Government plan for £100bn infrastructure investment delayed just days before Budget

Strategy document was due to be published alongside Rishi Sunak’s statement on 11 March

Andrew Woodcock
Political Editor
Friday 06 March 2020 15:35
 Rishi Sunak, who took over from Sajid Javid as chancellor last month
Rishi Sunak, who took over from Sajid Javid as chancellor last month

The announcement of ambitious plans for infrastructure investment and climate change action that were expected to form the centrepiece of next week’s Budget has been put on hold with just days to go.

The move risks rendering Rishi Sunak’s first statement as chancellor threadbare, with Labour claiming it as a sign of “absolute chaos” within government.

Environmentalists expressed dismay over the prospect of delays to the detailed strategy for reaching the government’s 2050 target for net-zero carbon emissions – a postponement that comes against the backdrop of Glasgow hosting the vital United Nations COP26 climate change summit this November.

Downing Street said the £100bn National Infrastructure Strategy promised for publication alongside Mr Sunak’s Budget on Wednesday was being delayed to an unspecified date.

In addition, Treasury sources indicated that the bulk of measures to implement the government’s emissions-reduction strategy were now likely to be deferred to the summer’s spending review or the chancellor’s autumn statement.

The prime minister’s own advisers on global warming issued a call in January for next week’s statement to be “a climate change Budget”.

The advisory Committee on Climate Change said that crucial measures to slash carbon emissions – such as bringing forward a ban on sales of new petrol and diesel cars, and replacing gas boilers in homes – should be brought forward swiftly to improve UK “credibility” as chair of the Glasgow summit.

Friends of the Earth has released a list of 10 climate priorities for the Budget, including the restoration of the fuel-duty escalator, the removal of planning restrictions for onshore windfarms, and funding for trials of free urban public transport.

Muna Suleiman, a campaigner for the environmental group, told The Independent: “With the cabinet’s climate change committee only meeting for the first time this week – just months before crucial UN climate talks in Glasgow – we were waiting for the Budget to reassure us that this government is putting the climate crisis front and centre of all policy, backed with appropriate funding.

“The Budget is a huge opportunity for ministers to show the UK, and the world, what their intentions are when it comes to climate over the next few months. This isn’t an opportunity that they can afford to miss.”

The acting co-leader of the Liberal Democrats, Ed Davey, said: “It would be a dereliction of leadership if the Budget fails to include tough action to tackle the climate emergency.

“There is a huge opportunity to boost Britain’s renewable sector, fast-track the switch to electric vehicles and insulate homes across the UK, and the chancellor must end the last four years of dither and delay in energy and climate change policy.”

Labour said the last-minute postponement of the National Infrastructure Strategy was “unacceptable”, while the chair of the National Infrastructure Commission, Sir John Armitt, said he was “disappointed” by the hold-up.

Heathrow's third runway is in question after the High Court ruling 

Downing Street said the document – a response to recommendations for long-term investment made by Sir John in 2018 – would be released “in the coming months”, but Treasury sources suggested it was likely to appear within a matter of weeks.

In the Queen’s Speech following the December election, Boris Johnson said the strategy would be published “alongside the first Budget” and would set out “the government’s long-term ambitions across all areas of economic infrastructure including transport, local growth, decarbonisation, digital infrastructure, infrastructure finance and delivery”.

It was presented as a key part of the prime minister’s plans to “level up” economic prosperity and improve connectivity in every part of the country, including the so-called red-wall seats in the Midlands and north that switched from Labour to Tory in the election.

Mr Johnson said that it would address the challenges of delivering on the government’s climate change target of net-zero emissions by 2050.

The shadow chancellor, John McDonnell, said the delay was a sign of “panic” in the Treasury following last week’s High Court verdict against plans for a third runway at Heathrow – a ruling made on the basis that ministers had failed to take account of Britain’s climate change commitments under the Paris Agreement.

“This is absolute chaos in government,” said Mr McDonnell.

"We are facing the threat of climate change and an economy at risk of recession. That’s why we desperately need an immediate start to large-scale infrastructure investment.

"Delaying implementation of investment is unacceptable."

He added: “I suspect it’s incompetence. The government clearly hadn’t assessed the infrastructure plan proposals against the Paris Agreement, and after the Heathrow decision are panicking that they could face legal challenge to the infrastructure plan on grounds of the Heathrow judgment.”

However, Treasury sources insisted that the delay was a result of Mr Sunak’s arrival in 11 Downing Street just 27 days before the strategy was due for publication.

While the budget will still include significant infrastructure announcements, the new chancellor decided within days of taking office last month that he wanted to take personal ownership of the long-term plan rather than simply commit himself to the document inherited from his predecessor, Sajid Javid, said a source.

A Downing Street spokesman said: “For too long, we have under-invested in our infrastructure, so it is vital that we give these decisions the proper time and care they deserve.

“The national infrastructure plan will follow in the coming months and government officials are working on it as a priority.”

Sir John Armitt said: “Naturally we are disappointed about the further delay in the government’s formal response to the national infrastructure assessment, which we published over 18 months ago.

“However, we are encouraged by the evident focus the government wishes to place on investing in the UK’s future infrastructure.

“Prioritising that investment within a long-term plan is key to success and if a short delay leads to a better strategy that more comprehensively addresses our recommendations, it will be worth the wait.”

Henri Murison, director of the Northern Powerhouse Partnership, which campaigns for investment in the north of England, said: “The long-term challenge of closing the north/south divide will require a national infrastructure plan which is bold and ambitious. The country’s chancellor is a committed backer of the Northern Powerhouse project, including the case for building a new rail line across the Pennines as part of the High Speed North network.

“I remain confident that he will ensure that whether it is local transport infrastructure, with devolution of long-term funding to our metro mayors, or on energy, where rolling out small modular reactors as well as carbon capture, use and storage will help to reach net zero, he will take advantage of what the north can deliver for the nation.”

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