Hammond promises he will get Britain moving – If Parliament moves to support a Brexit deal

Philip Hammond’s central message in his Spring Statement was the bright economic future for the UK, if a Brexit deal is agreed.  He said that if a deal passes the Government will start the spending review this summer and it would be announced at the Autumn Budget.

A constant sub-message in the Chancellor’s speech was that if Parliament were to agree to a deal, the Government would be able to turn its attention to delivering investment in domestic priorities.

There was a focus on investments in projects in the North and the Midlands. He namechecked the Northern Powerhouse Rail project, a plan to transform rail services across the North of England with new infrastructure and enhanced services. He said that Transport for the North’s business plan will be reviewed as part of the spending review.

For the Midlands, the Chancellor announced that Sir John Peace will oversee the development of plans for the proposed new HS2 station at Toton. Ensuring that the site delivers the maximum economic benefit to the area. This will include considering the case for a Development Corporation.

The Chancellor reiterated the Government’s commitment to publishing a comprehensive National Infrastructure Strategy setting out the Government’s priorities for economic infrastructure and responding to recommendations in the National Infrastructure Commission’s National Infrastructure Assessment. This will help to provide more clarity about the infrastructure pipeline and the Government’s investment priorities.

There was a focus on sustainability in the statement. Hammond announced a call for evidence on offsetting transport emissions, which will consider whether travel providers such as airlines should be forced to offer carbon offsets delivering “genuinely additional offsets” to avoid double counting issues.

Private finance has played an important role in the delivery of a range of transport infrastructure. Since Hammond announced the end of the use of PFI at the autumn budget, there has been uncertainty about the future role of private sector finance and concerns about impact that this would have on the delivery of the UK’s infrastructure pipeline.

The launch of the Infrastructure Finance Review will be welcomed across the sector. The consultation makes it clear that private sector investment will continue to play a significant role in the delivery of transport and other infrastructure.  It highlighted that of the £600 billion infrastructure pipeline over the next decade, half of the finance will have to come from the private sector.  The review makes it clear that the Government is open to a range of different ideas for how the private sector can support infrastructure delivery and there will not be a one size fits all replacement to the current PFI and PFI2 structures.

A key principle will be ensuring that benefits brought by private finance outweigh the additional cost to the taxpayer of using private capital.  This is likely to lead to more of a project by project approach to developing financing solutions and sharing risk and reward between the public and private sectors.

The Government sees significant potential for the UK to take a lead in the development of connected and autonomous vehicles. The Spring Statement included an announcement that the Government will publish a new Future of Mobility Urban Strategy putting the UK at the forefront of mobility, and responding to the significant changes taking place in transport technology – such as the growth in electric vehicles, the development of self-driving vehicles and advances in data and internet connectivity.

There was also some more detail about the allocation of funding from the Transforming Cities Fund, first announced in 2017, which will invest £60 million in new infrastructure, such as bus stations and cycle lanes.

The Chancellor announced that the Government will come forward with its response to the review of the new Worldwide harmonised Light vehicles Test Procedure (WLTP) and vehicle taxes within the coming months.  The WLPT is a new EU led standard of measuring emissions from vehicles based on real world conditions and data from real world driving data, rather than theoretical models.

Whilst very technical, the impact on vehicle car tax, through vehicle excise duty and company car tax could be significant with some models potentially seeing significant increase in tax.  Fleet operators and manufactures will be anxiously waiting further details on the outcome of the review.

Often criticised as being too negative, the Chancellor seemed to be positively brimming with enthusiasm about the UK’s potential if parliament agrees to a deal.  We will see if over the coming days and weeks whether Parliament provides the Chancellor the opportunity to deliver on his promises of new investment.

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