Connecting Europe Facility

Kelvin Hopkins Excerpts

Thursday 19th January 2012 Commons Chamber

[Mr Hoban]

My right hon. Friend is, as is often the case, spot on. There is no requirement under the proposal for us to build High Speed 2.

[Kelvin Hopkins (Luton North) (Lab)]

Following the intervention from the right hon. Member for Wokingham (Mr Redwood), is not the nation state rather than the EU the best place to judge how much should be spent, what it should be spent on and how efficiently it should be spent?

[Mr Hoban]

The hon. Gentleman makes an important point. There is a debate to be had on where such decisions should be taken and what our priorities should be. That is why it is important for us to impose discipline on the EU budget and try to influence debate on it to ensure that when money is spent, it is spent well and wisely in pursuit of our objectives.

Let me remind the House of three key aspects of the Commission’s proposal for the next financial framework: first, an increase in the budget of more than €14 billion a year compared with a freeze on current levels; secondly, a new financial transactions tax to fund the EU budget; and thirdly, an end to the UK’s permanent rebate. That financial framework proposal and the proposals to increase spending through the connecting Europe facility are unacceptable.

In November, the House agreed that the Commission’s financial framework was

“unacceptable, unrealistic, too large and incompatible with the tough decisions being taken in the UK and in countries across Europe to bring deficits under control and stimulate economic growth”.

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[Mr Hoban]

My hon. Friend is absolutely right: there were bold and tough words from the previous Government about being prepared to give up part of our rebate for real reform of the CAP. Well, we gave up our money, but we did not get real reform. That was typical of the Labour party’s reactions when it was in government: lots of tough talk, but no action to back it up.

[Kelvin Hopkins]

Will the Minister give way?

[Mr Hoban]

I will give way just once more, but then I want to try to make some progress.

[Kelvin Hopkins]

Like Government Members, I was opposed to giving up that great tranche of our rebate. The Government have made much of the issue. Is it not time they started trying to renegotiate the rebate to get it back again?

[Mr Hoban]

We have made it absolutely clear that the rebate is there to stay, and that is one of the key parts of our negotiating strategy.

I want to say a few words about infrastructure spending. The Government have made it clear that focused infrastructure improvements are a domestic priority. When undertaken wisely, it is clear they can boost growth, protect the environment and improve lives. In his autumn statement, my right hon. Friend the Chancellor announced investment of £100 million in the creation of up to 10 super-connected cities across the UK with 80 to 100 megabits per second broadband and city-wide, high-speed mobile connectivity. Last week, the Secretary of State for Transport announced details of the new high-speed rail network.

However, the key is having carefully focused investment. When prioritising spending for infrastructure, the Government have taken the wider economic context into account. The urgent need to reduce our domestic deficit has meant that we have had to choose our investments carefully and focus infrastructure spending on where it can have the most positive effect.

That is the approach the Commission needs to take to European infrastructure spending, focusing affordable levels of spending where they will make most difference. Therefore, while the Government will, first and foremost, argue for a reduction in the overall size of the connecting Europe facility budget, we will endeavour to ensure that the final settlement agreed is focused on spending money where it will add most value. That means spending money only where neither the market nor domestic Governments are better placed to act—the point the hon. Member for Luton North (Kelvin Hopkins) made in his first intervention.

We will be pushing the Commission for additional information to allow us to judge where the money will best aid growth and support our environmental objectives. That is consistent with the Government’s desire to see spending that promotes sustainable growth take a bigger share of a tighter budget in the next financial framework. The ambition of the connecting Europe facility, while laudable, must respect the fiscal realities of Europe.

The Opposition have tabled an amendment to today’s motion. It is rather incredible, in a week when Labour’s policy on deficit reduction has become ever more confused, that the hon. Member for Nottingham East has tabled an amendment calling for an effective deficit reduction strategy. Ever since the shadow Chancellor said on Saturday that

“we are going to have keep all these cuts”,

the Labour party has been totally confused, with its deputy leader later saying:

“We’re not accepting the Government’s austerity cuts, we are totally opposing them”.

So Labour Members accept the cuts, but then oppose them.

Labour Members cannot say they are credible on the budget, because of the legacy they have left. Despite our entering the downturn with the largest structural deficit in the G7, the Labour leader told Andrew Marr this weekend that he did not think Labour spent too much. Let us remind him that it is because of Labour’s record on spending that our triple A rating was on negative outlook when the Labour party left office. That downgrade threat has been lifted because this Government have a credible and effective deficit reduction strategy. One would think that the Labour party would have learned from that, but, no—its five-point plan would add £20 billion to the deficit this year. Rather than seeing an effective debt reduction strategy from Labour, all we have is more of the same: more spending, more borrowing and more debt. So before Labour lectures anybody else on the deficit reduction strategy, it had better get its own house in order.

