§ Mr. David Steel (Tweeddale, Ettrick and Lauderdale)I am grateful for the opportunity at this early hour in the morning to introduce a debate on public expenditure on our infrastructure. I shall be brief, as I hope to catch the eye of the occupant of the Chair in Tuesday's debate on the economy. I shall therefore not deploy the wider economic arguments, but concentrate on the positive and detailed proposals that we believe the Government should be considering against the background of the very poor current and projected rates of growth in the economy and the continuing intolerable levels of unemployment.
The debate is stimulated by two reports—that of the Select Committee on the Treasury and Civil Service and the recent CBI report, "The Fabric of the Nation." Commenting on the Budget, the Select Committee said:
A number of the specific measures taken in the Budget are imaginative and welcome. Nevertheless more attention should be given to the case for increasing public investment in particular sectors, and we are concerned at the implications for unemployment of a growth rate which is expected to decline from present levels.When the Select Committee makes such a request, there should be a positive response from the Government.We in the Liberal and Social Democratic parties made this a major part of our election campaign. We differ fundamentally from the Government in believing that the country's resources, especially the resources and revenue from North sea oil, ought to be used to invest forward in our future rather than to pay for an ever-lengthening dole queue.
I am glad to say that that general thesis has received some support from the CBI. My hon. Friend the Member for Colne Valley (Mr. Wainwright) and I had the opportunity to meet the CBI shortly before publication of its report. Although we may not agree on the exact amount of public investment that we want, the CBI agrees with our general proposition because public infrastructure investment is easily the most cost-effective means of job creation. It is about 10 times as cost effective as tax cuts. Infrastructure investment has a very low import content. If we pay British workers to build and repair British houses with British raw materials, that is bound to be more effective than giving people more money in their pockets to buy Japanese videos through tax cuts. However, public investment has declined by one third since the present Government came to office in 1979.
In its report, "The Fabric of the Nation", the CBI argues that an efficient infrastructure is the foundation of an efficient economy, and that sensible investment in the right infrastructure will achieve three things. First, it will help to sustain the current economic recovery by reducing business costs, improving competitiveness and creating a framework within which jobs can be generated and unemployment reduced.
Second, the CBI says that it would eliminate some of the bottlenecks that hamper economic growth and help to avoid similar constraints arising in future. It is referring particularly to improvements in transport and communications.
Third, the CBI argues that it will promote regional development and improve the environment. In addition, it makes the point that I have just made—that, if such investment has a low import content, it should be 1194 undertaken now while there is substantial spare capacity in the economy and we still have a substantial income from offshore oil and gas production.
What surprises me about the CBI report—a surprise that I none-the-less welcome—is that it goes on to say that the responsibility for improvements in the basic infrastructure lies predominantly with the public sector. The CBI—that great bastion of private enterprise in this country — recognises that that is true. It says that is because many of the returns on such investment accrue to society as a whole rather than to the person providing the finance, and that such returns are not easily quantified in monetary terms.
I hope that the Government, committed as they are to the private sector of the economy, will pay attention to that powerful argument, coming as it does from the CBI, and recognise that public investment is required. I shall leave my hon. Friends to raise particular matters with the Minister. In summary, the major candidates for such expenditure are clearly regional policy: the development of derelict land, environmental upgrading and improving the quality of life.
The British Road Federation has recently published a report. Even if one does not go as far as it goes into the amount of money that it would like to spend on roads, clearly another major candidate for expenditure is roads.
Members of the Liberal party are more concerned perhaps about requests from the British Railways Board for further investment in our railways system.
At present, in many of our major cities and towns, the sewerage system requires upgrading. The system is a legacy that we inherited from the Victorians, and it has served us well. This is never particularly popular with the voters, because it is expenditure that is not visible. Nevertheless, we now know that failure to invest in the sewerage system will lead to severe trouble in future.
Of course, at present, very topically, Members in different parts of the country are acutely aware that we have not invested sufficiently in a national water grid. Much of the suffering that parts of the country are undergoing at present through drought is quite unnecessary. We have plenty of water in other parts of the country, but we are unable to transfer it because of the lack of investment in water supplies.
If I may make a constituency point, bridges are another candidate for investment. More than half our nation's bridges were built before 1922. About six years ago, one of the road bridges in my constituency was washed away by a high flood of the River Ettrick at Selkirk. That led the local authority to conduct a survey of all the bridges in the Borders region. Since my constituency includes a large part of the river Tweed and all its tributaries, we have a large number of bridges. The cost of repair and replacement is enormous. Much work is waiting to be done, not only in my constituency but in the whole country.
Investment in housing is also important. The housing condition survey conducted in 1981 reported that over 1 million dwellings were unfit, nearly 1 million were without amenities, more than 1 million were in need of extensive repairs, and over 4 million were regarded as unsatisfactory. There has been a sharp slowdown in amenity provision, no progress on unfit dwellings and an acceleration of disrepair. We argued that fully in the House last night. The lack of capital expenditure, repair and the rescue of old housing stock is a scandal.
1195 Plenty of work has to be done. It is better to use our oil revenues on such work than to finance an ever-lengthening dole queue. The British people are eager and willing to do the work. Such capital investment is well within the Government's grasp without unsettling the economy. All that is required is for the Government to look up from their narrow, monetarist vision and to see the needs of Britain, its people and its economy.
§ Mr. John Golding (Newcastle-under-Lyme)I welcome the opportunity to speak in the debate, because it is about one of Labour's themes during the election campaign. We said that the Government had failed because they were more willing to fund unemployment than to finance investment. I congratulate the Leader of the Liberal party on raising this important subject. I do not see the alliance working this morning. — [Interruption.] Perhaps members of the Labour party are not present to support the Liberal party, but I had expected at least one member of the SDP to bother to turn up.
