London: The UK is drawing up plans for a state development bank to fund infrastructure projects as part of Boris Johnson’s mission to promote economically neglected regions in the country.
Treasury Chancellor Rishi Sunak will unveil tens of billions of pounds of infrastructure spending next week as part of a $ 800 billion five-year plan he announced in his budget in March. On Friday night, he confirmed Bloomberg’s earlier report that the state bank would be created to speed up investment in these projects.
“Infrastructure investment will be a key driver for the UK to rebuild better and greener from the pandemic,” the chancellor said in an email. “By improving connections across the country with the support of innovative green technology, the new national infrastructure bank will invest in the projects it needs most.”
The Treasury said the awards and the publication of a national infrastructure strategy, along with the government’s spending review, would appear on November 25.
The proposed investment bank would use public money to leverage extra private funding for roads to wind farms projects, which would help Johnson deliver an election pledge to invest £ 100bn in infrastructure over five years.
The government consulted last year on the way in which infrastructure is financed in the UK, and asked respondents whether ‘the government should set up a new, operationally independent, UK infrastructure financing institution.’
The bank will be based in the north of England, with full details to be published next year’s budget. Local authorities will be able to use it for regional projects, the government said.
Officials believe the involvement of the state will make projects less risky and reduce the cost of credit for infrastructure across the country, which will help stimulate investment in poorer parts of the North of England, where voters helped Johnson gain a majority by 80 to deliver seats.
“In time, we will put forward further measures to boost investment in UK infrastructure,” Johnson said on Wednesday when asked by Tory’s legislator Gareth Davies whether he would consider setting up a national development bank to raise private capital. to help mobilize new infrastructure.
“The UK has suffered for decades from underinvestment, low productivity and poor infrastructure in the regions compared to London and the South East,” Davies said by telephone on Friday. ‘As our economy recovers from coronavirus, now’s the time to invest in boosting the economy. To help achieve this, we need a national development bank that can mobilize private capital in critical investments. ‘
Davies said such a bank would also fill a gap left by the British investment bank as a result of Brexit.
Since the United Kingdom joined the EU in 1973, British projects have received € 119 billion ($ 158 billion) in EIB loans, including more than € 44 billion, according to the bank’s data. The projects funded include the Channel Tunnel connecting Britain with France and the Crossrail project in London.
Source: Gulf News