Infrastructure (Financial Assistance) Bill

Kate Green Excerpts

Monday 15th October 2012 Commons Chamber

[Chris Leslie]

I think that the right hon. Gentleman is technically correct. The wording of the Bill is very loosely framed. We know that accounting officers in the Treasury had put a big question mark over exactly what Ministers were proposing. They wanted one line to cover them in circumstances in which things might go wrong, and they would be challenged and hauled before the Public Accounts Committee. That dates back to the 1932 concordat on public accounts, and it is being radically changed by the Bill. We do not necessarily think that that is the wrong thing to do, but it is noticeable that legislation has been presented to the House of Commons by Ministers who cannot say what it will be used for. We need information on the specifics of the schemes and the dates on which they will be supported. That is the level of detail that we require.

Amendment 9 relates to the definition of “infrastructure” in clause 1. I am sorry that the amendment tabled by my hon. Friend the Member for York Central (Hugh Bayley) was not selected; he noticed that flood defence schemes were not included in the list of items covered by infrastructure expenditure.

Our amendment seeks to insert the word “childcare”. Education is included in the set of infrastructure projects that might benefit from the scheme, but child care is quite different. We consider that to be an obvious anomaly which the Government should correct. We know that the costs of child care are afflicting many families throughout the country, a number of whom are not necessarily choosing to enter employment because the child care options are too limited or too expensive. One of the reasons why child care is so expensive is that the facilities are expensive. We do not have enough of them, and we need more investment in them.

[Kate Green (Stretford and Urmston) (Lab)]

rose—

[Chris Leslie]

I am happy to give way to my hon. Friend, who I know has campaigned strongly on these matters.

[Kate Green]

Does my hon. Friend agree that many of the infrastructure projects the Government have talked about have been in typically masculine industries? Does he also agree that one of the huge advantages of investment in child care is that it also helps to redress the high level of female unemployment—it is the highest in a quarter of a century—because it offers the opportunity for more mothers to go out to work and because that sector remains largely dominated by female employees?

--- Later in debate ---

[Mr Redwood]

I am not trying to say anything that contentious. I am trying to unpack what is going on in this clause, because we are in Committee. I was not going to presume to give my views on total public spending, because that is a matter for another day and another debate. I am trying to get the Committee to understand that we are dealing with three different types of project, and the health one is closer to the pure public sector project. Even if it is carried out in a private sector facility with some so-called “private sector risk”, all the patients will be paid for by the NHS if it is for the NHS and so it is a flow of public revenue. We have to account for it in the proper way and be realistic about that.

[Kate Green]

The right hon. Gentleman is making an interesting argument. Does he not also accept that one of the difficulties with long-term infrastructure projects is that they have different phases, some of which may be susceptible to public intervention and some of which, later on, will require private investment. Let me give the example of a large site in my constituency that is currently in private ownership and has large redevelopment potential. The initial investment will have to be public investment to decontaminate the land and prepare the planning requirements, but down the line one would hope to see private investment. Does that not create a further accounting conundrum?

[Mr Redwood]

Yes, indeed. My point, which is not hostile to the Minister and is merely an attempt to inform the debate, is that we are discussing a set of very different projects and we are not sure what we are talking about because the Bill is very generic and general. We can probably all come to the conclusion that for this to work we will need precise control over what is being proposed—of how much of it is public, how much is private, how much involves a direct charge on the taxpayer and how much involves a guarantee or indemnity.

If a guarantee or indemnity is involved, I am sure that the Minister, with his forensic financial backgrounds and skills, will be able to keep control of it and to reassure the Committee that it is unlikely to be called on unless it was absolutely essential and a very important project would not go ahead without it, which would mean that it was a reasonable risk to run. I am happy at that end of the spectrum, as we will have to trust the Minister’s judgment and this is a good Minister with the skills and ability to do such things. We need to probe when such projects are proposed, however, as we are the custodians of public money and do not want to end up with white elephant projects with huge guarantees and indemnities that will in due course have to be met by some Government.

I am also concerned about the projects in which there is more of a mixture or a muddle, because they must be fitted in to the public expenditure plans. That does not prejudge whether the expenditure should be higher or lower, and there will be different views on that in the Committee, but they will need to be fitted into the plans. A large sum is involved—£50 billion—and we do not know the time scale. The Government might want to come back and ask for more money, and a provision allows them to do so by order, so I want a little more information from the Minister about how such projects will fit into the public expenditure plans and how Ministers collectively will evaluate the mixed projects that receive a big flow of public subsidy and, more particularly, those that really are public sector projects. They might be dressed up as private sector projects, but as far as I am concerned if all the money for the provision on behalf of customers or users of the service comes from the state, that is a public sector project and the private sector is merely a franchisee or agent of the state. If all the money comes from the state, I expect the state to have a grip of the project and to satisfy us that it represents value for money that is being organised in the best way.

I am not ideologically driven as regards the provision of state services. I think that should be done in the cheapest possible way, provided that they offer good quality, and that always causes problems, but I hope that the Minister will give us some guidance about how he will differentiate and seek reassurances about the granting of those indemnities and guarantees and about what proportion of the projects will involve pure public spending, as the Bill entitles him to spend as well as offer guarantees.