Armitt Review

How do we deliver vital infrastructure investment into an ageing energy system? The answer throughout this Parliament has been – seek it from overseas. This means the Treasury is not laden with debt and risk is retained by the private sector.

But investors need to consider how safe their investment is, does political uncertainty make a destination uninvestable, are the skills in place to deliver the investment and how certain are you that Government policies will not be changed?

Politicians have been faced with this dilemma on numerous occasions in a post-privatisation era. The Chinese own Weetabix, the Qatari’s own Canary Wharf and the Russians own The Independent Newspaper. Investors have been drawn to the UK for decades, but in a climate of ever increasing risk – financially and politically – it is important to think about how you continue to bring investment forward.

Sir John Armitt CBE has worked on Sizewell B, the Channel Tunnel rail link and most recently as the Chairman of the Olympic Delivery Authority. It is with this background in mind that the Labour Party asked Sir John to consider how we deliver the infrastructure the UK is in need of, whether that is renewing Victoria innovation in the London sewers, or delivering a new generation of high speed rail.

Sir John found that ‘The UK needs affordable clean energy, modern communication systems, flood defences that can cope with the effects of climate change and a transport system that can cope with ever growing demand and which links business with markets and people with families, leisure and job opportunities.

To deliver on these ambitions and attract the money necessary to make them a reality, he has suggested a National Infrastructure Commission be formed. The Commission would produce a 25-30 year infrastructure strategy, underpinned by evidence-based assessment of the needs across the UK.

Sir John diagnoses the fundamental problem as a ‘…lack of clarity around the UK’s long term needs [making] it difficult to sustain cross-party political consensus on controversial infrastructure issues’. Such changes in direction are of course the opposite of what the market are looking for when selecting where to make their investment.

Ed Balls maintains that an infrastructure commission with foresight and far reaching powers could send the necessary market signals to drive investment.

It was hoped that Sir John’s review would be met with cross-party consensus. Given Matthew Hancock’s response at a recent Policy Exchange event – we can say with some certainty it has not!

Hancock asserts that infrastructure projects must be Government led. Their strength comes from them not being dictated by an independent body, but driven by an accountable Minister, working in collaboration with Whitehall.

This line of argument has been built on by Stephen Hammond MP whose concern is that the Infrastructure Commission gives us an unelected, unaccountable politicised body.

It is clear that there is no cross-party consensus (ironically what the projects themselves are seeking out) and the Armitt proposals will not see the light of day if the Conservative party are the largest party after the election.

But should Mr Miliband be in Number 10 then we can expect the process to select an infrastructure board to begin. They will be faced with the challenge of taking a 30-50 year view of the market – not an enviable task – and certainly not one that is in a position to pick the winners given many will not have been invented yet.

Yet you could argue that the Coalition Government have in fact introduced their own infrastructure commission for one sector – aviation. The Davies Commission is an evidence based assessment of the options on airport expansion. Sir Howard Davies has already ruled out ‘Boris Island’ and will publish his full report following the election in May.

No decision will be taken on the long term future of infrastructure investment until the next Government is formed. What is not in doubt is that whoever forms the next Government will be keen to maintain the pipeline of investment and investors by delivering certainty as best they can.

Alastair Evans
Public Affairs Manager

Nuclear industry showcases UK talent

Along with almost 400 other delegates I was at the Russell Hotel this week attending the NIA/UKTI Nuclear Industry Showcase. Amazingly this is now the fourth of these events, which as Baroness Verma pointed out has firmly established itself as the premier event of its kind.

For those of you who’ve been on another planet, the aim of the showcase is twofold; first to highlight the huge expertise and capability that exists within the UK nuclear supply chain to assist countries in developing nuclear programmes; and secondly to enable UK companies to learn about the specific situation in overseas countries, and importantly to see where the UK nuclear industry might help.

Going on my own feedback (and that of one or two others) the showcase succeeded in both counts. One delegate even said this was the best showcase he’d attended.

With 100 international delegates coming from countries as diverse as Japan and Poland, there was a wide spread of interest both geographically and in terms of nuclear development, with information being sought on the initial requirements for launching a new build programme – planning, licensing, financing, programme management, etc. – all the way through to decommissioning and waste disposal.

Over the course of the three days, covering new nuclear build, decommissioning, and innovation and manufacturing sequentially, these areas were brilliantly addressed by our industry speakers. They were all the more effective because they were speaking on the basis of their own experience.

This was possible because the UK really is now at the forefront of developments across the nuclear lifecycle, ranging from exciting plans for a programme of new nuclear build – with three different technologies being developed – all the way through to the clean-up of our older stations and the historic legacy.

Our long tradition and experience in nuclear technology built over 60 years gives us a great deal to offer to international clients and partners, at whatever stage of development they are at in their own nuclear programmes. And as a result we now have a very impressive nuclear offer – if you don’t believe me just take a look at the beautifully written UKTI/NIA brochure UK Nuclear Powering the Future.

Of course one of the benefits of effective presentations is that they provide an opportunity for delegates to explore together the scope for cooperation, to share and exchange experience and to create fruitful and lasting business opportunities. It is too early at this stage to say whether the last of these has happened. However it was noticeable that when the bell rang to indicate the end of the coffee break and the start of the next session a large number of people remained in the room in animated discussion. I would like to think this was a sign of new relationships being forged or existing relationships being strengthened.

Peter Haslam, Public Policy Adviser, NIAPeter Haslam
Head of Policy