Behind Osborne’s smoke and mirrors today on transport spending
4:44 pm - June 26th 2013
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by Andrew Allen
In his spending round statement, the Chancellor has pretty much done what we feared he would.
First and foremost, he has shifted a huge chunk of government spending from revenue to capital. That’s right – despite the Coalition Government’s poor record in getting anything built, the Chancellor’s big idea for kick starting the economy is to spend £300bn on infrastructure by 2020.
Although we won’t get the detail until Danny Alexander speaks tomorrow, it appears certain that a huge tranche of money will go on new road projects.
Schemes like the A14 in Cambridgeshire and Mersey Gateway Bridge will doubtless be announced yet again and be joined by zombie schemes resurrected from the infamous 1989 Roads to Prosperity White Paper. All this will be highly controversial, lighting the blue touch paper for a new wave roads protests.
It won’t help the economy either. The likelihood of any new scheme being under construction and creating jobs by the time of the next election is minimal. All while the backlog of road maintenance continues to grow.
Now approaching £11bn, tackling this backlog would not only do more to help business than new road plans, it would also create jobs more quickly.
Another thing the Government could do to help more people get back to work would be to invest in the bus network.
While the Department for Transport’s bus support appears to have been saved from the axe, local authorities budget have been hit.
Their buses support is primarily aimed at those on lower income – exactly the people who have no other way of getting around, and certainly won’t benefit from shifting transport spending to road building.
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Andrew Allen is from the charity Campaign for Better Transport – which calls for affordable green transport for all.
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Reader comments
if you don’t believe governments are able to boost demand during recessions by increasing investment – not to mention create productive infrastructure – that’s a lot of text book left wing policy prescriptions out the window.
if you have a deficit you need to cut but don’t want to cripple the economy by cutting spending during a recession, the thing to do is shift spending from recurrent to temporary – i.e. increase investment projects.
by all means argue that roads aren’t the right thing to spend the money on, perhaps argue that transport infrastructure is too slow to get off the ground so that other forms of investment are preferable, but I would not argue that shifting spending to capital projects per se is a bad idea. Unless you want to please Tim Worstall.
Try this in Wednesday’s FT: UK’s undereducated youth suffer most from the crisis, says OECD
“Unveiling the results of the OECD’s annual education report, Mr Schleicher highlighted the ‘significant’ numbers of British youngsters not in work, employment or training, compared with others in the group. In the UK, those in the 15 to 29 age group are expected to spend 2.3 years on average out of the work force, according to OECD figures for 2011. This is longer than the averages of other countries; in the Netherlands, the figure is 1.1 years, in Switzerland it is 1.3 and in Germany it is 1.7 years.”
Backing shale gas and road building. They really have no new ideas, though I suppose 80s retro is in. Plus ca change!
The World Economic Forum doesn’t even rate the UK in the top 20 countries in the world for the quality and availability of infrastructure.
So although the government’s record on delivery is weak, we can hardly complain that they’ve recognised their massive mistake in slashing capital spending three years ago – a move that naturally went on to earn them a reputation for weak project delivery as they didn’t have the cash to delivery much – and a move that underpinned the stagnation that has held sway over the economy ever since.
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