord, Lord Davies, asked me about the process for resolving disputes between the UK and Scottish Governments and how independent experts will be chosen. In the current draft of the scheme, we have ensured that dispute resolution processes will be carried out by an independent person. Where there is a dispute about market value, an appropriate independent person with specialist expertise will be appointed by agreement between the interested parties, or between Treasury and Scottish Government Ministers, as the case may be, and in the event that agreement cannot be reached, the Royal Institute of Chartered Surveyors can be asked to nominate an appropriate person instead.

This is an important transfer of powers to the devolved Administrations. We want the administration to be seamless and to take effect, as I said, from 1 April.

National Infrastructure

Lord Adonis Excerpts

Thursday 22nd January 2015 Lords Chamber

Moved by

[Lord Adonis]

To move that this House takes note of the case for improving investment in and planning for the United Kingdom’s national infrastructure.

[Lord Adonis (Lab)]

My Lords, the case for improving investment in and planning for the country’s infrastructure is compelling and I hope that today’s debate will promote consensus in working towards this goal from all sides of the House. Although the value of investing in infrastructure is increasingly understood and supported by politicians and the public alike, we have got to make it happen, and my argument is that it will not happen on the scale required unless it is better planned, better led and better financed. I want to look to the future, but an understanding of past failures is essential to preparing for a better future, so I will highlight three areas of failure.

First, as a country, we have significantly underinvested in infrastructure, and there has been far too much stop-go in public investment, which is just as bad. This has been a problem during the entire post-war period, but the present coalition Government have provided a master class. Public sector net investment more than halved between 2010 and 2014, from £53 billion to £25 billion in constant prices—a decline from 3.3% of GDP to 1.5%. The OBR projects that public sector net investment, as a share of GDP, will fall further to just 1.2% by 2017 under the present Government’s forward spending plans, and it will stay at just 1.2% for the rest of the next Parliament. To put this in context, across the EU as a whole, public sector net investment has declined much less—from 3.6% to 2.9% since 2009. Yet even within this fast-shrinking total there has been damaging and expensive stop-go investment, particularly in the roads programme, which was slashed in 2010, only for a large number of schemes—including the A14, the A21 and the A27—to be reinstated last year.

On top of public investment in public infrastructure there is, of course, privately financed investment. In some of the privatised utilities—notably telecommunications and water—and in port and airports, there have been significant investment programmes, but here, too, there are serious deficiencies. Where is the superfast broadband in rural areas that has been promised for years? What has happened to the super-connected cities programme, only a fraction of which has been implemented? The electricity generation sector, although privately financed, is in a precarious position because of serious underinvestment in new generating capacity and long-standing political uncertainty about the most appropriate and cost-effective mix of new energy sources.

This brings me straight to the second long-standing problem. It has proved notoriously hard to forge long-term consensus on key infrastructure priorities and projects. This is not universally true, even of big, initially controversial projects. Crossrail, HS2, the Thames tideway tunnel, the Silvertown tunnel and the nuclear power programme are now progressing with broad consensus. But in all these cases they are progressing years—if not decades—later than they should have done. I hope it will be possible to reach consensus much more rapidly on HS3, linking the major cities of the north with much faster and higher-capacity trains, and we look forward to the Government’s plan, to be published in March.

However, in many vital areas, controversial projects have been stalled, for years if not decades. Airport expansion in the south-east of England, vitally needed bridges across the east Thames, many major new housing developments and new electricity-generating capacity have been stymied not just by understandable differences of opinion but by a protracted inability to resolve these differences at the political level. Heathrow, the Thames Gateway bridge, new nuclear power stations and onshore wind farms, eco-towns and swathes of undeveloped brownfield land in areas of high housing need are all bywords for years, if not decades, of indecision and inability to build consensus.

The third key failure of recent decades is the failure to regard homebuilding as an overriding national and local infrastructure priority, in the face of an escalating housing crisis. There is consensus that we need to be completing between 200,000 and 250,000 new homes a year to meet England’s population and household growth. When housing was a major national priority in the 1950s, 1960s and 1970s, this level of housebuilding was achieved in most years, reaching a peak of 437,000 new homes in 1968, which also happens to be the year after the state last designated a major new town—Milton Keynes. But it is now 25 years since 250,000 new home completions were achieved in any year. Under this Government the provision of new homes has barely exceeded 100,000 a year, which is not only a policy failure but a cause of acute anxiety and stress to families nationwide, particularly in London and the south-east, where population is booming.

How should we tackle these weaknesses? Partly it is a question of priorities and leadership. To govern is to choose; we need political leaders and government—national and local—choosing to give a higher priority to housing and infrastructure, prioritising funding, and being prepared to take controversial decisions where they cannot or should not be ducked. These will be key issues in the next Parliament. I am particularly glad to see my noble friend Lord Rogers of Riverside in his place. He has long been making the case for systematic planning for brownfield sites to tackle housing need, particularly in London. This requires planning not just of housing but the transport and other infrastructure required to unlock major sites. The result could be a new generation of city villages. But it simply will not happen without a strong lead and systematic support from central government developing its own landholdings, notably in defence and the NHS, mobilising local government too in a new national drive to transform housebuilding.

Institutions have a key role to play in promoting better decision-making in respect of infrastructure, and I want to set out two worthwhile institutional changes which, between them, could transform our national and regional infrastructure planning and delivery: first, devolution to city and county regions; and, secondly, an independent national infrastructure commission.

