Infrastructure investment should be left to the private sector
18 July 2012
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Dr. Richard Wellings comments on the Government's infrastructure investment announcement
Commenting on today’s government announcement to underwrite £40 billion worth of infrastructure investment, Dr. Richard Wellings, Head of Transport at the Institute of Economic Affairs, said:
“There is a real danger that the government’s infrastructure investment plan will end up hindering economic recovery rather than promoting it. If the funds are used for green energy schemes or public transport projects, for example, this is likely to lead to higher bills for consumers and higher subsidies from taxpayers. Unfortunately the plan is likely to produce wasteful, loss-making infrastructure that would never have been constructed without artificial support.
“The government needs to take a much more economically rigorous approach to infrastructure investment to ensure that taxpayers and consumers obtain good value for money. Ideally investment should be left to the private sector to ensure that projects are commercially viable and do not constitute a burden on the wider economy.”
Notes to Editors:
To arrange an interview with an IEA spokesperson, please contact Stephanie Lis, Director of Communications: 020 7799 8909, slis@iea.org.uk
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.
“There is a real danger that the government’s infrastructure investment plan will end up hindering economic recovery rather than promoting it. If the funds are used for green energy schemes or public transport projects, for example, this is likely to lead to higher bills for consumers and higher subsidies from taxpayers. Unfortunately the plan is likely to produce wasteful, loss-making infrastructure that would never have been constructed without artificial support.
“The government needs to take a much more economically rigorous approach to infrastructure investment to ensure that taxpayers and consumers obtain good value for money. Ideally investment should be left to the private sector to ensure that projects are commercially viable and do not constitute a burden on the wider economy.”
Notes to Editors:
To arrange an interview with an IEA spokesperson, please contact Stephanie Lis, Director of Communications: 020 7799 8909, slis@iea.org.uk
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.
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