Economic Growth

Geoffrey Robinson Excerpts

Wednesday 15th May 2013 Commons Chamber

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

I think that some of us who have sat through this debate find it regrettable that, to a large extent, it has been hijacked by the obsessively anti-European faction in the coalition parties. It is not that Europe is not important, but the debate is about the Queen’s Speech and a reflection on the Government’s record after three years in office. Rather than intruding on the private grief of Government Members caught up in their internal and agonising debates, I would much rather say to those on the Treasury Bench that, in all seriousness, they have to face up to the fact that after a full three years in office they are responsible for the economy: they are responsible for the situation we are in, and they are responsible for getting us out of it. Unless they accept that responsibility, they will never accept the measures that are necessary to find a way out of the chronic situation in which we still find ourselves.

Three years ago, after only a few months into office and after they brought in the cuts that went too far and too fast, the Chancellor was already crowing that the plan was working and the recovery was on track. We know what the recovery was meant to achieve: central to all economic policy is growth. In the three years to date, we were meant to have achieved 6% growth, but have achieved only 1.1%. I wonder whether the Government realised that what they were committing themselves to, and which after three months they thought was working, would achieve only one-sixth of their central economic objective. Those who have doubts about whether they should change course should reflect on that. Had they realised what that would achieve, they would never have embarked on it. The only way forward is to change course. Of course, as my right hon. Friend the Member for Morley and Outwood (Ed Balls) pointed out, to do that would mean going back on so much of what they proclaimed to be absolutely essential, and that is impossible for them to do.

Time is limited for all Members, so I want to concentrate on just two aspects of economic policy where the Government’s incompetence and failure is hard to explain. The first is investment. What the Government call the national infrastructure plan has been variously described by conservative organisations as “hot air”, “complete fiction” and, by the chairman of the CBI, as “lacking all delivery”. Where does this leave investment? One cannot understand the Government’s failure, because there is no cross-party debate on investment or conflict over it. Less still is there any doctrinal argument such as we have on economic growth or financial policy—on the components, predictors or causal factors of, say, bond yields in 30 years and so on. Everybody in the House I have ever heard speak on this has said, “We must have more investment,” because traditionally the UK has not invested in R and D or fixed equipment and plant as much as we should have done or as much as our competitors have done. There is no argument about that.

[Stephen Barclay (North East Cambridgeshire) (Con)]

I am struck by the hubris of the hon. Gentleman, who is a former Paymaster General. The report on the extension of the private finance initiative by the Public Accounts Committee, which is chaired by a Labour Member, found that the previous Labour Government wasted more than £1 billion. Half, or more, of the PFI projects in the housing sector came in at double their original budget. He needs to accept his party’s record on major infrastructure projects.

[Mr Robinson]

Here we go again. I do not know of any major infrastructure project that has not run over budget. As my hon. Friend the Member for Huddersfield (Mr Sheerman) said, let us see what happens to HS2. They all run over budget. Some terrible PFI deals were done—there is no question about it—but all Government Members ever do is say what Labour did badly. We have admitted that we did many things badly. We failed on certain things, but it will not help to get the Government’s plan going to say, “Oh, look what you did when you were in office.” Nothing could be more pathetic. That is what I am trying to get through to the Government. They are now in charge, and they now have to face up to their own failures and the things that need to be done to put them right.

I come now to what those things are. I have mentioned how the Government budgeted for 6% growth, but in fact have achieved about 1% growth. It could not get much worse than that. Under their national infrastructure plan, they have about 567 projects in the pipeline, ready to go, but in three years they have achieved seven of them, or 1.2%. Everyone agrees that these projects are good ideas, so why can they not get these things done? We own one of the banks outright—I shall come to the banks in a moment—and we have a substantial stake in another, but the Government have created their own business bank. It could be investing in some of these projects, but against a background in which bank lending to businesses has fallen by £4.8 billion in the last quarter alone, they are offering £300 million through the British business bank. It is no wonder they are not getting the projects through. It is no wonder they are failing.

[Stephen Barclay]

With respect to the hon. Gentleman, who is a senior Member of the House, he is just not engaging with the facts. Public investment as a share of GDP will be higher on average over this Parliament and the next Parliament collectively than under the last Government. On housing, which was my previous example, his party’s record was absolutely shocking, whereas our build to rent fund is addressing some of these issues. Action is being taken. He is ignoring his own record as a former Treasury Minister and the action that this Government are taking. It is remarkable.

