Time for Less Talk and More Action on Infrastructure

Ultimately, we must invest in our infrastructure and make the UK the most attractive place in the world to do business. It's time to stop the talk and get spending. If this is the course of action the Government has decided to take - rightly, in my view - let's get on with it.

Earlier this year David Cameron spoke of the government's "failure of nerve" over infrastructure by pledging to hold a consultation on 'Boris Island' and reform bureaucratic planning laws.

George Osborne, too, made it a key priority in November last year when he unveiled the National Infrastructure Plan, in which he outlined 500 priority projects across the UK.

And this week, nearly six months after that announcement, the final member of the trio at the top of government, Nick Clegg, told the FT it is an "absolute priority" to increase spending on infrastructure to stimulate growth. There has been no detail on this as yet, but the Deputy Prime Minister said the Government has agreed a "massive" increase in state-backed infrastructure projects.

'Clegg sounds new economic tone' probably wasn't the headline he was looking for - no 'plan B' here - but the point remains the same: this isn't the first time we have heard this. When are we going to see action?

The announcement comes just a day after Christine Lagarde, IMF Managing Director, called for Britain to refocus on growth, citing a notable increase in infrastructure investment as one key measure.

And yet this all comes under the backdrop of a hot debate around the reform of PFI. It is extremely inconvenient that at a time when there are hugely ambitious infrastructure investment targets being set, one of government's primary financing vehicles is being derided by policymakers and the media alike.

This piece by Conservative MP Jesse Norman earlier this month outlines the strength of feeling, but leaves the question hanging: where is the cash for this huge infrastructure investment coming from? We certainly need to reform some aspects of PFI - to increase flexibility and transparency, for instance - but we must be careful not to throw the baby out with the bathwater.

People need to understand that infrastructure - and by this we mean roads, rail, hospitals, schools, airports, sewers, harbours, power, broadband, and beyond - doesn't come free. There is too often a misunderstanding between funding and financing. PFI is about financing a project in the long-term so we can have it built now and effectively maintained over 30-40 years, but the taxpayer ultimately still has to provide the funds for these projects.

The politics of this are undoubtedly going to be tough. The Government's challenge is to avoid the 'plan B' tag sticking, despite the inevitable calls from Labour MPs to the contrary. Whether or not you view it as such, the UK needs this investment now in order to remain competitive on the international stage.

The fact that air routes to key export targets including China, Russia and Brazil are going to Paris, Frankfurt and Amsterdam over London due to limited air capacity is scandalous.

It has been reported this week that China's biggest aerospace firm has plumped for Paris over London as a location for its EU HQ because of these better air links back to the mothership. If it isn't already doing so, this sort of thing should be keeping the Prime Minister awake at night.

Whilst the Government's consultation on Boris Island is welcome, the creation of a third runway at Heathrow should be an immediate action. Alas, I fear the Government has made one too many U-turns recently to make this a possibility in the foreseeable future.

Ultimately, we must invest in our infrastructure and make the UK the most attractive place in the world to do business. It's time to stop the talk and get spending. If this is the course of action the Government has decided to take - rightly, in my view - let's get on with it.

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