The Secretary of State for Transport (Justine Greening)
It is a great pleasure to be able to resume the debate on the Budget today. This is the coalition Government’s third Budget. It is a Budget that helps Britain to earn its way in the world, rewards working families, backs business, and sticks to our course of clearing up the economic mess that the previous Government left us. This Budget, like the last two, cannot be divorced from the urgent need to deal with Labour’s debts. Let us remember the crisis that we inherited less than two years ago. The state was borrowing one in every four pounds it spent and spending £120 million a day on debt interest alone. The country was taken to the brink of bankruptcy by a profligate Labour Government, leaving our people with the biggest deficit in the developed world.
This Budget marks another step on the road to a strong and stable economy, and that is why we are sticking to our deficit reduction plan, winning credibility in the markets and keeping interest rates low.
Mike Gapes (Ilford South) (Lab/Co-op)
Will the right hon. Lady explain why this Government are going to add £150 billion to total borrowing? Is that a sign of success?
Justine Greening
Many people who see that the hon. Gentleman’s party’s strategy is to borrow in the middle of a debt crisis will wonder why he is asking that question. I presume it is because he thinks that borrowing is not high enough.
This Government ultimately have a laser focus on making Britain the best place in the world to start, finance and grow a business.
Mr Stewart Jackson (Peterborough) (Con)
On the subject of Labour waste and profligacy, is my right hon. Friend aware that the Institute for Fiscal Studies says that had Labour been re-elected, it would have borrowed an extra £200 billion, which would have had a huge impact on interest rates, in particular, and, given the debt legacy in households, a calamitous impact on the economy generally?
Justine Greening
My hon. Friend is absolutely right. Labour Members have learned nothing from the mess they handed over to us. They see us in a debt crisis and their solution is to keep on borrowing—keep on digging—and we all know who would pick up that bill.
Justine Greening
I will not give way; I am still replying to an intervention. The worst thing that Britain could do right now is to listen to the siren voices of the Opposition. They are very good at criticising, but they have absolutely no credible alternative, and that is probably the key message that will come across to the public who are watching this debate.
From easing access to credit and bringing down the cost of borrowing for small businesses, to cutting corporation tax and reforming the planning system, the measures set out in this Budget will help to get growth back into our economy. They will also help to rebalance the economy by supporting our companies—wealth creators shifting UK plc from a spend-and-borrow path under the previous Government to a make-and-sell future under this one.
Owen Smith
Will the Minister confirm that the Office for Budget Responsibility tells us that next year the volume of investment by British companies in the UK will go down by 0.7%—that is, 7% down on the previous year’s estimate? Is that right?
Justine Greening
If the hon. Gentleman reads the whole OBR report, he will realise that Britain is an economy that operates in a global marketplace. Of course, his solution to the challenges faced in that global marketplace is to go and join all the countries that are facing problems, not to tackle our own economic crisis that his party left us. I assume that most, if not all the interventions that I get from Labour Members will be cherry-picked statistics that offer no alternative solutions to the challenges facing Britain.
Mr Brown
I am not about to cherry-pick a statistic, but let me give the Secretary of State some facts. I appreciate that she was not here at the time, but when the Labour Government came into power in 1997, the servicing of the debt that was left behind amounted to more than was being spent on transport and defence combined. That was a major task to be handled by the incoming Labour Government, so everything was not rosy in the garden.
Justine Greening
The previous Conservative Government handed over a golden economic legacy. It was the Labour party that handed over a Britain loaded up with debt, costing us £120 million a day in debt interest, and that left unemployment higher than when it came to office, like every single Labour Government we have ever had. I will take no lectures from the party opposite on economic management, and neither will the British people.
Matthew Hancock (West Suffolk) (Con)
On the question of investment from overseas, is my right hon. Friend aware that some Labour shadow Cabinet Ministers have said that they would reverse the corporation tax cut, which was cited by GlaxoSmithKline yesterday when it announced 1,000 new jobs in this country?
Justine Greening
Ultimately, Labour Members seem to know nothing about how business runs. It may be that none of them has ever worked in business. Keeping our corporation tax rate low is critical in re-establishing our economic credibility and our tax competitiveness. Those are fundamental building blocks in getting the investment that we are seeing. I wholeheartedly welcome the steps that the Chancellor has taken.
