The Sir John Armitt interview: ‘I’m not sure the government is really serious about nuclear’
Sir John Armitt (PA Images / Alamy Stock Photo)
Britain’s infrastructure tsar heavily criticised the cancellation of the second phase of HS2. Now Sir John Armitt intensifies his attack on the ‘governance’ holding Britain back in an interview with Tali Fraser
At the age of 77 and with the successful delivery of the Olympics under his belt, Sir John Armitt is not one to pull his punches. Prime Minister Rishi Sunak was wrong to cancel HS2 in the way that he did, is daft to sell off the project’s land almost certainly at a loss, is not serious about nuclear power, has misjudged renewable energy and has imperilled the UK’s climate change targets, says the country’s infrastructure tsar. And that’s not even the full charge sheet.
With a recent string of failings, the question hanging over the country is: Can the United Kingdom do infrastructure well?
“I think we’ve got the talent to do it. I think we sometimes don’t get our governance structures right,” Sir John says.
The National Infrastructure Commission (NIC), which Sir John chairs, has just published their latest assessment on major long-term challenges, which includes a series of bold policy recommendations directed to the government, like shutting down Britain’s gas network and spending billions to roll out heat pumps.
Part of his fears, the infrastructure tsar adds, stem from government’s “tendency for knee-jerk reactions” when it comes to planning and spending decisions. The handling of the HS2 U-turn – where the Prime Minister made the announcement to cancel its northern leg while in Manchester for the Conservative Party conference – would fall under this bracket, a decision Sir John brands “absolutely short-sighted”.
“You couldn’t make it up really, could you? We’re gonna go to Manchester and now tell Manchester we are cutting them off. Great move,” he says, chuckling to himself in a state of disbelief.
“I would not have made that decision.”
The former London Olympics Delivery Authority chairman, relaxed and clearly across his brief (he is a civil engineer by trade), has been national infrastructure tsar for five years now, with his appointment currently set to end in January 2025 – and it feels like he has seen it all.
What Sir John can’t understand about HS2 – and describes as “the daftest bit of it all” – is the rapid selling off of land acquired for phase two of the project.
“It suddenly becomes a buyers’ market, doesn’t it? I mean, for the government to come out and say: ‘Well, we’re desperate to sell something’. ‘Oh jolly good, how low a price are you going to accept,’ is the natural reaction of everybody. If you bought at an average of £20,000 an acre, and now you’re going to finish up selling at 10, that’s a bit of a large loss,” he says.
“You’re preventing a future government, no matter if it is Conservative or Labour, from picking this up again and being able to move reasonably quickly, to start totally all over again.”
The other “really silly” part of the decision on HS2, Sir John flags – and he should know, having been chief executive of Network Rail – is that the HS2 train going up to Manchester would actually run slower than current services.
When the existing West Coast mainline was upgraded, to increase the speed of trains, they began to be designed with a tilting mechanism in order to go around corners more quickly – something HS2 trains are not made to do, seeing as they were designed to go along a straight line: “So the high speed rail will run slower than the existing pendolino Avanti train does!”
Sir John allows himself a small laugh at the irony. As a metaphor for Britain’s struggles with big infrastructure projects, it could hardly be more apposite: a more expensive way to go more slowly.
You couldn’t make it up really, could you? We’re gonna go to Manchester and now tell Manchester we are cutting them off
He believes that part of the way to avoid issues like this from repeating themselves is to reform the way the budget is directed and create separate pots for big infrastructure projects like HS2, something similar to what he had during the Olympics where he had direct access to half the budget and the Treasury had the other.
“I would argue on these really large projects, you need to put it outside the department budget… I always felt concerned that HS2 sat within the Department for Transport. I thought to run it properly, it needed to be outside of the department.”
What does the decision over HS2 say more broadly about the state of infrastructure in the country?
“One of the current concerns is: Does that rebound into the view of outside agencies? Investors thinking: ‘If that’s the UK, surely there are better places where I might put my money.’”
That is a view that, Sir John says, “gets expressed quite a lot”. He adds: “The proof of pudding will be in the eating.”
“You might say that the proof of pudding came in the last auction for offshore wind. Where the government was saying: ‘Well, look, we think that’s the right price.’ Industry was saying: ‘Well, I don’t think you’ll get much interest at that price.’ The government goes: ‘Oh, we will carry on… Oh! We haven’t got any bids.’ Now we’ve lost another year.
“They might be able to get it back to another auction in six months but if we lose another year, that’s just another year lost in meeting our objectives in 2035.”
The prospect of meeting our climate change targets by 2035 does not exactly fill the national infrastructure tsar with hope.