The unemployment statistics become worse, and a growing problem is that of unemployment among young people. This year youngsters will find it even more difficult to find work. The 18 to 24-year-olds have become vulnerable. Unemployment hits between one-quarter and one-third of that generation. It is a scandal that such a high percentage of young adults should be without work. The Government have made provision for 16-year-olds, but they are making no provision for the 18 to 24-year-olds who desperately need work and status as they begin adult life. We travel on inadequate roads and visit inadequate housing, while so many young and energetic people are without work. It is such a waste.
Not only are the young causing anxiety. Long-term unemployment is a growing problem. This country has neglected that subject for far too long. It is commonplace to be unemployed for a year or more. When I was at the Department of Employment I was worried about the fact that even before 1979 the hard core of unemloyment was emerging. That hard core has grown increassingly and the Government's response has been, not to increase provision for the long-term unemployed but to reduce it proportionally. We are now getting to the stage at which we talk of hundreds of thousands of people being unemployed, not just for one or two years, but for three years. It is unacceptable for people to be unemployed for three or more years. There is no doubt that unemployment of such a duration is destructive to the personality and the family.
It does not make sense to have a society in which young adults are without work in such numbers and for such considerable periods. It has been pointed out that at the same time there is inadequate provision for housing and roads. The sewerage system, especially in the north-west, is in a terrible state. The railways need modernisation and electrification. As the Leader of the Liberal party pointed out, we need a national water grid.
There is a need also—this is a subject in which I have a great interest—to emulate France and develop a telecommunications and cable system for the future. Road and rail provision are important, but, in a computer and data information age, telecommunications and cable facilities will be vital. Unfortunately, the Government's actions with telecommunications, especially cable, will 1196 deprive Britain of the telecommunications system that it should have to survive as a great industrial nation. It is for the Government to respond to what the CBI has said.
The housing problem is grave. As the Leader of the Liberal party pointed out, 4 million houses are unsatisfactory. Every Member of Parliament knows the tragedy that lies behind inadequate housing. I believe that many of us regard housing as the most important subject to consider on Friday and Saturday mornings. It is difficult to get across to the Government the idea of the individual and family misery that is created because those people are unable to obtain reasonable accommodation. It is a case not just of putting up with physical discomfort—many working people have been used to that discomfort all their working lives—but of enduring the psychological strain which destroys marriages and turns lives into a misery because individuals are unable to obtain the houses to which they are entitled.
Sometimes people live an houses which are totally unsatisfactory because of the physical conditions, such as damp, because they have to climb stairs when they have emphysema or pneumoconiosis, and cannot manage, or because they have cardiac complaints and live upstairs, when they want groundfloor accommodation. People not only suffer because their houses are physically unsatisfactory, but have the problem of not being able to get a transfer from one house to another because of the shortage of housing stock.
What is criminal about the Government is that they are making all those problems worse. They seem to have no knowledge of the stress and discomfort under which many people live. If the Government understand that, yet deliberately ignore it, they are as heartless as people say they are.
We need the houses. There is no doubt about that. I represent a constituency where there is a good housing chairman, housing committee and housing office. Other constituencies have many more problems. Hon. Members who represent Liverpool constituencies or some of the London constituencies face far greater problems. It has never made sense to me that, on the one hand, there are the unemployed and on the other hand there is totally inadequate housing provision. It does not make sense that there are hundreds of thousands of unemployed workers from the construction industry, yet there is terrible dereliction in housing. One cannot justify it in any way. The Government should revise their housing policy.
The Government have dragged their feet, not only in housing. The CBI is right. Our road system is inadequate. Anybody stuck behind trucks, for example on the M1 and M6 last Friday, will have seen examples of waste, not only of one's own time, but of energy and manpower in the transport of goods. Conservatives have often said in my lifetime that if working people worked harder the problems of this country would be solved. They have emphasised productivity. I have always believed that there is great room for improvement in efficiency in production and distribution and that we can increase competitiveness, not by more sweat, but by more thought.
One area in which that is true is distribution. It does not make sense for big trucks to be in long queues to use one lane of a motorway for literally hours on end. It does not make sense that our distrubution system is so poor on the roads. The Government should improve the road system so that industrial efficiency can improve. If the Government doubt that the roads need improvement, 1197 Ministers with London constituencies should take to the motorways more often on Mondays and Fridays. [HON. MEMBERS: "And the railways."] I agree. My friends in the National Union of Railwaymen and in the Associated Society of Locomotive Engineers and Firemen have pleaded for a modernisation of the railway system and for investment in electrification.
The need for more Government investment in the Channel tunnel must be stressed. The House has heard about bridges over rivers. We should consider the building of a Channel tunnel with more urgency. It does not make sense for the Government to say that we can have a tunnel only if private entrepreneurs fund a substantial part of its cost. They are delaying great opportunities.
Our physical communications are inadequate. On top of that, there is a need to take a more rational view of the development of the cable system. In the coming era of information technology it will be vital to have an integrated telecommunications system which can deal with telephony and broadcasting, and with the exchange of data information. The Government's present piecemeal plans will not provide that.
The Government decided to introduce cable earlier than was desirable in order to create jobs. Those plans will not materialise as things stand. The Government should regard telecommunications and cable as exceedingly important. They should get all the technical decisions right and should ensure that funding is available, whether or not private entrepreneurs think that cable television and advertising will be profitable. That is almost irrelevant in the context of our need to develop an integrated telecommunications system.
I congratulate the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) on introducing this subject. On behalf of the Labour party, I wish to say how important it is and how badly the Government have been behaving in this area.
§ 8.3 am
§ Mr. Richard Wainwright (Colne Valley)The telling examples given to the House by my right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) and the hon. Member for Newcastle-under-Lyme (Mr. Golding) underline the fact that for the past seven years the country has failed to keep up even the bare maintenance of our public assets. The nation has been, and is today, eating into its capital. Recently the Institute for Fiscal Studies demonstrated this and did a heroic job on the past few years' meagre figures provided by our makeshift public accountancy system. Its conclusions are unreserved and unqualified. The Government have been poor stewards, and the public assets overall are in a worse condition now than when they first took office.
