Infrastructure

Clive Betts Excerpts

Tuesday 12th February 2013 Commons Chamber

[Greg Clark]

It is not clear to me whether the hon. Gentleman is criticising PFI. If PFI was initiated by the previous Conservative Government, the champion of it—the party that relied on it and put it off balance sheet, and that misused it and mortgaged the future of our country—was clearly the Labour party.

After 13 years of the Labour Government our roads were more congested, our railways were creaking, house building was at its lowest level since the 1920s and electricity customers were facing black-outs for the first time since before the war. Our great cities were as poorly connected as they had been a century earlier, while across Europe and the world, new roads and railways brought cities together in 21st-century networks of prosperity. As the excellent report published recently by the London School of Economics states,

“infrastructure has been neglected, particularly in the areas of transport and energy. For example, more than a fifth of the UK’s electricity-generating capacity will go out of commission over the next decade and Ofgem…has warned of power shortages by 2015.”

That is the reflection after 13 years of neglect of Britain’s infrastructure.

[Mr Clive Betts (Sheffield South East) (Lab)]

Will the Minister give way?

[Greg Clark]

Of course I will give way to my friend the Chairman of the Communities and Local Government Committee.

[Mr Betts]

I hope to find a bit of common ground with the Minister. He knows that local authority borrowing is covered by prudential guidelines, apart from borrowing for house building, which is covered by a separate cap imposed by the Treasury. Given that housing finance accounts are now separate, if a local authority were allowed to borrow up to the prudential limits for house building, it could potentially borrow to build another 60,000 homes without any cost to the Treasury. In other countries, that would not even count as Government borrowing. Is the Minister prepared to look at that as one way of kick-starting house building and creating more jobs in the construction industry?

[Greg Clark]

The hon. Gentleman knows that it does count as Government borrowing in this country, which constrains this Government as it did the previous Government. Being a fair man he will be the first to acknowledge that the work I have been doing with our eight core cities has found innovative ways through tax increment financing and other schemes to invest in infrastructure in anticipation of some of the revenues associated with that. We are doing everything we can and have had some success in being creative in that regard.

As Europe and the developing world streaked ahead, the gulf in this country between London and the north widened under Labour. Only one of the eight largest cities outside London has an income per head that is above the country’s national average, which is in marked contrast to the norm on the continent of Europe. Seven out of the eight biggest German cities outside Berlin, and six out of the eight biggest cities in Italy, have an income per head that is above the national average. In France, that is true for half the largest cities, and for the others the figure is close to the national average. In other countries around Europe and the world, great cities outside the capital are motors of growth and drive the local economy. In this country, the legacy of 13 years of Labour is that the gulf with the north and in our cities across the country has widened and is a source of shame.