As a policymaker, I have long believed that R&D often stands for “rob and duplicate”. On devolution, hardly anyone would now dispute that the establishment of the Mayor of London and the Greater London Authority, with a particular brief to manage London transport and promote better transport infrastructure, has been a notable success. We now need similar institutions in England’s other city regions. As a former Transport Secretary, I can say with near certainty that without the Mayor of London there would be no Crossrail, no Overground, nowhere near as much upgrading of the Tube and bus infrastructure, and, although this is not the direct responsibility of the mayor, there would also have been less commercial development and even less new housing development in the capital. Indeed, a good part of the reason why we are stuck on airports is because the mayor and central government have been at loggerheads on the way forward.

It is also notable that the next most effectively led and cohesive of the city regions after Greater London, Greater Manchester, has been the next most effective in terms of transport infrastructure planning and investment. Witness the growth of the Manchester Metro and Manchester Airport, thanks to significant investment and effective regional planning. We need bold devolution for other city and county regions to enable them to promote infrastructure improvements in a similar fashion. The noble Lord, Lord Heseltine, said this in his excellent report, published two years ago. I urged it too in a report for my party last year. The challenge is to create fit-for-purpose institutions, which means more, and more powerful, combined authorities on the Greater Manchester model and devolving to them serious budgets, tax income and infrastructure planning powers. For London, there needs to be more devolution to the mayor and the boroughs, particularly in respect of housing.

I turn to national institutions. It is essential that we have better institutional machinery for assessing medium-term and long-term requirements for national infrastructure in a non-party fashion, not—I stress this—to replace government and Parliament as decision-takers but to support and strengthen them and to help build consensus. This is the purpose behind my party’s proposal for a national infrastructure commission, as recommended by an independent review led by Sir John Armitt, who, along with the noble Lord, Lord Deighton, played a key role in the planning and delivery of the Olympics. The commission would span a 25 to 30 year planning horizon, updating its assessments at least once a decade.

At the Report stage of the Infrastructure Bill in November last year, I moved an amendment to establish a national infrastructure commission. I hoped the Government would rob and duplicate the idea, particularly given the consensual way that the noble Lord, Lord Deighton, has gone about his job as infrastructure Minister. Unfortunately, this did not happen, perhaps because the noble Lord himself was not responding for the Government. I am more hopeful today because he is. In responding for the Government last November, the noble Lord, Lord Ahmad, did not address the key argument for a commission—to promote independent analysis of medium-term and long-term infrastructure requirements in energy, transport, telecoms, water, waste, flood defences and possibly also social infrastructure and major urban extensions, taking account of sustainability, both environmental and financial. In responding, the noble Lord, Lord Ahmad, simply retreated into an argument about the cost of a commission, although, of course, the Government already employ armies of civil servants and officials within Whitehall and their agencies to work on infrastructure planning. They are just not sufficiently co-ordinated, expert, long-term or independently led. The noble Lord, Lord Ahmad, also said that a commission,

“would distract from the business of providing the infrastructure that the country needs now and in the future”.—[Official Report, 05/11/14; col. 1644.]

It could hardly distract from the future, since it is all about the future. It is stark, staring obvious that governments and the state need the capacity both to deliver in the present and to plan for the future. They are not either/or. Indeed, the Government accept this in principle, which is why they now publish an annual national infrastructure plan. The problem is that the plan is not really a plan. It is a catalogue of some projects already under way and many hundreds more in the ether with little overarching needs analysis, rationale or prioritisation. I know this from bitter experience. When I became Transport Minister in 2009, the nation’s forward plan for rail modernisation stopped in 2014, which is why we had no national plan for main-line rail electrification or high-speed rail, both of which take somewhat longer than five years to plan and deliver, and which relate to national needs over the next generation, not the next decade.

It is no surprise, then, that the World Economic Forum Global Competitiveness Report 2014-2015 ranks Britain 27th for overall quality of infrastructure—27th for a country with the fifth largest GDP in the world. It is no surprise either that the view of business leaders is that future growth and prosperity prospects are being undermined by weaknesses in planning and delivering major infrastructure. A CBI survey of 443 senior business leaders in November last year showed that 96% felt political uncertainty to be discouraging investment and 89% were supportive of an independent infrastructure commission.

Let me stress that an independent infrastructure commission is not a dangerous innovation. Australia has a successful one, Infrastructure Australia. It applies to infrastructure the principle of systematic, impartial advice and analysis which is taken for granted in other spheres. It is precisely the principle behind the present Government’s decision to establish the Office for Budget Responsibility in 2010, to bring independent analysis and advice to bear on fiscal policy, although of course decisions on taxes and spending are a matter for government and Parliament. My party has endorsed the OBR, and it is here to stay. The last Labour Government also set up the National Institute for Health and Care Excellence—NICE—to make recommendations on the funding of NHS medicines and treatments based on evidence of clinical and cost effectiveness. NICE, too, has been sustained and it is clearly here to stay. A national infrastructure commission would play an analogous role. Indeed, the Davies commission, set up by the present Government to recommend a strategy for extra airport runway capacity in south-east England, is precisely such a commission but with a single-issue remit. So I hope that we hear a more positive response from the Minister today.

Let me end on an optimistic note. London 2012, the greatest infrastructure project in Britain since the Victorians, was a model of national purpose, successful planning and effective delivery. If we can make an outstanding success of the Olympics, there is no good reason why we cannot do the same in modernising our transport systems, our utilities and our housing. 2012 was Britain at its best; let’s make it the model for the future. I beg to move.

