The shift from austerity to growth

Austerity is not fun, it has a chilling reality about it. I am in the middle of my own austerity campaign, “Living Below the Line” for a week on £1 a day for food and drink for my charity, Article 25. So far I’ve raised about £5,500, so I’m happy about that bit. But it is revealing having to live on such a meagre budget, like most of the rest of the world do. Mind you, me living on £1 a day is still an awful lot easier than someone in the developing world. I have running water, a fridge freezer and a super efficient food economy to help me. I don’t have to walk a mile to the nearest tap, or worry about precious food going off in the heat or being infested with insects. So it’s not that bad. For me, it’s not that I can’t eat; it’s not that I am hungry; it’s that I can’t eat what I want when I want. I have a very simple adequate diet for the week mainly composed of soup, potatoes, frozen fish, milk and some very cheap tea bags. But no Coke for a lift mid-afternoon, no fruit for something fresh and no snacks when I feel peckish. How spoiled I am; choice is my expectation, as well as food itself.

It hasn’t mattered what your politics were - if you were in power before the crash, you are unelectable. How predicable this all is - governments will fall when bad things happen

It looks like the rest of Europe doesn’t like austerity either. Two more governments have fallen in the past month. It hasn’t mattered what your politics were, if you were in power before the crash, you are unelectable. In the UK, soon after the crash, a leftish government fell to a right of centre coalition and recently in France the right fell to the left and so it has gone on. How predicable this all is - governments will fall when bad things happen. Germany’s chancellor Angela Merkel has another year to run; it will be interesting to see if she alone can buck the trend. She suddenly seems very isolated. The citadel of Merkozy has fallen and all the Mediterranean nations want growth, not austerity. Greece, Italy, France and Spain - that is a very big part of the eurozone.

And maybe they are right. None of the super-dry calculations of the North Europeans took into account the energy price hike and the danger of stalling into double-dip. What we need is some extra growth and construction is best placed to deliver it. Rather than fuel some housing price bubble led consumer boom, we need to invest in projects that will equip the UK to become a low carbon, super-efficient and competitive economy. Unlike Europe, we are not great at “grand projets”; we tend to muddle through until action is imperative. Well, it is imperative now.

Let’s start with decarbonising the economy. This would contribute an economic boost to a real purpose. We have talked a good talk, have many measures in place, not least the Green Construction Board, but are still, according to a recent EU survey, way off our 20% reduction by 2020 and 80% reduction by 2050 targets. While we have made big progress with wind, it is expensive and is only due to supply 20% of our needs. Nuclear is billed to re-emerge but costs are spiralling, and carbon capture and storage for fossil fuels isn’t here yet. We need massive investment to crack this nut.

My fear is the Green Deal will be thrown out into the market to see if it works. the government needs to be hands on promoting it, managing it, adapting it and making super sure it works

But most of our buildings in 2050 are already built now and need “greening”. Successive governments have bottled out of this. Part L was not applied to existing buildings by Labour because of the consumer backlash. One government minister told me they were waiting for “magic wallpaper”. This government has pinned its colours to the Green Deal mast to tackle the issue. Great, a mechanism to get the job done, except that it looks complex, may not work financially and people don’t like strange builders in their homes. My fear is that the Green Deal will be thrown out into the market to see if it works. Instead, government needs to be hands on promoting it, managing it, adapting it and making super sure it works. If it does, it will provide work all over the country and deliver a more efficient energy demand equation to the benefit of many future generations.

Then there are schools, it looks like the government is realising (hallelujah) that we do need good schools if we are to provide good education. We are two years behind schedule now and we need to get on with making our schools fit for purpose, albeit with budgets more appropriate to recession than boom.
And we haven’t even touched transport, air, rail and road - all needing investment to provide an efficient infrastructure.

If the mood music has turned away from austerity to investing in growth, shovel-ready construction is the answer.

Jack Pringle is a partner in Pringle Brandon