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Osborne and Alexander launch £50 billion infrastructure and exports scheme

By Tim Montgomerie
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It's Infrastructure Week in the Coalition's grid. On Monday we had Nick Clegg and David Cameron announcing a major increase in investment in Britain's railways. Today the other two members of the Quad that run this Government - George Osborne and Danny Alexander - are standing together to launch a £50 billion underwriting of investment in infrastructure and exports.

Writing for PoliticsHome, the Chancellor and Chief Secretary set out the aims and conditionality of the projects:

"The Government will make available innovative new guarantees for major infrastructure projects that have stalled because of lack of available finance. We will put the hard-won credibility of the nation’s balance sheet to work for the benefit of the whole economy. The two-year scheme begins today, with the first guarantees expected to be awarded in the autumn. To be eligible, projects will be of national significance – as identified by the Government’s National Infrastructure Plan 2011; financially credible; good value for the taxpayer but without a guarantee would be unable to proceed. And they must be ready to begin construction within a year. This scheme has the potential to transform UK infrastructure – up to £40 billion of energy, transport, communication and utilities projects could benefit."

The FT (£) suggests that "the Thames tunnel, the Mersey Gateway toll bridge and the A14 road widening in Cambridge" are all projects that might benefit.

Another £6bn of underwriting will be used to "provide support to public private partnerships that are struggling to get financing" and £5bn for export guarantees from "major growth sectors from aerospace, oil and gas extraction equipment, to transport and telecommunication".

The two Treasury ministers argue that these huge guarantees are affordable because of the tough action that the Coalition has taken on cutting the deficit. Britain has re-established its "creditworthiness", they say.

Writing in The Times (£), engineeering entrepreneur James Dyson congratulates the Government for its focus on infrastructure but challenges ministers to end the dither on airport capacity. "Indecision over a third runway for Heathrow or a Thames Estuary airport," he writes, "is bad for business and bad for government coffers too".


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