TAPAS.network | 3 October 2022 | Editorial Opinion | Peter Stonham

It’s not all about Economic Growth now, stupid.

Peter Stonham

ANYONE SEEKING to discover what the new Truss Government’s transport policy might be should find the Chancellor’s ‘Growth Plan 2022’ an instructive read. This document, tabled by Kwasi Kwarteng as he delivered his mini budget just over a week ago, unashamedly (at least for now) makes economic growth the Government’s central mission, setting a target of reaching a 2.5% trend rate. It claims that “Sustainable growth” will lead to higher wages, greater opportunities and “provide sustainable funding for public services,” although the reaction of the financial markets clearly questioned the affordability and budgetary prudence of the measures Kwarteng announced in a bid to achieve his aims. 

The overriding quest for this significantly higher growth rate compared with recent British experience is further embodied in the Growth Plan statement that “As part of a disciplined approach to spending, departments will focus on deploying their existing budgets on the Government’s top priorities.” They are instructed to continue to find ways to work more efficiently, and to drive economic growth through their spending. The Chancellor said he would be writing to each department asking them to set out how they will prioritise growth within their plans.

This clearly sets a firm context for transport priorities, and indeed a detailed list appears as an appendix to the Growth Plan setting out well over a hundred transport infrastructure projects amongst an overall total of 138 investment schemes, including in energy and other fields, “which will be accelerated as fast as possible, aiming to get the vast majority starting construction by the end of 2023.” With this on her mind, it is now unsurprising why Liz Truss twice name-checked building roads faster when she made her first speech on the steps of Ten Downing Street as Prime Minister.

The new imperative to get things built is not a small ask of the Department for Transport, Highways England, Network Rail and the local and regional transport authorities – leaving aside for the moment whether justified or not. Moreover, it also must mean cutting through ‘due process’, or as the Government might have it ‘red tape’, so the projects “may benefit from acceleration through planning reform, regulatory reform, improved processes or other options to speed up their development and construction, including through development consent processes,” as the Growth Plan spells it out.

Indeed it is already clear that the DfT is having to come up with suitable new proposals to meet this directive.

Where local authorities or agencies are the delivery leads, the Plan says it is the Government’s intent to support them where possible in acceleration. The Government also says it “will review the spending control framework, including the business case process, to accelerate decision making across government.”

The Growth Plan’s list of ‘good to go’ projects, it should be noted, does not guarantee funding, planning consent or approval for other regulatory or permitting processes – and is non-exhaustive of all projects which may benefit from acceleration, the Growth Plan says.

So where does this leave us with all the other transport initiatives that were already happening, or due to begin, that might not so easily tick the “Good for the Economy” box ?

For example, does the Government still think that it is important to reboot a new generation of comprehensive Local Transport Plans, promote active travel or Bus Back Better? And what does this new Government believe will achieve Levelling Up, with which the old one did not see much connection to road building?

Beyond these immediate obvious practical policy considerations, it is surely also right to consider whether the overriding pursuit of economic growth through infrastructure investment is either appropriate or is compatible with the previously tabled Decarbonisation Plan, and the trajectory to Net Zero?

The Government led by Liz Truss is clearly betting the house on its bid to achieve economic growth that both supports individual incomes and the provision of public services. And to a significant extent the Opposition led by Kier Starmer are doing something similar too. Of course, there has been strong Labour criticism of over-generous tax cuts and the removal of restrictions on bankers’ bonuses, amongst other fiscal measures announced by the Chancellor. But the Labour leader has pledged himself and his party to be in pursuit of economic growth as their priority too, whilst his transport spokeswoman steered well clear of anything beyond the need to sort out the railways and the buses in her speech to the party’s conference last week. Of Labour’s roads policy, there was no hint.

For local transport professionals there now seem to be two immediate and contradictory pathways ahead. Do they celebrate the acceleration of implementation of those transport schemes that the Government wants to prioritise in their fields of activity and geography, and get them rapidly built as it wants. Or hope for a return to more balanced and cohesive transport planning that embraces projects not just bringing economic growth but helping with accessibility, healthier lifestyles, social inclusion and saving the planet?

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Does the Government still think that it is important to reboot a new generation of comprehensive Local Transport Plans, promote active travel or Bus Back Better? And what does this new Government believe will achieve Levelling Up, with which the old one did not see much connection to road building?

“It’s the economy, stupid” was a phrase coined by advisors to candidate Bill Clinton in his successful run for the White House in 1992.

The USA was experiencing an economic recession at the time, and the incumbent president, George HW Bush, was perceived as out of touch with the needs of ordinary Americans. Clinton’s campaign sought to hammer on the importance of the economy at every chance they got – he even went so far as to hang a sign in campaign headquarters reading, in part, “the economy, stupid.”

The Truss/Kwarteng mantra is a version of that, but times have changed since 1992 – and since the Thatcher era before then to which some see a throwback. There is mounting evidence that the electorate now want a more balanced version of the new British Government’s prescription for achieving growth through tax cuts and incentivising businesses and high earners – let alone the de- regulation and easing of planning and environmental controls that are now in the air. And more focus on what should be the distributional benefits of economic growth rather than a single overall GDP growth ‘magic number’.

Perhaps the now embattled Government might eventually find a way to square the circle itself. And seek a balance between a rush for short term growth, and the wider longer-term shape of the economy. And in not simply prioritising material wealth over the wider issues of well-being, social cohesion and securing a sustainable future for the Earth’s ecosystem.

How quickly things can change. This time last year we were preparing for our Local Transport Summit in a situation where there seemed an opportunity for transformative change in the transport landscape. Since then, we have had a European war, an energy supply and cost crisis, and change of national leadership. This year’s Summit, which we have just announced, will address a very different agenda and context. Literally so, as it will take place not in England as has been the case so far, but in Wales. Our visit to this distinctively developing and administered UK nation now pursuing a range of innovative and forward-looking transport policies, should offer a great opportunity to look at different ways of doing things. Wales is much more focused on well-being and social equity issues than what seem to be the priorities in the new Westminster Government’s agenda. 

Peter Stonham is the Editorial Director of TAPAS Network

This article was first published in LTT magazine, LTT854, 3 October 2022.

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