A Place to Stand

  The big news yesterday was that SNP Minister Alex Neil promised. to spend £60 billion on infrastructure to get us out of recession.

   Over the next 20 years.

   Which suggests he expects a rather long recession and that he will be in power for a long time too. One might expect the former to reduce his slim chance of the later.

   Looking at the "key points" it seems to be dualling the A9 which has been on everybody's "first priority" list since before devolution, next generation broadband to all by 2020, largely the work of the free market and available already in places like Singapore, asking England to build a railway and rebuilding Scotland's millions of homes to keep them warm without being heated - at a rate of  6,000 a year.

    Fortunately this is all obvious political flannel.

    I say fortunately because, while infrastructure building is one of the very few ways governments can help an economy grow (mainly the best thing they can do is get out of the way) but in Britain government infrastructure spending is, by an overwhelming margin, wasted. The previous Forth Bridge cost £19.5 million, £320m in today's money, but the new one will cost £2,300 million. This means 7/8th of the price is going missing. I like, being a trusting sort, to think it is going into paperwork, but going it certainly is. Nor is this an unusual example. We have a parliament building that went more than 10 times over budget. Trams which, at the original price would have been 5 times more expensive than if built elsewhere but will now be half the length and twice the price.

    I did put in an FoI on the subject asking why and was told that this is because such government projects have an automatic inflation rate of 4% per annum above inflation which, while it explains an 8 fold increase in bridge costs over 53 years almost exactly, rather begs the question so I put in another FoI

FoI request, exactly why the Scottish civil service believes that inflation in their costs in tunnelling projects; bridge building projects, other construction projects; and those other areas of government who claim this applies, insist that the very long term rate of cost increases for things they do simply cannot ever be reduced to less than 4% above what applies to the rest of the world.

      To which I have now received another reply. The nearest it gets to giving a reason is that "over the last decade the construction industry has faced higher costs with significantly higher oil prices" which (A) applies to everybody and so does not explain why the government bureaucracy has a higher "inflation rate" & (B) doesn't explain over 50 years of it. I am, also helpfully advised that the growth in the costs of government projects is proven (I never doubted it the question was is there an excuse) and "evidenced by research carried out recently by Transport Scotland" which "is yet to be published".

     There have been cases where I have made FoIs where I was and am certain the failure to reply or provide information was deliberate. However I don't think this is one of them.

    I believe the inability to produce any outside justification for the cost of government work increasing 4% more than the rest of the world's is a responsive answer. There simply is no slightest excuse for this massive state parasitism and there is no slightest intention to control it. Not only is it expected that costs will be 8 times higher than they could be the rise in wastefulness is intended to continue. In another 5 years it will be 10 times and so on ad finitum.

     In which case there are no circumstances whatsoever under which it would be a good thing if Alex Neil's promises were to be worthwhile. In 20 years time government parasitism will be taking 17 times more than the engineering costs of projects. Overall, if government were actually to take £60 billion out of the economy or add it to the next generation's debts the benefit it would produce would be well under £6 billion. That is not a way to grow an economy it is (yet another as if our government hadn't produced enough of them) way to impoverish us.

     Now if the government actually wanted to grow the economy and had £60 billion to spare over the next 20 years all they would have to do is halve corporation tax (£1 bn a year), halve business rates (£1 bn) and cut income tax by "the Tartan Tax" 3p (£1 bn) and keep at it for 20 years. That would grow the economy even under Scotland's political nomenklatura.

     I will repeat what I said would be the inevitable conclusion if there were no technical reason for this price increase since clearly there isn't and thus clearly there is no other conclusion possible .

    

One obvious answer would be an enormous growth of government employees whose work adds zero, or less, to productivity. Another would be massive fraud. I do not insist it be either but it is clearly, at least in this case, not in any way an engineering cost and there must be otherwise some enormous, irreducable and generationally continuing reason or reasons for this....

Obviously this effect does suggest, overwhelmingly, that, whatever the reason, no activity should ever be left in government's hands over the long term where it could possibly be put into the free market, even if there were cases where government appeared to be currently doing it at less cost.