October news, insights & events

U.S. news

By David Quam, Senior U.S. Advisor and Alessandro Pecorari, Policy & Public Affairs Manager

This month, GIIA was invited to brief the National Infrastructure Advisory Council (NIAC) Disaster Response and Resiliency Subcommittee. Our briefing presented insights into best practice from our members, as well as putting forward recommendations as to how the Federal Government could strengthen the resiliency of its critical infrastructure at a time when multi-billion climate-induced disasters are rising exponentially year on year.

The insights and recommendations GIIA proposed to the Subcommittee will inform its upcoming report to President Biden entitled ‘Reimagining the Federal Government’s Approach to Disaster Response’. We highlighted our key asks to the government: from promoting asset inventories, to further establishing P3 offices to facilitate public-private partnerships, and the sharing of knowledge and best practice between agencies and the private sector. One area of increasing importance is the digital twinning of infrastructure assets, which can provide advanced scenario planning to test multiple responses to a range of climate disasters. Such recommendations should be strongly considered, particularly given exponentially increasing billion-dollar, climate-related disaster year-on-year. The Federal Emergency Management Association (FEMA) reportedly spent almost half its annual budget in eight days in early October.

As widely reported, the race to the White House between former President Donald Trump and Vice President Kamala Harris is extremely tight and difficult to call. The main focus has centred on the seven swing states, of which less than 6 per cent of the population within these states – approximately 0.5 per cent of Americans – will be the determining voice in the outcome.

Five of these swing states have senatorial races. This is noteworthy because Senate races, like the presidential race, are statewide. At the time of writing, Democrat Senate candidates are leading in Arizona, Michigan, Nevada, Pennsylvania, and Wisconsin, and Real Clear’s tracking of the five Senate-race swing-states over the past several months until late October shows that the Republican candidate has never led in any of them. While former President Trump is leading across swing state polls, the divergence in polling is interesting when informed by the trend in American politics of decreased ‘split-ticketing' since the 1990s (the concept of voting for a president and a senator from different political parties) as parties have become more polarized.  One thing is for certain – winning the White House is going to come down to the slimmest of margins.

The Senate and House could flip in opposite directions in November’s Congressional elections. Democrats hold a 51 to 49 majority in the Senate but must defend nearly twice as many seats as Republicans, meaning it is likely the latter will lose the upper chamber. In the House, Republicans have 220 seats compared to Democrats' 212, with more 'toss-up' seats favoring the GOP. Additionally, any ability of an all- Democrat or all- Republican Congress will be muted by the fact that action in the Senate can still be blocked by 41 senators. The expected political gridlock within the legislature means that a full repeal of the Inflation Reduction Act (IRA) and CHIPS and Science Act will be very unlikely, and regardless of who takes office on January 20th, lawmakers will likely not provide the same level of funding for reauthorization the Infrastructure Investments and Jobs Act (IIJA) received at its outset in 2021.

UK news

By Nick Elliott, Policy & Public Affairs Manager

October kicked off with the new government’s inaugural International Investment Summit. Despite some organisational challenges, the event was ultimately deemed a success, bringing together over 300 business leaders from around the globe and securing £63 billion in investment commitments. We were pleased to see many GIIA members in attendance and were particularly encouraged by the Prime Minister and Chancellor's remarks emphasising the need for a pro-growth regulatory regime. This focus on fostering an investment-friendly regulatory environment was highlighted in Sky News' coverage (7.55 – 11.51), which cited GIIA’s views on the importance of regulatory reform – an issue we have consistently advocated for in recent years.

There has also been considerable activity in the water sector. The government has announced a major review of the sector led by an independent commission chaired by Sir Jon Cunliffe, aimed at delivering a much-needed "reset." This review will explore several key areas including establishing a clear vision for the sector, adopting strategic planning approaches and rationalising regulation. GIIA has long called for such a review, and we see this as a positive step toward addressing critical challenges in the sector.

Alongside these developments, I had the opportunity to attend Moody’s 2024 water conference, this year’s iteration was themed "Crunch Time", and the atmosphere in the room certainly reflected a sense of urgency. In his remarks, David Black (CEO of Ofwat) acknowledged that Ofwat would need to adjust its allowances from the draft determinations to incorporate the strong feedback they have received from investors. We view this as a promising sign, and hope that the prevailing broader government narrative on regulation and the need for a more investment-friendly approach is reflected in the PR24 final determinations. We are entering critical weeks in regard to PR24, and we are ensuring that the investor voice is heard. 

On the energy front, we welcomed the government’s announcement of £22 billion in funding commitments for the carbon capture and storage (CCS) sector. This is a significant win, as GIIA has consistently advocated for increased government support for this critical, yet nascent technology. The funding is expected to accelerate the development of key CCS projects to support the UK’s broader decarbonisation ambitions.

In other news, it was excellent to see members at a roundtable event we co-hosted in London as part of our partnership with McKinsey’s Global Infrastructure Initiative. The session focused on the impact of UK government policy on infrastructure investment and the broader infrastructure challenges the country faces. We were delighted to have Gareth Davies, Permanent Secretary for the Department for Business and Trade, address the event and participate in the panel discussion chaired by our CEO Jon.

Additionally, I was pleased to join a roundtable with the National Audit Office as they embark on a new study exploring potential new public-private partnership models in the UK. The government has signalled that PPPs are firmly on their agenda, and we are committed to ensuring that the investor perspective is well-represented as this initiative develops.

Finally, with the UK budget announced yesterday, I’ve prepared an article summarising the key announcements for our members. We hope the budget will bring greater clarity to the government’s recent policy commitments.

EU news

By Harvey Chandler, Head of Policy & Public Affairs

Five months after June’s parliamentary elections, EU institutions are moving towards finalising arrangements for a new Commission, due to take office before year-end.

Hearings of Commissioner-designates in the European Parliament will run between 4-12 November, before the full Commission is voted on by the parliament. Only then will the new college of Commissioners take office, most likely in late November or December.

Commissioners will have a full programme of activities awaiting them with Ursula Von Der Leyen's mission letters setting out many of the priorities she is keen for her college to advance. This includes Spain's Teresa Ribera Rodriguez whose wide brief includes the twin challenges of climate and competition policy. Within her role, Ribera Rodriguez will be responsible for the Clean Industrial Deal, alongside Wopke Hoekstra and Stéphane Séjourné, who respectively have climate and industrial policy aligned responsibilities within their roles.

Meanwhile in Brussels, much is being made of how portfolios will develop and how many of the recommendations of the Draghi report, where accepted, will be implemented. The success of the report's ambition to expand the InvestEU programme for instance, will be decided within the EU's long-term budgetary negotiations. While much work will be needed to overcome long-standing blocks to developing a full Capital Markets Union, there's also a question around a possible return of new funding. However, a European Competitiveness Fund, which looks like the European Sovereignty Fund may help inject capital into industrial projects.

In October, we had the opportunity to speak to many of GIIA’s partners in Europe, including financial, energy and transport associations, who play an important part in helping us amplify our messages around investor needs to bring more investment into their respective sectors. We were also delighted to share our new hydrogen policy paper  which sets out a list of recommendations for governments to consider as they strategise about how to better attract private capital into an area of increasing focus as governments seek to decarbonise.

Within all these discussions the voice of long-term patient private capital is needed, and GIIA continues to represent members at EU level and increasingly in discussions with member states. If you're interested in hearing more about our work in Brussels, please contact hchandler@giia.net

For information on how you or your company can get involved in our advocacy work, get in touch with our Membership Officer Sophia Taylor, or email any of our Policy & Public Affairs team via the links above.