Don’t kill capital projects
AnYOnE travelling on the Eurostar from London to Paris could not but be impressed by the contrast of the wonderful restoration of St Pancras and the depressing gloom of the Gare du nord.
When Britain backs big infrastructure, from the Elizabeth Line to the new Bond Street Station, Thames Tideway and the redevelopment of the Battersea Power Station, it does so with aplomb. Yes, it must be acknowledged that the costs of these projects often are out of hand and there can be long delays in delivery. UK planning regulation, environmental standards and respect for the past slow the process.
Once delivered, the nation has created something for future generations, improved the overseas earnings capacity and provided a boost to lagging productivity.
Yet so many of these projects are vulnerable to cancellation. Without the intervention of John Prescott in the 1990s the highspeed connection of Eurostar, from London through Ashford to Dover, might never have been completed. In the 1970s the ill-fated project to build a new London Airport at Maplin, on the Thames Estuary, could have transformed Britain’s capacity to be the world’s entrepot. It was cancelled by austerity. The country pays heavily for shorttermism and a lack of the ‘can do’ spirit.
Judging from the latest leaks from the Treasury star chamber, presided over by fiscally dry Rishi Sunak and Jeremy Hunt, the next generation of capital projects is in danger. If Britain is to have a carbon neutral future it needs not just renewables and insulation but reliable power generation.
The UK’s nuclear power stations are ageing and too often off-line. Many plants need to be retired. Hinkley Point in Somerset, one of the most complex pieces of engineering ever attempted, is meant to be the first of a new generation of nuclear reactors.
Sizewell C in Suffolk was intended to be next and Boris Johnson’s government was determined to make it happen, in partnership with France’s EDF, providing funding to make sure the project gets off the ground. It could now be terminated.
ASthe Treasury takes an axe to public spending it cannot resist including committed capital spend. It could place not just Sizewell but the prospects for a new fleet of Rolls- Royce Small Modular Reactors (SMRs) in jeopardy.
not only will this threaten net-zero by 2050, it will make us more dependent on the kindness of strangers for energy supplies.
The Treasury has a history of nixing nuclear ambitions. Hitachi was an enthusiastic backer of new nuclear investment in the UK at Anglesey. In 2020 the Japanese firm pulled back from the project after former chancellor Phil Hammond suspended a pledge of government backing. It appears this same cycle of pledge, announcement and cancellation could be back.
Also in the sights of the capital cost cutters are vital rail projects. Getting HS2, the high-speed link, has been a mighty heave. nimbyism and environmental campaigners have pushed up the cost to an estimated £72bn as tunnels and viaducts have been added. Despite £15bn spent it is an easy target for budget trimmers.
Cancellation would be disastrous and the levelling up agenda sacrificed along with private sector investment. Death by further cuts – the Leeds leg is already a victim – should not be an option.
Every generation should aspire to leave something in which to take pride. Big infrastructure offers the possibility of creating a better and more productive economy. It should not be abandoned.