Much has been written in the national press about Chancellor Rishi Sunak’s March 2021 budget and his three-point plan to build the future economy.
In terms of the railway, infrastructure formed a major part of that plan. He confirmed the setting up of a new UK Infrastructure Bank (UKIB), to be established in Leeds and to extend loans, equity financing and guarantees to fund infrastructure projects that support net zero – the “green industrial revolution” – and levelling up. The bank will have an initial £12 billion available to finance loans and equities for the next five years. It will also take over the £10 billion UK Guarantees Scheme.
The Chancellor also outlined plans for town regeneration and ‘Levelling-up’. The National Infrastructure Commission will carry out a study to look at the link between infrastructure investment and town regeneration and funds will be made available for various ‘levelling up’ schemes.
Plans for English Freeports were announced, to be based in East Midlands Airport, Felixstowe & Harwich, Humber, Liverpool City Region, Plymouth, Solent, Thames and Teesside. These will be special economic zones with different rules to make it easier and cheaper to do business. New port infrastructure will be built to support the next generation of offshore wind projects in Teesside and Humberside. The UK will issue at least £15 billion in green bonds to help finance the transition to net zero and the government will launch the world’s first sovereign green savings bond for retail investors.
The UK Government will contribute £30 million towards the Global Centre of Rail Excellence (GCRE) – a planned rail testing complex in South Wales.
REACTION – Civil Engineers
Unsurprisingly, reaction was generally welcoming, but many felt that more could have been done.
The Institution of Civil Engineers’ director of policy, Chris Richards, said: “If the government wants to make real headway on their levelling up agenda, they will need to take a radical approach to fixing the problems that hold back parts of the country from realising their economic potential.
“The UK Infrastructure Bank will move us closer to addressing those problems, but only if it is given the mandate to take a trial-and-error approach to ideas from local and regional leaders. As the government develops the scope of the bank, prioritising the delivery of outcomes from day one, not prudent financial management, should be the main effort.”
REACTION – Rail Industry
Andy Bagnall, director general at the Rail Delivery Group, which represents both train operators and Network Rail, said: “Britain’s rail companies are committed to driving a green economic recovery from Covid-19. The investment set out in the budget means the railway is on track to support job creation and bring people together after the pandemic.
“Funding for the new Global Centre of Rail Excellence in Wales, the re-opening of Okehampton to Exeter for passenger services and the creation of new stations in the West Midlands builds on the continued delivery of improvements during the pandemic. Investment in new free ports, and the transport links to them, allows rail freight companies to increasingly support British businesses and future trade opportunities.
“We know passengers want an easier fares system and we want to work with government to push forward reform. Raising the contactless payment limit will save people time when buying tickets and, if introduced alongside retail reform which sees pay as you go introduced across more of the network, has the potential to transform how passengers travel with the tap of their card – changing the game for longer distance commuters, levelling up the regions and helping to catalyse a truly national recovery.”
REACTION – Rail industry supply chain
Darren Caplan, chief executive of the Railway Industry Association, said: “It is good to see the Chancellor clarify a number of the government’s plans for infrastructure, including the establishment of a UK Infrastructure Bank based in Leeds and the £4.8 billion ‘Levelling Up’ fund opening for infrastructure around the UK.
“It is also positive to see funding announced for test track facilities at a new Global Centre for Rail Excellence in Wales – the UK vitally requires more test track facilities, and the Centre will help deliver a new cluster for the industry in the region, supporting jobs and investment. We would hope that all rail businesses – whether related to rolling stock or infrastructure, and whether large or SME – benefit in some way from these announcements.
“However, the Chancellor himself said in his speech that ‘for business, certainty matters’, and, with today marking 500 days since the Rail Network Enhancement Pipeline was last published, we would once again urge the government to provide the rail sector with visibility of upcoming rail schemes, so crucial to the UK developing a world-class network for the future. This is not about seeking more budget; rail suppliers simply need the updated pipeline of rail upgrades to be published, along with the Integrated Rail Plan and the Transport Decarbonisation Plan, to help them build up capabilities and skills, and ultimately support jobs and investment at what is a very difficult time for everyone.
