Capital Investment

(asked on 14th December 2021) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to the Charter for Budget Responsibility: autumn 2021 update, if he will publish calculations made when setting the 3 per cent cap on capital investment set out in that update, announced in the Autumn Budget and Spending Review 2021.


Answered by
Simon Clarke Portrait
Simon Clarke
This question was answered on 17th December 2021

Over the medium term, the new fiscal framework ensures that government borrowing will only be used to fund investment. To ensure that our investment in capital is consistent with plans for debt to fall over the medium term, the framework includes a supplementary target for Public Sector Net Investment (PSNI) to not exceed 3% of GDP a year on average over the rolling forecast period. This will allow the Government to deliver on its ambitious plans for investment over this Parliament, with the highest sustained levels of PSNI as a proportion of GDP since the late 1970s.

Investment to support the transition to net zero is a major part of the Government’s plans. The Net Zero Strategy confirmed £26bn of public capital investment since the Ten Point Plan. The Autumn Budget and Spending Review 2021 confirmed that since March 2021, the Government will have committed a total of £30bn of investment for the green industrial revolution in the UK.

Public spending is not the only policy lever available to support the transition to net zero. Our balanced package, with appropriate carbon pricing and regulatory levers among others, will support 440,000 jobs by 2030, and leverage up to £90bn of private investment by 2030. This investment will keep the UK on track to meet its carbon budgets and Nationally Determined Contribution, and reach net zero by 2050.

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