The economics of Nimbyism

The October Spending Review is likely not only to have a severe impact directly on public sector jobs, but also indirectly on the private sector through reduced spending power and a loss of public contracts. That is a given in George Osborne's plans. But there is also an assumption that the private sector will still be able to step in to fill the gap created, generating sufficient growth to outweigh the negative impact of the cuts.

That theory might be fine if it were not for three deeply damaging protectionist policies that are achieving exactly the opposite effect, and which are set further to stunt prospects for growth. In a welcome breath of fresh air, Vince Cable has told the Financial Times this morning that the ludicrous cap in non-EU skilled migrants is having a real impact on key economic sectors, echoing views expressed by the London Mayor Boris Johnson. Meanwhile, Damian Green's zealously populist embrace of Home Office antipathy to overseas students - who contribute £5 billion a year to the UK economy - not to mention the ties that are created with many graduate entrepreneurs afterwards - is likely to see them turn to other countries with less short-sighted attitudes instead.

But there is a third element that is exemplified vigorously in today's Bristol Evening Post: the coalition's support for Nimbyism over the national interest, whether in the expansion of Heathrow Airport or in major economic developments. What the Post accurately describes as a 'rutted former tip' has been given the status of a 'town green' because 22 local residents successfully appealed in a planning inquiry against a £150 million investment in a world-class football stadium at Ashton Vale that could have provided 6,000 jobs and £150m if the World Cup comes to Britain. Yet far from reducing the impact of such Nimbyism, the coalition in a misguided piece of localism has handed far more power back to small groups of residents and abolished the independent Infrastructure Planning Commission, to the dismay of industry.

Combined with an appetite for cuts that has already choked infrastructural investment in schools and transport, it all amounts to a recipe for economic stagnation. Let's hear more from those in the coalition who recognise this reckless folly for what it is.

The Tories' planning paradox

Listening to Tory transport spokesperson Theresa Villiers trying to explain on the Today programme why she couldn't take up Andrew Adonis's generous offer to give her early sight of his transport white paper and why she couldn't back a high-speed link to Birmingham - apparently it would undermine her commitment to yah-boo politics - I was struck by one extraordinary paradox in the Tories' approach to planning. After years of frustration, Labour sensibly established a fast-track planning mechanism to support large projects. Now Ms Villiers plans to undermine any chance of a UK high speed rail network a mere 20 years after our major competitors by handing the decision back to interminable planning inquiries.

However, her saner colleague Michael Gove who has seen how such Nimbyism can impede the establishment of academies, has decided that planning decisions about new schools, including new primaries, will be taken centrally in his department should be become secretary of state. So major national infrastructure projects like high speed rail will be taken only after every parish council has had the chance to complain, but local councils will have no say on whether new primary schools should be established in their communities. That's localism in action, I suppose.

This posting has been picked up by Stumbling and Mumbling.