HL Deb 18 January 1984 vol 446 cc1051-61

3.5 p.m.

Lord Cledwyn of Penrhos rose to call attention to the urgent need to modernise and improve the infrastructure of the United Kingdom, including the transport system and other means of communication, drainage and the water supply system, and housing; and to move for Papers.

The noble Lord said: My Lords, there are some basic things which are a good indication of the state of a nation and its general health. The way in which the young and elderly, the sick and the disabled are treated is one such indicator and there are several others. But the subject of today's debate is as good a long-term test as any of the nation's fitness and ability to meet the challenges of a difficult age. Is Britain's infrastructure in good shape, and how do we compare with our main competitors?

I should make clear at the start that I take infrastructure in its widest definition as covering those services regarded as essential in sustaining a modern economy"— that is, the country's basic capital investment. Several definitions are available and I was interested to note that the Federation of Civil Engineering Contractors, who are at present carrying out a project on "infrastructure", are defining it as that capital equipment and stock which materially assists industrial production". Others tend to confine it to communications, such as roads and railways, alone. But I propose to go beyond that, as the Motion indicates, and to include housing, sewerage and drainage, although I do not regard that as an exclusive list.

The problems of Northern Ireland, which are covered by the Motion, are acute, as is the problem of Wales, and I hope that my noble friend Lord Underhill, when he comes to wind-up for this side, as well as my noble friend Lady Ewart-Biggs and my noble friend Lord Elystan-Morgan, will deal with those parts of the United Kingdon.

The Prime Minister has exhorted us to return to Victorian values, but I invite her to look very carefully at Victorian infrastructure, for we are still dependent upon it in many parts of the country and in most of our big cities. These services were a remarkable achievement when they were constructed over a century ago, but that Victorian infrastructure—the sewers, the water mains, the railway lines and the rest which serve London, Manchester, Glasgow and other great cities—badly needs replacing. The edifices of civil engineering, the bases of life in urban Britain. have been taken for granted and far more is needed than a little repair here and a little patching up there. As someone said to me the other day, "Britain is looking tatty and run-down and ill cared for".

Let us consider the facts in relation to the main basic services. First, the problems caused by deteriorating sewerage systems are now fairly well known, not least as a result of the excellent report produced by this House's Select Committee on Science and Technology some 12 months ago. We had a debate in the House on the report and I believe that many noble Lords were shocked to learn of the size of the problem. For example, the report referred to 5,000 sewer failures a year and 3,500 collapses with repair costs of £100 million a year. The committee said that they found enough evidence to believe that there is a sufficient risk of decay in the 4sewerage system of Britain getting beyond the water authorities' control.

We know that Manchester, for example, has particularly difficult problems, but the report makes clear that a significant percentage of the country's 210,000 kilometres of sewers are over 100 years old and recommends, first, A sense of urgency should be introduced into tackling sewer dereliction", and, secondly, The National Water Council's call for additional investment in sewer renovation and renewal should be acted upon". Sewerage, therefore, is without doubt a major part of the infrastructure which must be dealt with urgently if collapse, with all that that implies, is to be avoided.

Secondly, I turn to the country's road system and noble Lords will be aware that a serious, developing problem exists here as well. We observe almost every week that traffic restrictions are placed on a new section of the motorway network, reducing the number of lanes from three to two and even to one in some cases. Major rebuilding and repairs are taking place on the M.1, the M.5 and the M.6, and all this means that the Government are having to spend more on road maintenance. I can best illustrate what is happening on the roads by pointing out that, whereas £34 million was spent on maintaining roads in 1971, 10 years later, in 1981, the Government were in this connection spending £252 million. Roads maintenance now takes a quarter of the roads' budget compared with about 10 per cent. in the middle 1970s. It is a frightening increase.

I have read what the experts say. While the age of the road has something to do with it, it seems that by far and away the biggest cause of damage is the large increase in the number of heavy goods vehicles. I learned that "the damage inflicted by one lorry axle weighing 10 tonnes is 160,000 times that of a car axle" and, further, that "the M.1 in Northampton shire, which was designed to carry about 8,000 heavy goods vehicles a week by 1979, did in that very year carry up to 26,000 heavy goods vehicles a day". That is an enormous difference in calculation. There was clearly a very large miscalculation in the early planning stages. But hindsight is easy and I do not want to be unfairly critical. However, there is one point that I must put to the Minister about the Government's Transport and Road Research Laboratory. The work of this unit in testing roads is absolutely crucial, but the Government have cut its budget. The amount involved is not great. How the Government could take the step of cutting the budget of so essential a unit is something which passes my comprehension. Perhaps the Minister will be good enough to comment on this.