Public capital expenditure has been declining in real terms ever since 1976, except for a few months in the autumn of 1982 when the Prime Minister was forced to intervene to get a hasty, but brief, temporary upturn in local government capital spending that winter.
There are serious consequences of such a long period of decline in capital spending, and I shall spend a few moments discussing some of them. We are not dealing with a sudden phenomenon or downturn. We are dealing with a long period of decline. One result is that the stock of up-to-date technologically modern plans for capital 1198 expenditure processed through our town planning system, and the rest, is now meagre because it has been thinned out so much in recent years.
There is a risk that if, by some magic, capital resources were to be released a great many of the projects which would be immediately available would be out of date. We would, as it were, be fighting the last war but one. There is no doubt, as I am sure most hon. Members have found when they have approached public boards, that planning staffs have been depleted. Which ambitious young people trained to assess capital projects and to make detailed plans would go with any great sense of adventure into the project departments which are so manifestly in decline?
The effect on civil engineering, of course, has been devastating. For the most part it is still flat on its back and seriously deprived of the contracts necessary to keep teams of skilled people together. The Government do not seem to understand that it is not just a matter of keeping individual experts in employment. It is a matter of having teams of people who are accustomed to work together on skilled projects with a great deal of expertise. Alas, many such teams have been broken up by this long period of capital starvation. The private sector is rather more affected than the public sector, because it is the private sector which almost entirely carries out the public sector's plans. The private sector of our big capital works industries, with one or two exceptions, has been in a long cycle of unrelieved decline.
I liken the Government's attitude to that of extraordinary parents who deliberately keep their children anaemic and underfed because they know they could not control them if they were robust and properly developed. The Government are scared of expansion.
When one visits public authorities, it has been my experience in Yorkshire that a number of them say, "Of course you are right, and the House of Lords and the House of Commons were right in their reports on these various public services but, frankly, our expert staffs are now so depleted that we could not cope if the Government suddenly had a change of mind." It is high time to start relaying those foundations and equipping our public sector properly.
The set of examples which I should like to give the House come from my constituency. I do not apologise for that, because the Colne valley is located between and surrounded by three of the largest groups of urban populations in the country; indeed, in Europe. To that extent, the Colne valley provides a fair example of what is happening.
The most topical item in this dismal catalogue is water supply. It so happened that the Colne valley became one of the cradles of the early industrial revolution because of its vast natural water supply from the high Pennines for the early canals which brought up the coal, and for processing wool. Those natural resources are as generous and bountiful as ever, but more neglected than they have been for 150 years.
My constituents living on the high Pennine ridge and suffering the awful level of rainfall that that involves are at the moment forbidden by an order sanctioned by the Department of the Environment to rescue their allotment crops, cricket pitches or public parks from withering in the heat, yet for years, from the reservoirs that surround places such as Marsden, at least one quarter of the water leaving the reservoirs has leaked out through our decaying distribution system before it could reach anyone's taps.
1199 In evidence to the House of Lords Select Committee on the water industry in 1982 the then chairman of the National Water Council, Sir Robert Marshall, said:
Parts of West Yorkshire are in a very bad state in terms of their distribution systems.Nothing like enough has been started since to begin to remedy that position. A major new water link from Bradford to Dewsbury which would enable the valleys to keep more of the water for their own purposes remains just a paper plan. It has been authorised and appears in the projects for the future, but there is no sign of it starting. However, the House of Lords Select Committee on the water industry recommended at least an extra £100 million capital expenditure for that industry.The same is true of sewerage. A once beautiful stream that meanders through choice countryside in my constituency, between the two industrial villages of Meltham and Honley, known as the Mag brook, has for weeks resembled a sewer. I inspected it first on the European election polling day because there did not seem to be enough public interest in voting, so I went off on a voyage of exploration.
§ Mr. Jeremy Corbyn (Islinton, North)I hope that the hon. Gentleman had had a hepatitis injection.
§ Mr. WainwrightI shall reveal my medical history at some other time. It includes a mild attack of hepatitis.
I inspected this brook again only last week, when it not only looked like a sewer but in the heat smelt like one. This used to be a most attractive part of the scenery. All this work will have to be done eventually and never so cheaply as now, when there are so many people wanting work and when so many private sector firms, in the very part of the economy which the Prime Minister claims to cherish so much, are desperate for work.
In an industrial district such as the Colne valley, which has some of the largest mills in the world, there are many derelict buildings. Sometimes these occupy the only flat building land around in the Pennines. The Common Market, bless its heart, has made an offer, which means about £18 million for west Yorkshire, for clearing, or possibly refurbishing, these mills. It is a scheme for areas of textile decline. It has a reasonable condition—that the British Government should match these grants pound for pound. Already, almost a year of the five-year term of this offer has elapsed and the Government have not yet responded with the necessary extra grants for local government. In their crazy way they are threatening to penalise local authorities, which are good stewards of public assets and want to take up this offer to keep these assets in proper nick.
There is also the problem of heat conservation and energy saving. Many of these old industrial buildings, and some of those built during the first world war, look all right —some of them are monuments of industrial premises—but they are gigantic losers of heat. They were built when the coal coming up by canal from the south Yorkshire coalfields was dirt cheap, and the shop floor was scarcely heated in those days. Now they need demolishing and replacing with energy saving buildings, with other modern features.
Much has already been said about roads, but in respect of exports I must support the CBI's plea that what it calls the absurdly poor level of linkage with the EEC ports should be put right by constructing proper roads to those ports. The CBI also says that by the time the M25 orbital 1200 road round London is completed, which should be in 1936, large parts of it will be out of date when the Minister advances to cut the tape, because the width will be inadequate for the traffic that will be generated by then. The M62 motorway through the Pennines and part of my constituency has now been listed by the Government as a subject for expert survey because of the overcrowding by freight vehicles on the steep slopes.
