The Autumn budget has been keenly awaited in the UK and was historic for many reasons, but after a long build up and much anticipation did it deliver?
With a promise to ‘invest, invest, invest’ Chancellor Rachel Reeves set out her intention to change fiscal rules to allow for more borrowing to invest and rebuild schools and hospitals, transform the UK into a ‘clean energy superpower’ and get Britain and Northern Ireland on the way to building 1.5 million houses per year.
Key promises to achieving this vision included the £70 billion National Wealth Fund, transforming the planning system, working with metro mayors on regional growth plans, and creating a long-term modern industrial growth strategy.
But what do the finer details mean for Steer and the sectors we serve? Below we take a closer look.
The electric vehicle (EV) transition remains a key cornerstone not just of Net Zero but of building an economy for the future.
Continued support for gigafactories and automobile manufacturing in the West Midlands and Northeast signals the Governments consideration for UK industry, and continued tax relief on electric company cars and a promise of £200 million to accelerate the rollout of EV charging infrastructure points to their understanding of consumer incentivisation needed.
Part of this figure will go to local authorities for installation of on-street charge points across England, but nervousness over progress on delivery of the existing Local Electric Vehicle Infrastructure (LEVI) fund remains a barrier to implementation.
Meanwhile, £120 million to support the purchase of new electric vans through the plug-in vehicle grant speaks to the urgent need to look at commercial fleet electrification. Vans, lorries and taxis make up 15% of vehicles on Britain’s roads but are responsible for 42% of emissions with low EV penetration for this market.
The rail industry has had difficult times since the pandemic, and has been seeking greater certainty, especially for investment programmes. The Government seems to recognise this and has pledged to improve performance, reliability and financial sustainability post-COVID.
With a nod to boosting connectivity and the economy across the North there were renewed promises to fund the TransPennine upgrade with full electrification from Manchester to Stalybridge by the end of 2025.
Funding to improve capacity at Manchester Victoria, upgrade Bradford Forster Square and electrify the Wigan to Bolton line also signal commitments to investment in rail across the North of England. However, the guarantee of money for East to West rail connecting Cambridge, Oxford and Milton Keynes as well as money for the HS2 tunnel from Old Oak Common to Euston show the South and England’s Economic Heartlands are still a priority.
The annual fare cap is set to rise by 4.6% in April 2025 and, subject to an industry proposal, there will be a £5 increase to the price of most rail cards (except the disabled person’s rail card) to improve the industry’s financial sustainability. A new rolling stock strategy will boost long-term confidence for the rail manufacturing sector.
The Secretary of State for Transport’s plans for reform and the transition to Great British Railways continue to be supported, and will consider changes to fares, services and workforce practices and are intended to deliver a modern railway increasing efficiency and reducing costs, while boosting ridership and revenue and improving performance.
The retained freeze on fuel duty will be a disappointment to a rail industry hoping to encourage consumers out of their cars and onto trains, but a focus on sector stability is welcome.
Establishing Great British Energy (GBE) is the cornerstone of Government clean energy policy with £100 million capital funding promised for clean energy project development and £25 million to establish GBE itself, headquartered in Aberdeen. But whilst welcome, this figure is modest compared to the commitment of £3.9 billion set aside for carbon capture and storage (CCUS) clusters in Merseyside and the Northeast.
There will be £1 billion of funding for local energy schemes to help decarbonise the public estate through the Public Sector Decarbonisation Scheme, and there is £3.4bn allocated towards the Warm Home Plan for heat decarbonisation and household energy efficiency over the next three years. Again, whilst welcome, this falls significantly short of the estimated £150bn required to uplift all English homes to EPC C and meet the UK government’s goal of achieving this by 2035.
Greater Manchester and West Midlands Combined Authorities integrated settlements will provide local agency in delivering decarbonisation, for example the retrofit pilots of both combined authorities. In this case more continuity for retrofit funding will enable the regions to build up skills and supply chains and ultimately accelerate retrofitting.
The pledge to build 1.5 million homes a year looms large in the minds of politicians and the public as one of the few numerical commitments made by Labour during the election.
Where these homes will go and more critically the availability of affordable housing is perhaps a deeper concern. Rachel Reeves promised £5 billion for housing overall with an additional £3.1 billion for Affordable Homes Programme, £3 billion of support in guarantees to boost the supply of homes and support smaller housebuilders, and investment to renovate sites across the country including in Liverpool and Cambridge.
In the realm of social housing the Government will reduce the right to buy discount and allow councils to keep full receipts on sales of council houses, while a consultation on a new long-term social housing rent settlement aims to boost building of new social homes by creating long-term certainty.
As planning consents run out the proposed hiring of 300 new planning officers is welcomed (although this would presumably be spread across 317 local authorities in England), while how the Warm Homes Plans (which aims to install heat pumps, solar panels and insulation to 350,000 homes including for those on low incomes) will fit into rollouts of increased social housing remains to be clarified.
The era of devolution continues with headline commitments for the first integrated funding settlements for Greater Manchester and the West Midlands and city and growth deals for parts of Northern Ireland and Scotland.
Concerns over a threat to the City Region Sustainable Transport Settlements (CRSTS) were eased with a £200 million increase that brings local transport spending for Metro Mayors to £1.3 billion or projects such as West Yorkshire mass transit system and Sheffield Supertram.
Beyond the city regions £650 million will go to transport connections to improve towns, villages and rural areas, going some way to addressing concerns of a ‘postcode lottery’ over transport funding.
The hot button issue of buses – called the ‘lifeblood of communities’ by Labour – was front and centre pre-budget with the fare cap increase from £2 to £3 which has been extended to December 2025. This buys the Government time while they consider a financially sustainable future for buses.
The aforementioned freeze in fuel duty and £500 million for road maintenance and potholes indicates some appeasement to drivers, while £100 million for cycling and walking infrastructure shows active travel is not forgotten.
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