If you build hospitals, roads and railways, growth will follow
Torsten Bell
It’s not true.
If we build a railway from Camelford to Midford – recreate part of the old coal line used to film the Titchfield Thunderbolt – then it is not true that growth will follow. There’s a reason we riupped up that line, recall?
If we build a line from Leeds to Sheffield – assuming there isn’t one already etc – then growth might well follow. In that second case we might well find that enough growth follows to pay for the line.
It finds “a sustained 1% of GDP increase in public investment could plausibly increase the level of potential output by just under 0.5% after five years and around 2.5% in the long run.”
The lessons? Not just the obvious one that investment is a long game, given that building takes time and the flow of new investment is small v the stock of public sector assets. But the impact isn’t just long term. It’s big. That 2.5% compares to the 4% estimated economic hit from Brexit.
Of course, it matters what you invest in and whether projects are delivered on time and budget (unlike HS2). But good investment, of the kind the government plans on green energy, builds our nation’s future and needs valuing in the here and now.
Quite so, this hsa always been true. What is invested in is what matters, not who does the inesting. Which then brings us to the base problem with public investing. Governments, politics, are shite at deciding what to invest in. So, you know….
That example of HS2 – it never did pass a cost benefit analysis even before not being on time or budget.
The cousin of this argument is “If you build it, people will come”. Often stated by advocates of segregated cycling infrastructure.
It does depend what you build – cycleways in Stevenage, the George Reynolds Arena no. A 3rd runway for LHR or new bridge for the River Tees which is currently down by two crossing points in the last 6 years, probably yes.
The delusion of investing in ‘green energy’ is doing immense damage.
The fabrication is not done in the UK and it creates very few jobs. We then have the hidden cost of having an unbalanced electricity grid as well as assets that have a low life expectancy that does not meet their RoI point.
It is the typical economic ignorance of the socialists, who have been running this country for the last 30 years.
Motorways carry more traffic than Rail. How much growth could we get by spending our money on Mways rather than railways? That’s the kind of comparison that ought to be made.
Oh, and what outcome for HS2 would be better than cancelling it today, this morning nd selling off the assets for whatever we can get? Freeing up plant, labour and finance to build something worth having without the vast single pile of plunderable money which will keep on giving so long as the project can be stretched out.
The thing with roads and rail is that we already made them reasonably quick and the marginal value of better is very small.
Like the London to Birmingham train line took days off the journey time compared to horse and cart. HS2 takes about reduces it from 83 to 49 minutes. But you’re still going to do a meeting with a client when it’s 83 minutes. Maybe you have to set the alarm earlier but you’re still going to do it. So the economic value is miniscule.
“the value is minuscule”. Easy to remember because negantive value is added.
There are lines from Sheffield to other cities in Yorkshire, but the last time I was using them they were extremely, painfully, might as well walk slow, and largely served by those horrid, noisy, bumpy things that were like adapted buses on (single sets of) wheels, whatever Thatcher thought was good enough for the north, I imagine. I wonder if anything has changed in the intervening quarter century.
You literally just need hordes of Somalis, and then the magic growth will come.
But have they compared the building stuff growth rate to the growth rate of say slashing corp tax? That can be done at a stroke of a pen, no boondogging, no overbudgeting, no compulsory purchase and available next budget immediately not 5-10 years away.
Because they changed the timetables so the buses don’t meet up any more, I’d been taking the train from Leeds to Sheffield a few times. It uses Class 150 Sprinters.
BiG
Luxury.
When I were a lad we only had oxen to pull trains.
I were speaking to old Fred Trueman in pub and he said “Aye, sithee lad, in my day we’d’d dreamed of ‘aving oxen. We had to pull t’trains ourse’en and pay a shilling for t’privilege.”
I thought the whole idea is we didn’t want growth – at least according to the various Green lobbies? Therefore his entire argument runs counter to the prevailing zeitgeist – as well as being fundamentally wrong.
Bloke in Germany,
Leeds and Doncaster are both under 35 minutes or less from Sheffield which is fast enough for a commute.
The primary factor which determines whether increase in economic activity occurs in a particular area is… do the people, entrepreneurs, corporate management, workers want to live there, they and their families.
Steve:
“You literally just need hordes of Somalis, and then the magic growth will come.”
No, you need the roads as well. Where else are they going to camp and shit?
Out in the desert north of Los Angeles is a place called California City. It was designed in the 1960s to be the next Palm Springs. They built out a marvelous road network, a PGA level golf course, and the infrastructure for a large city. Unfortunately no one was interested. The climate was harsher than Palm Springs and water was a problem.
Today many square miles of paved suburban streets surround the town with no houses on them. The main industry there is a prison and marijuana grows. Another western ghost town.
“ Where else are they going to camp and shit?”
They could follow the example of the Indian immigrants in Toronto and crap on the beaches.
Like the London to Birmingham train line took days off the journey time compared to horse and cart. HS2 takes about reduces it from 83 to 49 minutes.
Even that minor gain is only true if you’re going from Acton* to Aston. If you need to continue your journey by rail, you’ve got to transfer from Curzon St to New St, which takes an additional 10-15 minutes.
* as I’ve been saying ever since HS2 was announced (and certainly since they flattened the Bree Louise of blessed memory), HS2 will never reach Euston. In a 1,000 years’ time, archaeologists digging beneath the ruined mosques of London will come upon a giant buried tunnelling machine and ask themselves what possible purpose it could have served. ‘Ritual’ is their likely conclusion.
The great minds of the West Yorkshire Combined Authority have announced a consultation on a tram line between L**ds and my beloved hometown of Bradford…
Leaving aside the fact there already two train stations in Bradford (I’ll leave out the historic reasons) that service L**ds and there is a multi Million pound “Cycle Highway” that no one uses…
There is nowhere to build the smegging thing!
Maybe nowhere to build it, but there will be a big pot of money to share out amongst the “well connected”