Infrastructure (Financial Assistance) Bill

Geraint Davies Excerpts

Monday 17th September 2012 Commons Chamber

[Danny Alexander]

I did see that survey. I note that it was conducted before the Government announced the guarantees plan. However, a subsequent snap-shot poll showed a widespread welcome from the business community for the Bill. My hon. Friend will know that we have made significant changes to the planning system, including in the announcements last week, that relate directly to the threshold for infrastructure projects. Those will allow more projects of a slightly smaller scale to go through the national process, rather than getting tied up in local processes.

[Geraint Davies (Swansea West) (Lab/Co-op)]

rose—

[Danny Alexander]

I will take one more intervention, then I will make some progress.

[Geraint Davies]

The right hon. Gentleman will know that there are schemes in America where, with the support of pension funds, the private sector builds houses on land provided by the public sector. That provides a mixed asset with social and private housing, and a revenue stream for the public sector at no cost to it. When such schemes are available, why are the Government instead saying to the private sector, “Forget about social housing for a while. Just build private sector housing”? That will have a long-term impact on the demography of an area.

[Danny Alexander]

The hon. Gentleman, with the greatest of respect, has misunderstood the Government’s message. Part of the guarantee programme will extend the benefit of Government guarantees to housing associations, to enable an additional 15,000 affordable properties to be built. That is why it has been welcomed by the National Housing Federation, which speaks for housing associations in this country. Housing associations recognise that they will benefit from the guarantee, because it will reduce the cost of finance and help them to build many more homes for the sadly limited amount of money that is available to this country at the moment.

The plans are also supported by the Home Builders Federation, which said:

“Government now clearly understands the constraints on delivery and has outlined action to address them.”

The Government are committed to delivering a sustainable, private sector-led recovery that is balanced across industrial sectors and geographical regions; to moving away from an economy focused exclusively on the south-east of England, which is reliant on financial services and unsustainable debt, towards an economy supported by a wide variety of industries across the United Kingdom; and to making the UK one of the best places in the world to do business, attracting foreign investment and promoting our exports. To achieve that vision, the Government are committed to delivering world-class infrastructure, thereby giving firms access to the communication and transport networks that they need, wherever in the UK they happen to be.

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[Danny Alexander]

I must make some progress, but I will give way again later.

Housing guarantees, alongside a wider package of housing and planning reforms, will contribute to the construction of up to 70,000 homes, including affordable housing, and opportunities for first-time buyers to get on to the housing ladder. That will ease conditions in overcrowded and overpriced residential areas, and will enable people to locate near to jobs.

The steps that we plan to take, and which the Bill enables us to take, will help more companies in a wide range of sectors to grow and flourish, not just in the south-east of England but throughout the UK, and will give more people access to a wider range of opportunities. The benefits will also be felt in Scotland, Wales and Northern Ireland. The UK’s hard-won fiscal credibility should benefit the whole of the UK.

[Geraint Davies]

Will the Minister give way?

[Danny Alexander]

I have a bit more to say. I have been generous with my time, but I must now make some progress. The hon. Gentleman’s Front-Bench colleagues are becoming restless.

The Bill will enable major infrastructure projects to secure finance regardless of where they are based. We will work closely with the Northern Ireland Assembly, the Welsh Assembly Government and the Scottish Government to ensure that the authority conferred on the Treasury or the Secretary of State by the Bill can be used effectively to help to deliver for people in Scotland, Wales and Northern Ireland.

I shall now give way to the hon. Member for Swansea West (Geraint Davies).

[Geraint Davies]

In certain areas of Wales—such as Swansea, part of which I represent—the cost-benefit ratio is not always as strong as it might be. Will the Minister support, for instance, super-connectivity for Swansea, given that it has been granted to Cardiff, and better links to Cardiff airport? Passenger numbers are not great at present, but that is simply because the infrastructure has not been there in the past.

[Danny Alexander]

I hear the case that the hon. Gentleman is making. We have made important announcements recently, particularly in relation to rail links in and to Wales, which I hope he welcomes. I will not support specific projects that may be in gestation, but we will work with the Welsh Assembly Government, who are principally responsible for such proposals. If there are projects for which a guarantee is appropriate, we will consider that very positively in the light of the representations made to us.