As my right hon. Friend the Prime Minister has said, the infrastructure deficit that we inherited is just as serious as the budget deficit for our future productivity and the country’s ability to be successful. Infrastructure matters because it makes possible our journeys to work, delivers light when we flick on the switch and provides the connections that have created the communications revolution. Whether it is the congestion on our roads, our ageing power stations or the slow speed of our broadband connections, we face massive challenges to ensure that we have the infrastructure that we need to put Britain at the head of the competitiveness curve, not just in the next four to five years, but in the next four to five decades.
My remarks will focus on transport, because the Budget sends a clear message about how crucial the Government and I believe our transport infrastructure is to our economic future. That reflects what business is telling us. The CBI states:
“There are large amounts of business capital waiting to be unlocked if the Government achieves a step-change on transport”.
The Institute of Directors says that it is
“essential to provide more and better transport infrastructure in order to sustain the UK’s competitiveness.”
The British Chambers of Commerce rightly states:
“Infrastructure is the lifeblood of British business.”
I could not agree more. The last Government delivered the biggest boom and the biggest bust. As we chart our way back to economic recovery, what companies and firms up and down the country rightly want to see is a Government taking action.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
I find the Secretary of State’s emphasis on infrastructure appealing, because infrastructure is needed. Unfortunately, the Office for Budget Responsibility has put the majority of growth for the foreseeable future down to personal consumption. Last Budget, it said that 12.5% of growth would come from private consumption. It now says that the figure is 37.5%. That is the very growth that the Government have now condemned.
Justine Greening
I am not sure that the hon. Gentleman’s intervention made much sense. I agree that infrastructure is critical. The key part of the OBR report, which he ought to focus on, states that we are on course to meet our fiscal mandate and to get our public finances back in order. I am sure that he welcomes the OBR’s assessment that we will see the net creation of 1 million jobs in this country over the coming year.
Helen Goodman (Bishop Auckland) (Lab)
To explain further the point made by my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), if the Secretary of State turns to table D.1 in the Red Book, which shows the detailed summary of the OBR’s central forecast, and looks along the line for “Fixed investment” by “General government”, she will see that it falls in 2011, falls in 2012 and falls in 2013. That is the point that my hon. Friend was making. The right hon. Lady clearly has not looked at the Red Book.
Justine Greening
This Government are investing more money in capital spend than was planned by the previous Government. If the hon. Lady is complaining about those numbers, she would be complaining even more if we had the misfortune of having her party in office. This Government are investing in infrastructure and putting unprecedented levels of investment into the railways, as I am sure she is well aware, even though she prefers to score a political point.
The Government are rightly taking action to make it easier for people and businesses to go about their daily business. We are cutting commuting times and speeding up journeys; getting people and products moving faster and more reliably; and ensuring that Britain is plugged into the global marketplace. Of course, the easy choice, faced with Labour’s debt and deficit, would have been to cut capital spending and major infrastructure projects. We are not doing that. Instead, we have taken a deliberate decision to invest in our transport infrastructure, from relatively small interventions that make a big difference such as hard-shoulder running on motorways, to huge projects such as Thameslink and Crossrail.
I am delighted that we have a London Mayor who is committed, alongside the Government, to driving forward projects such as Crossrail, which are vital to our capital’s future prosperity. It is vital that we continue to have a Mayor who is passionate and successful in campaigning on London’s behalf at the heart of the Government; a Mayor who refuses, unlike his opponent, to make empty spending promises based on imaginary pots of money; and a Mayor who will be the best possible advocate for London’s economic success when he welcomes the Olympic tourists and athletes in the summer.
Gavin Shuker (Luton South) (Lab/Co-op)
I am extremely grateful to the Secretary of State for giving way after that party political broadcast to re-endorse the London Mayor. Turning to a point of substance, may I ask her what her policy is on airport expansion in the south-east? The Government were keen to show a bit of leg in that regard, but have ruled out a third runway at Heathrow.
Justine Greening
The hon. Gentleman will be delighted to know that I will come on to that matter shortly. After all, this is a speech on infrastructure. I hope that when the Opposition spokesman responds, he will take the time to set out some kind of alternative plan. That would be of real interest to us all.
Five months into this job, I could reel off a long list of the transport investments that we are making. We are electrifying the trans-Pennine railway and the Great Western line from London to Cardiff, far surpassing the 39 miles of electrification that happened under the previous Government. That would not even stretch from Cardiff to Swansea, let alone from London to Cardiff. We are upgrading the Tyne and Wear metro. There are 45 local authority major schemes to improve connectivity across the country. We are finally progressing with the first parts of the northern hub project, which is so important to many Members.
