Osborne worker

I’ve already listed ten things to look out for in this week’s Budget. Here’s an eleventh: infrastructure. I didn’t mention it in my earlier post because infrastructure is now a constant feature of Osborne’s Budgets. There’s always some big project either dancing in the spotlights, as when a £15 billion scheme for renovating Britain’s roads was announced just ahead of Autumn Statement 2014, or quietly progressing in the appendices. It has become predictable.

But two stories in this morning’s papers brought infrastructure to mind nevertheless. The first was Justine Greening, in interview with the Sunday Telegraph, claiming that David Cameron will abandon all hope of a third runway at Heathrow. The second concerns research that was conducted last year, at the HS2 group’s behest, into HS2. Apparently, it found that the route could require major engineering works to make it safe for high-speed travel. And that could, in turn, mean more money and more delays.

Two stories, two sets of infrastructure problems. And yet contrast them with what Osborne is doing, and what he is expected to do. In his ever-informative Sun column yesterday, James Forsyth revealed that “The big themes of this Budget will be worthy rather than controversial – expect lots on infrastructure.” Is the Chancellor a glutton for punishment?

No, actually. To explain why Osborne is so keen on infrastructure, you have to return to the middle years of the last Parliament, when he diverted from the capital spending cuts he had inherited from Alistair Darling. I’ve already told this story before, so I’ll stick to the short version here. Basically, Osborne came to realise that, of all the public spending he could do, infrastructure spending was among the best. Not only would it leave the country with some lovely knick-knacks, it would also boost the economy in the meantime. Construction firms would be occupied, workers would be employed, and towns would be revitalised.

These effects are important all of the time, but they are perhaps even more important when the economy is struggling or at least threatening to struggle. Hence why infrastructure could be such a large part of next week’s Budget. As the Chancellor himself puts it in today’s Sun on Sunday, “the world [is] facing its most uncertain period since the Great Recession”. He could do with some ways of shielding Britain from the worst of it.

But, despite the wisdom of this thinking, infrastructure can be as much a pain as a panacea. There always comes the immediate question: how to pay for it? During the last Parliament, to help fund his building ambitions, Osborne came up with the idea of asking ministers to find even more savings in their departmental budgets. This was not a universally popular policy among his colleagues. Might Osborne ask the same of them again, on the grounds that they got off better than expected in last November’s Spending Review? Or will he look elsewhere for cash, on the grounds that he wants to be Tory leader some day?

And then, inescapably, there are those two stories in today’s papers. Infrastructure spending may make a whole lot of sense, but it rarely goes as planned. As I’ve observed before:

“Even Margaret Thatcher found grands projets a struggle. Her Roads for Prosperity plan, announced in 1989 as the ‘biggest road-building programme since the Romans,’ ended up coming to very little in the face of political and public opposition.”

Osborne’s grands projets amount to a lot at the moment. His just-as-grand hope is that we’ll be able to say the same in several years’ time.

20 comments for: The importance of infrastructure to Osborne

Leave a Reply

You must be logged in to post a comment.