The Treasury issued a very breathy press release overnight saying that:
Infrastructure at heart of Spending Review as Chancellor launches National Infrastructure Commission
And:
In his statement, he will pledge £100 billion in infrastructure spending by 2020 – including full funding for the £15 billion Roads Investment Strategy.
What the release does not say is that this may be a cut in real spending plans. According to the July 2015 OBR forecasts planned investment spending for the next five years was:
So why the reduction now?
At the very least a little more detail on all such numbers would seem to be needed.
Same pattern as last electoral cycle. Small-ish cuts followed by relatively small-ish expansion ahead of 2020 election = political game playing. Worked last time, so he’s trying to repeat the trick. With Osborne its always about the potential political capital. The evidence suggests he knows very little economics and cares even less about it. Cutting infrastructure/ investment – when interest rates and borrowing costs are this low, is exactly the opposite of what any economist of pretty much every stripe would tell you to do.
The austerity is in the structure of the cuts