I could continue, Mr Speaker, but we are investing in so many projects that you would probably call me out of order for speaking for too long. Therefore, let me summarise. The spending review set out more than £30 billion of investment for road, rail and local transport projects across the country. On our roads, we are investing billions to unlock extra capacity and ease congestion. We have set up the £560 million local sustainable transport fund, which gives local communities more power to design and deliver local transport systems. We have put in place the Growing Places fund to kick-start infrastructure projects.
We have given the green light to High Speed 2, a national high-speed rail network that will radically improve the connections between our great cities and, by doing so, help to create jobs and generate growth and prosperity. That sits alongside our unprecedented investment in the existing railway network, from new stations and rolling stock to line electrification, which will help to decarbonise the industry. That amounts to the biggest modernisation programme since Victorian times.
Hand in hand with additional resources for our railways goes the reform of our railways. The rail Command Paper sets out our vision for an efficient, effective and value-for-money rail industry. Our reforms will put the customer first and allow us to end the era of inflation-busting regulated fares increases once the vital savings are made.
Building on all those investments, the Chancellor announced further measures on Wednesday to improve our country’s transport links. He announced a £323 million package that includes a range of projects. There is an extra £150 million contribution towards the Growing Places fund, which will facilitate the economic growth, jobs and house building that our country needs so badly. There is £15 million for cycle safety in London, which will enable the innovative redesign of some of the capital’s most dangerous junctions for cyclists. There is £11 million more for low-carbon buses, which is part of the £101 million bus investment package that the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker) is announcing today.
In addition, the Chancellor has announced that the rail industry will benefit from £130 million of funding from Network Rail to improve rail connectivity in the north of England by giving the go-ahead to further parts of the northern hub project. That will include increasing line speed and capacity on the Sheffield to Manchester Hope Valley line, and reducing journey times on the Manchester to Bradford via Rochdale and Halifax line and the Manchester to Preston via Bolton line. We are linking up the great counties of Yorkshire and Lancashire in the way that they have always wanted to be linked. That all adds up to passengers enjoying better connections, faster services and more seats.
Our national road network is also a key part of our national infrastructure. The strategic road network carries two thirds of all the freight on Britain’s roads, and it is vital for all types of business from mail order retailers to industrial parks and shopping centres. We have already announced, in last year’s growth review, £1 billion of additional investment in the nation’s strategic roads, on top of the £2.3 billion planned investment in major improvements announced in the spending review. However, as the Budget makes clear, we want to go further and examine the opportunities for more private investment in the road network in future. We want to consider where we can learn lessons from other industries, and we want to build on the proposals in Alan Cook’s report on the Highways Agency.
John Woodcock (Barrow and Furness) (Lab/Co-op)
Will the Secretary of State spell out what will constitute a capacity improvement that could lead to extra tolling on existing roads? That is unclear.
Justine Greening
The hon. Gentleman will be aware of the work on how we can improve the A14, for example, and some of the options being considered could include tolling. If he is interested in finding out more about how the Government are approaching the issue, he can meet up with people who are involved in the A14 challenge. That programme of improvements will deliver for the community in that region in a way that his party’s Government failed to in 13 years.
The hon. Gentleman is looking at the sky and shaking his head, but I have a very, very long list of investments that the Government are making, whereas the Labour party delivered precious little. The biggest irony, of course, is that we ended up with all this debt, but what did it get spent on? Not the things that would have made a real difference to Britain—not roads, not trains. Labour frittered it away and wasted it on an unprecedented scale.
This Government understand that Britain is not just an island nation but a trading nation, so our ports must be world-class global gateways. That is why we are backing major container port developments such as Liverpool, Bathside Bay, Felixstowe South, London Gateway, Teesport and the port of Bristol. It is also why we want to see a successful and sustainable future for that other crucial global gateway, our aviation industry.
We should remember that our country and our capital are right up there with the very best when it comes to international connections. Only China and the USA have aviation networks more extensive than ours. We are directly connected to 356 international destinations, and no European country can match our connections to the world’s great commercial centres. There are more than 9,000 flights every year to New York, 3,000 to Hong Kong, 2,500 to Singapore—I could go on. To each of those important destinations and many others, Britain is the world leader.
Nevertheless, if we are to maintain that status, we have to take on the tough challenges facing the industry, whether it is improving the passenger experience or enhancing capacity and connectivity, while tackling the industry’s impact on climate change and the local environment. We are determined to look at those difficult issues. As the Budget makes clear, we will set out our thinking on aviation capacity and a sustainable aviation framework this summer. We are determined to ensure that we retain our aviation competitiveness and hub status in the decades to come.
