Council pension funds to be combined to fund infrastructure projects

The new National Infrastructure Commission will be chaired by a peer from the opposition Labour party, Andrew Adonis, Osborne will announce.

Lord Adonis, a former transport secretary under Gordon Brown, is going to be tasked with leading an independent new body created to “calmly and dispassionately work out what the country needs to build for its future”.

Labour’s new far-left leader Jeremy Corbyn has struggled to overcome divisions over a few of his defence and foreign policies, but his main argument – that Britain suffered from a lack of infrastructure and housing investment – had found strong support among economists and industry groups.

This suggests the chancellor is keen to endorse the findings of the independent commission, chaired by Sir Howard Davies, which recommended the building of a third runway at Heathrow.

Announcing that his plan would mean “money raised locally, spent locally, e very council able to cut business taxes, e very mayor able to build for their city’s future, a new way to govern our country”, he declared: ” Power to the people.

The Pensions Infrastructure Platform, launched by the UK’s National Association of Pension Funds, also welcomed the news, but its chief executive Mike Weston struck a more cautious note. However, there was trouble brewing for Mr Osborne over his Budget decision to slash tax credits for people working on low incomes.

He will also look into how London’s rail capacity can be boosted to cope with its growing population through a Crossrail 2 north-south link.

The Chancellor is expected to acknowledge in his speech that the National Infrastructure Commission was first proposed by Labour in its manifesto for the May general election.

‘I am not prepared to turn around to my children – or indeed anyone else’s child and say I’m sorry we didn’t build for you’.

Mr Osborne said devolving the raising and spending of business rates was one of “the biggest transfer of power to our local government in living memory” and would help restore local government, which had had its wings clipped “again and again” over the past decades by all parties, including the Conservatives.

In addition, Britain’s 89 local authority pension funds are to be pooled into six British Wealth Funds to save in management fees and allow for more investment in infrastructure.

Lord Adonis said: “I hope it will be possible to forge a wide measure of agreement, across society and politics, on key infrastructure requirements for the next 20 to 30 years and the assessments which have underpinned them”.

Announcing the major shake-up, Mr Osborne repeatedly claimed the Tories were “the builders” and “the only true party of labour”.

A spokesman for Mr Corbyn said the Conservatives’ record on infrastructure over the past five years has been “one of complete failure to deliver”.