12 March 2010

MPA Calls for Reversal of Planned Public Investment Cuts in 24 March Budget

MPA Executive Director, Simon van der Byl, today called on the Chancellor to reverse Government plans to halve public investment in the budget on 24 March.

He said, “In the previous Budget, Government set out plans to reduce net public investment by 50% by 2013/14. Given that private sector construction is still in decline and will remain very subdued for several years, the planned cuts to public investment – most of which is construction – would significantly damage the prospects of economic recovery. Such cuts would also damage the quality of our public services and infrastructure when there is much outstanding work to do.

“We know that construction investment is a very effective means of stimulating economic growth, each £1 invested in construction generates £2.84* of economic activity.  Net public investment remains a small proportion of total Government spending and is equivalent to only 7% of current spending by Government and only 6% of overall Government debt**.  Given the economic benefits of this relatively small proportion of Government spending, it surely makes economic sense to sustain public investment and boost economic recovery.”

ENDS

Notes to Editors

1. The Mineral Products Association (MPA) is the trade association for the aggregates, asphalt, cement, ready-mixed concrete, lime, mortar and silica sand industries. The MPA represents 100% of GB cement production, 90% of aggregates production and 95% of asphalt and ready-mixed concrete production. Each year the industry supplies £5 billion of materials to the £110 billion construction and other sectors.  The MPA has a growing membership of over 261 members across the UK. Industry production represents the largest materials flow in the UK economy.

2.  *Construction in the UK Economy – the benefits of investment.  LEK Consultants for the UK Contractors Group.

3. ** Data from the 2009 Financial Statement and Budget Report Chapter C, Table C4 “Current and Capital Budgets”.
   2009/10
    - Net public investment £44 billion
   - Government current expenditure £608 billion
   - Public sector net debt £792 billion

ENDS