Over the course of the next week I am going to look in turn at the main areas of infrastructure, where the UK and especially southern England are badly provided . This is a good time to be considering substantial new investment in transport, water, communications, and energy. The construction industry is going to be short of orders, prices will become keener as a result, whilst even in this Credit Crunch there are substantial funds available from Infrastructure funds and banks for this type of investment.
The last eleven years have seen little progress in making the substantial new investments we need. Many road projects were cancelled when the new government arrived in power. With the exception of the completion of the Midlands relief toll motorway, proof that toll roads can be successfully built and financed as supplementary routes in the UK, there is little to show for this long period. It is the same story on the railways. Massive sums have gone into rail, but so much of it has been spent on consultants, advisers, repairs and remedial work, and little on new track or capacity enhancing facilities. The period has seen the completion of the Cross Channel rail link and a revamped St Pancras Station as exceptions to this rule of maximum spend for no gain.
In energy there has been a deathly silence. The Conservatives initiated the â€œdash for gasâ€ as the newly privatised industry decided building more fuel inefficient and dirty coal fired power stations was a bad idea. The UK made its one decisive move to a lower carbon economy through this change of fuel for power generation, which has enabled the country to hit its Kyoto targets. Over the last decade little has happened. The nuclear stations have got that much older and closer to the point where they have to close as they exceed their design lives, whilst we have been treated to successive Energy consultation documents and the promise of a grand debate on new nuclear.
The water industry has remained a monopoly for all but the largest users, and has seen a drought of new provision leading to hosepipe bans and reduced supplies as if it were still nationalised. The regulators have allowed the industry to push through substantial price rises, exploiting the monopoly position. The South and east of the country are short of water capacity.
Only in telecommunications has there been an explosion of new capacity, as a more competitive industry has responded to the demand for much more capacity to handle the internet, increased demands for mobile telephony,. And new services ranging from data transmission through security to entertainment downloads. Even here there has been some difficulty in generating the extra line capacity needed to ensure all have access to good internet service, thanks to the strong market position enjoyed still by BT in controlling the local loop and the local exchange network. Mobile networks have expanded dramatically under the impetus of full competition and strong user demand.
The UK as a result of the missing decade of network investment is short of capacity of all kinds for running a twenty first century economy with substantial inward immigration increasing demand as well. The next few years of slowdown or worse present an ideal opportunity to start to remedy these defects. I will set out thought son what the government and the private sector can do in the months ahead to rectify the shortages.