MPA calls on Chancellor to reverse public investment cuts
THE Mineral Products Association’s executive director, Simon van der Byl, has called on the Chancellor to reverse government plans to halve public investment in next week’s Budget.
He said: ‘In the previous Budget, government set out plans to reduce net public investment by 50% by 2013/14. Given that private sector construction is still in decline and will remain very subdued for several years, the planned cuts to public investment – most of which is construction – would significantly damage the prospects of economic recovery. Such cuts would also damage the quality of our public services and infrastructure when there is much outstanding work to do.
‘We know that construction investment is a very effective means of stimulating economic growth, each £1 invested in construction generates £2.84 of economic activity. Net public investment remains a small proportion of total government spending and is equivalent to only 7% of current spending by government and only 6% of overall government debt.
‘Given the economic benefits of this relatively small proportion of government spending, it surely makes economic sense to sustain public investment and boost economic recovery,’ said Mr van der Byl.
He said: ‘In the previous Budget, government set out plans to reduce net public investment by 50% by 2013/14. Given that private sector construction is still in decline and will remain very subdued for several years, the planned cuts to public investment – most of which is construction – would significantly damage the prospects of economic recovery. Such cuts would also damage the quality of our public services and infrastructure when there is much outstanding work to do.
‘We know that construction investment is a very effective means of stimulating economic growth, each £1 invested in construction generates £2.84 of economic activity. Net public investment remains a small proportion of total government spending and is equivalent to only 7% of current spending by government and only 6% of overall government debt.
‘Given the economic benefits of this relatively small proportion of government spending, it surely makes economic sense to sustain public investment and boost economic recovery,’ said Mr van der Byl.