An economy built on success requires investment in infrastructure that is built to last. That is why we need to invest in, reform and modernise our transport networks to make them the very best that they can be at not just national but local level. This Budget helps to lay those foundations for Britain’s future economic success.
We will not follow the Labour party’s advice to spend more, borrow more and put our economic credibility at risk. We will hold our course to cut Labour’s deficit, rebalance our economy and forge a path to sustainable growth. We will make the investment decisions needed to ensure that our economy is well placed to compete in the decades ahead. Tackling today’s challenges and investing in tomorrow’s future—that is what this Budget is about and what this Government are about, and we will build a country that we can be proud of again.
John Woodcock
I am sure that businesses will now see a great opportunity to set up offices at the top of Mickle fell as a result of this great tax cut.
Ministers are making decisions that will make our economy more fragile and that expose where their true priorities lie.
Justine Greening
The hon. Gentleman said that he supported £6 billion of the £9 billion of spending cuts in the Department. Which £6 billion does he support? Will he give us a summary?
John Woodcock
I will be happy to, within the constraints of time, but I want to try to keep to the same time as the Secretary of State took. If you will allow me to go slightly over that time, Mr Speaker, I can do so.
We have not opposed £3.36 billion being taken from the Highways Agency’s budget, out of the total reduction of £3.86 billion. We have not opposed £1.73 billion being taken from the Transport for London budget, which represents the full reduction. [Interruption.] The Secretary of State looks surprised. If she had paid a little more attention to what we have been saying over the past several months, she might not have had to ask the question now.
We have not opposed £794 million of the road maintenance budget out of total reductions of £1.23 billion or £528 million of cuts from the Network Rail passenger budget out of total reductions of £1.29 billion. We have not opposed the efficiencies that are being made to the Crossrail budget, or the £231 million from the local authority major transport teams out of a total reduction of £731 million. The Secretary of State asked for the list and has got it. I hope she is happy.
John Woodcock
I will not give way on that point, because I want to make progress.
I am afraid that the priorities the Government and Secretary of State have set out are not—
John Woodcock
As the right hon. Lady is the Secretary of State, I will give way once more, but I want to make a little more progress.
John Woodcock
I am glad the Secretary of State asks me that. I would expect a little more humility from the Government given that on their own plans they are set to borrow £150 billion more. We strongly believe that the cuts we do not accept represent a false economy that will act as a drag on the nation’s growth and stop us returning to the prosperity that this country desperately needs.
The Government’s priorities are not with the family who are struggling to make ends meet, with the small business that wants to create more jobs or with the employee who wants to be able to afford to turn up to work in the morning.
John Woodcock
The hon. Gentleman seems to have more information about how the scheme will work than either me or the Secretary of State, who does not seem to know how exactly motorists will be clobbered with tolls.
Who, if anyone, will police tolls? Will contracts stipulate that tolls must be removed when improvements have been paid for? How will we avoid people being driven off the motorways and dual carriageways and back into the communities and road networks that the toll roads were built to relieve?
In addition to the fear of massively increased tolling, there could be a further, lasting sting in the tail for motorists from this Budget. Buried on page 70 of the Red Book are plans for what can be described only as a new stealth tax hike on motorists. The Government say they will consider reforming—by which they clearly mean “increasing”—vehicle excise duty. Ministers need to come clean on how much extra they plan to squeeze out of motorists through that new stealth tax increase. They also need to say what it will mean for motorists who behave responsibly and opt for fuel-efficient vehicles.
On a less testing note on the subject of sustainable road travel, let me say that the Opposition welcome the £15 million the Chancellor has found to help to make London’s roads safer for cyclists. The spate of injuries and deaths in the capital has been truly appalling, and the Opposition fully support the campaign, led by The Times, for significant change. As the Secretary of State will know, however, the Budget contained only this one-off grant for London—the fact that there is an upcoming mayoral election is a complete coincidence, I am sure. Labour has committed to reserving a portion of the roads budget to dedicated cycle facilities on roads across the country, not just in the capital. Will she make a similar commitment?
If transport on the ground is up in the air with the uncertainties created by the Government, transport in the air, aviation, remains at serious risk of being grounded—if Members follow me. On aviation capacity, the Government still do not know—and we still do not know after the Secretary of State’s speech—whether she is taking off or landing.