Government underwrites £50bn infrastructure spending
The government says it will underwrite £50bn of investment in infrastructure and exports to try to lift the economy.
The Chancellor, George Osborne, said he was using the coalition's "hard won fiscal credibility" to release private sector funds.
The news follows a report earlier this week from the International Monetary Fund (IMF) which sharply cut its growth forecasts for the UK economy.
It said it would grow by just 0.2% this year.
Under the "UK Guarantees" scheme, up to £40bn of funding will be underwritten for infrastructure projects that have been put on hold following difficulties in raising money from private investors.
The government will charge for finance for the projects, which could be in a range of sectors, including transport, energy, communications, and education.
Those seeking the money will have to to meet criteria including being able to begin work within 12 months.
They will also have to prove the project will have a positive impact on economic growth, as well as provide good value for taxpayers.
The government hopes the first guarantees will be made in the autumn.
The government is also planning to help the private sector by providing £6bn to around 30 projects planned under Public Private Partnership (PPP) arrangement.
These schemes get all their initial funding from the private sector but some are struggling to get off the ground because of difficulties in securing funding.
Mr Osborne and the Treasury Chief Secretary Danny Alexander also announced a £5bn export refinancing facility to be launched later this year.
Mr Alexander said: "The measures we're announcing today will help work get started on many important infrastructure projects and help our major exporters, providing lasting benefits for thousands of people and a significant boost to the economy."
UK does the stmulus thing
UK does the stmulus thing
“If you trust in yourself, and believe in your dreams, and follow your star. . . you'll still get beaten by people who spent their time working hard and learning things and weren't so lazy.”
Re: UK does the stmulus thing
I'm having trouble understanding what's going on here.
This is apparently NOT government spending per se, but the government "underwriting" private sector borrowing?
Who, exactly is borrowing money from whom (for these projects), and how will it be repaid?
Are they privatizing highways and bridges?
This is apparently NOT government spending per se, but the government "underwriting" private sector borrowing?
Who, exactly is borrowing money from whom (for these projects), and how will it be repaid?
Are they privatizing highways and bridges?
Re: UK does the stmulus thing
Right idea, wrong amount, very late, and less effective than direct spending. By population it is the equivalent of $250B in stimulus in the U.S. . Not enough to move the dial but perhaps it is a sign of things to come?
We need more leaders who can admit they were wrong and change course when a policy (austerity) has totally failed.
yrs,
rubato
We need more leaders who can admit they were wrong and change course when a policy (austerity) has totally failed.
yrs,
rubato