HS2 v. Potholes

£33 billion over 20 years for a new 'High Speed' railway from London to various places oop north - an example of the Keynesian approach to capitalist economics which centres on a 'demand led' economy where the State intervenes to stimulate demand and thus growth. The greater good being the motive, rather than merely a profitable return on capital for a few individuals or corporation. But hold up! Weren't the railways privatised in 1996 and so doesn't this, in effect, amount to a £33 billion subsidy from the taxpayer to the private sector? Any profit from the venture will go the privatised railway companies. Moreover, the taxpayer - the public - will also have to pay to travel on the railway. I smell a rat.

The new railway will increase capacity as well as speed so that's good too as it is to be hoped it will stimulate investment around the UK and facilitate the movement of labour (but not for Romanians and Bulgarians, we assume). And the project will provide employment directly during construction which will be spread over twenty years so that's good. But will the contracts go to local companies i.e. UK taxpayers? Some of it, but the big bucks will go to multi-nationals who will no doubt find ways of moving their profits off-shore.

Meanwhile, there is an 11-year backlog of road repairs featuring every motorist's favourite gripe, the ubiquitous pothole. In 2012, local authorities paid out £22.8 million in compensation to motorists whose cars had been damaged as a result. The estimated cost for clearing the entire road maintenance backlog is £12.93 billion. It doesn't take a genius to work out that if instead of spending 20 years building a high-speed railway you were to spend £12.93 billion now on repairing the roads, you would reap the same Keynesian benefits in terms of stimulating the economy, but sooner. Plus you would save 20 years' worth of compensation awards (£456 million). It's anybody's guess whether the contractors might be local or, via some web of intrigue, registered in Albania for tax purposes, but that's another argument.

So, there you go, Mr Osborne, I just saved the taxpayer £20 billion smackers and cheered up a lot of motorists (although disappointing all those people who wanted to get to Manchester half an hour sooner).