How Labour lost its way

When John Prescott announced the £180bn 10-year transport plan before this year's election, it was universally welcomed – not least by me. Up until then, frankly, Labour's record had been abysmal. For years as a minister I had fought long and hard for greater recognition of the case for infrastructure investment, and watched resignedly as year after year, transport spending was the first to be cut in the annual spending round. Towards the end of the Conservative government term in 1997, as the prospect of an election loomed, I consoled myself with the thought that the only silver lining on the cloud of a Labour victory would be that at least it would spend more money on transport.

I got it wrong. In its first term, Labour achieved the near impossible. It actually spent less than its Tory predecessors. All the fine aspirations of the integrated transport white paper were looking decidedly ragged around the edges. Something had to be done – on cue, enter the old pugilist himself.

While John Prescott's reign at the DETR will no doubt be described by polite historians as turbulent, and by less kind souls as frankly anarchic, there is no doubt that the deputy prime minister did carry weight – literally and metaphorically – in cabinet. As a result, and because the mounting public hostility to Labour's record was twitching the prime minister's ultrasensitive political antennae, Prescott achieved what none of his predecessors had achieved since Malcolm Rifkind's all-too-brief sojourn at the then Department of Transport. He secured a commitment from government, in the teeth of Treasury opposition, to long-term funding that at first sight looked like a serious attempt to recover lost ground. For that, if for little else, transport enthusiasts should remember him fondly.

Even in those early days, there were those who spotted a classic New Labour presentational trick. Of the £180bn, which sounds on the face of it a fairly enormous sum, the plan suggested about £60bn would in fact come from the private sector. While that assumption was no doubt based on the best evidence available, it also assumed that the government would create the conditions under which that investment would happen. Key to this, of course, is the necessity for government itself to underwrite its own participation in particular projects, and that is far from guaranteed. The Treasury might have reluctantly conceded the principle of a long-term plan, but it has made it clear the rearguard fighting will be hand-to-hand.

Labour achieved the near impossible: it spent less than its Tory predecessors

The plan also makes heroic assumptions, in my view, as to the chances of our reforming the process by which schemes achieve legislative approval. Neither the Transport and Works Act nor the regular planning system offers an attractive prospect to investors, who look instead at the £100m-plus BAA has spent on the Terminal 5 inquiry before a single sod has been turned. Labour has a mountain to climb – one that, to be fair, consistently defeated the last administration – if it is to offer legislative certainty.

Then there is the question of the remaining £120bn. Covering 10 years, the expenditure is predictably back-loaded. In practice that means that in the early years – and to old cynics like me, they are the only ones that count – spending will actually not differ to any substantial degree from previous years. There is certainly no evidence that the plan can provide new investment over and above what is required for current spending and rolling schemes. This is the minimum necessary expenditure for the Strategic Rail Authority to have any chance of delivering a decent railway in the next decade and for local authorities to be able to make sense of their own transport plans.