Infrastructure (Financial Assistance) Bill

Sajid Javid Excerpts

Monday 17th September 2012 Commons Chamber

[The Economic Secretary to the Treasury (Sajid Javid)]

I thank the shadow Financial Secretary to the Treasury, the hon. Member for Nottingham East (Chris Leslie), for his warm words of welcome. This has been an excellent debate. It has highlighted the areas on which we agree—the importance of safeguarding the flow of investment into this country’s critical infrastructure, for example—as well as those on which we differ. I would like to thank those on the Labour Front Bench for backing the Bill so that we can get on with the important investment that this country needs. There have been some excellent contributions to the debate—I have counted 22 of them—and I will comment on them shortly.

First, I want to make one critical point. As my right hon. Friend the Chief Secretary to the Treasury said, the action that we are taking, which this legislation makes possible, is possible only as a result of the decisive action taken by this Government to deal with the economic mess that we inherited. In the decade before we came to power, Government debt had risen from £346 billion to over £900 billion; that represents almost a tripling of the national debt. That created the conditions for the severe economic crisis that we are all now suffering from, and mortgaged the future for our children and grandchildren.

Because of the lack of a credible plan from the Labour party, on general election day in 2010, 10-year gilts were 3.8%—the same as those of Italy and Spain. Because of the tough decisions we have taken, however, and the responsibility and credibility of our long-term fiscal plans, the UK is now a safe haven from the global debt storm. The 10-year gilt interest rates are now 1.9%—less than half what they were when we came to power. We are now in a position to unlock private sector infrastructure investment only because of the immense strength of the UK Government’s balance sheet.

Opposition Members seem to be under the illusion that this credibility has come at the expense of infrastructure investment, so let me clear up that misconception. We are spending more on transport and communications infrastructure than the previous Government decided to spend at the height of the boom. That is despite the fact that they ran deficits every year for eight years, including when times were good. Now that Britain is restrained and is responsible in the face of a global debt storm, we are nevertheless delivering the public investment that Opposition Members say they want to see, while we are making tough decisions and taking control of spending, such as welfare, where we can.

We announced £18 billion in retail investment in the spending review and a further £9.4 billion of infrastructure enhancements in the summer. In the Budget, we announced that there will be 10 super-connected cities across the UK that will enjoy ultra-fast broadband and high-speed wireless connectivity. On top of that immense investment, we now propose to unlock potentially billions of pounds of further investment from the private sector.

Let me deal with Back Benchers’ contributions to the debate. I start with one of the most thoughtful speeches, from my hon. Friend the Member for Reigate (Mr Blunt). This was the first time that I, as a new Member of Parliament, have heard him speak from the Back Benches. He made an extremely thoughtful speech, which was a great contribution to the debate. He suggested using the facility put in place by this Bill to invest in prisons, and I hope that that will take place. He also drew attention to the economic credibility that the Government have won, as did my hon. Friend the Member for Weaver Vale (Graham Evans).

A number of hon. Members referred to particular projects in their constituencies. For example, my hon. Friend the Member for Weaver Vale mentioned the Mersey Gateway project, while my hon. Friend the Member for Halesowen and Rowley Regis (James Morris) mentioned the Birmingham international airport, and the right hon. Member for Salford and Eccles (Hazel Blears) raised the issue of MediaCityUK and superfast broadband. My hon. Friend the Member for Witham (Priti Patel) mentioned roads in Essex as another example. Strong cases were made, and they were all duly noted. If the promoters of these projects have not already done so, they should start the discussion immediately with the UK infrastructure team in the Treasury.

There were a number of other good contributions. My hon. Friend the Member for Suffolk Coastal (Dr Coffey) raised an important point about how Labour’s investment in infrastructure paid very poor attention to value for money.

