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The existing Forth road bridge, as the hon. Gentleman said, has served Scotland well. I was slightly horrified to realise that I am slightly older than the bridge, but I
hope that I am managing to wear my age a bit better than the first crossing—although I think that there has been slightly less pressure on me.
The new Forth crossing is an ambitious project. Its estimated cost is £1.8 billion, and its planned completion date is, as the hon. Gentleman said, 2017. The project is designed to enhance the connections between the transport networks of south-east and central Scotland, improving journey times and contributing to the growth of the Scottish economy. Given the position of his constituency, I can see why he is keen to see the project go forward as quickly as possible. That is why the Government have taken steps to support the Scottish Executive in proceeding with the second crossing, but, because the Government recognise that this is a devolved issue, it is for the Scottish Executive to decide whether the new bridge is necessary, which designs they should follow and how to fund it.
I should like to make a couple of points about the UK Government’s record of support for public sector investment in Scotland, a record of which we are very proud. Since devolution in 1999, the capital provision made available to the Scottish Executive has more than tripled from £1 billion to more than £3 billion a year today. That increase is enabling the Scottish Executive to modernise Scotland’s infrastructure—its schools, hospitals, transport—and provide sound foundations for future growth and prosperity.
In the pre-Budget report, the Government announced that they would agree to the Scottish Executive bringing forward capital spending from 2010-2011 to 2008-09 and 2009-2010 as part of a major fiscal stimulus. In total, the PBR fiscal stimulus was worth about £2 billion for Scotland, including reduced VAT. I am pleased that the Scottish Executive announced in January that, through their Scottish economic recovery programme, they are accelerating £227 million of capital spending and supporting almost 4,700 jobs in the Scottish economy. Beyond that, we recently announced in the Budget a further £104 million for the Scottish Executive to strengthen investment in Scotland during the recession.
The Government are working with the Scottish Executive to deliver improved infrastructure and to tackle the recession. If they wish, the Scottish Executive can seek funding for private finance initiative projects from the Treasury’s new PFI fund, to assist projects adversely affected by the current financial conditions to come to a successful conclusion. To date, the Executive have chosen not to do that; I suspect that that is due to an ideological objection to PFI. However, PFI is a potential route for the Executive.
As I have said, the UK Government are keen to support progress on the new Forth crossing, and we have been proactive in seeking innovative solutions. To be helpful, my right hon. Friends the Secretary of State for Scotland and the Chief Secretary to the Treasury initiated a meeting with the Scottish Cabinet Secretary for Finance and Sustainable Growth on 4 March to discuss methods of funding that the Scottish Executive might choose; the hon. Member for Dunfermline and West Fife was right to point out that that would bring nearly £1 billion to bear. The package was one of innovative flexibilities and it was designed to try to facilitate the development of the funding package.
Willie Rennie:
I recognise that there is some flexibility within the funding, but the biggest chunk of it was
coming to the Scottish Government anyway. The Minister has accepted the principle that new funding should come from Westminster. Perhaps she will consider a new package.
Angela Eagle: The principle that has been accepted is in respect of increased flexibilities, some certainty on end-of-year funding, the Barnett consequentials of Crossrail and a range of other things. We are trying to say in advance to the Scottish Executive that if they were to put together a package in such a way, there would be no doubt about some of the decisions on end-of-year flexibility, so they could act with confidence.
It is easy to say that the flexibilities contain no new money, but they account for nearly £1 billion of extra assistance. Obviously, £500 million of Crossrail-Barnett consequentials were going to Scotland anyway. It is perfectly reasonable of the Government to say that if the Scottish Executive wish to use that money to bring forward the second Forth bridge, they can do so. Some of the other parts of that package would have given certainty about the consequences of extra efficiency savings or the income from extra asset disposal. If we gave certainty, that money would, under the waiving of normal Treasury rules, be allowed to be put into the pot for funding the bridge. Saying that there is no new money is a possible analysis, but I dispute it.
Stewart Hosie: Measures were certainly suggested, but they included end-of-year funding, as the Minister rightly said. To raise the funds required for the bridge on that basis would require the Scottish Government to underspend by about £275 million a year between now and 2016-17. That would be rather foolish. It would be much better if we could simply repay the cost of the bridge over a longer period.
Angela Eagle: That is the hon. Gentleman’s interpretation. In England, the Government require efficiency savings of 3 per cent. a year; in Scotland, I note, efficiency savings of only 2 per cent. are required. With a more radical look at efficiency savings, money for the bridge might be freed up. There are ways to help to put the funding together. My right hon. Friends’ meeting with the Scottish Minister was about trying to give certainty in these circumstances. Efficiency savings often go straight back to the Treasury. Part of the reason for the meeting was to say that if such efficiency savings or asset disposals were successful, the Scottish Executive could keep the money. There are many areas where such pledges are not forthcoming from the Treasury; it was an attempt to be helpful. The Scottish Executive have called for borrowing against 20 years of future public funding by the Barnett formula. That is not a way that we can fund public expenditure across the UK, in Scotland or anywhere else: the systems do not work in that manner and it is not a viable option. We had the meeting to try at least to see whether we could explore a way forward, and all those issues remain on the table.
It is also open to the Scottish Executive to propose an asset disposal plan for assets such as land and buildings that are no longer required. I can reconfirm that in this context the Treasury would be happy to consider the Scottish Executive’s retention of the increased receipts that would follow in order to fund the bridge. For example, disposing of 1 per cent. of the Scottish Executive’s
assets in the national assets register could yield £230 million to assist in providing the funding necessary to turn the bridge into reality. The Treasury also offered the Scottish Executive the flexibility to switch from resource budget provision to capital, which provides further options for choosing how a funding package for the bridge might be put together. The package that has been offered is potentially worth £1 billion, and it illustrates how it might be possible to take the Forth bridge forward, even within the genuine constraints under which we are all operating, which must not be underestimated.
It is therefore disappointing that the Scottish Executive have not come forward with practical proposals for adopting that or similar packages to fund the bridge. The UK Government remain ready to work in partnership with the Scottish Executive, and the proposals put forward by my right hon. Friends the Chief Secretary and the Secretary of State for Scotland remain on the table. We look forward to working with the Scottish Executive to find a way forward. There are clearly choices and priorities to decide on as regards the funding
mechanism that will allow the bridge to proceed, and I hope that they will now be able to make some progress with that.
The hon. Member for Dunfermline and West Fife asked about the Calman report. It is not sensible for me to anticipate what may be in that report when it is published, much less, from the Front Bench in an Adjournment debate, to expand on what the Government’s position on any such proposal might be. However, we know that the report is imminent, and we await its suggestions with interest.
I look forward to being around to see the second Forth bridge become a reality. I know that the hon. Gentleman has been a doughty advocate of that. I hope that the Scottish Executive can find a sensible way forward to put the funding in place, and we stand ready to assist.
10.47 pm
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