CBI attacks infrastructure cuts as “false economy”

Grant Prior 13 years ago
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Business leaders at the CBI are urging the Government not to slash investment in infrastructure ahead of next month’s Comprehensive Spending Review.

In a speech to businesses in the East of England today, John Cridland, the CBI’s Deputy Director-General, will urge the coalition Government to make some “smart choices”, return capital spending to 2.25 percent of GDP as soon as possible, and “appreciate the consequences of not giving infrastructure the attention it deserves”.

Cridland will say: “Reducing spend on transport links might seem a politically saleable option, but it’s just not in the country’s long-term interests.

“An apparent saving today means spending more tomorrow, and fails to recognise the direct and indirect benefits that quality infrastructure can bring in the near term.

“Analysis shows that the ‘multiplier effect’ of investment in infrastructure is much greater than in other sectors. The economic case for targeted new infrastructure remains robust.

“We accept the need for cuts, and we’d expect any special pleading to be given the short shrift it deserves. There needs to be a robust case for spending of any sort, and especially in the current fiscal climate.

“But just as we’re absolutely sure about the need to reduce the deficit, there’s also a certainty that failing to prioritise infrastructure spending in the CSR would be short-sighted in the extreme.

“The UK’s infrastructure is poor by international standards and is a serious barrier to greater efficiency and to economic growth. Put simply, balancing the Government’s books is going to need improved infrastructure, and doing it on the cheap would be a false economy.

“Infrastructure investment can contribute to the urgent task of reducing the deficit if there is a relentless drive for more value for money in the way it is delivered, as is being demonstrated by Crossrail.”

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