Were it not for coronavirus, the 2020 budget might have been known as the ‘infrastructure budget’. Indeed, the word ‘infrastructure’ is mentioned no fewer than 74 times throughout the budget report.
Newly appointed chancellor Rishi Sunak has promised to “get Britain building”, aiming to fulfil the Conservative’s election pledge to address regional inequality. Decrying the UK’s historic under-investment in its infrastructure, the chancellor has pledged £640bn of gross capital investment in roads, railways, communications, schools, hospitals and power networks by 2025. This will be music to the ears of construction industry that has been looking for an injection of momentum after a sluggish 2019. Shares in Kier (KIE) and Balfour Beatty (BBY) registered double-digit increases in their share prices on budget day.
There are no flagship projects akin to HS2 to speak of. More than rail, the focus was on the future of our roads. The second road investment strategy will see more than £27bn spent on England’s strategic road network over the next five years and motorists can look forward to 50m potholes being filled by the end of this parliament. To facilitate the transition towards electric vehicles, the government has pledged to invest in charging infrastructure such that drivers are never more than 30 miles away from a rapid charging station. As we move closer to the 2035 ban on new combustion engine vehicles, there will be £532m of incentives for ultra-low emissions vehicles and lower taxes on zero emission vehicles.
While this budget threw out a lot of headline numbers it was light on detail. This will come when the government publishes its national infrastructure strategy later in the spring. In the meantime, it has provided a handy lift to sentiment for a downtrodden sector.
