River Forth Crossing

– in the House of Commons at 10:18 pm on 18th May 2009.

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Motion made, and Question proposed, That this House do now adjourn. —(Mr. Blizzard.)

Photo of Willie Rennie Willie Rennie Chair of Parliamentary Campaigns; Shadow Defence Minister 10:21 pm, 18th May 2009

It is a pleasure to open this debate. I have been seeking a debate on this subject for about five months, and I am delighted to have finally secured it, but it is disappointing that the issue has not moved on in those five months. We are still debating the funding of the crossing over the River Forth. This time five months ago, I was deeply concerned about the arrangements that were in place, and the worry that the issue was causing within the community in Fife. The slow pace of progress on this important issue is matched only by the increasing concern in the local community. The longer the process takes, the more that concern grows.

The Forth bridge was opened by the Queen in 1964, replacing the ferry from north to south. At the time, there were about 4 million crossings a year. Now the figure is about 21 million, which is much more than was expected when the bridge was constructed. That fivefold increase has put a huge strain on the bridge, leading to deterioration that means it cannot support the current volume of traffic for more than a further decade. If action is not taken to build a new crossing, we may be asking the Queen to return to launch a new set of ferries to secure the lifeline link between Fife and Edinburgh.

The bridge is a crucial part of the east coast transport artery. A blockage at Queensferry would have major consequences for the economy of the whole of Scotland. Many businesses locate in Fife because of the transport links to Edinburgh, Glasgow and the north, and because it has easy access to the east coast main line and the airport. Thousands of commuters have moved from Edinburgh to Fife to enjoy the benefits of living in Fife while maintaining their jobs in the capital. There is no doubt that the bridge is essential, no matter what some protesters say. We cannot do without the bridge at Queensferry.

The technical problem is that the hundreds of little cables that hold the bridge up are snapping. The deterioration is considerable, but the rate of decline is unknown, as the snapping was discovered only about four years ago. Current estimates are that the bridge has only another decade of life in it. Those estimates may change, however, as we get a better assessment of how the deterioration is advancing. If the deterioration is discovered to have slowed, the length of the life of the bridge will be longer. However, by the time that we know for sure how long the bridge has, it will be too late, so we need to construct the bridge as soon as possible.

Despite the need to start building the bridge in 2011, there remains considerable uncertainty about the funding package. I simply do not buy the assurances of the Scottish Government that they have the funding in place. Some may say that we do not need to have the funding in place until about 2011, but businesses crave certainty, especially in these difficult economic times. We need absolute certainty so that we can give businesses in Fife the confidence that they need.

On my tours of firms in Fife just after the new year and at Easter, I came across business after business that was deeply concerned about the crossing. They want an assurance that a bridge will be built, but they have not received one. Two years ago, John Swinney, the Cabinet Secretary for Finance and Sustainable Growth, agreed:

"However, the Government has yet to decide on the type of crossing that will be built and the method of financing. Those decisions will be made during the autumn"— of 2007—

"so that we can make early progress on the replacement crossing and avoid having a question mark over the existence of a Forth crossing in the future".

Those were eminently sensible comments from the Cabinet Secretary, but he has not followed through.

In 2006, before the Scottish parliamentary elections, the leader of the Scottish National party, Mr. Salmond, told the Edinburgh Evening News:

"If we have a new bridge,"—

I can just imagine the right hon. Gentleman saying that—

"a bond issue is definitely the way to do it. Compared like for like, bond issue against PFI, the savings would be in tens of millions, maybe even hundreds of millions. Because it's such an iconic project, that would have a wonderful take up and resonance not just in Scotland but worldwide."

That is the so-called patriotic bonds speech. I can almost hear the pipes and drums battering away as the right hon. Gentleman made those remarks. Two years on, not one patriotic Scot has paid a single penny for those bonds. It is not because we lack patriotic Scots, but because there is a lack of sensible thinking in the SNP. As a result, the SNP has not built one school, one road, one railway or one hospital since it came to power, through that method—absolutely nothing.

Photo of Stewart Hosie Stewart Hosie Shadow Chief Whip (Commons), Shadow Spokesperson (Treasury)

I obviously want to stick to the narrow remit of the debate, but the hon. Gentleman will understand that the ability to take money for bonds is not permitted at the moment by the UK Government. I am sure he will confirm that the First Minister has since made the position clear, and has described the project as

"publicly funded and procured through a conventional design and build contract."

