Budget to boost infrastructure spending by £100bn, writes Robert Peston

The heart of Wednesday's budget will be a pledge to increase infrastructure spending in the five years of this Parliament by just under £100bn to around half a trillion pounds.

The aim, according to government sources, is to boost UK public spending on roads, rail, broadband, flood defences and so on from less than what is spent in competitor economies like the US and France, to more than in those countries.

The plan is to allow public sector net investment to rise to 3 per cent of GDP or national income, up from 2.2% per cent.

According to the Institute for Fiscal Studies, the UK government hasn't invested this much since 1978 - though in the decades after the second world war this rate of investment spending was the norm.

All these new projects are part of the effort characterised by the prime minister as "levelling up" the poorer parts of the UK, in the midlands, north, Wales, Scotland and Northern Ireland.

Although there will be huge new sums made available, much of it will not be allocated to specific projects.

The new chancellor, Rishi Sunak, will also announce the profile for overall public spending over the coming three years.

But decisions on the budgets of individual departments will not be made till the Comprehensive Spending Review, expected in July.

Sunak will also start an important public debate on the so-called fiscal rules, and how much the government can safely borrow.

The core question he wants addressed is whether low interest rates are now a permanent feature of the global economy, and therefore whether the UK can securely increase its national indebtedness beyond the 80 to 90 per cent of GDP (depending on how and who measures it) that it is currently and that previous chancellor have seen as at the top end of what is prudent.

Although Sunak's budget will set the framework for all investment and spending for Boris Johnson's government, which really matters, the headlines may well be taken by the chancellor's emergency measures to limit the economic impact of Covid-19.

He will announce proposals to protect the incomes of those who self-quarantine and are unable to work, and to provide support to businesses suffering temporary losses as a result of being unable to trade or suffering a sharp downturn in custom.

This budget will be the first of three big "fiscal" events this year, with that spending review due in the summer and another budget scheduled for the autumn.

Sunak is spoiling us.