[Mr Robinson]

The Chancellor produces that tired statistic every time we mention investment. Let us take construction. The last time the level of house building was this low was in the 1920s. Overall, the level of construction has fallen 11% in the last year. This is against a background of a chronic need for the jobs and growth that investment can supply. We need a major uplift in the level of investment. It is higher, marginally, than it was 10 years ago, but so it ought to be. It is pathetic that Government Members continue not to face up to the reality of the failure of their own programme. As long as they do not, they will not succeed. Would the hon. Member for North East Cambridgeshire (Stephen Barclay) really have embarked on this plan if he had known that, instead of 6% growth, we would end up three years down the road with 1% growth? Would he? Of course not: nobody on the Government Benches would have done that, and if they had, they would have needed their brains tested—perhaps they need them tested anyway. That is the truth of it.

Then we come to the failure of Merlin and the question of the banks. Instead of making the Royal Bank of Scotland a national bank to invest in such projects, all the Government want to do is flog it off ahead of time. That will be another failure to add to the long list. This is a Government of failure who will not admit it, and therefore they will not put things right.

amendment of the law

Geoffrey Robinson Excerpts

Monday 25th March 2013 Commons Chamber

[Mr Pickles]

This is the second time the hon. Gentleman has asked whether I am willing to see him. I am; indeed, only this morning I sent out, at my own expense, for some high-quality tea and better biscuits for him. We are looking forward to seeing him.

Seven out of 10 councils have published a local plan, and the figure continues to rise. Nearly nine in 10 planning applications are approved—a 10-year high. Indications are that there are fewer planning appeals, meaning that local decision making is to the fore. The latest data from Glenigan show that planning approvals for new homes are up 62% year on year, and 33% up on the previous quarter.

However, brushing the cobwebs off the planning system is only part of the plan. As a result of Labour’s inaction, this country is crying out for more homes to meet that desperate demand, so this Government are helping to get development off the ground. Locally supported, once-mothballed large-scale sites—such as in Cranbrook, in Milton Keynes, in Eastern Quarry and in Wokingham—are now being kick-started. We should contrast that with Labour’s top-down eco-towns, which delivered not a single home.

Our programme is set to deliver 170,000 new affordable homes, almost 63,000 of which are already completed, by 2015. The Royal Institution of Chartered Surveyors says that home sales have reached their highest level in more than two and a half years, while builders from Barratt to Bovis say that Government schemes are driving increased sales, putting people back on the property path.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

We can give moderate support to the expansion of the Firstbuy scheme, which sounds good. Indeed, I recently visited such a scheme on the old Jaguar site in my constituency, which has proved a great help. However, does the Secretary of State not agree that making the mortgage expansion scheme available to second home buyers would be quite obscene, given that we are imposing a bedroom tax on those who can ill afford it?

[Mr Pickles]

The hon. Gentleman makes a reasonable point, and if that were a way in which Mrs Pickles and I could obtain a second home in Frinton, it would indeed be a scandal, but that is certainly not the Government’s intention. However, in our endeavours to ensure that I do not end up with a nice little flat in Frinton, we have to be careful not to rule out people whose marriage has just broken down, or situations in which parents are acting as part-guarantors. By September, we will be able to satisfy the hon. Gentleman on this issue.

We know that the demand is there, but it is also clear that for many individuals in very good jobs the housing ladder simply remains out of reach. Under Labour the number of first-time buyers plummeted to a 30-year low. Labour’s 2005 manifesto promised 1 million more home owners, but home ownership fell by a third of a million in the last Parliament. The industry is clear about what lies at the root of the problem. The British Property Federation says:

“Helping people needing a deposit has for some time been cited as the missing piece of a coherent housing policy”.

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[Mr Geoffrey Robinson (Coventry North West) (Lab)]

May I draw the House’s attention to my entry in the Register of Members’ Financial Interests?

I listened attentively to the Budget statement and tried to hear something that was positive, not just for exports, but for manufacturing, for business and for productive industries. There were just two things that we, of course, welcome: the £2,000 off national insurance contributions and the increase to 10% of the research and development credits for those investing, which I am pleased to say several companies in my constituency have already welcomed. The trouble is that those two things pale into insignificance when we look at the scale of the problem we face; they just are not going to tackle it.

The problem can best be measured by looking at the plan from 2010 and the Office for Budget Responsibility forecasts attached to it. Two crucial elements were going to support that plan and those forecasts. I recall saying in the debates that followed that they seemed to be the two most solid pillars on which the Government were building, but that, as far I could see, there was nothing underneath to support them or the OBR’s very optimistic forecasts. Those two elements were: manufacturing exports—exports on the visible account; and the increase in output from manufacturing. We were told to expect a 10%—I believe the figure given was 9.8%—increase in output from the business sector, but what have we had in the two years to the end of 2012? An increase of less than 5%—barely half what was projected. The hon. Member for Reading West (Alok Sharma) said that we are doing well on exports—I am not sure whether we were more interested in exports or Reading—but compared with what was projected and with what we need, the outcome in those two years has been terrible. I believe that the projected figure was 6% and we achieved minus 0.3% to December last year in the value and volume of exports.

