HC Deb 30 November 1993 vol 233 cc931-3

Spending on health, education, training and science contributes significantly to the long-term economic performance of the economy, by improving the nation's stock of so-called human capital—the health, knowledge and skills of the population as a whole. Important though it is, this contribution is very difficult to quantify. This year, however, as promised last autumn, the public sector accounts will identify separately the amount the Government plan to spend on physical capital projects, including improvements to the nation's infrastructure.

Overall, the new plans provide for total public sector capital spending over the next three years of around £22 billion a year. But just as that figure takes no account of the massive investment programmes of the former nationalised industries which are now thriving in the private sector, so too it ignores the very large amount of investment which is stimulated by Government policies, including investment in housing and urban regeneration. On top of this, the private finance initiative is now adding to spending in areas for which the public sector in the past has traditionally taken responsibility.

To make a success of this private finance initiative—and to deliver the increase in capital spending within the public services that I want to see—will require a complete change of culture within Government, together with imagination and innovation on the part of the private sector. That cannot be expected to happen overnight. Even so, the flow of private sector projects to date has still, in my view, been disappointingly small.

To speed the process up, I have already announced the establishment of a working group chaired by Sir Alastair Morton, who I am sure can be expected to work alongside me as something of a warrior in this cause. In the meantime, the Government are today giving the go ahead to three substantial new transport projects under the private finance initiative: first, the extension of the docklands light railway to Lewisham; secondly, a new air traffic control centre for Scotland; thirdly, the refurbishment of the west coast main line, one of our most important routes, linking some of the biggest cities in the country—London, Birmingham, Manchester, Liverpool and Glasgow.

The private finance initiative also offers major opportunities for improved services in the NHS. There are almost 40 NHS projects where private finance is already involved or being considered, ranging from cardiac units to hospital car parks. At Aintree in Liverpool, a scheme involving the construction of a 100-bed patient hotel, four operating theatres and other facilities is going ahead—a model for other private finance projects.

In addition, my right hon. and learned Friend the Home Secretary will be taking forward proposals to finance and build six new prisons using private finance. He has already announced that he also intends to involve the private sector in the provision of secure training centres.

Finally, I have always made clear my view that roads provide a major opportunity for private finance. My right hon. Friend the Secretary of State for Transport will be informing the House shortly about the Government's plans for taking forward motorway charging in the light of responses to his Green Paper, but I can announce today that, when the technology is ready, we intend to introduce a system of electronic motorway charging in this country. This will be a massive high-technology project in its own right.

In the meantime, the Government plan to introduce new contracts under which the private sector will design, build, finance and operate roads. My right hon. Friend will hold discussions with the construction industry and others to identify the best road schemes to start with. Bringing private finance and management into the roads programme offers the prospect of substantial benefits for the construction industry, the motorist and the taxpayer alike. I am sure this will be warmly welcomed.