Speech

Chief Secretary to the Treasury discusses government’s infrastructure programme

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Danny Alexander speaks about the government's infrastructure programme to an audience of civil engineers.

Chief Secretary to the Treasury Danny Alexander

I’m very glad to be given this opportunity to discuss the government’s infrastructure programme.

In fact, I’d like to start by reading a quote about a certain high profile rail project.

This is something that was said in the House of Commons on the 13th May:

We have the wrong scheme at the wrong price […]

The local community and financial investment community have no confidence in it and the public could not care less about it and do not believe that it will happen.

Only the government plough serenely on, full of blind optimism.

The day of reckoning will come, but in the next Parliament. I look forward to being there at the kill.

I’m sure that sounds familiar.

Well those were words spoken on the 13th May 1987, by Jonathan Aitken in a debate on the Channel Tunnel.

Of course, Jonathan – (and his sword of truth) – didn’t always make the best calls.

And so fast forward:

  • 26 years
  • 300 million passengers
  • 250 million tonnes of freight

And I think most people are quite happy the government moved ahead with that long term investment.

So I’d like to begin by saying this.

The government is fully committed to the infrastructure plan we’ve set out.

We know that every project will have its detractors…

But we know that those overall plans:

  • on High Speed 2
  • on station and platform upgrades
  • on electrifying our rail lines
  • and on improving our roads

are absolutely essential for the long term future of our economy.

Economic argument

As the minister that oversees all public spending – I’d be the first to admit that we are spending a lot of money on transport projects.

£70bn will be invested over the next parliament.

More than we’ve seen in many decades.

And this is at a time when we’re working hard to reduce the deficit.

But if we want a successful economy in the 21st century, then we’ll need a transport network fit for the 21st century.

And – as such – this is the best possible way to invest in a stronger economic future for this country.

In the short term, our investment is creating jobs in planning and design and construction:

  • 500 jobs are being created in the construction phase of the Mersey Gateway Bridge
  • More than 1,000 were created during the peak of the redevelopment at King’s Cross

And many of the people moving into these jobs will be learning skills that will increase their future employability – 400 apprentices are being appointed on the Crossrail project alone.

Of course, that idea of creating jobs for the future is crucial.

Because our investment in these projects will allow thousands of British businesses to flourish in the longer term.

And those businesses will help put thousands more people into employment.

  • The Northern Line extension and redevelopment of Battersea could support around 25,000 jobs
  • The first phase of High Speed 2 will support about 40,000

And – according to the KPMG report that Patrick McLoughlin launched in this very room two weeks ago – High Speed 2 could deliver an annual productivity boost of up to £15 billion spread across the UK, every year.

I think it would be an absolute folly to neglect this long term economic benefit, for short term political reasons.

I’m wary though, that so far I’ve only really touched on rail projects.

Of course rail projects will be crucial to millions of people and millions of jobs in and around urban areas.

But speaking – as someone who spent half of his youth on an island, and represents a huge rural constituency – I know that there are many parts of the UK where people are simply reliant on their cars.

And as such, I recognise that we need to invest to reverse the decline of our roads networks.

In fact, the Institute’s State of the Nation report recognised that need too.

I was recently presented with the statistic that – without significant investment – in 27 years time all motorists would spend a quarter of their road-time stuck in traffic jams…

Which is a consequence of the continued under-investment in our roads since the 1970s.

And that’s why the £28 billion we’re investing in maintaining and enhancing our road network also makes huge economic sense.

Nor should we neglect the role our airports and waterways can play in the economy.

The work at Gatwick and Heathrow will prove crucial to international business.

And port and canal development lies at the centre of the Atlantic Gateway Project, which has the potential to create a quarter of a million new jobs in the North West of England.

So these investments are an economic necessity.

They will lead to further economic growth.

And raise this country’s growth potential in future.

Delivery

Because I know about the jobs and the growth these projects can bring, I’m determined we get them completed.

And – to make sure that happens – we’ve had to spend a little time getting the right delivery structure in place.

So we’ve:

  • Increased civil service expertise
  • Set up the National Infrastructure Plan, and an investment pipeline
  • Developed the UK Guarantee Scheme to unlock private sector investment in infrastructure projects

We’ve also made sure that we’ve learned lessons from our most successful project of recent years – the 2012 Olympics and Paralympics.

So the £42.6 billion High Speed 2 budget includes £14.4 billion of contingency.

We have the mechanisms at the Treasury and in the Department for Transport to keep those costs under control and – as happened with the Games – I want to see this project delivered under budget, and returning money to the taxpayer.

And it will be delivered.

Just as over 30 transport projects have been delivered in 3 years, with more getting underway each month.

Just as Crossrail is being delivered – with 18km of tunnels bored so far.

And just as over 150 station upgrades have been delivered up and down the country.

The King’s Cross redevelopment – in fact – will officially complete tomorrow.

Finally leaving behind a booking hall, erected as a ‘temporary’ measure in 1970.

And bringing offices, shops, homes and – most importantly – a railway station fit for Britain’s future, which will rejuvenate a once neglected part of the city.

Conclusion

So, before I take questions I want to reassure everyone here, that we are a government serious about investing in our transport infrastructure.

And we are a government serious about delivering on that investment on time too.

We have a credible, considered and costed pipeline of projects.

They are projects that will boost our economy in both the short term, but more importantly the long term.

And they are projects that we are fully committed to moving forward with.

Not out of vanity or pride or pig-headedness.

But out of an understanding of what our economy needs.

We’ll look forward to working with you as we take this work forward.

Published 25 September 2013