Are we building a highway to recovery or have our leaders put the brakes on?

RACHEL REEVES

THE Prime Minister has said that “getting construction projects off the ground is critical”. The Chancellor agrees, saying that “investing in Britain’s economic future is the priority of this Government” and that infrastructure investment was critical in “laying the foundations for future economic success”.

It should come as no surprise that the Government’s grand rhetoric has not been matched by grand actions. Dithering without a strategy for growth, they have cut too far and too fast, choking off demand and stifling the economic recovery. It is hardly surprising, then, that the Government is failing to attract the private sector funds it needs for its infrastructure investment.

It is worth remembering how the Government’s plan to target £20bn of pension funds for investment is going. The Chief Secretary to the Treasury (Danny Alexander) had to tell us that the Government were on course for just a tenth of their original target: £2bn out of £20bn raised.

The Government lack the policy framework to attract the long-term investment we need. Changes such as cuts to feed-in tariffs have had a detrimental impact on low-carbon investment. The CBI warned that such measures have been “damaging to business confidence, with implications not just for immediate investment decisions but for longer-term trust in government policy”.

It is no wonder that, last year, 50 companies, investors and industry bodies wrote to the Chancellor asking him to set a firm decarbonisation target for 2030 to give investors the confidence they needed.

On energy policy, the Institution of Engineering and Technology has been clear in saying “short-term uncertainty around UK energy policy… is very unhelpful and has the potential to… delay much-needed investment in all forms of energy infrastructure”.

According to a poll by KPMG, two-thirds of businesses believe that the UK’s energy and water infrastructure is unlikely to get any better because of uncertainty about the policy framework.

From the business community, we hear resounding frustration when it comes to the Government’s infrastructure policy. The Government do not seem to understand that businesses long for certainty when attempting to grow, employ more people and build for the future. The Government’s ideological decision to cut infrastructure investment further and faster is hampering confidence.

Small businesses, the engines of growth, are still waiting for the Government to roll out universal broadband. The Government abandoned the commitment from the last Labour Government to provide broadband for virtually every household by 2012. When business needs this Government, they are nowhere to be found.

Fundamentally, the Government fail to understand the need for a comprehensive and long-term plan to build Britain’s infrastructure for the 21st century.

That is why the Labour party has commissioned Sir John Armitt, chair of the Olympic Delivery Authority, to consider how long-term infrastructure decision making, planning, delivery and finance can be radically improved.

The Olympics taught us what we could achieve together as one nation. With the right leadership and the right investment, and by building consensus around the long-term projects that are essential for our energy, transport and housing needs, we can compete globally.

Labour is therefore making the case for a British investment bank, which would help to support long-term finance for British businesses so that they could take risks and grow. That is especially urgent given that net lending to businesses has fallen by a staggering £13.5bn over the last year.

Investing in infrastructure is about more than the Tarmac on our roads or the bricks that make up our schools. It is about creating skilled jobs for our youngsters. It is about supporting the entrepreneurs who want to export and grow their businesses.

It is about ensuring we can grow and operate across the globe. It is about being ambitious in the face of challenges, and attempting to build a better country for the next generation.

The Prime Minister said in his New Year address: “This is, quite simply, a government in a hurry. And there’s a reason for that. Britain is in a global race to succeed today.”

Whichever way we look at it, however, this Government do not seem to be in a hurry to invest in our country’s infrastructure. Indeed, they are spending £12.8bn less on capital investment than the amount specified in the plans that they inherited from the last government, which amounts to an eight per cent cut. A Government in a hurry? Hardly. Inertia is the watchword of this Government, at a time when what we need is action. It is time that we changed course.

GREG CLARK MP

THERE is little that can be said by Labour Shadow Ministers that should not start with an apology. Infrastructure, more than most issues, is an area of policy in which the present is haunted by the decisions of the past.

The Opposition talks about dither and delay, which is pretty ripe stuff considering the sorry saga of their roads policy and, for that matter, their stewardship of British energy policy.

In July 2009, after 12 years in office, the then Government announced that they expected to have to resort to power cuts in the years ahead. They even published a chart in their strategy for energy predicting an annual shortfall of 3,000 MWh by 2017 – a truly shameful admission for the Government of a developed nation after 12 years in power.

How did things reach that point? As on the economy, when it came to infrastructure, the previous administration took a typically ostrich-like pose to the challenges of the future.

They knew for 12 years that, for example, most of our nuclear power stations and most of our polluting coal-fired power stations would have to close in the decade ahead – indeed, they signed the agreement to close down those power plants – but, unbelievably, by the time they finally made up their mind about nuclear new build, it was already too late to have the new stations up and running before the old ones closed down.

How is that for dither and delay? They did not even get around to the long overdue reform of energy markets on which investment in new capacity depends. That surely is something that marks the record of Ed Miliband, Labour’s first and last Secretary of State for Energy and Climate Change.

This Government has recognised the importance of infrastructure to the long-term prosperity of the British economy in a way that Labour never understood.

We have published for the first time a national infrastructure plan, comprising £310bn of investment in the most strategically important projects in sectors such as transport, energy and communications in the period to 2015 and beyond.

The man who delivered the Olympics in east London with such spectacular success, Lord Deighton, is the Minister in charge of implementing that plan.

Despite inheriting the most disastrous set of public finances that any Government have bequeathed to their successors outside wartime, we are not only investing in infrastructure, but increasing that investment. Public sector infrastructure investment from 2010 to 2012 was £33bn a year, which is £4bn more than during the previous Parliament.

Last year’s Autumn Statement included a further £5.5bn of investment, including £1.5bn for the strategic road network. That includes upgrades to the M1, the M3, the M6 and the A60 at Immingham; £378m to upgrade the A1 between Leeming and Barton in North Yorkshire, as part of a much needed drive to bring the A1 up to motorway standard between Newcastle and the M25.

This Government is ushering in the largest programme of investment in the railways since Victorian times, with £9.5bn of capital investment allocated from 2014 to 2019.

This Government is committed to investing in Britain’s infrastructure for the long term. High speed rail will revolutionise travel and link London and Birmingham to Leeds and Manchester, create five new stations, and cut journey times from Birmingham to Leeds, for example, from two hours to one hour.

Had Labour in government taken a greater interest in the long-term future of our railways and of our cities and begun action immediately when it took office, we could have been looking at a high-speed line to Birmingham and beyond opening before the end of this Parliament.

High-speed rail is a long-term project. It takes a long time to execute, but even in the two and a half years that this Government have been in office, we have increased the pace of delivery on the ground.

The way that investments can be financed has also been transformed for the better. Labour saddled future generations with PFI debts of £279bn, of which less than £40bn has been paid off, and which cost at least five times and often more than the original project cost of the underlying investment.

All governments are stewards of the country that elects them. The test of their stewardship is whether they leave their country better equipped and better prepared to prosper in the future.

In two short years, Britain’s reputation for infrastructure has been transformed. Having plummeted down the international league table of countries rated by their infrastructure, we are now climbing it again.

The rest of the world has seen this country shaking off the torpor of the past. After more than a decade of inaction, we are once more laying the foundations of the future.