Infrastructure: Expenditure

Lord Hollick Excerpts

Monday 25th March 2013 Lords Chamber

Asked By

[Lord Hollick]

To ask Her Majesty’s Government how much has been spent on infrastructure projects in the current financial year, and how that figure compares with that in the previous financial year.

[The Commercial Secretary to the Treasury (Lord Deighton)]

My Lords, we are spending more on infrastructure projects this year. Capital spending by the departments responsible for economic infrastructure—DfT, DECC and Defra—is increasing. The transport budget, for example, rises from £7.7 billion last year to £8 billion this year, then £8.7 billion next year and £8.9 billion in 2014-15, which is more than at any point under the last Government. This has been possible because the Government increased infrastructure spending by £10 billion over the past two Autumn Statements, increases which the Budget committed to making permanent, with a further £3 billion a year from 2015-16.

[Lord Hollick]

I thank the Minister for that Answer. However, the Office for Budget Responsibility reported a rather different situation last week, when it announced that public sector net investment would fall by 34%, from £38.7 billion in 2010-11 to an estimated £25.5 billion in the current year, 2012-13. The OBR also forecast that, taking into account all the measures so far announced, including those announced in the Budget last week, there would be zero growth in infrastructure spend between now and 2017-18. Will the Minister please explain why these measures have failed, and continue to fail, to boost overall infrastructure investment, and which additional measures he plans to introduce to improve the dire forecast for the next five years?

[Lord Deighton]

My Lords, first, it is necessary to clear up the numbers. There is a significant difference between public investment numbers and investment in infrastructure. Public investment includes huge investments in health and in defence, so there is a significant difference there. Also, if you look at the national infrastructure plan, you see that approximately 80% of the investment that we expect over the next 15 years in fact comes from the private markets and not from public capital expenditure.