Saturday, 26 January 2013

Clegg is *not* endorsing Plan B

BBC broadcasters' spin is misleading. The website editor is more scrupulous. Nick Clegg specifically regrets cutting so much capital spending, as Stephen Tall lucidly explains.

It seems to me that in the panic generated by the Greek crash, decisions were rushed. It was easier to make percentage cuts across the board, rather than take time to discriminate. It was clearly necessary to show progress in cutting the structural deficit in order to "get the bond-holders off our backs" as the deputy prime minister put it. Only Ed Balls would disagree with this; Labour's outgoing chancellor would have cut slightly more government expenditure than the coalition is doing. It was right to replace the PFI-based "Building Schools for the Future" scheme.  However, within the envelope of budget cuts it would have been possible to retain some capital projects (e.g. in the Wales budget) while reducing spending on administration elsewhere. The restructuring of the NHS in England comes to mind.

Having said all that, the coalition has been rather bolder than Labour in authorising several big railway expansions. The GWR and Valleys Lines electrification is one example and, whatever one thinks of the environmental impact, HS2 is also going to generate a lot of construction work.

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