The commitments to deliver the bridge on time are definitely there.

Photo of Willie Rennie Willie Rennie Chair of Parliamentary Campaigns; Shadow Defence Minister

I am highly sceptical about those remarks, because of the First Minister's hyperbole in 2006: he knew the rules—he knew the game—but he made those overblown, overcommitted comments, giving people confidence that things would happen. The hon. Gentleman should not be surprised that I do not have a great deal of confidence in the First Minister's remarks or in the Cabinet Secretary's comments that it would be through capital spending that the bridge would be constructed. The First Minister must give us a greater assurance, and must spell out the sacrifices required, which he has so far refused to do. If, over three years, we spend £700 million a year, there will be massive consequences for infrastructure projects—hospitals and schools—throughout Scotland during that period. Almost nothing else will be built. The First Minister, however, has refused to spell that out, and will not name the projects that will be cancelled. The hon. Gentleman will therefore understand why I do not have a great deal of confidence in the First Minister's remarks in that regard.

The Civil Engineering Contractors Association confirmed my belief and is deeply concerned about the situation:

"CECA is concerned that if the Forth Replacement Crossing is paid for during the course of the works Transport Scotland will find itself unable to do much else during the forecast...years of the bridge's construction. This would mean cutting many smaller projects designed to enhance the fabric and safety of the transport network across Scotland—schemes not on the same scale as the Crossing, but of equal importance to...local communities and local economies".

So CECA understands the consequences of the First Minister's commitment.

I do not wish this contribution to be dominated by Scottish Executive powers, so I shall move on to the reasons why we need to reach some kind of resolution. If the SNP refuses point blank to use the powers it has within its grasp, we must seek alternative methods. After two years in power, during which the SNP Government pondered their Scottish future strategy and eventually decided that that would not be possible, they have come cap in hand to the Westminster Government for additional support. That is a humiliating U-turn on which, unsurprisingly, the SNP has gone silent.

I give credit to Gavin Brown, a Conservative Member of the Scottish Parliament, for this analogy—there seems to be a dangerous game of chicken going on between the Westminster Government and the Scottish Government. Who blinks first? Who ducks out of the road of the oncoming juggernauts? Meanwhile, uncertainty in Fife and the east of Scotland grows. Because the stakes are so high, it is essential that we achieve a resolution to the problem as soon as possible.

Photo of Stewart Hosie Stewart Hosie Shadow Chief Whip (Commons), Shadow Spokesperson (Treasury)

When the hon. Gentleman describes a humiliating U-turn, I take it that he is describing the rather sensible proposal to go to the UK Government and ask to pay for a major capital project over a longer period than the two or three years for which the UK Government have allowed. I hope the hon. Gentleman will agree that that is not humiliating. It is a rather sensible way to repay the cost of a major capital project.

Photo of Willie Rennie Willie Rennie Chair of Parliamentary Campaigns; Shadow Defence Minister

Spreading payment over 20 years is not the way the Westminster Government usually work. I do not think most Governments would commit future Governments to such spending, so it is not particularly sensible. It is humiliating, because of the First Minister's overblown hyperbole in 2006 and 2007. That is why the SNP Administration should reflect on their ideological obsession with opposing public-private partnership. I am not a strong advocate of PPP, but I recognise that it is the only game in town. It is a way of delivering projects for our communities.

Rather than maintaining their ideological opposition, and their support for alternative methods, the SNP Administration should recognise that the bridge is more important than their ideology. Patriotic bonds sound great in opposition, but in practice they have turned out to be patriotic tosh. We need an alternative way forward.

I am almost pleading with the Westminster Government, who I believe have a significant responsibility. By offering £1 billion, they have accepted the principle that in the present circumstance they should help the Scottish Government out of their difficulties. The trouble is that that was not new money. About £500 million was from Crossrail, which was coming anyway, and other moneys were always designated as Scottish Government funds. So the Westminster Government were not assisting with the difficulty. None the less, I welcome the fact that they have accepted in principle that they should help the Scottish Government out of their obvious difficulties.

I plead with the Minister to come up with a new package of support so that we can get this essential bridge built across the Forth—some real new money that would resolve the difficulty. The Westminster Government have accepted in principle. Now it would be nice to see some real cash that could get us out of the present difficulties.

