Taxpayers may foot 'substantial losses'

Under new government proposals, private companies are set to provide more than 60 per cent of the £310 billion set to be invested in major infrastructure schemes including energy, rail and road projects.

Conservative and Liberal Democrat leaders hope that the scheme will produce some rare good news and stop the sharp decline in public support for both coalition parties.

But the government also plans to protect privateers from losses with billions of pounds from the public purse.

And yesterday, Parliament's public spending watchdog told the government to get real about the risk their plan presents.

The National Audit Office (NAO) predicted the government would have to bail out privately funded projects that take longer than expected or stop altogether. NAO chief Amyas Morse added that businesses who invest in the projects will pass their costs on to consumers by pushing up prices.

Left-wing economists have led calls to kickstart growth by getting Britain building.

But Left Economics Advisory Panel co-ordinator Andrew Fisher told the Star that the plans "risks creating another decade of costly and failing infrastructure projects, while a rich elite skips away with the profits."

He said: "There is an urgent need to increase spending on infrastructure because it would create jobs, increase tax revenues, reduce welfare spending and boost growth.

"Infrastructure investment should be publicly funded and publicly owned - the government can borrow more cheaply, can guarantee genuine employment and training opportunities. Once built, it can receive the revenues such as rent from housing, fares from transport and bills from energy projects."

Communist Party of Britain general secretary Robert Griffiths said: "As with the banking system and the railways, the government is proposing to nationalise the liabilities while the profits are privatised.

"Governments can borrow at lower rates than most companies, so why should taxpayers underwrite company profits, at the same time as paying extortionate prices for energy, rail and road use?"