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Budget review


This blog looks at some of the key transport, development and sustainability measures from the Budget.

Short read

This blog looks at some of the key transport, development and sustainability measures from the Budget.

Short read

For the North East the key transport announcements were funding for Metro upgrades and the Chancellor supporting the Darlington station upgrade. A new Mayoral fund for transport improvements, funding for roads and a review of how the Government allocate funding to major projects were also announced.

Looking at development policy the key announcements included changes to business rates, new funds for areas looking to build on brownfields land along with more funding for affordable housing. A planning white paper in spring and an increase in research and development funding for the UK were also announced.

There were also some new environmental policies with the Government announcing funding for Carbon Capture Technology including for the Net Zero Teesside project, and for electric vehicle infrastructure. A climate change levy on gas and introducing a new charge on plastic packaging in 2022 were also announced.

Longer read

The North East saw £95 million allocated for Metro upgrades along with the Chancellor backing the plans to upgrade Darlington station.

The Metro flow scheme will address the current issue of only having a single-track section on the South Shields line. This will help to increase the frequency and reliability of the service allowing for an extra 30,000 passenger journeys every day.

The Darlington station upgrade scheme was also backed by the Chancellor in his speech to Parliament. The scheme would allow for more frequent local rail, better freight connections from Teesport, and prepare the station for high-speed services and Northern Powerhouse Rail.

Other large announcements included that the Treasury’s Green Book will be reviewed in order to ensure ‘that government investment spreads opportunity across the UK’. The Green Book is used by Government as part of the appraisal for major investment projects, changes to the Green Book will form an important part of the Government’s ‘levelling up’ agenda. The Chamber have been campaigning for changes to the Green Book to help encourage investment in the North East.

The Budget also announced a fund of £4.2 billion for the transport networks of eight city regions across England from 2022-23. Funding will be delivered through five-year transport settlements based on plans put forward by Mayors. This created opportunities for both the Tees Valley and North of Tyne Mayors to put forward plans for improving the North East’s transport networks.

There were also £27 billion for national roads as part of the RIS2 strategy, the Budget mentions the plans to dual the A66 as part of this strategy which would help to improve east-west connections for the North East.

In our Budget letter to the Chancellor we asked for reforms to business rates to support our town centres. It was positive to see the Chancellor announce a fundamental review into business rates due to report back in the autumn along with measures to support smaller retail businesses with the decision to abolish business rates for shops, cinemas and restaurants with a rateable value of less than £51,000, for the next financial year.

In terms of housing, £12.2 billion was announced for the Affordable Homes Programme along with £400 million for Mayoral Combined Authorities and local areas to establish housing on brownfield land across the country. Changes to the planning system were also highlighted with a white paper due in spring.

Other investment announcements included an increase in Research and Development funding to £22 billion a year, along with an acknowledgement that much of this funding has previously been focussed in London and the South East. Hopefully a pledge to ‘support world-leading research in all regions and nations of the UK’ will mean an increase in funding for the North East.

Some new environmental policies were announced with £800 million invested in Carbon Capture technology. This is good news for the Net Zero Teesside project, the world’s first industrial scale carbon capture and storage facility on the South Tees Development Corporation site. The project is set to drive almost half a billion pounds into the regional economy.

Investment in electric vehicles were also announced with £129.5 million to extend the Plug-in Grants for electric vans, taxis and motorcycles to 2022-23 and for zero emission cars to be exempt form the Vehicle Excise Duty.

The Government also announced that they would be raising the rate on gas to £0.00568/kWh in 2022-23 and to £0.00672/kWh in 2023-24 whilst freezing the rates on electricity as gas is less environmentally friendly form of energy. This gas climate change levy will be used to fund heating from low carbon sources, such as biomethane.

Another key announcement was the planned plastic packaging tax due to be enforced in April 2022 to incentivise the use of recycled plastic. The Government would charge £200 per tonne of plastic packaging that contained less than 30% recycled plastic- this would apply to businesses producing packaging and those importing any packaging.There will be a minimum threshold of 10 tonnes of plastic packaging to ensure the smallest businesses are not disproportionately impacted

More announcements around the environment, low carbon energy and sustainable transport are expected to be included in the Government’s National Infrastructure Strategy due to be published in Spring. The recent Court of Appeal ruing that the decision to give Heathrow Expansion the go ahead was not consistent with the Paris Climate Change agreement has meant that the Government have delayed publishing their infrastructure strategy and are now ensuring that their future policies are in line with the climate change agreement.