Restoring the coalition’s credibility

The coalition’s infrastructure shopping spree to cheer itself up after a miserable few weeks continues today. George Osborne and Danny Alexander are offering guarantees on up to £40 billion of ‘ready or nearly ready’ projects such as transport, communications and energy. They are also announcing a £6 billion temporary lending programme and a £5 billion export guarantee facility, which will give long-term support for British exporters.

Today’s announcements are clever because they don’t commit any extra money, using the government’s balance sheet purely to guarantee the projects and get them off the ground. Osborne and Alexander have written a joint comment piece for PoliticsHome, in which they point out that their efforts to secure credibility for the government on the credit markets mean they can offer these guarantees today. They write:

‘The credibility the Government has earned by tackling the deficit is already benefitting millions of British taxpayers, families and businesses through consistently low interest rates.