Chief Secretary to the Treasury Danny Alexander said the new investment was “a massive vote of confidence in the UK economy”.
He added: “It supports the wider £100bn public investment to rebuild Britain over the next seven years that I announced at the Spending Round 2013.”
The funds will be used alongside taxpayer’s money and receipts from the sales of assets including the Government’s 40% stake in Eurostar to pay for construction projects.
Alexander revealed the support for Government infrastructure spending ahead of publishing the fourth update of the National Infrastructure Plan this morning.
The latest edition lists projects totalling £375bn over the next 20 years, up from £309bn last year.
New National Infrastructure Plan highlights
- Further £50m for a redevelopment of the railway station at Gatwick Airport
- Government guarantee to support building of new Wylfa nuclear power station in north Wales
- Signing of UK guarantee for the £1bn Northern Line extension to Battersea in London
- Funding for improvements to the A50 around Uttoxeter, to start no later than 2015-16
- Create a new court to consider infrastructure-related planning disagreements
- £30m contribution to support the construction of a new Garden Bridge across the River Thames in London
- Target for the sale of Government corporate and financial assets doubled from £10bn to £20bn between 2014 and 2020, including the government’s stake in Eurostar.
The Government has also pledged to set out strategic plans for improved flood defences, setting out a priority list of projects by the 2014 Autumn statement.
Alexander will also confirm the Treasury has dropped plans to toll part of the A14 and will now fully-fund the £1.5bn Cambridge to Huntingdon upgrade.
He said the Government was now confident the insurance industry would help to shoulder some of the spending commitment burden.
The decision by insurers L&G, Prudential, Aviva, Standard Life, Friends Life and Scottish Widows to invest in infrastructure follows changes in European rules pushed for by the UK which incentivise investment in a wider range of assets.
The insurers have not yet committed to specific projects, and Legal & General said it wanted to invest partly in real estate projects that are part of the Government’s plans.
The commitment by insurers mirrors earlier statements from the pension fund industry which pledged to invest £20bn in infrastructure. So far this has attracted just £1bn of investment.
Katja Hall, the CBI’s chief policy director, said: “We’ve been calling for a more focused approach on infrastructure projects and look forward to seeing the fourth National Infrastructure Plan. As ever the devil will be in the detail on timelines and delivery.”
She added: “With the majority of national infrastructure projects earmarked to be delivered by the private sector, the insurance industry’s £25bn investment is good news.”
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