The full list of problems is a great deal longer than that. All this evidence points to the urgent need for larger management teams and more project planners getting new schemes off the drawing board as soon as possible. This would help in the retraining of some of those 400,000 unemployed construction workers who have been without work for more than a year.
One assumes that the demands on the infrastructure will increase substantially up to the end of the century. Do the Government believe their propaganda about an economic recovery? They show no sign of preparing for the extra demands on the infrastructure which such a recovery would bring. We have been talking about the kind of work which would create more jobs for our people and might begin to get us into the same league as the United States, which has generated 5 million new jobs since January 1983.
The Government can no longer pretend that all our competitor countries are behaving in the same half-cock fashion and are deliberately keeping numbers of their people unemployed. It is miserable to watch this country being administered into decline, but that is happening today.
§ Mr. A. J. Beith (Berwick-upon-Tweed)My right hon. Friend the Leader of the Liberal party, the hon. Member for Newcastle-under-Lyme (Mr. Golding) and my hon. Friend the Member for Colne Valley (Mr. Wainwright) detailed some ways in which public investment could contribute materially to employment and provision for our future.
I shall concentrate, in following that theme, on local government, because in the last week we have had the Secretary of State for the Environment's statement about restraints on capital spending by local authorities. When the right hon. Gentleman made that announcement, he argued that the national cash limits on local authority expenditure had been exceeded by about 13 per cent.
In drawing attention to that, the right hon. Gentleman was acting in marked contrast to his predecessor, now the Secretary of State for Defence, who, only 18 months ago, was urging local authorities to remedy an underspend on capital projects that had occurred in 1981–82 and in 1982–83. The then Secretary of State for the Environment was not alone in arguing that case, because the Prime Minister leapt to his support. Speaking in the debate on the Loyal Address in November 1982, the right hon. Lady said:
We need more capital spending by local government and in the public sector generally".— [Official Report, 3 November 1982; Vol. 31, c. 21.]Great emphasis was laid by Ministers on the need for capital spending and to switch the emphasis from current to capital expenditure.Only months later, however, we have the Secretary of State for the Environment castigating local authorities for excessive capital expenditure. Responsible officials who 1201 have served in local government all their lives—I am not talking of politicians — believe that central Government have gone mad because, month by month, the instructions of the Government are put into reverse. The tap of local government expenditure cannot be turned on and off in that way. To be sensibly and effectively carried out, capital expenditure needs a team of people building up a project, ensuring that it is properly costed and designed and fitted into a programme.
During my years as a Member of this House I have never met such despair as I now see among professional local government officers over the way in which their capital programmes have been handled in recent years. They are by no means strangers to stop-go; they have witnessed that under various Administrations over the years. Now, however, it has reached extraordinary depths. Stop-stop is a tempting way to describe it, but it is not quite that, for we need look back only about a year to the dramatic assertions by the Government that local government capital spending should be increased. They were criticised at that time for not engaging in adequate capital spending.
The recent announcement by the Secretary of State must be set against the background of local authorities having built up capital receipts which they could properly use on capital expenditure. On the Government's instructions, they have been selling off houses and bits of land with the express purpose of increasing their capital receipts. But they are now told that they cannot use that money to reinvest. In business, capital receipts are used for new investment. It is the only sensible use to make of that money.
At the time of the Budget, when commenting on the Chancellor's proposals, I expressed the fear that we would end up like a family at the time of the depression, selling the piano to keep the debt collector at bay and to pay off current expenditure. That is what the Government are telling local authorities to do—not to use the capital receipts which they have acquired to reinvest and to replace investment which the Government may believe is no longer necessary or appropriate. They are being told that they cannot spend those receipts on investment. That money should be used to reinvest. It is the only sensible purpose for it.
Let us consider in more detail the implications of the Secretary of State's announcement. From the beginning of this business of getting in capital receipts, councils were committed to spending on capital projects their capital allocation, plus only a proportion of their accumulated capital receipts. The proportion was originally 50 per cent.; last year it was reduced to 40 per cent.; now it has been further limited to 40 per cent. of the new capital receipts arising in the current year. Those local authorities that have carefully put aside capital receipts and said, "We shall use this money for sensible new investment", are being told that they cannot use that money for capital purposes. All that they can use is a proportion of their receipts for the current year.
Northumberland county council is especially affected. It has engaged in proper, good housekeeping. It has done what the Government told it to do. It has gained capital receipts by selling land and property that are surplus to its requirements, on the assumption that it could use that money to invest in what it now considers to be necessary. 1202 I understand the philosophy that the Government are pressing upon them: that local authorities' capital investment in the past is not appropriate to the needs of the present. Therefore, it may be right that public investment is switched to some extent.
However, that is not what local authorities are being told to do. They are now told that the capital receipts that they have gained from selling property that they no longer needed cannot be invested in new needs.
In my constituency, that has had the direct and immediate effect of leaving Northumberland unable to go ahead with projects for sports halls and facilities in schools. One example is Duchess high school, in Alnwick in my constituency, which has no adequate indoor sports facilities. Alnwick is a market town which does not have the leisure centres and sports complexes which its citizens regard somewhat enviously in some big urban communities. That it should have indoor sports facilities in its only high school seems only reasonable. Northumberland made provision for that through capital receipts, but now it discovers that it cannot use those capital receipts—the money which it husbanded — for that purpose. Other projects are also being affected.
Similar schemes for Ashington technical college and Ashington high school are also being affected. Northumberland had put aside the money for those projects, but the Secretary of State's announcement last week means that the money cannot be used for that purpose. Where is the sense or logic of not switching the capital investment, if it can be switched, into new investment? That is a very striking example of the mistaken nature of the Government's policy.
