NEWS / Blog / Clear action to deliver the infrastructure pipeline


09 MAR 2020


Julian Francis, Director of External Affairs, looks forward to this week’s Budget


ith the first Budget of the Johnson administration almost upon us, now seems an appropriate time to look at the challenges facing the new Chancellor of the Exchequer and what will be the potential opportunities and challenges for our industry.

Despite all the promises made around increased government spending in the last few months, the announcement is rapidly turning into an Emergency Budget to fund the response to the Coronavirus. As a result, the main focus of the event will be keeping the economy from entering a slowdown rather than outlining a vision for a post-Brexit UK. This focus on Coronavirus, and the possibility of a large stimulus in the Budget, has already displaced other planned announcements on infrastructure.

Regardless of this, the Johnson administration has been very clear about its agenda over the last few weeks: Get Brexit Done, invest in infrastructure and level up the country. We have already seen the Government starting to follow through by implementing a series of key election manifesto pledges. The Budget is expected to be a continuation of this focus on delivery, with a key theme being the Government repaying the trust placed by northern voters in ‘red wall’ seats in the Conservative Party.

While the UK left the European Union on 31 January, the transition period is still in place and trade talks only got underway earlier this week. This means that we are unlikely to see any real discussion of the implications of the UK leaving the EU. The November Budget statement will provide a better opportunity for Government to announce funding measures to soften the shift to the UK’s new trading relationship with the EU from 1 January 2021. At this point, the UK Government will hopefully have a clear idea as to what this new relationship constitutes.

The Government has also shared that net zero issues will be looked at post-Budget, but we may see outline energy efficiency measures announced and there are renewed suggestions the Chancellor will scrap the fuel duty freeze or the rebate on red diesel. It would be a brave Chancellor to act now given the accusation that these changes could exacerbate output and consumption fears caused by the Coronavirus.

No matter what the Chancellor says we can be sure that it will be portrayed as the Government getting on with the job and delivering on its promises to voters. Julian Francis

The sharpest contrast between Sunak’s Budget and what was expected of his predecessor’s is expected to be around borrowing to fund and deliver infrastructure and ‘level’ up the North. Historically, the Tory right who usually denounce increased borrowing now believe it is a sensible move for the Government to take advantage of the cheaper rate of borrowing and build things to create jobs and boost economic growth. This world view, however, may be more challenging than initially envisaged given the growing concern over the global economic impact of Covid-19. The Chancellor may find he has far less wiggle room then he thought. 

No matter what the Chancellor says on Wednesday we can be sure that it will be portrayed as the Government getting on with the job and delivering on its promises to voters. What will be of more importance for our industry, however, will be what is not said.

With the implications of the Court of Appeal judgement on Heathrow causing widespread uncertainty over the delivery of existing infrastructure projects, the Government will still need to demonstrate with clear actions how it will ensure the infrastructure pipeline can be delivered.

All eyes will be on the Chancellor to see if he will give full support to Heathrow, HS2, RIS2 and the energy strategy, all of which have now been put in doubt, this week. We can have little confidence in promised future projects if we cannot rely on the existing pipeline being delivered.

Julian Francis

Julian Francis

Previously Director of External Affairs

Julian was previously a Director at ACE.