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Government Capital Expenditure

My hon. Friend makes a good point that I shall develop later. He is absolutely right that in the current environment trying to finance projects by selling off assets cheaply in highly depressed asset markets is not efficient, and that is one of the reasons why the Government's own programmes are in considerable difficulty. Let me finish my central point about the importance of public investment. Of course, it is important for employment generation, but it also generates an asset. If it is properly constructed, it generates a stream of income and environmental and social benefits. That is why we presented our series of proposals before Christmas. My second basic point is that, despite the Government's commitment in principle to accelerating public investment, a growing amount of evidence—anecdotal so far, but I hope that the Government will clarify the matter—shows that many of their enhanced public investment projects are not happening or are severely delayed. Let me enumerate some of the difficulties that we hear about from councils, parliamentary questions and elsewhere. In the middle of last week, we heard about the serious problems that are beginning to arise with the large capital works programme for further education colleges and adult colleges. Two in my constituency are affected. Twenty-two advanced projects have been put on hold and a long pipeline of more than 100 others has been put into abeyance. There may be good technical reasons for re-examining the projects—for example, some depend on asset disposal, as my hon. Friend the Member for Sutton and Cheam (Mr. Burstow) said. However, many do not. The adult college and the tertiary college in my constituency do not have that problem, or the other problems that are supposed to be associated with the building programme, and cannot understand why the projects are being held up. They say that they may have to retender. The process will take a long time—they will have to renegotiate bank loans, which will cause serious delay. Some of the colleges, which are being held up by what appears to be merely a three-month delay, say that it will retard construction by up to two years. When they come on stream, the recession may have passed, though perhaps that is an optimistic interpretation.