The squeeze on investment also damages other areas. To take another heart-rending example, my constituency contains a village called Low Hauxley—an old fishing village right by the beach and in an idyllic position. The village is threatened by coast erosion. The Secretary of State for the Environment recently announced, following a public inquiry, that he will not require the necessary coast protection works to be carried out to protect that village. He has told the inhabitants of the village that in 15 years' time it is likely that such works will be essential, but he will not allow them to be carried out. In effect, he is saying that that village's citizens can risk their houses being washed away by the sea or move somewhere else. He is condemning that village to die with that assertion. If the coast protection work is carried out, it will provide employment for contractors and the labour force that is available in Northumberland and the north-east of England. It would protect their homes and the way of life of a happy village, over which a terrible shadow has been cast.
My right hon. and hon. Friends mentioned the lack of investment in water. That is an interesting topic for me to consider, because it does not apply in my part of the country. The Northumbrian water authority has undertaken one of the nation's largest capital projects on water. I turn on my garden hose with enthusiasm, knowing that half my water rates are being used to pay interest charges on a reservoir that has enough water to supply the constituencies of all my hon. Friends who are worried about what is happening in their parts of the country and far more than is needed in my part of the country. However, because we do not have a national water grid, we cannot get the water to other parts of the country. Where is the logic in creating that vast resource without 1203 having the means of taking it to other parts of the country? Where is the justice in the people in Northumberland having to pay the interest charges on that enormous facility when they do not require all the water that it makes available?
My colleagues have mentioned railways. Ministers must know how great is the need for investment in the railways and how much benefit we would get if the east coast main line between Newcastle and Edinburgh were electrified. Those are not money-wasting schemes. They represent investments in our future, to make the country more efficient and to provide jobs for our people. That is what the Government should be doing.
§ Mr. David Alton (Liverpool, Mossley Hill)I am glad to follow my hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith). When his illustrious predecessor, Sir William Beveridge, was the hon. Member for Berwick-upon-Tweed in 1945, he spoke about how unemployment should be tackled. He referred to the need to speak of outlay rather than spending, because outlay suggested a sense of design rather than simply spending money for the sake of it.
Forty years later, we have more than 3 million people in the dole queue. Another person has become unemployed every minute of every day since the Govenment were elected in 1979. That is a tremendous waste of resources. It is not an efficient way of lubricating the economy to have so many people on the dole when so much work needs to be done.
The only growth industry in this country since 1979 has been acronyms—YOP, TOPS, MSC and the rest. There has been a growth of schemes, rather than a growth of work related to the problems facing our people.
I have pleasure in joining my right hon. and hon. Friends in this debate, and we welcome the support of the hon. Member for Newcastle-under-Lyme (Mr. Golding). The hon. Gentleman talked about the destruction of personality that unemployment can bring. Personalities are also destroyed when people live in abject conditions, and it is outrageous that in this day and age 500,000 people still live in homes without inside sanitation, running hot water or bathrooms.
Last week, I met representatives of the National House Improvement Council, who told me that only 12 per cent. of the homes in designated housing action areas have so far been improved. Of course, the number of homes being improved is declining because of the lack of momentum in the improvement programme, thanks to the cuts initiated by the Government.
The council is also worried that the 1986 house conditions survey may not take place, in an effort to disguise the reality of what is happening. As my hon. Friend the Member for Colne Valley (Mr. Wainwright) said, we have a staggering 400,000 building workers on the dole, yet there is so much work to be done. On Merseyside, for every Yosser Hughes, every boy from the blackstuff, who says, "Gissa job", I can show you his wife who says "Gissa house."
It is to a specific building project that I wish to bring to the attention of the House this morning. It involves work that desperately needs to be done on Merseyside and is related to the needs of the area. It would be spending with a sense of design rather than simply for the sake of spending. I bring the attention of the Minister to the need 1204 for a Merseyside barrage. It is a scheme supported by the Merseyside county council and the Mersyside Docks and Harbour Company. It has the backing of the local university. Research has been undertaken by the Merseyside barrage group of Marintech North West, which was formerly the North Western Universities Consortium for Marine Technolgy. The group comprises four separate research units in the north-west and it has shown that the scheme is both feasible and practical. I pay tribute especially to the work of Peter Woods, the planning officer of the Merseyside county council, in drawing up some of the proposals for the barrage. It is a scheme which the Liberal party on Merseyside has been urging for over a decade. It pressed for it in conjunction with the need for a freeport on Merseyside and I pay some tribute to the Government for having responded to Merseyside's request for a free port. I hope that Mersesyside will now get the second part of the equation
Two tidal schemes connected with barrages are currently in operation elsewhere in the world. One was established in 1966 near St. Malo on the La Ronce estuary. The second was stablished in 1968 at Murmansk in the Soviet Union. Detailed studies have been undertaken for a Canadian site in the bay of Funday and £2 million has already been spent in Britain on studies for a barrage in the Severn estuary.
In my view, the Mersey estuary is a much more suitable location for a pilot project for a barrage, as it has a large tidal range and would provide an extensive storage area. The studies, including the £30,000 study of the county council, show that, even though there would be a need for a full feasibility report, the project is practical and could bring many advantages to the people of Merseyside.
The barrage would consist of a large sea wall or dam across the estuary. It would have located within it turbine generators, sluices and a lock, or locks, for shipping. It would probably have a working life of 120 years. Three possible sites have been considered. The first is between New Brighton and Langton docks. The second is between Seacombe and Trafalgar dock and the third is between Rock Ferry and the former Herculaneum dock.
The scheme would offer several advantages. It would generate about a third of Merseyside's electricity requirements. It would provide new deep sea water facilities in the mouth of the Mersey, which would be linked with the freeport. It would create a third river crossing and many much-needed jobs in the construction industry.
