Chancellor puts transport and energy infrastructure at heart of Government’s plans for economic growth

Chancellor Rachel Reeves has promised to take immediate action to fix the foundations of the UK’s economy and wants the Secretaries of State for Transport and Energy Security and Net Zero to prioritise taking decisions on critical infrastructure projects which are with them now.

Prime Minister Keir Starmer has appointed Louise Haigh as transport secretary and Ed Miliband as energy security and net-zero secretary as the Labour administration takes shape.

In her first speech as Chancellor, Rachel Reeves pledged to leaders of some of the UK’s pioneering industries to build growth on strong and secure foundations built on stability, investment and reform, and forged through a new partnership with the private sector.

Addressing the difficult economic inheritance this government faces, she committed to taking immediate action to drive sustained economic growth, the only route to improving the prosperity of our country and the living standards of working people.

Setting out her first steps to deliver on the government’s commitments in its manifesto that every action it takes will be based on sound money and economy stability, the Chancellor promised a new economic model that will grow the economy and keep taxes, inflation and mortgages as low as possible.

The Chancellor said had the UK economy grown at the average rate of OECD economies over the fourteen years from 2010, it would be £143.3 billion larger – worth £5,053 for every household in the country. This could have brought in an additional £58 billion in tax revenues in the last year alone to sustain our public services.

Taking decisive action, the government is today announcing a series of measures to lay the foundations for a dynamic, modern and growing economy, including taking urgent steps to build 1.5 million homes over the next five years and the immediate removal of the de facto ban on onshore wind in England, as part of its clean energy mission.

Chancellor of the Exchequer Rachel Reeves said: 

“Today I am taking immediate action to fix Britain’s economic foundations. “By growing our economy we can rebuild Britain and make every part of the country better off.”

Deputy Prime Minister Angela Rayner said:

“Our country is under new management and a new era for economic growth will be built on secure foundations. The Chancellor and I will work in lockstep to kickstart the economy, unleashing housebuilding and powering local growth. Change starts now. We will unblock the bottlenecks and drive forward a transformational package to build the homes people need.”

Energy Security and Net Zero Secretary Ed Miliband said:

“Every family has paid the price of the ban on onshore wind farms in higher energy bills. This ban has undermined our energy security, put costs on people’s bills – especially those on lower incomes – and held us back in our fight against climate change.

“This Government is wasting no time in delivering the bold plan we need to take back control of our energy; boosting our energy independence and cutting bills for families as we tackle the climate crisis.

“Getting rid of this ban and giving priority for planning permission for much needed infrastructure sends an immediate signal to investors here and around the world that the UK is back in business, an immediate step in our mission to make Britain a clean energy superpower.”

Critical major infrastructure

According to the Government, the current planning regime acts as a major brake on economic growth which is why it will make the changes the country needs to forge ahead with new roads, railways, reservoirs, and other nationally significant infrastructure.

The government will set out new policy intentions for critical infrastructure in the coming months, ahead of updating relevant National Policy Statements within the next 12 months to provide certainty to industry. We will legislate to ensure they are updated at least every 5 years.

The government will also build on the Strategic Spatial Energy Plan which is being developed by the National Energy System Operator to speed up the roll out of clean power, and will seek to expand the use of spatial planning to other infrastructure sectors.

The Chancellor has asked the Secretaries of State for Transport and Energy Security and Net Zero to prioritise taking decisions on critical infrastructure projects which are with them now.

To go further, to help speed up delivery on infrastructure such as transport and energy, the government will review how it can unlock critical infrastructure, without weakening environment protections.

Alongside this, the government will make sure energy projects are prioritised in the planning system and consult on including onshore wind power developments in the Nationally Significant Infrastructure Projects (NSIP) planning regime.

Further details on ending the de facto ban on onshore wind will be set out later by the Department for Energy Security and Net Zero, and the Department for Levelling up, Housing and Communities.

Planning

The government is taking swift action to identify and unblock key ‘stalled sites’ to get large housing schemes moving forward, starting with four sites across England to unlock over 14,000 homes: Liverpool Central Docks, Northstowe, Worcester Parkway and Langley Sutton Coldfield.

To facilitate this new approach, the Deputy Prime Minister will also write to local mayors and the Office for Investment to ensure that any investment opportunity with important planning considerations that comes across their desks is brought to her attention and to the Chancellor’s. This will help to ensure the planning system can unlock major schemes from clean energy projects and transport infrastructure to film studios and art-entertainment venues.

The Chancellor has also confirmed that the government will support local authorities with 300 additional planning officers across the country. 

Further announcements will be made in the coming weeks to accelerate the development of housing and infrastructure, including launching a landmark consultation on an updated, growth-focused National Planning Policy Framework to include mandatory housing targets and a requirement to review greenbelt boundaries where necessary to meet them.

These will prioritise Brownfield and “grey belt” land for development to meet housing targets where needed, partnered with new ‘golden rules’ that will make sure the development this frees up will also deliver thousands of affordable homes, including more for social rent.

Industry reaction:

Martha Lane Fox, President of the British Chambers of Commerce, said:

“Fixing the foundations of the economy can provide businesses with the stability and certainty they need to unleash a wave of investment to create growth and new jobs.

“Labour’s pledges to create an industrial strategy, improve trade relations with the EU, and boost skills training all have capacity to make a huge difference. 

