A series of infrastructure projects across the UK could be financed by changes to borrowing rules and unlocking private investment.
Chancellor Rachel Reeves is keen to raise borrowing to fund infrastructure projects while avoiding a Liz Truss-style meltdown in financial markets.
The Chancellor will convene the inaugural meeting of the British Infrastructure Taskforce today as part of a new approach to building business confidence in supporting major investments.
The Taskforce will explore different options with some of the country’s biggest financial companies including Lloyds, HSBC, and M&G.
This marks a significant shift in approach, with key businesses and stakeholders invited to work with the government to support the delivery of its infrastructure agenda.
It will be accompanies byu a change of rules at the Treasury. At the moment, the amount of money it can borrow for investment is determined by government debt.
But the Treasury effectively confirmed it will loosen the long standing self-imposed target on falling debt in order to borrow billions more to invest in a range of major projects.
Darren Jones, the chief secretary to the Treasury, said it was important to have “guardrails” to ensure major public works offered value for money, after years of overspending and delays in big projects.
He said: “We are serious about ending the cycle of underinvestment that has plagued our infrastructure systems for over a decade. The best way to do that is to design the solution with business in the room. That’s what this taskforce is all about.”
Ms Reeves added: “Increasing investment in infrastructure is a vital part of delivering on our number one mission to grow the economy and create jobs.
“Just days after our International Investment Summit, we are delivering on our promise to work with business to drive growth across the country, and the expertise of this Taskforce will be invaluable in the weeks and months ahead.”
The government has launched a National Infrastructure and Service Transformation Authority (NISTA) to oversee strategy and delivery under one roof. It marks a shift in the UK’s approach to infrastructure projects.
The NISTA will support the development and implementation of the ten-year infrastructure strategy in conjunction with industry which was outlined for the first time last week by the Chief Secretary Darren Jones.
Andrea Rossi, CEO of M&G said: “M&G has been an active investor in the UK for 175 years. Of the £100 billion M&G invests in the UK, infrastructure remains a core part of delivering sustainable returns for our savers, clients and shareholders.
“The UK’s clear focus on infrastructure presents a significant opportunity to deliver economic and social progress and we are delighted to contribute our expertise.”
Andy Briggs, CEO, Phoenix Group, said: “Over the last three decades there has been an underinvestment in the UK economy compared to other developed nations. I am delighted there is a growing consensus that in order to grow we need to work together to invest.
“The British Infrastructure Taskforce provides the opportunity for business and government to work on shared priorities, help finance the social and economic infrastructure the country needs for the future, and give potential for better returns for pension savers.”
Taskforce meeting attendees:
- Tracy Blackwell, CEO, Pension Insurance Corporation;
- Anne Richards, Vice Chair, Fidelity International;
- Charlie Nunn, CEO, Lloyds Banking;
- Vivian Nicoli, Managing Director, CDPQ;
- Andy Briggs, CEO, Phoenix Group;
- Ian Stuart, CEO, HSBC UK;
- Andrea Rossi, CEO, M&G;
- Stephen Cohen, Chief Product Officer, BlackRock (represented by Helen Lees-Jones Global Head of Sustainable & Transition Solutions)
- Deepa Bharadwaj, Head of Infrastructure Europe, IFM Investors;
- Mike Regnier CEO, Santander UK;
- Sir Douglas Flint, Chairman, ABRDN;
- Nick Smallwood, CEO, Infrastructure and Projects Authority;
- James Heath, CEO, National Infrastructure Commission;
- John Flint, CEO, National Wealth Fund.