However, there is a second option that the Minister could consider. If the Government were to legislate quickly, we could introduce new borrowing powers. They have been considered by the Calman commission which has been set up by the Conservatives, the Liberal Democrats and the Labour Government. We are considering all the options—all the funding mechanisms—that could be given to the Scottish Parliament so that it might have the real powers of a real Parliament. If the Scottish Parliament did have them, the Scottish Government would be able to use the borrowing powers to spread the cost of building that massive bridge—about £1.7 billion to £2.3 billion—over quite a long period. There would be a benefit in giving the Scottish Government the necessary powers to deliver the bridge on time, because building it on time is the absolute priority.

On behalf of the east coast of Scotland, I am therefore pleading—almost begging—with the Westminster Government to help the Scottish Government out of their difficulties, either by coming up with real money that will make a difference to the construction and the costs, or by considering, through the Calman commission, the possibility of new powers for the Scottish Parliament, so that it might spread the cost of borrowing over a long period. Such an offer would bring certainty to the businesses and commuters of Fife, who need it, and avoid the childish game of chicken that seems to be taking place between the Westminster and Scottish Governments.

I hope that the Minister will consider those recommendations. The final points are really important to the east coast of Scotland, because we need that bridge and we need it soon.

Photo of Angela Eagle Angela Eagle The Exchequer Secretary, Member, Labour Party National Executive Committee 10:36 pm, 18th May 2009

I congratulate Willie Rennie on securing this important debate about funding for the new crossing over the Forth. I should clarify at the outset, however, that the Forth bridge is a devolved project, so its funding, as I think those listening to the debate will have worked out by now, is also a devolved matter. That said, everybody recognises the importance of the project and is keen to see it move forward.

The existing Forth road bridge, as the hon. Gentleman said, has served Scotland well. I was slightly horrified to realise that I am slightly older than the bridge, but I hope that I am managing to wear my age a bit better than the first crossing—although I think that there has been slightly less pressure on me.

The new Forth crossing is an ambitious project. Its estimated cost is £1.8 billion, and its planned completion date is, as the hon. Gentleman said, 2017. The project is designed to enhance the connections between the transport networks of south-east and central Scotland, improving journey times and contributing to the growth of the Scottish economy. Given the position of his constituency, I can see why he is keen to see the project go forward as quickly as possible. That is why the Government have taken steps to support the Scottish Executive in proceeding with the second crossing, but, because the Government recognise that this is a devolved issue, it is for the Scottish Executive to decide whether the new bridge is necessary, which designs they should follow and how to fund it.

I should like to make a couple of points about the UK Government's record of support for public sector investment in Scotland, a record of which we are very proud. Since devolution in 1999, the capital provision made available to the Scottish Executive has more than tripled from £1 billion to more than £3 billion a year today. That increase is enabling the Scottish Executive to modernise Scotland's infrastructure—its schools, hospitals, transport—and provide sound foundations for future growth and prosperity.

In the pre-Budget report, the Government announced that they would agree to the Scottish Executive bringing forward capital spending from 2010-2011 to 2008-09 and 2009-2010 as part of a major fiscal stimulus. In total, the PBR fiscal stimulus was worth about £2 billion for Scotland, including reduced VAT. I am pleased that the Scottish Executive announced in January that, through their Scottish economic recovery programme, they are accelerating £227 million of capital spending and supporting almost 4,700 jobs in the Scottish economy. Beyond that, we recently announced in the Budget a further £104 million for the Scottish Executive to strengthen investment in Scotland during the recession.

The Government are working with the Scottish Executive to deliver improved infrastructure and to tackle the recession. If they wish, the Scottish Executive can seek funding for private finance initiative projects from the Treasury's new PFI fund, to assist projects adversely affected by the current financial conditions to come to a successful conclusion. To date, the Executive have chosen not to do that; I suspect that that is due to an ideological objection to PFI. However, PFI is a potential route for the Executive.

As I have said, the UK Government are keen to support progress on the new Forth crossing, and we have been proactive in seeking innovative solutions. To be helpful, my right hon. Friends the Secretary of State for Scotland and the Chief Secretary to the Treasury initiated a meeting with the Scottish Cabinet Secretary for Finance and Sustainable Growth on 4 March to discuss methods of funding that the Scottish Executive might choose; the hon. Member for Dunfermline and West Fife was right to point out that that would bring nearly £1 billion to bear. The package was one of innovative flexibilities and it was designed to try to facilitate the development of the funding package.

