The new Labour government has arrived in Number 10 – we look at the decisions relating to infrastructure such as energy, transport and planning that need resolving by the new ministers.
The secretary of state for transport Louise Haigh and secretary of state for energy and net zero Ed Miliband have plenty to investigate in their new in-trays. Here are some of the considerations that we’ll be watching closely.
Transport
Rail
The new government’s plan to renationalise the country’s railways has been well publicised and was cemented with the release of its Plan to Fix Britain’s Railways in April. This will see it capitalise on private rail contracts that are coming to their conclusion to install a new publicly-led model.
It will also bring management of infrastructure and services under one roof with the establishment of an integrated delivery body, likely maintaining the name Great British Railways which was the name that the previous government had been using. Network Rail chief Lord Peter Hendy had been supportive of this move and under the new government he has been appointed minister of state for transport, which will give him the platform from which to support the transition.
The Labour manifesto did not make specific pledges on rail projects except the fairly vague promise of “improving rail connectivity across the north of England”.
The former regime set out the next steps for action on the first part of Northern Powerhouse Railway, between Liverpool and Manchester, in March. This committed the Department for Transport (DfT) to continue to engage with local leaders to bring the plans to fruition – potentially including the long-desired underground through station at Manchester Piccadilly.
Mayor for Greater Manchester Andy Burnham, along with his fellow Labour mayor for the Liverpool City Region Steve Rotherham established a Liverpool-Manchester Railway Board to speed this development along by engaging with public and private stakeholders. Since the General Election, Burnham has been on Laura Kuenssberg’s television programme saying that the new government must “commit early to the Northern Powerhouse” and said he wants to see work on the new line between Manchester and Liverpool started quickly.
There is also the question of what to do in the area between Birmingham and Manchester where High Speed 2 (HS2) was to be constructed, prior to its cancellation last October. May’s annual review from the National Infrastructure Commission (NIC) said that a ‘do nothing’ scenario north of Handsacre junction is “not sustainable”.
In January, prime minister Keir Starmer said that reinstating the line was “impossible” due to the former government’s budget mismanagement. However, in March new transport secretary Louise Haigh was reported to have been pushing for the reinstatement of Phase 2a between Birmingham and Crewe.
After her first speech as chancellor, on 8 July, Rachel Reeves was asked about HS2 and, without entirely ruling out the possibility of reinstating the line, said that the government is not going to make any promises without knowing where the money is coming from.
If it isn’t to be HS2, an alternative route may be put on the table. Burnham and former West Midlands mayor Andy Street put together a proposal for a new line between Handsacre and Manchester Airport on the request of former prime minister Rishi Sunak, which was revealed in March. With Street and Sunak now both out of office, it is unclear if this is still being pushed.
England’s other major new railway is East West Rail between Oxford and Cambridge. The first section between Oxford and Bletchley is nearing completion and is expected to come into service next year. However, it (and the following stages) are planned to run diesel-powered trains, which many commentators have said is unacceptable for a new rail line. The new government may choose to provide funding to electrify the line or invest in battery-powered locomotives.
There is also the question of the third connection stage between Bedford and Cambridge. The route for this section was confirmed last year but was widely criticised for its twisting and turning nature. The DCO application for this section has not yet been submitted and the government might want to signal its support for the chosen route before effort is invested in developing the plans.
Uncertainty also lingers over the Aylesbury ‘spur’ of the project, which would see the town connected between Bicester and Winslow. However, concurrent with the confirmation of the third section’s route, the spur was removed from the government’s route map, suggesting it no longer intended to fund this. Clarity will be sought on this
Roads
Determining the future of the £9bn Lower Thames Crossing now falls to the new government. The £300M DCO application for the new road tunnel under the Thames between Kent and Essex was submitted in November 2022 and reportedly runs to around 360,000 pages, making it the longest ever. The deadline for a decision on whether to proceed with the project is now 4 October.
The Lower Thames Crossing has been divisive, with many saying it is imperative to reduce congestion at the Dartford Crossing, but others have said the project will be too disruptive and pollutive (despite National Highways’ pledging to make it carbon neutral construction). The northern part of the project is in the constituency of South Basildon and East Thurrock, which was won by Reform UK in the General Election. The party was inconclusive on its views about the scheme when quizzed in a hustings prior to the election.
Other major road schemes in the UK have had their DCO granted already – this includes the A1 dualling, A66 dualling and A303 Stonehenge. The latter two are subject to legal appeals against the decision to green light them, but this sits outside of the government’s power to influence.
The new government will now look to push National Highways to publish its plans for the third roads investment strategy (RIS3) period, which runs between 2025 and 2030. The roads authority has been evasive on its plans, only saying that it will prioritise making the most of the existing network through renewals rather than building new roads.
Last July the transport select committee released a report saying “it is time for the government to reconsider its portfolio of expensive, complex strategic road network enhancement projects”. It also said that the RIS approach had introduced “confusion and uncertainty” to the sector as projects were continually being pushed back.
The new government may wish to reconsider how roads schemes are planned and funded given these remarks.
