Private Finance Initiative

Oral Answers to Questions — Treasury – in the House of Commons at 12:00 am on 13th July 1995.

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Photo of Edward Garnier Edward Garnier , Harborough 12:00 am, 13th July 1995

To ask the Chancellor of the Exchequer what contribution he expects the private finance initiative to make to the provision of capital for infrastructure projects. [32556]

Photo of Michael Jack Michael Jack , Fylde

My right hon. and learned Friend the Chancellor of the Exchequer announced in his Budget speech that contracts leading to £5 billion of capital investment are due to be signed in 1995 under the PFI. He announced a further £1 billion of projects in January.

Photo of Edward Garnier Edward Garnier , Harborough

Will my hon. Friend confirm that the PFI is available across the national infrastructure and is available to every Department of State? Will he comment on the lamentable failure of the Opposition to come to grips with that excellent initiative?

Photo of Michael Jack Michael Jack , Fylde

My hon. and learned Friend precisely states the situation. The fact that we can post £5 billion-worth of new economic activity at a time when the Opposition are criticising us on investment shows the true effectiveness of our economic policy. I note that, with regard to private finance in the Prison Service, on the one hand the Opposition call for tougher measures on law and order and then announce that in principle they are against private money building new prisons.

Photo of Stephen Timms Stephen Timms , Newham North East

The Minister will be aware that the Belgian high-speed rail link to the channel tunnel is being built and that the French high-speed rail network has been operating for a number of years, yet in Britain this week fundamental questions have been raised about whether our high-speed rail link to the channel tunnel can be funded. In those circumstances, does the Minister agree that the Government's priority should be investment in infrastructure before the abolition of capital gains tax and inheritance tax?

Photo of Michael Jack Michael Jack , Fylde

What is fundamental is that the high-speed channel rail link—a project valued at some £2.7 billion—is being actively competed for; the four original bidders are now down to the final two. Private sector companies want to make this investment and they will do so, to the benefit of our transport infrastructure.

Photo of Mr John Wilkinson Mr John Wilkinson , Ruislip - Northwood

Does my hon. Friend agree that the crossrail project offers one of the best prospects for private finance and is of particular importance for the regeneration of the economy of London and the south-east? Will he and his colleagues in government do everything possible to facilitate it?

Photo of Michael Jack Michael Jack , Fylde

My hon. Friend is right to point out how private capital can further develop London's transport infrastructure. I add to his joy on that, because we also have PFI help for 100 extra trains on the Northern line. Again, that is an example of how much-needed public investment in infrastructure has been achieved under this remarkable initiative.