Nusrat Ghani
Main Page: Nusrat Ghani (Conservative - Sussex Weald)Department Debates - View all Nusrat Ghani's debates with the HM Treasury
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The Chief Secretary to the Treasury (Darren Jones)
When this Government came to power, we were elected on a promise to deliver a decade of national renewal, and from day one, we have worked to fulfil that promise. Less than a year into the job, we have already started to see the results: the fastest growing economy in the G7 in the first quarter of the year, interest rates cut four times and real wages rising more in the first 10 months of our Government than they did in the first 10 years under the Conservatives.
However, we are under no illusions about the challenges ahead. We will be going further and faster to turn the page on 14 years of chaos and mismanagement from the Conservative party, and to deliver the decade of national renewal that we promised. That is the backdrop against which I present this strategy to the House today. I put on record my thanks to everyone whose input has helped to shape the document, including those involved in the review I led when in opposition, which resulted in this strategy and the creation of the National Infrastructure and Service Transformation Authority, about which I will say more shortly.
Infrastructure is key to unlocking growth across the country. Our roads, railways, airports and digital infrastructure connect people to businesses, public services and one another; our energy, water and housing infrastructures create and support communities; and our schools, hospitals, prisons and social infrastructure provide high-quality public services and help to keep us safe. But good infrastructure means improved productivity and efficiency in our economy too: increased resilience to shocks, stronger public services, more jobs and ultimately higher wages for working people.
From the development of the railways to the 2012 Olympic games, we have a proud history in Britain of innovating, developing and building high-quality infrastructure, but the reality is that we have now fallen behind many of our international competitors. Too many investors now question our intentions and our capabilities. When we say we will build something, they will often ask if we will and whether we can. That is because for too long the Conservatives cut capital investment, promised major projects one minute then abandoned them the next, and left the public estate to crumble for 14 long years, from the roads we drive on to the schools we send our children to. They wasted money, time and effort, saw a decline in productivity and wages, and there was stagnant growth and an increasing belief that politics cannot change things for the better. However, with this new Labour Government, we will prove once again that change is possible.
The spending review last week set out how our Government are investing in the renewal of Britain, allocating an additional £120 billion of capital investment over the course of this Parliament, with new road and rail projects to connect our towns and city regions. That includes £3.5 billion more for the trans-Pennine route upgrade to reduce journey times between Manchester and Leeds, benefiting communities along the train line. We are also investing in the next phase of the midlands rail hub to strengthen connections between Birmingham and the wider midlands to the south-west and Wales. In Wales, we are investing £445 million in new rail projects in north and south Wales over 10 years to connect cities, towns and manufacturing hubs, with two Labour Governments working together for the people of Wales. We will set out further details on our plans for Northern Powerhouse Rail in the coming weeks.
This is not just about transport. We are delivering the biggest roll-out of nuclear power for half a century, with a £30 billion commitment to our nuclear-powered future. We are providing £39 billion for the affordable homes programme over the next decade, which is the biggest cash injection into social and affordable housing in 50 years. We are backing British industry in its pioneering work in carbon capture, usage and storage, including with support for the Acorn project, with benefits felt right across Scotland.
The task before us now is to ensure that this investment is spent effectively and efficiently—a real change in approach from the Conservatives’ time in government—and to plan for not only the next five years, but the long term. That is the driving force behind the 10-year infrastructure strategy. Crucially, it is our hope that this long-term approach will give investors and businesses the confidence to invest in skills and their workforce, hire more apprentices, create more jobs and improve wage rates in every part of the country.
The strategy is by its nature thorough and detailed, but I will draw the attention of the House to five key elements today. First, we will provide certainty and stability through increased capital investment. We are committing to funding at least £725 billion for infrastructure over the next decade, ensuring that infrastructure spending continues to grow in line with inflation after the current spending review period. At the spending review, we committed detailed capital spending plans for each Department until 2029-30. To provide further certainty and confidence in our plans, we are also confirming funding for the school rebuilding programme to 2035 and for the prison expansion programme to 2031. This long-term certainty needs to be translated into real jobs in every part of the country, so ahead of the summer recess we will publish a new online infrastructure pipeline. It will provide up-to-date information about what we will build and when, and where we will build it, giving industry and investors the confidence they need to invest in highly skilled jobs in every part of the country.
Secondly, for the first time we are bringing economic infrastructure such as transport, energy and waste together with housing and social infrastructure, including schools, hospitals and prisons, into one overarching Government strategy. In doing so, we will expect stakeholders to think more strategically about the communities they are creating, not just the specific piece of infrastructure they are building. For example, as part of our review of the Green Book, we have decided to pilot place-based business cases, which will ensure that there is proper co-ordination between Departments when bidding for funding from the Treasury. I know that will be a huge relief for communities across the country, which have relied too often on poor planning on infrastructure and community benefit. That is the difference it makes to have Labour MPs who show up and listen and a Labour Government who get it.
