Sunday, 11 September 2016

Brexit and HS2

Updated 9th September.

From the Daily Telegraph, 8th September:

Chancellor of the Exchequer appears to rule out spending on big infrastructure projects.

The Chancellor of the Exchequer, Philip Hammond, will deliver his first Autumn Statement, the budget, on Wednesday 23rd November. Mr Hammond, speaking before the House of Lords Economic Affairs Committee last week, said that:

Britain's roads and railways are in line for a multi-billion pound boost to help cushion the impact of the Brexit vote. But any fiscal stimulus delivered by the Government would provide a “quick” boost to the economy, be “well designed” and “limited in duration”.

Mr Hammond appeared to rule out spending on big intrastructure projects.

Mr Hammond said "modest" projects would be more beneficial to the economy, citing the UK’s fiscal position and the lengthy time needed to start large projects.

Complete article:
http://www.telegraph.co.uk/business/2016/09/08/chancellor-signals-boost-for-roads-and-railways-but-warns-on-unh/

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These are some extracts from reports that appeared in some of the media on Friday (22nd July):

Daily Mail:


Financial Times:

"Billions of pounds’ worth of public projects will have to be scrapped because of a tidal wave of pressures from an impending Brexit.

The comptroller and auditor general of the National Audit Office, Sir Amyas Morse, said the government would have to treat leaving the EU as an emergency and that government departments would be forced to decide which plans could be cancelled or suspended. Major projects such as the Hinkley Point C nuclear plant, a third runway at Heathrow and the ambitious HS2 rail project would have to be reassessed as the government decides which can be done without. 

Ministerial ambition also made it hard for the government to think rationally about which projects were “must have” and which were “would like” and expendable, he said.

We need to ask ourselves, can the public sector deliver Hinkley Point C, a third runway, HS2, a northern powerhouse, nuclear decommissioning, Trident renewal and restoration and renewal of the Palace of Westminster all at the same time? All these projects are drawing on the same pool of skills and many of these contain optimism bias that they will be able to meet their skill needs at an appropriate cost, he said, while declining to speculate on which should be scrapped."

Full reports:

http://www.publicsectorexecutive.com/Public-Sector-News/civil-service-overcommitted-to-projects-which-suffer-from-optimism-bias--nao-head

http://www.theguardian.com/politics/2016/jul/21/brexit-could-force-multibillion-pound-projects-to-be-scrapped-says-nao-chief

http://www.dailymail.co.uk/news/article-3703121/Brexit-tidal-wave-means-cuts-needed-major-projects-new-nuclear-power-rebuilding-Parliament-HS2-railway-spending-watchdog-warns.html