Some things are right even though the Right says them: Telegraph calls for more spending on infrastructure

I read the Daily Telegraph. I used to read the Guardian and Telegraph daily until the former advised me to vote tactically for the Lib-Dems in order to get a Lib-Lab coalition government. That stupid advice helped bring about a coalition of a very different kind – and a rather illiberal one, I have to report.

So in a typically perverse manner I dropped the Left-leaning paper that didn’t know what it was doing for the Right-wing one which did. I like to know what my enemy is thinking, especially when I don’t even think the Left is thinking at all (hence Ed Miliband: discuss).

Today’s Telegraph has an interesting piece by Jeremy Warner on ‘The catastrophe of cuts to infrastructure’. He’s talking about the axe the Con-Dems are taking to capital expenditure at exactly the wrong time in the economic cycle. Having just returned from China, Warner has seen close up what the emerging world is doing to build its capital and infrastructure base and he properly worried about the long term consequences for the UK of this short-termist government and its (frankly over the top) attack on public investment.

Warner makes the important point about China and indeed about the type of public investment required when he notes that it is well understood in the People’s Republic that the one type of spending  which should have a priority over all others is infrastructure. There, ‘at every level’, he says ‘it is a well-understood fact of long-term development’. This is that ‘infrastructure comes first, then education, then quite a lot lower down the list, public health. Absolute bottom is social security’.

Warner claims that even under this government, welfare spending will rise while infrastructure spending falls. That’s what happened under Maggie, so I think he’s right. I add that whilst i think China, in spending too little on welfare, is causing major problems for the international economy (though Chinese people’s surplus saving ends up distorting Western finances), I cannot find overall fault with their infrastucture priorities. They are transforming and modernising their country. We have watched private wealth grow amidst public squalor in the UK and continue to under-invest in roads, rail, broadband and the public realm. Oh, we do invest in education, it’s just that our investment is wasted on teaching methods and buildings which institutionalise  ignorance and waste. We may well have one of the worst education systems in the known world. The idea that ‘free schools’ will change that would be laughable if the situation weren’t so serious.

So Britain is about to cut capital spending by over half when the serious world is doubling and trebling investment during the down turn. Warner sees this as not a fiscal problem to be overcome through cuts but a problem of political will. The last government didn’t have it and this one lacks it too (the cowardly refusal to allow local government council tax re-evaluation being a symbolic failure of both). I worry that only autocracies can do infrastructure in the modern world because keeping  competitive advantage requires that current consumption be cut for the sake of long term benefits to society. And no-one is willing to have that debate with British people. By the way, this is why Gordon Brown pushed PFI/PPP as a way of doing infrastructure. He knew it was necessary but also know that people in this generation wouldn’t sacrifice their current living standards or pay more tax to achieve the required infrastructure. PFI was a way of  doing which perversely made future generations pay – thereby deferring the political risk for governments now. My judgement on that? Decadent yet understandable. Those who have killed PFI/PPP – on Left and Right – need to explain where the country’s infrastructure is going to come from.