Thirdly, we are taking steps to address the soaring maintenance backlog in our public estate, which is estimated at more than £49 billion. I am today announcing a new maintenance fund to provide at least £9 billion per year over the next decade to improve our public services and save money for the taxpayer. That includes at least £6 billion per year to maintain and repair our hospitals, so that our loved ones can get the best possible treatment when they need it; £600 million per year for our courts and prisons, so that justice can be served; and almost £3 billion for our schools and colleges per year by 2035, so that every young person gets the best start in life.
Fourthly, we will leverage the private capital needed to deliver this strategy. That means matching capital to individual projects and using Government debt and equity to invest alongside the private sector. We will also work with industry to explore the targeted use of new public-private partnerships where they can be shown to deliver value for money for the taxpayer. Any new model will learn lessons from the past to secure value for money into the future.
Lastly, we have established the National Infrastructure and Service Transformation Authority. Based in the Treasury, NISTA brings oversight of infrastructure strategy and delivery together, and integrates assurance, design and delivery assessments into Treasury spending decisions. It will ensure that the strategy is implemented effectively across the whole country, including through formal reviews of progress every two years, aligned with the spending review cycle. It will also work across Government to provide expertise and support to delivery partners.
By design, this 10-year infrastructure strategy is a technical policy document, and we will continue to work with businesses, investors, workers and trade unions, and local leaders to drive up ambition and improve delivery. However, the strategy is much more than that. Alongside our modern industrial strategy, it will provide certainty and confidence in Britain as an investment destination, and will establish the framework needed to deliver the step change in infrastructure investment announced by the Chancellor in last week’s spending review. Done properly, it will result in tangible improvements to the fabric of our country: our local roads and high streets renewed so that communities are even better places to live; our public transport more available and more reliable, making it easier for people to get around and access opportunities; our schools, hospitals and GP surgeries fit for the future, to deliver for generations to come; and a country that will be stronger and more resilient. Communities will see the difference as this Labour Government deliver on the promise of change and a decade of national renewal. On that basis, I commend this statement to the House.
Richard Fuller (North Bedfordshire) (Con)
I thank the Chief Secretary to the Treasury for his statement, and for providing early sight of it.
Our ability to invest in public infrastructure is a positive for individuals, communities and the country as a whole, and it is right that the new Government set out their strategy. The last Government had to deal with a series of economic disruptions, including the impact of covid, the unwinding of quantitative easing across all advanced economies, and the consequences of Russia’s invasion of Ukraine. The global impact was disrupted supply chains, increased inflation and raised interest rates. Notwithstanding those shocks, under the last Government, public sector expenditure on capital increased in real terms, from £81.7 billion in 2019-20 to £117.8 billion in 2024-25—an increase of 44%. Today, the Chief Secretary has confirmed expenditure of £725 billion, but has provided very little detail. There is no project pipeline today; will he commit to coming back to this House when it is published?
In 2024, the last infrastructure pipeline analysis included an investment pipeline of 660 projects over a 10-year period, commencing from 2024-25. The Chief Secretary’s last statement to the House was, in very large part, a restatement of the investments in local transportation projects that had already been announced by the previous Conservative Government. Will he confirm how many of the 660 projects in the previous pipeline will be retained? Will he advise the House which major projects are being abandoned, and give some insight into his reasoning for doing so?
Translating a pipeline into reality requires a labour force of sufficient size and with a range of skills—in construction, project management and engineering, for example. Again, the 2024 analysis by the Construction Industry Training Board indicated that that project pipeline would create labour pressures in many of those skills areas. Since coming to office, this Labour Government have increased national insurance and are proposing new regulations on employment, both of which will disproportionately affect the construction sector. Does the Chief Secretary have any concerns about the impact of those changes on the availability of labour? Will he advise the House what assessment he has made of skills pinch points and what steps the Government are taking to alleviate them? Fulfilling these plans will require investment by taxpayers and private capital. Will the Chief Secretary advise the House on whether there has been any significant change in the mix of private and public investments—within discrete sectors or overall—compared with the last pipeline analysis in 2024?
The Government created the National Wealth Fund, and said that it was their principal investor—a critical part of the Government’s growth strategy for infrastructure. The Chief Secretary has given the National Wealth Fund £7 billion, but has made no mention of it today. Why has there been no mention of the National Wealth Fund?
We are moving through an era with a rapidly accelerating pace of change, in which the period from technological innovation to obsolescence can be vanishingly short. The risk that public investment in new technology solutions will become redundant is increasing. While being forward-looking, the Government should also be careful to nurture both existing technologies and new but proven ones, so what are the Government’s priorities for technology choices in the energy sector, and what actions will he take to protect taxpayers from technology redundancy risk?
