Infrastructure (Financial Assistance) Bill
9:10 pm
Nicholas Dakin (Scunthorpe, Labour)
I am pleased to follow my right hon. Friend Mr Raynsford, who, as always, spelt his argument out cogently and with great clarity. My hon. Friend Hugh Bayley said, very precisely, that the Bill is a small but necessary step. He is right, but so is my hon. Friend Stella Creasy, who said that the legislation is an inadequate response to the economic crisis. How right she is.
The Government inherited an economy that was growing, and they now preside over one that is shrinking. We have the third quarter of negative growth, a double-dip recession made in Downing street, and we are one of only two G20 countries in such a parlous position. Part-time working is at its highest level since 1992, and unemployment among women and young people is at an all-time high. My hon. Friend Roberta Blackman-Woods made clear the waste and loss that can follow if young people do not get work when they leave the education system—a waste not only now but into the future.
Due to a lack of growth, the Government are on target to borrow more in five years than the Labour Government borrowed in 13 years. The economy badly needs growth now, and that requires demand. When I asked small businesses in my constituency what they needed, I was surprised by their response—a cut in VAT to stimulate retail sales. Labour’s policy to reverse last year’s damaging VAT rise for a temporary period would give spending an immediate boost and put cash in people’s pockets—£450 for a couple with children. People would spend that money in the high street, boosting businesses at the same time as helping struggling families and pensioners. Labour’s other policy of a one-year cut in VAT to 5% on home improvements, repairs and maintenance would also boost home owners and small businesses, and stimulate demand in the economy.
Large businesses and companies in my constituency say that infrastructure projects need to be brought forward as that would stimulate demand in the economy. They include Clugston Construction, which this year celebrates 75 years of business, and Tata Steel, which sadly had to lose 1,200 jobs this year owing to a collapse in demand for construction steel in this country, as well as in the rest of the world.
The problem is not new; it has been around for a long time. The other day, I was reading Hilary Mantel’s
“Bring up the Bodies”, which has been shortlisted for the Man Booker prize. I was struck by Thomas Cromwell, musing on the situation:
“England needs roads, forts, harbours, bridges. Men need work...honest labour could keep the realm secure. Can we not put them together, the hands and the task?”
Thomas Cromwell’s fictional words, through the voice of Mantel, grasp the issue. [Interruption.] We may not need forts now, but we need all those other things. Having listened to what hon. Members have said, there are many projects across our constituencies where we could put hands to work and make things happen.
Local people who work in the construction industry tell me that work is drying up. It has been tough in the real world in the past two years, but as Building Schools for the Future projects are completed and run out, and even supermarkets slow down their investment in new projects, the order books are emptying. Sadly, many construction companies have gone out of business. That is what is happening in the real world owing to the lack of demand.
As a leading local industrialist said to me at the weekend, it is time to get on with things. He is a practical man. He said, “It’s time to get the diggers in the ground and cranes on the skyline. What we need is work. We need jobs now.” Bringing infrastructure projects forward and getting jobs done that need to be done will put cash in the pockets of construction workers, who will spend that money in the real economy and therefore provide jobs for other workers. As Thomas Cromwell said:
“Can we not put them together, the hands and the task?”
Putting the hands and task together is a win-win.
The Government’s record on infrastructure is not yet a pretty one. I hope the Bill helps bring projects forward and that it is not just another re-announcement. Let us look at the record. None of the road building projects announced in the autumn statement package have begun construction. The value of orders for infrastructure investment made by the private sector fell by a fifth—from £7.3 billion to £5.9 billion—from 2010 to 2011. Output in the construction industry fell by 3.9% in the second quarter of 2012. The number of house building starts is down since the start of 2011.