Infrastructure (Financial Assistance) Bill

Nicholas Dakin Excerpts

Monday 17th September 2012 Commons Chamber

[Nic Dakin (Scunthorpe) (Lab)]

I am pleased to follow my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford), who, as always, spelt his argument out cogently and with great clarity. My hon. Friend the Member for York Central (Hugh Bayley) said, very precisely, that the Bill is a small but necessary step. He is right, but so is my hon. Friend the Member for Walthamstow (Stella Creasy), who said that the legislation is an inadequate response to the economic crisis. How right she is.

The Government inherited an economy that was growing, and they now preside over one that is shrinking. We have the third quarter of negative growth, a double-dip recession made in Downing street, and we are one of only two G20 countries in such a parlous position. Part-time working is at its highest level since 1992, and unemployment among women and young people is at an all-time high. My hon. Friend the Member for City of Durham (Roberta Blackman-Woods) made clear the waste and loss that can follow if young people do not get work when they leave the education system—a waste not only now but into the future.

Due to a lack of growth, the Government are on target to borrow more in five years than the Labour Government borrowed in 13 years. The economy badly needs growth now, and that requires demand. When I asked small businesses in my constituency what they needed, I was surprised by their response—a cut in VAT to stimulate retail sales. Labour’s policy to reverse last year’s damaging VAT rise for a temporary period would give spending an immediate boost and put cash in people’s pockets—£450 for a couple with children. People would spend that money in the high street, boosting businesses at the same time as helping struggling families and pensioners. Labour’s other policy of a one-year cut in VAT to 5% on home improvements, repairs and maintenance would also boost home owners and small businesses, and stimulate demand in the economy.

Large businesses and companies in my constituency say that infrastructure projects need to be brought forward as that would stimulate demand in the economy. They include Clugston Construction, which this year celebrates 75 years of business, and Tata Steel, which sadly had to lose 1,200 jobs this year owing to a collapse in demand for construction steel in this country, as well as in the rest of the world.

The problem is not new; it has been around for a long time. The other day, I was reading Hilary Mantel’s “Bring up the Bodies”, which has been shortlisted for the Man Booker prize. I was struck by Thomas Cromwell, musing on the situation:

“England needs roads, forts, harbours, bridges. Men need work...honest labour could keep the realm secure. Can we not put them together, the hands and the task?”

Thomas Cromwell’s fictional words, through the voice of Mantel, grasp the issue. [Interruption.] We may not need forts now, but we need all those other things. Having listened to what hon. Members have said, there are many projects across our constituencies where we could put hands to work and make things happen.

Local people who work in the construction industry tell me that work is drying up. It has been tough in the real world in the past two years, but as Building Schools for the Future projects are completed and run out, and even supermarkets slow down their investment in new projects, the order books are emptying. Sadly, many construction companies have gone out of business. That is what is happening in the real world owing to the lack of demand.

As a leading local industrialist said to me at the weekend, it is time to get on with things. He is a practical man. He said, “It’s time to get the diggers in the ground and cranes on the skyline. What we need is work. We need jobs now.” Bringing infrastructure projects forward and getting jobs done that need to be done will put cash in the pockets of construction workers, who will spend that money in the real economy and therefore provide jobs for other workers. As Thomas Cromwell said:

“Can we not put them together, the hands and the task?”

Putting the hands and task together is a win-win.

The Government’s record on infrastructure is not yet a pretty one. I hope the Bill helps bring projects forward and that it is not just another re-announcement. Let us look at the record. None of the road building projects announced in the autumn statement package have begun construction. The value of orders for infrastructure investment made by the private sector fell by a fifth—from £7.3 billion to £5.9 billion—from 2010 to 2011. Output in the construction industry fell by 3.9% in the second quarter of 2012. The number of house building starts is down since the start of 2011.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

Does my hon. Friend have a sense that the Bill, although utterly laudable, promises jam tomorrow? We do not have the clarity that the construction industry needs for planning and getting new jobs into the industry.

[Nic Dakin]

My hon. Friend echoes my right hon. Friend the Member for Wentworth and Dearne (John Healey), who said that the Bill is a laudable measure, but insufficiently urgent in responding to the crisis with which we are confronted.

We need action now to create growth. We need deeds, not words. We need action, not dither. Indeed, the CBI said recently that 2012 should be the year to deliver on infrastructure to “translate ambition into action” and to ensure we get people working on infrastructure projects

“that will help deliver a long-term return for the UK economy in the decades to come.”

Many things need doing. We have heard about the houses that need to be built, and transport projects in all hon. Members’ constituencies would transform their localities. The A160 in north Lincolnshire badly needs upgrading. It will be upgraded, but why not bring it forward so it happens now, giving confidence to business and everyone?

The messages from the Government on low-carbon investment have been confusing—including on the change to feed-in tariffs and on renewables. They do not create the confidence necessary to encourage private sector investment and development, and the private sector is looking at the Humber in respect of developing such initiatives. We had a debate last week on broadband in which all north Lincolnshire MPs, on a cross-party basis, agreed that broadband projects and infrastructure should be brought forward.

We are not short of projects, we are just short of will. Money has been pumped into the banks in quantitative easing, but they have not lent to anybody. Would it not be better to give the money to a national investment bank that invests directly in companies and gets things going?

As many hon. Members have said, it is not clear to which projects the Bill would give the green light. The Chief Secretary said that there were ongoing discussions with individual projects, but was vague about what would and would not get the green light. It is time to stop dithering and time to start doing. There is much to do. Let us get on with it.