--- Later in debate ---

[Lord Adonis]

My Lords, this has been an excellent debate and I congratulate the Minister on his highly constructive speech and on the great work that he is doing. It is striking how broad has been the support across the House for the establishment of an independent national infrastructure commission, including from Conservative Members and from the Minister himself. I think he came as close as he could to endorsing the idea provided, as he said, that it is practically focused. I entirely accept that proviso.

The only dissenting note was from the noble Lord, Lord Sassoon, who said that the commission would be a bureaucracy. Any gathering of public officials is a bureaucracy. Your Lordships’ House is a bureaucracy; it just happens to be a very good one. The case for an independent commission is that it would be a good bureaucracy because its job would be to prepare a major infrastructure pipeline which has been so sorely lacking in recent decades. However, I believe that the noble Lord, Lord Sassoon, secretly agrees with me; he was just obeying orders from Tory Central Office. I say that because it was the noble Lord himself who took through the House the excellent legislation setting up the independent Office for Budget Responsibility— another bureaucracy, but a valuable one to provide independent advice on fiscal policy. It is precisely analogous to what we seek to do in respect of infrastructure. When making the case for the OBR to your Lordships, the noble Lord said:

“The independence of the OBR’s judgments will ensure that policy is made on an unbiased view of future prospects”.—[Official Report, 8/11/10; col.12.]

An independent infrastructure commission would have exactly the same purpose—to ensure, or at least to help ensure, that policy is made on an unbiased view of future prospects in respect of infrastructure. As almost every noble Lord who has spoken in this debate has recognised, we urgently need such an unbiased view so that we move from 27th to at least the top 10 in international rankings for the quality of our infrastructure. Nothing is more important to our future prosperity.

Motion agreed.

Autumn Statement

Lord Adonis Excerpts

Thursday 4th December 2014 Lords Chamber

[Lord Adonis (Lab)]

My Lords, I warmly endorse what the noble Viscount said about the economic importance of small businesses. May I also say how much we look forward to the maiden speech of the noble Lord, Lord Rose?

In responding to questions yesterday, the noble Lord, Lord Deighton, said with refreshing candour:

“I fully accept that this country has a long-term productivity problem”.

He continued,

“earnings have not recovered as fast as we all would have wanted … because the economy recovered more slowly than we expected … that explains why it is taking longer to get the deficit down”.—[Official Report, 3/12/14; col. 1337-38.]

The Minister sums up the weakness of government policy over the last four years: the failure to make much impact on productivity, reflected in particular in poor export performance; too few high-growth companies; a record balance of payments deficit; and average earnings still far below their 2010 level in real terms.

So the key question is: what impact will the Autumn Statement have on productivity? The measures on science and support for postgraduate students are welcome but the word virtually absent from the Chancellor’s Statement was “skills”. Every recent business survey of obstacles to growth highlights a skills shortage—in particular, the acute shortage of technicians. To tackle this, we need, in particular, a transformation in the number and quality of technical apprenticeships, by which I mean far more school leavers and young employees with good literacy, numeracy and social skills going through an intensive work and training route, leading to reputable technical qualifications, yet this is not happening.

The Government, and the noble Viscount in his speech, parade big figures for the growth in apprenticeships, but these largely involve older employees doing short work-based training courses and did not even count as apprenticeships until the Government reclassified and renamed them in 2010. Meanwhile, the number of apprentices under the age of 19 has been falling, the number in their early 20s has barely risen, and a high proportion even of these apprenticeships are of short duration and low quality, while the proportion of employers offering apprenticeships of any kind remains pitifully low.

Until this skills crisis is addressed systematically, productivity will remain poor and the underlying cause of much of the concern about immigration will continue —namely, the shortage of good employment with training opportunities for the two-thirds of our young people who do not go straight from school to university.

In my remaining minutes I want to comment on infrastructure, which is critical to long-term productivity. The single biggest infrastructure challenge facing the country was ducked by this Government in 2010—the expansion of hub airport capacity in south-east England, supplementing our most important port for goods and business people: Heathrow Airport. Heathrow has a big sign outside saying “full”. On this, we are still waiting for an independent review, which may or may not chart a viable way forward in a year’s time. There have been five years of delay, with seriously negative economic consequences.

In his remarks yesterday, the noble Lord, Lord Deighton, lumped public and private investment together to suggest that overall infrastructure investment was fine and we need not worry. This week we have had from the Treasury a long list of proposed road and flood defence schemes. However, although I pay tribute to the noble Lord’s work in driving many schemes forward—particularly HS2—the Government have performed more U-turns on road investment than a hapless driver following rogue sat-nav diversions. There was a mass cancellation of schemes in 2010, followed by the reinstatement of some in 2012, then this week’s list—lots of promises for the future. Meanwhile, far too little has actually been built—or even begun—in the five years that the Government have had to get things done. The same is true of flood defences and energy.

I should also note that HS3, which the Chancellor rightly highlights as vital to the northern powerhouse, is still only a slogan. A year after he announced the upgraded east-west rail scheme between the northern cities, and five years after the previous Government started work on the electrification of the Liverpool to Manchester line, which is the first section of the east-west link, there is still no plan setting out the upgrade projects from Manchester going east to Leeds and Hull, with costs and timelines, without which HS3 is just words and a press release. When he responds, can the Minister tell us when the project plan for HS3 will be published and by what date HS3 will be completed?

