Event round up: G&I business breakfast with Steve Norris
On Thursday 7 September 2017 Bircham Dyson Bell held a Business Breakfast with politician and Council Chairman of the National Infrastructure Planning Association (NIPA) Steve Norris. Steve touched on the unescapable topic of Brexit, despite what he described as an ‘unedifying’ process, Steve was confident that ultimately the deal to emerge would be one to suit both sides. In the context of infrastructure, Steve explained that the impact of the 2017 general election and its re-emphasis on ‘the great divide’ was far more significant, particularly when taken in parallel with the continued pressure on the Treasury with respect to the continued widening of the debt-to-GDP gap.
In relation to rail, Steve addressed the North versus South debate surrounding major projects investment. He viewed that there was a real need for focus on the intention for the Northern Powerhouse, be this addressing the efficiency of the link between the two major hubs of Leeds and Manchester or improving the cross country connection out to Hull. He asserted that a viable and costed scheme, setting out what the public spending would be and what the scheme would look like, to be presented to the Government for evaluation was now crucial. Steve described how HS2’s value had been reinforced by the North versus London and South East debate and the role it could play in taking back office services up to the North, which would in time see a transition to front of house offerings, as experienced in the Docklands.
Steve recounted his involvement in Crossrail back to the Jubilee line extension. Whilst there was always the question of how funding would be raised for such projects; with taxing or borrowing both equal in unpopularity, Steve emphasised the importance of not underestimating their significant growth potential (the Jubilee line extension cost £3.2 billion and is now worth £14 billion). In relation to land value capture, Steve explained that it is the owners of property who benefit hugely from improvements in surrounding transport infrastructure and suggested, as such, they should be making a contribution to the funding of those projects.
In the energy sector, Steve spoke of the notable lack of energy policy in recent decades. Without coherent policy for investors to rely on, for example in relation to renewable energy, there was nothing to base decisions on the type of energy infrastructure we should be investing in; nuclear, offshore/onshore wind farms or tidal barrage schemes. In the realms of construction, whilst the industry had seen a revaluation in construction costs that has not been reflected in pricing. Constructors have reset their margins, learning from the lessons of the days of fixed price contracts with 3% margins. Steve addressed the issue of airport expansion, whilst sceptical about the future of Heathrow T3 (his own view being that Stansted had been the obvious choice for expansion), there was no doubt that an increase in airport capacity was crucial in the new Brexit world in order to demonstrate we are open for business.
Steve concluded that going forward major projects would need to navigate the potential hazards facing the infrastructure sector.