“Today’s commitment to deliver large scale infrastructure at greater pace, especially green energy projects and more housing where people want to live, is very welcome.

“But policy must be backed up with better skilled and resourced planning departments to deliver this step change. That’s why the pledge to fund an extra 300 planning officers is so important.

“It’s also why the BCC’s Planning Skills Fund has been set up in partnership with Government. It will develop an additional pipeline of new and upskilled planning talent to boost growth in our local economies.”

David Thomas, Chief Executive Officer, Barratt Developments’ said:

“We welcome the Government’s commitment to reform of the planning system and their drive for growth. Building more new homes will bring huge economic and social benefits to the UK, and it is vital that local and central government are united with industry to plan positively to deliver high quality new homes and developments across the country.”

Keith Anderson, Chief Executive Officer, Scottish Power said: 

“I welcome the clear sense of urgency and direction set out by the Chancellor today.

“Prioritising clean energy infrastructure and building at speed and at scale will unleash strong economic growth across the country. If the UK can halve the time it takes to get renewables, electricity grid and storage projects through the planning system, we’ll look to double our investment over the coming years.”

Henrik L. Pedersen, Chief Executive Officer, Associated British Ports said:

“Associated British Ports has an ambitious project pipeline of major investments in port infrastructure including supporting the development of floating offshore wind in Wales as well as green hydrogen and carbon capture and storage in the Humber. The right enabling measures from Government will unlock these developments at pace. In this regard the Chancellor’s speech is very welcome and encouraging.”

Mark Reynolds, Chairman & Chief Executive Officer, Mace Grop, Co-Chair of the Construction Leadership Council said:

“Today’s announcements show a welcome proactive approach to tackling the delays to the planning system that are costing the UK up to £11bn a year in growth and hampering the delivery of the homes and infrastructure we sorely need. The focus on cutting the red tape to progress nationally important projects, such as data centres, combined with increased resourcing of the planning departments, will bring a renewed energy and focus to the construction sector. It’s particularly welcome to see the Chancellor has put this at the top of her agenda – we stand fully behind the delivery of the Government’s ambitions.”

Kate Kenny, Senior Vice President, Jacobs said:

“We greatly welcome the changes outlined by the Chancellor today to simplify the planning regime and unlock greater investment in critical national infrastructure projects. The updating of National Policy Statements will also play a major role in providing clarity and certainty of pipeline for industry and its supply chains to invest in the long-term skills required to deliver the clean energy, transport, water and other significant infrastructure projects that the UK requires for a prosperous future.”

Tom Glover, UK Country Chair, RWE said:

“We fully support the new government’s focus on unblocking the planning system, and welcome commitments to prioritise taking decisions on critical national infrastructure projects as soon as possible. Ensuring that local authorities are properly resourced to deliver a real acceleration in planning approvals is also crucial – we therefore welcome the announcement to fund an additional 300 planning officers. 

As a leading renewables developer we are also pleased that the government are moving swiftly to end the ban of onshore wind, in the long-term this means committing to bring projects over 50MW back into the Nationally Significant Infrastructure Projects (NSIPs) regime. We look forward to further information on this in due course”.

Andrea Rossi, Chief Executive Officer, M&G said:

“As a major investor in the real economy we welcome efforts to provide long-term policy certainty and the ambition to get Britain building. Speed and ambition are crucial. By providing clarity on infrastructure priorities, combined with a swifter planning system, we can deliver investment, kick-start the economy and secure good returns for UK pension policy holders.”   

Chris Cummings, Chief Executive Officer, The Investment Association said: 

“The Investment Management industry strongly supports the Chancellor’s ambition to drive economic growth. There is more our industry can do to support the UK economy and its people, and we are ready to work with the new government to achieve this.  

Investment is the engine of economic growth, and our industry supports the government in finding innovative ways for more capital to be channelled into thriving British businesses and infrastructure projects. Removing blockers in the planning system will be key to this. It is vital we open straightforward ways for pension funds to invest in the housing, transport and energy projects we all rely on by removing regulatory obstacles and overturning the culture of “safetyism” that has curtailed economic growth.” 

Rob Perrins, Chief Executive Officer, Berkeley Group said:  

“We’re hugely encouraged to see the clear priority and focus on housing delivery as part of the Government’s mission for growth.

“Today’s announcements are a very positive start and we will continue to work closely with Government to help unlock the potential of brownfield regeneration sites to deliver good green homes, both affordable and private. Reviving urban land has a vital role to play in driving the sustainable growth and productivity our country needs.”

UK100 Chief Executive Christopher Hammond says:

“UK100 strongly welcomes the new Labour government’s swift action to lift the effective ban on onshore wind farms. This game-changing decision, made within days of taking office, is a crucial step in the government’s mission to make Britain a clean energy superpower by 2030.

“This move will empower our local authority members to play a pivotal role in the clean energy revolution. It enables local leaders to deliver on their ambitions for local energy security and accelerate the decarbonisation of the grid, working with their communities to build cleaner, healthier, and more prosperous places.

“As the cheapest form of renewable energy, onshore wind will help reduce bills in the long term, enhance energy independence, and create good jobs across the country. We look forward to collaborating with the new government, MPs, our members, and local communities to ensure rapid, responsible deployment of onshore wind across the UK.”

Image courtesy of Shutterstock.

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