Expert Blog

How to build infrastructure and alienate people

You must have seen the photographs of George Osborne wearing a hi-vis jacket. There’s even a Tumblr about it. There he is in Slough, pointing at a new factory development. There he is in Doncaster, cooing at some paving slabs. There he is in Rhyl, holding a brick. And all the time he’s wearing the obligatory hi-vis jacket and hardhat.

The Chancellor’s choice of clothing is, in a way, indicative of this Government’s growing eagerness for infrastructure projects. When the Coalition first came to power, they inherited Alistair Darling’s cuts to capital spending. There wasn’t much money for building things. But, spurred on by Nick Clegg, Downing Street’s decision-makers came to believe that those cuts were too severe. ‘Why not splash a bit more cash on infrastructure?’ the thinking went. ‘Not only could Britain do with some new roads and new buildings, but it would also get companies and people working.’

This lead to one of the most significant fiscal developments of this Parliament: with his Autumn Statement in 2012, Mr Osborne started raiding the budgets of Whitehall departments for extra cash to spend on infrastructure. As the document put it:

“Departmental resource budgets will be reduced by 1 per cent in 2013-14 and 2 per cent in 2014-15. This measure will save £980 million in 2013-14 and £2.4 billion in 2014-15 that can be reprioritised to fund additional investment in infrastructure and support for businesses.”

The Chancellor was asking departments to find spending cuts on top of spending cuts, so that Britain could get building. He’s asked them to find more since.

Nowadays, Mr Osborne can barely stop himself. The National Infrastructure Plan was already stuffed full of projects, but the Chancellor keeps appending on new ones. In a speech in Manchester recently, he backed plans for a £15 billion ‘Crossrail of the North’ that would link up cities from Liverpool to Newcastle. ‘I think this kind of proposal is affordable,’ he intoned like a calculator in a tie.

Of course, much of the Chancellor’s enthusiasm for infrastructure is about growth: by stimulating jobs and industry, capital spending delivers more bang per buck than most other forms of public spending. But it’s also about politics. Conservative strategists will be acutely aware of the party’s general unpopularity up North. They’ll hope that the promise of money and work and beautiful new things will do something to rectify that.

Yet the funny thing about infrastructure is that it also creates enemies – and some of them will be quite close to Mr Osborne. Just think of those ministers who were asked to find extra savings in their budgets. There was probably quite a lot of grumbling around Westminster at that.

Then there are the Tory backbenches. Some MPs will just be straight-up unamused with the infrastructure projects that are planned for their constituency, as Cheryl Gillan is with HS2. Other MPs will wish that those infrastructure projects were happening in their part of the country. This is one of the abiding features of public spending, in both good times and bad: it involves trade-offs. The estimated £42.6 billion that’s being spent on high-speed rail could instead be used to fill in every pothole in the country – and there’d still be change left over to buy each person in Britain almost 800 Mars Bars. Not everyone will be left happy with the Government’s decisions.

And the people who will be most unhappy with the Government’s decisions? In many cases, those who have to live near to them. The spectre of NIMBY-ism is nothing new, but it has taken a peculiar shape in recent years. As we saw when fracking firms tried to start up in the south of England, well-to-do types are uniting with dogged environmental protestors to oppose developments in their area. As the Daily Telegraph’s excellent Geoffrey Leanputs it, this strange union is a ‘symbiotic’ one. The landowners have political clout, but don’t want to man the barricades. Whereas the protestors are more than happy to get dirty and bloodied.

It is a formidable combination, and one that could bear down on plenty of infrastructure projects in future – from HS2 to new nuclear power stations. Which is why the Government will hope to break it in advance. Again as Mr Lean points out, the redoubled efforts to compensate people living in the shadow of fracking drills and construction sites is part of a plan to ‘drive a wedge into the alliance’. Expect to see it used again and again.

But who will be using this tactic? George Osborne, or some other Chancellor for some other Government? This Parliament is almost over, but many of its infrastructure projects will continue for decades to come. The battle is far from over. We shall do our best to keep track of all the combatants.

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