Water Industry (Financial Assistance) Bill

Rory Stewart Excerpts

Wednesday 14th March 2012 Commons Chamber

[Rory Stewart (Penrith and The Border) (Con)]

Will the hon. Gentleman reflect on the idea that proper debate in the House should be required on triggering very detailed financial amendments? Given the lack of attendance in the broader debate about this Bill, is it realistic to expect proper parliamentary scrutiny of something so minor?

[Gavin Shuker]

I am grateful for that point from the hon. Gentleman who has joined us in the debate. I ask him to hear me out regarding this measure. I am sure he has read the amendment and understands that it refers to the process for statutory instruments under which Members who had a particular interest in the matter would be able to go and make representations. We use that system quite commonly across the House and I feel that such additional parliamentary scrutiny would be appropriate for projects such as those we are discussing, which could involve costs of up to £4.2 billion and a long period of tunnelling works and the like, let alone for other projects that we do not currently know about.

As Members of Parliament we scrutinise, debate and legislate, and we are elected to do so. By putting the power to decide whether public money should be risked on large water infrastructure projects solely in the hands of the Secretary of State, we lose that thorough process, which is the most accessible way for Members to engage in legislation here in Parliament. We will see how much interest the Thames tunnel has attracted in the Chamber today as part of the Bill. The debate so far has allowed MPs who represent constituencies that will be affected by the plans to come forward and express the views of their constituents, but it is limited. The debate has also allowed those with experience and expertise in the field from both sides of the House to feed in their knowledge and advice.

However, the clause in its current form concerns us because it means that from here on we risk writing blank cheques for the Secretary of State and her successors when it comes to large water infrastructure projects. The clause will see the decision-making process remain in the Secretary of State’s office—decisions which might lack awareness of how enormous these infrastructure plans are and how they will affect people’s homes and lifestyles.

Let us compare the Bill with other Bills that will be introduced in this Parliament before 2015. We know that a hybrid Bill process will be used in some cases. This is not a hybrid Bill, so it is important that we get the groundwork right in relation to the decision-making process on the Thames tunnel and other infrastructure.

Our amendment requests that such proposals come to the House for debate and allow Members to contribute their knowledge and experience. Accountability and scrutiny are needed if infrastructure plans are to reshape constituencies that Members are elected to represent. It is only right for their input to be considered. Amendment 2 will improve the Bill in that way.

As an aside, although it is essential to our decision whether to move the amendment, I noted on Second Reading in the discussion of the decision-making process on the Thames tunnel that reference was made to the policy intent in the Government’s document, “Major infrastructure planning reform: Work plan” of December 2010, which states:

“Following Royal Assent of the Localism Bill major infrastructure applications will return to ministers for decision as follows: . . . the Secretaries of State for Communities and Local Government and Environment, Food and Rural Affairs will jointly determine water supply and waste water applications.”

I have checked and DEFRA has confirmed that the joint decision-making process is undertaken by administrative means, not statutory means. In other words, although the Localism Act 2011 amended the planning legislation to give Ministers the final decision-making responsibility for major infrastructure, it did not lay down a legal duty imposing the policy intent. So DEFRA will lead on waste water and DCLG will handle planning, including the report from the planning inspectorate, but the Departments have not yet, as I understand it—I look to the Minister to clarify this—decided how Ministers will act jointly in the final decision. That falls short of a legal duty to make joint decisions that place a legal responsibility on both Secretaries of State. It could result in messy horse-trading between the two Departments. If the Minister clarified the exact process, that would be helpful. It may not address our particular concern that proper parliamentary scrutiny is applied to the decision through the statutory instrument process, but it will help us decide whether to press the amendment.

The Minister said earlier that he would share the discussions that he has had with his officials and, as I understood it, with Thames Water, to reassure us about the cost and the process for implementing the tunnel. We have another debate on Monday to approve the guidance on waste water. If not during this debate or the one on Monday, when will he share the discussions that he has had, which he sought to use to reassure Members that the process would be properly managed?

