Transport and the Economy

Debate between Stephen Hammond and Angela Smith

Tuesday 28th February 2012 Commons Chamber

[Stephen Hammond (Wimbledon) (Con)]

It is a great honour to follow the Chair of the Select Committee, the hon. Member for Liverpool, Riverside (Mrs Ellman).

I want to comment principally on the “Transport and the Economy” report. The report recognises, of course, that for many years transport was like Cinderella, as it rarely came to the fore and was not regarded as one of the key parts of Government policy. That was true for many years, but there has been a sea change and there is recognition both in the report and in the actions of the previous Government and this Government that the performance of an economy can be directly related to transport.

Transport can undoubtedly boost growth and increase competitiveness, and one of the best policy interventions a Government can make is to ensure that the infrastructure allows industry to thrive. Some of the infrastructure not only benefits industry but improves the quality of life of a number of our citizens, although clearly it can be provided in a number of ways that differ not only physically but financially. Efficient infrastructure will allow efficient and cost-effective movement around national, regional, sub-regional and local networks—I think that that is implicitly recognised in the report. The fact that transport can boost the economy—the report questions its efficacy in some areas, which I wish to discuss later—is also self-evident.

Any report that links transport and the economy is welcome, but having read both the report and the Government’s response and having listened very carefully to the hon. Member for Liverpool, Riverside, I would like to address one or two areas of slight concern and some surprise. For instance, as the hon. Lady conceded, we are discussing this report some time after its publication and so a number of its explicit recommendations have, to the Government’s credit, been covered in a number of ways. Indeed, it seemed to me that the Government were already covering a number of the report’s recommendations at the time.

Let me pick out recommendation 5 as an example. It states:

“The Government must explain the nature of the economic solutions that it is seeking to deliver through transport spending and how the schemes that it is supporting will achieve these aims.”

By the time the report had been published, however, the Government had already set out those things through their transport business case. They have also set out quite clearly in their business plan some of their objectives for transport spending, as well as a vision for a transport system that is an engine for economic growth, and they have attempted to provide a greener, cleaner and fairer solution for our communities.

Moreover, during the previous Government's period in office, many of us on both sides of the House recognised that the formula that the Department for Transport was using to analyse a number of its schemes beyond the basic benefit-cost ratio, NATA—the new approach to appraisal—had a number of deficiencies. We should recognise that the Government have set out a more embracing framework for analysing infrastructure spending. Clearly, there are the four areas to consider: the economic case; whether there is commercial viability; whether a scheme is financially affordable; and, perhaps most importantly, whether a scheme is achievable. That sort of framework, beyond what was previously in place, should provide a greater degree of rigour, for there is now more than one test. There are not only the tests in NATA or the benefit-cost ratio but a number of tests which, added together, will give a transparent and more rigorous approach to the analysis of economic transport investment. I hope that such an approach will stay in place for some time, because one of the problems with transport investment has been that for an awfully long period in this country’s history there was complete inconsistency in approaches to what a scheme could deliver. I support what the Minister has put in place, and I hope he will ensure that it is enshrined and embedded for a long period.

I was somewhat surprised at the report’s conclusions about regional strategies and the removal of regional strategic development and development agencies. I listened very carefully to the speech of the hon. Member for Liverpool, Riverside and I almost intervened, but as I hoped I would have the chance of catching your eye, Madam Deputy Speaker, I saved my remarks. I listened to the hon. Lady’s comments about what regional development agencies were doing for transport spending. However, I think the previous Transport Committee concluded in one of its reports—I forget which one—as did commentators up and down the country, that the variability among what RDAs delivered regarding transport was vast. It is fair to say that what the regional development agency did in the north-west in some of the delivery and spending on transport projects was well appreciated and supported. However, in other parts of the country, particularly the south-west, the RDA was felt to be failing almost everybody it attempted to help.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

Does the hon. Gentleman acknowledge that the arguments and strategies developed by The Northern Way, which brought together three RDAs in the north of England, made a huge contribution to the development of the High Speed 2 project and the northern hub?

[Stephen Hammond]

Indeed I do, and I thank the hon. Lady for making that point because it helps me to make my next point. One thing that this Government have recognised is that, although there was some mix of RDAs, the reality is that a differing of approach in different areas will be the solution.

I also think it is quite clear that the report has prejudged the efficacy of local enterprise partnerships. It seems to me that all the initial evidence, anecdotal though it is because they have been in place for so short a time, shows that they are taking their responsibilities towards transport seriously.