Future Investment

Lord Adonis Excerpts

Thursday 27th June 2013 Lords Chamber

[Lord Adonis]

My Lords, I thank the noble Lord for laying the Statement before the House, but perhaps I may also express surprise that the Minister with responsibility for infrastructure is not in the House to respond to questions. The Government describe this as a major Statement on infrastructure, so the House would expect him to be here, unless he has a compelling obligation elsewhere of which I have not been informed.

I offer the noble Lord my commiserations that the Statement contains so many words chasing the construction of so little real infrastructure. Can he confirm that the £300 billion of infrastructure investment that the Chancellor trumpeted yesterday is a forward projection right to the end of the decade, with no new funding for this year or next, and a real-terms cut in capital investment in 2015? Can he confirm, as the Office for Budget Responsibility has, that in the three years since 2010 the Government have actually spent £5.6 billion less than the previous Government had planned on infrastructure? Can he also confirm that, in consequence, in 2010 the Government cancelled a string of shovel-ready infrastructure schemes, some of which they are now trying to reinstate although, of course, they are no longer shovel-ready? These include the cancellation of 715 new and refurbished schools and a string of major road schemes, including upgrades of the Al, the A14, the A19, the A21 and the A47.

Turning to the national infrastructure plan, which in reality is the longest fairy tale since “Snow White”, can the noble Lord tell us why of the 576 projects in the last version of the plan, 80% have not even been started, and why only seven have been completed, five of them started under the previous Government?

On housing, can the noble Lord confirm that the Homebuy scheme, which the Chancellor said would support 100,000 home purchases and stimulate housebuilding, has so far supported only 2,000 purchases, suggesting that it will take half a century to meet its goal?

On energy, despite what the Statement says about shale, can the noble Lord confirm that investment in energy infrastructure has decreased in this Parliament? Specifically, can he tell us when he expects the Government and EDF to sign a real contract to build Hinkley Point as the first of the proposed new nuclear power stations?

On transport, will the noble Lord confirm that Crossrail 2, which is highlighted in the Statement, does not even yet have an agreed route let alone a funding plan, and that construction could not start until the 2020s or even the 2030s?

To take a specific immediate project of considerable economic importance to the country—the A14, which links the port of Felixstowe with the Ml, the M6 and the Midlands, a project which was cancelled in 2010 and is now being revived—can the noble Lord tell us when he expects construction to start and finish and whether part of the new A14 will definitely be a toll road, as announced last year, since there is still no published plan for how the tolling will work on an A road with the prospect of mass diversion on to untolled roads going through Cambridgeshire villages? Can he also tell us when we will see the actual plans for the delivery of each project in the Highways Agency pipeline as promised in the Statement?

Surely the Minister is also aware that there is a gaping black hole in the Government’s entire transport infrastructure plan, namely airport capacity in the south-east of England. The previous Government published plans to expand Heathrow which the private sector would have financed entirely. The present Government cancelled that plan and then did nothing for two years. Then, last year, the Prime Minister appointed a commission, but the commission will not even report for another two years. Does the Minister accept that five years of total inaction on extra hub airport capacity serving London, which is desperately needed by business, exemplifies the Government’s failure on infrastructure?

On HS2, the plan for which I published three years and three months ago, can the Minister tell us why this is moving ahead at a snail’s pace? Why is there still no Bill to grant planning powers for the first London-to-Birmingham section of the line, and do the Government still stand by their pledge in 2010 to enact such a Bill by 2015, something which is now an absolute impossibility given the hybrid Bill procedure?

The only thing high speed about the Government’s infrastructure delivery is the speed at which Ministers read out long lists unrelated to real projects being delivered in the real world. Will the Minister confirm that in the real world, 84,000 construction jobs have been lost since 2010; that the World Economic Forum ranks the UK lower than Barbados for infrastructure delivery; that, again according to the ONS, infrastructure spending in the first quarter of this year plunged by 50% on the previous quarter, and by 40% on the same quarter last year; that the pensions infrastructure platform launched in 2011 to help deliver £20 billion of new roads, railways and utilities, has so far raised commitments of just £2 billion, none of which has yet been invested; and that the UK guarantees scheme announced in July last year, with the promise of up to £40 billion of projects, has so far guaranteed only a single project? The Chief Secretary spoke of two more today—the Mersey Gateway bridge and Hinkley Point—but he then concluded by saying that these are not done deals.

