25 Jun 2026

What the Markets Would Think of Lord O’Neill’s Infrastructure Views — and Why it Matters for the Strangford Lough Crossing Campaign

Strangford Lough Crossing Campaign | www.strangfordloughcrossing.org

1. The Two Audiences Within “The Markets”

“The markets” is not a single actor. In the context of UK public infrastructure spending, two distinct market constituencies have opposing interests, and Lord O’Neill’s position sits precisely at the fault line between them.

Equity and Infrastructure Fund Investors: Strongly Supportive

Infrastructure funds raised over $115 billion in the first half of 2025 alone, compared to $102 billion for the whole of 2024, and were on pace to exceed annual fundraising highs from 2022. These investors actively seek exactly the kind of long-duration, revenue-generating, tolled transport asset that a fixed crossing of Strangford Lough would represent. After several years of subdued activity, there is renewed optimism in large-cap infrastructure dealmaking, driven by increased clarity around interest rate trajectories, improved financing availability, and a backlog of quality assets.

This is the O’Neill thesis made manifest in market behaviour. Capital is available. What is absent is the pipeline of appraised, investable projects. A TAG-compliant feasibility study — at £250,000–£500,000 per specialist industry advice — is the instrument that creates that pipeline entry point.

Bond Markets and Gilt Investors: Conditionally Cautious

This is where the tension resides. Uncertainty surrounding the Labour government’s fiscal strategy is contributing to market caution, with investors reacting to the ambiguity encircling the trajectory of public finances. The Institute for Fiscal Studies has been direct: the credibility of the government’s fiscal consolidation plan is paramount to delivering bond market stability.

Bond markets do not object to infrastructure investment in principle. Their objection is to undisciplined borrowing without a credible return. The critical distinction — which Lord O’Neill himself draws — is between productive capital expenditure with a positive multiplier and indiscriminate current spending. His position is that for projects with big positive multipliers, governments should borrow money and build them, as that will help boost the trend rate of growth. That is not a blank cheque; it is a quality filter.

2. The O’Leary Lens: The Markets Hate Process, Not Projects

Viewed through the Ryanair prism, Michael O’Leary’s perennial argument with airport authorities is not that airports should not be built — it is that the process for deciding whether to build them is captured by incumbents who benefit from the status quo. The Stangford ferry operator is, institutionally, in precisely that position: a DfI-funded service assessed by a DfI division that previously had administrative responsibility for it.

Lord O’Neill’s own words from the UK Parliament are the sharpest expression of this: on major projects, “we never see from any independent body whether doing something better with them is going to have any benefit or not. We just get fed sort of leaked things in the media.” DfI’s cost figures — moving from “in and around £300 million” on 3 February 2026 to “in excess of £500 million” on 11 May 2026 with no commissioned study between the two statements — are a textbook example of exactly the institutional behaviour Lord O’Neill describes.

The markets, whether bond or equity, price risk on evidence. DfI has produced no evidence. It has produced assertions. Markets would regard the refusal to commission a £250,000–£500,000 feasibility study — against a confirmed net annual ferry subsidy of £2,090,000 (FOI DFI-2024-0366) — as analytically indefensible.

3. The Specific Market Signal: Infrastructure as a Fiscal Multiplier

Value creation is no longer seen as a discretionary element of infrastructure investment — it is now a fundamental expectation for both large-cap and mid-cap infrastructure funds. A tolled crossing of Strangford Lough — replacing an annually subsidised ferry service — is structurally a value-creation proposition. It converts a recurring public expenditure liability (£2,090,000 net subsidy per annum confirmed by FOI DFI-2024-0366) into a self-financing asset with induced demand potential.

Bond markets would note that a feasibility study costing £250,000–£500,000 is, in the context of the UK’s gilt issuance programme of £252 billion in 2026/27 alone, a rounding error. Around 9% of UK government spending is currently on debt interest payments, roughly the same as the Department for Education’s entire budget. The fiscal discipline argument cuts both ways: it is precisely the reason to stop subsidising a ferry indefinitely and start testing whether a permanent crossing pays for itself.

4. The Campaign’s Position

The campaign’s ask is not for construction funding. It is for a Ministerial direction to commission an independent TAG-compliant feasibility study estimated at £250,000–£500,000. In market terms, this is due diligence before investment decision — the step that every infrastructure fund manager, every bond underwriter, and every Green Book-compliant Treasury appraisal requires before any capital is committed.

Lord O’Neill’s frustration — and the market’s frustration — is not with fiscal discipline. It is with the use of fiscal discipline as a reason to avoid even the analytical work. That is not caution. As Lord O’Neill has stated publicly, it is simply “bonkers.”

The full evidential base for the campaign, including the interactive TAG and Green Book appraisal model, is available at slc-feasibility-dashboard.netlify.app and the campaign hub at www.strangfordloughcrossing.org.

Kevin Barry BSc(Hons) MRICS, Chartered Quantity Surveyor, Portaferry mail@kevinbarryqs.com | www.strangfordloughcrossing.org