Infrastructure

Helen Goodman Excerpts

Tuesday 12th February 2013 Commons Chamber

[Greg Clark]

The hon. Lady seems to be unaware of the fact that under the last Labour Government the national debt almost trebled. That is the legacy that they left and with which this Government are dealing. Over 13 years, they borrowed so much they left us with a deficit that was as big as that of Greece, and bigger than that of Spain, Portugal or Italy.

We would think that there would be something to show for all that money spent. We would think our roads, railways and power stations would be at least as good as those of Spain, Portugal and Italy. That, at least, would be a consolation prize: modern, up-to-date national infrastructure available to support British business and help us to generate the billions of pounds we need to pay off the deficit and reduce our debts.

[Helen Goodman (Bishop Auckland) (Lab)]

I have never heard such an absurd statement in this Chamber. Of course the increase in the debt in the last two years of the Labour Government did not produce new roads; that is because it went into supporting the banks, and if we had not done that, we would have had a banking collapse.

[Greg Clark]

The hon. Lady did not hear what I said. The structural deficit the Labour Government ran was in place before the financial crisis. That is the root of the problems we now face.

I do not for a moment want to suggest those 13 years did not result in a transformation of Britain’s position in respect of infrastructure. It was transformed, all right: the quality of our infrastructure declined in relation to that of our world competitors.

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[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.

[Helen Goodman]

I am sorry to correct the Minister for the second time, but the rate of growth in the north-east went from being the lowest of the regions during the 1990s to the second highest during the last decade. Only two English regions grew faster than the national average under the Labour Government—London and the north-east.

[Greg Clark]

I do not quite understand the basis of the hon. Lady’s intervention, because the point I was making was precisely about the gulf between the capital and our provincial cities, and she has pointed out that London streaked ahead. By contrast, in other countries the performance of the regional economy kept pace with the capital, and that is something I want to champion; I want to encourage our provincial cities to be the equal of the capital on growth. I know she will recognise that in the past two years, at least, the performance of my native north-east, the place she represents, has indeed outstripped the rest of the country on creating jobs.

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[Gordon Birtwistle]

rose—

[Helen Goodman]

Is the hon. Gentleman going to tell us about Eastleigh?

[Gordon Birtwistle]

No, I am not going to mention Eastleigh at all. Hon. Members are interested in the hon. Gentleman’s point on PFI—[Interruption.] No, he was talking about new colleges. Will he tell us when those massive infrastructure deals will be paid for? Will my grandchildren be paying for them?

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[Helen Goodman (Bishop Auckland) (Lab)]

I found the Minister’s description of the recent history of this country totally astonishing. In my constituency, I can think immediately of a new bypass, a new further education college, a new hospital, several GP surgeries, several new schools and thousands of people who benefited from the decent homes programme under the last Labour Government. I am very concerned that this Government are not investing in the north-east as they should be. In the autumn statement of 2011, only 0.03% of the £40 billion that the Chancellor of the Exchequer switched into capital spending came to the north-east. In the autumn statement of 2012, there was an injection of £124 million, a road-widening scheme in Gateshead and some housing, which takes our share of the Government’s capital spend to an incredible 0.5%. That is an appalling waste of opportunity and potential in the north-east.

I am sorry that the Minister who opened the debate is not in his place, and I urge the Treasury to examine what the report from the Institute for Public Policy Research says about the way in which calculations for cost-benefit analysis on roads are made. The report makes it very clear that there is no level playing field between how cost-benefit analysis is carried out in sparse areas and how it is done in densely populated areas. I hope that the Treasury revisits that.

I also hope that the Treasury will examine the report from the North East chamber of commerce, which makes it clear that we have a large number of projects that would significantly improve the operation of the north-east economy. That is important, because we face the highest level of unemployment in the entire country at 9.1%. That is the short-term problem that the Government have pushed us into.

The long-term problem set out by Oxford Economics, which did some special simulations for us, is that in the 10 years from 2010, we will see a deficit of 20,000 jobs in our region. That is 20,000 lives wasted because this Government are not making intelligent decisions about investment. This Government’s infrastructure decisions are driven almost entirely by political considerations rather than economic considerations.

The Chancellor’s unstable approach to energy policy is such that we do not have a framework to enable investment in offshore wind and renewables. Those are of value in themselves and offer a significant opportunity for the north-east economy.

Another area where the Government are ignoring this country’s potential is connectedness. Since 2005, more than 7 million UK households have gone online. The explosion in internet use has had significant economic benefits: in 2010, the internet economy made up 8.3% of this country’s GDP—a higher proportion than in any country in the world. Underpinning that is the roll-out of Britain’s broadband infrastructure, but what this Government have done has almost halted the roll-out of broadband in England. The Labour Government had a plan to ensure that by 2012, 90% of the country would have access to at least a good speed of broadband, but this Government put the achievement of the target back to 2015, and last week we heard from British Telecom that it is unlikely to be achieved until 2017. That is five lost years from this Government.

We need solutions that allow the benefits of broadband to be spread as widely as possible, but what the Government are doing by failing to invest in broadband disadvantages rural communities in particular. That is extraordinary in view of the fact that both coalition parties claim to represent the countryside; neither is doing so effectively. By breaking up the large areas on which we were letting the contracts for broadband and instead adopting a policy of fragmentation by local authority area, this Government made it uneconomic for many providers to bid for the contracts; consequently, they have produced a market in which there is almost no competition. Clearly the slogan is, “Vote Tory, vote against competition.” That is not the way to develop our economy. It is really important that we move forward and have one digital nation.