HC Deb 10 July 1997 vol 297 cc1060-1
7. Gillian Merron

To ask the Chancellor of the Exchequer what new measures he is proposing to increase public-private partnership. [6183]

The Paymaster General (Mr. Geoffrey Robinson)

The Government have reinvigorated the private finance initiative and accepted the 29 recommendations of the Bates report. We will see to their timely implementation between September and December. We have asked Departments to prioritise their schemes and I am pleased to be able to say that schools and hospitals—two early priorities—are proceeding well. Within the next few days, I also hope to announce the chairman of the new task force which we are setting up.

Gillian Merron

I thank the Minister for his reply. Is he aware that in my constituency of Lincoln we have a first-rate example of public-private partnership in the presence of the new university of Lincolnshire and Humberside, which is the first purpose-built university in this country for many decades? Will he and his ministerial colleagues study such models of good practice, where councils, businesses, local organisations and individuals have joined to ensure the co-operation necessary for the provision of educational excellence?

Mr. Robinson

I am grateful to my hon. Friend for drawing to my attention the excellent example of Lincolnshire and Humberside. I commend it to the House as an example of the public and private sectors working well together. In particular, I compliment my hon. Friend on her contribution to that partnership. In marked contradistinction, we note that the private finance initiative got nowhere under the incompetence of the previous Conservative Government. We are determined to make a success of it.

Mr. David Heath

Whereas any extension of public-private partnerships is to be welcomed, does the hon. Gentleman appreciate that in many areas—rural areas, in particular—where the schemes are small and scattered and we are dealing with single classrooms or schemes of that type, the PFI will never he the appropriate solution? Does he appreciate that, however much it is extended, it will be no substitute for a proper capital investment programme in local authorities?

Mr. Robinson

The hon. Gentleman will be aware that, in the next five years, we will be spending three times what the Liberals intended to spend. He must also be aware that, of that £1.3 billion programme for schools refurbishment, two thirds is intended to be non-PH and so, in that sense, directly for schools. As I am sure he will agree, where the PFI can work for the other third, we will get incremental spending in so far as it is successful in those areas, and I am sure that it will be.

Mr. Boswell

Although I am sure that the Paymaster General will be pleased to hear that we agree with public-private partnerships where they offer good value for money to the taxpayer, does he agree that the biggest case of that is probably the existence of the pension funds, which have built up some £650 billion of assets? Does he feel that it is wise or conducive to future good will and the success of such collaboration to introduce a tax, through the changes in advance corporation tax, to the tune of £5 billion a year, with all the consequent effects either in driving people back into the public sector or in requiring rebates to be adjusted—therefore at greater public expenditure cost?

Mr. Robinson

The question is totally irrelevant to the PFI, as the hon. Gentleman well knows. The fact is that the Conservative Government made a total flop of the PFI and this Government are going to make a success of it.