November 28 2011

Chancellor George Osbourne has announced that the Treasury is to commit to a £30bn scheme to invest in British infrastructure over the next decade– including £5bn to be spent by 2014.

The pot is being financed largely on the back of existing pension funds with Chinese investment also being solicited. The Treasury will play its part by diverting an additional £5bn from the current spending round to infrastructure.

It is stated that this money will be found from efficiency savings and a clampdown on tax avoidance rather than cuts to public services.

40 projects have already been identified by the National infrastructure Plan as likely recipients of the cash, including electrification of the rail link between Manchester and Leeds, expansuion of the Tyne & Wear Metro and a new motorway connection between Stockport and Manchester Airport.

Chief Secretary to the Treasury Danny Alexander said: "We're putting in place a new arrangement with private pension funds - which is the first time this has been done in this country - to try and unlock pension fund money to go into infrastructure."

It is hoped the measures will serve to make the British economy more productive in the long term and boost capital flows in the short term.

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