Britpave: The British In-Situ Concrete Paving Association

Infrastructure investment would kick start UK economy

Calls by the Organisation for Economic Co-operation & Development (OECD) for the UK government to consider borrowing more to pay for vital infrastructure projects in order to stimulate economic growth have been welcomed by Britpave, the transport infrastructure group.

Following figures showing that the UK has slipped back into recession, Christophe Andre, acting head of the OECD UK office, said that Chancellor George Osborne could relax his debt reduction targets and invest in infrastructure to help growth without adversely affecting the government’s debt reduction programme. His comments echo those of Vicky Pryce, the former joint head of the Government Economic Service, and Gerard Lyons, the chief economist at Standard Life, who have both called for extra borrowing to pay for infrastructure projects.

“The moribund UK economy needs a kick start. Increased investment in transport infrastructure would provide such an economic boost by creating short-term jobs and improve the UK’s long-term business prospects,” said David Jones, director of Britpave.

Jones pointed out that it is widely recognised that every £1 invested in construction generates £2.84 in economic activity, whilst a range of financial studies have found that investment in infrastructure is the best use of government funds as it is three times as efficient at stimulating growth than a cut in VAT.

Furthermore, there is the long-term benefit. Investment in transport infrastructure would address the years of under-investment that has left Britain lagging behind many other countries. The latest World Economic Forum found that the UK came 28th in terms of quality of infrastructure, beaten by the likes of Portugal and Malaysia. For most of the past decade, Britain has invested at half the average rate of advanced countries. The result is congested motorways, a failing rail network and airports that are reaching over capacity. If these issues are not addressed, increasingly Britain will be viewed as being closed for business.

“The Chancellor needs to be less obsessed with debt reduction and more focused on economic growth. The OECD and other economic organisations are right to be calling for infrastructure investment as a sure way to increase economic growth,” said Jones.