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Spending Review: Energy and transport to get share of £100bn Spending Review: Energy and transport to get share of £100bn
(about 3 hours 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 has unveiled what it claims is the most ambitious modernisation of the UK's national infrastructure in a generation.
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. Between, 2015-2020, £100bn will be spent from on projects including road maintenance, new homes and boosting new sources of energy, including shale gas.
The chancellor said shale gas could be a "real boon" for the UK economy. Treasury Minister Danny Alexander said it was putting "long-term priorities before short-term political pressures".
But it is unclear how soon projects will start construction and Labour says investment is needed sooner. But Labour says investment was needed sooner to turn round the economy.
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. The announcement of the government's infrastructure plans came a day after Wednesday's Spending Review, in which £11.5bn of cuts to Whitehall departments were announced.
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.
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.
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.
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". The main funding commitments include:
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. "This is an ambitions plan to build an infrastructure that Britain can be proud," he said.
Mr Alexander said the road building programme was the largest for 40 years and the support for new homes the most substantial for more than two decades.
He said unused government-owned land will be sold to facilitate home building, while there will be new guarantees to help the building of new nuclear plans and tax incentives brought in for shale gas projects.
His speech came as a report was being published showing that the UK's shale gas reserves were much greater than previously thought.
The transport plans focused mainly on roads and railways.
Mr Alexander said £10bn would be spent on dealing with the UK's "decaying" road network with 21,000 miles of roads to be resurfaced and new lanes to be added to
Among to the roads which will be upgraded the A14, which runs from Catthorpe, in Leicestershire, to Felixstowe, in Suffolk.
Mr Alexander said the spending on roads was the same as the cost of filling 19m potholes.
On rail, he restated plans to electrify large parts of the network and increased the budget for the proposed HS2 line connecting London and seven of the largest ten UK cities, to more than £42bn.
He also confirmed that £2m feasibility funding would be provided for London's proposed Crossrail 2 project, but said Mayor Boris Johnson's challenge was to work out how the private sector could meet half the cost of the scheme.
Earlier, Mr 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.""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.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.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 fallReal-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.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: