§ 3.13 p.m.
§ The Earl of LAUDERDALEMy Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government how the Tyne and Wear metro rail-tram project is to be financed.
§ Baroness STEDMANMy Lords, the Tyne and Wear county council is responsible for the project and for its financing. The Government contribute to the costs through the transport supplementary grant.
§ The Earl of LAUDERDALEMy Lords, while thanking the noble Baroness for that reply, may I ask her how much central Government are contributing by way of grant?
§ Baroness STEDMANAbout 70 per cent., my Lords.
§ The Earl of LAUDERDALEMy Lords, may I ask the noble Baroness to say, for our information, whether the Government ale satisfied as to the economic viability of this project?
§ Baroness STEDMANYes, my Lords; we think this project is essential to the regeneration of the Tyneside area.
§ The Earl of LAUDERDALEMy Lords, may I ask the noble Baroness to answer this further question: if it is economically viable, cannot the Government go to the money market and raise money from private enterprise instead of burdening the public sector borrowing requirement? In looking at the finances from now on, will the Government perhaps be consulting Mr. John Pardoe?
§ Baroness STEDMANMy Lords, the normal practice with projects such as this is that the Government pay a percentage by way of transport supplementary grant. This varies around 70 per cent. a year, but it is a fluctuating figure. In the same way, when the scheme is operating they will pay, if necessary, up to 70 per cent. of the deficit, again in the form of grant.
§ Lord WYNNE-JONESMy Lords, is my noble friend aware that the inhabitants of Tyneside regard this as a very admirable scheme and look forward to it operating very soon?
§ Baroness STEDMANYes, my Lords, that is why we sponsor it and why we want it to continue. It is extremely important to the regeneration of the Tyneside area. We need more mobility of labour there and we need it in connection with the inner city development of the City of Newcastle.
Baroness WARD of NORTH TYNESIDEMy Lords, may I ask the noble Baroness to accept my view that the scheme is very necessary and that we are glad to have it? Will she bear in mind, and tell many other people, that the North-East does not always get all the money that it either requires or needs by comparison with other parts of the country? May I add that we are delighted with the scheme and feel that the sooner it comes into operation, though it is expensive, the more grateful we shall be?
§ Baroness STEDMANMy Lords, I am delighted as a Minister to accept bouquets from the noble Baroness.
§ The Earl of LAUDERDALEMy Lords, may I ask the Minister to confirm that the balance of Government grant will fall on the public sector borrowing requirement?
§ Baroness STEDMANYes, my Lords, it will be part of the transport supplementary grant.