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Garden Bridges to Nowhere

Supply-side reform

2.198 A garden bridge for London – The government will provide a £30 million contribution to support the construction of a new Garden Bridge across the River Thames in London. This will supplement funding from Transport for London and private donations.

These aren’t the supply-side reforms we were looking for, GordonGeorge.

Categories: Fiscal Policy
  1. ChrisA
    December 6, 2013 at 09:05

    “The government will provide” …..so the money is coming from the private savings of George and David?

    • December 6, 2013 at 09:08

      Yeah. Or maybe Garden Bridges are a government spending free lunch because they improve productivity so much?

    • December 6, 2013 at 12:48

      David, thanks for the link, interesting data, but it wouldn’t it be better to look at the capital stock per head, rather than the flow?

      I would imagine that the flow is naturally “lumpy”, especially when there are big projects in the pipeline. (Say the government spends five years building Thameslink, then the next ten years building HS2, then the next five years building a new Sellafield.)

  2. ChrisA
    December 7, 2013 at 04:08

    Also, I think the reasoning is the wrong way round, the North is not poorer relative to the South-East of UK due to a lack of infrastructure investment, the infrastructure investment is going to the South-East simply because it has a better return there (or is needed more). London has an economy that is very competitive in today’s global world, there are not many places that can offer its combination of financial services, legal resources, headquarter effects, safe haven effects, culture, fashionability, high end services and so on. Because it is so unique London can effectively charge very high prices for what it offers (high house prices are one facet of this). The collective offering of the rest of the UK are just not in this level of competitiveness, so they can’t charge such high prices, so they are poorer. This means London is booming and the rest of the UK is not. In a way this is good news for the UK, London is like the rest of the UK owning a giant offshore oil field, paying taxes. On the other hand it is dragging investment and bright people away from the rest of the UK, including Government investment.

    It is hard to know what to do about this trend, at the very least you don’t want a policy that ruins the advantages of London while adding no benefit to the rest of the UK. I think myself that a guaranteed minimum income could be one way. In effect this would lower marginal wages in the North and encourage employment there, a bit like a currency depreciation effect. With a lower cost of living, more people would be inclined to stay in the North, rather than go for the higher paying, but much higher cost London area. Bright people though would still want to advance their careers in the most attractive areas so this would probably only slow the trend. I don’t think policies like moving the BBC to Salford are going to work, there just isn’t enough critical mass in just one industry to make a difference.

    • December 7, 2013 at 12:40

      I would agree with some of that Chris… but I don’t think “cost of living” is what you really mean there; it is the places with *high* cost of living where people want to live & work – London. “Standard of living” is better. And I don’t think minimum incomes will do much to improve standard of living, because incentives matter.

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