If that was not bad enough, the hon. Member for Nottingham East has scored another own goal in his amendment by calling for reform of the common agricultural policy—we touched on that earlier. We have heard brave words before from Labour politicians about CAP reform. Tony Blair said that

“the rebate remains because the reason for the rebate remains. Of course, if we get rid of the common agricultural policy and we change the reason why the rebate is there, the case for the rebate changes.”—[Official Report, 29 June 2005; Vol. 435, c. 1293.]

Those were tough words, but as we know, he gave way to the French, sacrificing €2 billion in our rebate a year, which will cost the country €10 billion over the lifetime of this Parliament. In the current financial framework, CAP spending has not fallen, as Labour said that it would, but increased by €3 billion. So it is all very well the hon. Gentleman talking tough in his amendment, but we have heard it before from Labour—all bark and no bite.

Achieving the priorities that the House has supported in the next financial framework will not be an easy task. The Government need to defend the rebate, resist EU taxes and restrain the budget size. The UK can deliver results in Europe, as outcomes in the 2011 and 2012 annual budget negotiations have shown, but to achieve our overall aims we must be constant and vigilant in our resistance to increases in the budget. A 400% increase to infrastructure spending in the EU budget, without any corresponding reductions elsewhere, is unacceptable in the current economic environment. We will work with our allies to cut this programme down to size, delivering fiscal restraint and value for money. Although we are clear that we need infrastructure investment to boost productivity and growth, projects need to be effective and affordable, but the plans in the connecting Europe facility proposed by the Commission are neither. I therefore urge my hon. Friends to support the motion.

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[Chris Leslie]

We have to change the common agricultural policy. My point is that the CAP is far too heavily involved in subsidising the big multinational farming institutions, which are the largest agricultural producers, and is not fair enough on some of the smallest farmers and crofters.

[Kelvin Hopkins]

One simple point, which I have made before, is that if the common agricultural policy were abolished, we could continue to subsidise farmers at the same level and be net beneficiaries.

[Chris Leslie]

There is much agreement on the need to reform the common agricultural policy. More should have been done in the past, but more needs to be done now. I want to hear the Government’s strategy on that. I want to hear how they are going to win some concessions and what they are doing to change the negotiation stance. They are certainly doing nothing about refocusing growth priorities or reforming the common agricultural policy.

We have to re-order the connecting Europe facility so that we can phase capital infrastructure components and enhance employment and growth. While the 26 other countries are busy negotiating their new economic treaty without the UK taking part, they will realise that the EU budget is highly relevant to their economic predicament, particularly in the eurozone. I would therefore like to ask the Minister an important question: how will he ensure that he keeps track of all those discussions on the sidelines—all those deals being done in meetings that he will not be party to—so that the UK voice is part of the process?

We are discussing an important series of proposals, which touch on broadband, transport and energy policy. A year ago, the Government unveiled their broadband strategy. It is becoming clear that the vast majority of local authorities are not likely to meet the Government’s universal broadband target by 2015, which has already slipped by a couple of years compared with the target that we set when in government. We tabled some freedom of information requests before the Christmas break and discovered that 70% of local councils said that they had

“not made any plans, provisions or budgeted to take advantage of the Government’s funding allocation for broadband provision,”

and that 74% had had no assessment made of the likelihood that the roll-out of superfast broadband in their areas would be completed by 2015. The Minister therefore needs to explain why a quarter of local authorities say that they have not even been contacted by BDUK—Broadband Delivery UK—about the need to secure funding; indeed, only a quarter have made plans to finance universal broadband roll-out. Even the Countryside Alliance and the Federation of Small Businesses agree that the Government are not doing enough to support Britain’s digital future.

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[Kelvin Hopkins (Luton North) (Lab)]

I strongly support the amendment and its heavy emphasis on growth, because growth is the way to reduce deficits. Members who have seen The Independent today will know that our deficit is rather lower than those of many other major European member states, and that our biggest debt is located in the banks rather than in state spending. The fact remains, however, that the way to lower deficits is to achieve growth. Creating employment and ensuring that people pay taxes rather than living on benefits is the way forward.

I agreed with most of what was said by the hon. Member for South Northamptonshire (Andrea Leadsom), who is no longer in the Chamber. In particular, I agreed with the hon. Member for Portsmouth North (Penny Mordaunt), who pointed out that we do not need the European Union or the European Commission to tell member states what they need and what they should build, and to spend our money for us. Member states themselves know best what they need, and what should be done to meet those needs. International co-ordination is best achieved through bilateral and multilateral agreement and collaboration, rather than through the bureaucratic controls imposed by the European Union.

