National Infrastructure Plan — Statement

– in the House of Lords at 3:38 pm on 4th December 2013.

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Photo of Lord Deighton Lord Deighton The Commercial Secretary to the Treasury 3:38 pm, 4th December 2013

My Lords, with the leave of the House, I should like to repeat in the form of a Statement an Answer given by the Chief Secretary to the Treasury today in the other place. The Statement is as follows:

“Mr Speaker, as honourable Members will be aware, this June, I made a Statement to the House laying out the Government’s long-term plans for UK infrastructure, in which I set out our plans to invest more than £100 billion of taxpayer’s money over the next decade towards improving our transport networks, energy networks, digital networks and other specific infrastructure projects crucial to our civic life.

This morning, the Government published the latest updates of the national infrastructure plan, or NIP, and the investment pipeline. First, the documents provide an update on the projects that have been delivered to date, including the completion of 353 flood and coastal erosion schemes; 36 transport projects; major station upgrades, as we have seen at Kings Cross; and 10,000 houses being given access to superfast broadband every week.

Secondly, the documents update our plans to further improve delivery. The updated pipeline provides the most comprehensive overview of planned and potential infrastructure investment ever produced, which gives investors the long-term clarity and certainty they need to put their money into our infrastructure.

The NIP also includes changes around legal and planning practices, including reforms to judicial review.

Thirdly, the documents update some of the details of our last infrastructure plan, including: changes to energy strike prices reducing slightly support for onshore wind and solar; increasing investment in offshore wind; meeting our growth commitments as cost-efficiently as possible; decisions on the option of the renewable heat incentive regime; changes to specific transport schemes, such as our decision not to toll the A14; to provide new investment in the A5; and to contribute £30 million to the garden bridge in London, as well as other important developments, such as our plans to double our corporate asset sales target.

Finally, today’s publication lays out the commitment, made today by a group of insurers, to work with government and regulators and invest £25 billion in UK infrastructure over the next five years. I am sure that honourable Members will agree that this represents a massive vote of confidence in the UK economy.

It also draws attention to the new agreement, signed with Hitachi and Horizon this morning, which commits us in principle to offering a guarantee for their nuclear power station at Anglesey. I am sure that honourable Members who have had a chance to look through the document will recognise that this is real evidence that we are making real progress on delivering an infrastructure fit for our country’s future.

The NIP is a plan that demonstrates a long-term vision for our energy, transport and digital networks. It is a plan that is helping to secure long-term investment. It is a plan that will lead to sustainable, strong, long-term growth. As such, I look forward to the honourable Member welcoming it with open arms and congratulating us on our progress”.

That concludes the Statement.

Photo of Lord Adonis Lord Adonis Shadow Spokesperson (Treasury) 3:41 pm, 4th December 2013

My Lords, I welcome one part of the Statement—the decision to abandon the hare-brained scheme to levy tolls on the A14, which would have led to a mass diversion of trucks and cars on to Cambridgeshire villages.

However, does the Minister agree that the A14 episode illustrates why the Government are delivering so little real infrastructure as they announce ever more grandiose targets and plans? The upgrade of the A14—a vital growth corridor from the east coast ports to the Midlands—was shovel-ready in 2010. One of the first acts of the coalition Government was to cancel it, along with a string of other major road schemes, the expansion of Heathrow and 715 school-building schemes which were all ready to go. Last year, Ministers tried to resuscitate the A14 as a toll road with magic money. Now that scheme has collapsed, we are back to where we were in 2010, except that the costs have gone up by £200 million.

Is this not the story of infrastructure non-delivery on roads, airports and energy, and even more on housing, where completions are at their lowest level since the 1920s? Does this not explain why the ONS says that infrastructure work is down 3.7% in the past year after a fall of 10% in 2012; why the World Economic

Forum ranks the UK 24th in infrastructure behind Oman and Barbados; and why today’s Treasury press release on the national infrastructure plan heralds, as one of its greatest advances, the spending of £10 million on new light bulbs in NCP car parks?

Photo of Lord Deighton Lord Deighton The Commercial Secretary to the Treasury 3:43 pm, 4th December 2013

I thank the noble Lord for bringing his experience to bear on what is a very important subject. I do not want to go through the normal procedure, whereby the Government lay out their plan for infrastructure and then the Opposition say that nothing much is happening. It is much too important for that. Remember that there was no national infrastructure plan before this Government came into office in 2010. All the reasons around any deferral of capital expenditure are totally a function of the economic mess that the previous regime left this country in.

Noble Lords:

Oh!

Photo of Lord Deighton Lord Deighton The Commercial Secretary to the Treasury

One can laugh but it is as simple as that. Over the past three years, we have been trying to fix that problem—to stabilise the fiscal position and to push across money into vital capital schemes where we can afford it. That is what happened in the Autumn Statements in 2011 and in 2012. All the schemes that we laid out then are absolutely on timetable in terms of the announcements made at those points.