Housing supply is the gaping infrastructure hole at the heart of both the Autumn Statement and the Government’s record. The coalition is building fewer than half the number of homes needed just to keep up with population changes, and the Prime Minister has presided over the lowest level of housebuilding in peacetime since the 1920s. The announcement of a new garden city in Oxfordshire is welcome but it is not a substitute for the new contract needed between local authorities, central government and the housebuilding industry to double the rate of housebuilding.

Those are just some of the challenges facing the country on which Ministers are either silent or complacent. It will take a Labour Government to provide answers and to deliver.

Greater Manchester

Lord Adonis Excerpts

Thursday 27th November 2014 Lords Chamber

[Lord Adonis (Lab)]

My Lords, a key part of the Greater Manchester deal is public bus franchising, which is a good Labour Party policy. Can the Minister confirm that this has been a huge success in London, where it has led to a doubling in bus passenger numbers over the last 10 years? We confidently expect that it will do the same in Manchester, so will he confirm that the same offer will be available to other cities that request it of the Government?

[Lord Newby]

My Lords, I can, certainly in terms of franchised bus services and for integrated smart ticketing across all modes of transport in Greater Manchester, which has been a success in London. The Government have made it clear that if other cities wish to follow the Manchester model, requests to do so will be sympathetically received.

National Infrastructure Plan

Lord Adonis Excerpts

Wednesday 4th December 2013 Lords Chamber

[Lord Adonis (Lab)]

My Lords, I welcome one part of the Statement—the decision to abandon the hare-brained scheme to levy tolls on the A14, which would have led to a mass diversion of trucks and cars on to Cambridgeshire villages.

However, does the Minister agree that the A14 episode illustrates why the Government are delivering so little real infrastructure as they announce ever more grandiose targets and plans? The upgrade of the A14—a vital growth corridor from the east coast ports to the Midlands—was shovel-ready in 2010. One of the first acts of the coalition Government was to cancel it, along with a string of other major road schemes, the expansion of Heathrow and 715 school-building schemes which were all ready to go. Last year, Ministers tried to resuscitate the A14 as a toll road with magic money. Now that scheme has collapsed, we are back to where we were in 2010, except that the costs have gone up by £200 million.

Is this not the story of infrastructure non-delivery on roads, airports and energy, and even more on housing, where completions are at their lowest level since the 1920s? Does this not explain why the ONS says that infrastructure work is down 3.7% in the past year after a fall of 10% in 2012; why the World Economic Forum ranks the UK 24th in infrastructure behind Oman and Barbados; and why today’s Treasury press release on the national infrastructure plan heralds, as one of its greatest advances, the spending of £10 million on new light bulbs in NCP car parks?

Future Investment

Lord Adonis Excerpts

Thursday 27th June 2013 Lords Chamber

[Lord Adonis]

My Lords, I thank the noble Lord for laying the Statement before the House, but perhaps I may also express surprise that the Minister with responsibility for infrastructure is not in the House to respond to questions. The Government describe this as a major Statement on infrastructure, so the House would expect him to be here, unless he has a compelling obligation elsewhere of which I have not been informed.

I offer the noble Lord my commiserations that the Statement contains so many words chasing the construction of so little real infrastructure. Can he confirm that the £300 billion of infrastructure investment that the Chancellor trumpeted yesterday is a forward projection right to the end of the decade, with no new funding for this year or next, and a real-terms cut in capital investment in 2015? Can he confirm, as the Office for Budget Responsibility has, that in the three years since 2010 the Government have actually spent £5.6 billion less than the previous Government had planned on infrastructure? Can he also confirm that, in consequence, in 2010 the Government cancelled a string of shovel-ready infrastructure schemes, some of which they are now trying to reinstate although, of course, they are no longer shovel-ready? These include the cancellation of 715 new and refurbished schools and a string of major road schemes, including upgrades of the Al, the A14, the A19, the A21 and the A47.

Turning to the national infrastructure plan, which in reality is the longest fairy tale since “Snow White”, can the noble Lord tell us why of the 576 projects in the last version of the plan, 80% have not even been started, and why only seven have been completed, five of them started under the previous Government?

On housing, can the noble Lord confirm that the Homebuy scheme, which the Chancellor said would support 100,000 home purchases and stimulate housebuilding, has so far supported only 2,000 purchases, suggesting that it will take half a century to meet its goal?

On energy, despite what the Statement says about shale, can the noble Lord confirm that investment in energy infrastructure has decreased in this Parliament? Specifically, can he tell us when he expects the Government and EDF to sign a real contract to build Hinkley Point as the first of the proposed new nuclear power stations?

On transport, will the noble Lord confirm that Crossrail 2, which is highlighted in the Statement, does not even yet have an agreed route let alone a funding plan, and that construction could not start until the 2020s or even the 2030s?

To take a specific immediate project of considerable economic importance to the country—the A14, which links the port of Felixstowe with the Ml, the M6 and the Midlands, a project which was cancelled in 2010 and is now being revived—can the noble Lord tell us when he expects construction to start and finish and whether part of the new A14 will definitely be a toll road, as announced last year, since there is still no published plan for how the tolling will work on an A road with the prospect of mass diversion on to untolled roads going through Cambridgeshire villages? Can he also tell us when we will see the actual plans for the delivery of each project in the Highways Agency pipeline as promised in the Statement?

