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| Investment is the key to recovery | Investment is the key to recovery |
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| Polly Toynbee (Labour's golden policy key? Build, build and build more, 30 April) highlights Labour's problem in talking about borrowing. They should take head-on the Tory myth that too much borrowing by the last Labour government was what led us into trouble, and that more borrowing will lead to more problems. The difference between borrowing for current expenditure and borrowing for investment needs to be emphasised. Much government borrowing at the moment goes on benefits to people out of work or paid minimal wages. | Polly Toynbee (Labour's golden policy key? Build, build and build more, 30 April) highlights Labour's problem in talking about borrowing. They should take head-on the Tory myth that too much borrowing by the last Labour government was what led us into trouble, and that more borrowing will lead to more problems. The difference between borrowing for current expenditure and borrowing for investment needs to be emphasised. Much government borrowing at the moment goes on benefits to people out of work or paid minimal wages. |
| As well as housing, borrowing to invest in massive home energy efficiency schemes and other sustainable energy projects, good cycle routes and sustainable transport would bring returns to the government in reduced unemployment benefits, lower housing benefit payments, reduced need for winter fuel allowances and lower healthcare costs, as well as in receiving more revenue from income taxes, housing rentals and, for example, larger payments by train operating companies for access to better rail infrastructure. These benefits to central finances could occur on a timescale comparable with the present government's forecast of when the deficit will be reduced. Labour should say, clearly, we will reduce the welfare budget and the government deficit, not by hitting lower- and middle-income people, but by sensible investment. Martin Quick Stroud, Gloucestershire | As well as housing, borrowing to invest in massive home energy efficiency schemes and other sustainable energy projects, good cycle routes and sustainable transport would bring returns to the government in reduced unemployment benefits, lower housing benefit payments, reduced need for winter fuel allowances and lower healthcare costs, as well as in receiving more revenue from income taxes, housing rentals and, for example, larger payments by train operating companies for access to better rail infrastructure. These benefits to central finances could occur on a timescale comparable with the present government's forecast of when the deficit will be reduced. Labour should say, clearly, we will reduce the welfare budget and the government deficit, not by hitting lower- and middle-income people, but by sensible investment. Martin Quick Stroud, Gloucestershire |
| • The news that the economy is not officially in a triple-dip recession (Report, 26 April) should not be allowed to mask the intolerable human cost of the downturn. Behind the statistics and rhetoric are thousands upon thousands of people being denied the opportunity to be economically active. This breeds resentment, fear and is corrosive to community cohesion. In the last few months, Newcastle city council, with partners, has created a massive capital programme to invest in infrastructure, including roads, pavements, housing and ultrafast broadband. We have also acted decisively with the private sector to unlock major development projects stalled by the failure of banks to lend. We are doing this to create much-needed jobs, instil business confidence and give people a sense of hope in the future. It's time the chancellor switched from his destructive austerity programme and followed our example. Cllr Nick Forbes Labour leader, Newcastle city council | • The news that the economy is not officially in a triple-dip recession (Report, 26 April) should not be allowed to mask the intolerable human cost of the downturn. Behind the statistics and rhetoric are thousands upon thousands of people being denied the opportunity to be economically active. This breeds resentment, fear and is corrosive to community cohesion. In the last few months, Newcastle city council, with partners, has created a massive capital programme to invest in infrastructure, including roads, pavements, housing and ultrafast broadband. We have also acted decisively with the private sector to unlock major development projects stalled by the failure of banks to lend. We are doing this to create much-needed jobs, instil business confidence and give people a sense of hope in the future. It's time the chancellor switched from his destructive austerity programme and followed our example. Cllr Nick Forbes Labour leader, Newcastle city council |
| • Monday's public accounts committee report on UK infrastructure spending and many of its recommendations are timely (Report, 29 April) but what the UK urgently needs is better cross-party consensus on major projects, improvements to the existing infrastructure strategy and more collaborative methods of infrastructure funding to obviate the failings of PPP. | • Monday's public accounts committee report on UK infrastructure spending and many of its recommendations are timely (Report, 29 April) but what the UK urgently needs is better cross-party consensus on major projects, improvements to the existing infrastructure strategy and more collaborative methods of infrastructure funding to obviate the failings of PPP. |
| Foreign investors are reluctant to invest in the UK because of dithering over south-east airport capacity and, despite leading the world in the implementation of PPP, we still deliver two-thirds of infrastructure projects late or over-budget. At a time when the UK should be benefiting from low rates of borrowing, the current PPP model fails to capitalise on this, which in turns feeds through to higher financing cost. Private sector and government need to work a lot harder to develop more effective development and financing strategies that provide better value for money. Ian Kennedy Co-founder Institute for Infrastructure Studies | Foreign investors are reluctant to invest in the UK because of dithering over south-east airport capacity and, despite leading the world in the implementation of PPP, we still deliver two-thirds of infrastructure projects late or over-budget. At a time when the UK should be benefiting from low rates of borrowing, the current PPP model fails to capitalise on this, which in turns feeds through to higher financing cost. Private sector and government need to work a lot harder to develop more effective development and financing strategies that provide better value for money. Ian Kennedy Co-founder Institute for Infrastructure Studies |
| • Ed Miliband has been criticised for his admission that Labour's blanket cut in VAT would lead to a temporary increase in government borrowing. Any moves to cut VAT ought to be directly targeted at stimulating activity in those sectors of the economy struggling most – and where the Treasury is currently losing millions in tax revenue as consumers opt to pay cash in hand to rogue traders. This is one of the key challenges facing legitimate building firms in this country. With VAT at 20%, many property owners are choosing not to have building works done or else employing cowboys willing to "lose the VAT". | • Ed Miliband has been criticised for his admission that Labour's blanket cut in VAT would lead to a temporary increase in government borrowing. Any moves to cut VAT ought to be directly targeted at stimulating activity in those sectors of the economy struggling most – and where the Treasury is currently losing millions in tax revenue as consumers opt to pay cash in hand to rogue traders. This is one of the key challenges facing legitimate building firms in this country. With VAT at 20%, many property owners are choosing not to have building works done or else employing cowboys willing to "lose the VAT". |
| As borne out by experience in France and the Isle of Man, a targeted cut in VAT on building repairs would stimulate construction activity and increase tax revenue. Rather than causing an increase in government borrowing, this policy would enable the Treasury to give an immediate stimulus to economic growth and bolster government coffers into the bargain. Michael Levack Scottish Building Federation | As borne out by experience in France and the Isle of Man, a targeted cut in VAT on building repairs would stimulate construction activity and increase tax revenue. Rather than causing an increase in government borrowing, this policy would enable the Treasury to give an immediate stimulus to economic growth and bolster government coffers into the bargain. Michael Levack Scottish Building Federation |
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