Petrol, major rail projects and poor government policy

Gordon Brown is busy at the G20 summit trying to push a spending agenda to bring the world out of recession.

On the same day Gordon is saying that, there are two minor stories to suggest that he might need to get his own house in order before telling the world what to do. This is not to suggest I don't agree with Gordon's plan to use government spending to boost the economy but that doesn't stop me pointing out what are really some quick wins that have been missed.

After all the role of the voter is to hold the government to account.

Fuel Duty

Today there was a 2p rise in fuel duty which had been planned all the way back in November at the beginning of our darkest months / downturn / credit crunch whatever those media people want to call it today. I fundamentally agree that the price of fuel should reflect the true cost of car use in terms of the environment and emissions.

What I would argue is that the duty rise should have been postponed by six months. This is coming at a time when consumers and businesses are already suffering from a squeeze on their finances. This is just a kick in the teeth.

It is also money that will go straight into the treasury rather than be used on the high street. Think of it as a Vat rate cut in reverse, if you reverse the argument that the government used for the Vat cut then surely putting on the fuel duty raise will take money out of people's pockets and therefore stifle economic growth.

Taxation is often about smoke and mirrors but this is perhaps a step too far.

Major rail projects

A big aspect of the agenda is to invest in capital projects, several of which could be major transportation and railway projects. The good news is that the government nationalised the infrastructure of UK railways some time ago. So all it would have to do is loan money at very favourable rates which could be spent on major projects. There are lots of projects to spend the money on as well, several projects are in the planning stages and the government could bring several forward or just create new projects. The railways will happily make use of any money that the government cares to give it.

So are they doing it? The article would suggest probably not. Jarvis one of the main railway contractors who work on infrastructure projects has just cut 450 jobs citing network rail spending reductions as a trigger. Network rail have delayed projects and reduced spending causing a downturn in business for Jarvis and therefore Jarvis are having to trim there business to suit the new economic climate.

So if the government are not putting money into planned existing capital projects where exactly are they going spending this money they keep on talking about?