I am not saying it is easy, but one thing I am sure about is that either the OBR has no idea about forecasts or we need to reconsider the OBR model, as it continually gets everything so wrong. My right hon. Friend the Member for Edinburgh South West (Mr Darling), the former Chancellor, was kind enough to say that he thought the estimates were optimistic—that the sunny uplands kept moving to the right and that the further out the OBR went, the more optimistic it became, but that was the case from the very beginning and nothing has changed. We should now be in those sunlit uplands. I do not understand why the OBR, with its much-vaunted independence, continues to get things so hopelessly wrong. Somebody needs to rethink that model. It is not enough to take responsibility out of the Treasury and pop it somewhere down Victoria street—one should not think that that will put everything right. There we are; that is one problem.

One part of the Budget that I thought might lead to some positive movement concerned the construction industry and the house building sector in particular. In an intervention on the Secretary of State, I welcomed the Firstbuy initiative, and a development on the old Jaguar site in Coventry has made quite a contribution, but the extension of the mortgage scheme, which is much bigger, is—yet again—a measure that has not been thought through. The problem with this Government is that they are totally incapable of thinking anything through. They should not be consulting on whether millionaires can have subsidised mortgages for second homes. That should have been ruled out in principle right from the beginning, before the consultation began. Many things require consultation, but not that. I cannot imagine why it was left in as an option—well, I can; things were not thought through.

We are in real need with housing starts down 11%, 70,000 construction workers unemployed and the lowest house building programme since the ’20s. That is the scale of the problem and such tiny measures show that the Government are fiddling around the edges—fiddling while Rome burns, as it were. Central to it all is the attitude of the Treasury and the Chancellor. If the Chancellor has lost self-confidence to such an extent that it impacts on confidence in the business community and consumers in the UK, he must consider whether he any longer has the vision, courage and self-confidence—whether he ever had those things is, of course, another question—to do what is necessary and change course.

Tax Fairness

Geoffrey Robinson Excerpts

Tuesday 12th March 2013 Commons Chamber

[Chris Leslie]

I am not sure about the hon. Lady’s maths, but we are still within the period of the 50p rate. Of course we want to see the details of what has been happening. However, while the Conservatives have the notion that for those who are very wealthy, the higher tax rates are a deterrent and create avoidance, they do not say the same about the poorest and the middle-income families in the rest of the country. They can pay VAT at 20%; they can pay higher taxes. The hon. Lady takes a view that is taken by so many Conservatives. There is one law for those who are very wealthy, but everyone else must suffer because of the Conservatives’ failure on revenue and borrowing.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

Does my hon. Friend not find it strange that the Government do not seem to understand that taxes are an element of economic policy that can be adjusted in line with economic circumstances? During the first period of the Labour Government, the prevailing circumstances meant that there was no case or need for taxes to be increased, by means of a mansion tax or by any other means. When the need appeared after the economic collapse, compounded by the financial crisis, it became clear that we had to do something, and of course the Government did. The trouble with this Government is that they think policies need not to be adjusted in line with circumstances, but they do need adjusting. Does my hon. Friend not agree with that?

[Chris Leslie]

I agree. It is instructive to observe the different choices that the different parties are making on this issue. The Conservatives choose to cut taxes for the richest—the millionaires in society—and to increase everyone else’s taxes. The Liberal Democrats have said that they believe in a mansion tax. Indeed, a fortnight ago the Liberal Democrat leader, the Deputy Prime Minister, said:

“Victor Hugo observed that it is near impossible to resist an idea once its time has come. Last week, he was again proved right as calls for a mansion tax, first proposed by the Liberal Democrats in 2009, gathered new momentum…I offer certainty: the mansion tax, or a version of it, will happen…The Conservatives and opponents of fairer taxes have a choice. They can dig their heels in and remain stuck in the past. Or they can join with the Liberal Democrats and the chorus of voices seeking to make our tax system fair.”

Well, here we are today. What more can we do? The issue is on the table, ready for that momentum to make it happen, so how can the Liberal Democrats resist that idea whose time has come?

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[Chris Leslie]

We digress slightly, but that is an interesting observation. I did not realise that the Green party had fled from that Eastleigh by-election.

[Mr Robinson]

Before we leave the subject of the hapless Liberals and consistency, does my hon. Friend agree that they do show consistency in their inconsistency and in their insincerity—that is the only consistency we can identify?

[Chris Leslie]

There is time for those sinners to repent, and I hope that in three hours’ time they will re-examine the motion, seriously consider the outrageous stretch in the amendment, stick with their principles and support the motion. I accept that there is a need to flesh out the details of how the mansion tax arrangement would be designed. We need to commission the Treasury and the OBR to work on those particular details.

