Infrastructure

Steve Reed Excerpts

Tuesday 12th February 2013 Commons Chamber

[Steve Reed (Croydon North) (Lab)]

I wonder whether the hon. Gentleman understands that some of the cuts that local government is delivering might well be the result of the 50% cash reduction that most authorities are experiencing over the comprehensive spending review period.

[James Morris]

The hon. Gentleman knows that the decisions taken by local authorities are about priorities. I was giving an example from Dudley borough of a specific decision about priorities for local funding which will be greatly detrimental to local residents.

I welcome this Government’s commitment to effective and efficient investment in vital infrastructure at a time when finances are constrained by the need to tackle the record deficits built up by their predecessors. Using Government guarantees to leverage private investment is a prudent use of public funds, whereas overuse of PFI has left taxpayers paying over the odds for capital schemes, as has been described in this debate.

The Chancellor’s announcement of the new PF2 scheme in the autumn statement was badly needed. We must restore people’s confidence that public money allocated for infrastructure is being spent on roads, schools and hospitals, rather than on swelling contractors’ profits. My constituents were particularly pleased that the proposed new Midland Metropolitan hospital in Sandwell was cited as the first candidate for the new scheme in the NHS. The local hospitals trust has been working hard with the Department of Health and the Treasury to ensure that those plans progress. I hope that my constituents can look forward to further good news shortly. Such investment would not only undoubtedly stimulate local economic activity in the short term, but provide a valuable new facility, providing better services more efficiently for years to come.

I believe that the Government are taking the necessary and tough decisions to invest for the long term in Britain’s infrastructure in order to make up the gap and the deficit left by the previous Government.

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[Steve Reed (Croydon North) (Lab)]

I congratulate my hon. Friend the Member for Leeds West (Rachel Reeves) on securing this debate on this important issue. I want to draw the House’s attention to the Croydon tram extension—or, rather, the lack of it. That project has huge local support. It was also supported by the Mayor of London; in his re-election campaign, he came to the area twice and was photographed on the proposed tram route. I greatly regret that the scheme is now not proposed for delivery, the cause of which is an unhappy combination of a Tory Mayor of London and a Tory-led Government abandoning a major infrastructure project that had huge regenerative potential for areas including Upper Norwood and Crystal Palace in my constituency. The constituency has extremely high, and growing, youth unemployment. That was a huge issue in the by-election at which I was elected. I would very much like all parties concerned to think again about recommitting to the promise that the Mayor of London made in his re-election campaign.

Before I was elected at the end of November, one of the roles I had was chair of the Vauxhall Nine Elms strategy board. That is a fantastic project just across the river from here. It is led by local government, which the Government frequently take pleasure in denigrating and decrying. It was led by the Labour administration in Lambeth and the Conservative administration in Wandsworth, acting together with private sector partners to create a regeneration project that is bigger than the Olympics in the heart of London. It will be the single biggest generator of new homes in the entire country, delivering about 16,000 new homes and creating about 20,000 new jobs, as well as the Northern line extension.

I am surprised by how frequently we hear the Government taking credit for that scheme. Indeed, the Chancellor did so in both of the last two autumn statements. There is no Government money of any note going into this scheme, however. It is not a Government project—although I give them credit for underwriting it—and all the parties involved would be pleased if they would stop trying to take credit for something they are not doing.

Although the Government are pleased to talk up that excellent and vital infrastructure project, their planning reform proposals will slow it down. A number of schemes with permissions in place are ready to go, but the Government have now told the developers that if they delay implementation, they may be able to reduce or remove some of the social housing requirements. Therefore, as a result of Government intervention, we are looking at fewer affordable homes at a time of record homelessness, and the delay of planned jobs at a time of record unemployment, none of which makes sense.

As a Member of this House I am also privileged to be a member of the Public Administration Committee, which is conducting an inquiry into Government procurement. While taking evidence, the Committee has repeatedly been told that the lack of a long-term Government procurement pipeline for national infrastructure means that businesses are not confident, cannot plan for growth and jobs, and therefore do not invest. As a result, yes, there are more jobs—low-paid and part-time jobs—but there is no growth, and when there are more jobs but no growth there is a collapse in productivity. The confidence of business has been broken by the failure of the Government to invest, and that can only be a harbinger of further trouble for our economy.

The Government failure to invest in infrastructure is one of the key causes of their failure on jobs, growth and the economy. The Deputy Prime Minister is right to admit that the Government have got it wrong. The country needs them to change course and I commend Labour’s five-point plan as an excellent starting point.