The Pension Schemes Bill, introduced by this Government, includes a reserved power for the Government to mandate the investments of pension schemes. Has the Chief Secretary had any discussions about—or had the Treasury do any analysis of—the use of mandation powers to provide financing to the capital investments he has announced today? Have the projects announced today been assessed according to the revised Green Book rules? If not, will they be reassessed at some point on the revised basis, and what assurance can the Chief Secretary provide that these projects will give value for money to taxpayers? As this Government have stated, and as we acknowledge, when pressures on public expenditure increase, it is frequently capital expenditure that suffers. What actions is the Chief Secretary willing to take if finances are tight to protect the budgets for the projects he has announced today?
Investment in infrastructure benefits from a stable economic background, a clear set of priorities, efficient delivery, and optimal returns for taxpayers and investors. Madam Deputy Speaker, I miss the Chief Secretary in his old guise as Chairman of the Business Select Committee, when there was less of the rhetoric and the partisanship. These big decisions need open communication and critical analysis if we are to improve value for money and get projects delivered on time and on budget. In those endeavours, the Chief Secretary will always have our support.
Madam Deputy Speaker (Ms Nusrat Ghani)
As Mr Fuller knows, there were three of us on that Committee back in those good old days.
Darren Jones
I remember them very fondly, Madam Deputy Speaker. I am grateful for your support, and for that of the shadow Chief Secretary to the Treasury in his statements today. He has asked me a number of questions, which I will take in turn.
The first question was about detailed spending allocations between Departments. Today, we are making a commitment to a minimum level of investment in infrastructure— £725 billion over 10 years, which is rising in line with inflation. The detailed spending plans per Department get allocated at the spending review. We have returned to longer-term, multi-year spending reviews, which are obviously different from the annual allocations done under the previous Government; capital is now allocated at a departmental level until 2029-30. We will do the subsequent five-year detailed allocations in 2027 at the next spending review.
The pipeline will be published in a couple of weeks, in mid-July. The reason for a small delay between the strategy and the pipeline is that we wanted to integrate the data from last week’s spending review, and it takes a little time to do so. We have worked in partnership with industry, skills providers and others to develop the pipeline, which—as I say—will show on a map of the country which projects we are procuring, when, and where. That will give investors and businesses long-term confidence about the jobs that are going to be available, so that they can invest in their own workforce. The shadow Chief Secretary is right to highlight that skills is a constraining factor in the UK economy. We have the strategy and the money from the Chancellor; we now need to work through the industrial strategy with the Department for Business and Trade and the Department for Transport and with private sector partners, to do all we can to create the great jobs in every part of the country that will enable us to build the infrastructure we have set out today.
The shadow Chief Secretary asked me about the role of private capital. The strategy set out today contains a whole chapter about the role of private capital and the different mechanisms that we use with private investors. There is a commitment to use private capital for economic infrastructure where there is a revenue stream, and some of the approved methodology for looking at those options. Further work will be done between now and the autumn Budget on some very targeted potential applications of private capital for social infrastructure but, crucially, only where that provides value for money compared with it being funded by the state.
The shadow Chief Secretary also asked me about the Green Book. The Green Book review was published last week as part of the spending review, and it will be applied on a business case basis as projects come through to the Treasury for spending approval. There is nothing in the strategy set out today that pre-approves a business case, so the new Green Book will be applied to business cases as they come through in the normal way.
At a couple of points, the shadow Chief Secretary asked me to explain the difference between this Government and the last Conservative Government. To put it simply, it is failed promises from the Conservatives, and promises delivered by the Labour Government.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call John Grady, a member of the Treasury Committee.
John Grady (Glasgow East) (Lab)
I welcome today’s announcement and in particular the focus on housing and transport, because Glasgow has a real housing crisis. In my constituency, the busy Bridgeton train station does not even have lifts for disabled people. All taxpayers are concerned about value for money, particularly given the huge overspend and utter chaos of HS2 under the last Government. In Scotland, there is the absolute scandal of the Arran ferry. Will my right hon. Friend reassure me and set out the steps that the Government are taking to ensure value for money in this infrastructure spending? Will he commit to sharing the learnings with the Scottish Government, who desperately need help on that?
Darren Jones
The key thing I will point my hon. Friend to is the role of the National Infrastructure and Service Transformation Authority sitting in the Treasury. The assessment on delivery, assurance, design and commercial capabilities for projects will be part of the advice now coming to me as Chief Secretary and to the Chancellor, and it will be aligned with spending decisions on budgets. That means that if a project is not delivering effectively or is not yet ready to start, we will not release the money for that project, and we will stop funding projects that are failing. That is a key difference from how decisions were processed previously, and we think it will lead to much better discipline in delivering big projects.