Some have suggested building on existing property tax systems, although that is not wholly straightforward. In New York City, apparently, a £2 million property owner can pay about £22,000 of property tax, but Lord Oakeshott, who, as we know, is a leading light in the Liberal Democrat firmament, argues against council tax banding as one way of approaching the question. He says:

“If you just put on one or two council tax bands, you can't make the superrich pay their fair share”.

Some Conservative Members, such as the hon. Member for Bognor Regis and Littlehampton (Mr Gibb), complain that a mansion tax is impractical, that it cannot be done and that it would be an administrative nightmare, but I simply refer them to their own Front Benchers. Unbeknown to most Government Members, Her Majesty’s Treasury is, with very little fanfare, actively talking about the viability of an annual charge on high-value residential properties and launched a consultation document last May entitled, “Ensuring the fair taxation of residential property transactions”. It contains a whole chapter about introducing an annual charge, as the Treasury calls it, as part of the regime to tackle the avoidance of tax on high-value residential properties, albeit for properties enveloped in non-natural person terms—in other words, those owned by a company or by partnerships or investment vehicles.

Let me draw the attention of the House to some sections of that Treasury publication, because it suggests that a mansion tax is entirely feasible. On page 8, it states:

“The aim of the new annual charge is both to deter avoidance and to ensure the owners of high value residential property pay their fair share of tax…The annual charge will be introduced in Finance Bill 2013.”

So, the measure is coming in the forthcoming Finance Bill at the other side of the Budget. The document states:

“The interest to which the charge will apply will be the freehold or leasehold interest”

and that the annual charge will be

“applied separately to the freehold (if valued over £2 million) and the leasehold (if valued over £2 million…)”.

It goes on to state that the value of the property interest is proposed to be the value determined on 1 April 2012 and, interestingly—let us remember that the document comes from the Treasury—states:

“Property valuations for the annual charge will be self-assessed by the persons liable to the charge and submitted to HMRC as part of their annual charge tax return. HMRC will have powers to enquire into returns and also to make assessments so that non-compliance can be effectively challenged… Properties will be re-valued every five years…The valuation required will be an assessment of the ‘market value’”.

It even goes on to give a helpful list of four bands of annual charge on properties worth more than £2 million. The Treasury knows in its heart of hearts—I do not know whether it has shared this with hon. Members—that the concept of a mansion tax has some feasibility.

Economic Policy

Geoffrey Robinson Excerpts

Monday 25th February 2013 Commons Chamber

[Mr Osborne]

We are debating the decision of Moody’s credit rating agency, which said in its market notice on Friday that reduced political commitment to fiscal consolidation could lead to further downgrades of the United Kingdom. That is the verdict of the ratings agency. The verdict of the Institute for Fiscal Studies, an independent body, is that Labour plans would add about £200 billion extra to borrowing. That is the view of independent bodies about the Labour party’s economic policy.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

Is the Chancellor aware that the whole country is getting progressively more sick of the mantra that there is no alternative, which he parades as a policy, and that for as long as he perseveres with these counter-productive policies there is no hope? In particular, until he can get his national programme for investment in infrastructure under way—even the director general of the CBI said that he had totally failed to deliver on that, and the whole country and the whole House agrees—he is failing as a Chancellor.

[Mr Osborne]

Infrastructure spending—actual money being spent on infrastructure—is higher in this Parliament than it was in the previous Parliament. That is, I am afraid, the simple fact produced and audited by the independent Office for Budget Responsibility. We have increased capital spending compared with the plans that we inherited, and under this Government in this Parliament it is higher as a percentage of GDP than under the previous Labour Government. That is what has happened.

Oral Answers to Questions

Geoffrey Robinson Excerpts

Tuesday 29th January 2013 Commons Chamber

[Mr Osborne]

I agree with my hon. Friend. In East Anglia, where his constituency is, we have invested more than £280 million in life sciences, and are providing infrastructure by, for example, upgrading the A11. He is completely right that we should look at new forms of financing. We have introduced tax increment financing, as he suggests. From April this year, all authorities will, within prudential limits, have unfettered access to standard tax increment financing.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

Is the Chancellor aware that Mr John Cridland of the CBI said yesterday that the Government have a national infrastructure plan but were just incompetent at delivering it? That incompetence, which characterises the Government, is leading to a situation in which the Government will have achieved, by the end of this Parliament, about half the level of national infrastructure investment of 2008, which will cripple the competitiveness of the British economy. What is the Chancellor going to do about it?

[Mr Osborne]

It is an inconvenient truth to the hon. Gentleman that public investment as a percentage of GDP is higher on average in this Parliament than under the entire last Labour Government. That is because this Government are making the difficult choices on welfare, which Labour Members oppose, to save money and reduce the deficit, and to spend more, for example, on roads than they did during their period in office. That is the right priority for the taxpayer.