Surely the Minister is also aware that there is a gaping black hole in the Government’s entire transport infrastructure plan, namely airport capacity in the south-east of England. The previous Government published plans to expand Heathrow which the private sector would have financed entirely. The present Government cancelled that plan and then did nothing for two years. Then, last year, the Prime Minister appointed a commission, but the commission will not even report for another two years. Does the Minister accept that five years of total inaction on extra hub airport capacity serving London, which is desperately needed by business, exemplifies the Government’s failure on infrastructure?

On HS2, the plan for which I published three years and three months ago, can the Minister tell us why this is moving ahead at a snail’s pace? Why is there still no Bill to grant planning powers for the first London-to-Birmingham section of the line, and do the Government still stand by their pledge in 2010 to enact such a Bill by 2015, something which is now an absolute impossibility given the hybrid Bill procedure?

The only thing high speed about the Government’s infrastructure delivery is the speed at which Ministers read out long lists unrelated to real projects being delivered in the real world. Will the Minister confirm that in the real world, 84,000 construction jobs have been lost since 2010; that the World Economic Forum ranks the UK lower than Barbados for infrastructure delivery; that, again according to the ONS, infrastructure spending in the first quarter of this year plunged by 50% on the previous quarter, and by 40% on the same quarter last year; that the pensions infrastructure platform launched in 2011 to help deliver £20 billion of new roads, railways and utilities, has so far raised commitments of just £2 billion, none of which has yet been invested; and that the UK guarantees scheme announced in July last year, with the promise of up to £40 billion of projects, has so far guaranteed only a single project? The Chief Secretary spoke of two more today—the Mersey Gateway bridge and Hinkley Point—but he then concluded by saying that these are not done deals.

Summing all this up, it is hardly surprising that John Cridland, the director-general of the CBI, said yesterday:

“While the Government talks a good game on infrastructure we’ve seen too little delivery on the ground”;

or—even more damning—that the director-general of the British Chambers of Commerce has described the Government’s national infrastructure plan as,

“hot air, a complete fiction”.

[Lord Newby]

My Lords, I am extremely grateful to the noble Lord for his tour d’horizon. He asked why the Minister for infrastructure is not here. There are two reasons why he is not here: first, in the spirit of the coalition, I am repeating the Statement as my colleague Danny Alexander made it in the other place; and secondly, the Minister for infrastructure is spending every moment of his waking hours ensuring that the infrastructure programme moves forward more rapidly.

[Lord Adonis]

Does the Minister not regard himself as accountable to this House?

[Lord Newby]

The Minister for infrastructure does regard himself as accountable to this House; that is why he made the Statement here yesterday and why he will make further contributions to the work of your Lordships’ House over the next few weeks.

The noble Lord made a number of scathing comments about the forward projections in the infrastructure programme. Perhaps I may remind the House that this is a proposal for long-term planning for infrastructure. What was the long-term legacy left by the previous Government of whom the noble Lord was a member? It consisted of a note that said, “There is no more money left”. His Government presided over what we now know was a GDP falling by 7.2%, which we have spent the last three years turning round. We are now doing what everyone involved in infrastructure wants to happen—that we set out a long-term, credible plan for infrastructure development. He talks about the level of planning and the expenditure planned. However, this Government, and these plans, would generate a degree of expenditure on capital investment and infrastructure over this decade that is greater than that achieved over the lifetime of the last Labour Government. These are ambitious plans that we are determined to carry out.

The noble Lord raised a very important point about the speed at which things happen. This is one of the reasons why my noble friend Lord Deighton is now part of the Government and why, for the first time, we are setting up in each department dedicated teams with commercial experience to enable infrastructure expenditure to take place on a sensible and sustainable basis.

The noble Lord talked, for example, about schools. We are delivering a school building programme with a cost per school that is 40% less than was achieved under the previous Government. This is absolutely essential if we are to undertake the degree of new expenditure required.

The noble Lord talked about affordable housing. This Government will deliver more affordable housing than the last Labour Government, and in much worse economic times. The noble Lord talked about whether plans to stimulate the housing market and house purchases had been successful. He will know that the announcements made by the Chancellor at the general election have already resulted in many people who would otherwise not be able to afford a deposit for a house, being able to get a house. Not only are mortgage approvals at their highest level for a considerable time but private sector housebuilders are now saying that they are making significantly enhanced plans to increase housebuilding. These are real, positive developments in an area where everybody agrees we needed to do more over a number of decades, and now we are doing more.

The noble Lord raised a number of questions about rail. He asked why we have not got an agreed route for Crossrail 2. We are looking at developing the route and at the detailed feasibility plans for Crossrail 2. I remind the noble Lord that we are in charge of the biggest rail construction programme since Victorian times—not just High Speed 2, but also a huge electrification programme that completely puts into the shade anything achieved by his Government. As for the pace of High Speed 2, we are bringing forward the hybrid Bill and a paving Bill.

The main reason for the delay on High Speed 2 is, as he knows, that we have undertaken a huge public consultation. Many aspects of the scheme have been changed because very strong public opinion was expressed against certain aspects of the original programme. For example, there will now be more tunnelling. Is he saying that he would rather we tried to bulldoze the whole thing forward without that consultation and without ensuring that when the scheme goes ahead, it is done with the minimum of disruption to the communities through which the railway will pass?

I know that the noble Lord has considerable interest in the A14. This is a programme that will cost £1 billion. We have announced today more detail about the balance of funding and the fact that we are now going to be getting £100 million from the local authorities that stand to benefit from the road. He said that he was not sure whether it is still planned to toll the road. As the document makes clear, it is still the plan to toll it, but the details of how that will be done have yet to be finally worked out. I am sure that he will barely be able to contain himself until they are.

