Announcement comes as government publishes new National Infrastructure Plan containing a pipeline of over £375bn of planned projects
Six major insurers are ready to invest £25bn in UK infrastructure over the next five years, chief secretary to the Treasury Danny Alexander has said.
Speaking on the BBC’s Radio 4 Today programme this morning ahead of the publication of the government’s new National Infrastructure Plan containing a pipeline of over £375bn of planned infrastructure up to 2030 and beyond, Alexander said the move by the insurers was a “a massive vote of confidence in the UK economy”.
Alexander said the insurers - Legal and General; Prudential; Aviva; Standard Life; Friends Life; and Scottish Widows, working together with the Association of British Insurers - were willing to invest in UK infrastructure, in what will be seen as a major boost to the government which has been trying to attract institutional investors into the sector.
The Treasury said the decision followed the successful negotiation last week by UK government of the key European directive Solvency II.
The UK negotiations ensured those capital rules incentivised life insurers to invest in a wider range of assets including infrastructure projects which can deliver the consistent long term returns these businesses seek.
The future infrastructure pipeline, which only includes projects and programmes worth over £50m, shows that planned investment in infrastructure has increased to over £375bn from £309 billion last year.
Of the 646 projects and programmes in the updated pipeline 291 are already under construction.
The move comes amid a raft of announcements today, including:
- an agreement with Hitachi and Horizon to support the financing of the development of a new nuclear power station at Wylfa in North Wales through a UK guarantee, subject to final due diligence and ministerial approval
- a further £50m for a full redevelopment of the railway station at Gatwick Airport
- strike prices for renewable energy, so that energy providers know how much they will receive for electricity generated in the future
- take forward steps to convert public sector car fleets to electric vehicles investing £5m in a pilot during the year 2014 to 2015
- fund improvements to the A50 around Uttoxeter starting no later than 2015 to 2016
- no tolling on the planned A14 scheme between Cambridge and Huntingdon, construction of which is planned to start in 2016
- confirm a UK guarantee has now been agreed for the £1bn Northern Line extension to Battersea, unlocking a development the size of the Olympics in the Nine Elms area
- announce a £10m guarantee for new energy efficient lighting systems across car parks in the UK
- create a new court for infrastructure to avoid unnecessary delays in the planning process for major projects
- open a £10m competitive fund in early 2014 to test innovative solutions to deliver superfast broadband services to the most difficult to reach areas of the UK.
- build on the Spending Round commitment of £2.3bn capital investment for flood defences by developing a new long-term plan, including naming key projects by Autumn Statement 2014
- double the target for the sale of corporate and financial assets from £10bn to £20bn between 2014 and 2020, which could include the government’s shareholding in Eurostar
- the government will also look at options to bring private capital into the Green Investment Bank to enable it to operate more freely in delivering its objectives
- aim to make the UK a world centre for the testing and development of driverless cars. The government will conduct a review to ensure that the legislative and regulatory framework to support this aim reporting late 2014. It will also create a £10m prize fund for a town or city to develop as a testing ground for driverless cars
Commercial secretary to the Treasury Lord Deighton said: “The fourth National Infrastructure Plan shows that the government is delivering on infrastructure, with a long term strategy to make sure the UK tackles decades of underinvestment and gives us the infrastructure we need to compete in the global race.
“Investment is increasing to around £375 billion over the coming years, with 45% of our prospective infrastructure already under construction.
“We’ve set out government priorities with clear delivery milestones and reformed planning rules to drive forward the most important projects, making sure we are building the strong, modern economy of the future.”