After last week鈥檚 shock election result, what does this hung parliament mean for some of the biggest issues facing construction?
As new MPs dragged their cases behind them this week, bewildered by the enormity of the Palace of Westminster, older and more experienced hands were gossiping about the chances of Theresa May staying on as prime minister.
Having failed to secure a majority of any kind, let alone the landslide for which she hoped, May emerged from the 8 June general election weakened, denuded, perhaps even broken. A confidence and supply deal with the Democratic Unionist Party was the only way of ensuring May鈥檚 minority government could pass key votes, yet even most political journalists could name no more than a handful of their MPs or policies.
With Brexit negotiations due to start next week, the UK has never appeared so ill-prepared for its secession from the EU. Having spoken up a hard Brexit through ruling out membership of the lucrative Single Market, many MPs believe May will have to soften her stance.
Yet there is a core of Brexiteers in her party who can now bring down her government by rebelling in crucial votes should she veer off the hard secession they demand. May is squeezed from both sides of the Brexit debate, a personally devastating political outcome given her party had led Labour by 21 points in some polls only two months ago.
In the midst of all this confusion, scheming and disarray, construction and infrastructure investment has not been getting much of a mention. Under David Cameron and George Osborne, the idea that economic revival could be achieved through a Victorian-style infrastructure investment renaissance was a central tenet. The industry was at the centre of political and economic discourse.
But this new parliament threatens to see infrastructure and construction overwhelmed by Brexit and the Conservatives鈥� attempts to govern effectively day-to-day. Survival, both at national and governmental levels, trumps long-term economic concerns.
Tim Stone, the government鈥檚 former nuclear adviser and a non-executive director at Arup, warns that this inevitable political short-termism will eventually hurt the country鈥檚 standing as a world power. He argues: 鈥淚nfrastructure is at least as important as it has ever been. We need leadership to deal with the backlog [of projects and investment] to drive economic competitiveness.鈥�
Here, 黑洞社区 examines what this hung Parliament means for some of the biggest areas and issues facing the industry.
General infrastructure
Industry insiders who have regularly dealt with the May government since she succeeded Cameron last July warn that chancellor Philip Hammond could use the chaos to rein in infrastructure spending. In the Autumn Statement, Hammond pledged an additional 拢23bn National Productivity Infrastructure Fund, including 拢1.3bn for roads, to be spent over the five years to 2021/22, but the Office for Budget Responsibility forecast a capital spending underspend of 拢14.8bn over that same period.
One insider says: 鈥淗ammond is highly protective of the public sector balance sheet, like a tigress protecting her cubs. This is a serious issue, because so much needs doing.鈥�
Given the furore over care for the elderly and criticisms of the government鈥檚 handling of the NHS, the source predicts that any public money made available will be spent on social issues. 鈥淭his is such a complete mess,鈥� adds the source.
High Speed Two
Phase One of the 拢55.7bn railway, from London to Birmingham, seems secure with construction due to start shortly with an opening date of December 2026. The second phase, which connects HS2 to Manchester and Leeds, is due to go through parliament for approval in 2019 and is more at risk.
A leading industry figure says that any errors to be made by HS2鈥檚 recently installed chief executive, Mark Thurston, would give Hammond the 鈥渂asis for a pause鈥�. This would also avert an embarrassing rebellion from central England Conservative MPs whose constituents are against HS2 because of the disruption caused by construction work and fears of environmental blight.
Crossrail 2
Commitment to the proposed north-to-south London line was a glaring omission in the Conservatives鈥� election manifesto. The estimated cost of 拢30bn in London, which is already set to benefit from the 拢15bn first phase of Crossrail, now known as the Elizabeth Line, is difficult to sell to the public given May wants the industrial strategy to geographically rebalance the economy away from its dependence on the South-east.
But there is also the problem of personality politics. Firstly, this was one of Osborne鈥檚 favoured projects, but the former chancellor and May now suffer a poisonous relationship.
Perhaps more importantly, London mayor Sadiq Khan and transport secretary Chris Grayling are enemies as a result of holding the justice portfolios during the coalition years and have this year clashed over Khan鈥檚 bid to take control over suburban rail routes. 鈥淚鈥檓 expecting a bigger campaign coming out of London for this soon,鈥� says a source close to Crossrail 2. 鈥淏ut this is going to be very difficult until that relationship between Grayling and Khan is sorted out. They鈥檙e going to need a broker.鈥�
Northern Powerhouse
As well as Crossrail 2, the so-called northern powerhouse dominates the next wave of proposed mega-projects. Richard Threlfall, head of infrastructure, building and construction at KPMG, says Northern Powerhouse Rail and the 拢6bn Trans-Pennine road tunnel face 鈥渦ncertain times and a rough ride鈥� while the Treasury prioritises its spending.
