§ 6. Mr. A. J. Beith (Berwick-upon-Tweed)Whether the borrowings of the successor company to Railtrack will be accounted for as public borrowing. [18687]
§ The Chief Secretary to the Treasury(Mr. Andrew Smith)I see no prospect of such an outcome.
§ Mr. BeithIs it not a condition of Treasury agreement that that borrowing should be off the Government's books? How, then, could the permanent secretary go around the City telling people that the successor company would have a BBB star rating? Is not that an implicit guarantee?
§ Mr. SmithAs public sector net borrowing is, as it says, borrowing by the public sector, and as we do not foresee the successor company—whatever it is—being in the public sector, I see no prospect of the outcome being counted as public sector borrowing.
§ Mr. John Bercow (Buckingham)So far as the impact of the dismantling of Railtrack on public borrowing is concerned, the Chief Secretary oozes smug complacency. Given that the Confederation of British Industry, the Ernst and Young ITEM Club, Franklin Mutual, Legal and General, PricewaterhouseCoopers and the state of Wisconsin, to name but six, have all warned that the Railtrack fiasco will make it more expensive to attract private capital, why does he not now accept that present policies risk the possibility of financial famine and the virtual certainty of increased borrowing, higher taxes and further damage to a transport system which is already described by the Government's own advisers as the worst in the European Union?
§ Mr. SmithOn smug complacency, the hon. Gentleman would do well to look in the mirror. As for the impact of what has happened at Railtrack on credit ratings, I shall quote the view of a leading credit rating agency. Standard and Poor published a document on 23 October that dealt with precisely these matters, in which it stated that
the Railtrack situation had no direct credit implications for rated PFI projects".Moreover, the Government are attracting private investment into public-private partnerships and private finance initiative projects of all types. That includes our commitment to invest in our railways, in line with the 10-year plan that the Government have set out.
§ Mr. Michael Jack (Fylde)If Railtrack's credit rating is so good, why did the Minister for Transport recently suggest that the Government are considering reducing expenditure on the roads programme to subsidise expenditure on rail? Is that correct? If it is, by how much will expenditure on roads be reduced, and what will be the damage to the roads programme?
§ Mr. SmithI am confident that our plans for rail can and will be financed within the 10-year plan that we have already set out, and out of the £180 billion that the Government have committed to transport. In contrast,
456 the Conservative party and the shadow Chancellor at the time of the general election explicitly refused to match our commitment on transport investment.