Moves may not be enough for North East transport

Jun 23 2010 by Adrian Pearson, The Journal

A GOVERNMENT commitment to maintain spending on major infrastructure projects may not be enough to help North East transport concerns.

In his Budget the Chancellor said he wanted to ensure no further cash was diverted away from capital spending projects.

But under the new austerity regime the Department for Transport and others which are unshielded from the cuts will face an average real cut of around 25% over four years.

Mr Osborne told the House of Commons he did not want to repeat “the error” made in the early 1990s when “the Government cut capital spending too much”.

The Government will stick to cuts announced by Labour, which will see capital spending drop from £44bn to £22bn in 2014.

“Well-judged capital spending by Government can help provide the new infrastructure our economy needs to compete in the modern world,” Mr Osborne said.

But despite this projects will still have to be prioritised based on what they contribute to the national economy.

Ministers have already written to councils across the region warning they should not carry out any further work on major transport schemes.

It means upgrades to the A19 and a new bridge over the River Wear are put on hold until the Government finishes its spending review in the Autumn.

Mr Osborne did single out the Tyne and Wear Metro as one project which will get the go ahead, although this is using £350m of money already handed over by the previous Labour Government.

Bernard Garner, director of rail and infrastructure for Nexus, said: “We are delighted the Chancellor has recognised, in confirming this investment, the vital role that Metro plays in the economic fortunes of North East England. Over the next decade Metro: all change modernisation will protect and create hundreds of jobs in the construction, engineering and technology sectors.”

There is an expectation the air passenger duty used to tax flights will be replaced with a per plane duty.

Such a move, it is feared, would unfairly damage regional airports and encourage passengers to make long-haul flights from European airports. Mark Tanzer, chief executive of travel organisation Abta, said the possible switch to a per-plane duty system should be introduced in such a way “that ordinary people are not taxed out of flying”.