Labour ex-minister chosen to head body to get Britain building

George Osborne has appointed a former Labour Cabinet minister to head a new commission to get Britain building.

The Chancellor said that the independent National Infrastructure Commission, chaired by Lord Adonis, will take the politics out of major infrastructure decisions and shake the UK out of the "inertia" which has seen it fail to produce the roads, railways, airports, power stations and homes it needs.

Mr Osborne also announced plans to combine 89 local authority pension funds in England and Wales into six regional British Wealth Funds, in the hope of dramatically scaling up the sums which they invest in major infrastructure projects.

Lord Adonis, who served as transport secretary in Gordon Brown's administration, will quit the Labour whip and sit as a crossbencher in the House of Lords to ensure the political independence of the new Commission.

The body will start work immediately, with an initial remit to focus on plans to improve links between Northern cities and advise on large-scale investment in London's transport network, as well as providing a power storage, interconnection and demand management system fit for the demands of the 21st century.

The Adonis Commission will produce a report at the start of each five-year parliament, containing recommendations of projects which governments of any political colour should be pushing forward.

Although its recommendations will not be binding, Mr Osborne made clear it will monitor ministers' response and be able to "hold the Government's feet to the fire" if they fail to act on its advice.

Treasury sources said the new body was modelled on Sir Howard Davies' Airports Commission, which earlier this year recommended the construction of a third runway at Heathrow.

Sir Howard's report has so far failed to break the logjam on a new runway for the South-East, with David Cameron saying only that the Government will make a decision by the end of 2015.

Unveiling his plan in a keynote speech to the Conservative conference in Manchester on Monday, Mr Osborne is expected to say: "Where would Britain be if we had never built railways or runways, power stations or new homes? Where will we be in the future if we stop building them now?

"I'm not prepared to turn round to my children - or indeed anyone else's child - and say `I'm sorry, we didn't build for you'.

"We have to shake Britain out of its inertia on the projects which matter most."

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.

Asked whether he was stealing Labour's more mainstream ideas in order to consolidate the Tories' hold on the political centre ground following the election of leftist Jeremy Corbyn as the party's leader, an aide said: "The Chancellor is open to good ideas."

Mr Osborne said he was "delighted" that Lord Adonis would be "working together in the national interest" as chair of the new body.

Aides said he had long admired the peer for his work on promoting the HS2 high-speed rail link between London, the Midlands and the North and the Crossrail tunnel in London.

Lord Adonis - who was a Social Democrat councillor and Liberal Democrat election candidate before joining Labour - said he was "pleased" to accept Mr Osborne's invitation to lead the NIC.

"Without big improvements to its transport and energy systems, Britain will grind to a halt," said the peer.

"Major infrastructure projects like Crossrail and building major new power stations span governments and parliaments. 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."

The Chancellor also announced plans to sweep away rules preventing the development of brownfield sites, to increase the supply of homes for sale.

And he said the Government will increase infrastructure spending by up to £5 billion over the course of the Parliament, with cash from the sale of land, buildings and other state assets is recycled to fund new projects.

He said local authority pension funds were investing only around 0.5% of their £180 billion assets in infrastructure - well below the norm for other advanced nations, where pooled public pension funds put up to 8% of assets into projects of this kind, and 17% when housing is included.

Combining them into a smaller number of British Wealth Funds will not only benefit pensioners by saving around £600 million in administration fees annually but also give the funds more clout, with each managing assets worth over £25 billion, he said.

While the new funds will not be directed to invest in infrastructure, he believes the scale of their assets will make them more likely to.

A spokesman for Mr Corbyn said: "We have heard it all before from Osborne and the Conservatives on infrastructure and their record is one of complete failure to deliver.

"There is still nothing to indicate that the Tories understand the desperate need for serious long-term investment in infrastructure - and the real story of their conference remains their attack on working people through the cut on tax credits."

CBI director general John Cridland welcomed the commission: "Updating the UK's infrastructure is critical to sustainable growth and productivity, and we've long called for an independent body to assess our long-term needs.

"This new commission is welcome but we must not duck the important infrastructure decisions that need taking now, particularly on expanding aviation capacity in the South East.

"Business will want to see a decision on airport capacity by the end of the year, in line with the Government's commitment."

Labour frontbencher Pat McFadden said: "Andrew Adonis is a huge talent, he was an excellent Labour minister. "

The shadow Europe minister, who praised Lord Adonis' work on education, told BBC Radio 4's Westminster Hour: "I understand he may be resigning the Labour whip and not leaving the Labour Party.

"I would not want him to leave the Labour Party because he is a big talent, he has got a lot to offer and he has got a record of achievement in government."