Business welcomes infrastructure plans

BUSINESS groups have welcomed new Government plans to underwrite major infrastructure projects that could be worth up to £40bn.

Chancellor George Osborne has launched the UK Guarantees scheme which will be open to “shovel ready” projects that have stalled due to credit issues.
The Government will make £6bn of guarantees available to kickstart public private partnerships and later this year a £5bn export refinancing facility will be added to UK Guarantees.

Mr Osborne said: “The credibility the Government has earned through tackling the deficit is already helping millions of British families and businesses through keeping down the cost of borrowing.

“Now ‘UK Guarantees’ will use that hard-won fiscal credibility to provide public guarantees of up to £50bn of private investment in infrastructure and exports.
“Britain’s credibility has been hard-won and involved difficult decisions, so I want to make sure its benefits are passed on to the whole economy.”

Only projects deemed “national significant” will qualify for the scheme with Ministers expecting applications from the transport, utilities, energy and communications sectors.

Corin Taylor, senior economic adviser at the Institute of Directors, said: “This is a positive way of encouraging more private investment in the key projects that are fundamental to our economic future. It is beyond doubt that the nation’s infrastructure needs massive development.

“These guarantees are an innovative way of putting the benefits of the Government’s deficit reduction scheme to work in the national interest.”