Department for Transport

Gareth Bacon Excerpts

Wednesday 25th June 2025 Commons Chamber

[Gareth Bacon (Orpington) (Con)]

It is a pleasure to respond on behalf of His Majesty’s Opposition. I thank the hon. Member for Brentford and Isleworth (Ruth Cadbury) for securing this important debate.

Transport has always been about more than how we get from A to B. Infrastructure is the connective tissue of our economy, and investment in infrastructure can propel economic growth. I think the whole House would agree with that statement. In that light, I welcome the fact that the spending review confirmed that capital investment, excluding spending on HS2, will increase at a real-terms annual growth rate of 3.9% between 2025-26 and 2029-30. The Government have outlined where much of this capital will be directed in the spending review and the 10-year infrastructure plan, and I am pleased that many of these projects align with the commitments set out in the previous Government’s Network North plan. I look forward to the publication of the infrastructure pipeline in July to see further information.

[Wendy Morton]

Although some projects in the Network North plan have been transferred over and continued, Aldridge train station was not one of them. It was funded through the city region sustainable transport settlement, so does my hon. Friend share my disappointment for my communities that it has been scrapped by Mayor Parker in the West Midlands?

[Gareth Bacon]

My right hon. Friend is a doughty champion for her Aldridge constituents. I share her disappointment. It is not the first time I have heard her raise that disappointment in this Chamber in the past few months and—

[Wendy Morton]

It will not be the last.

[Gareth Bacon]

No, I suspect it will not be the last time I hear it.

There will be occasions when Labour Members fail to read the previous Government’s announcements, so for their benefit let me point out how the funding sums promised to authorities by the previous Government have been closely replicated, in some cases identically replicated, by those promised in this Government’s spending review announcements. For example, for West Yorkshire, £2.115 billion was promised in 2023, and £2.115 billion in 2025; for Greater Manchester, £2.47 billion was promised in 2023, and £2.47 billion in 2025; for the Liverpool city region, £1.58 billion was promised in 2023, and £1.58 billion in 2025; and for West Midlands, £2.65 billion was promised in 2023, and £2.4 billion in 2025. I could go on, but Members will recognise the point. The estimates and the spending review are not new and they are not innovative.

Turning to the substance of the Government’s plans, I want to take this opportunity to examine some of the assumptions underpinning this spending review. I am afraid those assumptions are flawed. The first relates to the supposed benefits of nationalisation. The spending review anticipates that the Department for Transport’s resource departmental expenditure limits, which is its day-to-day revenue spending, will fall by 5% in real terms during the next three years. I do not dispute that it is possible to make savings in the Department for Transport, but I do question the means by which the Government expect to deliver those savings. The spending review claims:

“Resource DEL funding falls in real terms over the period, primarily driven by a declining rail passenger services subsidy as passenger ridership and revenue continue to recover post COVID-19 and efficiencies and savings are made through public ownership.”

This is another entry in the ever-growing list of benefits that Labour claims nationalisation will deliver—lower fares, no strikes, better services and now lower spending.

Let us be clear: this is political daydreaming, not economic reality. The first train operating company to be brought into public ownership by the Government was South Western Railway, and we have already seen unexpected costs with its rolling stock. Credible reports show that mistakes made by the Government will cost the taxpayer an anticipated £250 million more. The Transport Secretary herself has admitted that nationalisation is not a silver bullet. She is right, but the narrative presented in the spending review and these estimates continues to rely on assumptions that remain unproven.

Labour’s ideological plan to nationalise even the best performing rail operators will benefit neither passengers nor taxpayers. Beyond the loss of private sector investment, nationalisation also poses a deep structural risk, because under a single nationalised employer, there will be enormous pressure to harmonise terms and conditions across the entire railway workforce. That may sound harmless or even desirable, but in practice it means the trade unions openly calling for levelling up pay, benefits and working practices to the most generous standards currently found in the system, and they have wasted no time in doing that. I am sure that their members will be delighted by that, but for the Government, the taxpayer and the fare payer, that has one inevitable outcome: rising costs, almost certainly with no corresponding rises in productivity. Far from delivering savings, this sets the stage for spiralling costs, renewed industrial action and even poorer services for passengers.

Turning to the wider economic picture, the Government claim their infrastructure plans are

“creating the conditions for sustainable economic growth in communities throughout the UK.”

However, the truth is that the greatest barrier to growth in this country is not a lack of spending. How could it be when current levels of spending are just about the highest in our entire peacetime history? No, the greatest barrier to growth is the economic mismanagement of the Chancellor of the Exchequer and this Labour Government.

We know that to fund this increased spending, Labour has not got control of the welfare bill, or reduced the size of the state, but simply changed the fiscal rules to allow billions more in borrowing. More borrowing is certainly not the long-term answer—this is not free money. Britain already spends almost £106 billion a year just to service its debt. For context, those payments outweigh what we spend to protect our country not just from foreign threats, but from crime at home, because our debt-servicing payments exceed the combined amounts allocated in the spending review to the Ministry of Defence, the Home Office and the Ministry of Justice. That is not just unsustainable, but irresponsible.

Higher spending and higher borrowing fuels inflation. It undermines growth and it blows a hole in the public finances. Of course, we all know how Labour plans to fill that hole—with higher taxes. Will the Transport Secretary urge the Chancellor to restore discipline to the public finances? I hope she does. Will she set a credible strategy to deliver efficiencies within the Department for Transport? I hope she does, so that come autumn we are not hit with yet another round of tax hikes.

I thank hon. Members for their contributions to this estimates debate, exploring their priorities for Government spending, including those Members who presented a vision with which I might disagree. We must acknowledge that the Government continue to offer more questions than solutions. In transport, we are presented with legislation to change bus policy without the funding that we know will be required to implement it properly. We await pipeline plans, railway reform papers and road investment strategies. When I was appointed shadow Secretary of State, I was initially faced by the former Transport Secretary, the right hon. Member for Sheffield Heeley (Louise Haigh), who constantly declared that she wanted

“to move fast and fix things.”—[Official Report, 10 October 2024; Vol. 754, c. 446.]

But nearly a year into this Government, it feels as though things are moving at the speed of a canal boat in reverse—very slowly and taking the country backwards.

The problem is not the current Transport Secretary, or the Under-Secretary of State for Transport, the hon. Member for Wythenshawe and Sale East (Mike Kane), who is responding to the debate today. The problem emanates from No. 10 and No. 11 Downing Street, because when the captain and the first officer of the ship have no ideas of their own, refuse to scan the horizon and see it for what it is, rather than what they would wish it to be, the journey ends up lost and directionless. For the good of the country, I hope that the Government will come to understand that real change means supporting British business and backing the everyday commuter. In the meantime, I fear these estimates are indicative of a Government who are not listening, failing to heed the warnings and will continue steering the ship of state straight towards the iceberg.

[Mr Deputy Speaker (Sir Roger Gale)]

I call the Minister.