Sorry, but trains can’t really replace welfare lines

George Osborne proposed an attractive idea this week: that spending on state benefits should be diverted into new infrastructure in the North. His conceit was that while welfare spending produces no economic return, spending public money on new high-speed railways and the like will inevitably boost the economy.

We can’t fault the former assertion: that paying people to be idle is a drain on the public purse. But we take issue with the notion that infrastructure will always serve to boost the economy. The Chancellor made his remarks while in Manchester helping to promote the idea of a new 125mph railway across the Pennines, a little brother for the yet-to-be-started High Speed 2 and the central axis of a hypothetical new metropolis called One North, which would unite Liverpool, Manchester, Leeds, Sheffield and Newcastle.

The promoters of HS2 only managed to achieve a positive economic case for their project by discounting the value of time businessmen spend on trains.