Oral Answers to Questions

Geoffrey Robinson Excerpts

Tuesday 11th December 2012 Commons Chamber

[Mr Osborne]

I say to the Chair of the Treasury Select Committee that we will set out at the Budget—of course, he will want to scrutinise this carefully—a new control total for the off-balance sheet liabilities of PFI. We already now publish the whole-of-Government accounts so that people can see the liabilities built up under the previous Administration. The country now has more than £280 billion of PFI debt, of which only £40 billion has been paid off, so he is absolutely right to hold our feet to the fire to ensure that we properly account for this and remove perverse incentives in Whitehall. We want the private sector investing with us in public services, however, so it is important that we have the right regime.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

The House will be pleased that the Chancellor is not trying to get rid of PFI, but trying to improve it in those areas where it can be improved. What does he mean, however, when he says that the Government will take a stake in the projects? How will he do that? It will need more than a director on the board, which I heard him say.

[Mr Osborne]

We propose to take a public sector share and put in an equity stake on behalf of the public sector. It will be a minority stake, but it means that we will share in the upside, and, of course, in order to keep an eye on our investment, we will have a director on the board representing the public sector, which was not the case in previous projects.

Bank of England

Geoffrey Robinson Excerpts

Monday 26th November 2012 Commons Chamber

[Mr Osborne]

These days, of course, the House of Commons can choose what it wants to debate through the Backbench Business Committee, while the Opposition are always able to table motions, too. I do not think it would be sensible to try to divide the House on something the appointment of the Governor of the Bank of England. One of the advantages of the Bank of England, as I was saying to the shadow Chancellor, is that there is an agreement that it should be kept out of party politics and the like; we have achieved that today. Mr Carney said clearly in my discussions with him that he did not want to talk about British economic policy at any great length at his press conference today or, indeed, while he continues as the Governor of the Bank of Canada, but that he did want to talk at length to my hon. Friend’s Committee. At a mutually convenient time, he will do that.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

Is the Chancellor aware that this may be the first occasion under his chancellorship at which we can wholeheartedly welcome his decision? I hope he will extend to Mark Carney, the prospective Governor, a warm welcome to these shores. We also hope that he will get his citizenship before his term of office expires.

[Mr Osborne]

I welcome the hon. Gentleman’s support. Perhaps we could bottle this cross-party consensus and use it on future occasions, but I doubt it.

Mark Carney will apply for British citizenship, but he is absolutely clear that he should do so in the normal way—the same way in which anyone else would apply for it. One thing that I have learned from the last Government is that Ministers of the Crown should be very careful about becoming involved in citizenship decisions.

Infrastructure (Financial Assistance) Bill

Geoffrey Robinson Excerpts

Monday 17th September 2012 Commons Chamber

[Danny Alexander]

I think that my constituents in the highlands would say that describing it as close to my constituency might be a misuse of the word “close”, but none the less I recognise the right hon. Gentleman’s point. I gently observe that his party had 13 years in office to deal with that project, although I mean no disrespect to him in saying so.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

Will the Chief Secretary give way?

[Danny Alexander]

Let me answer the intervention made by the right hon. Member for Rotherham (Mr MacShane) and then I will gladly take a further intervention. I will deal with them one at a time, if I may.

I certainly will pass on the right hon. Gentleman’s concerns to the Department for Transport, which is aware of the matter. I have received representations from Members of all parties in the north-east of England about that particular project.

[Mr Robinson]

On road projects that would be advantageous, such as the one mentioned by my right hon. Friend the Member for Rotherham (Mr MacShane), is the Chief Secretary aware that not a single one of those announced in the autumn statement has yet got under way?

[Danny Alexander]

I would point out to the hon. Gentleman that one of the announcements in the autumn statement was about local authority major projects. He will know, for example, that the Kingskerswell bypass is under constructions, that the A164 Humber bridge to Beverley improvements are under construction, and that the east of Exeter scheme improvements to the M5 junction 29 are under construction. I could carry on, but I will save the rest of the list for further interventions.

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[Danny Alexander]

The right hon. Lady is referring to an important piece of legislation, which, generally speaking, will have been taken into account in the process of giving consent to a project. The guarantees will be offered to projects that meet a number of criteria, one of which is that they already have the necessary consents in place to get going within 12 months. The objective is to bring forward and accelerate the development of infrastructure, and it would be inappropriate to impose additional obligations on people delivering projects. This is about enabling projects that are already slated to happen to get going quickly.

[Mr Robinson]

This is a huge sum of money that the Treasury is undertaking to guarantee. I cannot imagine what some officials must think about it, but I know that there will be a strong case for ensuring that all guarantees are immediately and unconditionally added to the public sector borrowing requirement. Is it the case that any guarantee will be counted as public expenditure and be part of the PSBR?

