Private Finance Initiative (Hansard, 3 February 1994)

§ 5. Mr. Mudie
To ask the Chancellor of the Exchequer if he will make a statement on the present state of the private finance initiative.

§ Mr. Kenneth Clarke
The Government are committed to a substantial increase in the level of private investment in the infrastructure of public services that were previously totally dependent on public funds. A number of major private finance projects, including the channel tunnel rail link and the Heathrow express, are already going ahead. The high-level working group that I set up under the chairmanship of Sir Alastair Morton is examining how private finance can be developed in many sectors of Government activity.

§ Mr. Mudie
Is the Chancellor aware that the fear in the country is that there are more announcements than activity? The right hon. and learned Gentleman announced three new schemes in the Budget—the extension of the docklands railway to Lewisham, new air traffic control for Scotland and the refurbishment of the west coast main line. Can he tell the House which of those proudly announced projects has a private sponsor or a construction start date?

§ Mr. Clarke
Well, they are all being progressed—[Laughter.] The Labour party has the glorious record of cutting capital investment in the public services of this country by one third at a stroke, when the International Monetary Fund instructed it to do so, and it still betrays a total absence of knowledge about the management of major projects. We are now defining the projects described, and identifying private sector partners. For example, following my announcement, we shall progress to modernise and upgrade the west coast main line in a way that the economic policies of the Labour party would plainly never succeed in doing.

§ Mr. Dykes
As my right hon. and learned Friend mentioned the channel tunnel scheme, may I ask him whether he is aware that Customs and Excise and other bodies are planning to have 400 officials at the tunnel entrance on the British side? Will he look into that, to see whether it squares with the single market?

§ Mr. Clarke
I certainly think that the Government should ensure that the costs that they incur in necessary controls and security protection on the trains should be kept to the barest minimum. I am sure that the Departments responsible will be kept up to that by my right hon. and hon. Friends and myself. Clearly, we have particular regard to our obligations under the single market, one result of 1016 which has been the removal of all routine Customs and Excise frontier checks on imported goods, and a substantial lifting of the bureaucratic burden that previously bore on importers and exporters.

§ Mr. Beith
If all those projects are "progressing", will they take as long as the Jubilee line did to progress through the process of working out a private sector initiative? Is not the truth that while other countries get ahead with, for example, the link to the channel tunnel, only in this country do the Government wait for private finance before undertaking essential infrastructure projects?

§ Mr. Clarke
The Committee that will consider the Bill on the channel tunnel rail link will have to take into account the hundreds of objections and detailed points that individual members of the public want to make about the route. The Government have just announced the latest batch of decisions about the route, the terminus and the terminals. The Opposition are naive in believing that in this country, or in any other, one can announce a great new project and start construction the following day. The method that we use employs a more rigorous planning system than that enjoyed by any of the populations on the continent. We are using private finance to advance such projects, just as other countries are doing. The attitude of the Labour and Liberal parties towards progressing public infrastructure projects is childish, naive and extremely old fashioned.

§ Mr. Evennett
Will my right hon. and learned Friend confirm that, under the Government, public expenditure has increased in the priority sectors of health, education and law and order, and that Conservatives believe in both public and private finance being used to improve our public services?

§ Mr. Clarke
Capital investment in the health service has increased enormously under the Government, and capital investment in the railways and roads is roughly double what it was when we took over. We seek to increase both the amount and the quality of investment in the infrastructure of our public services by bringing in the private sector. Our firms and banks are good at enabling countries overseas to do that, and we shall do it here, too. As a result, we shall have the infrastructure that we need, the taxpayer will not have to finance it entirely, and we shall have well-judged, well-managed projects which prove efficient to run thereafter. That is the way in which the world is going—a way which the Labour party is plainly completely incapable of understanding, despite its history of failure on the capital investment front.

§ Mr. Darling
The Chancellor will recall that, on a wet night in Glasgow last September, he announced 78 new projects to be financed jointly by the private and the public sectors. Given his mastery of detail, will he tell us how many of those projects have a firm start date? Does he accept that, although tarmacking the car park of Eastbourne hospital is no doubt desirable, it is hardly the stuff of economic regeneration, whereas building the channel tunnel is? Last month, he said that the channel tunnel rail link had not even been designed yet. Will he tell us this month whether it will be completed this century or the next?

§ Mr. Clarke
Heathrow express is under construction. It is financed by the public sector, is being built by the private 1017 sector and will provide London with a high-speed main line link between the centre of London and Europe's busiest hub airport.
The next stage in developing the channel tunnel rail link, as I have already described, involves the decisions that my right hon. Friends will announce on the routes, terminals and intermediate stations. Those decisions matter to the people of Kent and east London. The next stage is to have a competition for the private sector—the managers and financiers of the project. A Bill also has to go through the House—[HON. MEMBERS: "When?"] No Minister in any Government who were controlled by a sensible party would announce the construction date on the day that the project was announced. We are progressing it quickly and efficiently and will produce a high-speed channel tunnel rail link of a kind that is well managed and matches anything produced elsewhere in the world.