Being Roosevelt is far harder in practice
Getting Britain building will be a major political challenge for the Prime Minister. Is he up to it?
Irecently passed a sign for a business called “Victorian Plumbing”. The name struck me. You wouldn’t see a delivery company advertising “Medieval Logistics” or a builder’s firm called “Post-war Construction”. So why Victorian plumbing? It’s a phrase grumbled at the cistern when the loo breaks. Yet it also pays homage to a time when Britain built things quickly and they lasted for generations, unlike the modern era in which we take generations to build things and they decay almost immediately.
When Boris Johnson promised a “Rooseveltian” age of infrastructure renewal yesterday, he was appealing to the same sense of longing. Even before Covid, large parts of the country felt abandoned and starved of investment. With the economic situation dire and fiscal controls junked, the Prime Minister is now returning to his electoral pitch. He is promising to spend time, money and effort not on the economy’s strong points, but on its weaknesses. “This is the time to invest,” he declared.
He’s right, but talk is cheap. Building and buying are not. Fiscally and politically, they are very, very expensive. That is why governments have come and gone making the same promises and leaving the same failures behind them. If Mr Johnson is serious, he has a huge fight on his hands.
The biggest fight he faces is with the planning system. Planning barriers have destroyed the concept of a market economy in housing in this country, creating 100-fold differences in valuation between identical patches of land purely based on their planning status. It is a system built on special interests and sleaze ( just ask Robert Jenrick).
It has added years and billions to the cost of infrastructure projects. Take Crossrail, the new train line bisecting Greater London. The concept was first mooted in the 1940s – closer to the Victorian age than our own. In the Seventies, the government ordered a feasibility study. In 2008, it was finally given the go-ahead and in January of this year, the first stations opened. This is a project broadly supported by voters, for which land was laid aside decades ago. In other words, this is one of the “easy” ones.
The second fight is with the Government’s own procurement system and the dysfunctional supply chain it has created. Once upon a time, the state did everything itself, resulting in a profusion of grim, damp tower blocks and whole industries run for the benefit of unions. After that, it privatised everything, improving services but failing to lift investment enough, despite ever-rising costs for users. Then it tried private finance, an extortionate disaster.
Today, the construction industry operates on 2 per cent margins that are wholly unsustainable. Decent firms go out of business and the rest limp on. No wonder construction productivity has not improved for over a decade. Yet despite the absence of private profit and investment, the taxpayer still ends up out of pocket when a firm like Carillion goes bust.
The third fight is with the system, public and private, that funds UK technology development. We have a plethora of grant-giving bodies prioritising abstraction and academic prestige over useful, applied science and then presiding over the sale of Britain’s technical capabilities on the cheap to multinational consortia. We have telecoms companies outsourcing their research and development to China and then using the enormous economic rents they collect at home not to invest, but to lobby government on what a wonderful idea this was.
All of these problems are big, complicated and entrenched. Over decades, they have been running our economy into the sand. But solving them is not just a question of money. It is fundamentally a problem of politics – the willingness to ruin special interests, create inconvenience and tell some people things they don’t want to hear. If you are looking for a test case of whether this Government is up to it, we have one right in front of us: the expansion of Heathrow airport.
Is Mr Johnson going to let it fail, honouring his pledge to “lie down in front of the bulldozers”? Or is he going to be the Prime Minister Britain elected, who climbed into a bulldozer on the campaign trail and smashed through a wall labelled “Gridlock”? He has the mandate for his “New Deal”, but a mandate means nothing without the political will to deliver.