Growth plans are a high growth industry — with every day bringing yet another set
of ideas, from one quarter or another, for how the government can fix the economy. And one suggestion pops up quite frequently in all these plans: bring forward spending on infrastructure. This is
often presented as a simple thing to do, with few (if any) downsides. But how realistic is this?
We know that infrastructure is important for growth. Economic texts generally suggest that the ‘multiplier effect’ (when government spending leads to more private spending later on)
from is higher for infrastructure spending than for spending in other areas, such as health and welfare. We also know that the UK’s infrastructure needs to improve. It performs poorly in
international surveys, and there are problems with congestion on roads and airport capacity in London.
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