The Edge

Richard Northedge takes on corporate finance

We need fast-track policies, not just fast-track railways

There’s no point the team captain devising tactics for the Cup Final if the side is knocked out in an early round. The north-south high-speed rail link may be a valuable national asset in mid-century but it is no substitute for a short-term growth policy.

If past generations had not built Britain’s railways and motorway the country would be in a poor state now. So governments that looks beyond the next general election – ministers who think beyond their own careers – are to be congratulated. As David Cameron is finding, ploughing a railway line through the countryside is a good way to lose friends with no reward to show for it for several decades.

Whether speeding the journey between London and Birmingham and onto Manchester and Leeds is good value at £33bn is one matter. But it is irrelevant to the country’s current plight. Whatever the rail link does for economic growth in the 2030s, it does nothing for now. It will be years before the spending starts and the first land is levelled, even if Nimby-politics does not delay the timetable.

Even the most optimistic view of the short-term prospects for the UK economy see little growth. As well as looking to the future this government needs to do something to boost the short-term economy to ensure that there is a future that can afford and exploit projects such as the fast-rail connection.

A fast-track housebuilding programme still looks the best way to boost growth – a labour-intensive industry using largely British materials that pays wages to relatively low-skilled people who instantly re-spend it. And the resultant houses are a long-term asset that the young can buy or rent. It might not even require public money – just guarantees and eased planning rules. But such a programme can start this summer – not decades hence.

One hopes that announcing a railway project for the far-off future is not a diversion by politicians with no short-term policies. A good government thinks forward but thinks for the present too.

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