Labour's Election Victory: Impact on UK Transport & Logistics

The top of the wish list for transport & logistics in recent years has been far more government support for decarbonisation infrastructure to compensate for market failure in this space.

Labour are far more supportive of nationalisation, command planning of infrastructure projects, and also favours more employee rights, which will impact on a sector already struggling with workforce shortages and tight margins. 

In Rachel Reeves first speech as Chancellor this week she announced:

Critical major infrastructure

The current planning regime acts as a major brake on economic growth which is why the government will make the changes the country needs to forge ahead with new roads, railways, reservoirs, and other nationally significant infrastructure.

The government will set out new policy intentions for critical infrastructure in the coming months, ahead of updating relevant National Policy Statements within the next 12 months to provide certainty to industry. We will legislate to ensure they are updated at least every 5 years.

The government will also build on the Strategic Spatial Energy Plan which is being developed by the National Energy System Operator to speed up the roll out of clean power, and will seek to expand the use of spatial planning to other infrastructure sectors.

The Chancellor has asked the Secretaries of State for Transport and Energy Security and Net Zero to prioritise taking decisions on critical infrastructure projects which are with them now.

To go further, to help speed up delivery on infrastructure such as transport and energy, the government will review how it can unlock critical infrastructure without weakening environment protections.

Alongside this, the government will make sure energy projects are prioritised in the planning system and consult on including onshore wind power developments in the Nationally Significant Infrastructure Projects (NSIP) planning regime.

Further details on ending the de facto ban on onshore wind will be set out later by the Department for Energy Security and Net Zero, and the Department for Levelling up, Housing and Communities.

According to the Labour party manifesto, Keir Starmer’s newly formed government has committed to:  

• fix an additional one million potholes across England each year of the next parliament
• support the transition to electric vehicles by accelerating the rollout of charge points and restoring the phase-out date of 2030 for new cars with internal combustion engines
• overhaul Britain’s railways, bringing them into public ownership as existing contracts expire or are broken
• deliver via Great British Railways a unified rail system focusing on reliable, affordable, high-quality, and efficient services
• replace the Apprenticeship Levy with a Growth and Skills Levy, and align skills provision and migration with an industrial strategy
• promote and grow the use of rail freight and create a tough new passenger watchdog to drive up standards
• investment of £7.3 billion via a National Wealth Fund, with upgrading ports and green hydrogen manufacturing set to benefit within T&L
• doubling onshore wind, tripling solar power and quadrupling offshore wind by 2030
• reform the bus system by providing new powers for local leaders to franchise local bus services and lifting the ban on municipal ownership
• give local communities control over routes and schedules, improving reliability and accessibility
• empower mayors to create unified and integrated transport systems, promoting seamless journeys and active travel networks
• develop a long-term strategy for transport infrastructure to ensure efficient and timely delivery
• tackle congestion and promote active travel networks, ensuring infrastructure meets the needs of modern transportation demands.

Through these policies and promises, the Labour party is aiming for a comprehensive overhaul, emphasising public ownership and long-term planning. Its policies focus on integrating transport systems, supporting local control, and ensuring sustainable development. Labour’s approach also reflects a desire to correct perceived neglect and mismanagement by the previous Conservative government, aiming for a more equitable and efficient transport network. And yet, while Labour’s comprehensive approach is promising, it could face significant financial and logistical hurdles, particularly in achieving public ownership of railways and extensive infrastructure projects.

Industry body Logistics UK has commented:

“The Labour manifesto rightly puts economic growth at the centre of its ambitions and recognises the importance of industrial strategy and infrastructure delivery, as well as reform to planning, the Apprenticeship Levy and our trading relationship with Europe to achieve that. UK productivity and growth needs a boost, and it will take a step-change in how government works to achieve this by ending siloed, short-term thinking in favour of joined-up, long-term strategies, in partnership with business.

“Labour is right to commit to upgrading the grid to support the electrification of industry. However, it is vital that net zero, infrastructure and fiscal plans are fully aligned. If the end of sale date for new internal combustion engine vans is put back to 2030, this must be matched by a substantial increase in public and depot charging, and incentives for businesses so they can afford the investment. The proposed 10-year infrastructure strategy also recognises the need for a long-term focus. However, we would press for an even longer timeframe with 30-year infrastructure strategies that are implemented and held to account through five-year delivery plans. This would move us away from the current stop-start approach that sees much needed projects take far too long to move from concept to delivery, holding our economy back”