As the hon. Gentleman will know, great interest has already been expressed by investors and those involved in projects since the UK guarantees idea was launched six weeks ago. Since then, about 40 companies and project sponsors have come forward, responsible for projects worth well over £5 billion and covering high-priority investment in areas such as energy, transport, water, waste and telecommunications. Detailed discussions are already taking place with, for example, those involved in the Mersey Bridge Gateway project, which is considered to be one of the world’s top 100 infrastructure projects. We have also indicated that we would be willing to consider a guarantee relating to the green deal.

There should be no doubt that the Government are in a position to deliver this policy, and the investment it will unlock, only because of the decisive action that we have taken to reduce the deficit, and the credibility that that has secured for this country. When we came to office, the UK taxpayer was paying interest rates comparable to those of Spain and Italy. Were that still the case, the course of action that we are taking now would be impossible. Because we made tough decisions to regain control of our public finances, we now enjoy interest rates of only about 2%. That is the result of a responsible approach to spending and a credible long-term commitment to regaining control of the public finances.

Despite those tough decisions, we are already spending more on critical transport and communications infrastructure directly as a Government than was spent at the height of the spending boom. We are providing £18 billion-worth of rail investment, supported by the spending review, and a further £9.4 billion of infrastructure enhancements for the rail network was announced in the summer. Ten super-connected cities—the hon. Member for Swansea referred to super-connectivity—will enjoy ultrafast broadband and high-speed wireless connectivity as a result of Government investment, with funding set aside for a further 10. We are also focusing on how we can reduce burdens and keep costs low so that investment, whether public or private, goes as far as possible.

Last week we announced a package of measures to reduce burdens on business still further, including the reform or removal of more than 3,000 regulations to reduce their impact. That constitutes the most ambitious action ever proposed by a modern British Government to set business free. Our spending plans have prioritised capital spending that supports balanced sustainable growth across the country, and our efforts to reduce burdens on businesses mean that investment has gone even further. That approach is producing results despite difficult conditions. More than 1 million private sector jobs have been created under this Government, and this year we rose from 10th to eighth in the World Economic Forum rankings of international competitiveness. The Bill could allow us to unlock even more investment without placing material additional burdens on the public finances, enabling the Treasury to support infrastructure delivery so that we can make better use of private sector finance, skills and incentives, while also managing exposure to the taxpayer.

Under the previous Government, the UK fell in the infrastructure world rankings from seventh in 1998 to 33rd in 2009—behind Namibia, Slovenia and Cyprus. We are now up to 24th and taking the necessary steps to make the further improvement this country needs. There can be no argument with the view that we are delivering far more than under the plans we inherited from our predecessors.

The Bill contains appropriate safeguards and checks to ensure transparency and accountability to Parliament for actions taken under it. It imposes an upper limit on the amount of expenditure that the Treasury and Secretary of State may incur, which can be increased through affirmative resolution. It also requires the Treasury to update the House regularly. In answer to a point that was made earlier, where expenditure is charged on the Consolidated Fund, the Bill requires the Treasury as soon as practicable to lay a report before Parliament specifying the amount paid. Any expenditure or contingent liabilities will be reported in the whole of Government accounts.

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[Rachel Reeves]

The bank bonus tax is being used to do two things: first, to create 100,000 jobs for young people; and secondly, for the construction of 25,000 new affordable homes. The Opposition believe that the priority right now is construction and getting young people back to work. The Government believe that the priority is a tax cut for the bonuses. That just shows how out of touch this coalition Government are.

Nothing better illustrates the long-term costs of this Government’s short-sighted complacency than the shocking shortfall in infrastructure investment. If we want to build a productive, competitive economy for the future, we need to invest in the road and rail systems that keep this country moving; in the energy supplies that power our industries; in the information and communication networks that turn ideas into real innovations. With study after study confirming Keynes’s original insight—that construction projects can maximise the multiplier effects of new investment, creating skilled jobs in the construction sector as well as in engineering and design—there is no better time than now.

