What will a new UK government mean for transport? A Cicero Group overview

What the new Government will mean for transport Cicero Group | July 2019

Introduction The Conservative leadership race has so far been dominated by Brexit, with each candidate’s different approaches to break the current impasse dominating early analysis of the race.

As well as Boris Johnson or Jeremy Hunt replacing Theresa May as Prime Minister, we are likely to see a major Government reshuffle with a significant number of cabinet ministers changing roles or leaving Government.

This reshuffle is likely to include a new Secretary of State for Transport.

What have been the key transport promises so far?

During the race we have seen several commitments on transport policy. The pledges made by the eventual winner, currently looking likely to be Boris Johnson, will clearly have a huge influence on the approach taken by the new Government. Ideas floated by other contenders also matter, with many of the defeated candidates expected to serve in the next Cabinet and the reason that their ideas were put forward is that they resonate with a significant group of Conservative MPs and members.

One of the key themes of the race has been the need to move on from the period of austerity and deliver significant new investment in infrastructure, with a focus on the North of England. At the launch of his campaign, Boris Johnson said: “I would like to be the Prime Minister who does for connectivity in the West Midlands and the northern Powerhouse what I did for London, with Crossrail and with massive tube upgrades.” cicero-group.com

Earlier this year Jeremy Hunt talked about the lessons that the UK could learn from Singapore in terms of investment in infrastructure. In recent weeks he has also talked about the need to deliver investment in HS2 and rail links in the North.

Hunt has given his backing to the Power up the North Campaign led by local papers in the North of England calling for more investment in the North and the devolution of more powers. The campaign was also backed by Sajid Javid, talked about as a potential future Chancellor, Michael Gove, Rory Stewart and Esther McVey. Javid has gone further, suggesting that the Government borrows up to £100 billion to deliver investment in infrastructure in the North of England.

Another major theme of the race has been a commitment to tackling climate change, with all the candidates highlighting their green credentials. These commitments and Theresa May’s decision to commit the UK to delivering net zero carbon emissions by 2050 will have a significant impact on the future of transport policy.

Boris Johnson, who has in the past expressed scepticism about the human impact on climate change, has more recently expressed more green sentiments claiming that the environment will be at the centre of his programme and highlighting how during his period as Mayor of London the economy grew while CO2 emissions fell.

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What transport policy issues will face the new Prime Minister?

Brexit is the issue which will dominate the first few months in office, with both Johnson and Hunt saying that they want to keep the option of a ‘no deal’ exit on the table. Johnson has said that he is planning to take the UK out of the EU by the 31st October, even if a deal hasn’t been agreed, meaning that the first weeks and months of the new Government are likely to be focused on no-deal preparation.

commuter lines, perhaps balanced with support for more competition on long distance services.

A no deal Brexit would have significant consequences for cross-border transport services. Road transport links, especially the Dover to Calais ferry link, are particularly important in the transportation of goods between the UK and the EU. A key priority for the new Transport Secretary would therefore have to be planning to ensure continued access to the EU for British hauliers and mitigating any impact of boarder delays on goods being transported to and from the continent.

Jeremy Hunt’s plan for a National Logistics Committee, to sit in the Department of Transport tasked with keeping goods flowing in and out of the UK in the event of no deal, and possibly including emergency powers to ensure ports and airports are running, underlines the potential impact on transport of a no deal Brexit.

Given the heightened chance of a general election if the future Prime Minister seeks to deliver a no deal Brexit against the will of Parliament, stepping up no deal preparation might be the only transport issues that the new Government has time to influence.

If the parliament does run its course or Johnson or Hunt do call and win a general election, there are a number of significant transport policy decisions which will need to be taken by the new Prime Minster, including the future of Heathrow expansion; addressing the future of HS2 and its rising costs; deciding on the future of rail investment in the North of England and the Northern Powerhouse Rail proposals, and delivering the reshaping of the transport system which will be required to progress the Government’s ambitious carbon reduction targets.

The Williams Review on the future of the rail system is likely to call for major reform of the current franchising system, which has been the basis of rail for the 25 years since privatisation. Any replacement of the current system will reopen the debate about whether privatisation has worked in the interests of passengers and will provide an opening for the Labour Party to push its case for nationalisation. The Government’s response to the Williams Review could heavily influence railway policy for years to come. Political pressure to try and neutralise public support for nationalisation could lead to more intervention over services on key cicero-group.com

Is Heathrow Expansion in balance?

