Danny Alexander admits some of the Govt £50bn infrastructure fund could go to build Heathrow 3rd runway
£50bn fund could go to build third runway at Heathrow
A £50 billion fund to kick-start the UK economy could be used “in principle” to build a third runway at Heathrow Airport, Chief Secretary to the Treasury Danny Alexander said today.
Mr Alexander admitted the Government was not imposing a time limit on the fund, which will create 140,000 jobs in the construction industry, leaving the door open for it to be allocated to the controversial third runway at the UK’s largest airport.
He told MPs the money would not be added to the country’s borrowing figures, adding that companies benefiting from loans will pay a commercial interest rate to offset the risk to the taxpayer.
Mr Alexander’s admission that the funding could be used for a third runway at Heathrow came as he laid out the details of the Infrastructure (Financial Assistance) Bill in the Commons.
In an exchange with Mr Alexander, Labour MP for Hayes and Harlington John McDonnell said: “Although it may not be listed in the national programme … and it will not be brought forward for the next 12 months, there is no sunset clause to this Bill so this legislation could be used to that effect.”
Mr Alexander replied: “As you said there are no such proposals on the table at the moment but in principle should a major infrastructure scheme in the transport sector come forward, and it is then unable to attract the necessary finance because of conditions in the funding market, then of course in principle that could be eligible.
“But that would be a decision for the Government of the day.”
Mr Alexander said £10 billion of the funding would be set aside to build 70,000 new homes, telling the Commons the money would not be used for new projects but to bring forward existing construction schemes that were struggling to get off the ground because firms could not get finance.
The money would also be used to back improvements to the country’s waterways, waste schemes and other major building works as part of the Government’s efforts to take “decisive action” in the economy.
The Chief Secretary added: “The actions enabled by this Bill will provide enormous benefits across the UK. This is not just about a near-term boost, the projects that go ahead as a result of the action we are taking will provide major long-term benefits to individuals, firms, households and the whole UK economy.
“The steps we plan to take will help more companies in a wide range of sectors to flourish, not just in the south east of England but across the whole of the UK, and will help more people access a wider range of opportunities.”
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Here are some extracts from the debate in Parliament:
17.9.2012
Infrastructure (Financial Assistance) Bill Second reading
http://www.theyworkforyou.com/debates/?id=2012-09-17a.676.0&m=40201
Danny Alexander (Chief Secretary, HM Treasury; Inverness, Nairn, Badenoch and Strathspey, Liberal Democrat)
Today we seek authority for the Treasury to incur up to £50 billion of expenditure in connection with giving financial assistance to infrastructure across the UK.
That financial assistance might take the form of guarantees, loans, indemnities or other support backed by public funds.
…. to support investment in utilities, transport, other infrastructure for the provision of economic and social public services or housing.
John McDonnell
Will he clarify whether those “other transport facilities” include airport expansion and runways? Although the third runway at Heathrow, or perhaps elsewhere, is not listed in the national programme and will not be brought forward in the next 12 months, there are no sunset clauses, so this Bill could be used to that effect.
Danny Alexander
The hon. Gentleman is right: there is no sunset clause. That is because we think that it is important to introduce these powers, not just for now but for the future. By circumscribing the financial limit of the extent of the powers and also by establishing strong requirements for reports to be made to Parliament, we can ensure that Members continue to be informed on how they are used. As the hon. Gentleman says, no such proposals are on the table at present, but in principle, should a major infrastructure scheme arise in the transport sector but be unable to attract the necessary finance because of conditions in the funding markets, it could be eligible in the future. However, that would be a decision for the Government of the day.
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Joan Walley (Stoke-on-Trent North, Labour)
I am grateful to the Minister for giving way a second time. Does he agree that it is important for the Bill to provide for proper environmental impact assessments? Given that consultation is taking place in the House now that the Government have got rid of the regional spatial strategies, there is a requirement for us to ensure that environmental impact assessments take place. Will the Minister explain how that is linked with the requirement in clause 3?
John McDonnell MP
Will he clarify whether those “other transport facilities” include airport expansion and runways? Although the third runway at Heathrow, or perhaps elsewhere, is not listed in the national programme and will not be brought forward in the next 12 months, there are no sunset clauses, so this Bill could be used to that effect.
and
Interestingly, the coalition against the expansion of Heathrow has been cross-party up until now. If I remember rightly, the Government’s deputy Chief Whip committed to lying down in front of the bulldozers if it ever came about, and he was not moved in the reshuffle, so I take that as another commitment to opposition to the policy. I hope that the Government will support an amendment to prevent the Bill from being used to give guarantees on the funding of the expansion of Heathrow, certainly during the lifetime of this Parliament. We can then debate the matter with the subsequent Government.
and
A succession of MPs have stood up and urged the inclusion of particular projects in the Bill. May I be a contrarian and suggest one that should not be included in the Bill—the expansion of Heathrow airport? I am worried because although the Bill is meant to account for ready-made projects—those on the drawing board and ready to be implemented over the next 12 months—there is no sunset clause. Furthermore, it can be renewed and additional sums can be bestowed simply by statutory instrument. Now, I am not a conspiracy theorist, but my constituents might start to believe in conspiracies: we had 12 months of intensive lobbying by the aviation industry; after that, the Chancellor expressed scepticism about existing Conservative party policy, which was against a third runway at Heathrow; then the Prime Minister announced a review of that policy by someone who was director of the CBI, which had lobbied for a third runway; and now we have a Bill that would go on the shelf as almost suitable for funding the expansion of Heathrow. It is no wonder, then, that my constituents are anxious about the attitude of the Government to that measure.
The measures in the Bill would perfectly suit Ferrovial, the Spanish company established by a fascist in the 1930s who made his profits as a result of contracts awarded to him by Franco. It would ideally suite Ferrovial to come forward and seek funding for the infrastructure expansion at Heathrow. I am sure it would be willing to pay for the tarmac, but not for all the infrastructure that goes with it, particularly the road and rail network needed to support a third runway. I fear that Ferrovial will come forward seeking Government guarantees to fund and back up the expansion. I say that because its construction company globally is in serious difficulties, or certainly is in doubt.
I give notice that despite the cross-party support for the Bill, which I also support, I will be moving amendments to ensure that the expansion of Heathrow is not part and parcel of it. I expect coalition support for that on the basis of the existing coalition policy, sworn in this Chamber by the Prime Minister, that the Government will not bring forward the expansion of Heathrow during the lifetime of this Parliament.
Stephen Pound (Ealing North, Labour)
I am not entirely sure if Ealing North and Hillingdon constitute a coalition but, if it does, may I say that that coalition is solid and that we are as one on this?
John McDonnell (Hayes and Harlington, Labour)
Interestingly, the coalition against the expansion of Heathrow has been cross-party up until now. If I remember rightly, the Government’s deputy Chief Whip committed to lying down in front of the bulldozers if it ever came about, and he was not moved in the reshuffle, so I take that as another commitment to opposition to the policy. I hope that the Government will support an amendment to prevent the Bill from being used to give guarantees on the funding of the expansion of Heathrow, certainly during the lifetime of this Parliament. We can then debate the matter with the subsequent Government.
And it continues at great length……..at
http://www.theyworkforyou.com/debates/?id=2012-09-17a.676.0&m=40201