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Insurers to give vote of confidence to British economy

SIX major insurers are to give a "massive vote of confidence" in Britain's economy by deciding to invest a total of £25 billion in the nation's infrastructure over the next five years, the UK Government1

SIX major insurers are to give a "massive vote of confidence" in Britain's economy by deciding to invest a total of £25 billion in the nation's infrastructure over the next five years, the UK Government1

Much of the money will go into so-called pipeline projects, the list of which will be published by the Coalition government under its new National Infrastructure Plan, which covers £375bn worth of public and private sector projects, including transport, water, waste, flood defence and communications schemes.

The decision by the insurance companies follows the successful negotiation last week by the UK Government of the key European directive Solvency II.

Coalition ministers were determined in their negotiations with Brussels to ensure that capital rules incentivised life insurers to invest in a wider range of assets, including infrastructure projects that can deliver the consistent long-term returns these businesses seek.

Danny Alexander, the Chief Secretary to the Treasury, who will detail the infrastructure plan before a business audience in London, said: "This is great news for the people of the UK because after years of neglect, the UK's energy, road, rail, flood defence, communications and water infrastructure needs renewal.

"It will boost the UK economy creating jobs and making it easier to do business. It will also make the UK a better place to live for everyone who calls it their home," he added.

But a different gloss was put on the Coalition's grand infrastructure plan earlier this week with reports suggesting that little progress had been made on many schemes.

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