Infrastructure

Catherine McKinnell Excerpts

Tuesday 12th February 2013 Commons Chamber

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

This has been a good and thoughtful debate with Members on both sides of the House illustrating how important infrastructure projects are to their constituencies, to the wider region and to UK plc as a whole.

I want to highlight some of the more memorable moments in the debate. My hon. Friend the Member for Swansea West (Geraint Davies) summed up the Minister’s opening speech as a dismal display of dither and delay; I hope that I have paraphrased him correctly. The hon. Member for St Albans (Mrs Main) gave the Government’s position away by speaking up for dither and delay and cautioning against a mad dash for growth. One could not accuse the Government of that—it is more like a mad dash for the dip.

My hon. Friend the Member for Corby (Andy Sawford) spoke my mind when he expressed deep concern about the Government’s very backward-looking approach on this issue. He also made a passionate plea for more infrastructure investment in his area. My right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) spoke passionately about High Speed 1—a major achievement by Labour in government—and set out his concerns about the lack of housing investment by this Government.

The hon. Member for Rochester and Strood (Mark Reckless) limited his comments to rail infrastructure. He claimed that that was because the Government’s infrastructure activities are too broad and varied, but I would argue that it is the only area they are taking any action on at all.

My hon. Friend the Member for Croydon North (Steve Reed) raised the crucial issue of youth unemployment, which the Government, with their complacent approach, seem to overlook too often. My hon. Friend the Member for Sefton Central (Bill Esterson) recalled the cancellation of Building Schools for the Future—the decision made so rashly by the Government on taking office that has impacted not only on children but, as we now know, on economic growth.

My hon. Friend the Member for Bishop Auckland (Helen Goodman) talked about the lack of investment in the north-east region, with 0.05% of Government investment being the north-east’s share to date and the Government’s decisions being driven by a political rather than an economic rationale. My right hon. Friend the Member for Tottenham (Mr Lammy) set out the desperate need for investment in London. He was seconded by my hon. Friend the Member for Edinburgh East (Sheila Gilmore), who cited the Mayor of London’s having called for much the same thing.

The majority of Members on whom I have commented are Labour Members. That is because we called this debate to raise the fundamental role that infrastructure projects could and should be playing in getting our country and our economy on the road to recovery and growth. This is an economy that has been flatlining as a result of the Government’s failing plan, that did not grow at all in the whole of 2012 and that has now shrunk in four of the past five quarters.

[Andy Sawford]

This country’s growth rate since the 2010 comprehensive spending review is 0.4%. On infrastructure, does my hon. Friend agree that the huge contrast between us and America, Germany and other countries that are maintaining their stimulus is highlighted by the fact that they are now above their pre-crisis peak? They are now growing by 3% or 4%, compared with the abysmal record of this Government.

[Catherine McKinnell]

Indeed. My hon. Friend makes that point very well. Infrastructure investment fell off the cliff when this Government came to power and we are seeing the economic consequences of that today. Many Members have referred to the Chancellor’s 2010 spending review. It took place in the fourth quarter of 2010 and the UK’s economy has grown by just 0.4% since then. During that time, the USA economy has grown by 4.2%, Germany’s by 3.6% and France’s by 1.5%. Our economy, however, has been stagnating for the past two years, and borrowing is now rising, not falling, as a result.

[Geraint Davies]

Will my hon. Friend give way?

[Catherine McKinnell]

I do not have much time left, but I will give way.

[Geraint Davies]

Does my hon. Friend agree that the United States strategy for the top 2% to pay more towards reflating the economy and getting 1% extra growth is a good idea and that we should not be hitting the poor to pay for debts?

[Catherine McKinnell]

This Government’s choices on spending and tax have resulted in millionaires being given a tax cut while the poorest bear the brunt. We are seeing the results of that, not just in the suffering that we see at our constituency surgeries, but in the lack of economic growth. That is why it is so disappointing—indeed, unforgiveable—that the coalition Government have been asleep at the wheel on the issue of infrastructure investment.

[Andrew Bridgen (North West Leicestershire) (Con)]

Will the hon. Lady give way?

[Catherine McKinnell]

I will give way one last time and then I must make some progress.

