UK Government Policy (Edexcel A Level Geography)

Infrastructure Investments

• It is the role of national governments to facilitate regeneration projects, in partnership with charities and developers, to tackle economic, social and environmental inequalities

• By investing in infrastructure, such as high-speed rail and airport developments, the UK government can maintain economic growth and improve accessibility to promote regeneration of regions

  • As relatively remote places become more accessible, they become more attractive to businesses and investments, which generates jobs and can lead to the positive multiplier effect

• Infrastructure projects are generally very expensive and take time to complete, so require government backing and funding

• Most projects are public-private partnerships

  • The private sector is used to design, build, finance and/or maintain public sector investments in return for a share of profits generated by the project

• A variety of stakeholders are involved in regeneration projects 

  • Department for Culture, Media and Sport (DCMS) markets the UK’s image abroad and includes Sport England and the National Lottery

    • Some of its projects include the London Olympic Park regeneration plan and the various Commonwealth Game developments 

  • Department for Environment, Food and Rural Affairs (DEFRA) aims to achieve environmental stability as part of sustained economic growth by:

    • Developing rural villages in decline

    • Protecting eroding coastlines

    • Improving the agricultural industry

  • UK Trade and Investment supports UK businesses and aims to attract more foreign direct investment

  • Local councils aim to improve their area by: 

    • Attracting new businesses

    • Increasing housing stock or improving the quality 

    • Regenerating a problematic location (abandoned, deprived or dangerous places)

  • Non-governmental organisations (NGOs), such as pressure groups, environmental groups, charities and businesses

  • Local individuals

• There may be differences of opinion between stakeholders that need to be resolved by the government or legal systems

• To encourage economic growth within the UK, national infrastructure investment has been used to improve accessibility and reduce the North-south divide 

• Examples of infrastructure investment projects in the UK include:

  • £27 billion to improve the quality, capacity and safety of the motorways and major A roads, which were largely built in the 1960s and 70s

  • HS2 is a new high-speed rail network that will connect London to Birmingham and then the north

    • Phase 1 is expected to open between 2029 and 2033

    • It has been announced (2023) that phase 2 will no longer go ahead

    • Estimated to create 22,000 jobs

    • Cut travel times by half

The HS2 route

• The expansion and upgrade of Heathrow Airport

  • Building a third runway to increase flight capacity by 260,000 flights per year

  • Terminals 1 and 3 would be demolished, and terminals 2 and 5 would be expanded over 30 years

  • It is expected to cost just under £20 billion, which would be privately funded

  • Business leaders are in favour of the expansion, which could boost the wider economy by £61 billion and create an additional 77,000 jobs

  • Local residents and environmental NGOs oppose the project as 761 homes will be demolished and pollution will increase with the extra flights 

  • The expansion project is currently paused due to the pandemic, inflation and the Government’s commitments to reducing the UK’s greenhouse gas emissions

Development & Effect on Regeneration

• The UK government is a key player in making decisions about regeneration:

  • Government actions may prioritise national needs over local needs, which can delay regeneration projects and widen regional inequalities

  • Their domestic policies influence regeneration through:

    • Planning laws and restrictions

    • House building targets

    • Housing affordability programmes

    • Granting permissions for ‘fracking’ 

• These domestic planning policies can affect the rate and type of development, which impacts the amount of economic regeneration taking place in urban and rural areas

UK planning laws

Planning for housing needs in the UK

Fracking

• Onshore shale gas fracking began in the UK in 2008

• The government saw fracking as a national priority for securing energy supplies and increasing economic stability

•  Planning policies could be avoided if authorities thought the proposed schemes were in the national interest

• In 2015, a new fast-track system was introduced to speed up licence applications for fracking

• Many of the UK regions that have been granted fracking licences are located in either rural areas or deindustrialised areas, and would benefit from regeneration

  • Fracking is helpful for local economies as it generates jobs at the shale gas companies

  • Other sectors then benefit, such as construction, hospitality, engineering

• Fracking causes considerable conflict over its environmental consequences:

  • Small earthquakes can be experienced at the drilling sites

    • One earth tremor lasted 100 hours

  • Fracking requires huge amounts of water, which must be transported to the site

  • Contamination of groundwater

  • Increased methane emissions, a greenhouse gas that traps 80 times more heat than carbon dioxide

The threat to wildlife from fracking

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• In 2019, a high court ruling suspended the process of fracking due to the government’s lack of consideration over the climatic impact of fracking

Government Decisions & Effect on Growth

• The government’s international policies can significantly impact on economic growth and direct/indirect investment, including:

  • The degree of their involvement in capital markets, like banking and the stock exchange, which is achieved through the deregulation of financial markets

  • The government creating open door migration policies to influence labour supplies and skills

International migration policies

• In 2022, UK net migration reached 606,000, the highest figure ever recorded according to the Office of National Statistics (ONS)

• The rise is driven by people arriving from non-EU countries on government-issued visas to study, work or join family members

• The current policy for people wanting to work in the UK is they have to apply for a visa through a points-based system 

• The main economic arguments for immigration are:

  • Increased gross domestic product (GDP) 

  • Extra taxes and production 

  • Both well-qualified and lower-skilled immigrants can fill skills shortages

• However, high levels of net migration can also hinder regeneration:

  • Increased pressure on services and housing availability in certain areas

  • Social issues caused by asylum seekers being housed in hard-to-let properties in already deprived areas, such as estates in Middlesbrough

Deregulation policies

• Before the deregulation of financial markets in the 1970s and 80s, London was viewed as globally uncompetitive as only UK banks could operate in UK cities 

• In 1986, the government decided to deregulate the financial sector in a policy known as the big bang, which meant:

  • The London Stock Exchange became a private limited company

  • Overseas companies to set up in London without governmental approval eg. banks like HSBC

• The big bang resulted in:

  • Banking, finance and business services creating almost 30% of the UK’s GDP by 2015, double that of 1986

  • It drove the regeneration of London Docklands in Canary Wharf, with the skyscrapers the visible evidence of this new investment

  • London becoming the leading financial centre in the world

• Deregulation also enabled wealthy foreign investors to buy property as second homes, which meant they paid less tax in their home countries

  • This has added to the lack of available housing as the owners often leave these homes unoccupied

  • It is estimated that 138,000 residential and commercial properties in England and Wales are owned by offshore companies (2022)