Originally Posted by Cyclone
Not really, but it achieves the same effect.
They aren't proposing infrastructure projects on the same scale as I1L2T3 though, so presumably he'd need to make additional arrangements to borrow much more...
Yes it is borrowing. National debt most definitiely includes the NS&I liabilities.
I do take the point about scale and you're right NS&I doesn't really scale up to what we need.
We need on board:
1. Individuals. The crux of Osbornes plan. They need to be offered something attractive with an element of index linking. These bonds can't be too long dated though or else people will be put off. Whether NS&I would offer these I don't know.
2. Domestic institutional investors. Banks, pension funds, companies etc... They need to be attracted by offering something better than the current (all but locked-in) very low gilt yields and these are the investors that need to be brought on board with serious sums invested with long dates. The more investment from domestic sources the better. In November 2011 Osborne was talking about sourcing £48bn in this way.
3. International institutions and individuals. A necessary evil but the less borrowing from this source the better.
In essence I don't disagree with what Osborne is planning. I think the scale is perhaps too small. And although it isn't exactly broadcast news he clearly sees the need for infrastructure-fuelled growth. It's just a shame that the austerity media agenda is getting in the way. Either that or he's saving up for a blitz of announcements.