My noble friend Lord Underhill will deal in greater detail with the roads problem when he speaks later. I shall therefore refer only very briefly to some other aspects of communications. In addition to the major roads, a matter of concern to us all—we must not overlook the fact that Britain has 170,000 miles of minor roads. The evidence is that they are deteriorating even faster than the 30,000 miles of major roads. The Institution of Municipal Engineers concede that the major effort should be put into the main roads; but they go on to say that the neglect of minor roads cannot continue much longer without serious consequences. As the Minister will, I know, have noted, the British Road Federation in their report of 10th January take a very grave view. They say that local government reforms will further delay the existing road programme by three years and that an investment of £7 million is needed on urban roads to halt the decline.

I will quote a passage from their report which summarises the view of a detached and reasonable authority. They say: The Government is rightly urging industry, local authorities, and all sections of our society fully to face present economic realities. It cannot at the same time be selective in those which it chooses to face itself. Our national failure adequately to invest in the adaptation of essential urban infrastructure to the needs of the late 20th and early 21st centuries will impede the economic recovery for which we are all working. Decisive action to face and deal with this problem can he put off no longer. The drawing up of a realistic urban transport capital spending programme and its implementation offers an immense challenge. It is, moreover, one which the Government must take now before it is too late. Unnecessary restraints on or unwillingness by local authorities must not be allowed to continue. If Britain's major cities and towns are to have modern highway and public transport networks commensurate with their commercial and industrial importance to the country and to provide worthwhile living and working environment, there is no time to lose". That is the view of a detached and responsible authority.

There are other matters, such as bridges, which are an integral part of the system. The House will be aware that many of us are deeply concerned about the Severn Bridge. Perhaps the Minister will tell us what is the latest position and what are the Government's firm intentions on the future of this vital link. Then there are the old bridges, most of them built before 1922, which are crumbling under the weight of modern traffic. I understand that the Ministry of Transport is asking bridge authorities—that is, the county councils and British Rail—to institute a survey of all their bridge structures. Can the Minister tell the House a little more about this? How many bridges are there? How long will the survey take? How much is it estimated that it will cost? And who is to pay the bill for the repair and restructuring of these bridges?

I must in passing refer to the railways, although I shall not dwell upon them. Here again, the British railway system was once the admiration of the world, but for the reasons that I have mentioned the board is struggling to increase efficiency against heavy odds. Again, most of its structures were built in the last century and many are more than a century old, yet the Government are squeezing the railways' investment budget. Let me give just one small example to illustrate the point. In 1982, British Rail's total capital spending was smaller than that of the Paris Metro. It really is a very sorry state of affairs that Britain, in relation to its competitors, should find itself in this sorry state. Somehow or other, at so many crucial points, the Government fail to achieve a co-operative effort but manage to contrive a confrontational bitterness which frustrates progress. This is the most insensitive Government since that of Lord Liverpool. The failure to operate a coherent transport policy and to achieve the right balance between road and rail is one of the tragedies of postwar Britain. The statement by the Secretary of State for Transport(I mention it in passing) which he made in another place on 24th October was dismal and deeply disappointing. It seems to give no hope for the future.

I turn to another very important aspect of this problem—housing. Again this is an essential part of the infrastructure. As was made plain in the debate initiated by my noble friend Lord Pitt of Hampstead on 30th November, the Government's record is dismal. There are two fairly simple questions—for which the Minister of State has a special responsibility—to be answered. First, what are the country's housing needs? Secondly, are they being met? It would be interesting to hear the Minister's answer to the first question: what do the Government regard as the country's housing needs? It was suggested in the Housing Policy Review Green Paper a few years ago that Britain needed 300,000 new homes each year up to 1985. What happened in fact?

By the end of 1981, housing completions had dwindled to barely 200,000 a year, and the rate of new housing "starts'' declined to virtually half the Green Paper target in both 1980 and 1981. The Minister will know well that in 1980 the Environment Committee in another place warned of a cumulative shortfall of half a million homes by next year. The truth is that in this field, as in others, the Government are making a huge policy change. This change is not apparent to the great majority of the people of this country. The Government's housing policies are aimed at reducing council housing to provision for the disabled and the aged, with traditional family homes gradually disappearing from the scene; yet the Government persistently refuse to make a clear public statement on the level of house building which they consider adequate to meet Britain's housing needs and to prevent a further deterioration in the stock. This is what I should like to hear from the Minister this afternoon, without any doubt, prevarication or equivocation.

