Our problem is no longer unwillingness to spend on infrastructure, it's inability

Outsourcing government policy since 2010

As my colleague George Eaton wrote this morning, the political top-line from the government's announcement of a £50bn infrastructure program is that it signals a gruff acceptance of Keynesian economics:

The delusion that the coalition's spending cuts would increase consumer confidence and produce a self-sustaining private-sector-led recovery has been abandoned after Osborne's "expansionary fiscal contraction" turned out to be, well, contractionary.

But getting wonkish about it, there is something interesting buried in all this about how the government has chosen to execute this volte-face. Rather than simply borrow the money – at interest rates so low that it would basically be paid to do so – it has announced that it will guarantee the private loans of any company which fulfils certain requirements.

Doubtless part of the reason is political. This way, the government can confidently state that they aren't adding anything to the deficit, even though this way of borrowing is functionally identical to doing it the standard, on-the-books way. But part of it will be because infrastructure investment is really hard.

According to the FT:

To qualify for the new guarantees, projects must be ready to start in the 12 months from the offer being made and Treasury officials say they will be monitored to ensure they would not have gone ahead in any case.

The thing is, there just aren't that many shovel-ready projects simply lying around the place, and certainly not big flashy ones. Although the government is proclaiming that the Thames tunnel, the Mersey Gateway toll bridge and the A14 road widening in Cambridge could all be helped with the money, it's usually more mundane things which are the easiest use of infrastructure spending. Forget high-speed rail and airport islands, and focus on sewers and road resurfacing.

Unfortunately, its relatively tricky to spend £50bn on sewers in a year. Thames Water is replacing all the Victorian Water mains in London, but its taking 5 years and costing £5bn. To do it any faster would risk chaos in the streets. And noteably, they had already started that program without the governments money. That's going to be true of a lot of the low-level infrastructure investments that would otherwise be ripe for targeted spending.

So the government needs ideas. And what better way to get them than to offload the generating of them to the private sector? It's no longer just a government outsourcing based on ideology. It's now a government outsourcing because it has literally no idea how to enact policy it desperately wants to.

Osborne knows what it means to be Keynesian, but doesn't know how to do it. If you think you do, why not bid for his money?

The Thames tunnel, one of the proposed uses of the infrastructure money. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Theresa May’s stage-managed election campaign keeps the public at bay

Jeremy Corbyn’s approach may be chaotic, but at least it’s more authentic.

The worst part about running an election campaign for a politician? Having to meet the general public. Those ordinary folk can be a tricky lot, with their lack of regard for being on-message, and their pesky real-life concerns.

But it looks like Theresa May has decided to avoid this inconvenience altogether during this snap general election campaign, as it turns out her visit to Leeds last night was so stage-managed that she barely had to face the public.

Accusations have been whizzing around online that at a campaign event at the Shine building in Leeds, the Prime Minister spoke to a room full of guests invited by the party, rather than local people or people who work in the building’s office space.

The Telegraph’s Chris Hope tweeted a picture of the room in which May was addressing her audience yesterday evening a little before 7pm. He pointed out that, being in Leeds, she was in “Labour territory”:

But a few locals who spied this picture online claimed that the audience did not look like who you’d expect to see congregated at Shine – a grade II-listed Victorian school that has been renovated into a community project housing office space and meeting rooms.

“Ask why she didn’t meet any of the people at the business who work in that beautiful building. Everyone there was an invite-only Tory,” tweeted Rik Kendell, a Leeds-based developer and designer who says he works in the Shine building. “She didn’t arrive until we’d all left for the day. Everyone in the building past 6pm was invite-only . . . They seemed to seek out the most clinical corner for their PR photos. Such a beautiful building to work in.”

Other tweeters also found the snapshot jarring:

Shine’s founders have pointed out that they didn’t host or invite Theresa May – rather the party hired out the space for a private event: “All visitors pay for meeting space in Shine and we do not seek out, bid for, or otherwise host any political parties,” wrote managing director Dawn O'Keefe. The guestlist was not down to Shine, but to the Tory party.

The audience consisted of journalists and around 150 Tory activists, according to the Guardian. This was instead of employees from the 16 offices housed in the building. I have asked the Conservative Party for clarification of who was in the audience and whether it was invite-only and am awaiting its response.

Jeremy Corbyn accused May of “hiding from the public”, and local Labour MP Richard Burgon commented that, “like a medieval monarch, she simply briefly relocated her travelling court of admirers to town and then moved on without so much as a nod to the people she considers to be her lowly subjects”.

But it doesn’t look like the Tories’ painstaking stage-management is a fool-proof plan. Having uniform audiences of the party faithful on the campaign trail seems to be confusing the Prime Minister somewhat. During a visit to a (rather sparsely populated) factory in Clay Cross, Derbyshire, yesterday, she appeared to forget where exactly on the campaign trail she was:

The management of Corbyn’s campaign has also resulted in gaffes – but for opposite reasons. A slightly more chaotic approach has led to him facing the wrong way, with his back to the cameras.

Corbyn’s blunder is born out of his instinct to address the crowd rather than the cameras – May’s problem is the other way round. Both, however, seem far more comfortable talking to the party faithful, even if they are venturing out of safe seat territory.

Anoosh Chakelian is senior writer at the New Statesman.

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