Some Labour Members made some interesting contributions. The first, from the right hon. Member for Wentworth and Dearne (John Healey), was thoughtful, and I welcome his support for the Bill. His experience as a former Minister shows. I believe that he was once a Housing Minister—he raised the issue of housing—and also a Minister in the Treasury. Indeed, I think he once held my job. The hon. Member for Coventry North West (Mr Robinson), who is not in his place, also raised the issue of housing. It was strange that he raised that subject—I think he was talking about whether the Bill should back investment in housing, but financing housing is something he has great experience in.

The right hon. Member for Salford and Eccles raised a number of important issues; I am pleased that she welcomed the Bill. The hon. Member for Derby North (Chris Williamson), who I do not see in his place, made a speech that would have fitted well with a Labour conference in the 1970s. For a moment I thought that I was listening to Derek Hatton. The speech made by the hon. Member for Scunthorpe (Nic Dakin) towards the end of the debate was in a similar vein.

The hon. Member for York Central (Hugh Bayley) asked a number of good questions. He asked, for instance, whether flood defences would be included. I am advised that there is no reason for them to be excluded, and we envisage their being part of the infrastructure that is being considered. I hope that that is helpful to the hon. Gentleman.

My hon. Friend the Member for Portsmouth North (Penny Mordaunt) made some excellent points about Portsmouth’s infrastructure needs, which were duly noted. The hon. Member for Glasgow North East (Mr Bain) did a very good job of following his Whip’s brief, but he asked one interesting question: where were the members of the Scottish National party? I was asking myself that as well, especially given that the Bill is UK-wide and is intended to support infrastructure throughout the United Kingdom, including all the devolved regions. It was surprising that we did not hear much from SNP members. I had thought that they would be here today, fighting for the interests of their constituents.

[John Healey]

Given the absence of Scottish and Welsh nationalists, may I ask the Minister whether decisions on projects in Scotland and Wales will be made in Scotland and Wales?

[Sajid Javid]

All decisions covered by the Bill will be made by the United Kingdom Government: by the UK Treasury, or by relevant Secretaries of State. However, when projects clearly relate to devolved regions, the Government will work very closely with the relevant Departments in those regions.

The hon. Member for Walthamstow (Stella Creasy) made a thoughtful speech containing some very good points, but I must take issue with one of her closing comments. I believe she said that one of the problems with the Bill was that it placed restrictions on spending. It does place restrictions on spending, because this Government are very keen on restrictions on spending. The previous Government lost sight of that, which is what got us into this mess in the first place.

[Stephen Pound]

Let me add my voice to those of Members who have already congratulated the Minister.

The Minister has rightly called the House’s attention to the absence of members of certain political parties. May I remind him that the Democratic Unionist party, one of the parties representing Northern Ireland, has a strong interest in the Bill, although much of the material that we are discussing today is devolved? The issue of infrastructure development in Northern Ireland is essential. Will he assure me, and silent members of the Northern Ireland parties—unusually silent—that he will continue that dialogue?

[Sajid Javid]

I agree with the hon. Gentleman: they are unusually silent, although they are welcome to intervene on my speech. However, I can tell the hon. Gentleman that people in Northern Ireland should be assured that the Bill is intended to help infrastructure investment throughout the United Kingdom. I agree with him that there are often some special cases in Northern Ireland, which suffers from a relatively higher level of unemployment than other parts of the UK. I look forward to receiving applications from the Province.

Two issues—two myths, I should say—arose again and again in the speeches of Labour Members. The first—

[Geraint Davies]

Will the Minister give way?

[Sajid Javid]

Yes, for the last time.

[Geraint Davies]

Are the Government going to become involved in the brokering of deals and the forming of partnerships with the private sector? I am thinking specifically of easyJet’s move to Cardiff airport and its discussions with First Great Western about the provision of more passenger links to ensure that when the two come together it makes sense for everyone. Are the Government willing to become involved in that?