The noble Lord said that there is a gaping black hole in our airport policy. There is no gaping black hole in our airport policy; rather a process is under way which will lead to proposals for a new hub airport in the south-east—

Infrastructure: Expenditure

Lord Adonis Excerpts

Monday 25th March 2013 Lords Chamber

[Lord Deighton]

I bow to the noble Lord’s extensive experience in managing public expenditure. There is absolutely a distinction between what is allocated and what is spent. There is a small additional amount this year that is underspent, but it is in the region of £2 billion, which is consistent with previous years. I agree that that is part of the difference.

[Lord Adonis]

My Lords, the Budget document says that the Government will create an enhanced cadre of commercial specialists in Infrastructure UK to promote infrastructure delivery. How many such specialists are there now, how many will be in the enhanced cadre and when will these specialists be appointed?

[Lord Deighton]

I thank the noble Lord for drawing attention to an important part of our intervention to improve the public sector’s delivery of these crucial projects. On the question of the amount of resources required, we are not simply discussing the resources in Infrastructure UK here; we are discussing the resources right across government, particularly in the government departments that are charged with delivering infrastructure: the DfT and DECC being the two primary examples. Between now and June, we will work precisely to define their requirements, based on the project load that they are managing, and what they ought to be staffed with in order to make that happen. That gap is thus being defined, and we have to assess what is in the departments as well as what is in Infrastructure UK in order to determine how to fill in that difference.

Economy: Credit Rating

Lord Adonis Excerpts

Monday 25th February 2013 Lords Chamber

[Lord Adonis]

My Lords, the Conservative Party manifesto said:

“We will safeguard Britain’s credit rating”.

When that rating was maintained immediately after the 2010 election, the Chancellor said:

“That is a big vote of confidence … in the coalition government’s economic policies”.

Does the Minister not feel embarrassed to have to come here this afternoon to eat all the Chancellor’s words, and does he not accept that this downgrade shows that the Government’s economic strategy has failed, in their own terms? Will he confirm that Moody’s says that the main driver of its decision to downgrade is the weak growth of the British economy? When does he expect growth to return to the 1.8% level of 2010?

At the 2010 Conservative Party conference, George Osborne said that a credit downgrade would put Britain “on the brink”, as he referred to:

“The lost jobs. The cancelled investment. The businesses destroyed. The recovery halted”.

Since all these things have now come to pass, is it not time to change course?

Property: Commonhold

Lord Adonis Excerpts

Monday 19th November 2012 Lords Chamber

[Lord Newby]

I absolutely agree with the need for joined-up government. As noble Lords would expect me to say, on a whole raft of housing initiatives, not least in relation to the Infrastructure (Financial Assistance) Act, the Treasury and the Department for Communities and Local Government are working extremely closely together.

I understand why the noble Baroness is such a keen proponent of commonholds, but between 2002 and the present day, there have been only 15 commonhold developments in England and Wales comprising a mere 161 units.

[Lord Adonis]

Has the Minister seen today’s Financial Times, which reports:

“While the government had hoped that pension funds would invest … £2 billion”,

in infrastructure,

“by early next year, a year of talks has so far raised just £700 million”?

When does the Minister expect to raise the missing £1.3 billion?

[Lord Newby]

My Lords, the initial £700 million consists of a commitment by a significant number of pension funds to put in £100 million each as a starter. We are working very hard with them to scale up the programme, but it is a new programme. Pension funds have never done this kind of thing before and, not surprisingly, they want to dip their toe in the water before they immerse themselves more fully. I am very confident that they will see this initial £700 million as an effective investment, and then they will rapidly scale it up in the way that the noble Lord wishes.

Infrastructure (Financial Assistance) Bill

Lord Adonis Excerpts

Tuesday 23rd October 2012 Lords Chamber

[Lord Adonis]

I am very grateful to the Deputy Chief Whip for explaining the Bill and I am delighted to be debating with the noble Lord for whom I have the highest regard. I am also very glad that Paul Deighton is to become Minister for Infrastructure. It was specifically to shadow him and his vitally important work that I have returned to the Front Bench and I much look forward to engaging with him. I understand that Paul Deighton will not be joining the Government until January so this is an unusual, if not unprecedented, case of the shadow materialising three months before the substance, which sort of sums up the Government’s infrastructure problem: all shadow, no substance.

If I can continue the metaphor, this Bill is one of the most shadowy I have ever seen. Its four clauses simply give the Government power to spend up to £50 billion on infrastructure in very broad areas—water, electricity, gas, telecoms, sewerage, railways, roads, health, education, courts, prisons and housing—with little indication in the Bill or in the debates in the House of Commons beyond a single announcement about Crossrail trains of what real infrastructure projects it is intended to assist and when.

The Minister did not enlighten us much further, saying that,

“it would be inappropriate … to run down a list”,

which is a phrase redolent of Sir Humphrey at his very best. Our consideration of this Bill is a mere shadow since it is a money Bill which we cannot amend or even debate amendments to. However, before this phantom passes into law, I should like to set out some issues for debate and would be grateful for the Minister’s response.

In 2009, expenditure on infrastructure was at the highest real-terms level for about two decades. Three years later, the Construction Products Association is warning that infrastructure is in free fall. It is expected to decline by 13% this year compared to last. The CPA is projecting even bigger falls in key sectors—for example, a 40% drop in road construction this year—not least because of the coalition’s wholesale cancellation of road schemes in 2010. Will the Minister confirm these figures and tell us whether, in retrospect, it was wise to cancel essential schemes of national importance such as the dualling of the A14 east-west route from Felixstowe port to the Midlands and the dualling of the A21, a key route from London to the Kent and Sussex coast?