There are other arguments in favour of a barrage. It would create a sheltered impounded basin, which would in turn create extra opportunities for navigation, amenity and recreation. The impounding effect would change the estuary from being fully tidal to one where tides continued to be present but where the low tide part of the regime would be missing. The water would rise to present high-tide levels but would not fall appreciably below the present mean water level. That would reduce the mean spring tide or range inside the barrage from the current 8.4 m to 4 m. That could have important implications for shipping. My noble Friend Lord Evans of Claughton, members of the Liverpool city council group and I have discussed these matters with the Merseyside Docks and Harbour Company, which is an enthusiastic support of the barrage scheme.
An energy-generating Mersey barrage would have an important environmental and regional impact in the 1205 complex that is Merseyside. It is further suggested in the feasibility studies that decisions on a barrage would best be considered as part of an integrated Merseyside regional development programme. If this is done, power from a Merseyside barrage could be available in 1993 and full power one year later. That is considerably earlier than the earliest time when power could be generated by a Severn barrage, but is dependent on a rapid accumulation of momentum, strong project management and speedy decision making in the next three years. There is a strong case for promoting a Mersey barrage as a relatively low-cost pilot tidal energy project. It is the most attractive alternative in the United Kingdom to a Severn barrage on a basis of unit cost of energy produced. It would cost less than one tenth as much as a Severn barrage and would provide valuable barrage construction and operating experience.
A barrage would create an impounded basin in the inner and upper estuaries. The high-water stage would be prolonged and minimum water level would drop only to approximately the present mean water level. The principal environmental benefits would be water-based recreation and the avoidance of flooding from high tides and surges. The area of water available for recreation in the centre of a large conurbation would be unique in the United Kingdom, and the barrage could become a major tourist attraction. Over 300,000 people a year visit the barrage scheme at La Ronce.
As a barrage would significantly change the estuarine characteristics in terms of pollution load, flora and fauna, sediment transport, and siltation, there would have to be extensive studies of those points before work was begun.
Perhaps the greatest impact of the barrage project would be in job creation. During the first four years or so there would be massive construction activity. During that period, some 3,500 jobs would be created, with a short-time peak of up to 5,000. Longer-term employment effects are unlikely to be great unless substantial new activities are developed around the impounded basin, as I hope they would be.
There are at present 130,496 people on the dole on Merseyside—88,619 in Liverpool—many of whom had worked in the construction and related industries. This scheme would provide work for many of them. It is a crazy waste to keep those people in the dole queue at a cost of some £650 million a year in unemployment benefit alone — and that figure does not include the tax that they would pay if they were in employment. Ironically, £650 million is a rough estimate of the cost of the barrage project.
This scheme would improve the infrastructure, create work, harness a God-given renewable source of energy and provide a symbol of faith in the future for a part of Britain where commitment, faith and hope have been in desperately short supply. I commend it to the House.
§ Mr. Paddy Ashdown (Yeovil)I, too, should like to mention some matters of importance to my constituency. However, my right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) and my hon. Friend the Member for Colne Valley (Mr. Wainwright) made some broader points. It is the theory behind the Government's view which many of us find 1206 perplexing — the idea that the money spent on the infrastructure is expenditure, not investment. We believe that we must begin to invest in Britain's infrastructure, not just to improve it, but to keep it in one piece. Do the Government intend to allow Britain to continue to disintegrate into a pile of muddle and decay? In the end, someone will have to pick up the bill for the neglect.
The Government frequently claim that previous Governments have been irresponsible in leaving large bills and debts behind them, but the Minister is doing no less. He is leaving a large bill which, in the end, someone will have to pay. The Government have adopted a madcap, "Alice through the Looking Glass" system of economics, in which whatever is private is all right, but anything which calls for public expenditure must be wrong.
I recently received a letter from the Minister on the subject of the direct labour organisation in my constituency. He said that the council must accept the tenders put in by private industry, irrespective of the cost. It could cost significantly more to have certain jobs done privately than to have them done through the DLO.
Only last night we were presented with another example of madcap logic — the sale of British Shipbuilders. British Shipbuilders deals with our trade infrastructure, rather than our internal infrastructure, in the sense that it provides our merchant ships. We heard some dotty logic yesterday from the Secretary of State for Industry, who complained that it was wrong for the British taxpayer to be creating, in the warship division of British Shipbuilders, profits which would then be used to support the manufacture of merchant shipping in Britain. The sum of that logic is that the profits of British Shipbuilders should not be ploughed back into our capacity to produce merchant ships, but should be put in people's pockets.
When that logic comes home to roost in our constituencies, it creates havoc and misery. In my constituency, evidence produced by the British Road Federation, which is backed up by the evidence of the county surveyor, shows that the road network on which my rural community depends is falling into decay. The county surveyor has told me that he cannot deploy sufficient money to maintain it. Who will pick up the tab? Is it the Government's long-term intention simply to allow those roads to decay? Someone must pick up the tab in the end.
The hon. Member for Newcastle-under-Lyme (Mr. Golding) mentioned the housing problem. He was right when he said that eight out of 10 people who come to our surgeries want to discuss housing problems. The sum of human misery that is created by the housing problem is not significantly less than that created by unemployment. In my constituency a single person has no hope of a house, and married people, even if they have a child, have no prospect of getting a house in the foreseeable future. Elderly people frequently live alone in five-bedroom houses because there is no accommodation for elderly people. That is a waste of resources and a cause of misery. Meanwhile, the maintenance of houses is neglected. Window frames are rotting and there are problems with wall tiles. All of those jobs must be done in the end. The Government are leaving the bill to their successors. I hope that they arrive soon. Indeed, the Government are leaving no less a bill than that which they complain of being left by the Labour Government.