One area of transport policy that Boris Johnson has taken a significant interest in is the future of airport expansion in the South East.

As Major of London, he proposed an alternative scheme of a new airport in the Thames estuary and when he reentered Parliament, representing Uxbridge and South Ruislip near the airport, he promised to “lie down in front of bulldozers” to stop the construction of the third runway going ahead at Heathrow.

So, if he were to become Prime Minister might Boris Johnson scupper the current plans? The answer seems to be uncertain. He has expressed “grave concerns” about the impact of expansion on noise and air pollution and said that he would take an interest in the legal challenges to the airport’s expansion. The most recent applications for judicial review have been rejected, but that decision is being appealed.

That said, things have moved on since Johnson made his promise to oppose Heathrow. Most importantly, the Parliamentary vote in favour of an extension was passed with a huge majority 415 votes to 119, with the then Foreign Secretary deciding to visit Afghanistan to avoid the vote.

The strong parliamentary mandate for the National Planning Statement in favour of expansion means that any reverse of the Government’s current plans can’t be a decision taken by the Prime Minister alone. Johnson has himself said at hustings meetings that Parliament has now voted in favour of expansion. His campaign has been clear that Boris’s alternative proposal when he was Cicero Group | 2

Mayor of a new airport in the Thames Estuary is off the table.

On the current timetable, the final decision on the Development Consent Order by the Secretary of State for Transport is due in 2021. If the current parliament does run to 2022 Johnson could be tempted to delay this final decision to after the general election, especially given the unpopularity of expansion in his constituency.

Any reversal of the Government’s current policy would be more difficult because the DUP, on whose support the Prime Minister currently depends on to deliver the Government a working majority, has been long term supporters of extra capacity at Heathrow.

This means that the most likely outcome would be for any Johnson-led Government to let the current planning process and public inquiry run its cause. If the airport can deliver expansion plans while keeping to its current air quality obligation and reducing the number of people affected by noise, Johnson might be able to argue that the concerns he had as Mayor of London have been addressed.

One possible consequence of a Johnson-led Government could be further delay to the project. On the current timetable, the final decision on the Development Consent Order by the Secretary of State for Transport is due in 2021. If the current parliament does run to 2022, Johnson could be tempted to delay this final decision to after the general election, especially given the unpopularity of expansion in his constituency.

Jeremy Hunt has been a consistent supporter of Heathrow expansion. As a Cabinet Minister he supported the Government’s policy, but he has recently highlighted his personal support for expansion, for example, tweeting about the advantages to the Scottish economy from Heathrow expansion on a recent campaign trip.

What future for HS2?

the opportunity of a new Prime Minister to cancel it.

Others representing seats in the Midlands and the North are strongly committed to the scheme’s future.

The project is unpopular amongst Conservative Party members, with a recent poll by YouGov suggesting that 57 per cent of party members wanting the scheme scrapped, with 32 percent wanting it to go ahead.

Boris Johnson has so far held an ambiguous position on HS2, mindful of its unpopularity amongst Conservative Party members. He has reportedly told hustings that he thinks that the costs are spiralling out of control and he would commission former HS2 chairman Douglas Oakervee to “have a look at the business case” and “think about whether and how we proceed”. He has spoken about the problems that the line creates for his constituency in Uxbridge and South Ruislip despite extensive tunnelling.

He has, however, said that he is ‘worried’ about the impact of cancelling a major infrastructure project of this scale. Oakervee has in the past said that it would be “catastrophic for the UK” if HS2 was cancelled. The vote due later this year on the notice to proceed, which would unlock £27bn of funding to start construction on the first phase, should be ‘D day’ for the scheme with a final decision on its future and no further delay, Johnson has said.

The combination of the political impact of cancelling the project and Johnson’s previous tendency as Mayor of London to support Grande Projects means that it is likely that the scheme would carry on.

It has been suggested that Johnson’s promised Oakervee review could lead to a rephasing of the delivery of the line. This could see the section from London to Birmingham going ahead as planned, but some of phase 2b covering the links to Manchester and Leeds being delivered earlier than planned as part of the promised investment in the Northern Powerhouse Rail enhancements. It has also been suggested that a new approach could lead to a rebranding of the project to the north of Birmingham.

