Industry

17 NOV 2022

INFRASTRUCTURE BACKING IN AUTUMN STATEMENT

Infrastructure, innovation and energy were placed firmly at the heart of the economy’s future as chancellor Jeremy Hunt outlined his Autumn Statement today, 17 November, with firm committments to major infrastructure projects including HS2 and Sizewell C included in the keenly-anticpated speech. 

Unveiling his plan for “stability, growth and public services” Hunt said the statement’s package of measures would “tackle the cost-of-living crisis and rebuild our economy”.

Turning to economic growth, he said the government’s key priorities would be energy, infrastructure and innovation. 

Making commitments to infrastructure investment he said: “If a modern economy needs secure, clean and affordable energy – it also needs good roads, rail, broadband and 5G infrastructure. Such connections allow wealth and opportunity to spread.”

He said while capital was sometimes seen as the “easy option” for cuts, doing so “limits not our budgets, but our future”. He said the government would not be “cutting a penny” from capital budgets in the next two years.

Hunt also confirmed commitments to major rail infrastructure projects including HS2 to Manchester, the Northern Powerhouse Rail core network and East West Rail.

He said the new Sizewell C nuclear plant will go ahead. Subject to final government approvals, the contracts for the initial investment will be signed with relevant parties, including EDF, in the coming weeks. Creating 10,000 skilled jobs, it will provide low-carbon power to the equivalent of six million homes for more than 50 years. The £700m investment is the first state backing for a nuclear project in more than 30 years.

Plans for the second round of the Levelling Up Fund were confirmed, with at least £1.7bn to be allocated.

To ensure prosperity in the future, the chancellor recommitted to the £20bn R&D budget.

He also confirmed a new hospitals programme and a gigabit broadband rollout.

He said government would drive growth across the UK by working with the Scottish Government on the feasibility study for the A75, supporting the Advanced Technology Research Centre in Wales and funding a trade and investment event in Northern Ireland next year.

And to unlock more growth, Hunt said more “inspirational local leadership” was needed. 

A new devolution deal will bring an elected mayor to Suffolk, plus there will be deals to bring mayors to Cornwall, Norfolk and an area in the north-east. Progress is also being made towards devolution deals with the Greater Manchester Combined Authority and West Midlands Combined Authority.

Hunt also said that cheap, low carbon, reliable energy must sit at the heart of any modern economy. While calling Britain a “global leader in renewable energy” he said the UK needed “to go further” with a major acceleration of home-grown technologies like offshore wind, carbon capture and storage, and nuclear.

By 2030, government wants to reduce energy consumption from buildings and industry by 15% and from 2025 there will be a further £6bn in funding to deliver the UK’s new energy efficiency ambition. 

Commenting on the Autumn Statement, Stephen Marcos Jones, CEO of the Association for Consultancy and Engineering (ACE), said: “It will come as no surprise that the chancellor presented a challenging macro-economic picture, and with tax increases previewed in the media over the last few weeks, today’s tax announcements have already had time to be digested by the business community.

“I wrote to the chancellor this week outlining the importance of investment in infrastructure to deliver the jobs and growth that will help drive the economy through the challenging times ahead. 

“With this in mind I was pleased to see the government maintain the capital programme, which means the Northern Powerhouse Rail core, HS2, and the new hospitals programme can all progress. 

“ACE also welcomes the commitment to new energy infrastructure in Sizewell C. 

“As important was the news that devolution deals have been struck for Suffolk, Norfolk and Cornwall, as well as increased powers for the Combined Authorities in West Midlands and Greater Manchester. 

“Increasing local decision-making is crucial if we are to make real progress on Levelling Up across the UK, but we would have liked to have seen the government use this opportunity to consolidate and ringfence spending, rather than introduce another round of competitive funding.

“We were also pleased to see a new focus on innovation for investment zones. While it may impact councils that initially expressed an interest, we look forward to seeing what can be made of these initiatives.”

“We were, however, surprised to see road duty on EV vehicles raised and it does raise broader questions around the long-term viability of the current system which relies on fuel duties to fund road investment. 

“ACE has long argued for reform in this space, and we look forward to engaging with government departments on the issue.”

However, Labour shadow chancellor Rachel Reeves hit out at the Autumn Statement – especially on the issue of energy costs.

“After months of resistance, including from this prime minister, the government has finally been dragged kicking and screaming to extend the windfall tax that Labour first called for in January,” she said. 

“Yet still they leave billions of pounds on the table, profits that are the windfalls of war. Because they have failed to close a huge loophole that they created, that hands out massive tax breaks to those oil and gas giants for doing things they were going to do anyway.

“And the Tories’ failure on energy goes back further. They closed down gas storage, blocked onshore wind and solar and slashed support for home insulation. Now today he says he will act on energy efficiency but I’m afraid it is all far too late.

"We called for the insulation of two million homes a year more than 12 months ago to cut bills by up to £1,000 not just for one year but for every year. And they did nothing.

“Insulation levels in 2021 were 20 times lower than 2010 because of their neglect. And now he proposes to wait until 2025 for them to act.

“And still they block renewable power like onshore wind that would bring bills down, create good jobs in all parts of the country, and ensure Britain can lead the world in the industries of the future.”

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