Today is the most upbeat day for investment in UK infrastructure in a very long time—long overdue, after many in the business community have championed these investments for nearly two decades.
This, I hope, signals a fresh start and a powerful example of business, local and national government working together, committed to leaving a legacy we can all be proud of.
Having worked in UK’s engineering sector for over 30 years, I feel incredibly positive and want to join many in business and government in celebrating today’s announcements: the UK’s most successful energy auction (AR7) ever—indeed in Europe—and the commitment to build Northern Powerhouse Rail (NPR) and reinstate a new rail route from Birmingham to Manchester.
Two pieces on Energy here and Rail here
As Heidi Alexander said in the Rail article; ‘’For too long, the North has been held back by underinvestment and years of dither and delay,”
And as Ed Miliband noted in the Energy article; ‘’This biggest single procurement of offshore will bring forward investment of £22bn into the sector and create 7,000 new jobs’’
I could add many more big numbers—like the £40bn NPR will add to the northern economy—but the tangible benefits are simpler to explain.
As Henri Murison said in the above Rail article, ‘’this is going to create a single labour market more like that of London and the Southeast so a young person in Bradford could aspire to work in Sheffield or Manchester, or a business there attract talent from further afield than they can today.”
This is of course something that happens in most European economic areas, like the Rhein-Ruhr in Germany, and in today’s world should be seen as normal.
On energy, this is fundamentally about security—building locally operated renewable power and reducing dependence on volatile global Oil and Gas markets. This is something any responsible Government and Business should be getting behind to protect its citizens. With these investments the possibility of price shocks happening like we experienced during the start of the Ukraine crisis should be a thing of the past.
And a key point that is all too often missed is the opportunity for business to invest and create well paid exciting jobs around the country – especially in some of our most de-industrialised heartlands, that need exactly this type of opportunity. Not everyone gets excited about engineering supply chain opportunities but just think about the opportunity for construction & building material suppliers, the opportunities to build new housing in places that will be better connected, the opportunity for steel manufacturing, for designing, engineering and building more of this infrastructure like floating offshore wind in the UK. The list goes on and the opportunity for excellent green economic growth and 100,000’s of brilliant jobs is exciting and very real. I’m delighted that today’s announcement will boost industry confidence and allow Great British Energy to get behind this mission.
Much of the UK media coverage today doesn’t reflect this optimism. Indeed, it was hard for me to find the two more positive or at least balanced media pieces that I have referenced here. Most of our media is instead pouring cold water on it. I’m not going to spend much time on those, as to me their arguments do not stack up in the real world of business and economics.
On the argument regarding increasing energy costs – it simply isn’t true.
While the clearing prices for fixed offshore wind were above the current average price of electricity in the wholesale market at £81/MWh (2024 prices), they are ~40% lower than the estimated price of building and operating a new gas-fired power station (£147/MWh as a comparable price). This means that increased offshore wind at the AR7 – auction clearing price (£91/MWh) is expected to contribute to lower bills. This is a huge win for UK businesses and consumers. More arguments to support this are in this piece I wrote recently.
And on Rail, whilst we should not be proud of the spiralling costs of HS2, the Elizabeth line in London is now a huge success and shows we can build major infrastructure. I’m certain NPR will deliver the same across the North. So, If the argument is to build better, I agree. If the argument is not to build at all, I believe that we will prove them wrong. More of the positive arguments for investing in transport infrastructure in this Transport review that had the support from many in the private sector and was commissioned by the then incoming Labour Government. I’m also very pleased that some of the core recommendations in the review have been included in the announcements today.
And finally, here is a very crucial point in all of this.
A positive partnership between business and government is essential. Under the last administration this had broken down, especially when it came to the build of new critical UK infrastructure. However, business remained optimistic, long‑term in its thinking, and committed throughout years of uncertainty, and wasted investments. It fought for a better prosperity, partnership and a country that works and is future ready.
Some will say this is simply business lining its own pockets and putting profits first. My experience tells a different story. Having worked with energy companies, engineering designers, rail and rolling stock firms, construction businesses and their wider supply chains, I know that—yes—businesses must make a profit to survive. But they are also deeply committed to improving Britain’s infrastructure and to leaving a legacy they can be proud of. Indeed, only a profitable company can be a responsible one—and today’s announcements and good collaboration with local and national Government show that business is a tremendous force for good, creating opportunities right across Britain.