Without new infrastructure, the outlook for the coming decade is poor

Poor old Bradford. Poor old “Build Back Better”, Boris Johnson’s rallying call for a fair deal for the North. Poor old Britain.

The rumours and spin emanating from the Treasury sound increasingly grim. There is a threat to Northern Powerhouse Rail (NPR), which promised to revive the huge potential of great cities such as Bradford, Doncaster and Hull; to the northern/eastern extension of HS2; and to the planned nuclear power station in Suffolk, Sizewell C (though this is denied by No 10). And those are just the headline-grabbing mega-projects. Countless improvement schemes involving roads, power lines, renewable energy and insulation – and very possibly new school and hospital buildings – may well be delayed as Jeremy Hunt goes hunting for savings.

The whole budget of the levelling up department, already puny when set against the task of regenerating the UK north of Watford and west of the Cotswolds, is likely to be denuded still further, with passive minister Michael Gove putting a brave face on his department’s humiliating failure to deliver the promises of 2019.

Already the new business secretary, Grant Shapps, has confirmed the downgrading of the NPR link, and the drum beat of cuts to public investment is indeed intensifying. It is especially concerning because private investment, in particular private inward investment, has been historically weak ever since the Brexit vote in 2016 – once again all roads, and rail links, lead to that disastrous moment. Investment, public and private, is the key to implementing new technologies, reducing costs generally, and raising productivity – and thus wages and living standards in the long run.

Liz Truss’s drive for growth was ill-conceived to the point of stupidity, but she had a point. Growth does indeed solve the problem of debt, and releases resources for better public services as well as private consumption – years, if not decades, down the line – just as the 18th-century canals, the 19th-century railways and the mid-20th-century motorways did.

Without such infrastructure to open up fresh territories for investment and growth, the outlook for the coming decade is poor. If adequate nuclear power to supply baseload electricity isn’t secured, then the years ahead will be more literally cold and dark as well.

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The conundrum is that all the parties, and even those fickle international investors known collectively as “the markets”, accept that “borrowing to invest” is perfectly acceptable, and is treated quite differently from, say, feckless unfunded tax cuts.

The wholesale scrapping of these schemes suggests either that the Treasury is even more concerned about overall debt levels than was assumed, or that the chancellor has taken a further look at the numbers and decided that, in the long recession to come, the projects no longer make financial sense. That is, if anything, even more depressing.

So the UK has gone from a boosterish and broadly tax-cutting agenda under Mr Johnson and Ms Truss to a return to the kind of austerity suffered in the unlamented Cameron-Osborne era.

There may be no alternative – to borrow another old slogan – but the fact remains that cutting investment in this way will add to the many existing drags on growth imposed by post-Covid distortions, the war in Ukraine, the energy crisis, and the creeping alienation of China from global trade – but also by Brexit, which, though disguised by those other very real crises, is working its own malign way through the British economy, from Bradford to Somerset.