The Government are considering the external financing limit of the Wessex water authority. It has said that it needs an irreducible minimum of £32 million this year and the 1207 Government have said that it is likely to get about £16 million or, perhaps, with a bit of arm twisting, £18 million. The result of that will be an immediate increase in water rates in my constituency of 25 per cent. in the first year and of 7 or 8 per cent. in following years. Moreover, as my hon. Friend the Member for Colne Valley said, 25 per cent. of our water is allowed to run away into the ground. That will continue, as will the decay in water pipes.
The sewerage developments which Yeovil needs cannot go ahead. The housing that we need cannot be built because the sewerage system cannot cope with it. In Lyde road in Yeovil there are two 375 mm drainage pipes going into a 300 mm main. The result is flooding in local council and private houses. In Cambone road, sewage is backing up through wash basins. In the villages of Barwick and Stoford raw sewage is being pumped out because a pumping station has failed right next to a primary school in a village which, only a few years ago, suffered a minor epidemic of polio. Will the Government leave the tab for that to their successors?
The Prime Minister is fond of telling us that she follows the simple economics of the housewife. We need to remind her that when she is in charge of the administration of Britain she is not a house owner but a tenant—but what a tenant. She has allowed the garden to run to rack and ruin. She has flogged off the doors to pay the week's bills. She has allowed the roof to decay so that it now leaks. That would never be allowed on any council estate. Indeed, the neighbours would be complaining and so would the people who live around. It is long past the time when the Government should be evicted for precisely the same reasons.
What the Government are doing not only defies logic but is deeply irresponsible, yet they claim to be a responsible Government. The decay which they have allowed to happen in the infrastructure of Britain not only causes personal misery but leaves a bill which in the end somebody else will have to pick up. It is that irresponsibility, as well as the lack of logic, that I and my colleagues condemn.
§ The Parliamentary Under-Secretary of State for the Environment (Sir George Young)The House is indebted to the Leader of the Liberal party, the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel), for choosing this important debate on the nation's infrastructure. We have had a Consolidated Fund debate within a Consolidated Fund debate. The matters that have been raised cover just about every Government Department, as well as going right to the heart of fundamental economic strategy. It is not often that a junior Minister in a spending Department is let loose on major issues of macro-economic strategy.
Two broad themes have run through the debate on the infrastructure. One is that, compared with a few years ago, we are now spending far less on the infrastructure than used to be the case. Related to that we are now urged to increase, fairly substantially, expenditure on the infrastructure, both as a means of creating the conditions for economic recovery and—an argument deployed by the right hon. Gentleman — as a means to economic recovery.
The second theme in any debate on the infrastructure is the need to spend more to maintain, repair and improve 1208 the infrastructure that we already have. I have a lot of sympathy with the second half of the argument, but slightly less with the first.
It is important to understand why we are not now spending as much as we used to spend on the nation's infrastructure. There were some good reasons for massive new construction in the 1950s and 1960s. At that time there was a substantial population increase, going up from about 50 million in 1951 to 52.7 million in 1961. and up to 55.5 million in 1971. Since then there has been an increase of only 200,000, to 55.8 million.
Just after the second world war we had to catch up on repairing all the war damage and rebuild the nation's housing stock, which rose from 11.8 million in 1950 to 13.8 million in 1960, to 16 million in 1970 and to 18 million now. The whole emphasis on housing was on repairing, maintaining and improving what we have rather than engaging in a massive new build programme. That was the theme of the first debate that we had.
It is important to inject a dimension on housing. I think that nearly everyone in the Chamber agrees that owner-occupation, rather than tenancy, is the preferred tenure. Over the past 10 or 20 years housing has to a large extent been taken out of the public sector and put into the private sector. Hardly anyone would disagree that that is a sensible way to proceed. But that has to be taken into account when one looks at public sector investment in infrastructure. If one tries to interpret what has happened to investment in infrastructure one has to recognise that there has been a displacement of public sector by private sector investment in housing.
The third reason for massive spending on the infrastructure in the 1950s and 1960s was to cope with the major shift to road transport. The number of vehicles increased from 2.5 million just after the second world war to almost 20 million in 1982. To cope with that there was a major motorway programme. By April 1983 there were 1,400 miles of motorway. I do not think that any member of the Liberal or Social Democratic parties would suggest that a programme of that scale should be continued indefinitely.
The first point to make is that we do now have the basic infrastructure of housing, roads, water and sewerage to provide for a population in which growth has now stabilised. The major expansion of the nationalised industries—for example, gas and electricity—has caught up with the demand and in some cases they have surplus capacity.
The new towns have been rounded off as the population increase was less than expected, and there are some perfectly respectable arguments for saying that public infrastructure investment need not be as high as it was in the 1950s and 1960s.
§ Mr. David Harris (St. Ives)How can my hon. Friend say that we have the basic infrastructure, when he knows that in my area, as in many others, we have an antiquated sewerage system pouring sewage on to beaches, there is no decent road to the west country—only the A30—and there is now a drought so people will be short of water?
§ Sir George YoungI do not know whether my hon. Friend was in the Chamber when I began my speech. I said that there was a respectable argument that we should spend more on what we have. I agree with him on that and hope to explain what we are doing in that respect.
1209 First, however, there are good arguments for not spending quite so much public money as we used to spend. It has been argued that a fairly large increase in capital expenditure would have beneficial effects on the economy, but a fiscal boost based on expenditure on the infrastructure will not necessarily produce lasting economic gains. Certainly, the case is unproven. We were also not told how it would be financed, whether through higher inflation or higher interest rates, and what would be the knock-on effect on the private sector. In the hour and a half of debate we heard no suggestions as to how the increases would be financed.
§ Mr. WainwrightWait until Tuesday.
§ Sir George YoungThe hon. Gentleman asks me to wait until Tuesday. I noted that the speech made by his right hon. Friend the Leader of the Liberal party was a trailer for a major attack on the Government on Tuesday.
