Liberal Democrat shadow chancellor Vince Cable today outlined his party’s proposals for a National Infrastructure Bank as alternative funding method for projects.
Speaking at Civils 2009 Mr Cable said that traditional funding methods are not working to improve the UK’s infrastructure.
He said: “The problem is that traditional funding methods are not working. Banks are not going to lend. PFI has ground to a halt. The stock markets have a short time horizon. Most equity companies have a time horizon of five years when [major projects] need 25 to 30 years.”
The Lib Dem deputy leader added that the construction and improvements of hard infrastructure was essential to the country’s economic recovery and growth, as well as having the power to drive the sustainability agenda and create more jobs.
Mr Cable said that the key to the success of the bank lay in “tapping into the huge amounts of savings” generated in the UK particularly in pension funds, of which Mr Cable said 60 per cent was invested abroad.
He added that he had already been in talks with “Britain’s largest insurance company” about investing in the bank.
Mr Cable also identified government assets, such as those owned by the Highways Agency and landing rights at Heathrow, could be sold off to generate capital.