Future Investment

Lord Shipley Excerpts

Thursday 27th June 2013 Lords Chamber

[Lord Newby]

My Lords, the Bank of England has expressed the view that low interest rates are here to stay for a significant period ahead. Only an idiot would predict what interest rates will be in 2020 but if we look at the next three or four years, I do not think that anybody would say that interest rates were going to rise significantly, if at all. As for whether employing lots of people to build houses or roads means that fewer people are unemployed, that is self-evidently the case. That is why we are keen to get these programmes moving as quickly as we can.

[Lord Shipley]

My Lords, I thank the Minister for the Statement on infrastructure investment, in particular the commitment to removing bottlenecks on the A19 in Tyne and Wear, both to the south and to the north of the Tyne Tunnel. May I ask him about the proposals for the A1 north of Newcastle and the western bypass? As I understand it, there is a feasibility study to consider problems and solutions to the A1 north of Newcastle. The solution is clear; it is the dualling of the A1. I interpret the Statement as saying that the Government are now moving to the next stage of dualling the A1 north of Newcastle and that we should have cause quietly to celebrate.

May I ask him one thing on affordable housing? I welcome the Statement that has been made today. Has any further thought been given to increasing the borrowing cap on local authorities? The average debt on a council house at the moment is £17,000. There is enormous headroom to increase borrowing. It should not be on the public balance sheet, following decisions to make this a trading account from April last year. There is the capacity to deliver around 40,000 to 50,000 council houses as a consequence of raising that borrowing cap if the Government would do it.

[Lord Newby]

My Lords, in respect of the A1, the noble Lord is absolutely right. There is a commitment to a feasibility study. Upgrading the A1, as he says, means dualling it. I think that quiet optimism strikes the right note. Obviously, if local authorities had their borrowing powers increased they would be able to do as he says. As he knows, the Treasury down the ages has set its face very firmly against such a move. I would be happy to raise his suggestion again with my colleagues in the Treasury.