In the case of the A14, this project has now resurfaced as a proposed toll road. My officials told me that tolling of the A14 was unworkable when I was Secretary of State, but the coalition clearly has a higher source of wisdom. So, could the Minister tell me, first, whether the Government are considering a state financial guarantee for the privately financed A14 project, as it will surely need one; secondly, what tolling scheme is proposed, because I can find no reference anywhere to a scheme that appears even vaguely workable; and thirdly, when the tolled and dualled A14 will be open? If the work had gone ahead as a conventional road scheme in 2010, the opening would be taking place in stages from now. The only reference that I can find on the web is to a tolled scheme that will open from 2018.

Equally concerning is the delay and prevarication over energy policy, which is holding up investment in new infrastructure, including the £210 million Siemens investment in a wind turbine factory in Hull and huge investment in new wind farms and renewable energy. There are big delays, too, in rolling out superfast broadband and 4G. When I was on the Norfolk coast earlier this month, visiting Statoil’s new Sheringham Shoal offshore wind farm, a particular concern was the lack of fast broadband and the poor quality of mobile phone reception. Britain’s lack of 4G mobile phone provision is pushing us behind the United States, Germany, Sweden and parts of Asia. As for broadband, the Country Land and Business Association recently described the superfast broadband situation as lamentable saying:

“It is becoming clear that the Government’s strategy will not meet the target date of 2015”.

The shadowy case for this Bill is that it will help unlock the capacity of the private sector to invest in infrastructure, but it is important to understand that a critical obstacle to infrastructure investment is the Government’s own failure to lead and deliver.

I mentioned road schemes a moment ago. It is the same story with airport capacity in the south-east, where the Prime Minister has just appointed a review which is going to take three years. It is now three-and-a-half years since the previous Government announced their decision on airport capacity in the south-east. In the House of Commons, the Economic Secretary to the Treasury said that any decision on airport capacity would be taken by the next Government. In other words, this Government have given up. If I may say so, that is one of the most brazen abdications of responsibility that I have ever heard from a Government.

It is the same story on HS2—another project that I know intimately—where dither and delay since 2010 have put the project back by at least two years and may again delay the key decisions until the next Government. It is a similar story too in London, where one of Mayor Johnson’s first cuts in 2008 cancelled the desperately needed Thames Gateway Bridge which would have provided another Thames crossing in east London, for which both planning and funding were already secured. Instead, all we have is a new cable car offering a tiny fraction of that capacity and—you could not make this up—the beginning of a planning process which might ultimately lead to a new bridge not far from the one which was cancelled for short-term political reasons. It is the same story now with the extension of the Northern Line to Battersea, a key development area. In June, a Treasury source told the Evening Standard:

“The entire weight of the Government is being thrown behind the extension of the Northern Line”.

Now, Transport for London can only say:

“Subject to funding being in place and permission from the Secretary of State for Transport, the new stations could be open by 2019”.

So much for transport, energy and broadband. Let us look at education. One of the Government’s first acts in 2010 was to slash to ribbons the school building programme. If that had not happened, hundreds of schools would be being built or refurbished as we speak, pumping billions into the construction industry and providing modern school premises which will now have to be built at far greater expense hereafter. It is the same story too with housing. The number of housebuilding starts fell by almost a quarter between March last year and March this year, with starts by housing associations, in the quasi-public sector, down by a similar proportion.

I have always taken it as a golden rule that the state should not preach to the private sector until it has got its own act together. Well, let us be clear: we are now confronting a situation where the state itself has slashed or delayed infrastructure spending across the board, and failed to agree planning decisions for key privately funded infrastructure projects, while deploring delays in the private sector. That is not leadership, but complacency masquerading as concern.

It is not just on investment that the state is failing to lead. The Government talk constantly about reducing planning delays, something which is within the power of the state to determine. Yet I note that last year only 60% of major planning applications were processed within the target date of 13 weeks, a big reduction on the 68% determined within 13 weeks in 2010.

Turning to the national infrastructure plan, which the noble Lord said was “ambitious but credible”, I note that in the latest reissue, 63 projects have disappeared without explanation from the 2011 plan—I assume that they were ambitious but not credible. Of the 357 projects in both the original plan and the updated version published this April, almost two-thirds were in pre-procurement stages. Only 38 had proceeded to procurement or construction. More than 300 projects in the national infrastructure plan therefore are still mere shadows, and 63 have vanished into thin air. Honing down to the most important projects, the British Chamber of Commerce identified 13 critical infrastructure projects before the last election. There has been little or no progress on eight of those 13.

Will the Bill help with any of this? It entirely depends what the proposed assistance is going to be used for. The Bill simply says that the Government may provide any kind of financial assistance up to the absolute limit of £50 billion. The only further limitation suggested by Ministers is that projects should be of “national significance”, a definition which looks to be in the eye of the beholder. Will the Minister give us just a few examples, beyond Crossrail trains, of projects which will now go ahead through the proposed guarantees to the private sector, as the CBI has said that we need urgent action from Ministers to identify further projects?

Will the Minister also give us an indication of when the first project financed under this guarantee scheme will actually go ahead? When the Crossrail trains announcement was made, the Financial Times said:

“The government appears to have relaxed one of its key criteria for guarantees—neither the super sewer”—

another possible project for this scheme, funding for which is apparently stuck in the Treasury—

“nor the Crossrail rolling stock schemes will be ‘shovel ready’ within 12 months”.

