With rumblings of the UK heading towards losing its AAA credit rating within the next 12 months, George Osborne is now planning to pump £50 billion into reviving the floundering economy.
The new UK Guarantees scheme aims to dramatically accelerate major infrastructure investment and provide major support to UK exporters. Under the scheme, major infrastructure projects that are struggling to access private finance because of adverse credit conditions will be able to go ahead – as long as these projects are ready to start within the next 12 months.
A staggering £40 billion worth of such projects will be supported. Also, £6 billion has been set aside for a temporary lending programme for 30 public private partnership infrastructure projects that are ready to start in the next year.
A £5 billion export refinancing facility will be available towards the end of 2012 to support British exporters.
The move has been welcomed by the CBI.
John Cridland, CBI Director-General, said: “Investment and exports will be the dual drivers of future growth in the UK and this scheme should help fire up both engines.”
However, the British Chamber of Commerce is sceptical that these may be empty promises.
Dr Adam Marshall, Director of Policy, stressed: “What’s clear is that these announcements are long overdue. Business expects speedy action, rather than yet more unfulfilled promises.”