The level of repair and maintenance work has, I concede, improved in recent years but it is far too low to counter the effect of low house building levels. The fact is that in England alone, nearly one in four houses is now in serious disrepair. The total is over 4 million houses and it is steadily growing. Estimates of the value of housing repair work necessary to restore the stock to an adequate condition range from £20 billion to £30 billion. Against this background it is impossible to understand much of the Government's policy, such as the cut in the rate of improvement grant.

Statistics are bandied about until it becomes difficult to make an accurate evaluation. I must, therefore, ask the Minister once again whether he will be kind enough to state clearly what is the Government's projection for house building annually over the next three years. If the Government believe in a constructive approach to the acute housing problems of the nation, then it is a question which deserves a clear reply. We on this side of the House believe strongly that the construction industry has a major role to play in the revival of the economy, in the provision of jobs and in improving the infrastructure generally.

What is the Government's view of the construction industry? The record is not a good one. They have progressively reduced their capital spending on construction work in the past four and a half years. They have cut the public housing programme by half, as I have said. In spite of what Ministers have been saying, last year's White Paper showed that public spending on construction actually fell in 1982–83 in real terms. The Government say that on the one hand they want local authorities to build houses and that they want to see a flourishing construction industry. The noble Lord the Minister is saying this all the time in the House when he answers questions on housing issues. But when I speak to local authorities and to local authority associations, I get a very different picture.

This Government have done a very great disservice to the nation and to democracy generally by creating a wide gulf between themselves and local authorities of all political persuasions, at a time when co-operation between local democracy and national Government is absolutely essential in the interests of Britain. I do not think that the relationship between local authorities and the Government has been so insecure or so lacking in confidence since councils first came into existence nearly a century ago. Nor do I believe that the Prime Minister can bridge that gulf by inviting a few Conservative councillors to No. 10 Downing Street. My impression is that that meeting had very little effect.

The noble Lord who is to reply to this debate, with his experience on Leeds City Council, should know these things. The noble Lord is on record as having said that he wants to see local authorities building houses. But he should know from his wide experience that local authorities are inhibited from expanding their building programmes under this Government because they are afraid that finances will be cut, as has so often happened in recent years. I must warn the Government—and I do so in a spirit of goodwill—that they must think of ways and means of restoring confidence with local authorities before the damage goes too deep. I myself had the privilege of being a councillor for some years, but I am not sure that I should like to be a councillor under this Government.

One necessary step which the Government should take is to modify the current system of financing and to make provision for forward planning, so that local authorities may have some confidence for the future. Local authorities are one of the bases of our democratic system in this country, and unless the Government can engender a new spirit of trust and introduce realistic policies which mean what they say, the future for the British construction industry is bleak indeed.

I hope it is not thought that I am making debating points for party purposes, because that is not my intention. The worry we have on this side of the House is shared by many others, including Government supporters—for example, the all-party Treasury committee in another place, many distinguished members of the Convervative Party, and the Confederation of British Industry. A statement was issued by the Director General of the CBI in his New Year message which dealt with the very subjects we are dealing with now. Our worry is shared by newspapers such as the Daily Telegraph—which is certainly not a supporter of this party, but which made its concern very clear in its leader on 25th November.

Also, if I may say so without elaborating the point too much, there were the events which occurred in another place yesterday, which are not without significance. Indeed, the two speeches which Mr. Edward Heath, a former Conservative Prime Minister, delivered made very thought provoking reading and there are other Conservative leaders of standing who feel as Mr. Heath does.

We are told that economic prospects are improving and that we are poised to take advantage of that situation. I greatly hope that that is true, for our country and several million people have suffered a good deal over the past few years and they deserve better times than they have seen. The one thing that can be done, and the one thing that is essential, is to move now with a constructive and co-ordinated plan to improve the infrastructure. Real economic and industrial revival depends on that. A recovery of the economy should be preceded by a measured and sustained growth in construction activity. This would certainly help to reduce unemployment—the nation's most urgent preoccupation. Even today, at a reduced level of activity, construction accounts for about 10 per cent. of the nation's GDP and provides jobs for 1½ million people.

The state of the economy is inextricably linked with the construction industry, and as far as civil engineering is concerned, the public sector—in the range of activities I have described—is responsible for 90 per cent. of all demand. So public expenditure has a central role to play in a construction-led revival. It is a labour-intensive industry in the first place and, significantly, it uses a high percentage of home produced material components, and so the home industry would benefit from a measured revival of the construction industry.

