The sign-off for the new Lower Thames Crossing and new infrastructure plans for growth took centre stage in Chancellor of the Exchequer’s maiden Spring Statement today.
Reeves was keen to stress the decision on the Thames, which has been years in the planning, as a victory for the UK Government as it looks to ensure new infrastructure projects get off the ground.
She also highlighted the schemes outlined in the growth plans from January this year, such as the UK Government’s support for a third runway at Heathrow, which was recently hit by an energy blackout last week with an investigation commissioned into the issue.
The Treasury also wanted to state that the statement was “definitely not a Budget” with only a small book of new schemes announced, with Reeves instead promoting the planning and infrastructure progress that has been made since the Autumn Budget last year.
It comes as the Office for Budget Responsibility (OBR) expects growth to be reduced to 1% this year, followed by 1.9% next year and then 1.8% in 2027, 1.7% in 2028 and 1.8% in 2029.
OBR forecasts have also concluded that the government’s planning reforms will result in a £6.8 billion boost to the economy and housebuilding by 2029-30.
The government said it was supporting growth by investing £13 billion more in capital infrastructure over the next five years, launching a construction skills package to train up to 60,000 more skilled workers, and investing an additional £2 billion in social and affordable housing.
Also impacting the transport and energy sectors will be the civil service cuts across Whitehall, which will effect the Department for Energy and Net Zero and the Department for Transport.
Across the sector, departments are expected to reduce administrative ‘back office’ budgets by around 10%, which will deliver savings of around £1.5bn a year by 2028-29.
Reeves said that as many as 10,000 jobs could be reduced across the civil service, which has become larger since Brexit and the Covid pandemic, but the FDA union claimed that the cuts could have an impact on public services as a result.
The Chancellor said that she wanted to make the state “leaner and more agile” and announced £3.25bn of investment to deliver public service reform.
It Spring Statement document said: “This will support the fundamental reform of public services, seize the opportunities of digital technology and artificial intelligence (AI), and transform frontline delivery to release savings for taxpayers over the long term”.
The government also said it would set out capital spending plans for the Parliament at the Spending Review in June.
The Chancellor also unveiled plans to unlock the potential of the Oxford-Cambridge Growth Corridor, which could add up to £78bn to the UK economy by 2035, and backed Heathrow expansion, which could create more than 100,000 direct jobs and achieve a better-connected economy.
It also announced strategic partnerships between the National Wealth Fund (NWF) and Greater Manchester, West Yorkshire, West Midlands, and Glasgow City Region to help regions develop and secure long-term investment opportunities.
Sue Robinson, Chief Executive of the National Franchised Dealers Association (NFDA), said about the Spring Statement:
“Today the Chancellor’s statement provided no update on some of the issues affecting the automotive retail industry.”
“NFDA remains of the view that raising employer NICs by 1.2 per cent to 15 per cent will significantly increase the cost of running a franchised dealership, particularly at a time when businesses are already facing pressure from rising energy costs and adapting to the shift towards electric vehicles.”
“Furthermore, the Spring Statement did not provide an update on the electrification of the UK car parc. This transition provides a huge economic opportunity for the UK and the Government needs to be incentivising consumers to purchase a new vehicle, which will drive growth in the UK economy.”
“Overall, there were missed opportunities in today’s announcement to use the automotive sector to stimulate growth in the UK. NFDA will closely examine the finer details of the Statement to understand its full implications for the sector and will continue to work with Government lobbying on behalf of franchised vehicle dealers.”
Tracy Brabin, Mayor of West Yorkshire, said:
“The Government is getting on with its plan for change and the growth mission is rightly its top priority.
“Global uncertainty has made this task more difficult, and we must now double down on our efforts to boost living standards and support public services.
“Mayors are best placed to help achieve this and I welcome the Chancellor’s focus on housing, skills and infrastructure as we build a country that works for all.”
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