£300bn infrastructure commitment from the Government

The £300 billion the Government has committed to is a new promise of £50 billion to be spent every year from 2015 for the next six years. Photo: PA Wire

As ever with any big government announcement it can take a while to work out exactly what has really just been announced.

There was a change of language on infrastructure, but as cautioned earlier, a lot of it was not exactly new.

The £50 billion the government has promised to spend on infrastructure was not new - it had been announced at the budget and only just returns spending on big projects to levels of before the coalition took power, in fact in real terms it will still be a slight cut.

But the £300 billion they have committed to is a new promise of £50 billion to be spent every year from 2015 for the next six years.

The Treasury says that will provide the long term certainty that businesses crave.

True up to a point.

Yet for business, and families worried about the economy now, there are two very important caveats on that:

  • That £50 billion would only take spending back to the kind of level it was at before the election. In 2009-10 the level of spending was £48.5 billion so in real terms it is a slight cut.
  • This commitment applies of course to after the next general election - with no immediate impact on the economy, and no way of binding any future government to spend that much

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