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UK MPs draw on ICE’s expertise in wide-ranging government debate on infrastructure

04 May 2023

MPs from the four biggest UK parties stressed the need for greater certainty in infrastructure spending in a recent debate.

UK MPs draw on ICE’s expertise in wide-ranging government debate on infrastructure
Wera Hobhouse MP echoed the ICE’s calls for greater clarity for investors and supply chains. Image credit: UK Parliament (licensed under CC BY 3.0.)

Wera Hobhouse MP, the UK Liberal Democrats’ transport spokesperson, led calls for a stronger infrastructure strategy during a Westminster Hall debate on funding for major infrastructure projects.

Open to all MPs, Westminster Hall debates allow them to raise local or national issues and receive a response from a government minister.

Drawing on HS2 as an example, Hobhouse stressed that “dither and delay over infrastructure investment” is costing the UK money and opportunities.

She and colleagues also warned that the UK needs to catch up on commitments to sustainability and economic growth.

“Infrastructure planning must be at the heart of any serious government”

“Any government should have a long-term strategic vision for the country beyond short-term election cycles,” Hobhouse said.

“The government is failing to capitalise on the long-term benefits of upgrading our infrastructure. We need an infrastructure strategy now to face the challenges of the future.”

Hobhouse called for the Treasury to produce a national infrastructure strategy “every five years, as opposed to once every Parliament”.

“That would provide greater long-term clarity to investors, supply chains, and other stakeholders,” she said.

“It would provide developers with a clear, long-term timeframe to plan ahead with confidence.

The Institution for Civil Engineers argues that this will deliver projects quicker and at a lower cost.”

Pipeline certainty can keep costs down

Hobhouse challenged the government’s claims that delaying the Birmingham to Crewe leg and Euston link of HS2 was “to balance the books”.

“The National Audit Office has said that the decision to delay will lead to additional costs and potentially a more expensive project overall,” she said.

“The Transport Secretary himself even admitted that the delay would not save money.

“Whether or not we agree with HS2, this incessant delay and further uncertainty benefits no one.”

Stephen Hammond, the Conservative MP for Wimbledon and a former transport minister, added that pipeline certainty is important for the contract and procurement stage of a project.

“If there is a pipeline of projects that developers and suppliers see, the contract price will almost inevitably decline because there will be a certainty of project work,” Hammond said.

“Getting the design and implementation phases right will undoubtedly make the financing of major infrastructure projects easier.”

Peter Grant, the SNP MP for Glenrothes, called for “a complete change in the way that the Government allocate and manage the funding for their major infrastructure projects.”

“I do not understand how we can possibly run a 25- to 30-year contract on an annual and cash-limited budget,” Grant said. “It produces incentives to do stupid things. We’ve seen that with HS2.”

“We do not have decades to wait”

Hobhouse and fellow MPs also criticised the government’s lack of progress on climate adaptation and resilience.

“Record temperatures last summer forced the cancellation of hundreds of train services,” Hobhouse said. “Flights were stopped at London Luton airport after heat melted the runway.

“[The former transport secretary] warned that it will take decades to make the UK transport system resilient to extreme heat. But we do not have decades to wait.

“If we do not prioritise climate adaptation now, we will pay for it later.”

Labour’s shadow Treasury minister, Tulip Siddiq MP, added that the UK “is losing the global competition for green jobs”.

“We are now investing five times less in green industries than Germany, and roughly half of what France and the USA invest,” she said.

“Only now, eight months after the passage of the Inflation Reduction Act, has the Chancellor finally confirmed that the UK will have to wait more than a year to respond.”

The ICE has warned that the Inflation Reduction Act – US legislation that will incentivise green investment – and the EU’s equivalent Net Zero Industry Act will divert needed money and talent away from the UK.

Pipeline uncertainty only worsens the problem.

“The Institution of Civil Engineers says that delaying HS2 could make the building process ‘more difficult as construction firms shift their focus to other countries’,” Hobhouse said.

The government’s response

Exchequer secretary Gareth Davies replied that the government was “committed to delivering the long-term economic benefits derived from capital investment and infrastructure schemes”.

“We want to build infrastructure that is modern, efficient and accessible to everybody across our four nations,” Davies said.

He added that HS2 remains “a key part” of the government’s rail strategy.

“The government remain absolutely committed to delivering HS2 from Euston to Manchester, and continue to push on with the sections in peak construction so that the first high-speed services… can be delivered between 2029 and 2033,” he said.

Why is a strategic approach to infrastructure funding important? The ICE’s view

This was a timely Westminster Hall debate highlighting concerns across all four largest political parties in the UK’s approach to infrastructure planning and prioritisation.

The UK, like many countries, is experiencing rising inflation, widening economic disparity, and growing threats to its climate resilience.

Infrastructure investment can answer these challenges: stimulating economic growth, protecting the environment, and improving lives. But infrastructure costs money to deliver and maintain.

Furthermore, rising inflation is making infrastructure more expensive in real terms – meaning prioritising the right projects and delivering them on time, within budget, and to a good standard is more important than ever.

Public finances are only part of the solution. The guideline ‘fiscal remit’ for public investment in infrastructure is between 1.1 and 1.3% of GDP; the remainder falls to the private sector to fund.

And without certainty – in what the UK is building, when, and what value it will deliver – investors are increasingly looking elsewhere.

If the UK doesn’t realign its approach to infrastructure planning, it risks missing out on the transformative opportunities other countries are rushing to seize.

How the ICE influences parliamentary debate

Ahead of Westminster Hall debates, the House of Commons Library produces briefings for MPs who want to participate.

The debate pack for funding for major infrastructure projects cited both the ICE’s commentary on the 2023 UK Budget and a previous parliamentary question focussing on our recommendations for a national infrastructure strategy.

The ICE policy and public affairs team produces consultations, reports, opinion pieces and more, which we share with decision makers and their staff, both in the UK and overseas.

We also regularly brief parliamentarians across the political spectrum, ensuring our impartial, expert advice influences the conversation about infrastructure policy at every level of government.

This is a crucial part of how we represent the interests of our members and the wider industry. Find out more about the ICE's policy and advocacy work.

  • Ben Gosling, speechwriter and policy content manager at ICE