However, he argues that any uncertainty or delays will be 鈥渁 small price to pay鈥� if the government is 鈥渇orced to stand back a bit鈥� from hard Brexit and rethink its stance over, for example, access to EU labour that is 鈥渦nhelpful for our industry鈥�. Threlfall also says May鈥檚 inability to make major changes in her reshuffle, because she could not afford to create additional political enemies through demotion, created stability, with ministers and cabinet members remaining in post.
Heathrow expansion
A leading infrastructure adviser warns that the parliamentary vote on the proposed third runway at Heathrow won鈥檛 happen 鈥渦ntil this mess is sorted鈥�. There is still plenty of opposition to the 拢17.6bn scheme among May鈥檚 own MPs, while the party鈥檚 critic-in-chief, former London mayoral candidate Zac Goldsmith, has returned to the House of Commons by regaining Richmond Park from the Liberal Democrats.
May鈥檚 fear of Heathrow鈥檚 Conservative opponents, which include populist foreign secretary and potential leadership rival Boris Johnson, was clear when the third runway became another scheme omitted from her election manifesto.
Palace of Westminster restoration
There were already fears among MPs that the proposed 拢4bn refurbishment of the Palace of Westminster, which is a serious fire risk and riddled with rodents, would be met with outrage from a public who have lived through austerity and have no sympathy over their politicians鈥� working comfort.
Plus, few insiders believe 拢4bn will be sufficient: Neil Gray, a Scottish National Party politician who sat on the committee that looked into the plan, has warned the cost will be 鈥渂illions more鈥�.
A free parliamentary vote on whether to press ahead with the plan has been delayed by the election and faced significant opposition. Sir Edward Leigh, a senior Conservative backbencher, has argued there cannot be 鈥渂illions of pounds of expenditure on ourselves鈥�, while former shadow business secretary Chuka Umunna has called for the palace to be turned into a museum.
Baroness Angela Smith, Labour鈥檚 leader in the House of Lords, who also sat on that committee, tells 黑洞社区: 鈥淭his didn鈥檛 seem to be a priority for Theresa May before the election. Hopefully there鈥檚 somebody in her office who is looking into this sort of stuff as well as big picture issues. People like me struggle to understand why there should be any delay 鈥� except from a PR point of view because of cost and the public鈥檚 reaction 鈥� given the longer you delay the more it will cost in the end.鈥�
Housebuilding
Senior Labour sources say the reason the party performed far better than expected, with 40% of the vote against barely 30% in 2015, was because the electorate was less concerned about Brexit than expected. Instead, says one senior MP, 鈥渢raditional Labour strengths like housing鈥� were the talk of the doorstep.
Although Labour and the Conservatives鈥� housing policies differ, both parties recognise there is a shortage and this might be one area that the parties could co-operate on, according to Labour MP and communities and local government select committee chairman Clive Betts. 鈥淭here is general agreement across parliament that we need to build more homes and get to 250,000 homes built per year. Even the Conservatives know we need more homes for rent below market [price] levels, the difference is whether it鈥檚 social housing or [private sector developers]. We will be pushing hard for more homes for social renting, particularly if the private sector starts to tail off [in construction] due to concerns over Brexit.鈥�
The regions
Fans of Jeremy Corbyn might argue this point, but the big winner of the election was Arlene Foster and her band of 10 DUP MPs. A senior Conservative minister says: 鈥淚f I were the DUP I鈥檇 be asking us for whatever I could get as the price for supporting us 鈥� a new airport, better roads.鈥�
The DUP鈥檚 election manifesto called for Heathrow鈥檚 鈥渋ncreased air connectivity to Northern Ireland鈥� and the establishment of a Northern Ireland Infrastructure Fund 鈥渁s quickly as possible鈥�.
The Conservatives promised North Wales and Borderlands Growth deals as part of their infrastructure plans for Wales and Scotland. Certainly the party will have to deliver north of the border, having won 13 seats there, up from only one.
鈥淭hey promised this infrastructure and now they鈥檝e got to deliver it,鈥� says the Liberal Democrats鈥� former Scotland secretary, Alistair Carmichael. 鈥淢ay has got Scottish Tory MPs to please now 鈥� now there鈥檚 a novelty.鈥�
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