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Chancellor's backing for investment in infrastructure

The resolute committment by the government to public spending on infrastructure is good to hear says NCE editor Antony Oliver
Whatever you read politically into the results of last week's Crewe by-election, there is no doubt that the Labour government - Gordon Brown in particular - is in a difficult spot right now.
Certainly on one level he has to deal with the Westminster Village media froth erupting as the Labour Party casts around to find the policy - and perhaps personality - to reignite UK voters' interest in the Brown premiership..
But more importantly he has the underlying difficulty of an economic double-whammy - huge un-expected calls on public finances coupled with the ever-tightening screw of an potential economic downturn.
The first problem he has two years to solve. The second is more pressing. The fear, of course, is that to satisfy the current fiscal imbalance something has to give and history suggests that major public expenditure on capital infrastructure could once again be the victim.
It was interesting therefore to hear the Chancellor Alistair Darling declare to the Confederation of British Industry (CBI) annual dinner last week his unswerving support for investment in the public realm.
Not least was Darling's reassuring restatement of support for the "vital" £16bn Crossrail scheme. This project is cantering through the House of Lords towards potential Royal Assent in August and will without question draw on substantial public spending.
OK it is spending that will be drawn out over a number of years and is partly backed by the private sector and fare-box. Yet given the amount of public cash required recently to prop up banking disasters and fund tax mis-calculations, there must still be schools of thought within Treasury recommending its 2013 opening date be pushed back.
Thus it was intriguing to hear Darling then call, virtually in the same breath, for even more new investment in "essential" transport.
"We need to spend more on rail," he told the CBI. "More will also need to be spent on road transport, and the need to provide more airport capacity remains essential."
And he didn't stop there. Darling then continued to bolster the confidence of the civil engineering with pledges for support in skills and education at university and a pledge to boost UK science in general.
Tackling climate change was, he went on, also a major opportunity that we could not afford to miss. Developing renewable energy sources and new nuclear with more investment in research and development in theses industries was, he said, core to a competitive economy.
"Let us seize the opportunity, so that British industry can benefit," he said, promising major reforms to the planning system so as to make it all happen.
So what to conclude? Politically you could argue that this was the speech of a man looking for friends. On the other hand we could take this as a clear sign that, at last, government understands how the provision of decent infrastructure drives the economy. Let's hope that it is the latter.

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