Infrastructure (Financial Assistance) Bill

Debate between Rachel Reeves and William Cash

Monday 17th September 2012 Commons Chamber

[Rachel Reeves]

I thank my hon. Friend for that intervention. He will know that there are 1.42 million people working part time who wish that they were working full time. As of April, about 200,000 families lost support through working tax credits because they could not find the additional hours that they need to still be eligible for that extra support to help them when they are in work; that support helps them to avoid poverty.

It is no wonder that people are asking whether they can have faith in anything the Government are saying, given that in every area we see dither and delay. In communications, the Government have put back the 2012 broadband target to 2015 and may not meet that new deadline. In house building, recent statistics show that new housing starts are down by 24% on a year ago. In waste management, the plan promised for spring this year will now not be delivered until the end of 2013. In energy, the CBI has warned that policy changes such as the cuts to feed-in tariffs have been

“damaging to business confidence, with implications not just for immediate investment decisions but for longer-term trust in government policy”.

In transport, we still await the long-promised national policy statement on transport networks and aviation, and tough decisions on airport capacity have been kicked into the long grass. Instead of the drive, decisiveness and clarity of vision that businesses are crying out for, what do we get in sector after sector? We get dither and delay; we get initiatives and announcements driven by the desire to hit headlines rather than to deliver results.

The Bill—the Government’s latest scheme—is a strange piece of legislation. It is being fast-tracked through Parliament, with the justification that the situation is immediate and urgent. However, given this need for speed, we are bound to ask whether legislation is necessary, particularly given that, as the House of Commons Library note explains, such commitments

“do not typically require…legislation”.

The UK guarantee scheme at the centre of the Bill was first announced by the Prime Minister in a speech in May. It was re-announced by the Chancellor in a speech in June. The press release came from the Treasury in July. It is therefore hard to resist the conclusion that the Bill is designed more to create the impression of activity and delivery than to get real results in the quickest way possible.

However, the Opposition’s biggest concern with the Bill is that it is simply inadequate to meet the challenge we face. Many in industry are sceptical that it will make any difference. Even where it is taken up, the tight criteria of economic and commercial viability may mean that it amounts to only a deadweight subsidy, aiding projects that would have gone ahead in any case. The best anyone has been able to say for it is that it might help some schemes at the margin, but that is hardly commensurate with the challenge we face.

The schemes that have been most frequently mentioned as strong candidates for assistance are those the Government have announced are going ahead several times already. Let me cite one example, which the Chief Secretary mentioned in his speech. Earlier this month, he said:

“Detailed discussions are already taking place with the Mersey Bridge Gateway project”.

We certainly welcome progress, but many may experience a strange sense of déjà vu, given that a year ago the same project was announced by the then Transport Secretary, who noted that although some transport plans are long term, this one could be

“implemented more quickly…creating jobs when they are needed most.”

What happened in the past year? It is no wonder the Government are gaining a reputation for more talk than action. As the director general of the CBI said today,

“firms fear initiative overload and are becoming impatient with delivery, leaving many companies still sceptical about the overall impact on investment.”

[Mr William Cash (Stone) (Con)]

Does the hon. Lady accept that this Bill is, in effect, pure Keynesianism? If she had the opportunity to read Nicholas Wapshott’s recently published and excellent book on the arguments between Keynes and Hayek, she might conclude that elements in this hoped-for infrastructure programme carry with them the germs of really serious difficulties if we pursue a policy of pure Keynesianism and do not take into account the arguments of Friedrich Hayek.