[Danny Alexander]

It is good to hear from someone on the Labour Benches who thinks that £50 billion is a lot of money, given the freedom with which the Labour Government borrowed such sums during their time in office. The hon. Gentleman will know that these guarantees will not score to the PSBR, except to the extent that one makes an assumption about them being called, which causes a bit of immediate public expenditure. It is only at the point at which a contingent liability is called on that it scores as public spending. He will also know, because I suspect that he was involved in these matters when he was a Minister at the Treasury—

[Mr Robinson]

rose—

[Danny Alexander]

If the hon. Gentleman will let me finish my answer, I will give way to him again. He will also know that we recently obtained the agreement of Members on both sides of the House to introduce a new process known as the whole of Government accounts. That process, in addition to covering the national accounts that relate to immediate expenditure, also reports on off-balance-sheet expenditure of all sorts. Contingent liabilities of the kind that might be entered into under the Bill will be reported in the normal way.

The hon. Gentleman will also observe that the Bill includes significant reporting requirements. These will require the Treasury—or the Secretary of State, where appropriate—to report to the House in circumstances in which guarantees are issued under the terms of the Bill. I hope that that satisfies him—but perhaps it does not.

[Mr Robinson]

There was a long-standing Treasury tradition—I do not know when it was last breached, or whether it has been discarded—that a guarantee was counted as expenditure when it was given, not when it was called. The Bill seems to provide yet another easy way for the Government to find some off-balance-sheet expenditure in a way that they swore not to do.

[Danny Alexander]

I am advised that that is not correct, but if the hon. Gentleman wishes to enter into correspondence on the matter, I shall gladly follow it up.

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[Mr Geoffrey Robinson (Coventry North West) (Lab)]

I am pleased to follow the hon. Member for Halesowen and Rowley Regis (James Morris), a fellow west midlands MP who sits on the other side of the House. I did not, however, agree with much of what he said, and certainly not about the Government’s great success in reducing borrowing. Figures from the last quarter of this year show that £6.9 billion more was borrowed than in the previous quarter. However, now is not the time to go into such matters.

Although we could question the need for this Bill, its focus is rightly on increasing infrastructure expenditure in the UK. I do not, therefore, want to enter into the rather arcane and intricate argument about whether housing is infrastructure investment. The point was made in a nutshell when it was said that after the war, there used to be competition between the parties over who could build more houses. I do not like to admit it, but I think Harold Macmillan showed the way by building 300,000 houses in one year. He found a way round the problems that the present Prime Minister seems unable to get over—of course, that building was coupled with a boost to the economy, increased spending power and confidence. Once a house is built, it still needs to be sold and people still need to buy it. That point was raised by my hon. Friend the Member for Luton North (Kelvin Hopkins) who has just left the Chamber. As he said, if we want successful infrastructure, we need demand in the economy.

It strikes me that this Government are one of the most incompetent in delivering their plans. They announce and reannounce plans again and again, yet they get nowhere. We need only look at what the Prime Minister has repeatedly said and what the director general of the British Chambers of Commerce thinks about that. As far as I am aware, the director general is not a political fan of the Labour party, yet he has called the national infrastructure plan “hot air” and “a complete fiction.”

I remember the Prime Minister saying in this House that there is nothing wrong with the Government machine or the way they are organised, and that they must say what they want and make sure they get it. He has been saying that for a long time, but the situation gets worse and worse. He repeated that point recently, but we know that the more the Government repeat things, the more desperate they get. Now they have presented this plan for guarantees. Strictly speaking, we do not need such guarantees, but they are a sign that the Government want to do something and I would be the last person to stop that. Nevertheless, they are not doing anything yet; they are providing guarantees that could be there if needed.

Let us look at the national infrastructure plan. It is dedicated to projects of national significance that are critical for growth. How many projects in that plan have the Government delivered? Fewer than 20% ever saw the light of day. The Government are still asking businesses, “Where is the project? Where are the diggers?” but, of course, they are not there yet.

I hope we can manage to get some useful infrastructure projects under way, and I want to make two points. The first concerns a project that I am greatly in favour of, and the other a scheme I would like the Government to drop—HS2. I know that HS2 was begun by the Labour party; it is a bright idea, a lovely, high-profile project and all the rest, but it is simply not value for money. The Treasury must look at the return on it, which has gone from over £2 for every £1 spent, to £0.90—below the established Treasury allowance for a return on a capital project. It is not as if HS2 is a small capital project; it costs £17 billion for a line that will go from London to Birmingham—no further—and shave quarter of an hour off the time. With improvements to our national railway, we could get that journey down to an hour by having four tracks between Coventry—my own city that I am proud to represent—and Birmingham. That would take 10 minutes off the journey time, and eliminate many causes of delay. HS2 will cost a huge amount of money for an elitist project that will go up and down an already well-established corridor. Other reasons for and ways of dealing with the situation are much cheaper and involve a much better cost-benefit ratio.

