Blog: 18 November 2016Spender or saver – how will the Autumn Statement define PM’s plans?

Gareth Wilson

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Gareth Wilson

Partner

Cambridge office

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Infrastructure is in the headlines.  That doesn’t happen very often.  The much-overlooked key building block for economic and social success is top of the charts both here and in the US.

Across the pond, President-Elect Trump is talking about transformational spending on roads, bridges and big ticket construction projects. Comparisons with Roosevelt and the New Deal are being made. With Trump promising to ‘make America great again’ he needs to show action to back up the rhetoric.  So infrastructure is in the spotlight, no doubt about it.

Here in the UK, we’re days away from Theresa May’s first Autumn Statement, indeed her administration’s first financial set piece since she became PM in the post referendum musical chairs over the summer. So there’s quite rightly heightened interest for two main reasons.  Firstly, how she’ll define her approach to austerity and balance investment versus reducing the deficit. And secondly, whether post Brexit and post Trump, she’ll be emboldened to signal spending in any significant way.

As a planner specialising in infrastructure and a firm believer in infrastructure-led development, I’m hopeful we’ll see reasons to feel more cheerful than some felt we could be under Osborne (and his persistent ‘driving down the deficit’ mantra). I’m firmly of the view that infrastructure-led development is the best way to achieve sustainable and balanced growth, meeting housing needs and putting in place the systems and services that people and the economy require at the same time.

For me, I see many worthy infrastructure projects out there so it’s prioritising the ones that will deliver the greatest benefits for the UK that is the big challenge.

No-one is saying the decisions are easy.  But our powerhouses outside of London must be supported by critical new and upgraded infrastructure that allows these centres to continue to thrive in a post-Brexit world.  Money may be tight but the consequences to confidence would be significant if ‘Spreadsheet Phil’ delivers a weak first formal foray at the despatch box.

Reassurances are also needed that certain EU funding will be ring-fenced – such as for research work at our leading academic institutions. This is also where private investment in start-ups is a key economic driver. Otherwise we risk losing talent, private investment and all the associated spin offs.

Return on invested capital is something we are all well aware of – we need our public finances to work hard. That’s why investment must be deployed in infrastructure that captures multiple wins – such as linking two key cities (the whole of which is greater than the sum of the parts). It should also go into projects and schemes that create greater knowledge and resource sharing, shared supply chain links and new opportunities to create sustainable communities.

So what would I like the Chancellor to say on Wednesday? Simple. That this Government and this new administration recognises the challenges of the times but will direct spending where and in ways that will deliver scalable benefits. That this Government will genuinely be clever about how it deploys public money and direct it where it will have a catalytic effect. That this Government will not duck the tough decisions – questions have certainly been asked based on its performance with Hinkley and Heathrow – and will take a leadership role by committing to long-term projects (as much as any 5-year Government can) in a way which provides certainty and confidence.

I’m not suggesting that Theresa and Phil should try to ‘out-Trump’ Trump. Thankfully there is only one of him and few would suggest he is a role model for our country. What I would suggest is that, come Wednesday, we get something which sets the tone for this Government’s approach and the value it places on infrastructure investment. And I hope that tone is one of positivity and progression, not caution and limitation.

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