No one wants cuts to infrastructure spending, and yet it’s the first item on Jeremy Hunt’s list
It was, it turned out, just a moment of madness. We woke today to the news that because of straitened finances due, in large part, to the energy crisis, the Government was halting the building of a huge new nuclear power plant. But as the sound of the country’s jaw dropping echoed through Whitehall, the word came through: no, no, it was all a mistake – Sizewell C was safe.
As for other infrastructure, however, like a high-speed rail line under the Pennines, the Transport Secretary thought there “wasn’t much point”. Tough times lie ahead, so it’s time for Britain to do what we do best: sell the roof to pay the mortgage while the sun is shining.
Aren’t they sick of making the same mistakes? This country has been under-investing for decades and we are reaping the consequences in the form of low growth and fragility to shocks. Capital spending was an early casualty of George Osborne’s austerity drive and now it appears yet again to be the first option for cuts in Rishi Sunak’s sequel.
That’s not to say that a degree of austerity isn’t required. The key indicator showing it’s necessary is that the cost of debt interest payments is shooting up. Interest payments amounted to £8.2 billion in August, almost twice what was forecast earlier this year and that was before the mini-Budget sent yields soaring.