This article was produced by Nabarro LLP, which joined CMS on 1 May 2017.
Summary and Implications
The budget is encouraging for the infrastructure sector with further commitments to invest in national transport and to provide funding to the Northern cities initiative, as expected there is also a reduction in taxation on North Sea oil and measures to encourage future exploration investment in the North Sea oil and gas fields. There is also financial support for a number of nationally important museums. One unexpected measure is the UK will become a founding member in a new infrastructure fund to invest in Asian infrastructure projects, it will be interesting to see which sectors and jurisdictions to be supported. Please find below a summary of the key points delivered during the Budget 2015 speech:
- The UK will become the first major western nation to become a prospective founding member of the new Asian Infrastructure Investment Bank.
- In London, there will be investment in transport links from Brent Cross to Croydon and the Mayor will be given more powers over skills and planning.
- The Northern Powerhouse will be developed and this week a comprehensive transport strategy for the North will be published.
- Connections to the South West will be improved with over £7 billion of transport investment, specifically for better roads and better air links.
- Also in the South West, a new rail franchise was announced. This will provide new inner city express trains and greatly improve rail services to the South West.
- There will be a £100 million investment in driverless technology. These will be tested in Coventry, Greenwich, Bristol and Milton Keynes.
- A total of £138 million will also be committed to the UK Collaboratorium for Research in Infrastructure and Cities in order to research how to create a resilient and responsive infrastructure in terms of the economy.
- The West Midlands' Energy Research Accelerator will receive £60 milllion funding and the new energy catapult will be in Birmingham.
- Negotiations on the Swansea Bay Tidal Lagoon are to begin. This would create a man-made lagoon generating power to run 120,000 homes for 120 years.
- The Severn Crossing's toll rates are to be cut from 2018, abolishing the higher bands for small vans and buses.
- From the start of next month there will be a single tax allowance to stimulate investment at all stages of the North Sea oil industry. This should amount to £1.3bn of support for the industry, boosting the expected North Sea oil production by 15% by the end of the decade.
- There will be new seismic surveys in under-explored areas of the UK Continental Shelf.
- From next year, the Petroleum Revenue Tax will be cut from 50% to 35%. The supplementary charge will also be cut from 30% to 20% and this will be backdated to the beginning of January.
- An investment of £140 million will be given towards world class research across the UK into the infrastructure and cities of the future.
- A total of £600 million will be invested to clear new spectrum bands to improve mobile phone networks.
- Ultra-fast broadband of 100 megabits per second will be expanded to reach almost all of the homes in the country.