It’s not clear why Vince Cable, the business secretary, feels the need to pipe up every so often with ideas that run contrary to government policy. But in a piece appearing in The New Statesman today, Cable said that the government could consider borrowing more money to kick-start the economy with infrastructure projects.
Whilst the idea has some merit – infrastructure helps to buoy the construction industry and leaves an economic activity-enabling legacy – borrowing more when we are already up to our eyeballs in debt is less appealing.
In his piece, Cable said: ‘There is a body of opinion arguing that the risks to the economy of sticking to existing plans are greater than the risks stemming from significantly increased and sustained public investment targeted at those areas of the economy where there are severe impediments to growth - housing, skills, infrastructure, innovation.’
Predictably, Cameron will give a speech later on Thursday saying that the government will not veer from its deficit-busting course. He is expected to say: ‘I know some people think it is just being stubborn to stick to a plan, that somehow this is just about making the numbers add up with no care whatsoever what it means for people affected by the changes we make.
‘But nothing could be further from the truth. My motives for sticking to the plan are exactly about doing the right thing to help families and business up and down the country. And while some would falter and plunge us back into the abyss, we will stick to the course.’
In a sense, both politicians are right. Infrastructure would certainly be helpful to the economy, but at the same time, the economic climate makes it very difficult to justify more borrowing…