Nicky come lately still doesn’t get it for all his Damascene conversion to capital spending
The Deputy Prime Minister Nick Clegg has realised, he says, that the Government cut capital spending too fast.
After this no doubt a whole industry – construction – is now saying “we agree with Nick”. The sad twist is that in reality it is Nick that now agrees with the industry. Sad because the nation has had to endure a long haul where opportunities were missed and huge damage done. Sadder still because there’s little hope of a meaningful boost to capital spending.
But credit where credit is due. Well done Nick for realising this four years after it was patent that capital spending was an essential tool in lifting both the construction industry and the nation from a prolonged depression.
And yes I mean to be patronising here because I am very, very disappointed with the political establishment.
But there are two points about the “I agree with David Miliband” confessional in The House Magazine that make his late arrival to sanity rather more unsettling for thinking construction folk who can put vested interest aside in favour of the nation.
The first point is his talk of “infrastructure”. From that I get the sneaking suspicion he doesn’t know what he’s talking about. If he means roads, say roads. If he means rail, say rail. If he means houses, say houses. If he means doing up pensioners’ homes, say so. The difference matters.
Yep, big infrastructure projects would help. But if there’s limited cash and we really want to lift the industry and the nation then the focus of capital spending would probably be on improving the current building stock and then building more homes. Not sexy, but every construction economist will tell you a similar story.
We need capital investment in all these things, but we need investment that will provide an immediate and that is the stuff like repair and maintenance and housing.
The second point is that I don’t think he really gets just how important public sector spending is to unlock private sector funding.
If he has to open his mouth to say these things it is a shame that he dilutes the importance of public sector spending.
Build a road and it will attract private sector funding. Improve a neighbourhood and it will attract private sector house building and private sector commercial investment in both buildings and businesses.
So I am sorry Nick, I’m glad you now agree with me, but I can’t say I agree with you.
One thought on “Nicky come lately still doesn’t get it for all his Damascene conversion to capital spending”
“Clegg opposes plans to slash capital spending. “One of the things you should not cut when the economy is fragile is building houses, railways, and new energy networks,” he says.” (2009)
http://www.guardian.co.uk/politics/2009/sep/18/nick-clegg-liberal-democrats-spending
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