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CBI chief slams government infrastructure investment plan

John Cridland has come out swinging against the government’s handling of infrastructure investment and PFI reform.

In an interview with the Financial Times, the Confederation of British Industry’s director-general said the government’s implementation of its growth agenda was “really disappointing” and said the coalition was “dazzled in the headlights”.

Mr. Cridland accused the Department of Transport of neglecting road improvement plans – such as the A303 in south England and the proposed toll road to ease congestion on the A14 - while chancellor George Osborne and Lib Dem energy secretary Ed Davey were squabbling over how far to cut subsidies for renewable energy and wind power.

The calls came as industry leaders were coming together under a UK Contractors’ Group campaign to urge the government to bring forward investment in infrastructure, with Kier chief executive Paul Sheffield giving details of the initiative at the Construction News Awards this week.

The government is expected next week to unveil a package of measures to accelerate the development of social housing and transport infrastructure, ahead of the parliamentary recess.

Speaking at the launch of the UKCG campaign, Creating Britain’s Future, CBI director for business environment Rhian Kelly said construction had the potential to create 215,000 jobs across the supply chain.

“It is more important than ever that we recognise the role of construction, both as a catalyst for local job creation across the UK in the short-term, and as the lead mover in the £250bn infrastructure renewal needed to underpin economic growth in the long-term.”

“To get spades in the ground on infrastructure delivery, there must be an urgent focus across the UK on bringing forward repair, maintenance and improvement projects, for example on roads, to deliver immediate and tangible results in terms of local jobs and growth.”

Mr. Cridland told the FT it was “really disappointing how long it is taking to get momentum and urgency into the growth plan”, and called for a decision on PFI reform, which he said was an example of anti-business rhetoric getting the way of effective policy-making.

He also called for an export fund and a ringfenced lending scheme for housing, as well as a cut to the 6% interest rate on Newbuy mortgages.

Shadow business secretary Chuku Umunna said business was “crying out for an effective growth strategy, but ministers’ response has been to tell firms to ‘work harder’, showing how out of touch, and out of step with British business, they have become.”

Also taking to the airwaves this morning, Mr. Cridland told BBC Radio 4’s Today Programme that infrastructure was “the best way to get business moving” but called the implementation of new developments “sluggish”.

“If we’re going to do road tolling so that we can get roads built when the taxpayers can’t afford them, let’s get the diggers on the ground for those roads, let’s get the new railways built. Everything is just taking longer than it should.”

“I’m talking about construction companies”, he told the programme, “and investment funds like pension schemes, putting up the money on the basis that they will do what the taxpayer can no longer afford to do, if they get an income stream in the long-term”.

He also urged the government to get a move on with PFI reform: “One of the decisions we’ve not had from the government, and I much regret this, is a decision about what’s going to happen with PFI.”

“PFI isn’t broken, there are some things that need changing to make sure that the benefits of new developments are shared between the taxpayer and the developer who puts their money at risk. But we need a decision on what’s going to happen with PFI.”

Shadow chief secretary to the Treasury Rachel Reeves said: “George Osborne has failed to deliver on the promises of extra infrastructure investment he made last year. And bank lending to businesses continues to fall.”

“The government’s plan has completely failed. That’s why we need a change of course and a real plan for jobs and growth. And it’s why we need a full-time chancellor 100 per cent focused on getting out economy moving again.”

 

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