Osborne pledges £100 billion infrastructure spend as energy shares centre stage

Chancellor George Osborne has today unveiled plans to spend £100 billion on UK infrastructure during this parliamentary term, with the energy sector set to be a central theme.

The announcement builds on the National Infrastructure Commission’s (NIC) formation last month and comes ahead of a statement to be made later today, where both Osborne and NIC chairman Lord Adonis will introduce additional commission members.

The commission will issue a report at the start of each five-year parliamentary term stating where it considers infrastructure investment must go. The government has however already announced its focuses until 2020, namely ‘northern connectivity’, London’s transport system and the UK’s energy system.

Of particular interest to the commission under its energy remit will be how the UK can better balance supply and demand – subtly hinting towards further energy efficiency measures and possible storage programmes – with the overall aim of delivering an “energy market where prices are reflective of costs to the overall system”.

“British people have to spend longer than they should getting to work, pay more than they should in energy bills and can’t buy the houses they want because of the failure of successive governments to think long-term.

“Infrastructure isn’t some obscure concept – it’s about people’s lives, economic security and the sort of country we want to live in. That’s why I am determined to shake Britain out of its inertia on infrastructure and end the situation where we trail our rivals when it comes to building everything from the housing to the power stations that our children will need,” Osborne said.

While energy is included as one of the early key priorities, there is no stand-out energy influence on the NIC’s board. Lord Heseltine is perhaps the member with the most experience of the energy sector having served as environment secretary and then trade and industry secretary, which at the time included energy in its remit.

Sir John Armitt is also present on the panel and worked extensively on the Sizewell B nuclear reactor project during his time at construction group John Laing and Bridget Rosewell, also on the panel, is a senior advisor at economic consultancy Volterra, which helps guide Ofgem on consumer behaviour.

The rest of the panel is made up by advisors with a strong transport interest, particularly in major projects such as HS2 and Crossrail 2.

When the NIC was unveiled earlier this month it was considered that its energy infrastructure remit would detract from that of DECC’s, fuelling the re-emergence of rumours that the department is to be axed. However a spokesperson for the commission at the time insisted its remit was to work alongside government departments.