An Infrastructure Bank, funded through the sale of bonds or road user charging could fund a high speed rail network, according to senior government sources this week.
Speaking at the Labour Party Conference in Brighton, economist and author Will Hutton, said: “High Speed Rail will link conurbanisations and create markets as huge as London and the home counties, which has 20M
“We need a national infrastructure bank but we are tiptoeing towards it.
“There is great difficulty putting anything together at the moment and making capital expenditure [because of the credit crunch]. It will be bloody hard to raise the £1bn per year for 20 years to build a high speed network.
“We would like a national infrastructure bank instead, where my pension would be invested in the bonds backed by the bank.”
The ICE has long been campaigning for an infrastructure bank, and the idea is gaining in credibility, especially in the current recession. Hutton’s book ‘The State We’re In’ gave credibility to the New Labour project first under Tony Blair and now Gordon Brown.
Former EU transport commissioner Neil Kinnock said road user charging was: “A good way to finance a national
“The European Investment Bank is the model - offering lending and unaffected by the credit crunch.
“There is no reason why we cannot apply it here, financed by bonds and the revenue stream from transport pricing.”
Kinnock said that the costs for high speed rail were insignificant compares to the costs of not funding it. “We have to think not about the costs of this mobility, but the costs of immobility,” he said.
Liberal Democrat shadow chancellor Vince Cable announced his support for an infrastructure investment bank in his keynote speech in Bournemouth last week.
Think-tank Policy Exchange also recently supported the ICE’s calls for a new funding model in their report ‘Delivering a 21st century infrastructurefor Britain’.
ICE Director General, Tom Foulkes, said: “It is encouraging to see the idea of National Infrastructure Investment Bank gain credibility from a range of sources across the political spectrum.
“When infrastructure is properly financed, planned, and prioritised the economic and social benefits always outweigh the initial costs. However during the current challenging economic climate, securing the funding required for these projects has never been more difficult.
“At the same time with new power stations urgently required, and projects such as High Speed Rail supported by the main political parties, securing the capital to ensure timely delivery has never been more important.
“The ICE believes that there is a strong case for a National Infrastructure Investment Bank and we will continue to push the case for it.”