From the TUC

What boost in capital spending?

26 Jun 2013, by Guest in Economics

George Osborne just made a great deal of fuss about his plans to increase capital spending from 2015/16. The immediate question is – how big is this boost?

The short answer is – there isn’t really one.

Osborne spoke repeatedly about investing £50bn a year  and given current public sector net investment is around £25bn a year – these seems like an awful lot, a doubling of investment spend.

However, it appears Osborne was talking about increasing gross rather than net investment spending.

Gross public sector net investment is around £47bn a year and was previously expected to be £50.4bn in 2015/16 according to the OBR (table 4.18).

In other words there doesn’t actually appear to be an increase in capital spending.

How very misleading.

This isn’t a real increase and it is not even scheduled to start for two years, the economy needs a boost now – not smoke and mirrors about the future.


2 Responses to What boost in capital spending?

  1. Politicians think you’re stupid! | Politics on a napkin
    Jun 26th 2013, 2:50 pm

    […] The most recent example is that of the British Chancellor, George Osborne, claiming to increase capital investment in 2015/16 to boost economic growth in today’s ‘Spending Review’. He announced it would rise by an astonishing £50 billion. However, in the midst of ascending hopes within the construction industry, it quickly became clear that Osborne had changed the statistics to fit his lie. […]

  2. Tax Research UK » Osborne’s little lie: there is no new investment
    Jun 27th 2013, 7:26 am

    […] Duncan Weldon from the TUC has, I note, already done the work of looking at the impact of the supposed new investment plans on previously announced intentions. As he has reported: […]