Instead, we have had from this Government countless speeches, statements and strategy documents. People are asking, “Where is the delivery?” As the CBI is asking, where are the diggers on the ground? When are we going to start turning blueprints into bricks and mortar? It was the Prime Minister who said,

“This autumn, the government is on an all-out mission to unblock the system and get projects underway”.

That sounds promising—until we realise that he said this a year ago. Since then, what have we seen? None of the road building projects in the autumn statement package have begun construction. The number of housing starts is down on 2011. Planning applications are taking longer to approve. I agreed with the Prime Minister when he said:

“In terms of job creation today, getting construction projects off the ground is critical.”

But in the year since he told us that barely one in 10 of the projects listed in the Government’s construction pipeline have moved forward to procurement or construction, and almost as many of them have moved backwards. Total UK construction output is down by more than 10% and last week’s jobs figures showed that the number of jobs in the construction sector has fallen by 89,000, bringing the total number of construction jobs lost since this Government came to power to 120,000.

The Deputy Prime Minister has promised that support for infrastructure and other private sector projects from the regional growth fund would offer a

“boost to business, which will jump start growth and create jobs that last in the places that really need it.”

That sounds like just what we need, but that was said a year ago. We know that since then just £60 million of the promised £1.4 billion has been released to businesses, creating barely 5% of the 37,000 jobs promised.

The Chancellor of the Exchequer announced £20 billion in new infrastructure investment to be funded by the pension funds—that was a year ago. We now know that this scheme will be launched next year, with funds amounting to only a tenth of what was promised back then. As the failure of this Government’s promises increases, their rhetorical displays have become ever more strident. Two weeks ago, in response to questions from my right hon. Friend the Leader of the Opposition, the Prime Minister said:

“If we look at what is planned by this Government, we see that between 2010 and 2015 we will be investing £250 billion in infrastructure.”—[Official Report, 5 September 2012; Vol. 549, c. 230.]

It is true that the national infrastructure plan sets out £250 billion-worth of projects— would government not be easy if you were judged only on what you had planned? If we look instead at what has been delivered, we see that the picture is rather different. The Office for National Statistics shows that new infrastructure orders since the second quarter of 2010 average less than £2 billion a quarter. At this rate, it will take not five years but more than 30 years for the Government’s grand plan to be delivered. The latest construction output figures released last week show that progress is slowing, not accelerating. It is no wonder that the director general of the British Chambers of Commerce has described the national infrastructure plan as

“hot air, a complete fiction”.

[Geraint Davies]

My hon. Friend will know that the Prime Minister boasts of an extra 1 million jobs in the private sector. Does she agree that many of those jobs are where people are moving into part-time work having lost full-time work? It is wrong that the Government penalise people who are now working less than 24 hours but used to do more, by cutting their working tax credits by £3,750. The Government are saying, “Get some more work” but these people have just come down from full-time employment.

[Rachel Reeves]

I thank my hon. Friend for that intervention. He will know that there are 1.42 million people working part time who wish that they were working full time. As of April, about 200,000 families lost support through working tax credits because they could not find the additional hours that they need to still be eligible for that extra support to help them when they are in work; that support helps them to avoid poverty.

It is no wonder that people are asking whether they can have faith in anything the Government are saying, given that in every area we see dither and delay. In communications, the Government have put back the 2012 broadband target to 2015 and may not meet that new deadline. In house building, recent statistics show that new housing starts are down by 24% on a year ago. In waste management, the plan promised for spring this year will now not be delivered until the end of 2013. In energy, the CBI has warned that policy changes such as the cuts to feed-in tariffs have been

“damaging to business confidence, with implications not just for immediate investment decisions but for longer-term trust in government policy”.

In transport, we still await the long-promised national policy statement on transport networks and aviation, and tough decisions on airport capacity have been kicked into the long grass. Instead of the drive, decisiveness and clarity of vision that businesses are crying out for, what do we get in sector after sector? We get dither and delay; we get initiatives and announcements driven by the desire to hit headlines rather than to deliver results.