Will the Minister tell us about the relationship between the Bill and the Growth and Infrastructure Bill, which was published last week? The Bill was supposedly going to unlock a string of major infrastructure projects. Now, before it is even enacted, another appears whose Explanatory Notes state that its purpose is,

“promoting growth and facilitating provision of infrastructure”.

There are to be yet more changes to the planning system intended—and have we not heard this before?—

“to enable applicants to avoid delays in local decision-making”,

while respecting localism. The next Bill also includes changes to the infrastructure financing regime, which overlaps directly with this Bill: for example, removing so-called unviable Section 106 agreements for affordable housing.

The CLG blurb accompanying the Growth and Infrastructure Bill states that those further changes could:

“Unlock investment decisions across a range of technologies, bringing thousands of new jobs and billions of pounds of investment”.

Those are almost precisely the same words used to justify the present Bill and a host of other initiatives over the past two years, each of which has been succeeded by another intended to achieve precisely the same objectives before it has even been enacted, let alone implemented. They are also the justification for the regional growth fund, only a tiny fraction of whose allocated funds have yet been released to businesses, as catalogued in the highly critical report from the Public Accounts Committee.

I have asked a lot of questions, and I entirely understand if the Minister writes to me about those to which he cannot get answers by the time he replies. I fully recognise that it may take longer than two hours —perhaps two years or even two centuries—to come up with a viable scheme for tolling the existing A14.

Let me end on a broader note. When the Bill was debated in the Commons, the Economic Secretary to the Treasury said that it would,

“facilitate headline schemes for infrastructure and housing investment, accelerate and bring forward investment in major UK infrastructure projects and increase the number of homes being built and occupied”.—[Official Report, Commons, 15/10/12; col 121.]

Those are fine words, but what we need now is action. At the moment, we are simply chasing shadows.

--- Later in debate ---

[Lord Newby]

That is a philosophical question, almost. When is a menu a plan and when is it not a plan? If I am making a dish, it very often lists a number of things that are absolutely required to make a successful dish but it does not necessarily say in what order I need to chop them up. The menu taken together would undoubtedly represent the implementation of a very significant plan.

[Lord Adonis]

Is the Minister not confusing a menu with a recipe? A recipe is the plan; a menu is options which then lead to recipes thereafter, if I can be philosophical.

[Lord Newby]

I am always in awe of the culinary skills of the noble Lord, Lord Adonis, and am extremely grateful for that way of looking at it. However, whether it is a plan, recipe, menu, or none of the above, the key thing is that, as far as risk is concerned, which was the second question that I wanted to address, the Treasury will be responsible for managing the risk and assumes the contingent liabilities. Value for money, as I said earlier, is key.

The noble Lord, Lord Giddens, asked about the pension infrastructure platform, about which I should perhaps have said more. As he may know, last week, seven pension funds announced that they would be initial subscribers to the platform. They will each invest at least £100 million. We hope that the system will be up and running early next year and that it will be the first element of a much larger fund. As to why we think that pension funds might now get involved in this kind of investment whereas they have not in the past, the answer is that, in the past, they have been able to get better returns through conventional means of investing the money. At the moment, with interest rates so low, they are getting very low returns. The other problem that they have had is that, where they have gone via private equity houses which have managed infrastructure programmes, they have often found that the programmes have not worked very well and that they have been charged an arm and a leg for it. So this is a way for the funds, with support from the Treasury, to get into what could be very important new form of investment without what they have seen as being the unreasonable cost of going down a purely private sector route.

The noble Lord also asked about the relationship between this Bill and the energy Bill. The purpose of the energy Bill is to set a framework for investment in the energy sector over the medium term. Once the energy Bill, which will come forward relatively soon, is enacted, and against the framework that that Bill sets out, people looking to invest in the energy sector can form a view about what they want to do and individual projects will be eligible for support under the Bill.

The noble Lord, Lord Skidelsky, started with three nonsenses and will not be surprised that the Government do not agree absolutely with everything that he said. I find it almost incredible to think that if the Government had not been seen to get the fiscal position under control, interest rates would not have gone up. Even if they had not gone up to the levels that they are at in Greece or Spain, a single percentage point increase in interest rates, among other things, costs mortgage holders in the UK an extra £12 billion a year and would over the course of a Parliament, with all other things being equal, cost the Government about £25 billion. These are very important considerations. Interest rates would almost certainly have been higher if we had turned on the tap.

On his proposal for a British investment bank which would raise money in the private market, the noble Lord will not be surprised to know that the Treasury view is that, if that bit of the state is raising money in the private market and conventional government borrowing is happening in the same private market at the same time, the markets will judge the pair of them together as a common pool of demand from the UK Government. Therefore, we could not segregate borrowing for a British investment bank without it having consequences for the way in which all government borrowing was viewed.

The noble Lord asked how many of the net gains in employment were self-employed or part time. There is a false assumption that working for oneself or working part time are somehow second-class things to do or things that people do not necessarily choose to do. Some people are forced to do one or the other. However, when I was made redundant in the last property crash in 1992, I in effect became self-employed by setting up my own company and it was one of the better things that I have ever done. It did not mean that I was economically out of the market or that I was not able to grow anything. Many people who become self-employed find that they are successfully self-employed. Equally, many people who work part time—and even the Guardian accepts that the figure is at least 80%—do so through choice rather than because they are forced to.