Chancellor Rishi Sunak will set out his Budget on Wednesday, March 3, which is expected to focus largely on the next period of economic recovery from the Covid-19 pandemic and outline a number of initiatives to support people and businesses across the UK.
It also has the potential to include announcements on transport and infrastructure investment that would help deliver transformational improvements across our region and drive forward the levelling up agenda.
So what will we be looking out for when Mr Sunak takes to the dispatch box?
Covid support is bound to be at the top of the Chancellor’s agenda. The impact of the global pandemic is wide-reaching, so further support for people and businesses is likely to be set out. This could cover things such as the furlough scheme, business support grants, and other employment initiatives, as well as ongoing financial support for industries impacted by lockdown.
Our Chief Executive Barry White said: “This budget is absolutely critical for the North of England and the levelling up agenda. With potential lifting of restrictions on the horizon, all attention needs to be on how we recover from the economic shockwave Covid has caused.
“Investment in infrastructure must be a priority to, quite literally, build back better and greener than what we’ve had in the past. We’re clear; transport must be a cornerstone of that recovery plan. Not only do transport schemes create jobs and an economic boost during delivery, they give certainty to businesses, allowing them to invest and create opportunities for local communities on the back of the firm commitment of better connections.”
Shovel-ready infrastructure projects can be an excellent way to help propel the economy out of a slump, providing jobs throughout the construction cycle, and supporting growth and connectivity for generations to come.
We submitted our Economic Recovery Plan last summer – a multi-step roadmap to aiding economic growth in the next five years by committing to more than 160 road, rail and smart travel projects. Since then there have been some positive steps forward. Investment has been pledged for rail re-opening schemes like the Northumberland line in the North East; dualling of the A66 Trans-Pennine route is being taken forward at pace as part of ‘Project Speed’; and the A59 Kex Gill scheme was funded earlier this year.
The Budget could be an opportunity to give the green light to some of the wider projects in the quick-wins pipeline we put forward on behalf of the North, including but not limited to, investment in electric vehicle charging points, as a well as road and rail schemes waiting to cross the start line.
Mr White said: “Last year we submitted an Economic Recovery Plan to Government with a raft of early schemes that could be delivered over the next five years to spur on recovery. It would be great to see some of those schemes committed.
“The big prize for the North will, however, remain full commitment to Northern Powerhouse Rail and HS2 in the North, to put rocket boosters under the economy and enhance quality of life.”
The lockdown restrictions have had a huge impact on the way we travel. Already we have seen our rail franchise operators being heavily subsidised public under Emergency Measures Agreements, with funds allocated in last year’s Spending Review to maintain a relatively high level of subsidy for operators into the next financial year.
Packages to keep trains running in the most practical and cost-effective way as people start to move around more could be part of the Budget. We need to rebuild passenger confidence as our economy reopens to ensure that we don’t see a mass return to cars over trains. Flexible ticketing options is one way to help rebuild passenger numbers, giving people value for money whatever their new working patterns.
Mr White explained: “In the short term, we’d like to see commitment to initiatives that will help rebuild passenger numbers including the delivery of flexible ticketing for passengers as they begin to return to public transport.”
We have long criticised the historic decision-making approach that has led to decades of under investment in the North. We hope to see a pledge to relocate a major part of Her Majesty’s Treasury to our region, importantly including senior civil service posts – the posts that shape policy and decisions. This, alongside the recent changes to the Green Book appraisal method, could create a new and much more beneficial culture of decision-making.
In addition, we are hoping to hear more about the National Infrastructure Bank, what it will focus on, when it will be set up, and where in the North of England it will be based. One lesson from the establishment of the Green Investment Bank several years ago was that, while it was headquartered in Edinburgh, many of the senior jobs gravitated to the ‘satellite’ office in Millbank, London. Let’s make sure this important new national institution is well and truly rooted in the North.
The North is fast becoming a real powerhouse in hydrogen. Essential to power green buses, HGVs, trains and construction machinery, this alternative fuel has massive potential for decarbonising our transport industry and network.
Tees Valley is already a major hydrogen producer, and the new hydrogen hub there will reinforce the opportunities that will arise in the coming years. South Yorkshire has one of the most advanced producers of the vital electrolysis equipment to produce hydrogen at scale, again, setting our region out as the leader in this area.
The National Infrastructure Strategy indicated that a new price support mechanism for hydrogen, a bit like Contracts for Difference already used for offshore wind, was being considered. Progress on this in the Budget would build confidence in the hydrogen market, which will spur on research, development and production, creating green investment and green jobs – all helping to build a green transport network for the whole of the UK.
“Levelling up” and “building back better” were two of the key phrases of 2020, used regularly to signify the importance of investing not just in London and the South East, but across the Midlands and North of England too (and indeed the Union). These aims were subsequently recognised as key Government objectives, forming the backdrop to the publication of the National Infrastructure Strategy (NIS) in November.
The NIS set out how the nation’s spine – our inter-city road and rail networks – are old and need serious investment. It also highlighted some of the major infrastructure projects we’re relying on to transform connectivity, such as HS2, and the Integrated Rail Plan (IRP) for the Midlands and North, which is still to be published.
For us, as well as HS2, we want to see a transformative Northern Powerhouse Rail network. From this budget we hope to see some signals on this vital investment, but we will have to wait for the IRP to be published to see the plans in full.
There have been some promising progress in recent weeks. HS2 Phase 2a received Royal Assent last month, giving the project the go-ahead as far as Crewe – finally bringing consented HS2 development directly into the North.