To ask His Majesty’s Government what steps they are taking in consulting on, revising and updating public/private partnerships with shares open to the public.
My Lords, the 10-year infrastructure strategy set out our approach to private finance and infrastructure through a variety of available models and approaches. Public/private partnership models are one mechanism available to bring in private finance to infrastructure projects. The strategy set out the circumstances in which the Government will consider PPEs. The Government will always consider carefully which model is most appropriate for a project on a case-by-case basis to ensure value for money.
My Lords, since I tabled this Question, my noble friend Lord Livermore has been appointed Labour’s national campaign co-ordinator for next year’s elections. I am sure that everyone would wish to congratulate him on that, even in his absence. He is now, of course, in a unique position: not only is he campaigning but he is within the Treasury. If he can spend a little time on looking more at the public/private partnership models, and if we could revise, update and extend them to include individual citizens’ contributions and people’s investments in them, rather than it simply being large capital investment, I think that he would find that they would attract greater interest. As he comes to campaigning, he could advance in Scotland a major PPP project, one in Wales, and one for every county and shire around the country as part of this programme.
I thank my noble friend for his question and I will pass on his good wishes to my Treasury colleague, whose full attention is on organising for next year’s elections but also on his duties in the Treasury. As I said, the Government will always consider carefully which model is most appropriate for a project on a case-by-case basis to ensure value for money. Matching the right private finance models to projects ensures that the project benefits from efficiencies. Investment trusts already open the door to retail investment in private assets such as infrastructure, but we are going further. By moving the long-term asset funds into the stocks and shares ISA from April next year, the Government will give more people access to long-term investment opportunities and the higher returns they can bring.
My Lords, does the Minister agree that where public/private partnerships have gone wrong is in there not having been people in the public sector with the procurement skills and knowledge to get a good deal, and the private sector has run rings around them? If we are going to go ahead, can we look at the way in which we carry out procurement and bring in the expertise required to match that in the private sector?
I agree with the noble Lord and accept his point of view. There have been a lot of benefits from public/private partnerships in the past—they have invested in many schools and hospitals, where pupils and patients have benefited—but we need to look at how we reform public/private partnerships and make them fit for the future. Obviously, the National Infrastructure and Service Transformation Authority, which was set up in 2020, has a great part to play in that.
My Lords, first, we on these Benches join in the commiserations with the noble Lord, Lord Livermore. Does the Minister agree that for a successful PPP, in addition to the key point made by the noble Lord, Lord Forsyth, not only is an educated public sector negotiator is required but clearly defined projects that will not undergo variances, and financing, in essence, set out up front and not used as a back-end bargaining tool? Does he agree that these and the other lessons that we learned before mean that there are relatively few projects that will meet the criteria for a public/private partnership?
We will look at public/private partnerships in the future. We are looking at them in a limited way for neighbourhood health centres, for example, and public estate decontamination projects, but we need certainty over future funding, which is why we have committed over the next decade at least £725 billion of investment in infrastructure so that we can ensure growth.
My Lords, I have had some experience of this, given that my union was involved when BT was privatised in 1984. That was a successful public/private partnership; it is a shame that today there is such scepticism. Of course, it requires the Government to be capable of ensuring a successful negotiation, but it also needs to ensure that the people involved—in my case, it was the union members—get a good deal, and they did get a good deal: for every share they invested, they got two shares back. The reaction from Eurostar is interesting. Virgin Trains is trying to run another train service through the tunnel. What is the reaction of Eurostar? It is to find every legal means possible to oppose it. It does not seem to me to be a good approach. As long as we are going to benefit, and as long as we are going to get growth and productivity, it seems to me that public/private partnerships are a good idea.
I thank my noble friend for that question; it is very good of him. As I said, we will look into how we ensure that public/private partnerships work in the future for the benefit not just of customers but of the Government and the taxpayer. We need to ensure that we move forward on this so that everybody is part of the success story, which I think they can be if it is done right.
My Lords, I am somewhat confused by the dissonance between the Minister and the aforementioned noble Lord, Lord Livermore. When I questioned the noble Lord, Lord Livermore, on the same subject, he said that the Treasury was working on appropriate contract models. The Minister seems much more reticent about the future role of public/private partnerships. Is the Treasury in favour of them and actively seeking ways of making them work for the public, or is it sort of waiting for them to come along?
I thank my noble Lord for that question. I think I will leave off there; obviously, we have the Budget in three and a half weeks’ time and other announcements will be made then. We want to make this a success for the public, and that is why from next April we are going to open up stocks and shares ISAs to long-term asset funds so that everybody can benefit.
My Lords, there is a shortage of capital for public projects, so permitting the public to provide some more of that capital is very sensible. The recently opened Thames Tideway tunnel is a very good example of a public/private partnership: it was on time and on budget with a good independent board. However, the shareholders were companies such as Dalmore Capital UK and foreign investors, and not individuals. Will the Government work up ideas drawing on this and on overseas success to allow us to attract more public finance from a larger number of corporate and individual UK shareholders? Might that include the type of populist share sales beloved of Baroness Margaret Thatcher?
I was agreeing with some of that until it got to the very end. I thank the noble Baroness for her question. Obviously, we need to look at this closely. We want to open up public/private partnerships, where they are to happen, to investment from consumers and shareholders, but we need to wait until the Budget to find out exactly what is going to be done.
My Lords, I join the noble Baroness, Lady Kramer, in wishing the noble Lord, Lord Livermore, all the best for the task he has in hand—it is going to be a very difficult one. In terms of public/private partnerships, what lessons can be learnt from what happened in Sheffield with the tree debacle? Will the Government use that as a case study of how not to go about a public/private partnership?