EEF is campaigning for a stronger UK manufacturing base and as part of that reliable and resilient infrastructure matters.
70% of freight goes via roads (See: 9 things you may not have known about freight transport in the UK), 40% of non-EU trade by value goes via air (See: How air freight fits into the aviation capacity debate - with charts) and digital connectivity plays an important role in day to day business operations.
Our previous surveys have shown:
- Quality of infrastructure is the fourth most important factor for manufacturers when deciding where to invest (See: Invest for Growth)
- One in five of manufacturers say an improvement in transport infrastructure would encourage them to expand production in the UK (See: Backing Britain - a manufacturing base for the future)
- One in five export-intensive manufacturers regard the state of the UK’s transport infrastructure as a drawback to operating in the UK (See: Transport for Growth)
Infrastructure is therefore a key foundation of securing long-term better balanced growth across the UK. Growth driven by increased investment, exports and greater productivity.
The need to maintain infrastructure once constructed, including plans for replacement and renewal, means that decisions have to be taken with one eye on long term costs. (See: The Infrastructure 'Generation Game': a warning)
Additionally, with the need to restore the public finances it is clear that short term decisions on infrastructure spending will need to take into account value for money.
Over the last few years manufacturers have been making the case for a better approach to investing in the nation's infrastructure. Capital budgets should not be sacrificed so easily and we must move away from repairing the under-investments of the past to planning for the future.
In our manifesto (See: EEF’s 2015 Manifesto: Securing a manufacturing renaissance) we set out five policy principles the next government should enact, in pursuit of better balanced growth:
A long-term approach to identifying the UK's infrastructure needs
While we have seen improvements in the delivery of infrastructure projects, a UK Infrastructure Authority will help to ensure we are building for the opportunities of tomorrow, helping to end the stop start nature of infrastructure investment and strengthening UK supply chains. (See: A UK Infrastructure Authority - streamlining the infrastructure debate)
Targeted investment and decision making in five key areas
Manufacturers are clear on their priorities for infrastructure investment and decision making in the next Parliament (See: EEF survey shows quality of UK infrastructure getting worse in key areas):
Funding for local and strategic roads put on a stable long-term footing
The levels of spending on the road network in the next Parliament will be historically unprecedented. We must not return to the unpredictable and inadequate funding settlements of the past. Alternative funding arrangements which lock in and guarantee the required levels of road funding should be pursued for beyond 2020. (See: Roads reform - are we there yet?)
Renewal of the UK's energy infrastructure
Including establishing a post-2020 Levy Control Framework, moving to a technology neutral allocation of Contracts for Difference and acting to ensure UK supply chains benefit from investment in new energy infrastructure. (See: Energy policy for manufacturers: an agenda for government)
Industrial decarbonisation that reflects competitiveness issues
The next government should reform domestic industrial decarbonisation policy. Current policies cannot address the challenges of decarbonising energy intensive sectors such as steel, cement or chemicals. (See: Energy policy for manufacturers: an agenda for government)
While this Parliament has been about recognising the value of infrastructure, the next Parliament will have to be about recognising the different return on investing in each.
With further fiscal consolidation and the ‘quick win’ decisions taken, the next Government will have to take some major decisions on the long term trajectory of infrastructure in the UK. This blog serves as a guide to how to take those decisions in pursuit of better balanced growth.