Chancellor George Osborne played it safe in today’s budget with transport and infrastructure spending focussed on protecting the burgeoning recovery and the resilience of UK networks, including a much-needed £200m giveaway to councils for pothole repairs.
Mr Osborne announced the fund, which councils will welcome despite the estimated £10.5bn backlog in pothole repairs, but added that it will be subject to a competitive bidding process that is likely to frustrate local highways departments.
He also announced £140m of new funding for maintenance and repairs to existing flood defences. This comes after the announcement earlier this month of another £140m funding boost to help roads damaged by this winter’s extreme weather.
The chancellor used his speech in the commons today to support several major housing projects requiring local transport infrastructure, including homes at the Barking Riverside development, London’s largest regeneration site. This project could see an extension to the Gospel Oak to Barking train line called for by London mayor Boris Johnson costing between £100m and £150m.
There will also be a major regeneration project at Brent Cross and £200m for the previously announced garden city at Ebbsfleet.
As expected, Mr Osborne also announced the scheduled fuel duty rise due in September would be cancelled. Petrol pump tax last went up in January 2011 by 0.76p per litre, but was cut by 1p in March 2011. Since then rises have since been cancelled or postponed.
Mr Osborne also announced new fiscal powers for Wales to help boost infrastructure in the devolved nation.
‘Tomorrow we introduce legislation to give new tax and borrowing powers to the Welsh Government to fund their infrastructure needs, and they can start now on work to improve the M4 in South Wales,’ he said.
He went on to promise ‘start up support for new routes from regional airports’ alongside changes in air passenger duty.
‘From next year, all long haul flights will carry the same, lower band B tax rate that you now pay to fly to the United States,’ he said.
He also approved £270m guarantee for the proposed Mersey Gateway Bridge project -a major scheme to build a new six-lane toll bridge over the Mersey between the towns of Runcorn and Widnes.
Mr Osborne told the House that ‘modern infrastructure is part of a successful economy’ and claimed to be the ‘first government to have committed to long term and rising capital budgets’.
Scores of billions of capital spending announced at last summer’s Spending Review is scheduled for post 2015, and the chancellor announced that this autumn he would ‘set out the detailed plans for the projects that will be supported for the rest of the decade’.
Following the recommendations of the report released this week by Sir David Higgins chair of HS2 Ltd, Mr Osborne said: ‘We’ve been reminded again this week of the benefits high speed rail will bring to the north of our country and I’m determined it goes further north faster.’
The announcement paves the way for HS2 links to the north to be delivered in 2027-29 instead of 2033 as originally suggested.
Mr Osborne also announced he would ‘extend the 2% increase in company car tax in 2017-18 and 2018-19 while increasing the discount for ultra low emission vehicles – and reducing the rate of fuel duty on methanol’.
