And so the wheels fall off. As the Times discloses this morning, Alastair Darling's Big Idea to bring forward capital spending projects looks like it just ain't happening. The thinking was that £billions of this spending could be funded via the Private Finance Initiative - which Brown's always liked, because of its "Buy Now, Pay Later" qualities, and because the costs can be swept under the fiscal carpet - but now the banks aren't willing to lend the necessary cash. Other sources of funds have also dried up as the credit crunch bites, so now the Government's left with a stark choice - either cut back on the spending projects, which include work on schools and hospitals, or fund them with even more borrowing. Either way, all this deflates Brown's talk of a meaningful "fiscal stimulus", whilst also adding weight to the Tories' "headless chicken" charge. With Labour already 15 points behind in the latest poll, Downing Street won't be best pleased to see the surface narratives shifting against them wholesale.
P.S. Seems that wind-farm projects are also surrounded by funding doubts. Details here in the FT.