[Andrew Bridgen]

I thank the hon. Lady for giving way. Does she not recall that a pledge was slipped into and hidden away in the Labour manifesto to cut capital spending—that is, infrastructure spending—by 50% had her party formed the next Government?

[Catherine McKinnell]

That shows, once again, the Government’s utter complacency and head-in-the-sand approach to this whole issue. The hon. Gentleman knows that his Government have spent £12.8 billion less on capital investment than Labour planned, so I will not take lectures on that from any Government Member.

Time and again over the past two years we have heard the Prime Minister and Chancellor expound the value of infrastructure investment in delivering growth in the economy and, crucially, creating new jobs. All the evidence shows, however, that their record is one of inaction, complacency, delay and failure to deliver, which, combined with private sector uncertainty, is having a highly damaging effect on Britain’s construction industry for one.

The much-vaunted national infrastructure plan, published back in 2011, identified 40 priority projects that the Government stated were

“of national significance and critical for growth”.

However, despite the Government’s proclaimed focus on those so-called priority areas—and, indeed, a Cabinet Committee that is supposed to be overseeing progress—we are yet to see spades in the ground for too many of those projects.

Last year’s autumn statement announced a £5.5 billion infrastructure package, but this is to be paid for by cuts to departmental spending and underspend, including capital underspends, and one third of the projects included in the package had been previously announced by the Government. Indeed, describing the 2011 infrastructure plan as

“hot air, a complete fiction”,

the director general of the British Chambers of Commerce urged the Government to develop

“bold leadership and some creative ideas”

and to “get a grip” on this issue in order to stimulate economic growth.

The CBI’s assessment of the Government’s performance does not get any better, with its annual infrastructure survey last year finding that 73% of its members do not think that transport infrastructure will improve over the next five years and that two thirds believe that the UK’s energy and water infrastructure is unlikely to get any better. This has been damningly described by the CBI director general John Cridland as

“a wake-up call that businesses in Britain are looking for action and we haven’t seen any yet.”

Even the Deputy Prime Minister finally appeared to wake up to the importance of this issue—although a little late in the day—when he acknowledged last month that the coalition cut capital spending too deeply when it came into government. We were all desperately disappointed that the latest apology did not come via YouTube—the “I’m Sorry” infrastructure remix. We were offered this particular mea culpa via The House magazine, which he told:

“I think we’ve all realised that you actually need, in order to foster a recovery, to try and mobilise as much public and private capital into infrastructure as possible.”

Yes, that is what the Opposition have been saying all along.

In their first three years, this Tory-led Government have spent £12.8 billion less in capital investment than would have been spent under the plans inherited from Labour. That is a fall of 8%. According to the Government’s Office for Budget Responsibility, the coalition will spend £7.3 billion less on capital investment over the course of this Parliament than was planned by Labour.

This debate is not just about investment. Ensuring that infrastructure projects get off the ground and deliver jobs and growth requires the political will and determination to drive things through—something that is sadly and damagingly lacking under this Government. The economic situation in which we find ourselves requires urgent action from Government, such as that proposed in Labour’s five-point plan for jobs and growth, which would bring forward long-term infrastructure projects, as we did in the aftermath of the global financial crisis. That plan includes the construction of thousands of affordable homes.

We need a comprehensive long-term plan to rebuild Britain’s infrastructure for the 21st century—a long-term framework that gives investors the confidence that they need to invest consistently and that will deliver real results for the UK economy. That is why my right hon. Friends the Leader of the Opposition and the shadow Chancellor have asked Sir John Armitt, the chair of the Olympic Delivery Authority, to conduct a review into how long-term infrastructure decision making, planning, delivery and finance can all be improved.

As this issue is of such national significance, a cross-party consensus is required to deliver what we need. We have seen what can be achieved when we reach a consensus and plan for the long term across Parliaments and across political divides. The Olympics showcased Britain as the great country and the one nation that it is, but that was Labour’s legacy. What will be this Government’s legacy? If they are not careful, it will be dither, delay, stifled economic growth and stagnation. It is time to get a grip. The Opposition motion calls on the Government to do just that, and I commend it to the House.