In contrast, Jeremy Hunt has expressed enthusiastic support for HS2. He tweeted in May that post-Brexit politiicans must be ambitious for our country and “hungry” for our economy. ”What signal would it send if we cancelled our highest profile infrastructure project and weakened our commitment to share prosperity around the country?”, he argued.

There has also been debate about the future of HS2 during the leadership race. Some Conservative MPs are strongly opposed to the scheme and would like to use cicero-group.com

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Investment in the North of England The one area where there has been unanimity throughout the contest has been on the need for more transport investment in the North. Jeremy Hunt has shown his support for the Power up the North campaign run by local newspaper groups across the North of England, calling for the devolution of further powers, and more investment in road and rail links, including a commitment to making Transport for the North’s Northern Powerhouse Rail plans a national priority.

Boris Johnson didn’t pledge his support for the campaign, but has signalled his strong support for the delivery of Northern Powerhouse Rail, the proposed major investment in improved rail links across the North of England. He told a recent hustings event “I want to be the Prime Minister who does Northern Powerhouse Rail.”

As well as his commitment to supporting better rail connectivity in the North and the West Midlands made at the launch of his campaign, Johnson has called for more powers in areas such as transport to be devolved to the regions.

Johnson has spoken recently about the need for local government to ‘take back control’ suggesting the need for significant fiscal devolution to cities across the UK.

De carbonisation The environment has been a one of the key themes of the leadership race. Almost all the 11 original candidates made the environment one of their key pledges. For example, before he was ejected from the race, Sajid Javid spoke about the need to consider climate change as a big a threat to the UK as terrorism, while Michael Gove spoke about the urgency of taking action against climate change.

net zero emission by 2050, with Jeremy Hunt writing about how climate change should be one key area in which the UK can take global leadership post-Brexit.

Boris Johnson has a history of expressing support for the ideas of Piers Corbyn, the brother of Jeremy Corbyn who is a climate change sceptic. Johnson has more recently spoken about how his concern about climate change has increased since he has become older and he praised the motivations of the Extinction Rebellion protesters, while arguing that their methods where misguided and that the focus of protests should be on countries like China where emissions were increasing.

In 2016 we were told that the money [£100bn] would be invested in projects like Crossrail 2. This time around we were told that it would be invested in better transport links and housing in the North of England.

London An issue where focus has been lacking during the race has been transport investment in the capital. It is telling that the £100bn of borrowing to invest which was promoted by Sajid Javid during his run for the leadership was a repeat of a pledge he made during his joint run for the leadership with Stephen Crabb in 2016. In 2016 we were told that the money would be invested in projects like Crossrail 2. This time around we were told that it would be invested in better transport links and housing in the North of England.

The number of marginal seats in the North and the Midlands and the sense that the Brexit vote was as much about communities that felt left behind by economic change as opposition to the EU has made the future of the North one of the key topics of the race.

Crossrail 2, which until recently was regarded as a key political priority, was praised by Boris Johnson at one hustings meeting, but it has otherwise not been mentioned.

Both Boris Johnson and Jeremy Hunt have said that they agree with the new Government target to deliver cicero-group.com

The eventual opening of the delayed and over budget Elizabeth Line might refocus attention on the importance of infrastructure in the capital to growth in London and across the UK. The focus on investment in the North during the leadership race, highlights a growing antimetropolitan political sentiment and therefore the challenge that the capital faces in making its case for investment infrastructure in post-Brexit Britain.

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Conclusion Brexit is likely to dominate the first weeks and months of the new Government. As this paper points out, if the new Prime Minister either chooses an early election or is forced into one, Brexit planning might be the only area in which the new Prime Minster is able to make any impact on transport policy before a general election. If Johnson or Hunt can deliver a new Brexit deal and move the agenda on to domestic priorities, there is the possibility of a new era of transport investment and innovation.

The consensus on the need for more transport investment in the North, the likelihood of spending on HS2 and Heathrow’s expansion plans being approved (albeit grudging from a Prime Minister Johnson) and the delivery of the Government’s 2050 carbon target could lead to a new era of policy change and partnership between Government and industry to deliver investment.

Get in touch If you would like to speak to the Cicero team about this report, or how we can help support your organisation with your public affairs or communications needs please contact Andrew Smith: Andrew Smith Director - London Andrew.Smith@cicero-group.com +44 (0)20 3397 0106

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