UK: Rail in line for a share of autumn spending bonanza

[John Ashworth]

Rail in line for a share of autumn spending bonanza

Posted: 28th November 2011 | railnews.co.uk

MORE electrification and a London Underground extension are reported to be among the capital projects which the Chancellor is set to confirm in tomorrow's autumn spending statement.

George Osborne is expected to unveil a number of projects, including the electrification of the North TransPennine line between Manchester and Leeds.

A proposed extension of the London Underground Northern Line to Battersea is also likely to get the go-ahead, while the development of the Tyne & Wear Metro is expected to be 'accelerated'.

The Metro has already received a £350 million injection from the Department for Transport to modernise the 31-year old system, although this was only awarded on condition that Tyne & Wear PTE (Nexus) created a third-party operating concession, which started in April last year.

Meanwhile, there has been more early reaction to the Chancellor's expected reduction of January's regulated rail fare rises from RPI+3 per cent to RPI+1 per cent, which is believed to have followed a submission to the Treasury from the new transport secretary, Justine Greening.

The Campaign for Better Transport said the lower increase was 'only a start' of the process of reforming rail fares.

Alexandra Woodsworth of CBT said: "This is very welcome news. We know from our Fair Fares Now campaign just how unpopular these rises were among passengers, particularly at a time when household budgets are so under pressure.

"But this is only a start – we already have some of the highest commuter fares in Europe and the fares system is confusing and unfair. The Government's forthcoming review of ticketing must make rail fares simpler and fairer as well as cheaper."

The TSSA union warned that fares were still set to 'rocket' by more than 20 per cent over the next three years.

The union's recently-appointed general secretary Manual Cortes said: "Instead of mugging passengers and taking increases of 8.2 per cent, Mr Osborne prefers to pick their pockets and take an averge 6.2 per cent in January.

"He thinks by playing Fagin instead of Bill Sykes, he can win some plaudits from hard pressed passengers. He's wrong: these increases will still mean real hardship for millions of families.

"And in the South East, the average means some eye watering fare increases of more than 10 per cent, adding an extra £1,000 on long distance season tickets over the next three years."

Mr Cortes called on the government to go further by also scrapping the RPI + 3 per cent increases which are currently due to follow in 2013 and 2014, and to adopt the LibDem policy of RPI – 1 per cent instead.

£30bn infrastructure spending 'to include M25 and Tube'

28 November 2011
London loves Business

Improvements to the M25 and London Underground’s Northern line are thought to be among the projects included in an ambitious £30bn investment programme in Britain’s infrastructure, it has emerged.

Chancellor George Osborne’s plan to breathe new life into the struggling economy will outline a decade-long schedule of works which will use £20bn of private investment from pension funds to pay for the development of railways, roads and the high-speed broadband network.

Full details of the plans are expected to be unveiled in Osborne’s autumn statement on the economy in the House of Commons on Tuesday, but a memorandum of understanding has already been signed with pension funds. It includes the creation of the new “investment platform”, which will be owned by the pension funds, to funnel money into the infrastructure programme.

Some 40 investment projects are going to be highlighted for funding, it has been reported. The managed motorway scheme on the M25 between junctions 23 and 27, which will see the hard shoulder used to increase capacity, is one of the projects which will receive money. The government is also expected to back the extension of the Northern line to Battersea and will consider letting the local authority borrow against the Community Infrastructure Levy to support it.

Osborne told BBC1’s The Andrew Marr Show: “British pension funds have not been investing the savings of British people in British infrastructure. Now we are hopefully going to change that. We have signed an agreement with the big pension funds that will see them investing British savings in British infrastructure, building an economy based now on savings and investment rather than on debt.”

Public funding of the spending programme will be split in two. The first £5bn injection will account for the current spending review period to 2014-15. The money will come from savings in other areas of the budget, it is understood, and the Chancellor does not believe it will add to the government’s existing public spending envelope. The other £5bn will be allocated to long-term investment programmes for the spending review beginning in 2015-16.

Osborne insists he is sticking to the government’s “plan A” strategy for tackling Britain’s debt. However, former chancellor Alistair Darling said: “Plan A is slowly but surely being left behind. Whatever you want to call the new plan, it’s different to the one he set out in June 2010 - that particular Rubicon has been crossed.”