Money to stimulate future fiscal stimulus packages to support economic growth should be focused on highways maintenance and local transport schemes, according to MPs.
The Commons environmental audit committee criticised the £3bn fiscal stimulus in chancellor Alistair Darling’s pre-Budget report for being too small in scale, and poorly targeted on large infrastructure schemes.
Instead, the backbenchers recommended ‘increased funding for transport measures that might be labour-intensive, relatively fast to implement, lighter in use of raw materials, such as Smarter Choices measures, road maintenance, and other projects which can be swiftly progressed’.
The MPs had received evidence that it was uncertain that the £300M announced in November to be spent on 200 new rail carriages would create ‘British jobs’, because these might be procured abroad.
It was also unknown whether the new trains would bring about modal-shift, given that they were apparently targeted at relieving over-crowding. The committee, noting that only £100M of the ‘green’ fiscal stimulus was new money, said it was ‘imperative’ that there was a further package in the Budget next month.
The points made by the cross-party committee, chaired by Conservative, MP Tim Yeo, echo those by the Institution of Highways and Transportation and the County Surveyors’ Society.
They also follow a claim from economic think-tank, Ernst & Young Item Club, that, the £3bn brought forward in the pre-Budget report would be insufficient to maintain construction industry demand, given a 25% fall in investment by developers.
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