The Minister may well return to the old argument about the need to reduce public expenditure and to screw it down as part of the anti-inflation strategy. We have heard that before and we know all about it. That is in real danger of becoming an end in itself—an obsession unrelated to reality or to economic well-being. Planned investment in the basic services of the country is at this moment reasonable and necessary, and it would bring enormous benefits. We do not believe—and, again, this is a view shared by noble Lords in all parts of the House—that it would be dangerously inflationary if it is planned properly over a period of time. The Prime Minister would not need to make a U-turn; she would need only to veer a little in the direction of common sense.

We ask the Minister and his colleagues to accept our Motion. We ask them to revive the hopes of those on both sides of industry who have gone through hard times. We ask them to consider the millions who are out of work and who have suffered—more than 3 million and probably nearer 4 million of our fellow countrymen. We ask them to take steps to give confidence back to local authorities and to recognise the crucial role of the public sector in all this. In short, we ask them to help to rebuild Britain. I beg to move for Papers.

3.28 p.m.

Lord Ezra

My Lords, we have on many occasions in the recent past addressed ourselves to the subject of the infrastructure and investment in it. In spite of that, I believe that the noble Lord, Lord Cledwyn of Penrhos, is entirely justified in introducing a Motion today as a result of which we can re-examine this vital issue. Looking at the problem of the infrastructure of Britain—the physical infrastructure—we would conclude, if we tried to take a totally objective view of it, that it is not so much the quantity that we are lacking, but the quality. If we compare the quality of our infrastructure and all that pertains to it—roads, railways, housing, water supply and sewerage systems —with those of other major industrialised countries, we find from the investigation that has been made of this subject that we are suffering in quality. I believe that as a nation we are entitled to feel that the quality of the physical infrastructure which serves us should be second to none, but unfortunately we are now in the second place, if not in the third.

If we look at the various aspects of the infrastructure—and I should like here to reinforce some of the points made by the noble Lord. Lord Cledwyn—and we refer to the debate initiated by the noble Lord, Lord Pitt of Hampstead, on 30th November, it was a revelation, no doubt, to some of us to realise from the statement of the Minister himself, the noble Lord, Lord Skelmersdale, that 1 in 10 of the houses in this country are either unfit for human habitation or require repairs of a major nature, and that 1 in 4 require substantial repairs, and yet the rate of replacement of housing at the present time is 1 in 1,000; 20,000 houses are being demolished and replaced at the present time out of a total housing stock of 20 million. There was a bit of an argument in that debate, which I listened to with great interest, as to how long it would take to get this problem right; there was an argument as to whether it would be 50 years, 100 years or more. As far as I can see, one could argue that it could be infinity because the rate at which replacement is taking place is getting nowhere near the rate at which houses are becoming unfit for habitation.

I think that this is a matter that we, as a self-respecting industrialised nation, have to take very seriously indeed: we have to see that the houses that are available for people to live in are up to the best standards of any other industrialised nation. There are more houses than there are families at the moment, but the geographical distribution of those houses bears no relationship to the need for them, and the quality bears no relationship to the standards we are entitled, as a leading industrialised country, to require. So I feel that here there is a priority problem of quality—the quality of the conditions in which people live in this country.

If we look at the transport system, which also comes into this infrastructure problem; if we talk about the totality of the road system; again we have, in pure mileage, if we add the trunk system and the rural system, an adequate supply of roads. But if we look at the quality of the roads, then I must say I am totally in agreement with the noble Lord, Lord Cledwyn, when he says that every time a trunk road has to be repaired major interference in the traffic flow occurs. In other words, we have not allowed for flexibility. The rural road repair programme is totally inadequate, according to those who are expert in this field, and the by-pass system is falling way behind what has been indicated as necessary. So I am afraid we must conclude as far as the road system is concerned that, although the quantity is adequate, the quality is totally inadequate.

Let us look at the railways. Those of us who use the railways—I happen to be one of those—are in a quandary as to what the post-Serpell situation for the railways is. We have no idea what the proposals are for the development of our rail system in Britain. All I know, as a confirmed user of the railways, is that when there is the slightest difficulty on the rail system due to no fault of the management or those who work on the railways, there is major disruption; in other words, there is no element of flexibility. We have so tightly drawn the capital investment limits of the railways at present, whether it be in respect of signalling, track maintenance or rolling stock supply, that, if the slightest thing goes wrong, there is major disruption, and the cost of that disruption, in my submission as somebody involved for many years in industry, far surpasses the saving made by tightening the belt to the extent to which it has been tightened.

