The 100+ pages of the Autumn Statement contained a number of measures which are likely to be significant for the infrastructure and energy sectors. Here's our take on the main highlights:

  • Infrastructure planning: the Government will implement key recommendations from a National Infrastructure Commission study published in April 2023 (although it has not fully adopted the Commission's suggestions on environmental assessments).
  • Pay, more – get planning consent faster? to help "bust the planning backlog", a new "premium planning service" will be introduced, with guaranteed accelerated decision dates for "major business planning applications" (and fee refunds when these are not met).
  • Business expensing/capital allowances: full expensing of qualifying capital expenditure will be made permanent (see section 1 of our detailed briefing on the Autumn Statement for further explanation). Whilst this will apply across all sectors, the infrastructure and energy sectors stand to benefit more than some because of their significant capital expenditure.
  • Pension fund reform: the Government provided some more information on plans announced in the Chancellor's Mansion House speech from July 2023 to help pension schemes invest in a more diverse range of assets. It is hoped that this will encourage greater investment in illiquid, long-term assets, including UK infrastructure.
  • Investment zones: 3 more Investment Zones will be created (Greater Manchester, West Midlands and East Midlands) to add to the 3 areas already announced (Liverpool, West Yorkshire and South Yorkshire). A further 6 are expected to be created in due course. These will benefit from significant tax breaks similar to some of those available in freeports (where the window for claiming tax reliefs will now be extended from 5 to 10 years).

Energy sector highlights

  • EV infrastructure: a number of planning-related measures will be taken forward with a view to prioritising and accelerating the roll-out of electric vehicle (EV) charging points.
  • Faster grid connections: in an attempt to overcome long wait times for connecting new renewables capacity to the electricity grid, the grid connection process will be reformed, with a view to reducing connection delays from 5 years to 6 months at the most.
  • New grid infrastructure: the Government will implement many of the recommendations of the Electricity Networks Commissioner designed to reduce the average time for constructing new grid infrastructure from 14 to 7 years.
  • Exemption for renewables from Electricity Generator Levy: the Government will introduce a new investment exemption from the Electricity Generator Levy (EGL); this will apply to renewables projects where a decision is taken to proceed on or after 22 November 2023. The EGL is a temporary 45% windfall tax on exceptional generation receipts realised by corporate groups or stand-alone companies who generate electricity in the UK, its territorial waters or a Renewable Energy Zone (as defined in the Energy Act 2004).
  • Green Industries Growth Accelerator: a £960 million fund will be established to support investments in manufacturing capabilities for clean energy sectors, including hydrogen, offshore wind, electricity networks and nuclear.

Our overall verdict

There is much to welcome in the Autumn Statement and it is encouraging to see the Government committing to implement recommendations of independent bodies on planning reform and electricity networks. There also appears to be a recognition that action is needed to tackle excessive delay in approving and implementing infrastructure projects – and the opposition Labour Party is reported to be considering similar measures, if elected. A drive for faster decision-making in planning is not new but the proposed changes do risk the creation of a two-tier planning service, with commercial applications being prioritised over housing applications. That is difficult to square with the parallel announcement of further investment to unlock more housebuilding.

There is still some way to go in developing pension reforms that could open the way to increased investment in infrastructure. The next General Election is likely to take place before this work is concluded, but Labour has said it will also look at how pension funds can support economic growth.

As regards investment zones, the tax reliefs are welcome but it remains to be seen whether they will have the desired effect; similar measures do not appear to have been as successful as the Government had hoped in attracting investment to freeports. It may be that investors want more reassurance that the UK Government prioritises longer term regulatory stability, as this is an area where many commentators think that the UK's reputation has taken a hit in recent years. That said, with its emphasis on measures to speed up project delivery and create greater certainty for investors, many aspects of the Autumn Statement represent a step in the right direction on that issue.

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