The whole economy needs investment for recovery

The Tories are in a mess because their economic strategy has failed. Private investment has collapsed, and they decided that public investment should be slashed too. Now even the IMF thinks this hasn’t worked out, so they are scrabbling around for an alternative.

One ludicrous idea is that the public sector should subsidise investment schemes solely for the benefit of corporations and the rich.  In Wednesday’s Evening Standard Doug McWilliams went so far as to argue that we should build ‘undergrounds roads’, which are road tunnels to you and me, solely to help ‘the movers and shakers’ get around.

Tunneling is about the most expensive form of infrastructure imaginable. Endless road building creates its own car usage, congestion and pollution. When New York Mayor La Guardia used money in the 1930s for economic regeneration he built ‘expressways’, road bridges that were meant to ease congestion for 10 years. They became almost stationary with traffic within four months. Instead, what is needed is a transport system that works for the whole economy.

Investment in efficient transport systems is necessary right across the country, as part of a plan to revive the economy, create jobs, reduce CO2 emissions and boost productivity. I have always stood for promoting public transport through investment and lower fares because it works. In my time as Mayor we cut congestion and bus journey times and passenger numbers increased massively. This meant making it easier for millions of people to get around, shorter waiting times, road deaths down by 40%, cycling up by 80%. It also helped to regenerate the entire London economy.

Yet for all the talk, investment in the public transport network, excluding Crossrail, is now much lower now than it was in 2008. Ordinary people travelling to work, pensioners and anyone who wants a night out are all paying the price in terms higher fares, longer journey times, more station closures and more crowded buses and carriages. What’s true in London is true all across Britain. Starving the economy of investment has failed.

Only the government can take the lead in making the very large-scale investments that are necessary to resolve this, as well as the housing crisis, failing infrastructure, education and so on. Without that investment, the key foundations of the economy will crumble. With it, we could begin to look forward to recovery, decent jobs and improving living standards.

The Tories are in disarray and have latched on to investment as a way out of the crisis. But they mean subsidies to the private sector, to benefit the richest 1%. What we actually need is large-scale investment for the whole economy.