If we come to the water supply and sewerage systems, on which your Lordships had a debate a year or so ago on a very important report to which the noble Lord. Lord Cledwyn, referred, there again we have an adequate water supply and sewerage system in terms of quantity but in terms of quality it is sadly deficient. I was appalled to read on page 21 of that report that in some cases up to 40 per cent. of the water which is pumped is lost in leakage; in other words, in a country which should be saving on energy, we are wasting it. Some leakage is, of course, inevitable, as the report makes clear, but that amount of leakage, and quite often averaging up to 25 per cent., seems incredible. What I worry about, as somebody who lives here and has a garden and is interested in maintaining that garden, is that at the slightest approach of exceptionally warm weather we are told that the water supply is inadequate to enable us to live to the standards we expect. If in future years, as some scientists predict, the climate in Britain is going to get progressively warmer, what are we going to do? Are we going to run out of water or are we going to be able to maintain our standards? People who live in deserts have found ways of getting over this. We live in a temperate climate, and at the slightest approach of warm weather we are told that we cannot use water. It seems to me that we have got our priorities wrong.

As regards the sewerage system, we pioneered this system in Victorian times. There is no doubt that we were way ahead of the rest of the world, but we are now way behind in our maintenance, repairs and replacement. That again is fully dealt with in the report.

So, my Lords, the issue is the question of the quality of the infrastructure in Britain, and this ought to be a matter of absolute priority for whatever Government may he in control of our affairs. However, it is not enought just to state the problem. I think it is incumbent upon those, such as myself, who raise this issue to suggest how it might be dealt with. Of course, it comes down to a question of money, so I would like to make a few suggestions in that regard. In the first place. I believe that the Government's objectives on the PSBR are too low having regard to a proper balance between running the financial affairs of the country correctly and running its economic and social affairs correctly. All is a matter of balance. I fully support the CBI's view that we are aiming at a PSBR which is at least £3;2 billion below what it ought to be. If we had that extra spending capacity, as indeed there has been in the resurgence of the American and German economies, and if we were to follow the example of those other bastions of the private enterprise sector, then we could carry out some of these operations.

But there are indeed other steps which we could take apart from restoring that £2 billion. There is a framework within which institutions in the public sector, whether local or other authorities, cannot carry over investment from one year to the next. They have to stop at the end of the financial year. But I am one of those who for many years served with a public enterprise and I am aware of the fact that all sorts of things can interfere with capital investment. It could be the weather; it could be geological problems. as in the industry in which I served for so many years; it could be all sorts of things. This business of having at the end of the year automatically to finish on all one's capital projects, losing all that and starting again, is crazy to say the least.

It is therefore no surprise that the under spending of public authorities on the infrastructure has been chronic in Britain. In spite of the fact that we are spending less than we need to spend, what is allowed to be spent is not spent. Therefore, with all humility and from my experience, I suggest to the noble Lord, Lord Bellwin, who is to reply to the debate, that he gives us his views on this question of carry-over whereby projects which are started in one year have to start recounting in the next year merely because of circumstances beyond the control of those who are involved in them.

There is a third way in which we might finance this very important issue of improving the quality of our infrastructure. Only recently we were debating in this noble House the sale of very substantial public assets; namely, the telecommunications network. I should like to hope that the Government will agree. if they are determined to pursue that measure—which did not achieve the full support of this House on Second Reading—that they dedicate some part of the proceeds of the sales of those assets to the improvement of the quality of our infrastructure. I hope that all the proceeds will not disappear into the claws of the Treasury without any accountability as to what happens to them.

Finally, there is another proposal—and far be it for me not to come forward with lots of proposals to help the Government in this important endeavour. I believe that there could be many ways in which the private sector would be interested in supporting public sector investment. Recently there was the case of the Black Country road project proposed by the Tarmac Company and supported by the National Westminster Bank. The Treasury and Government authorities said they were all in favour of private sector money being put into such projects. For over a year these enterprises worked on this project. They put forward a proposal. For some months now, however, no agreement has been reached. If the Government are serious in introducing and stimulating private sector investment, which a number of construction companies and institutions in Britain would he very glad to support, they should lay down ground rules which make it clear how one can do this. What disturbs me is the Treasury's cat and mouse game. It holds out a piece of cheese and the mouse approaches, but when the mouse gets anywhere near the cheese is removed. That does not seem to be a sensible way to run our affairs.

Therefore, I conclude by saying that I believe that this issue resolves itself into two facets. The first is that the problem of the infrastructure is one of quality, and the quality of our infrastructure is deteriorating very rapidly and needs to be put right. As to the financing, what in business we call off-balance-sheet financing provides ways in which this can be done with minimum difficulty. I should like the Government, and in particular the Minister when replying, to indicate that there is a creative approach to this question of how we can provide the necessary funds to improve the essential quality of our infrastructure.