The 2024 Autumn Budget, delivered by Chancellor Rachel Reeves, has brought significant implications for the UK rail industry. A key focus of the budget was on infrastructure investment, with particular emphasis on rail projects.
This is the first budget under the new Labour Government after the election five months ago. Rail has been highlighted as a key area for Transport Secretary Louise Haigh, which has culminated in the introduction of the Rail Reform Bill and Public Ownership Bill – aiming to take control of UK passenger rail services where TOCs have been underperforming.
Despite expected cuts in funding in certain areas, the Chancellor has committed to complete the funding of modernisation upgrades and electrification projects nationwide – including progression on the Transpennine Route Upgrade and East West Rail.
One of the major talking points was the progression of the HS2 tunnelling project between Old Oak Common and Euston, unlocking significant capacity opportunities and with the aim of stimulating private investment in the area.
Commenting on the budget, Railway Industry Association (RIA) Chief Executive Darren Caplan, said: “Ahead of the Budget the Railway Industry Association (RIA) wrote to Chancellor Rachel Reeves urging her to be ambitious in leveraging the full economic potential of UK rail, including supporting private investment.
“Rail suppliers will therefore welcome today’s decision to progress HS2 tunnelling between Old Oak Common and Euston, which means that there will now be a sufficient basis for future north-south capacity, something RIA specifically asked for in our Budget submission.”
Caplan added: “RIA also applauds the Chancellor’s commitment to continue delivering the TransPennine Route Upgrade (TRU), the delivery of East West Rail, and the other announcements to strengthen both national and regional rail connections.
“Additionally, we welcome that the Budget document specifically acknowledges the value rail manufacturing brings in the UK and hope that this will be reflected in the forthcoming Industrial Strategy.
“Looking ahead to the comprehensive spending review and ten-year infrastructure strategy due next year, we hope the Government will consolidate on today’s commitments by setting out a long-term investment pipeline for both infrastructure and rolling stock, giving businesses the confidence to continue to invest.
“RIA continues to seek clarity from the Government on both rail enhancements and on leveraging private investment into public infrastructure projects. Rail is a significant enabler of UK economic growth – today is hopefully a first step towards a fresh start for rail, enabling the railway industry to help boost the UK’s economy and it’s productivity in the years ahead.”
You can view RIA’s letter to Chancellor Rachel Reeves here.
Richard Risdon, managing director for UK and Europe at Mott MacDonald, has responded to the announcements: “Today’s confirmation on the changing of the fiscal rules, which could free up significant funding for major projects, shows that the government has recognised that growth is not possible without investment in infrastructure. This has the potential to create a longer-term approach to investment that is comparable with other nations in Europe. The benefits extend to more than creating a firmer pipeline of work for us as an industry – the new assets it funds will deliver a better outcome for society too.
“The plans set out by Sir Keir Starmer for a mission led government are key to achieving net zero but can only be delivered in the timescales planned through consistent investment in infrastructure. The new funding detailed today is critical for delivering those environmental improvements and creating climate resilience for the UK, while also improving public services and connectivity with better access to jobs and services.
“Hearing the government’s commitment to progress HS2 from Birmingham to Euston demonstrates their understanding of the role of connectivity in delivering economic growth and opportunities.”
Want to add your reaction to this briefing? Email dan.clark@railindustryconnect.co.uk