The Bill—the Government’s latest scheme—is a strange piece of legislation. It is being fast-tracked through Parliament, with the justification that the situation is immediate and urgent. However, given this need for speed, we are bound to ask whether legislation is necessary, particularly given that, as the House of Commons Library note explains, such commitments

“do not typically require…legislation”.

The UK guarantee scheme at the centre of the Bill was first announced by the Prime Minister in a speech in May. It was re-announced by the Chancellor in a speech in June. The press release came from the Treasury in July. It is therefore hard to resist the conclusion that the Bill is designed more to create the impression of activity and delivery than to get real results in the quickest way possible.

However, the Opposition’s biggest concern with the Bill is that it is simply inadequate to meet the challenge we face. Many in industry are sceptical that it will make any difference. Even where it is taken up, the tight criteria of economic and commercial viability may mean that it amounts to only a deadweight subsidy, aiding projects that would have gone ahead in any case. The best anyone has been able to say for it is that it might help some schemes at the margin, but that is hardly commensurate with the challenge we face.

The schemes that have been most frequently mentioned as strong candidates for assistance are those the Government have announced are going ahead several times already. Let me cite one example, which the Chief Secretary mentioned in his speech. Earlier this month, he said:

“Detailed discussions are already taking place with the Mersey Bridge Gateway project”.

We certainly welcome progress, but many may experience a strange sense of déjà vu, given that a year ago the same project was announced by the then Transport Secretary, who noted that although some transport plans are long term, this one could be

“implemented more quickly…creating jobs when they are needed most.”

What happened in the past year? It is no wonder the Government are gaining a reputation for more talk than action. As the director general of the CBI said today,

“firms fear initiative overload and are becoming impatient with delivery, leaving many companies still sceptical about the overall impact on investment.”

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[Rachel Reeves]

Olivier Blanchard and the International Monetary Fund have been saying for a year that if growth does not materialise the Government should think again. How much longer do we need to be in recession? How much longer must we have rising youth unemployment and rising long-term unemployment before the Government act? The IMF now forecasts that the economy will shrink this year and will barely grow at all next year. That is evidence that the Government need to rethink their strategy, and it is a shame that they have not heeded the advice of the IMF.

[Geraint Davies]

Does my hon. Friend agree that the reason consumer demand is so awful is that the Chancellor announced that 700,000 people in the public sector would lose their jobs? People in the public sector do not know whether it will be them or their neighbour, or whether it will be this year or next year, so they are saving not spending. That is why there is no growth.

[Rachel Reeves]

I thank my hon. Friend for that intervention. It is not just people in the public sector; people in the private sector, particularly in construction, which has shed 120,000 jobs since the Government came to power, are also worried about their jobs and futures and about how they will get the money to feed and house their families. There is real concern and a real lack of confidence among households and businesses.

This summer showed that things could be done differently. The Olympics showed what can be achieved with an inspiring vision—the right combination of public, private and social enterprise, with the nation united behind it. We delivered on time and on budget, and it was a perfect platform for Britain at its best. Let us hope that the Olympics provided a much-needed boost for our economy, but the lesson to learn is not that we can now rest; if we really want to seize the economic opportunities before us and build a better future, we need to repeat that effort on a much bigger scale, with a nationwide plan for jobs and growth. Let that be the lesson for today and let us get to work on laying the foundations of the economy we need to build for the next generation. Let us have a Government who follow up their rhetoric with real action.

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[John Healey (Wentworth and Dearne) (Lab)]

I am glad that I was in my place to hear the hon. Member for Reigate (Mr Blunt) make his first speech from the Government Back Benches. He was a very serious Minister and brought a very serious mind to his brief, as he has done in this afternoon’s debate.

I see borrowing guarantees to help fund investment in Britain’s infrastructure as a good, if overdue, use of the power of government. It is creative, innovative and active government, if it works. Using the strength of the public balance sheet to underwrite private investment makes sense, especially at a time when public funding is limited and private bank lending is constrained. It should improve the credit rating of, and attract investors to, infrastructure projects, and I see those as two key tests for the policy and the legislation before us.

