Osborne’s NIC will still need investor confidence, warns Greatrex

The newly proposed National Infrastructure Commission (NIC) will still rely on predictability of policy to overcome the barriers of securing investment energy infrastructure, former shadow energy minister Tom Greatrex has warned.

Osborne intends to “shake Britain out of its inertia” by establishing an independent body capable of offering investors a framework which extends over longer timescales than typical political cycles. But Greatrex has warned that government-driven political changes could undermine the NIC’s efforts.

“Extending the horizons of government, and giving investors a sense that there is long term commitment, is part of the picture. So, too, is giving trustees of pension funds the confidence that investing in infrastructure projects here is in the interests of their scheme’s members,” said Greatrex in an exclusive column for Utility Week.

The idea to establish the body was a key part of the Labour Party’s election manifesto earlier this year and were first proposed by former Labour leader Ed Miliband the year before. And Osborne has appointed Labour peer Lord Adonis to lead plans for the NIC.

Greatrex said many will welcome a Conservative government implementing a Labour policy to provide a long-term, ‘depoliticised’ framework for investors.

“[B]ut that is not the only barrier to making investment decisions,” Greatrex added.

“So too is the high risk profile as a result of sudden surprise changes in the government’s policy framework… And in energy policy, the driving force for the latest succession of sudden changes that have undermined investor confidence has been the very same George Osborne.

“Without clarity of intent and predictability of policy (expecting policy certainty is always going to be a forlorn hope), then many of those investments will not even be contemplated.”