Phil Graham: Speech to the Future of Infrastructure Conference

Published: 18 Jul 2019


Picture of Phil Graham

Commission Chief Executive Phil Graham gave the keynote speech at the Future of Infrastructure 2019 conference in London, reviewing the main recommendations of the National Infrastructure Assessment just over a year after its publication, the long-term challenge of achieving the UK’s Net Zero target and the importance of transforming the country’s infrastructure. The full text is reproduced below.

Check against delivery.

“This Saturday marks the fiftieth anniversary of the moon landing, one of the most astonishing feats of human endeavour.

In just nine years, with a combination of sheer will, focused energy and innovative thinking, two astronauts achieved something which many thought impossible.

What does this have to do with a conference about infrastructure?

Well, Sir John Armitt, the National Infrastructure Commission’s Chair, in an article in The Telegraph on Monday compared the UK meeting its Net Zero emissions targets to putting astronauts on the moon.

As he wrote, “the challenge is different, but it requires equal focus and commitment.”

Earlier this summer Sir David Attenborough said, “we cannot be radical enough” in our efforts to address climate change.

Addressing the impact of climate change is front and centre of much of our public and media discourse – among other things, of course – but it’s only one of the infrastructure challenges the UK faces…

…we need to replace a transport system based on the petrol and diesel engine through a wholesale shift to electric and other non-carbon sources of motive power.

…our transition to becoming a digital society means building the fibre infrastructure necessary to support the growing demand for data resulting from the ubiquity of being online to daily life.

…we must secure our water supply in the face of increasing drought risk because of climate change … while also protecting against major flooding.

…our cities are increasingly congested and polluted, and need to rethink how they plan and manage local transport to support the jobs and homes required for growing populations.

It’s quite a to-do list.

Too often over the last half century we’ve suffered an endless cycle of delays and uncertainty which have made us timid about getting to grips with such big challenges.

More of the same won’t cut it, or help us deal with the range of issues I’ve just identified.

Fortunately, we have a plan.

The National Infrastructure Commission was established to provide robust, independent advice to government on long-term infrastructure strategy, and just over a year ago we published the UK’s first-ever National Infrastructure Assessment.

It looked at the country’s economic infrastructure needs up to 2050, based on the most comprehensive evidence base available, and set out clear priorities for action.

A year on from the Assessment, a lot has happened.

Perhaps most important – the UK’s Net Zero commitment, prompted by the recent report from the Committee on Climate Change, has brought into sharper focus our recommendations for a low-carbon Britain. Crucially, the CCC’s report and our Assessment are strongly aligned.

Reducing costs and improving technology allowed us to confidently set the government the challenge of moving to 50 per cent of our electricity coming from renewables by 2030, as part of a shift to a highly renewable generation mix by 2050.

We’ve seen positive steps: the Offshore Wind Sector Deal was welcome, not least in securing the UK’s position as a world leader in renewables technology.

But we need similar deals to boost onshore wind and solar power, ensuring they have a future route to market through contracts for difference.

We also need to accelerate work on the options for decarbonising domestic heat – including a serious examination of the viability of hydrogen as a replacement for natural gas, as well as more detailed work on electric heat pumps.

We cannot meet our carbon reduction targets if we continue to heat our homes as we do now.

And we need serious action to enable a rapid switch to EVs. Under the banner of #ChargeUpBritain we’ve been making the case this summer for our recommendation for a national rapid charging network.

This is an essential component in encouraging drivers to make the shift from diesel and petrol to electric vehicles, enabling new car sales to reach 100 per cent electric by 2030.

There are signs that momentum is building. The government’s commitment to a national high-speed charging network and its restatement this week of plans to ensure all new homes have a built-in charge point are both welcome. The test will be how effectively those ideas are implemented.

Switching to EVs will have significant environmental benefits, but as the purchase price reduces (and many commentators expect EVs to cost no more than the petrol equivalent by the mid-2020s) the switch will also have a big financial benefit for households, since electric vehicles are significantly cheaper to run.

This was an important factor in our analysis of the costs of decarbonisation, which showed that when power generation, heat and vehicles are looked at together, it need not increase overall costs to households.

Too often, achieving our carbon goals is presented as a necessary but unwelcome cost – this work demonstrates that with the right decisions and early action that need not be the case.

Achieving Net Zero also means rethinking our approach to waste, a growing public concern.

We called for ambitious targets for recycling, and called on government to introduce new national standards and incentives to reduce packaging and plastics.

Encouragingly, ministers earlier this year set out plans to introduce consistent and standardised rules across the country for what can and cannot be recycled, in line with our approach. We await the next steps with interest.

But even with appropriate action on emissions, improving our resilience to the effects of climate change is urgent – particularly in respect of the increasing risks of drought and flooding.

In England, we know there’s a 1 in 4 chance of a severe drought between now and 2050. That’s why our Assessment called for a 50% reduction in leakage from England’s water supply by 2050 and measures to make it easier to introduce metering to manage demand, alongside significant investment in new supply infrastructure.