I welcome the Bill and want it to work. The country needs it to work. However, I say to the Minister and to the Chief Secretary, who is no longer in his place, that there are two big questions behind the Bill that, even after his long speech this afternoon, remain unanswered. They are about urgency and clarity. The value of the legislation and the Government’s borrowing and funding commitment will be felt when the first project is chosen, the guarantees are in place and the work begins. When will that be? As always with a new policy, the devil is in the detail. We have no detail and we have no idea how the arrangements allowed for in the Bill will work. The Government have already asked for expressions of interest for funding and borrowing guarantees but have published no guidance. When will that be done?

[Geraint Davies]

Will my right hon. Friend give way?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. May I make a quick point? The hon. Gentleman is making a lot of interventions and obviously wants to speak later in the debate. If he moves down the list of speakers, I presume he will understand why.

[Geraint Davies]

I got the point. May I ask my right hon. Friend—

[Mr Deputy Speaker]

Order. I have more than a point; I have control.

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[Geraint Davies]

You have many very good points, Mr Deputy Speaker.

Does my right hon. Friend agree that, given that the Building Schools for the Future programme was in place and ready to go before the Government cancelled it, it would be a good idea to reinstate it and get productivity through our children as well as through the construction industry?

[John Healey]

My hon. Friend is right, and I hope that he gets a chance to make a speech. I will move on in a moment to some of the changes in policy and cuts since the general election that have made infrastructure projects and that sort of investment harder, not easier.

There are big causes for concern behind the two big questions I mentioned. First, there are questions and concerns about speed and how serious the Government are about getting infrastructure work going. It is almost a year since the Prime Minister promised

“an all-out mission to unblock the system and get projects underway”.

It is almost two years since the Government published their first national infrastructure plan and almost two and a half years since they set up Infrastructure UK in June 2010 in the Treasury. Most seriously, since the Government’s second infrastructure plan in November 2011 the economy has shrunk by nearly 1% and Britain has become one of only two G20 countries in a double-dip recession.

On the point of concern about clarity and simplicity, the Infrastructure Investor journal recently conducted a survey of 200 industry investors. Lack of finance, poor regulation and procurement weakness are all problems they face, but some 60% said that confusion and lack of clarity from the Government are a far greater disincentive. What matters most is confidence in the pipeline of projects, often based on clear Government policy decisions and commitments. The Government are failing that test over big projects and policies such as High Speed 2, aviation capacity and power generation. Their record on other policy decisions that at first sight have nothing to do with infrastructure is also making it harder to put in place the funding required. The abrupt change and then change again in the solar feed-in tariffs, the benefits reforms and cuts, the tripling of student tuition fees, creating “core and margin” university course places, and the rebanding of renewables obligation certificates have all changed the risks and the costs of long-term capital—so much so that a senior figure in the industry recently said to me: “Investors are now asking for the first time how you can price in public policy risk.” The guarantee scheme needs to be flexible and straightforward. The devil is in the detail, and Government revel in the detail. Is every Department going to introduce and run its own scheme with its own rules? Who in Government will be accountable for the programmes and the problems on the guarantees?

On housing, let me take issue with the hon. Member for Reigate, because the Chief Secretary and the Government are right and he is wrong. I welcome its definition as infrastructure. It is basic to people’s lives and to a good society, and central to wider economic growth and to productivity. Above all, it is a long-term good. We are still getting rent from Bevan’s post-war council housing a long time after the cost of the capital to build them has been paid.

I am looking to the Government for reassurances on four questions, especially in relation to housing. First, the Chief Secretary said that he did not want to prescribe and would not circumscribe the stages of projects that credit guarantees can support. The Treasury has said that guarantees can cover key project risks including construction, performance and revenue risk. Will that apply equally to housing as to the other categories set out in clause 1(2)? Secondly, some housing associations already have a presence in the capital markets and can raise finance in their own names, so will such organisations with significant project proposals be able to push ahead without the creation of any intermediary or aggregator?