“With every pound spent on the railway generating £2.20 GVA (Gross Added Value) in the wider economy, being open about – and progressing – the rail enhancements pipeline not only benefits the railway industry but also ensures the UK can deliver new rail infrastructure much more efficiently and cost-effectively for the taxpayer, helping the country to build back better following the Coronavirus pandemic.”
REACTION – Rail freight
Following the Chancellor’s Budget statement, John Smith, managing director at GB Railfreight said: “We welcome the Chancellor’s Budget statement, which will be key to put the economy back on track. Investment in the future of the rail sector through a £30 million investment in a Global Centre for Rail Excellence is also welcome.
“Given the huge advantages that shifting freight from road to rail offers in terms of reduced emissions, this Budget is a missed opportunity to do more to support this shift through an increase in the current Mode Shift Revenue Support scheme.
“We eagerly await the publication of the Government’s Integrated Rail plan which we hope will be published shortly.”
REACTION – Consultant’s view
Richard Robinson, CEO of Atkins in the UK and Europe, said: “This budget has struck a sensible balance between protecting employment as we begin to come out of the pandemic and, looking further ahead, as the government begins to set out its plan for economic recovery.
“I’m particularly interested in how the National Infrastructure Bank will contribute to the UK’s Net Zero efforts while helping to address regional inequality, and welcome the role that private capital is poised to play as we look to secure the investment needed to build back better and greener.”
Simon Rawlinson, head of strategic research at Arcadis, commented: “The vivid contrast of the three parts of the Chancellor’s Budget Speech underline the gravity of the current situation, and the dramatic action that will be needed to pull the UK back towards growth. The success of the vaccine and upgraded forecasts for growth have given the Government confidence that ‘doing whatever it takes’ can be completed by September. But given the additional cost is £65bn, ensuring that coming out of lockdown is the final step is essential.
“When it comes to building the future economy, the budget includes some fast, local money – including the New Towns Deal and the first tranche of the levelling-up fund. In practice, this is a long-term budget setting-up a platform for a 2024 election. Most of the measures, incentives, support for training, new sources of capital, and even freeports, will take time to come to fruition, but feel like they are going in the right direction.
“One area where more detail is needed is the UK’s green revolution. The announcement of a Green Investment Bank and the re-set of the Bank of England’s remit are important moves in line with the 10-point plan, but we don’t have time to wait. Future budgets must have green recovery and revolution at the core.
“There are many challenges ahead. Brexit is far from fixed, and it’s likely that the Comprehensive Spending Review in November will be tougher than might have been intended. We are at the start of a very difficult recovery process, which the budget made clear. However, the Government has firmly nailed its colours on growth as a means of post-COVID recovery. That is ultimately good for the country and good for our sector.”
His colleague, Debbie Francis, Arcadis’ city executive for the North, added: “This is a vote of confidence in the North. I hope moving parts of government to our Great Northern towns and cities acts as an incentive for other organisations and businesses to follow suit, in part or in full. It will have a greater impact on stimulating economic growth than the direct employment of any government jobs themselves.
“We must still ensure real powers and funding are devolved to metro mayors and local leaders to deliver the Government’s levelling up agenda but this is certainly a step in the right direction.”
REACTION – Trade union
TSSA general secretary Manuel Cortes described the Budget as “a wasted opportunity” to set out a meaningful economic roadmap from the Covid crisis, for the travel sector and beyond.
“Sadly, the Chancellor has presided over a wasted opportunity in his Budget, again ignoring the plight of the travel sector and others who have been so badly hit in the pandemic,” he said. “While our union welcomes the extension to the furlough scheme, we know that many workers and businesses, not least in our travel trade, will be no less worried about their prospects after hearing from Rishi Sunak.
“Time and again our union has told the Government they must leave no stone unturned when it comes to securing the future of our high street travel agents. Yet we heard nothing. Time and again we have warned that Eurostar – our green link to Europe – requires intervention, again we heard nothing.
“This is deeply troubling. What we heard from the Despatch Box today was a lot of reheated announcements, coupled with showbiz and spin. Where were the rewards for our key workers who have done so much for our country throughout the pandemic?
“Sunak offered nothing on raising statutory sick pay, nothing on increasing the minimum wage, nothing on climate change and no big plan to help workers across the board, after a decade of Tory cuts.
“This is a government and a Chancellor lacking in vision and offering no economic solidity. The people of this country will not be fooled.”