Why are the Government going ahead with HS2? I do not understand. The Treasury has warned people, yet the Bill contains a guarantee of £50 billion and will allow £17 billion for HS2. No guarantee is needed—nothing at all—and the cost-benefit ratio has gone down and down. One can imagine what the Government have had to do just to maintain that ratio—they could not even keep it at £1 and it has reduced to £0.90. I hope that the Government will reconsider HS2 and put their foot down. After all, the Treasury should be the guarantor not only of how much we spend or the balance of spending, but for the return on that spending. The HS2 project does not stand up on any of those grounds.

The Prime Minister might be happy because he thought there was cross-party support for HS2. However, so much has he lost his self-confidence and the guts for the battle, he is prepared to commit to something only when he has cross-party support. Until there is cross-party support on Heathrow, he does not want to do anything. What has happened to this man? He has lost it; he has lost his bottle. Does he expect Opposition Members to come along and bail him out after what he has said about us and others? I do not get it. What world is he living in? I will not be part of that.

The Prime Minister does not want to face up to Heathrow. He says that we will discuss the issue in 2016-17—despite the urgent need to do so now—because he has not got cross-party support. He is steaming ahead—perhaps racing ahead is the right word for aircraft—with the one issue on which he has got cross-party support and about which he can do something. He can be seen to be acting by saying, “Oh, we’re fully committed to that.” I think it is pathetic. The trouble with the Government is that they never had competence and they have now lost their confidence. By introducing a Bill that we do not strictly need, they are—more intensively than ever before—trying to give the impression that they are doing something. I am sure that the Bill will be quite embarrassing for the mandarins at the Treasury. I cannot describe the problems that the Labour Government had to get one small, £2 billion guarantee not counted in their borrowing figures—although we should have counted it.

I am pleased to have spoken in this debate. We should press ahead with Heathrow. Even though I know that it is unpopular, the Government should have the courage of their convictions. I believe that we should stop HS2. Many projects are ready to go, and hon. Members cannot understand why they are still on the drawing board—or just off it—or have been discarded. This is a Government of shambles and without the conviction or the drive to remain in charge of the country.

Oral Answers to Questions

Geoffrey Robinson Excerpts

Tuesday 26th June 2012 Commons Chamber

[Danny Alexander]

It is precisely such an example of the sort of infrastructure that this country needs and the sort of project from which the economy of London and elsewhere will benefit if we can bring the investment forward and make things happen more quickly. As I said, we are looking for ideas about doing just that.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

Is the Chief Secretary not aware that the so-called national infrastructure programme is way behind schedule, that the construction industry is flat on its back and that the apprenticeships in that sector, so badly needed by the industry and by the Government, are seizing up? Why does he not get his finger out and do something about it instead of making vague promises?

[Danny Alexander]

The hon. Gentleman is wrong to say that the national infrastructure plan, which we published last November, is behind schedule, but of course he is right to say that there are problems in the construction sector. That is why we have taken a number of steps to support the house building sector, but we will make further announcements in that area later this summer.

Budget (Coventry)

Geoffrey Robinson Excerpts

Monday 21st May 2012 Commons Chamber

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

Thank you, Mr Speaker, for granting this debate, and I congratulate my hon. Friend the Member for Coventry South (Mr Cunningham) on securing it. There may not be many of us here this evening, but you are still in the Chair, Mr Speaker, and we will be able to speak directly, without a lot of interruptions, beyond this Chamber to the people of Coventry about the list of indictments, which my hon. Friend stated so powerfully, of the effects that the Government’s policies will have on our city, whether or not that is their intention.

My hon. Friend gave a long list of problems that the Government’s policies are creating for Coventry. I will start with Friargate. The inner city of Coventry is pretty well known. During the war, it was the most bombed city in the country, starting with the November raids right back in 1941. Afterwards, everybody thought that they owed a particular debt to Coventry, which was wonderful—I was not there at that time, of course—and the cathedral and the city centre were rebuilt. City planning was such at that time that good money, planning and thinking were put into it. A ring road was put around the city, and to this day traffic flows around Coventry and in and out of it marvellously well.

The trouble is that the city centre has become derelict. People do not eat there socially, congregate there or spend time there. It is desolate, which leads to all those activities that we do not want to see in any of our city centres. We need a revision of the original city planning more than 50 years ago, which is long enough.

Early on, the Government thought of an imaginative and good scheme called the tax incremental financing scheme, which was to be partly funded by incremental taxes from the locality, region or city, but would have Government encouragement and power behind it. No less a person than the Deputy Prime Minister promised that we would be beneficiaries of it. Sadly, however, we are used to his broken promises,. I say this as an admirer of his, but he has made and broken many promises, including on tuition fees. Despite being given a specific promise that we would be included in the eight cities that could contribute to their own rehabilitation, which we desperately needed, we have not been.

