Reeves to lay out 10-year infrastructure plan worth £725bn
Chancellor Reeves is set to deliver a 10-year infrastructure strategy plan which will lay out efforts to boost growth and upgrade services across the UK.
The new blueprint for UK infrastructure will come around a week after Reeves delivered the Spending Review, which marked out £190bn in extra government spending commitments for the years between 2026 and 2029.
Labour’s 10-year strategy will see £725bn of taxpayers’ cash go towards building train lines, power plants and affordable houses over the next decade.
Many initial commitments were revealed last week, including £39bn for affordable housing and £14.2bn for the Sizewell C nuclear power station.
Investment in infrastructure is key to the government’s pledge to deliver higher growth as they hope modernised hospitals and improved transport links could help revive UK productivity.
It will also come ahead of the industrial strategy, which is expected to better outline the UK government’s ambition to bring energy prices down while delivering on net zero emissions targets.
Reeves said the government’s new strategy would help “rebuild people’s pride in their homes”.
“For too long, our infrastructure – our schools and hospitals, or our roads and bridges – have been left to crumble, holding back communities and stunting economic growth,” she said.
“This was a dereliction of duty by previous governments overseeing an era of managed decline, but it ends with this one.”
Shadow chancellor Mel Stride said: “With inflation up, growth down, and unemployment rising, the economy is heading in one direction and that is backwards.”
Reeves to rely on new body
A government body, the National Infrastructure and Service Transformation Authority (NISTA), will be created to end a “disjointed approach” to delivery as recent developments in everything ranging from HS2 to the building of new hospitals have suffered from delays and overspending.
Its new chief executive Becky Wood, a partner at EY, said the 10-year strategy would help provide businesses with “stability” while NISTA will “be embracing the abundance of opportunities it outlines”.
Some of the UK’s largest pension funds are also expected to be major funders of infrastructure development over the next few years after an agreement was made for the likes of Legal & General and Phoenix Group to invest five per cent of defined contribution (DC) default funds in UK private assets by 2030.
The UK has faced low productivity levels in recent years, with output per hour worked lower than that seen in the likes of Germany and France.
Several economists believe the UK’s ageing infrastructure and high energy costs hold Britons back from producing more.
The Productivity Institute’s Bart van Ark last week warned that spending plans risked “dissolving into bureaucratic fog” if the government did not take a more coherent approach to infrastructure.
“With gilt markets watching, the surest route to sustainable public finances is faster productivity,” he said.
“Each one-point uplift in output per hour yields roughly £23 billion in extra revenues – far more than any single tax tweak can raise.”