Sarah Olney (Richmond Park) (LD)
Last week, the Liberal Democrats welcomed the announcement of investment in public infrastructure and transport projects, which we have long called for. We are glad that today the Government are setting out a 10-year infrastructure plan to realise those projects, and the Liberal Democrats will be closely scrutinising it to ensure that it delivers for communities across the UK.
Boosting our infrastructure is vital, given the appalling mismanagement under the last Conservative Government that left our school and hospital buildings crumbling while neglecting critical infrastructure, from transport to renewable energy generation. Today’s plan must draw a line under the disastrous mismanagement of projects such as HS2, which promised to connect our country and communities only to end up another hollow Conservative promise, long delayed and billions over budget. While we welcome the Government’s intention to deliver productive investment, we will closely scrutinise its implementation.
I have been concerned that Ministers have been unable to answer questions regarding delegated funding from the structures fund, such as for Hammersmith bridge in my constituency. Will the Minister confirm that specific projects have been selected, and will he ensure that infrastructure funding is distributed fairly for the benefit of all regions? Will he set up a crumbling hospitals taskforce to identify creative funding ideas, speed up construction timelines and put an end to the vicious cycle and false economies of delayed rebuilds, which lead to rising repair costs?
As we look carefully at the implementation of these plans, the Government must ensure that we have a workforce equipped with the necessary skills to meet these commitments. Does the Minister therefore agree that it is time to replace the broken apprenticeship levy with a broader, more flexible skills and training levy? Will the Government fulfil their promise to make Skills England an independent body with employers at its heart?
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. The Minister missed the Mexican wave that took place behind him. It was down to Chris Vince mostly, although probably it was also down to the length of the answers, which could be shorter.
Lola McEvoy (Darlington) (Lab)
I thank the Chief Secretary for his excellent work on this strategy, which will turbocharge confidence in the investment community while improving the lives, incomes and opportunities of my constituents in Darlington, which is exactly what I was elected to do. It will not surprise him to hear me ask politely for him to outline more detail on his ambition for the place-based approach, the Green Book reforms and the pilots that he has mentioned. Can we have one in Darlington, the home of many of his Treasury colleagues?
Darren Jones
I thank the hon. Member for her question. Without wanting to go through the entire infrastructure strategy or spending review, there is significant money coming to all parts of the country. The Chancellor has increased day-to-day spending by £190 billion and capital spending by £120 billion, so I am confident that the hon. Member’s constituents will benefit from an improved national health service, improved road maintenance and improved digital infrastructure. There is a very long list of things people will be able to experience, and they will see the difference made by a Labour Government as we deliver on our promise of change.
Madam Deputy Speaker (Ms Nusrat Ghani)
I am hoping that the next question will be as entertaining as his constant chuntering. I call Alan Gemmell.
Alan Gemmell (Central Ayrshire) (Lab)
Thank you very much, Madam Deputy Speaker. It is very nice to finally be recognised by the Chair.
Does the Minister agree that this approach to investment is fundamentally different from the Conservative chaos that led to crumbling schools, hospitals and roads, and light-years away from that of the SNP Government, whose profligate waste of public money has led to a £1 billion ferry fiasco in Ayrshire?
Darren Jones
Our universities play a crucial part in our education and skills landscape. They are, of course, privately-owned organisations and so are funded separately from the departmental budgets we have allocated in the spending review. The money announced last week and in the infrastructure strategy today is for schools and further education colleges. Any further changes to help universities with their estates will be announced in due course.
Tom Hayes (Bournemouth East) (Lab)
I spent a week in Leeds at the UK’s Real Estate Investment and Infrastructure Forum, banging the drum for Bournemouth and the south-west to say that we are open for business with this Labour Government. Investors and builders are responding. They are encouraged by the pension, regulatory and planning reforms and by this infrastructure approach, but we need more investment. We have £1.6 million going into Bournemouth and Poole college, £500 million into two new NHS buildings and £230 million into water upgrades, but we need more. Will the Chief Secretary meet me and Dorset MPs to consider how we will take forward this place-based approach towards investment, so that Dorset can benefit?
Darren Jones
Thank you, Madam Deputy Speaker. I thank my hon. Friend for his question and for championing not just his own constituency, but the region in which it sits. He is right to raise the fact that many communities have lost out on funding over many, many years because of the chaotic approach under the previous Government. Our approach to this long-term strategy, with long-term funding and partnering with private capital, is essentially set up to try to drive investment in the places that have missed out. I would be delighted to work with him to try to unlock those opportunities.
Chris Vince (Harlow) (Lab/Co-op)
Thank you, Madam Deputy Speaker. I thank the Chief Secretary to the Treasury for his statement and in particular for the funding for the maintenance of hospitals. I will be lobbying the Health Secretary in due course, but first will my right hon. Friend let me once again advocate for Harlow in respect of the future of the UK Health Security Agency? It is shovel-ready, well located and cost-effective.