June 2013: Investing in railways to build a better Britain

01 June 2013

George Osbourne has sharpened the Tory axe on public services, and public spending, in Britain. The trouble is that the Chancellor’s medicine isn’t working. It’s killing, rather than curing, the patient. The influential economist John Maynard Keynes explained how a government should spend, rather than cut, its way out of recession.


That was a lesson understood by Franklin D Roosevelt when, in the United States, he introduced the New Deal – and big public infrastructure projects such as the Tennessee Valley Authority – to drag America out of the Great Depression. FDR knew the value of “pump priming”– federal spending – to get the economy moving again.

Because a worker on a public project with a pound in his pocket will spend it in a shop which will order more goods – which gets the manufacturing and retailing cycle revolving again.
 

It’s good economics, as well as good politics, but the chancellor is stuck with his single-minded, and simple-minded, policy of cuts and a flatlining economy that refuses to grow.

HS2 is a start but it will run only from London to Birmingham. I regret the government’s lack of vision, and lack of imagination, because the longer the journey, the greater the benefits a high speed train brings. A high speed line from the south of England all the way up to Glasgow and Edinburgh and the central belt of Scotland would make domestic air travel, with all its detrimental environmental effects, a less attractive option.

Major public projects such as HS2, Crossrail, and electrification are good not just for the railways but for Britain, too, because they will help get the economy moving again. It’s not so much spending as an investment – in our future. Not just for the railways,in which we have a special interest, but for the greater good. The Conservative-led coalition, with its savage cuts in public spending, is putting that future at risk.

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