Budget 2020: £600bn to be pumped into UK infrastructure in 'biggest programme of public investing ever'
£4.2bn to be spent on urban transport
Chancellor of the Exchequer Rishi Sunak has today (11 March) announced £640bn of gross capital investment into the UK's roads, railways schools, hospitals and power networks by the end of the Parliamentary term, in a cash injection that will be "triple the average over the last 40 years in real terms".
In today's Budget, Sunak also announced the Government's "largest-ever investment" into English strategic roads of £27bn, in addition to a £2.5bn pothole fund which, over the next five years, will be enough funding to fill in approximately 50 million potholes across the country.
Additionally, the Government will invest an "unprecedented amount" in urban transport of £4.2bn, which will go towards integrated transport settlements for eight regions across the UK.
"We have agreed today a new devolution deal in West Yorkshire with the directly-elected mayor for the region," Sunak told the House of Commons in his first-ever Budget as Chancellor.
"To make sure that it is not just Londoners that will benefit from long-term transport deals that will help Transport for London, I am announcing today the West Yorkshire mayor, along with seven other mayors, get new London-style funding settlements worth £4.2bn."
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Further South, the Chancellor promised to "fix one of the most important regional arteries" - the A303 - following decades of congestion. In terms of electric vehicle infrastructure, the UK Government has also said it will ensure no car in the UK is more than three miles away from a charging point.
"We are also going to build better railways; with spades going into the ground for HS2, we remain committed to fund Manchester, Leeds and the Northern Powerhouse rail," Sunak added.
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Elsewhere, the Chancellor pledged a £10.9bn increase in housing investment, as part of the Government's promise to build at least one million new homes over the next five years. Some £5.2bn has been pledged for flood defence spending between 2021 and 2027, which should help to protect 336,000 properties.
"£200m will help communities most at risk of flooding recover faster in cases where they are affected by flood damage," Sunak said.
Additionally, the Chancellor said the UK Government will provide £5bn in gigabit broadband to the "hardest to reach places", as well as £510m into the shared rural phone network. Over the next five years, Sunak said 4G coverage will reach 95% of England.
"Our ambition is truly international," he said. "We promised to get Britain moving and we are getting it done."
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Richard Carter, head of fixed interest research at Quilter Cheviot, said the extra funding for infrastructure and flood defences with "very little in the way of tax rises" will mean a "substantial increase in borrowing".
"Had these announcements been made by a Labour Chancellor, there would probably have been howls of protest from currency and gilt markets," he reasoned.
"However, with bond yields at rock bottom levels and safe haven assets seeing strong demand, now is probably a good time for the government to invest for the future."
Robert Alster, head of investment services at Close Brothers Asset Management, said the £600bn investment into infrastructure projects over the next five years will "spur further regeneration of the midlands and the North, generating jobs and stimulating spending in local communities".
In terms of making investment decisions, Robin Byde, industrials and transport analyst at Cantor Fitzgerald Europe, said the "clear winner" should be Ricardo, which has large rail and infrastructure consulting practices.
"The other, to a lesser degree, is Stobart Group, which operates London Southend Airport (LSA) and has aspirations to operate and develop more regional airports and related infrastructure," he explained.
"The group operates the UK's leading wood biomass energy supply chain for green energy power plants. STOB also has a rail engineering unit."
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