Airports
London Luton Airport is awaiting a decision from the secretary of state on its plans to expand. It hopes to make the most of its current runway but deliver a massive boost to its annual passengers from the current 18M to 32M by the mid-2040s.
The first phase of expansion, which will take the capacity to 19M, was approved last year. This will see the current terminal building expanded in the first phase and new taxiways and associated supporting infrastructure constructed.
The second phase will see a new terminal built as well as many other upgrades to the local area. The Planning Inspectorate passed its recommendation on the DCO for the second phase to the secretary of state in February, but the decision deadline was pushed back to 4 October due to the General Election.
Meanwhile, a third runway at Heathrow Airport has long been mooted. In April, former transport minister Huw Merriman reiterated that developing and funding this is a matter for the private sector, but also revealed that the DfT officials had been working with stakeholders to develop the business case. It will be interesting to see if this collaboration continues under the new government.
Energy
Renewables
Labour’s manifesto set out plans to “make Britain a clean energy superpower” and the first move has already been put into action with the lifting of the de facto ban on onshore wind developments in England, announced on Monday 8 July. The comes as the government plans to double the country’s onshore wind capacity from 15GW to 30GW by 2030.
Bigger questions abound as to how it will achieve clean energy by 2030, which was an election pledge. It remains to be seen how it will establish its new public energy body Great British Energy and bring forth an Energy Independence Act to support its stated ambitions of doubling onshore wind, tripling solar, quadrupling offshore wind, investing in carbon capture and storage, investing in hydrogen and investing in marine energy.
The mention of marine energy will be encouraging to Liverpool City Region Combined Authority (LCRCA), which has been developing Mersey Tidal – a tidal barrage that would become the UK’s first tidal range scheme. The previous government had not shown much interest in developing tidal range, despite the UK being an ideal location for these schemes. A Labour government may be more open to the Labour-led LCRCA’s proposals for a 700MW barrage. It would be the largest engineering project in the north west and likely take a decade to construct. It would provide valuable information about these schemes and the potential to build more.
Nuclear
Beyond 2030, nuclear will be a critical source of power. The government has said it will get Hinkley Point C “over the line” and has committed to Sizewell C and small modular reactors (SMRs).
Sizewell C, the next large-scale nuclear station in the UK, was to be funded by private investment but at the end of the last term the government had failed to reach a final investment decision, despite promises.
The government has to date invested £2.5bn in the project in numerous tranches but intends to find private investors to cover the majority.
The government commenced the search for investment partners in the circa £20bn project last September. It said it is seeking companies with “substantial experience in the delivery of major infrastructure projects” and added “ministers will be looking for private investors who can add value to the project and will only accept private investment if it provides value for money, while bolstering energy security”.
Potential investors were required to register their interest by early October 2023 but there has been little news in the more than half a year since.
Following on from Hinkley Point C and Sizewell C, the next full-scale nuclear station was set to be developed at Wylfa in north Wales, following the government’s decision to purchase the land back from Hitachi. This was backed by the sector who said it was the best site in Europe for nuclear deployment.
However, Wylfa was not mentioned in Labour’s main manifesto – something picked up on by the Nuclear Industry Association. The Labour Party’s manifesto for Wales followed, with a pledge to “continue to explore the opportunities for new nuclear at Wylfa”.
Earlier this year it was revealed that South Korean nuclear energy company Kepco was in talked to develop the site. It will be down to Miliband and his team to decide how to progress at Wylfa.
Regarding SMRs, the previous government had established the new body Great British Nuclear and tasked it with running a competition for the best SMR design. The winning developer – out of six shortlisted – was to receive government backing. Timelines for the competition had been shifted due to the General Election and it remains to be seen if the new government will pursue the competition and development of SMR designs in the same manner laid out by the previous regime.
Water
While water investments lie in the private sector, it sits in the government’s gift to approve plans for major infrastructure developments, with numerous around the country being on the horizon. The water companies of England and Wales submitted their investment plans for the next regulatory period last autumn and regulator Ofwat will deliver verdicts on whether to approve by the end of this year.
New reservoirs are on the agenda for companies including Anglian Water and Thames Water, which will need to be consented by central government. Ofwat and the Environment Agency have established the RAPID system to help with ensuring that the planning process goes smoothly by aiding the companies in developing their application processes. However, it is still expected to be close to the end of the decade before plans for these reservoirs are approved, given the complexities of the current planning system.
Planning
Delivering all of the above-mentioned projects in a timely manner will require some overhaul to the current planning system, which the previous government had slowly been starting to move on.
Labour’s manifesto said that it would set out a “strategic approach that gives certainty and allows long-term planning”.
In her first major speech as chancellor, Reeves announced that work on this “urgent” issue is underway. The de facto ban on onshore wind has been lifted immediately and more is expected to follow with a reform of the National Planning Policy Framework.
The government will consult on a “new growth-focused approach to the planning system by the end of the month”, Reeves revealed. Energy projects will be given priority in this system to ensure that they make “swift progress”.
“If we are to put growth at the centre of our planning system, that means changes not only to the system itself, but to the way that ministers use our powers for direct intervention,” Reeves said. She said that benefits of schemes will be the central factor for ministers when deciding on planning applications.
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