Big infrastructure has indeed been built by European national Governments, especially rail freight infrastructure. We have our own channel tunnel, which is a product not of the European Union but of a collaboration between France and Britain. We have the channel tunnel rail link, which is also nothing to do with the European Union. We have rail tunnels through the alps, built to a broad gauge that enables trains to carry lorries and double-stack containers and providing a freight link from southern to northern Europe. Those were built by states using state funds. The Brenner pass, a 28-mile tunnel built to a broad gauge through faulted rock, also carries freight between northern and southern Europe, and it too is the work of member states rather than the European Union. We have the Betuweroute, another broad-gauge freight route linking Rotterdam to the Ruhr. When I visited it, I asked who had paid for it. I was told, “The Dutch Government, of course.” The state bears the cost, not the European Union.

We know that the EU offers token amounts to investment projects to try to confer some relevance, presence and significance on itself, but that is not the real deal. The real deal is that states decide what they want and need and pay for it—sometimes with private finance, but largely with state funds—and, on occasion, collaborate with neighbouring states to ensure that things work well.

What the United Kingdom needs is investment in a dedicated rail freight line from the channel tunnel to Glasgow. Although we are somewhat peripheral to the continent in geographical terms, we need to be linked with its economy. I refer to the continent rather than the European Union because we are talking about the whole continent, which extends beyond the bounds of the European Union as it is currently constituted.

We need to be linked to the continent by freight as well as passenger rail, and that will be possible only if the delivery system on this side of the channel is capable of taking trains carrying lorries and full-scale and double-stack containers, and, indeed, continental-gauge trains, which cannot gain access to our platforms or our tunnels. In fact, I have been involved with a scheme—which I have mentioned in the Chamber a number of times in the past—to build a line from the channel tunnel to Glasgow, linking all the major conurbations of Britain and capable of doing all the things that I have just mentioned.

[Mr Bone]

The hon. Gentleman is making an enormously powerful speech, as he normally does on these issues. Does he share my concern about the fact that, although members of his party and the nationalist parties have been in the Chamber today and the Conservative Benches are full, not a single Liberal Democrat Member has been present? Given that the Liberal Democrats make such a fuss about Europe and restrict what the coalition can do about it, where on earth are they?

[Kelvin Hopkins]

The hon. Gentleman makes a good point, but I have to say that the Liberal Democrats are in a coalition with his own party. It is his grief rather than ours, I think, so I will not intrude.

To an extent, work on a dedicated rail freight line has already begun. A terminal at Barking is taking trains from as far afield as Poland. However, although they can travel as far as Barking using the channel tunnel rail link, they can proceed no further because the gauge will not allow it.

According to an old chestnut, if we build HS2 we shall be able to take the passengers off the west coast main line and free it up for freight, but making that line capable of taking continental-gauge trains, double-stack containers and lorries would be prohibitively expensive. We need to build a line to take the freight off the west and east coast main lines and off our roads, so that the lines can be freed up for more and faster passenger trains and we can provide more capacity for passengers travelling to the north while taking as much traffic as possible off the roads. It is estimated that we could take 5 million lorry journeys off our roads simply by building that route, which would be economically viable and cheap to build.

The scheme has a precise route that uses old track bed and under-used lines, and requires only 14 miles of new track, mostly in tunnels. It will be easy to construct, it will not cause any environmental problems as the track bed is already there and it will be cheap to build. Some estimate that the whole route will cost as little as less than £4 billion. We have put in an estimate of £6 billion, which is still a third or so of what we will spend on Crossrail—I support Crossrail—and a tiny fraction of what will be spent on HS2, yet we would get an enormous advantage to our economy and transform road transport in Britain as we would not get the road damage caused by lorries, as the freight would be on trains instead.

The scheme would attractive to hauliers because they would not need to worry about drivers’ hours problems. They could put their lorry trailers on trains in Glasgow, south Lancashire, south Yorkshire or the north-east and, eventually, in the south-west and south Wales, and overcome such problems. On the question of unemployment, there is a shortage of long-distance lorry drivers because it is not a popular job. It takes people away from home and it is very difficult. The little group proposing the scheme even has a major haulier working with it.

That scheme is what Britain needs. It has nothing to do with the European Union, which would not pay for it—we would. It would offer value for money, it would be profitable and economical and it is vital for our future. I hope that both the Government and my hon. Friends on the Front Bench will listen carefully to our suggestion.