Photo of Willie Rennie Willie Rennie Chair of Parliamentary Campaigns; Shadow Defence Minister

I recognise that there is some flexibility within the funding, but the biggest chunk of it was coming to the Scottish Government anyway. The Minister has accepted the principle that new funding should come from Westminster. Perhaps she will consider a new package.

Photo of Angela Eagle Angela Eagle The Exchequer Secretary, Member, Labour Party National Executive Committee

The principle that has been accepted is in respect of increased flexibilities, some certainty on end-of-year funding, the Barnett consequentials of Crossrail and a range of other things. We are trying to say in advance to the Scottish Executive that if they were to put together a package in such a way, there would be no doubt about some of the decisions on end-of-year flexibility, so they could act with confidence.

It is easy to say that the flexibilities contain no new money, but they account for nearly £1 billion of extra assistance. Obviously, £500 million of Crossrail-Barnett consequentials were going to Scotland anyway. It is perfectly reasonable of the Government to say that if the Scottish Executive wish to use that money to bring forward the second Forth bridge, they can do so. Some of the other parts of that package would have given certainty about the consequences of extra efficiency savings or the income from extra asset disposal. If we gave certainty, that money would, under the waiving of normal Treasury rules, be allowed to be put into the pot for funding the bridge. Saying that there is no new money is a possible analysis, but I dispute it.

Photo of Stewart Hosie Stewart Hosie Shadow Chief Whip (Commons), Shadow Spokesperson (Treasury)

Measures were certainly suggested, but they included end-of-year funding, as the Minister rightly said. To raise the funds required for the bridge on that basis would require the Scottish Government to underspend by about £275 million a year between now and 2016-17. That would be rather foolish. It would be much better if we could simply repay the cost of the bridge over a longer period.

Photo of Angela Eagle Angela Eagle The Exchequer Secretary, Member, Labour Party National Executive Committee

That is the hon. Gentleman's interpretation. In England, the Government require efficiency savings of 3 per cent. a year; in Scotland, I note, efficiency savings of only 2 per cent. are required. With a more radical look at efficiency savings, money for the bridge might be freed up. There are ways to help to put the funding together. My right hon. Friends' meeting with the Scottish Minister was about trying to give certainty in these circumstances. Efficiency savings often go straight back to the Treasury. Part of the reason for the meeting was to say that if such efficiency savings or asset disposals were successful, the Scottish Executive could keep the money. There are many areas where such pledges are not forthcoming from the Treasury; it was an attempt to be helpful. The Scottish Executive have called for borrowing against 20 years of future public funding by the Barnett formula. That is not a way that we can fund public expenditure across the UK, in Scotland or anywhere else: the systems do not work in that manner and it is not a viable option. We had the meeting to try at least to see whether we could explore a way forward, and all those issues remain on the table.

It is also open to the Scottish Executive to propose an asset disposal plan for assets such as land and buildings that are no longer required. I can reconfirm that in this context the Treasury would be happy to consider the Scottish Executive's retention of the increased receipts that would follow in order to fund the bridge. For example, disposing of 1 per cent. of the Scottish Executive's assets in the national assets register could yield £230 million to assist in providing the funding necessary to turn the bridge into reality. The Treasury also offered the Scottish Executive the flexibility to switch from resource budget provision to capital, which provides further options for choosing how a funding package for the bridge might be put together. The package that has been offered is potentially worth £1 billion, and it illustrates how it might be possible to take the Forth bridge forward, even within the genuine constraints under which we are all operating, which must not be underestimated.

It is therefore disappointing that the Scottish Executive have not come forward with practical proposals for adopting that or similar packages to fund the bridge. The UK Government remain ready to work in partnership with the Scottish Executive, and the proposals put forward by my right hon. Friends the Chief Secretary and the Secretary of State for Scotland remain on the table. We look forward to working with the Scottish Executive to find a way forward. There are clearly choices and priorities to decide on as regards the funding mechanism that will allow the bridge to proceed, and I hope that they will now be able to make some progress with that.

The hon. Member for Dunfermline and West Fife asked about the Calman report. It is not sensible for me to anticipate what may be in that report when it is published, much less, from the Front Bench in an Adjournment debate, to expand on what the Government's position on any such proposal might be. However, we know that the report is imminent, and we await its suggestions with interest.

I look forward to being around to see the second Forth bridge become a reality. I know that the hon. Gentleman has been a doughty advocate of that. I hope that the Scottish Executive can find a sensible way forward to put the funding in place, and we stand ready to assist.

Question put and agreed to.

House adjourned.