Thirdly, the best housing developments are mixed and help to support mixed communities. The Government have said that the guarantees will support private and social housing. Will those building new homes be able to source guarantees for both sectors from the same fund scheme? Fourthly, I expect that security requirements will be part of the arrangements for the borrowing guarantees. Will developers building homes be able to provide the security on completion of those homes rather than in advance? If the Government want these guarantees to work, and to work rapidly, to boost housing, jobs and the economy, they need to provide answers and reassurance on all four points.

The Chief Secretary mentioned the 1932 Baldwin agreement, which emphasises that where financial liabilities that last beyond the term of one Government or one financial year are introduced, they should be backed by specific legislation. I believe very strongly that improved long-term infrastructure should be a shared endeavour of all parties, because infrastructure projects do not fit neatly within the political cycles and are damaged by the chopping and changing of Government policy.

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[Geraint Davies (Swansea West) (Lab/Co-op)]

I am grateful to follow the hon. Member for Stroud (Neil Carmichael), and, indeed, my hon. Friend the Member for York Central (Hugh Bayley), who laid out some of the background. It is important to see the issue in context. We hear the mantra from Government Members that it is all somehow Labour’s fault that we are in this mess, but if we track back as far as 1997, we have seen all this before—mass unemployment so that money is spent on keeping people on the dole and there is no growth. From 1997 to 2008, we saw sustained growth, people in employment paying tax, ensuring that debt was kept down and service provision up.

Then, of course, in 2008, we saw the financial tsunami—due to sub-prime debt—washing our shores. Two thirds of the debt we eventually saw in 2010 was from the banking community; the other third was from the Labour Government investing beyond earnings to sustain growth. As was graphically described by my hon. Friend the Member for York Central, we had fragile growth going into 2010, but then the new Chancellor simply announced that he would cut 500,000 public sector jobs—it is now 700,000—so it is hardly surprising that people in the public sector thought that they might lose their jobs, resulting in less spending and more saving; and we have seen pay freezes as well. This has had a knock-on effect on consumer demand—hence we have zero growth.

In terms of the public accounts, reducing a deficit is, as with any business, about both increasing revenues and tightening savings, but the focus of the new Government has been almost exclusively on massive cuts and austerity measures. Instead of focusing on growth, we now see an imbalance and a belated attempt to try to pump-prime a bit of growth. I welcome that belated attempt, but enormous problems with consumer confidence remain, making it important that infrastructure investment is focused on productive capacity.

When it comes to public accounts, it is worth remembering that, as with any business, spending on infrastructure is not like revenue spending; it is spending on assets, building up the balance sheet of UK plc. That is why I would like the Government to think positively again about spending some of this money on something like our Building Schools for the Future programme. That was about building assets to increase the skills and human capital of Britain for the next 10 or 20 years. Instead, the Government are busy trying to price people out of universities with excessive fees. Their latest announcements have generated uncertainty among the business community about the future value of GCSEs and the whole route map of education. They are saying to people, “Well, you may have GCSEs or other qualifications that are the currency of education”, but what they have done is suddenly to devalue that currency.

The main issue for today is how to spend the money on infrastructure in a public accounts-effective way. Through their massive spending on procurement, the Government need to ensure that they are focusing as much as possible on small and medium-sized enterprises. I say that because SMEs tend to employ local people and they tend to pay income tax, corporation tax, VAT and so forth. If we look at the history of this Government’s procurement in England, we find that only 6% of the money is spent on SMEs, so the great majority of it is spent on large foreign companies that do not pay tax in Britain and often do not employ local people. In Wales, by contrast, over 60% of the procurement goes to SMEs, regenerating the money, and it is all one business. We need to think carefully about how this money is contained or otherwise leaked abroad.