“I can see the politics of the recent decisions around cars [delaying the ban on new petrol and diesel cars to 2035 rather than 2030] and around heat pumps [off-gas-grid homes can continue to install gas boilers until 2035, rather than phasing them out from 2026] but it doesn’t help in terms of driving towards the targets. It undoubtedly does put a risk for what you’re trying to achieve by 2035 and what you’re trying to achieve by 2050.”
How realistic is it that we meet our 2035 targets? “I would be surprised if we do,” Sir John deadpans.
“When you have made international commitments, when you have put things into law, then you have to recognise that sooner or later, if you don’t get a move on, you’re going to be in trouble.”
It is part of the reason why Sir John is pushing for hydrogen to be ruled out as an option to heat individual buildings – something he says there is no public policy case for – “because otherwise,” he says, “we just have another two years of prevarication”.
Another element that he sees as “a big challenge to government and their current position” is the NIC’s recommendation on the support needed for people to switch from gas boilers to heat pumps.
When you have put things into law, you have to recognise that, if you don’t get a move on, you’re going to be in trouble
The current incentive of a grant worth £7,500 going towards an air source or ground source heat pump, Sir John says, “does not work. It is absolutely clear, it is not working… it’s got to be stronger than that.”
Instead, the national infrastructure tsar would like to see major reform beginning with social housing.
“Say to the housing associations and councils, we will support you 100 per cent on the cost here and indeed also on those homes which are – this will be tricky – on private rental but where people on low incomes are living. You’re saying to the private landlord that, because you are renting to people on low incomes, we’re willing to support you 100 per cent as well. To make that change for people who can afford it and owner occupiers, say we will give you some £7,000, but we will also give you a zero-cost financing on top of that to make it up. It’s quite a bold set of initiatives but I think it’s only by doing something like that will we actually get this whole change.”
Part of this change, Sir John says, must also include reform of the EPC rating system which he claims sees “people being misled”.
“The EPC rating, everybody accepts, is not fit for purpose because it’s not only about the energy efficiency of the building, it’s about what form of energy you use. If you’re using electricity for the last few years, you automatically get a lower rating, simply because electricity is more expensive. Everybody knows that’s an issue... but still nothing comes out and you think how much longer does this need to go on.”
Nuclear is another area where Sir John – who worked on delivering the Sizewell B station – believes the government needs to act faster: “At the moment, we’re not making any progress really on Sizewell C, there is no deal being done with EDF... so we don’t see nuclear as really having a significant part to play in any new stations other than Hinkley before 2035.
“I would say I’m not sure the government’s really serious about nuclear.”
To his mind, it is a commercial deal, and – if you were serious – you would “sit down and thrash something out”, not “leave it to drift”.
“Energy has always been the real challenge”, Sir John says, when it comes to national infrastructure decisions – and given the turmoil of the last 18 months, including the war in Ukraine, security is an important aspect. But he fears the latest handling of these concerns is not up to scratch.
The latest announcement of 27 new oil and gas licences for projects in the North Sea has been made with the idea of providing energy security, but Sir John says, “it is only going to give you security if you are willing to dictate to those companies that they cannot sell their product in the market as they do”.
He adds: “They’re investing on the basis of selling into a market, not being told you can only supply to the UK government, and by the way the government’s going to fix the price. So this security, I think, is not quite what it appears…
“If you say the only thing that matters is low price and the consumer, then you are cutting off your nose for your security and for your ability to deliver in the long term. Your infrastructure will actually just steadily get worse and worse and worse.”
Prioritising low price is something that has seen water usage rocket up to 150 litres a day, which leads Sir John to the “rather unpopular argument” that “water is too cheap” – and highlights the need for water meters: “There are too many people for whom controlling their use of water just doesn’t matter because they shrug their shoulders and say: ‘Well, it’s only £280 a year, I can afford £500 so I’ll just use more.’ Which I think is cause for the review of the structure of water pricing.”
He adds: “Make it free for the first 60 litres so there’s a minimum which people know they’re going to get that they haven’t got to pay for, but then it should become a fairly steep, regressive curve as you start to use more and more.”
Waiting for the government to, hopefully, catch up with his thinking, it could be tempting to wish there were a lever to pull and make the changes he and the NIC want.
“It’s no good comparing us with what can be done in China or the Middle East,” Sir John says. “It’s not surprising perhaps that in Western democracies, democracy in itself, creates challenges”.
He would, however, like it if the country was “a bit more directive” with its infrastructure plans – and flags Holland’s attitude to change “with more of a sense of national purpose” as one he would like to see replicated: “What’s good for Holland, overrides what’s good for a part of Holland, or a particular group... I think we need a bit more of that.”
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