‘Long-term decisions for a brighter future’ or a ‘decade of national renewal’? Both the Conservatives and Labour are positioning themselves as the parties of change. But there is one nettle which must be grasped if either party has any hope of changing the country for the better: infrastructure.

The UK’s infrastructure is in decline. According to a survey of UK manufacturers from Make UK, 68 per cent of companies said the state of the UK’s national infrastructure had worsened in the last 10 years. This should come as no surprise because, over the past two decades, the UK is a whopping £500bn behind the OECD’s average in public investment. 

Timely, then, is the National Infrastructure Commission’s Second Infrastructure Assessment, which sets the agenda for the next 30 years. The Commission, which was set up by George Osborne and reports every five years, has called for:

  • Policy stability: setting out a clear plan and sticking to it, to lend certainty to investors and help build up supply chains
  • Pro-investment regulation: clear guidance from government on priorities, investment ahead of need and business models to support emerging technologies
  • Speeding up the planning system for major projects, particularly energy transmission schemes

These recommendations seem entirely sensible. Why, then, is the UK’s infrastructure at such an impasse? The reason, ultimately, is politics. 

Slashing investment, for example, was a calculated political decision. The Conservative’s austerity agenda cut almost half a trillion from public spending and, after Boris Johnson’s government tried to set the UK on a different path in 2019, the short-lived Truss government reversed 80 per cent of promised investment. 

As we know, there has also been political instability – four Prime Ministers in four years, each with different agendas, and with the need to react to the landscape of the time, evidenced by Rishi Sunak’s recent cancellation of HS2 after over a decade of cross-party support and a new strategy on net zero derived from a handful of votes in West London.

However, there are also longer-term, structural political issues at play. 

Capital investment is the first lever many shades of government have looked to when public finances have been in a poor state – it is a simple way to get spending off the books immediately. This is why, for instance, HS2 was set out in phases over decades and why, despite the colossal amounts already spent, it is now in a position to be cut. 

Furthermore, even when capital spending has been allocated to Departments, they have often failed to get it out the door due to reallocation to day-to-day spending, lack of skills, and a ‘no-risk’ approach to contractors. Another is the churn of national government policy directions, forcing developers and the Planning Inspectorate to interpellate the Government’s often outdated National Policy Statements, leaving projects in limbo or open to long legal challenges

There are genuine political solutions. For example, changing fiscal rules so that infrastructure investment is treated differently from day-to-day spending, changing the formulas in the much-criticised Green Book, or even taking the responsibility altogether away from the Treasury and giving it to Parliament and local authorities.

If the next government is to change Britain, they must make tough political decisions to re-write the UK’s planning system, its central government orthodoxy and make the argument for investment. 

It seems unlikely that the Conservatives will be that Party.

The Conservative Conference was characterised by their cancellation of HS2 which, after enjoying cross-party support for 13 years, does not scream policy stability. After this, why would investors believe that ‘Network North’ (which is neither a network, nor is much of it in the North) would be delivered over the next seven years? 

The plans have now been described as ‘illustrative’ after they promised schemes which already exist and others which are merely ideas and not yet firm proposals. Elsewhere, the push-back of net zero targets and criticism of a meat tax, seven bins and 15-minute cities suggests a Party which is shoring up its base rather than looking to the future.

Labour are saying that they will rebuild Britain, power up growth and decarbonise the economy. However, they are so terrified of losing their lead on the economy that they are not committing to significant spending beyond what can be gained by scrapping the non-dom tax status or increasing stamp duty on properties purchased from abroad. Their headline £28bn green investment pledge, which comes close to the figure that has been proposed by the Commission, has already been pushed back.

While policy stability and reform on critical infrastructure and planning are welcome, it is not enough in isolation without longer term, structural reform. Labour will need to deliver results, and quickly, if it is to deliver the change the country appears to be crying out for. 

To set the UK on a more prosperous path which attracts international investment and confidence, we need strong political will. We need to challenge the vested thinking, short-termism and the inertia that have held back progress for decades and led to the UK falling behind its competitors.

Despite the rhetoric, it’s hard to say who will be up to the challenge.