Summing all this up, it is hardly surprising that John Cridland, the director-general of the CBI, said yesterday:

“While the Government talks a good game on infrastructure we’ve seen too little delivery on the ground”;

or—even more damning—that the director-general of the British Chambers of Commerce has described the Government’s national infrastructure plan as,

“hot air, a complete fiction”.

[Lord Newby]

My Lords, I am extremely grateful to the noble Lord for his tour d’horizon. He asked why the Minister for infrastructure is not here. There are two reasons why he is not here: first, in the spirit of the coalition, I am repeating the Statement as my colleague Danny Alexander made it in the other place; and secondly, the Minister for infrastructure is spending every moment of his waking hours ensuring that the infrastructure programme moves forward more rapidly.

[Lord Adonis]

Does the Minister not regard himself as accountable to this House?

[Lord Newby]

The Minister for infrastructure does regard himself as accountable to this House; that is why he made the Statement here yesterday and why he will make further contributions to the work of your Lordships’ House over the next few weeks.

The noble Lord made a number of scathing comments about the forward projections in the infrastructure programme. Perhaps I may remind the House that this is a proposal for long-term planning for infrastructure. What was the long-term legacy left by the previous Government of whom the noble Lord was a member? It consisted of a note that said, “There is no more money left”. His Government presided over what we now know was a GDP falling by 7.2%, which we have spent the last three years turning round. We are now doing what everyone involved in infrastructure wants to happen—that we set out a long-term, credible plan for infrastructure development. He talks about the level of planning and the expenditure planned. However, this Government, and these plans, would generate a degree of expenditure on capital investment and infrastructure over this decade that is greater than that achieved over the lifetime of the last Labour Government. These are ambitious plans that we are determined to carry out.

The noble Lord raised a very important point about the speed at which things happen. This is one of the reasons why my noble friend Lord Deighton is now part of the Government and why, for the first time, we are setting up in each department dedicated teams with commercial experience to enable infrastructure expenditure to take place on a sensible and sustainable basis.

The noble Lord talked, for example, about schools. We are delivering a school building programme with a cost per school that is 40% less than was achieved under the previous Government. This is absolutely essential if we are to undertake the degree of new expenditure required.

The noble Lord talked about affordable housing. This Government will deliver more affordable housing than the last Labour Government, and in much worse economic times. The noble Lord talked about whether plans to stimulate the housing market and house purchases had been successful. He will know that the announcements made by the Chancellor at the general election have already resulted in many people who would otherwise not be able to afford a deposit for a house, being able to get a house. Not only are mortgage approvals at their highest level for a considerable time but private sector housebuilders are now saying that they are making significantly enhanced plans to increase housebuilding. These are real, positive developments in an area where everybody agrees we needed to do more over a number of decades, and now we are doing more.

The noble Lord raised a number of questions about rail. He asked why we have not got an agreed route for Crossrail 2. We are looking at developing the route and at the detailed feasibility plans for Crossrail 2. I remind the noble Lord that we are in charge of the biggest rail construction programme since Victorian times—not just High Speed 2, but also a huge electrification programme that completely puts into the shade anything achieved by his Government. As for the pace of High Speed 2, we are bringing forward the hybrid Bill and a paving Bill.

The main reason for the delay on High Speed 2 is, as he knows, that we have undertaken a huge public consultation. Many aspects of the scheme have been changed because very strong public opinion was expressed against certain aspects of the original programme. For example, there will now be more tunnelling. Is he saying that he would rather we tried to bulldoze the whole thing forward without that consultation and without ensuring that when the scheme goes ahead, it is done with the minimum of disruption to the communities through which the railway will pass?

I know that the noble Lord has considerable interest in the A14. This is a programme that will cost £1 billion. We have announced today more detail about the balance of funding and the fact that we are now going to be getting £100 million from the local authorities that stand to benefit from the road. He said that he was not sure whether it is still planned to toll the road. As the document makes clear, it is still the plan to toll it, but the details of how that will be done have yet to be finally worked out. I am sure that he will barely be able to contain himself until they are.

The noble Lord said that there is a gaping black hole in our airport policy. There is no gaping black hole in our airport policy; rather a process is under way which will lead to proposals for a new hub airport in the south-east—