Mr. Andrew McDowell:

I would be reluctant to be interpreted as speaking on behalf of the Government. That is not my job anymore. If we have lots of fiscal space and we are seeking to choose between providing social housing through traditional Exchequer capital investment and PPPs, there are pros and cons to each approach. The interest costs of PPPs are higher but risk is transferred to the private sector and, therefore, that is inevitable. The legal costs are much higher and it is expensive. It, therefore, might be simpler to do it through traditional Exchequer investment. It may be, though, that the choice facing the Government is not that it has lots of fiscal space and can do it either way. The Government may be maxed out in terms of the amount of investment it is engaged in under the fiscal rules and the choice it faces is whether to supplement that with a PPP programme on top of increasing Exchequer capital investment. The decision is then whether the cost of the PPP, which will be higher than the cost of Government borrowing, is still low enough that it is justifiable on the basis of the economic and social return to the country for having additional social housing.