‘Fiscal headroom’ to help the economy through Brexit has been promised by Chancellor of the Exchequer, Philip Hammond, in his recent Autumn Statement, the Government’s update on its taxation and spending plans. One of the top headlines from the Statement is £150m pledged towards supporting low emission buses and taxis.
The Office of Budget Responsibility (OBR) was quoted as forecasting growth of 2.1% in 2016, then downgraded to 1.4% in 2017, with 1.7% growth in 2018, 2.1% for 2019 and 2020 and 2% in 2021. Debt is to rise from 84.2% of GDP last year to 87.3% this year, peaking at 90.2% in 2017-18.
In terms of transport, the Autumn Statement saw £2.6bn pledged to tackle congestion and ensure the UK’s transport networks are fit for the future. An additional £1.1bn will be available by 2020-21 in new funding to relieve congestion and deliver upgrades on local roads and public transport networks. £220m is to be invested to deal with key pinch points on strategic roads. The Government is to recommit to the National Roads Fund announced at Summer Budget 2015.
£390m is to be invested by 2020-21 to support ultra-low emission vehicles (ULEVs), renewable fuels and connected and autonomous vehicles (CAVs). This includes £150m in support for low emission buses and taxis, £80m for ULEV charging infrastructure, £20m for the development of alternative aviation and heavy goods vehicle fuels and £100m for new UK CAV testing infrastructure. Any rise in fuel duty has been cancelled for the seventh year in succession.
Devolution of powers are still being committed to, in an effort to support local areas to address productivity barriers. The Government is to continue working towards a second devolution deal with the West Midlands Combined Authority and is to begin exploring future transport funding with Greater Manchester.
In rail, an additional £450m will be allocated to trial digital rail signalling technology, to expand capacity, and improve reliability from 2018-19 to 2020-21. Around £80m will be allocated to accelerate the roll out of smart ticketing including season tickets for commuters in the UK’s major cities. With construction of High Speed 2 Phase 1 starting next year, the preferred route for Phase 2b of High Speed 2 has been announced and a business case for Crossrail 2 is awaited. £5m is being invested in development funding for the Midlands Rail Hub, a programme of rail upgrades in and around central Birmingham that could provide up to ten additional trains per hour.
Chief Executive of sustainable transport campaigning group Greener Journeys, Claire Haigh, said, ‘We welcome the Government’s plans to spend £1.1bn on upgrading local roads but are disappointed that the Chancellor has once again chosen to freeze fuel duty rather than acting to reduce car use. Britain is suffering from a congestion crisis which is costing the UK more than £13bn a year. If the Government is serious about tackling congestion, it must introduce measures to make it less convenient and more expensive for people to drive. At the same time, it must make buses and other forms of public transport a more attractive option.’
SMMT (Society of Motor Manufacturers and Traders) Chief Executive, Mike Hawes, said, ‘One of the main areas in which UK Automotive is playing a leading role is the development and introduction of low emission and connected and autonomous vehicles. The Chancellor’s announcement of £390m will help promote our competitive advantage in these fields. We welcome the investment to enhance the charging network for electric vehicles, as well as further support to boost uptake of low emission buses and taxis. These markets are still developing and it’s critical the government continues to encourage this through consistent policies and investment. Furthermore, the commitment to connected and autonomous vehicle testing infrastructure is an area in which the UK is already one of Europe’s leading centres. This commitment will help cement that position and promote this next generation technology, which has the potential to transform lives, preventing more than 25,000 accidents and creating more than 320,000 new jobs. We are, however, disappointed that the government has not done more on business rate reform. SMMT called for the removal of plant and machinery from business rates valuation, which would have helped encourage further investment at this time of great uncertainty.’
Head of Transport at KPMG UK, James Stamp, commented on the statement: ‘Today the Chancellor announced funding for more road and rail capacity. Specific improvements, such as alleviating road network pinch points, and the Midlands Rail Hub, are welcome, as is the positive sentiment about Crossrail 2. However, even with investment in specific schemes, a stark fact remains: demand for transportation will always be ahead of our ability to pour more concrete. Making more from the capacity we have is, and will stay, key. Without this, congestion will remain a limiting factor on productivity.’
‘It is therefore vital that investment in transport innovation tackles not only the specific issues of today, but also fundamentally how and why people will travel in the future. Smart ticketing, autonomous vehicles, and smart infrastructure all individually promise incremental benefits, and investment in this area is therefore encouraging. But the exponential change that could be unleashed by combining these initiatives (along with better use of data for providing information and choice to passengers) together is the real prize. Translating the potential of Mobility-as-a-Service (MaaS), enabled by digital technology, to reality will require collaboration between policy makers, private operators, and transport authorities. It must be a key aim for the Government.’
Visit www.gov.uk/government/publications/autumn-statement-2016-documents to download the Autumn Statement. A transcription of Philip Hammonds speech is available here: https://www.gov.uk/government/speeches/autumn-statement-2016-philip-hammonds-speech