[Sajid Javid]

The purpose of the Bill is to establish a structure to provide guarantees for credit-worthy projects in the private sector. Of course the Government will work very closely, step by step, with the private-sector promoters of each of the projects, and if one of the companies feels that it has a viable project that the Government should consider, it will be encouraged to discuss it with the Treasury. A specific Treasury team called Infrastructure UK, which was set up a couple of years ago, is full of specialists who understand infrastructure and have a great deal of experience. It will be keen to look at every single project, and if the hon. Gentleman has one in mind he should please present it as soon as possible.

The two myths that I heard from the Opposition—

[John Healey]

I am very grateful to the Minister for giving way; he is answering the questions that come up. Will Infrastructure UK look at every project and proposal for these borrowing guarantees?

[Sajid Javid]

It will consider every project that comes its way, but that does not mean it will agree to support every one. However, it is willing to look at every project and to come back with an answer on each.

[Priti Patel]

Can my hon. Friend confirm for the Opposition that the Infrastructure UK team has contributed a great deal more than the euro preparation team that Labour created?

[Sajid Javid]

As always, my hon. Friend is absolutely right. [Interruption.] I must plough on.

On a number of occasions the Opposition suggested that this Government were spending less on infrastructure than they would have if, by some miracle, they had won the last election. Let us look at the facts. After the last election, the right hon. Member for South Shields (David Miliband) said in his leadership hustings bid that they were going to halve the share of national income going into capital spending. Plans presented by Labour to this House at their last Budget, in March 2010, showed net investment falling from £50 billion in 2009 to a projected £23 billion by 2014-15, a figure lower than the one this Government have planned.

We heard from the Opposition about Britain’s growing debt. However, they forget, conveniently, that when this Government came to power, our budget deficit was 11% of GDP, higher than any other nation in the G7. According to the Institute for Fiscal Studies, if the plans of the right hon. Member for Edinburgh South West (Mr Darling) had been implemented, this country’s debt would be £200 billion higher than under the plans of this Government. They just do not get it—more spending, more borrowing, more debt.

Members on both sides of the House have recognised the scale of capital required to realise some major infrastructure investments.

[Mr Binley]

My hon. Friend will, I hope, remember that I posed a number of questions to him. Does he intend to write to me, or to forget those questions?

[Sajid Javid]

I will absolutely be writing to my hon. Friend. The questions he raised were characteristic of him, showing the experience he has brought to this House from the business sector. They were just the right type of thoughtful questions.

[Hugh Bayley]

rose—

[Sajid Javid]

Please sit down; sorry.

The Bill contains measures that will support growth, jobs and families. It will support the UK’s infrastructure sector by providing access to finance for financially credible, high value for money projects. It will unlock the investment that the UK needs to make it one of the best places in the world to do business. I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Infrastructure (Financial assistance) Bill (programme)

Motion made, and Question put forthwith (Standing Order No.83A(7)),

That the following provisions shall apply to the Infrastructure (Financial Assistance) Bill:

Committal

1. The Bill shall be committed to a Committee of the whole House.

Proceedings in Committee, on consideration and Third Reading

2. Proceedings in Committee, any proceedings on consideration and proceedings on Third Reading shall be taken in one day in accordance with the following provisions of this Order.

3. Proceedings in Committee and any proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.

4. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

Programming committee

5. Standing Order No. 83B (Programming committees) shall not apply to proceedings in Committee, any proceedings on consideration or proceedings on Third Reading.

Other proceedings

6. Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or any further messages from the Lords) may be programmed.—(Mr Evennett.)

Question agreed to.

Infrastructure (financial assistance) bill (money)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Infrastructure (Financial Assistance) Bill, it is expedient to authorise—

(1) the payment out of money provided by Parliament of expenditure incurred by the Treasury, or by the Secretary of State, in giving, or in connection with giving, financial assistance to any person in respect of the provision of infrastructure; and

(2) the payment out of the Consolidated Fund, in certain cases, of expenditure which would otherwise be paid under the Act out of money provided by Parliament.—(Mr Evennett.)

Question agreed to.