If we are serious about building industrial infrastructure for jobs, we need to think about the wider tax regime as well. A day or so ago, I visited an aluminium manufacturer, Aleris, which melts down scrap aluminium. The Minister may know that the energy needed to produce aluminium from scrap is 4% of the energy it takes to produce it from raw materials. No surprise, then, that China buys 20% of our scrap, yet puts penal taxation on foreign countries attempting to buy their scrap. It is the same with Russia, where the marginal tax rates are at nearly 50%. In other words, there is a strategic awareness of the value of raw materials, so why are we now in a position where we send scrap to China, which comes back as manufactured goods so that China makes the money from it?

We need to think very carefully about how the tax system works in relation to infrastructure. Tata Steel, which I am going to visit next week, provides another example. It has said, quite rightly, that it is one thing to have a European tax on carbon emissions, but if that means that steel manufacturing leaves Europe, goes elsewhere and produces more emissions, is that a good thing? To superimpose the UK’s carbon tax makes things worse.

I would also like to see more support for transport in my local area, particularly Neath, Port Talbot and Swansea ports, so that they become recognised by Europe as a core port. That should trigger, in turn, the trans-national European transport funding available. We need to think carefully about how we engineer ourselves so that we maximise the money available from Europe. Indeed, next week, Swansea university is announcing a multi-million pound investment from the European Investment Bank, which will lever in private sector money. Rolls-Royce, BP and Tata are supporting this, as are the Welsh Government. The issue is how we work together to make the most of the money available.

I mentioned in an earlier intervention that I am in favour of spending on social housing and housing in general. As I said, there is scope for some facilities to come from the private sector. For example, it could do the building, with the public sector providing the land. That allows for joint ownership of assets and a mixture of social housing and private housing. Local authorities could provide social housing on that basis, and we benefit from the rental revenue streams created.

In Swansea, Neath and Port Talbot, we have pushed ahead with the concept of the city region, which has been encouraged by the Welsh Government. Again, it amounts to having a joined-up view—it is not just for public-service delivery to make efficiencies—and it also means a genuine joining up with the private sector. That is why I have been in talks with Hewlett-Packard, which has a skills cluster in Swansea and is keen to get the work from the Government in the form of outsourcing from the Department for Transport. That would have a strategic impact on the area, which would be much better than the contract going to, say, a German company that is also bidding for that work.

We need to think in the round about what is good for Britain. My hon. Friend the Member for York Central mentioned flood risk management; I used to be the chair of Flood Risk Management Wales. The flood defence in north Wales is a railway and part of the defence in south Wales is a road. There is talk of the Severn barrage; it would be a flood defence too if it were allowed to develop. We need to get out of the silo mentality and think about UK plc in order to do what we can to build a stronger future for us all. I shall leave it there. I am grateful to have been called to speak and I hope that some of my ideas will be taken forward.

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[Sajid Javid]

I agree with the hon. Gentleman: they are unusually silent, although they are welcome to intervene on my speech. However, I can tell the hon. Gentleman that people in Northern Ireland should be assured that the Bill is intended to help infrastructure investment throughout the United Kingdom. I agree with him that there are often some special cases in Northern Ireland, which suffers from a relatively higher level of unemployment than other parts of the UK. I look forward to receiving applications from the Province.

Two issues—two myths, I should say—arose again and again in the speeches of Labour Members. The first—

[Geraint Davies]

Will the Minister give way?

[Sajid Javid]

Yes, for the last time.

[Geraint Davies]

Are the Government going to become involved in the brokering of deals and the forming of partnerships with the private sector? I am thinking specifically of easyJet’s move to Cardiff airport and its discussions with First Great Western about the provision of more passenger links to ensure that when the two come together it makes sense for everyone. Are the Government willing to become involved in that?

[Sajid Javid]

The purpose of the Bill is to establish a structure to provide guarantees for credit-worthy projects in the private sector. Of course the Government will work very closely, step by step, with the private-sector promoters of each of the projects, and if one of the companies feels that it has a viable project that the Government should consider, it will be encouraged to discuss it with the Treasury. A specific Treasury team called Infrastructure UK, which was set up a couple of years ago, is full of specialists who understand infrastructure and have a great deal of experience. It will be keen to look at every single project, and if the hon. Gentleman has one in mind he should please present it as soon as possible.

The two myths that I heard from the Opposition—