Chancellor adds concrete to the Government’s economic plans, but still lacks a Euro-vision

The Chancellor added plenty of concrete to the Government’s nascent economic strategy, setting out plans to build new railway lines, road tunnels and runways. But she’ll face tougher decisions ahead in her quest for growth, particularly on new trade agreements with India and an updated relationship with the EU, the Resolution Foundation said today (Wednesday).

In an expansive speech that ranged from infrastructure strategy to trade agreements, and reforms to regulation, benefits and pension funds, the Chancellor set out an economic plan centred around rebuilding Britain’s infrastructure.

This focus on rebuilding public assets – from a new Thames Gateway road-crossing to boosting transport links between Oxford, Cambridge and London, and within many of our major cities outside the South East – is long overdue, given the UK’s long-standing failure to invest in its future.

Resolution Foundation research has found that the UK has seen no increase in the amount of built-up land per capita since 1990. This is in stark contrast to every other G7 economy, which have seen substantial increases decade on decade. Over the same period, the amount of built-up land has increased by 21 per cent in Germany, 23 per cent in the Netherlands, 24 per cent in France and 24 per cent in Italy.

It adds that while the resurrection of plans to build a third runway at Heathrow has grabbed most of the headlines this week, plans to accelerate housebuilding will have a far more tangible impact on living standards and economic growth in the Parliament.

However, while the Chancellor made ‘taking tough decisions’ a feature of her speech, she may find the toughest decisions are yet to come, particularly when it comes to reaching agreements with the UK’s biggest trading partner, and the world’s most populous country.

Greg Thwaites, Research Director at the Resolution Foundation, said:

“The Chancellor today added concrete to the Government’s nascent economic strategy, with plans to build new railway lines, road tunnels and runways. The overarching theme of rebuilding Britain’s infrastructure is welcome after successive governments’ failure to invest in our future.

“And while attention has centred around building a third runway at Heathrow, successfully building 1.5 million homes across Britain will make a much bigger difference to people’s living standards, and to growth – if those homes can be built in areas with high economic potential.

“But while the Chancellor’s speech was laden with concrete, it lacked a Euro-vision. That gap will need to be filled given the huge potential gains from a closer trading relationship with the EU, and an ambitious services-led trade strategy. But achieving either will require taking even tougher decisions.”