PUBLIC INVESTMENT
By NICHOLAS DAVENPORT Certainly the forward-looking chairman of Associated Electrical Industries, Lord Chandos, would not be against it. He has just warned his shareholders that they will incur substantial losses on the building of the Berkeley nuclear power station. Was he perhaps wondering whether it was wise to rush into the construction of dear- cost nuclear generating stations at a time when the technique of nuclear power production is by no means finally established? If a National Investment Board were in existence it would un- doubtedly be asking awkward questions of this sort. It would be examining not only the economics of nuclear power investment but questioning the sense of investing in oil-fired boilers for electrical power, if that particular capital spending throws up a surplus of low-grade coal and makes invest- ment in some of the coal mines uneconomic. And against what capital programme should be charged the expense of retraining and resettling the thousands of coal miners thrown out of work?
With these thoughts I re-read Appendix B in the Economic Survey on Public Investment in Great Britain.' I know that Mr. Amory, bent on re-expansion, was right in looking to an increase of £158 million to £1,607 million in public invest- ment as a counter to the pause in private industrial investment. But would it not have been safer if the various programmes could have been 'vetted' by a National Investment Board? The coal pro- gramme for 1959-60 calls for capital spending of £119 million against £102 million last year. It is necessary, they say, to provide -new pits and re- construct others, so that future production may come from 'fully modernised capacity.' But what should future production be in relation to what demand? That point is not discussed. The Atomic Energy Authority is again put down for £46 mil- lion. Less controversial is the proposed spending on electricity, which goes up by £54 million to £353 million, and on gas, up by £6 million to £54 million, but these increases could well have been larger. A rapid re-expansion of the economy could find electricity supply again a restricting factor.
The proposed expenditure on roads also looks meagre, having regard to the fact that low trans- port costs are an essential part of our industrial efficiency. The four-year road plan of July, 1957,
This is not the place to discuss social investment in houses, schools and hospitals, but the local authorities account for nearly two-fifths of invest- ment in the public sector which in turn is nearly 45 per cent. of the total investment in the country. The economic importance of Appendix B is self- evident and 1 have given details of the principal spending programmes for the light they throw on the state of the order books of the electrical engineering industry, the road-making companies, the locomotive builders and others. Investors will be impressed by some of the schemes and not by others; they will certainly not want to invest in the commercial recipients of Mr. Marples's meagre favours. Not until that National Investment Board gets to work.
envisaged a spending of £60 million a year in England and Wales by 1960-61 and of £10 million in Scotland. For the current year Mr. Amory's programme meets the latter but allows only £56 million for the former, an increase of £9 million.
For the railways the increase is £44 million to £178 million, which is much more ambitious. The White Paper of 1956 called for £900 million to be in-
vested in the seven years to 1962, with an addi- tional £300 million up to 1970, a total of £1,200 million. The plan has now been revised to £1,500 million. The spending is on electrification, diesel engines and new rolling stock for London Trans- port, etc. This year the railways wi(11 take delivery of 300 main-line diesel locomotives.
After this imaginative effort by the British Transport Commission it is disheartening to see the proposed capital expenditure by the Post Office actually cut by £4 million to £94 million (against £101 million in 1957-58). One expected something better of Mr. Marples. The unions claim that investment in the telephone system is being arbitrarily restricted to a level below what is justified by public demand and they are abso- lutely right. The waiting list for telephones is still large-140,000—and of this number there is a hard core of nearly 70,000 for whom nothing can be done in the foreseeable future because of the shortage of cable and equipment at the exchanges. At the present rate of progress it will take twenty years to meet their needs, which is quite preposter- ous. Moreover, about a million residential sub- scribers—two out of every five—are sharing lines. All this is bad for health and bad for business. Mr. Marples gets much publicity for his technical improvements and innovations, but he is falling down on his main job, which is putting people who desperately want a telephone on the telephone system. If a National Investment Board were functioning the Postmaster-General would surely be on the carpet and getting marching orders.
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