Infrastructure
Debate between Rachel Reeves and Nigel Evans(11 years, 9 months ago)
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Mr Deputy Speaker (Mr Nigel Evans)
That means me. Members should speak through the Chair.
Rachel Reeves
I do not know how the hon. Gentleman bought his house, but when I bought mine, I had a mortgage because I could not afford to buy it outright. That is why schemes such as PFI were introduced. I am not sure what school, hospital or children’s centre in the hon. Gentleman’s constituency he would prefer not to have opened during the last Labour Government. I bet a lot more of those things opened under the last Labour Government than have been opened under this Conservative and Liberal Democrat Government.
The reality is that what the Government are doing is hurting business confidence. The director general of the British Chambers of Commerce has described the Government’s plan for infrastructure as
“hot air, a complete fiction”.
Rachel Reeves
I hope the hon. Gentleman is not suggesting that the Government are not going to be able to make the repayments on their debt. We know that their triple A rating is under threat, so if this is a warning that the Government are planning on not paying their debts and the deficit back, it will be interesting news.
The CBI has warned the Government that
“businesses in Britain are looking for action and we haven’t seen any yet”.
Yesterday, the monthly index published by BDO showed that business confidence hit a 21-year low. That is the lowest level of business confidence since Norman Lamont was Chancellor and sterling was ejected from the exchange rate mechanism on Black Wednesday in 1992. I am sure that right hon. and hon. Gentlemen will remember that day. The Prime Minister certainly does—he was working for the Chancellor at the time. Confidence is now at those low levels again.
It is now clear: business has lost confidence in this Government, who do not have a plan for jobs or growth. It is hardly surprising, then, that the Government are failing to attract the private sector funds they need for their infrastructure investment. It is worth remembering how the Government’s plan to target £20 billion of pension funds for investment is going. Responding to a question from my hon. Friend the Member for Ochil and South Perthshire (Gordon Banks), the Chief Secretary to the Treasury had to tell us that the Government were on course for just a 10th of their original target: £2 billion out of £20 billion raised.
The Government lack the policy framework to attract the long-term investment we need. Changes such as cuts to feed-in tariffs have had a detrimental impact on low-carbon investment. The CBI warned the Government that such measures have been
“damaging to business confidence, with implications not just for immediate investment decisions but for longer-term trust in government policy”.
It is no wonder that, last year, 50 companies, investors and industry bodies wrote to the Chancellor asking him to set a firm decarbonisation target for 2030 to give investors the confidence they needed. On energy policy, the Institution of Engineering and Technology has been clear in saying:
“Short-term uncertainty around UK energy policy…is very unhelpful and has the potential to… delay much-needed investment in all forms of energy infrastructure.”
According to the findings of a poll by KPMG, two thirds of businesses believe that the UK’s energy and water infrastructure is unlikely to get any better because of uncertainty about the policy framework.
From the business community, we hear resounding frustration when it comes to the Government’s infrastructure policy. The Government do not seem to understand that businesses long for certainty when attempting to grow, employ more people and build for the future. Those are the people and businesses that we need to encourage, not put off, and infrastructure is vital to that, but the Government’s ideological decision to cut infrastructure investment further and faster is hampering confidence rather than nurturing it.
Small businesses, the engines of growth, are still waiting for the Government to roll out universal broadband. The Government abandoned the commitment from the last Labour Government to provide broadband for virtually every household by 2012. When business needs this Government, they are nowhere to be found.
Fundamentally, the Government fail to understand the need for a comprehensive and long-term plan to build Britain’s infrastructure for the 21st century. That is why the Labour party has commissioned Sir John Armitt, chair of the Olympic Delivery Authority, to consider how long-term infrastructure decision making, planning, delivery and finance can be radically improved. The Olympics taught us what we could achieve together as one nation. With the right leadership and the right investment, and by building consensus around the long-term projects that are essential for our energy, transport and housing needs, we can compete globally, with a national infrastructure that is fit for the 21st century. Labour is therefore making the case for a British investment bank, which would help to support long-term finance for British businesses so that they could take risks and grow. That is especially urgent given that net lending to businesses has fallen by a staggering £13.5 billion over the last year.
Investing in infrastructure is about more than the tarmac on our roads or the bricks that make up our schools. It is about creating skilled jobs for our youngsters. It is about supporting the entrepreneurs who want to export and grow their businesses. It is about ensuring we can grow and operate across the globe. It is about attracting investment from abroad. It is about being ambitious in the face of challenges, and attempting to build a better country for the next generation.
The Prime Minister said in his new year address:
“This is, quite simply, a government in a hurry. And there’s a reason for that. Britain is in a global race to succeed today.”
Whichever way we look at it, however, this Government do not seem to be in a hurry to invest in our country’s infrastructure. Indeed, as I said earlier, they are spending £12.8 billion less on capital investment than the amount specified in the plans that they inherited from the last Government, which amounts to an 8% cut. A Government in a hurry? Hardly. Inertia is the watchword of this Government, at a time when what we need is action.
When other countries are investing in their infrastructure, aware of the benefits, this Government dither. On infrastructure, as on so much else, the country needs decisive leadership. Instead, we get incompetence, delay and cuts. It is time that we changed course.
Mr Deputy Speaker (Mr Nigel Evans)
Before I call the Financial Secretary to the Treasury, I should inform the House that a speaking time limit for Back Benchers will be announced when he has sat down. I advise Members not to think much beyond eight minutes for the moment.
Amendment of the Law
Debate between Rachel Reeves and Nigel Evans(13 years, 8 months ago)
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Rachel Reeves
I do agree. Of course, only half the plans were announced today, which was disappointing.
We need an approach to business taxation that fosters growth. Although the Government have trumpeted the cut in corporation tax, it has so far been funded at the expense of investment and manufacturing allowances, so while big businesses have benefited from a tax cut, start-up and investment-intensive firms have seen their taxes rise. If we are to create the jobs of the future, we need today’s entrepreneurs to innovate and that is where the limited funds should be targeted.
We also need greater investment in skills and education. Last year, 8 million people graduated from universities in China and India. No other country is cutting investment in universities, reducing the teaching grant by 80% and cancelling partnerships between business and universities, but that is what the Government are doing.
Last week, we heard that the youth unemployment figure is approaching 1 million and it beggars belief that the future jobs fund is closing its doors in the same month that youth unemployment has risen yet again. One in five young people—more in my constituency—now claims unemployment benefit. Today’s unemployment figures are likely to rise further and today’s Budget is bad news for young people up and down the country.
The public recognise the need for austerity, but they also want to know that the Government have learnt lessons from the crisis and are determined to build a fairer and more sustainable economic future. Britain could be a world leader in the jobs, technologies and industries of the future but only if the Government support growth. Today was the Chancellor’s opportunity to show that he understands the needs of businesses and families, but the OBR’s verdict was to downgrade growth for the third time in 2011 and for next year as well. The Government have ignored the wake-up calls. This Budget is a missed opportunity and I urge the Chancellor and his colleagues to think again about what is really needed to ensure that we emerge from this recession with a stronger, fairer economy for everyone in the country.