My right honourable friend the Chief Secretary went through the entire list of things that are currently being delivered, but the purpose of this plan is to break us out of the short-term cycle. I do not want us to be 27th on that list of countries: we are there because of 30 to 40 years of underinvestment. We, on both sides of the House, need to fix this together by promoting a focus on infrastructure to the top of the priority list for our economic strategy. We need to continue, through Government after Government, to prioritise in the right way; to get the systems working so we choose the right projects; to improve our capability so we deliver them effectively; and to make sure that this country is modernised in the way it deserves.

Photo of Lord Bradshaw Lord Bradshaw Liberal Democrat 3:45 pm, 4th December 2013

My Lords, I will give you a change from criticism. This plan is one of the first attempts to bring our infrastructure up to date but—there is a big “but”—we do not have the trained people to build power stations, develop the railway or set up the broadband. It is essential that we put some real life into the provision of engineering apprenticeships to provide the skilled people we need. I ask the Government to focus the necessary attention, once again, on our poor record in engineering training.

Photo of Lord Deighton Lord Deighton The Commercial Secretary to the Treasury

I thank my noble friend for his praise for the plan. It is important to focus consistently, year after year, on improving our capability to deliver infrastructure. I absolutely accept the importance of ensuring that we have a pipeline of engineering capability, brought right through from schools—and a renewed focus on STEM subjects—universities and research establishments, to enable us to deliver these projects effectively.

Photo of Baroness Meacher Baroness Meacher Crossbench

My Lords, I speak as somebody who studied a bit of economics a very long time ago. All Ministers understand as well as I do that what happened in 2008 was, in fact, a banking crisis that began in the United States and affected the western world. We happen to have some big banks here and it therefore caused us some difficulties. It is not fair to neglect, over and over again, where this all started.

Photo of Lord Deighton Lord Deighton The Commercial Secretary to the Treasury

I thank the noble Baroness for broadening the perspective of the debate. While I accept that the banking crisis was an important contributor, it is clear to me, from my time in the Treasury, that the spending planned through those last few years created significant problems for this country.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Justice)

My Lords, what proportion of the sums involved in the schemes announced today, many of which are recycled, do the Government expect to be spent in the north-east, the region with the highest levels of unemployment—in particular youth unemployment—in the country?

Photo of Lord Deighton Lord Deighton The Commercial Secretary to the Treasury

I am afraid I do not have the regional breakdown at my fingertips. However, if the noble Lord would care to go into the national infrastructure plan website, there is a map where you can drill down and see the details of every planned project, region by region.

Photo of Lord Walton of Detchant Lord Walton of Detchant Crossbench

My Lords, following the question asked by the noble Lord, Lord Beecham, do the plans include the long, long-awaited dualling of the A1 in north Northumberland?

Photo of Lord Deighton Lord Deighton The Commercial Secretary to the Treasury

That particular project, along with five or six others, is the subject of a feasibility study to determine the right solution. Next year, when all those studies are complete, we will make a decision to go ahead with the proposed solution.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

My Lords, will the Minister confirm that, had the Government stuck to Labour’s spending plans, capital expenditure would have been cut by considerably more and that, in coming into Government, we actually increased the allocation for capital expenditure? I congratulate him on his initiative, but how are the Government’s proposals to reduce the cost of electricity consistent with promoting offshore wind farms, which are the most expensive possible form of renewable energy and which will have to be paid for through people’s electricity bills?

Photo of Lord Deighton Lord Deighton The Commercial Secretary to the Treasury

With the first part of his question, as always, my noble friend forensically brings us to the detail. It is quite true that the Opposition’s plans for capital expenditure were lower than this Government’s. Subsequently, we switched current spend into capital spend in the Autumn Statements in 2011 and 2012, which further exacerbated this side’s advantage on investment. On my noble friend’s observation about offshore wind strike prices, the purpose of today’s announcement was to give the industry certainty in order to be able to get on with the building that we need, not only in nuclear but in wind and, over time, with the capacity mechanism, in gas. There are of course a variety of views about the speed at which we should decarbonise and the value of that, but the current status reflects our view on getting a diversified supply of energy.

Photo of Baroness Ford Baroness Ford Non-affiliated

My Lords, the Statement hints at changes to judicial review. As the Minister well knows, delivering infrastructure requires not just a plan —which we are pleased to hear about even though we, as a Government, plainly had a plan, whether he recognises that or not—but access to requisite finance and, critically, planning consent. The Government in their supposed wisdom decided not to go through with the infrastructure planning commission, which would have been a huge asset in delivering speedy planning consents for major infrastructure projects. Can the Minister say whether the changes to judicial review will accomplish exactly the same end?

Photo of Lord Deighton Lord Deighton The Commercial Secretary to the Treasury

I thank the noble Baroness for her intervention and for bringing her experience to bear on this. The whole idea of the judicial review changes is to make sure that, on all matters relating to national infrastructure, we get through the process more quickly, where it is appropriate, and fast-track them. That is consistent with what she is discussing.