Budget 2020: Chancellor will promise ‘record’ infrastructure spend

Spread the love

Image copyright
Getty Images

Image caption

Railways will be among the infrastructure to see a boost in funding after Wednesday’s budget

The government will promise to raise infrastructure spending to its highest in decades in Wednesday’s Budget.

It will pledge to triple the average net investment made over the last 40 years into rail and road, affordable housing, broadband and research.

The Treasury told the BBC it would lead to the “highest levels [of investment] in real terms since 1955” over the course of the five-year Parliament.

Chancellor Rishi Sunak will present the Budget less than a month into the job.

It comes as the government faces calls for increased investment in a number of sectors to help tackle the coronavrius outbreak.

On Sunday, Mr Sunak told the BBC’s Andrew Marr the NHS would get “whatever resources it needs” during the crisis.

The chancellor also said he was looking at extra financial help for individuals and businesses if measures against the virus meant they were out of pocket.

The BBC understands Mr Sunak will promise a gross amount of over £600bn for capital spending – money put into projects like roads and rail – by the middle of 2025.

Mr Sunak is expected to say: “We have listened and will now deliver on our promise to level up the UK, ensuring everyone has the same chances and opportunities in life, wherever they live.

“By investing historic amounts in British innovation and world-class infrastructure, we will rebalance opportunities and lay the foundations for a decade of growth for everybody.”

BBC political editor Laura Kuenssberg said the decision marked a significant increase in the amount of spending on capital projects compared to the period since Margaret Thatcher came to power in 1979.

However, she said it was not yet clear if the government would stick to its own fiscal rules set out in its manifesto.

In recent days, there has been a rush at the Treasury to find a way of helping the economy through the very unpredictable coronavirus, and Rishi Sunak is under significant pressure to come up with a package of goods.

But we also understand from the Treasury the new chancellor will promise, what they are dubbing, “the biggest package on infrastructure spending in a generation”.

The figure is not completely unexpected if we think of all the things promised during the general election campaign.

But it would mark a significant gear change in the levels of public investment on things like road and rail in recent decades.

It is very important to remember that until we see all the documents tomorrow, we won’t be able to put this into the full context – it is very important to look exactly what is laid out in black and white.

Also remember, this is about capital spending – the long term projects, the bricks and mortar. Day-to-day spending, where there is significant strain in some government departments, is a different set of accounts all together.

So, just because the government is making big promises on the long-term cheques they fancy writing, it doesn’t mean the squeeze on public spending will disappear.