Teesworks Joint Venture

Debate between John McDonnell and Lee Rowley

Monday 29th January 2024 Commons Chamber

[Lee Rowley]

The hon. Gentleman appears to be questioning whether the site is complex. These are not my words, but the words of the review, which many of his colleagues have used, often out of context in the past half an hour, to throw accusations around the place. He stood up once before, on 7 June 2023, to indicate that he thought the project was “a scam”. He was not choosing his words carefully then and he is not choosing his words carefully now. He should consider whether he wants to withdraw any of them.

[John McDonnell (Hayes and Harlington) (Lab)]

I am choosing my words carefully. For past similar projects we have had NAO investigations after the event. Many of us have been disappointed by our own decision-making process of not producing reports soon enough. The issue here is that there are potential allegations of excess profits, so would it not be better to have the NAO vet the project with regard to excess profits at this stage, rather than run the risk of trying to learn lessons after the event?

[Lee Rowley]

I am grateful to the right hon. Gentleman for bringing that up. I repeat that we have just had an independent inquiry—an independent inquiry which went through a process that the Labour party, when last in government, set up. If the Labour party is so desperate to have an independent inquiry into the Tees Valley after one has already been completed, I would love to hear from them where their calls are for independent inquiries into Birmingham, Croydon, Slough and Liverpool, all areas where mistakes have been made by Labour administrations but which they do not want to talk about.

Draft Construction Contracts (England) Exclusion Order 2022

Debate between John McDonnell and Lee Rowley

Wednesday 29th June 2022 General Committees

[Lee Rowley]

The reason the Act was disapplied in 1998 and 2011 was, in effect, the private finance initiative. PFI has a different structure whereby the Government are still involved in contracting out the cost. The order, however, relates to the arrangement between two private parties—the water companies and first-tier building contractors—though admittedly for a piece of infrastructure that will be important to the citizenry of the United Kingdom. It will, however, be a different prospectus. I do not, therefore, think that we can draw conclusions from the previous disapplications. That is why we want to tread carefully, and why Ofwat is keen that we have some early pathfinders, so that we can learn and understand that the proposal works.

[John McDonnell (Hayes and Harlington) (Lab)]

I do not want to delay the Committee, but the explanatory memorandum states:

“Public interest in the Exclusion Order is expected to be minimal. There are two projects under active development and a further 18 strategic water resource schemes are being progressed which may meet

DPC eligibility criteria”.

We are, therefore, talking about projects being developed at a significant scale. Following on from the question asked by my hon. Friend the Member for Hackney South and Shoreditch about Ofwat and monitoring, do the Government intend to provide the House with regular reports on the schemes? If they are of a significant scale—they may be innovative, but they may also be an unknown quantity—we will want to monitor them more closely.

Secondly, on the consultation, the Minister skated over the issue of the SME response. It would be very useful if he could write to us specifically about the points raised by the SMEs, so that that can be built into further monitoring of the projects.

[Lee Rowley]

I am happy to write with more details on the consultation. Also, my colleague in the other place answered a parliamentary question yesterday and that contains more information, should Members be keen to understand it. As we have indicated, this is a staged process. The purpose is to change the regulations to allow projects to come forward, and then we will need to learn from those projects. There will be much to learn on top of the consultation in the months and years ahead.

On reporting, Ofwat will take a very close view and provide updates. I will, therefore, let Ofwat provide the reporting structures in the way it deems appropriate. On the point about significant scale, the right hon. Member for Hayes and Harlington is absolutely right to say that the proposal applies to projects of over £100 million. This is not about a few million pounds or a few hundred thousand pounds in individual areas; it is about significant infrastructure changes that should greatly benefit communities over the coming decades.

[John McDonnell]

I will try to make this suggestion in as constructive a way as possible. The Minister’s own involvement with the PAC will have demonstrated to him that Ofwat may not be the most effective means by which to monitor projects of this scale. It might well be that the Government will have a direct role to play alongside Ofwat in informing the House on how the new regulations are being implemented.

[Lee Rowley]

I am happy to consider that separately, and I will also correspond with the right hon. Gentleman on the other point that he has raised.

To conclude, I reiterate that the creation of any exclusion under the construction Act would be the exception, not the rule, and can be justified only in circumstances where the benefits clearly outweigh the costs. We think that that is the case with DPC, and that it has the potential to improve the pipeline of strategic water schemes that come forward, and to do so in a way that will both de-risk the taxpayer and ensure that independent companies and organisations with agency come together to deliver resources from which we will all benefit over the coming decades. I thank everyone for their contributions, and I commend the order to the Committee.

Question put and agreed to.