You have got to admire the new shadow Chancellor Alan Johnson. His chutzpah is quite astounding. On the Andrew Marr Show this morning and in the Observer he has been talking about an alternative Labour plan to increase investment on infrastructure – he is talking about £7 billion. See Observer piece here. He fails to mention of course that it was his predecessor, Alistair Darling, who halved the nation’s capital programme in the first place in December last year in the Pre-Budget Report. If you go to table B13 on page 189 of the December 2009 Pre-Budget Report you can see how public sector net investment was due to be halved by Darling, see below (click to enlarge).
Darling made such a shocking cut to the country’s capital spending programme that during George Osborne’s budget speech he said:
We have faced many tough choices about the areas in which we should make additional savings, but I have decided that capital spending should not be one of them.
There will be no further reductions in capital spending totals in this Budget.
But we will still make careful choices about how that capital is spent. The absolute priority will be projects with a significant economic return to the country. Assessing what those projects are will be an important part of the autumn spending review.
There has already been the announcement of the severe curtailment of the Building Schools for the Future programme. This week as part of the spending review we will no doubt hear about severe curtailment of investment in social housing whilst key strategic transport schemes, such as Crossrail, which should feed through to step changes in economic performance, will be retained.
Today on the Andrew Marr show Johnson showed himself to be a total scuzz. He said:
Well I think Alistair Darling’s prescription was right. Alistair Darling incidentally took this country through the most difficult, horrendous global economic downturn that we’ve faced. His prescription for how we reduce the deficit whilst focusing on jobs and growth and without having the kind of economic masochism that I think many in George’s party would like to see – i.e. let’s take this opportunity to shrink the state, which I think is a large part of the philosophy here. So Alistair’s plan was about concentrating on jobs and growth at the same time as you bring the fiscal deficit down.
Johnson wants to have his cake and eat it. The Darling plan was predicated on cutting investment spending yet Johnson wants to boost it. Darling bought his credibility at the cost of halving capital spending. Johnson is a snakeoil salesman.