It was also implied that increased spending on the infrastructure would lead to improved economic performance. Again, there is no guarantee that that would take place. One could argue that a great deal of public expenditure in the past has been unproductive or counterproductive and a burden on the economy and has failed to add to the productive potential of the economy. Each scheme must be considered on its merits to see whether it can be justified in cost-benefit terms rather than to make the case on broad macro-economic grounds.
If the increase in capital expenditure were financed by reductions in current expenditure—again, this was not clear from the debate—there would be an adverse effect on employment because a high proportion of current expenditure is on direct employment. Therefore, I have some doubts about the macro-economic argument that we should invest in the infrastructure to create new jobs and economic growth. That was tried in the mid-1970s and came to a grinding halt in 1976 with the intervention of the IMF.
I have much sympathy, however, with the argument that we should do more to repair, maintain, improve and consolidate the infrastructure. I hope that my hon. Friend the Member for St. Ives (Mr. Harris) will accept that. The Government are fully committed to that course, and we have a continuing programme to that end. That is well illustrated by what we are doing in housing.
The hon. Member for Liverpool, Mossley Hill (Mr. Alton) criticised our record on housing, but when the Lib-Lab pact ended in 1979 only £90 million was being spent on improvement grants. In the year just ended we spent £907 million. That dramatic increase illustrates our theme of switching resources to repair, improvement and maintenance, as is sensible when we have a crude housing surplus of about 750,000.
§ Mr. CorbynAt current levels of Government investment in housing, how long will it take to house all the homeless and all the people on housing waiting lists who wish to live in council housing?
§ Sir George YoungWe could make a substantial start in London if the 20,000 houses in the public sector that have been empty for more than a year were put to good use. If authorities such as the hon. Gentleman's council, would sell property that they have to people on the waiting 1210 list or to sitting council tenants and thus obtain the advantage of re-lets, considerable progress could be made in tackling the problems of the homeless.
Last year we spent £1 billion on repair and improvement of local authority housing stock. Again, there is no case for massive investment in local authority new builds. We have a substantial number of difficult to let properties and properties that are vacant. We have to switch the whole emphasis to repair and improvement. This may not show up in the figures that have been deployed as investment if it is part of an increased programme of repair and maintenance.
§ Mr. AltonWithout being churlish about it, at the end of the 1970s we saw a reduction in the massive demolition programmes that had plagued the country over the previous 30 years. Sometimes property had to be demolished for good reasons, but many good properties were pulled down, and a switch was made to improvements, which I welcome. Surely the Minister is not denying that, as a result of the reduction in the promised funding for improvement areas, only 12 per cent. of the houses in declared housing action areas have had any work doen to them and, as the National House Improvements Council has said, the country is becoming a patchwork quilt—derelict decay, on the one hand, and limited sporadic improvements, on the other.
§ Sir George YoungI should like to see the details of the 12 per cent. If one looks at housing action areas that have only just been declared, the percentage is very low. In housing action areas that have existed for four or five years—and this is the case in my own constituency—the percentage is substantially higher—70 or 80 per cent.—where the property has been brought up to the right condition.
I want to consider that question in a little more detail. I was asked about the statement last week on the measures to keep local authority capital expenditure within the national cash limits. The hon. Member for Berwick-upon-Tweed (Mr. Beith) implied that there was some inconsistency between what was said last week and what the previous Secretary of State and the Prime Minister said in 1982. In fact, the two statements are wholly consistent. In the first case, there was evidence that the local authorities were underspending. The resources that we had allocated to the local authorities for capital investment were not being spent, so we urged them to spend up to the cash limit. Last week, when it was clear that they had overspent by £350 million last year, and were heading for a substantial overspend this year, we invited them to spend down to the cash limit. I cannot see that there is any inconsistency in the Government's approach, given that we operate by a system of cash limits for various Government Departments. It is worth saying that we have not tried to claw back the £350 million overspend last year by taking action this year, which is the conventional means of tackling overspends.
I was asked about the Merseyside barrage. I understand that my right hon. Friend the Secretary of State will be going to the tall ships' race next Thursday, and he will have an opportunity to discuss with other people the implications of this project, which I suspect is fairly expensive and will have to be looked at with some caution. Reference was made to some engineers and other people who were in favour of the project. I am sure that 1211 somewhere on Merseyside there are equally qualified people who are dead against it. The hon. Member for Mossley Hill shakes his head. I am sure that there will be an argument that can be deployed against it on various grounds.
§ Mr. AltonI am glad to know that the Conservative European candidate in the recent elections supported the Liberal party's campaign for the barrage. Indeed, there was all-party support for it. All the riparian authorities, the county council and the docks and harbour board supported it.
§ Sir George YoungI wonder whether the Leader of the Liberal party would regard himself as committed by everything that all his candidates said in every speech.
§ Sir George YoungWhile I note, of course, that this project was endorsed by the Conservative candidate in the European elections, the Government would not necessarily regard themselves as committed by such a statement.
The switch from new investment in housing to repair and maintenance that I outlined is being matched by similar trends in other sectors. In the private sector, housing repair and maintenance work rose by almost 7 per cent. to almost £4.3 billion last year. As to public sector assets, expenditure on repair and maintenance, putting housing on one side, rose to £2.7 billion last year in real terms.
We have heard quite a lot about water and leaks. My Department published a technical report on leakage control in 1980. All water authorities use this in deciding how far it is economical to deal with leaks. My brief says that leaks are greatest at times of high pressure, which is at night when demand is low. Leakages can be dramatically cut by the simple expedient of reducing pressure.
We have heard much about roads maintenance. The Government have achieved improved output for the money spent. Expenditure on structural renewal and the maintenance of the trunk roads system rose from £86 million in 1978–79—the last year of the Lib-Lab pact—to £207 million in 1982–83——
§ It being Nine o'clock, the motion for the Adjournment of the House lapsed, without Question put.