Opportunities for construction to influence Labour’s plans

Given the current hung parliament and the increasingly uncertain political situation, construction businesses would be well advised to familiarise themselves with Labour’s plans for infrastructure, says Andy Walker.

Labour leader Jeremy Corbyn (left) and shadow chancellor John McDonnell.

Foresight over astonishment is one of my favourite phrases. It can be applied to many situations and I think it is particularly apt when considering the Labour Party’s plans for the construction and infrastructure sector.

Following the general election result, I attended an industry dinner and asked those at my table whether they were aware of what a Jeremy Corbyn premiership would mean for the sector they all work in. Cue blank faces all around. Such a reaction may have been understandable in the aftermath of an election result that few predicted, but eight months on and with the government creaking and preoccupied over Brexit, the industry needs to get a handle on what might happen if Labour were running the country.

With Labour coming out in favour of a customs union and May’s local council elections set to be a disaster for the government, Theresa May’s grip on power looks ever more vulnerable. Increasingly, business leaders are beginning to realise that they need to take the prospect of a Labour government seriously. If the PM’s minority administration implodes because of Brexit, then we could end up with a snap election that hands Jeremy Corbyn the keys to Downing Street and puts John McDonnell into the Treasury.

So, should the industry be fearful of a Corbyn-led administration? Despite continuous scare stories in the press and media about the perils of a ‘hard left’ Labour government, I believe that our sector shouldn’t be overly concerned and indeed there are opportunities from engaging with the opposition at the present time.

Over recent months, senior Labour officials have been engaged in a charm offensive with the business community, holding a series of roundtable events across the country. The relationship between the party and the UK business community has improved of late and the recent reaction to the customs union announcement, where several business organisations including the CBI welcomed the party’s stance, is an indication of that.

Historically, Labour governments have been good for the infrastructure sector, with billions spent on road and rail and on social infrastructure. Labour’s pledge to build a million homes a year could be very good news for construction and the party’s commitment to major schemes like HS2 and Heathrow are also welcome.

The shadow cabinet understands the role that infrastructure plays in driving economic prosperity and we might see more social infrastructure projects as part of an enhanced strategy to rebalance the economy. Of course, despite a shared interest in a softer Brexit deal and higher infrastructure spending, businesses remain wary of Labour, especially on taxation and the party’s policies on greater state intervention in areas like the rail sector and utilities.

However, I believe that the industry could benefit from greater organisational clarity and financial investment in these areas, as irrespective of Labour’s plans for the ownership of these sectors, they will still need privately owned consultancy and contracting firms to do the work. My sources tell me that there is an open door for the industry to influence Labour’s thinking, so businesses need to engage with shadow ministers and their business advisors now to get the sector’s message across.

I’ve spoken to Labour’s senior economic advisors and they tell me that infrastructure is critical to the party’s economic regeneration plans. Their manifesto for the 2017 general election promised a £250bn spend on infrastructure over ten years. “We are actively engaging with businesses and we want to hear their views on how best we can deliver on our plans,” one advisor told me. It’s clear that Labour is genuine in its desire to hear from businesses in the construction sector and that dialogue will produce business opportunities for the industry.

Infrastructure firms should take advantage of these opportunities - and fast. They should also take heed of the words of Iain Anderson, executive chairman of public affairs company Cicero. Anderson, whose clients include big banks, says that when he gives boardroom presentations he now uses a slide which features Jeremy Corbyn in Downing Street. “The first time I did it was August, and back then you’d have a few smiles, you’d see people laugh,” he says. “They aren’t laughing now.”

Foresight over astonishment indeed.

Andy Walker is the editor of Infrastructure Intelligence.

If you would like to contact Andy Walker about this, or any other story, please email awalker@infrastructure-intelligence.com.