National Infrastructure (Hansard, 9 January 1985)

§ 6. Mr. Willie W. Hamilton
asked the Secretary of State for the Environment what action he proposes to take in response of the recent National Economic Development Office report on the state of the national infrastructure of roads, housing, the water and sewerage systems.

§ The Minister for Housing and Construction (Mr. Ian Gow)
My right hon. Friend the Secretary of State will be discussing this report at a meeting of the National Economic Development Council later today, at which my right hon. Friend the Chancellor of the Exchequer will be in the chair.

§ Mr. Hamilton
As the report is of critical importance to every member of our community and is a devastating criticism of the Government's current policies, and as almost every independent policy review institution is now asserting that public investment is the best and the most effective way of reducing unemployment, will the Government accept the verdict of the general public, or will they wait until 5 million or 6 million people are on the dole before they see the error of their ways?

§ Mr. Gow
The best and most effective way of reducing unemployment is by pursuing policies that will result in honest money and sound finance, and by creating an economy in which there is low inflation and high investment. That is precisely what is occurring.

§ Dr. Hampson
Does my hon. Friend agree that if the Government's oil revenues will be £1,000 million more than expected because of the strength of the dollar, he could improve the infrastructure, especially housing, by taking a more relaxed view of how local authorities may use their accumulated receipts from the sale of council houses and other assets?

§ Mr. Gow
My hon. Friend knows that that matter was debated in the House on 19 December and that the Government secured a majority of 100 in that debate.

§ Mr. Merlyn Rees
Is not one of our problems that the civil servants in the Treasury, whose job it is to advise the Chancellor of the Exchequer, know nothing about the problems of our northern cities? Would it not be a good idea for the Department of the Environment to organise coach trips at the weekends to take civil servants there so that they can see the problems that many Labour Members see every day?

§ Mr. Gow
My right hon. Friends and I, as Ministers in the Department of the Environment, rightly make extensive visits to all parts of the kingdom to study precisely the matters to which the right hon. Gentleman referred.
770 I have one further thing to say in response to the right hon. Gentleman's question. He was a member of an Administration — indeed, a member of the Cabinet — when the former Chancellor of the Exchequer, the right hon. Member for Leeds, East (Mr. Healey), wrote on 15 December 1976 to the then managing director of the International Monetary Fund: It is … essential to reduce the public sector borrowing requirement … in order to create monetary conditions which will encourage investment and support sustained growth". The Government are following those policies.

§ Mr. McCrindle
Has my hon. Friend seen the editorial in this morning's Financial Times under the heading of "Hard facts on infrastructure"? Does he note that the editorial concedes that a debt burden would be bad for future generations, but so, too, would a crumbling infrastructure? Leaving aside for the moment arguments about the benefits to the relief of unemployment that may flow from greater investment in the infrastructure, may I ask my hon. Friend whether he believes that, purely in terms of the infrastructure, there is a strong argument for additional investment in the very near future?

§ Mr. Gow
Of course I agree with my hon. Friend that it is important to have proper investment in the infrastructure. It is precisely for that reason that expenditure in the water industry will increase from £686 million this year to £769 million next year, and as planned to £870 million in 1987–88. The House will know that expenditure on roads will increase from £806 million this year to £824 million next year, and to £870 million in 1986–87. There is a programme of increasing investment in exactly the areas which my hon. Friend described.

§ Mr. Rooker
Does the Minister accept that the lack of public investment in the infrastucture back to 1976—the year which the Minister quoted—is holding up further private investment? What is his reply to the statement by that most moderate of employers' organisations, the Federation of Civil Engineering Contractors, which is responsible for 90 per cent. of the infrastucture, that we are becoming increasingly fed up with the current propaganda campaign being waged by the Government to discredit the case for more infrastructure investment"?

§ Mr. Gow
The hon. Gentleman will want to be reminded of some remarks by the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan)—[Interruption.] I was asked about the construction industry, and I was about to quote a comment by the right hon. Gentleman, to whom we shall all want to send our very best wishes. The right hon. Gentleman said: We used to think that you could spend your way out of a recession by boosting Government spending. I tell you in all candour that that option no longer exists and that in so far as it ever did exist it worked on each occasion since the war by injecting a bigger dose of inflation into the economy. I must tell the Opposition Front Bench that the best prospects for the construction industry are those that have been described, rightly, by my right hon. Friend the Chancellor of the Exchequer, namely, that we secure a soundly based economy. We do not intend to revert to the policies followed by the Labour Government of borrowing where they dared not tax and printing what they could not borrow.