Business team tells Osborne to invest in infrastructure

INVESTING in infrastructure would do more to help the economy than fresh action from the Bank of England’s Monetary Policy Committee, according to its Yorkshire shadow.

The Yorkshire Shadow MPC, a partnership between the Yorkshire Post and law firm Lupton Fawcett Lee & Priestley, expressed doubt that increasing the injection of money into the economy through further quantitative easing would have a significant impact.

However they were split on the merits of cutting the Bank of England base rate.

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Three members called for a largely symbolic reduction to 0.25 per cent against five recommending holding at 0.5 per cent.

The Bank of England’s base rate has been at its all time low of 0.5 per cent for four years.

There was a widespread agreement that the mechanisms open to the MPC to try and stimulate the economy are limited but the Government could have an impact if it commits to spending in key areas.

Nimble Thompson, chairman of NG Bailey and former regional director of the Institute of Directors, said: “There are a lot of projects out there that just need the dust blowing off them, they don’t need planning permission or anything else.

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Mr Thompson added: “If the Chancellor could get back to spending on things that are already available there could be people digging on roads or whatever it is within weeks.”

Paul Stephens, from UK Trade and Investment, the Government body for exports and inward investment, backed the call for infrastructure spending and said the Government also needed to be careful about the impact on the economy of its wider policies.

“I think the Government needs to be careful about understanding how its broader housing policy impacts on supply and demand in terms of where people can afford to live, where they want to live and where the demand for labour is,” he said.

“That could have a big impact on the economy.”

The meeting also heard calls for renewed efforts to encourage lending to business and to simplify Government lending schemes.

A video of the Shadow MPC’s discussion can be watched at the Business News section of the Yorkshire Post website – www.yorkshirepost.co.uk/business/business-news/.