Amendment 3 will sharpen the mind of anyone proposing major infrastructure works by obliging them to consider the requirement to make apprenticeship programmes a key part of that work. Thames Water estimates that the Thames tunnel project will directly create more than 4,000 jobs in the construction sector. The majority will be employed through contractors. Of course, the true number is likely to be higher, given the secondary employment effect. A partnership is emerging with Crossrail’s tunnelling and underground construction academy, which is currently training and placing about 70 apprentices each year. Last week the Minister gave an assurance at the Dispatch Box that the Thames tunnel project will specify in its contracts the number of apprentices who will be employed by contractors.

In amendment 3 we commend that approach, not just for the Thames tunnel project but for future projects. It would require the Secretary of State to lay a report before Parliament on her proposals to encourage level 5 and 6 training programmes—for those Members not fully versed in those programmes, they are equivalent to foundation and bachelor degree qualifications. These major works can take a decade or more to complete, which means that there is ample time to bring a generation of young people into the trades, if the political will is there to require it.

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[Gavin Shuker]

The right hon. Gentleman makes his point explicitly and brilliantly. If the lessons of the past 20 years on major infrastructure projects where we have required special social benefits are to be learnt, monitoring is absolutely essential. That is why I think that our amendment’s approach is very sensible. It would require the Secretary of State to bring forward her plan, and an agreement with the infrastructure provider, so that it could be approved by this House. The additional level of scrutiny given would not just be an assurance in the contracts; there would be proper parliamentary accountability to ensure that the benefits, for Londoners in this case, are spread across the capital and give young Londoners a fair start.

We know that the Thames tunnel will be a huge infrastructure project, and we have all seen the bad news on youth unemployment today, so we are calling on the Government to ensure that young Londoners get a fair share of the 4,000 jobs the tunnel will deliver. In short, this is a real opportunity to help guarantee apprenticeships and high-level skills. I hope that the Minister will be able to accept both amendments, which would improve the Bill for Londoners now and for all households in the years to come.

[Rory Stewart]

The hon. Member for Luton South (Gavin Shuker) has made a powerful case for apprentices and for better scrutiny of financial mechanisms. I stand, with enormous modesty, not as someone representing the Thames, but as someone representing a large body of water in Cumbria. However, my disagreement with the amendments, and I suspect my party’s disagreement, is based on profound Tory principles. It is a disagreement not on the nature of scrutiny or the importance of apprenticeships, but on the basis of law, the way statutes should be created, the way administration should be driven through and the importance of the issue. We begin in agreement: apprenticeships are important, as is scrutiny. But Parliament is not the way to do this.

This is an elegant and unencumbered piece of legislation. What we have seen in infrastructure investment over the past 50 years is a complete misunderstanding in this country about the importance of Parliament in infrastructure and where Parliament should not be involved. We have been a catastrophe— not just the Labour Government, but the previous Conservative Government—when it comes to making the right infrastructure investments for this country. Why? It is because, unlike Denmark and Germany, we have never developed a proper attitude towards infrastructure or investment. We have never developed a national investment bank. We continue to believe that highly technical matters, such as those relating to the deployment of water or the details of the financing of infrastructure, can be resolved by Parliament, rather than the kinds of specialists in the World Bank who deliver these projects effectively around the world. We see that in water and, just as powerfully, in broadband.

If the Government are pushing ahead with this legislation, and if we are pushing back against the Opposition, it is because the failings over the past 13 years in delivering infrastructure are reflected in the comments of the hon. Member for Luton South. There are better ways of looking at the financing; there are better ways of looking at apprenticeships.

We have in place flexible apprenticeship mechanisms that are currently delivering more than 100,000 apprentices. Encumbering this legislation or, indeed, any future infrastructure legislation with that degree of detail would not only, as my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) pointed out, prove generally ineffective, as it has in the past owing to a lack of monitoring, but take away from civil servants—which is where it should lie—the real responsibility and accountability for delivering good, imaginative infrastructure projects, well financed and with apprentices in place.

