Kwasi Kwarteng is set to ditch green planning rules and speed up the process of developing new offshore wind farms, roads and homes, as he targets ‘a new era for Britain’ driven by a laser focus on growth in his first major financial intervention as Chancellor tomorrow.
The Chancellor is expected to announce a flurry of new fiscal and planning policies in his so-called mini-budget tomorrow, in response to inflation hitting its highest level in nearly four decades, sparking growing concern over the risks of the British economy. plunge into recession in the coming months.
The global economy has been rocked by the impacts of the Covid-19 pandemic, which has also been exacerbated by soaring fossil gas energy prices and Russia’s war in Ukraine, as well as rising food prices and the devastating effects of the climate around the world.
To spur growth and investment, Kwarteng is expected to announce plans for new legislation to speed up the delivery of around 100 major infrastructure projects across the UK, prioritizing projects in transport, l energy and digital infrastructure.
These priority project areas are steeply slanted to include offshore wind farms, nuclear power plants and new roads.
In addition, plans to ‘reduce the burden’ of environmental regulations in planning rules and establish 38 new low-tax ‘innovation zones’ in England to encourage business investment are also set to be unveiled.
They are expected to be part of a major package of more than 30 measures announced tomorrow by Kwarteng – dubbed “the growth plan” – which aims to tackle soaring energy bills, curb inflation and cut taxes, said the Treasury.
This follows plans announced yesterday by the government to lift a ban on fracking in England, grant new oil and gas licenses in the North Sea and reduce hundreds of regulations and laws originally derived from the EU from by the end of next year, all this has angered green groups. Other policies expected tomorrow include reductions in stamp duties and national insurance payments.
Such moves follow repeated promises made by Liz Truss during her successful bid to become prime minister over the summer to cut taxes and regulations to spur growth, despite concerns from her opponent and former Chancellor Rishi. Sunak that cutting taxes too soon could lead to higher inflation as the UK watches the barrel of a possible recession.
Kwarteng, however, is expected to argue tomorrow that the UK needs “a new approach for a new era of growth”, and that cutting taxes, cutting regulations, accelerating infrastructure and the creation of 38 new investment areas across England “would turn the vicious cycle of stagnation into a virtuous circle of growth”.
“This is how we will provide higher wages, greater opportunities and sufficient income to fund our public services, now and in the future,” he is expected to say. “We will be bold and unashamed in their pursuit of growth – even if it means making tough decisions. Delivery work begins today.”
As part of the growth plan, the Treasury said it was currently in talks with 38 combined local and municipal authority areas in England – including the West Midlands, Tees Valley, Somerset and Hull – to create new areas of investment, or growth poles, in specific sites in their area.
These areas will each be offered targeted, time-limited tax cuts for businesses, which the government says could boost productivity and create jobs by encouraging investment in new infrastructure and services.
Also crucially, these areas should benefit from liberalized planning rules – including environmental regulatory reforms – to free up more land for housing and commercial buildings in addition to accelerating development, according to the Treasury.
Environmental groups earlier denounced potential reforms to environmental and planning regulations, which they said would lead to the abandonment of environmental regulations and critical habitats, while discouraging homebuilders from building greener homes.
But the government has insisted that investment zones will only be established with the support of local councils and that it will work closely with regions to “develop tailor-made proposals that support their ambitions and offer benefits to local residents”.
Kwarteng is set to argue tomorrow that construction of homes and infrastructure in the UK is “getting slower, not faster”, and that targeted action is needed to spur growth by freeing up land and accelerating development.
The Treasury pointed out that last year it took 65% longer to get consent for major infrastructure projects than in 2012, and that no new nuclear power stations have been built in the UK since 1995.
He also specifically pointed to the time needed to obtain planning consent for new routes, and that the 1.8GW Norfolk Vanguard offshore wind farm took nearly four years to go through the planning stages alone, before making facing legal challenges that delayed the project. by an additional year.
But the Treasury is expected to argue that to speed up crucial offshore wind, nuclear power, roads, railways, housing construction and other important homes and infrastructure, there is a need to ‘reduce the burden’ environmental assessments in the process of consultation and reform regulations on habitats and species.
“We will liberalize planning regulations on agreed specified sites, freeing up land and accelerating development,” Kwarteng is expected to say. “And we will lower taxes, with businesses in designated sites enjoying generous tax breaks.”
However, plans to cut environmental regulations are unlikely to find favor with green groups, while green business organizations have long called for stronger government intervention through strong investment and policies to support more renewable energy capacities and energy efficiency measures, none of which are expected. emerge tomorrow.
Friends of the Earth policy chief Mike Childs described the chancellor’s trailing announcements in tomorrow’s mini-budget speech as signaling ‘yet another lost opportunity’ to insulate homes and develop renewable energy to reduce the demand for expensive risky gas.
Plans to lower environmental standards are also “deeply worrying”, he said.
“The Chancellor treats economic growth and environmental protection as mutually exclusive, but that is not the case,” he said. “It is this tired thinking that is at the root of the energy, climate and ecological crises we face. We really needed this budget to alleviate the urgency of the cost of living, restore nature and reduce emissions that cause climate change, but it totally fails in every way.”