Rebuilding Britain Is More Than a Sugar Rush

The surge in public spending promised by Britain’s first Labour government in 14 years will create what has been called a “sugar rush” of growth that will fade. It’s an unfortunate, if understandable, idiom. As far as crumbling infrastructure is concerned, the £100 billion ($130 billion) of capital investment outlined in last week’s budget is better regarded as a protein boost. And on a long-term view, it isn’t anywhere near enough.

The amount will raise Britain’s public sector net investment to an average of 2.6% of gross domestic product over the five years of this parliament. That’s only a marginal increase from the 2.5% rate it has averaged this century. And it’s way short of the 3.7% average for advanced economies in the Organization of Economic Cooperation and Development over the same period, according to the Resolution Foundation. A sensible initial target for the UK would be 3%, the London-based think tank said in a report last year.