I understand that all is not lost. A new initiative—an initiative rather than a scheme this time—has been put forward in which Coventry has been invited to take part, and our council has responded positively. I hope that Coventry can usefully and profitably participate in the city deal initiative. I regret to say that the city centre is a blot on the copybook of our huge post-war efforts to rebuild the country and its cities. We did not succeed with it, and we need to do so in the near future.

Another area of great disappointment has been Coventry’s schools. The cancellation of the Building Schools for the Future programme has been a great setback. We were on the point of signing contracts, but as a responsible council, Coventry held back, and the Government applauded it for doing so. We urged it to sign the damn things and get the contracts signed, but no, it held back.

Two schools in my constituency were affected. One, Woodlands, is an exemplary comprehensive built after the, war with the usual ’50s and ’60s concrete construction. The other, President Kennedy school—the name tells the date—was constructed on similar principles. Those schools are now in urgent need of replacement, but because the council did not want to behave even slightly irresponsibly and would not sign the contracts, we lost out by a total of £335 million, as my hon. Friend mentioned. I visit those two schools regularly and work with them. The attitude of the Secretary of State for Education towards them is very off-hand. It is not that I mind personally, because it does not hurt me, but he seems to ignore the fact that those schools had a good and reasonable case for making a demand on the public purse.

The Secretary of State wrote in similar terms to Becta and to the Qualifications and Curriculum Development Agency. In fairness, the Conservatives said before the election that they would get rid of the QCDA—typically, they said that without hearing the case, but at least they had said that that was what they were going to do. The letter to the QCDA was, if I may say so, peremptory and impolite; it was unworthy of him, but at least they had said what they would do. Becta, though, was suddenly closed without anybody knowing anything about it. It seemed as though Coventry was being targeted again—I do not intend to make the obvious military historical reference here—as the centre that had to be hit.

My hon. Friend the Member for Coventry South mentioned what the chief executive of the Coventry and Warwickshire chamber of commerce had said. I promise that she is no supporter of mine or of the Labour party. I am pleased to see the Economic Secretary on the Treasury Bench, because I would like her to listen to what the chief executive said. The best that she could find to say was, “If we’re honest”—that is very difficult for Governments to do, as I appreciate—the Budget

“was quite London-centric in many regards and that obviously wasn’t particularly welcomed.”

That is the final judgment of a chamber of commerce chief executive, a representative of the very people the whole Budget was meant to be about supporting.

I put it to the Economic Secretary, who is to respond to the debate, that we desperately need help. We do not want handouts, we want help up. That is what we are after. If only she would meet us halfway, we could still do great things in Coventry, but we need a Government who are capable of responding to the need that exists.

--- Later in debate ---

[Mr Robinson]

Will the Minister give way?

[Miss Smith]

I have only three minutes left, but if the hon. Gentleman wishes to intervene, I will give way.

[Mr Robinson]

The Minister mentioned the west midlands, but could she not say something about Coventry? She even mentioned Birmingham. I made some unfortunate remarks about Birmingham not so long ago—I will not repeat them—but we are talking about Coventry tonight.

[Miss Smith]

The hon. Gentleman pre-empts my next paragraph. I should like to draw his attention to the successful bids in the Coventry and Warwickshire LEP area, including the Elonex advanced engineering supply chain and Alamo Manufacturing bids, which I am sure he welcomes, because they and others will create many thousands of jobs in the west midlands.

The hon. Member for Coventry South said there was little evidence of private sector growth. I simply dispute that statement. The core city deal for Birmingham, which was mentioned by both hon. Gentlemen, will have spillover effects for the wider west midlands region, although I hear the call for me to speak about Coventry in its own right.

The hon. Member for Coventry South raised concerns about the impact of regional pay—those were his words—across the country. I reassure him that the Government are not setting out detailed proposals at this stage, but simply asking the experts how public sector pay might better reflect local markets. He will be aware that the Institute for Fiscal Studies made an estimate of the public sector pay premium—he quoted off-hand some figures in that respect. In principle, the premium has the potential to hurt private sector businesses, which need to compete with higher public sector wages. A premium could prevent them from expanding and lead to unfair variation in the quality of public services.

On public spending, the previous Government left an appalling financial mess behind, which this Government have a moral obligation to sort out. We have delivered a challenging but fair settlement for local government, including for Coventry. The formula grant in Coventry will be £493 per person in 2012-13. The average per person across England is far lower, and it is £200 to £300 per person in some southern areas. That reflects the higher level of need in Coventry.

I thank the hon. Gentlemen for speaking in the debate. I believe the approach set out in the Budget is a strong one and am confident that it will benefit all areas of the country, including Coventry and its environs.