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Spending Review: Energy and transport to get share of £100bn | |
(34 minutes later) | |
George Osborne has said the UK needs to spend more on its energy and transport infrastructure if it is to create jobs and compete in the global economy. | |
The government will reveal on Thursday how £100bn will be spent from 2015-2020 on projects including nuclear and new sources of energy, including shale gas. | |
The chancellor said shale gas could be a "real boon" for the UK economy. | |
But it is unclear how soon projects will start construction and Labour says investment is needed sooner. | |
The details of the infrastructure boost will be announced by Chief Secretary to the Treasury Danny Alexander in the Commons after 10:30 BST and follows Wednesday's Spending Review, in which £11.5bn of cuts to Whitehall departments were announced. | |
Electricity price | Electricity price |
The focus of the infrastructure spending is expected to be on energy. | |
The nuclear sector has long complained of a lack of government backing for new power stations - in particular agreeing a price for the electricity they will produce - so the government will try to show that commitment by promising money for the industry. | The nuclear sector has long complained of a lack of government backing for new power stations - in particular agreeing a price for the electricity they will produce - so the government will try to show that commitment by promising money for the industry. |
There will also be tax incentives for shale gas projects, with a report being published on Wednesday showing that the UK's reserves are much greater than previously thought. | |
The transport plans are expected to focus more on roads than railways. | The transport plans are expected to focus more on roads than railways. |
One scheme thought to have been under consideration is for improvements on the A14, which runs from Catthorpe, in Leicestershire, to Felixstowe, in Suffolk. | One scheme thought to have been under consideration is for improvements on the A14, which runs from Catthorpe, in Leicestershire, to Felixstowe, in Suffolk. |
Mr Alexander's announcement is also expected to include plans to build schools and for investment in scientific research. | Mr Alexander's announcement is also expected to include plans to build schools and for investment in scientific research. |
The first £50bn will be committed to infrastructure projects starting in 2015-16 and the rest for 2016-20. | The first £50bn will be committed to infrastructure projects starting in 2015-16 and the rest for 2016-20. |
Treasury sources said "a lot of building will start this side of the [2015] election". | Treasury sources said "a lot of building will start this side of the [2015] election". |
Ms Osborne told BBC Breakfast that "you cannot just build a road in a week" but new homes, schools and roads were already being built and the coalition had a "long-term plan" rather than the "stop-start" approach of previous governments. | |
"We have got a long-term plan as a country to up our national game and make sure Britain is competing with the likes of China and India," he said. "We are doing all the things a country needs to do if it serious in winning the global race." | |
The chancellor said the government had made a "conscious" choice to limit public sector pay and welfare in the Spending Review so that it could prioritise long-term capital investment. | |
On energy, he said shale gas was "environmentally safe" and could provide "cheap energy" for many years to come - but that projects - criticised by environmental campaigners - would need to get the appropriate planning approvals. | |
Real-terms fall | Real-terms fall |
But shadow chancellor Ed Balls said the "problem" was that "none of it starts for four years". | But shadow chancellor Ed Balls said the "problem" was that "none of it starts for four years". |
"They should do an immediate boost for housing and transport this year and next," he told ITV's Daybreak. | "They should do an immediate boost for housing and transport this year and next," he told ITV's Daybreak. |
"George Osborne talks about capital spending but he's not actually acting. | "George Osborne talks about capital spending but he's not actually acting. |
"I don't think the public buy into this at all - I think people see their living standards falling, tax cuts for millionaires, the economy flatlining, unemployment high. The plan has completely failed." | "I don't think the public buy into this at all - I think people see their living standards falling, tax cuts for millionaires, the economy flatlining, unemployment high. The plan has completely failed." |
The £50bn for 2015-16 represents a real-terms fall of 1.7% from the infrastructure budget for 2014-15. | The £50bn for 2015-16 represents a real-terms fall of 1.7% from the infrastructure budget for 2014-15. |
But the coalition says the figure is still higher than the one Labour was planning when it was ousted from power in 2010. | But the coalition says the figure is still higher than the one Labour was planning when it was ousted from power in 2010. |
The infrastructure announcements come the day after the Spending Review when a lack of consistent economic growth led ministers to make further cuts of £11.5bn in spending plans for the year from April 2015. | |
In the review, the chancellor said the economy was "out of intensive care" and announced several measures aimed at saving money, including: | In the review, the chancellor said the economy was "out of intensive care" and announced several measures aimed at saving money, including: |