Our leakage target is now part of the National Policy Statement on water, and new regional planning frameworks are being developed to enable the case for transfers and other strategic infrastructure investments to be considered in the round.

We’ve seen a positive response to our recommendation in other areas, too.

On digital connectivity, we set an ambitious target for government of full fibre connectivity across the whole of the UK by 2033. This ambition is now incorporated into the Future Telecoms Infrastructure Review.

On urban transport, we proposed £43bn of additional investment and devolved powers for cities across England, and Metro Mayors like Andy Burnham in Greater Manchester, Andy Street in the West Midlands and Steve Rotheram in Merseyside, and other local leaders, have publicly backed our proposals.

Northern leaders see them as a key tool in their campaign to ‘Power Up the North’ and address ingrained problems with transport and congestion on both sides of the Pennines.

And there’s the Treasury’s recent consultation on infrastructure financing which included options for a possible replacement for the European Infrastructure Bank – another Assessment recommendation.

Incidentally, we’ll be publishing soon the results of our own pilot framework for analysing the best financing and delivery models for major infrastructure, so keep an eye out for that.

Even with all those positive changes since publication, however, there’s a long way to go and some important decisions facing the incoming Prime Minister and Chancellor.

But as we approach the end of the Conservative leadership contest, it’s been encouraging that infrastructure has been a prominent feature of the discussion.

Infrastructure will be a critical test of the next Prime Minister’s readiness to take the right decisions in the national interest, and we hope the planned National Infrastructure Strategy, the government’s formal response to our Assessment – which is due in the autumn – will set out a clear and ambitious way forward.

Sir John has already set out our four tests of an effective National Infrastructure Strategy in his recent letter to the current Chancellor, and his message will be the same for the new incumbents of 10 and 11 Downing Street.

The strategy must have:

  • A long-term perspective setting out the government’s expectations for infrastructure funding and policy up to 2050
  • Clear goals and plans to achieve them, backed up with clear deadlines and owners;
  • A firm funding commitment of 1.2% of GDP a year invested in infrastructure;
  • A genuine commitment to change how infrastructure is planned and delivered.

In short, a bold, achievable plan that galvanises politicians, businesses, investors and citizens to support infrastructure renewal.

And the Assessment is not an unaffordable wish list. Our fiscal remit – the requirement that our recommendations must fit within a ceiling of 1.2% of GDP a year of public investment in infrastructure – made sure of that. But we have shown that an ambitious programme of investment is affordable within that envelope.

In particular, it allows for major investment in HS2, Crossrail 2 in London and Northern Powerhouse Rail – there is no either/or scenario.

And it also shows that these can be afforded alongside continuing enhancement of our current networks and funding for digital connectivity, energy efficiency, flood defences and urban transport, as recommended in the Assessment.

Concerns about possible delays and costs of major infrastructure projects are, of course, understandable. They’re part and parcel of any discussion of public spending and taxpayer value – although they must not be used as arguments for stopping investment in infrastructure dead in its tracks.

But – and it’s a big but – that does require the country to get better at setting and sticking to budgets, particularly if we’re to encourage the public and private sectors to deliver the innovation we need.

We know from the evidence of offshore wind and solar generation, and electric vehicle battery manufacturing, that innovation and competition are driving down costs and transforming what renewables can deliver.

And the wider economic pay-off from implementing the Assessment could be considerable.

For instance, as Sir John pointed out, the challenge of delivering Net Zero is likely to support major investment and jobs growth in renewable generating technologies – building on the cluster already in place in Humberside – and boost the UK’s current position as a hot-house for electric vehicles.

What the Assessment doesn’t do, of course, is take the politics out of infrastructure. They will always be there, and rightly so.

But it offers a basis on which to make infrastructure less of a political football, and more of a strategic economic tool.

If our recommendations are reflected in its National Infrastructure Strategy, the government will send a clear signal that it is serious about giving the UK the world-class infrastructure that its economy – and families up and down the country – will need.

It will also position the UK as a global leader in how we plan our infrastructure for the long term.

Since taking this job, I have been continually struck by the international interest in the NIC, with countries as near as Ireland and as far afield as New Zealand setting out plans to follow suit and establish similar bodies of their own.

But it’s one thing to set up an independent commission and quite another to genuinely act on the recommendations it has made.

And it is the latter which will be the critical test.

We hope therefore the government decides to accept our full suite of recommendations.

But it won’t make those decisions in a vacuum.

Those of you here today, and others in business, local government, academia and in communities up and down the country, can help through making your voices heard.

We would like ministers to hear a loud chorus of support across the country for infrastructure renewal.

If you support the Assessment approach, say so … repeatedly … to ministers, to your supply chains, to stakeholders.

If we want to set the UK up for a sustainable and prosperous future, we can’t afford to be shy. We need to make the case for the stable, long-term strategy and the sustained investment in infrastructure that the country requires.

If we get this right, we can make a difference for decades to come.

Thank you for listening.”

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