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Coffee House

Labour’s infrastructure plans are good enough for George Osborne to steal

3 July 2014

6:12 PM

3 July 2014

6:12 PM

In some countries, infrastructure planning can be exciting. Two years ago, I was watching a group of Dutch civil servants gleefully manoeuvring a DeLorean sports car around a conference hall, its wheels squealing on the polished floor.

Why? Because the Ministry of Infrastructure and Environment was holding a summit, and the theme was, you’ve guessed it, ‘Back to the Future’. With leprechaun zeal, officials reeled off ambitious long-term plans to invest billions of euros in roads, rail and waterworks: all with cross-party political support.

Compared to the Dutch display, Ed Miliband’s efforts to enthuse British business over his plans for a national infrastructure commission don’t seem so corny. You can’t feel enthusiastic about a government policy unless you feel it’s critically important in its own right, and Labour’s event at the Science Museum today seems to show that Miliband thinks it is – and it ought to make George Osborne up his game.

Both Labour and the Tories have talked for years about investing in infrastructure to grow the economy, but they have struggled to grasp an important truth about how to do so: it is not possible to plan for and deliver infrastructure in the short term.

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Roads, power stations and airports all take years to conceive, design and win approval, and they are only worthwhile if they address our long-term needs – needs that go way beyond the next parliament. Governments of both colours have been guilty of dodging this in the past. That is why we could face power shortages next year; why Crossrail is two decades late; and why we haven’t agreed on new airport capacity in the south-east. All this risks restraining growth.

The solution, as Sir John Armitt has said in his review for Labour, is not to take politicians out of decision-making, but to persuade them to make commitments that stretch far beyond the political horizon, and to do it consistently. Not just for one-off projects like High Speed 2 and those new nuclear power stations China wants to build us.

When the industry magazine Construction News challenged David Cameron on the Armitt plans earlier this year, his response was to say that the government already had a national infrastructure plan, thank you very much. The truth is not so simple, however. The ‘plan’ Cameron refers to is not a strategic plan at all: it is an inventory, a list of already announced construction projects cobbled together from both the public and the private sectors. In fact, most of the projects listed, such as water pipes and broadband, are being delivered by the private sector without government intervention. The idea that there is any central idea guiding these projects is nonsense.

The Armitt proposal would lead to an infrastructure commission delivering an assessment of the country’s infrastructure needs over the next 25-30 years, to be voted on by Parliament. At a stroke, it would introduce the long-term non-partisan planning that Canada, Spain and the Netherlands have enjoyed for years.

There are problems: such an assessment would need to clearly spell out the estimated costs of the new infrastructure over the long term, to avoid a PFI-style payments timebomb. The funding models would need to be affordable and politically palatable: an area where new nuclear, with its promise of higher electricity bills, is struggling. And the infrastructure industry builds schools and hospitals too, so to boost their confidence, the Armitt plans should include social infrastructure.

Still, this is an intelligent plan that ought to win the business vote – which is why Osborne should steal it without delay.

René Lavanchy is an infrastructure writer. He blogs at Infrastructure Punk

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