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Rachel Reeves will this week announce what she claims will be a £725bn ten-year infrastructure plan for Britain, starting with a new programme to repair crumbling bridges, flyovers and tunnels.
Allies of the chancellor say she will commit to increasing the infrastructure budget to at least £725bn over the next decade, pre-committing part of the capital budget ahead of the next spending review in 2027.
A priority for Reeves will be to accelerate projects that bring quick results, as she attempts to leverage an increase in capital spending into political dividends ahead of the next election, which must be held by summer 2029.
One element will be a new “structures fund” with £1bn allocated to improve and repair transport infrastructure, including strengthening bridges so that they can take heavier freight and agricultural vehicles.
The infrastructure plan, intended to bring more predictability to Britain’s capital programme and attract pension funds and other investors, will also include a £590mn cash injection for the Lower Thames Crossing.
Ministers believe the 14-mile road and tunnel, intended to cut congestion on the M25 motorway at Dartford, will speed up connections from the midlands and north to English Channel ports.
The Treasury said the government was looking to bring in “private finance and expertise” to deliver the long-delayed project, which it described as “the most significant road-building project in a generation”.
The £590mn is far short of the £1.8bn that National Highways said would be needed to launch the private finance scheme, which will be paid for through tolls, but one person close to the project said the government was likely to provide additional cash in stages.
More than £1.2bn has already been spent on preparations for the road, even though construction has yet to start.
Reeves — who has told Labour MPs to “go out and sell” the extra cash going to projects — said the 10-year plan for boosting Britain’s physical assets was “a turning point for our national infrastructure and we’re backing it with funding to support thousands of jobs and connect communities”.
The infrastructure plan follows Reeves’ spending review last week, in which she began allocating an extra £113bn in borrowed money for capital projects over this parliament while setting out cuts in day-to-day spending across Whitehall.
The extra borrowing came after Reeves relaxed her fiscal rules to support capital investment intended to boost Britain’s sluggish growth. Inevitably, many projects will not even be holes in the ground before the next election.
But it has allowed the chancellor to announce a series of projects, such as railways, nuclear power stations and housing, which have been particularly targeting at Labour heartlands in the north, midlands and Wales.
Nigel Farage’s Reform UK, which has attacked the government for losing touch with working people, is advancing in those areas.
Ministers say a £725bn schedule of projects will be welcomed by some investors. Darren Jones, Treasury chief secretary, said an “online pipeline” of schemes would be published shortly.
But a long-term list of priority schemes is still laden with political risk: a general election is expected in 2029, when a change of government could lead to a shift in priorities.
Reeves knows many Labour MPs want to see cash directed to their constituencies before the next election. Her emphasis on schemes such as quick road repairs or home insulation is intended to deliver speedy results.
But Noble Francis, economics director at the Construction Products Association, a trade body, said the Spending Review had confirmed a 17 per cent cut to roads funding over the life of this parliament.
“The government keeps making more announcements on improving the state of road infrastructure, but once you dig below the headlines, the reality is markedly different,” he added. “Annual funding for our crumbling roads and bridges is being cut and the use of private finance on key projects may prove an expensive bet for taxpayers.”
Pat McFadden, Cabinet Office minister, said on Sunday that companies hoping to win contracts to build infrastructure would be asked to show how their bids would benefit British workers and skills training.
McFadden, writing in The Telegraph newspaper, said government procurement rules would be rewritten to reward companies that “put money in working people’s pockets”.
But Sir Mel Stride, Conservative shadow chancellor, said Reeves had weakened the economy — including by raising taxes on employers in her first Budget in October last year — and was now increasing borrowing at a time of high debt servicing costs.
