Labour turns its guns on Osborne's infrastructure failures

New figures show that just seven of the 576 infrastructure projects planned by the coalition have been completed.

When Nick Clegg recently conceded that the coalition had cut infrastructure spending too fast after coming to power, he took care to assure us that all was now well. "I think we've all realised that you actually need, in order to foster a recovery, to try and mobilise as much public and private capital into infrastructure as possible," the Deputy PM said. 

While one welcomes the government's belated conversion to the merits of counter-cyclical spending (a rare concession to its Keynesian critics), the early results are not encouraging. Labour will use an opposition debate today to highlight new Treasury figures showing that just seven (1.2 per cent) of the 576 infrastructure projects planned by the coalition are "completed" or "operational" and that most of these are road schemes began under the last government. In addition, just 18.2 per cent of the projects are said to have "started" or to be "in construction" or "under construction".  

Clegg himself has previously expressed frustration over the timelag between projects being announced and completed. He remarked in a speech to the LSE in September 2011: "A key blockage is actually within government: Whitehall. Identifying projects and funnelling cash to them can take time – I understand that. These are big investments, and you have to get the detail right. But failure to deliver major infrastructure projects on time and on budget is a perennial problem in the UK."

The government's failure to improve its performance on this front is a matter of concern to the Lib Dems, with some blaming George Osborne's preference for Treasury "guarantees" over direct spending. In her column today, the Times's Rachel Sylvester reports that "Clegg and other senior Lib Dems are convinced that the Government needs to loosen the public purse strings and spend even more on infrastructure to stimulate the economy". 

After Clegg claimed that the coalition's capital spending cuts were "no more than what Alistair Darling spelt out anyway", Labour will also point to OBR figures (see below) showing that the government has spent £12.8bn less than Darling planned. 

Year

Public Sector Gross Investment - OBR forecast of Labour plans

Public Sector Gross Investment under the Conservative-led government

Difference

2010-11

£61.3bn

£58.1bn

£-3.2bn

2011-12

£50.7bn

£47.8bn

£-2.9bn

2012-13

£48.4bn

£41.7bn

£-6.7bn

The last time Rachel Reeves cited these figures, George Osborne accused her of "not being completely straight", a remark which earned him a rebuke from the Speaker. 

But even if one discounts the numbers for 2012-13 (which is still ongoing), the data shows that the coalition spent £6.1bn less in its first two years than Labour would have. Little wonder that the Lib Dems are urging Osborne to finally loosen the fiscal taps.

Shadow chancellor Ed Balls visits a social housing project with shadow chief secretary to the Treasury Rachel Reeves. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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By refusing to stand down, Jeremy Corbyn has betrayed the British working classes

The most successful Labour politicians of the last decades brought to politics not only a burning desire to improve the lot of the working classes but also an understanding of how free market economies work.

Jeremy Corbyn has defended his refusal to resign the leadership of the Labour Party on the grounds that to do so would be betraying all his supporters in the country at large. But by staying on as leader of the party and hence dooming it to heavy defeat in the next general election he would be betraying the interests of the working classes this country. More years of Tory rule means more years of austerity, further cuts in public services, and perpetuation of the gross inequality of incomes. The former Chief Secretary to the Treasury, Seema Malhotra, made the same point when she told Newsnight that “We have an unelectable leader, and if we lose elections then the price of our failure is paid by the working people of this country and their families who do not have a government to stand up for them.”

Of course, in different ways, many leading figures in the Labour movement, particularly in the trade unions, have betrayed the interests of the working classes for several decades. For example, in contrast with their union counterparts in the Scandinavian countries who pressurised governments to help move workers out of declining industries into expanding sectors of the economy, many British trade union leaders adopted the opposite policy. More generally, the trade unions have played a big part in the election of Labour party leaders, like Corbyn, who were unlikely to win a parliamentary election, thereby perpetuating the rule of Tory governments dedicated to promoting the interests of the richer sections of society.

And worse still, even in opposition Corbyn failed to protect the interests of the working classes. He did this by his abysmal failure to understand the significance of Tory economic policies. For example, when the Chancellor of the Exchequer had finished presenting the last budget, in which taxes were reduced for the rich at the expense of public services that benefit everybody, especially the poor, the best John McConnell could do – presumably in agreement with Corbyn – was to stand up and mock the Chancellor for having failed to fulfill his party’s old promise to balance the budget by this year! Obviously neither he nor Corbyn understood that had the government done so the effects on working class standards of living would have been even worse. Neither of them seems to have learnt that the object of fiscal policy is to balance the economy, not the budget.

Instead, they have gone along with Tory myth about the importance of not leaving future generations with the burden of debt. They have never asked “To whom would future generations owe this debt?” To their dead ancestors? To Martians? When Cameron and his accomplices banged on about how important it was to cut public expenditures because the average household in Britain owed about £3,000, they never pointed out that this meant that the average household in Britain was a creditor to the tune of about the same amount (after allowing for net overseas lending). Instead they went along with all this balanced budget nonsense. They did not understand that balancing the budget was just the excuse needed to justify the prime objective of the Tory Party, namely to reduce public expenditures in order to be able to reduce taxes on the rich. For Corbyn and his allies to go along with an overriding objective of balancing the budget is breathtaking economic illiteracy. And the working classes have paid the price.

One left-wing member of the panel on Question Time last week complained that the interests of the working classes were ignored by “the elite”. But it is members of the elite who have been most successful in promoting the interests of the working classes. The most successful pro-working class governments since the war have all been led mainly by politicians who would be castigated for being part of the elite, such as Clement Atlee, Harold Wilson, Tony Crosland, Barbara Castle, Richard Crossman, Roy Jenkins, Denis Healey, Tony Blair, and many others too numerous to list. They brought to politics not only a burning desire to improve the lot of the working classes (from which some of them, like me, had emerged) and reduce inequality in society but also an understanding of how free market economies work and how to deal with its deficiencies. This happens to be more effective than ignorant rhetoric that can only stroke the egos and satisfy the vanity of demagogues

People of stature like those I have singled out above seem to be much more rare in politics these days. But there is surely no need to go to other extreme and persist with leaders like Jeremy Corbyn, a certain election loser, however pure his motives and principled his ambitions.

Wilfred Beckerman is an Emeritus Fellow of Balliol College, Oxford, and was, for several years in the 1970s, the economics correspondent for the New Statesman