HS2

11.03.20

Railway Industry Association responds to the 2020 budget

Today the Chancellor of the Exchequer, Rishi Sunak, announced the 2020 budget.

Among his announcements, he confirmed reports that the government will increase spending on infrastructure.

"We’re going to build broadband, railway, roads, he says, as he promises £5bn to get gigabit-capable broadband into the hardest to reach places and £510m of new investment into the shared rural mobile phone network.”

The chancellor also declared he will eliminate tax relief for red diesel for most sectors, which he says is a £2.4bn tax break for pollution. The change will take place in two years’ time. Agriculture, rail, fishing and domestic heating will be exempt.

Sunak says he will increase taxes on pollution, and raise funding for green transport solutions by £1bn.

He also said: "With spades going in the ground on HS2 our commitment to fund the Manchester-Leeds leg of the Northern Powerhouse Rail, funding today for a new station at Cambridge South and the Midlands Rail Hub, Darlington station moving to the next stage of development and approval and funding to make a dozen train stations more accessible."

The Tyne and Wear Metro will specifically receive £104m from the Government’s Transforming Cities Fund, with Government contributing £95m towards the total cost. The Metro Flow project will see an existing freight line developed and electrified in South Tyneside from September 2022, making it capable of carrying Metro services, boosting the capacity for an extra 30,000 passenger journeys every day.

In response to the Chancellor's budget, Darren Caplan, Chief Executive of the Railway Industry Association, said: “It has been a particularly difficult time for this Budget, with coronavirus rightly being the Government’s number one priority. Looking to the long term, though, it is clearly welcome that Chancellor Rishi Sunak has re-committed the Government to infrastructure spending and rail investment, including backing major projects like Midlands Rail Hub, HS2, Northern Powerhouse Rail and others. We also look forward to seeing the upcoming National Infrastructure Strategy, which we encourage the Government to publish as soon as possible.

“From the railway industry’s perspective, rail suppliers are excited and ready to deliver this ambitious programme of investment to ‘level-up’ opportunities and unlock the full potential of UK rail. However, as we set out in our submission to the Budget last month, there are five ‘crunch points’ which could act as a barrier and hamper the sector’s ability to deliver the world class railway everyone would like to see.

“These ‘crunch points’ are renewals, rolling stock, enhancements, decarbonisation and digitalisation. Investment in each of these areas can be characterised in terms of ‘boom and bust’, with some not ramping up until the middle of the 2020s meaning a real shortfall in the next five years, when rail businesses need to be boosting capabilities and investing in people to deliver.

“So we urge the Government to work with the Railway Industry Association and our members to find solutions to these crunch points – for example, by bringing work forward from CP7 into CP6 – and to smooth out ‘boom and bust’ investment so that we can continue to develop customer-focused rail in the UK and to increase UK plc’s offer abroad."

Image: Aaron Chown/PA Wire/PA Images

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