Given the importance of this issue, given that water matters so much to us, given that the drop in public sector demand means that we should make more infrastructure investment, given that we need to be much more creative about how we bring financial mechanisms to bear, given that it is so cheap at the moment to borrow money, and given that it should be possible to make not just this but many more profitable investments on the basis of public sector insurance or financing, I beg the hon. Member for Luton South to withdraw the amendment. It would tie the hands of the Government at a very important moment, when we need exactly this kind of infrastructure and exactly this kind of investment in water not just for apprentices but for economic growth.

The way to proceed is with a serious, responsible approach to infrastructure investment, which will not be delivered through the kind of statutory commitments that the hon. Gentleman proposes.

[Miss McIntosh]

I shall limit my remarks and take a slightly different view from that of my hon. Friend the Member for Penrith and The Border (Rory Stewart), because I believe that there is some merit in parliamentary scrutiny and that, often, we have better laws as a result. Given that there is all-party and, indeed, consumer support for what the measure and, in particular clause 2(6), is trying to achieve, I am sure that in moving amendment 2 the hon. Member for Luton South (Gavin Shuker) is not seeking to delay matters through parliamentary scrutiny.

Will the hon. Gentleman consider this approach, however, which I have shared with the Leader of the House? When we have—as was mentioned in the debate about the first group of amendments—parliamentary scrutiny of draft orders under the Flood and Water Management Act 2010, for example, is it not unsatisfactory that all we are required to do is to vote for or against the statutory instrument? Would there not be some merit in being able to amend it?

I have chaired and served on Statutory Instrument Committees, as all of us have been privileged to do from time to time—although I hope that the Whips do not take that as a bid to serve on any in the future. As a humble Back Bencher, however, I believe—and this is where I part company with my hon. Friend the Member for Penrith and The Border—that if we are going to have scrutiny we should be able to amend statutory instruments. I find it unsatisfactory that we may have an amendable motion but not the power to amend a statutory instrument. I just plant that thought in the minds of the hon. Gentleman and of other hon. Members.

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I am sympathetic to the concerns of the hon. Member for Luton South about jobs and growth, as are all hon. Members. Jobs and growth are central to the Government’s agenda. I agree that large projects such as the Thames tunnel have a significant role to play. As I explained on Second Reading, Thames Water estimates that the project will directly employ about 4,200 people in construction and related sectors. I understand that Thames Water has 40 apprentices in training, and that future intakes are planned to maintain that number. Thames Water’s tunnel team actively support Crossrail’s Tunnelling and Underground Construction academy, to which the hon. Gentleman referred, which is currently training and gaining employment for 70 apprentices a year. The Thames tunnel project is also committed to following the Crossrail model of specifying in its contracts the number of apprentices who will be employed in the contractors’ work force. I hope that that gives him the reassurance that he needs.

[Rory Stewart]

Does my hon. Friend accept, as a general philosophical principle, that one should not micro-manage the detail of a Bill to the extent that is called for in the amendments, because one would end up with endless and voluminous legislation? Does he agree that the issues of apprenticeships and financing are better left to the contracting authorities and to the administration of civil servants, and that if too much of this micro-managing happens on sectoral issues and specific projects, Parliament will be mired in complexity?

[Richard Benyon]

I agree with my hon. Friend. It would be wrong to put in the Bill requirements that might or might not suit today’s world, but that would be wrong for the future. The Government, in negotiations with private sector companies and through the planning process, are involved at many levels in the development of such contracts. We can impose our desires and our will. The companies and the Government can be held to account if they fail on these matters. I believe that to prescribe to such a level of detail would be wrong.

Thames Water is holding the launch for a jobs and skills report in the House on 20 March, to which MPs are invited. Its jobs and skills forum will promote the work that it is carrying out in this area. Thames Water will also look to gain from the experiences of other large-scale infrastructure projects. It is right for the Government to support and encourage Thames Water in those efforts.

Apprenticeships are central to ensuring that our work force are equipped to help build economic growth. There are huge opportunities in the project, if we can embrace them, for Londoners who are seeking work and training to be involved in a really high-profile scheme for a number of years. They can then take the benefits into other sectors and industries. However, we do not feel the need for further legislation to provide that encouragement. Nor is it necessary or appropriate to require the terms and conditions involved to be included in a statutory instrument. For that reason, I ask hon. Members not to press the amendments.