The government today announced plans to invest £100bn in modernising British infrastructure, including funding for projects in the road, rail and energy sectors.
Chief secretary to the treasury Danny Alexander announced the publicly funded investment, aimed at stimulating the economy, in the House of Commons this morning.
“This is an ambitious plan to build an infrastructure that Britain can be proud of,” Mr Alexander said to MPs.
The package, of which £50bn will come in 2015-16, is also aimed at boosting new sources of energy like shale gas.
Investors in a proposed power station at Hinkley Point in Somerset were also offered £10bn in guarantees.
Katja Hall, chief policy director for the Confederation of British Industry, praised the investment and urged the government to capitalise on it.
“This is the kind of bold, ambitious package which businesses have wanted for years – but the time for grand announcements is over. Ministers now need to follow through urgently on their promises or they risk the private sector growing even more frustrated,” she said.
But while the announcement has been welcomed by many, one of the companies standing to benefit from the investment said it had anticipated such a move.
David Weeks, head of communications for Heidelberg Cement, said: “We’ve always been optimistic about investment from 2014 onwards due to governments traditionally holding back ‘better’ policies in the run-up to elections.”
Mr Weeks, who said it would be difficult to estimate the economic impact for UK manufacturing at this earl stage. added: “With investment like this, the public often assume the money filters straight down to the manufacturer, but this is not the case as you have to consider project planning phases and contractors.”
Matthew Jones, a partner at Nabarro Infrastructure, said the need to increase investment in infrastructure is strong.
“The UK, like most of the European countries listed, lags behind the rest of the world spending only 6% of its GDP on infrastructure, compared to a huge 12% by top spender Qatar. China and South Africa follow, investing 10% of their GDP and India invests 9%,” he said.
“This is not a surprising statistic given that Western Europe and the USA have established, if rickety infrastructure, and the rest of the world is catching up.”
The announcement of the government’s infrastructure plans came a day after Wednesday’s Spending Review, in which £11.5bn of cuts to Whitehall departments were outlined.