Leader: Job-preserving private finance could be hard to oppose

AS BRITAIN’S economy, blown by a world downturn, slips ever closer to a renewed recession, calls to avert it by additional spending on roads, rail, and housing projects grow ever more clamorous.

Scotland’s finance secretary, John Swinney, has joined in, demanding that the Chancellor, George Osborne, should announce a £20 billion programme of infrastructure investment, with £2bn of that money destined for Scotland.

In fact, the signs are that Mr Osborne plans a more ambitious £50bn list of projects to stimulate the economy. The catch is that he seems to have no intention of diverting from his “Plan A” schedule of deficit and debt-cutting, spending reductions and tax increases.

Hide Ad
Hide Ad

To avoid this plan adding to debt, Mr Osborne apparently intends that pension and investment funds should produce the money and be repaid through tolls and user charges. It is private finance reborn and remodelled, in other words.

This presents a political problem for the SNP administration which has set its face against private finance, except in the guise of the non-profit distributing model. This may well prevent excessive profits being earned at taxpayers’ expense, but the problem, as been shown by the difficulties of the Borders rail scheme, is that private firms do not seem to like it.

And if more profitable, but expensive to the taxpayer, forms of private finance are the only show in town which will preserve jobs, will Mr Swinney continue to oppose them?