MPA & CEA reassured by Autumn Statement infrastructure commitment, but questions remain over delivery & energy prices

Quarry Products / November 17, 2022
By Guy Woodford
Aurelie Delannoy, MPA Director of Economic Affairs

The Mineral Products Association (MPA) has expressed relief at the Chancellor of the Exchequer’s decision not to cut capital spending in today’s Autumn Statement, as landmark infrastructure projects, including Sizewell C, HS2, and Northern Powerhouse Rail, were spared from cutbacks.

The commitment to maintaining capital spending in line with the Comprehensive Spending Review and increasing the UK’s energy independence is sensible amid difficult economic and fiscal circumstances, says the MPA. However, the association says ministers must follow through on these ambitions and ensure these projects are delivered.

The MPA is concerned about the lack of further detail about the future of energy price support for businesses after the Energy Bills Relief Scheme’s initial period ends in March. While the terms of reference for the review of the scheme, published today, reiterate previous Government comments about a smaller, more targeted scheme, there remains little indication as to whether energy-intensive industries such as cement and lime will be prioritised for targeted support.

MPA logo
The MPA is relieved at UK Chancellor Jeremy Hunt's decision not to cut capital spending

MPA is also keen to see further detail about the Chancellor’s commitment to cutting overall UK energy consumption by 15% by 2030 and the potential implications of that ambition for energy-intensive industries.

Aurelie Delannoy, Director of Economic Affairs for MPA, said: “It is a relief that the Chancellor has recognised that cutting capital spending in order to balance the books would have been an ill-advised option. His decision to maintain capital spending levels in line with previous announcements is certainly welcome and will support the delivery of vital infrastructure projects, driving the economic growth and green energy security of the future.”

“it is worth noting, however, that a lack of meaningful increase in these budgets to account for the significant cost pressure build-up since the 2021 Comprehensive Spending review will inevitably result in less activity on the ground.”

“With funding stable and the national policy statements for energy, transport, and water infrastructure being updated next year, it is crucial that ministers turn ambition into actual delivery.”

Diana Casey, Director of Energy and Climate Change for MPA, said: “For energy-intensive industries like cement and lime, it is disappointing that the Government has not provided more certainty about whether they will be prioritised for targeted support with energy prices after March 2023. While we recognise the pressures on the public finances, businesses in these industries are facing a cliff-face in their energy costs that could render them uncompetitive when set against longer-running support in Europe.”

Suneeta Johal
CEA CEO Suneeta Johal

Meanwhile, Suneeta Johal, CEO of the CEA (Construction Equipment Association), said: "There were no great surprises from Jeremy Hunt’s Autumn Statement - many of the announcements made relate to years that fall after the next general election so much of the impact will not be felt for years to come – however, the Government’s commitment to invest in infrastructure and energy efficiency is very welcome.
"The chancellor says the Government will focus on economic growth, despite having to find budget savings. A silver lining for our sector was the announcement that energy, infrastructure, and innovation are high on the Government's priorities.
"We welcome the Government’s decision to proceed with a new nuclear power plant at Sizewell C, which will help to provide reliable low-carbon power. This new power plant will create 10,000 skilled jobs, however, there was no mention of the chronic skills shortage we are already facing. The sector is struggling to recruit people – due to competition but also a lack of awareness and perceptions among younger generations. There is significant work to be done on this and the CEA continues to feed back to Government through its position on the National Manufacturing Skills Taskforce."

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