"Cutting through the dither": Government's three economic growth priorities

A new school year, a new focus on the economy. David Cameron has come back from his holidays determined to “cut through the dither”. On the same day this article set out the Prime Minister’s vision of a “more competitive, dynamic, creative” Britain, the Chancellor spoke to Andrew Marr about a series of policies designed to boost economic growth. His focus was on three main policies.

First, investing up to £50bn in infrastructure. The Infrastructure Financial Assistance Bill builds on a scheme launched in July and will underwrite £40bn of construction projects which are “nationally significant”, ready to start within 12 months, financially credible and “good value” for taxpayers. Plans to underwrite construction of up to £10bn worth of new homes, including guaranteeing the debt of housing associations and private sector developers, are also expected this week,

Second, reforming the planning system (again) in order to make it easier to build residential and commercial developments. This time the focus is on securing planning permission more quickly by reducing the time taken by appeals and judicial reviews, as well as making it easier to build on the green belt.

Third, increasing airport capacity. The Chancellor highlighted the importance of increasing airport capacity and even hinted that a third runway at Heathrow was on the table, contradicting Cabinet colleagues such as Justine Greening.

The success of the policies will depend upon the detail, as always,and we'll be arguing strongly for more of a 'place' focus. But broadly the focus on infrastructure and housing is right; they will make a difference to the economy in the short and longer term.

But none of these proposals are easy. Investing in “financially credible” infrastructure projects begs questions about why they aren’t already funded. The Government tried reforming the planning system a year ago and ended up backing down in the face of a public outcry. David Cameron’s desire to prevent nimbyism and allow more flexibility on the greenbelt is a direct challenge to the South East in particular and therefore to many Tory councilors. And backing out of a Coalition commitment not to have a third runway at Heathrow will provoke a firestorm – even if some say it will show the Prime Minister is a man, not a mouse.

Yet, as a Daily Telegraph article suggests, perhaps the Government’s greater desperation this year will make it easier to push through radical proposals. We’ll be updating the blog with what’s been announced and its implications for cities – watch this space.

Comments

[John Charlesworth]

This sounds fine but is a broad-brush attitude which might neglect some real hurdles. We are deemed here to be set to add about 40% to our population over the next decade or two. We have the Academies in place but not the road infrastructure, or even the water and drainage systems to cope. We will also have to deal with the issues of a much more divergent society with their own special needs. The rationale for doing it all seems to be as a result of moving people out of one part of the country to another. So fine in principle but industry and jobs are required and sustainable communities interlinked to others by good transport and communications.

[Alexandra Jones]

Thanks for your comment, John. I don't disagree: there needs to be a focus on infrastructure and housing, but it can't be all that the government does on economic growth. That means a broad defintion of infrastructure as including roads, transport, utilities and schools. And we also need policies that will support job creation beyond the jobs created by construction. Discussions about a Business Bank may have some promise here.

[John Charlesworth]

Thanks for your reply. The district I am concerned with is not on your list but is affected by policies and movement of people and goods from your list. I am referring to the Central Lincolnshire plan which is focussed on Lincoln but with "Primary Attractors" Sleaford and Gainsborough as major players.