When are politicians going to get real and start confronting excessive public spending? With the high-speed rail announcement earlier this week, it appears that they are still living in a fantasy land where such ambitious and enormously expensive schemes can be announced without a word about where the money is coming from.
Some simple fiscal realities:
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Britain is facing enormous deficits which will lead to a massive debt of between (PDF) £1.54 and £2.34 trillion by 2017/18. The deficits are partly the result of the economic cycle, but the structural deficit is the result of politicians jacking up spending as if the boom would last forever. The Government is borrowing a huge amount despite a decade of tax rises; further hikes will either do huge damage to the economy while raising next to no revenue - if politicians try to tax high earners and firms that can easily invest elsewhere - or create unacceptable hardship for ordinary families
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The Transport budget, in particular, faces cuts of up to £29 billion over a ten year period. This will put existing projects like Crossrail under considerable pressure. No one serious about the issue can be under any illusion that there is money to burn without compromising other priorities. There is a particular need for investment in the road network - which moves the vast majority of passengers and goods - and commuter rail - all of the most crowded routes are on commuter lines taking people into major cities.
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Big government projects routinely go over budget. TaxPayers' Alliance research (PDF) has shown that major capital procurement projects tend to go over budget, on average, by one third - even including defence projects whose final cost fell thanks to a cut in the amount ordered. That suggests this scheme could well cost over £40 billion. An over-run is particularly likely with a project this complicated.
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I don't think many people dislike the idea of a new high-speed rail line, and we're not going to suggest that taxpayers wouldn't get anything in return for their £34 billion. But, all the 'industry leaders', politicians and other worthies praising this now should also be setting out how they plan to cut other spending sufficiently to get rampant borrowing under control and pay for such big expensive schemes as this.
All we're hearing from politicians on either side of the partisan divide at the moment is what they want to protect from cuts and new commitments like this. If that continues, then we might all pay a heavy price.