LONDON (Reuters) – Britain’s Finance Minister Rishi Sunak will announce tens of billions of pounds of infrastructure investment next week, aimed at delivering on the government’s promise to address imbalances between different regions.
Sunak’s spending review on Nov. 25 will determine how much money departments need to spend over the next year.
But the big numbers on investment are likely to be overshadowed by forecasts showing government borrowing the highest since World War II.
The coronavirus pandemic has punched a £200bn hole in Sunak’s financial plans, forced him to abandon his target of a four-year spending plan in favor of a much shorter program and left many big questions about how this will all be paid for.
Nonetheless, the 40-year-old former Goldman Sachs banker will be emphasizing infrastructure investment as a way to ‘level up’ across the country – delivering on the prime minister’s central election victory promise Boris Johnson in 2019.
“We are absolutely committed to increasing opportunity so that those who live in every corner of the UK get their fair share of our future prosperity,” Sunak said in a statement.
Britain’s economy shrank 20% between April and June, more than any other major economy, and its recovery has been slower. The Bank of England has forecast an 11% drop in GDP for 2020, a fall last seen centuries ago in 1709.
Sunak will announce a new infrastructure strategy, new priorities for the departments of commerce, transportation, housing and education, and changes to the rules that determine which projects go ahead. All are designed to better distribute economic benefits across the country.
Without listing specific projects, the finance ministry said the package would be “a massive down payment on a number of flagship infrastructure programs, including fiber broadband, flood defenses and major transport projects “.
Reporting by William James; edited by Stephen Addison
