The future for construction

Firstly, can we expect the new Government to last a full five-year term? Already there is controversy over the Government’s plans to require a 55% majority before Parliament can be dissolved. Whether or not that holds, I am sure there is a strong will among both the Conservatives and the Liberal Democrats – and probably in much of the Labour Party as well – that in the economic plight we are in the last thing we want is another General Election this year.

Politicians I have spoken to and whose views I respect seem to think that the Government has a good chance of holding together for the next 18 months but that another General Election is quite likely in the autumn of 2011. Hopefully by then the Government’s rescue plan will not only be in place, but having the desired result What do we know about the people with whom we shall have most dealings? Vince Cable is enormously respected throughout politics, and his appointment as Business Secretary seems to have had a calming effect upon the City – although the banks will not welcome the forthcoming taxes upon them.

The Minister in that Department who has responsibility for construction, Mark Prisk, has a surveying background and since he shadowed that post in opposition he will have a good understanding of the key issues facing him. At Communities and Local Government, the Secretary of State, Eric Pickles, should have a good feel for the responsibilities of local authorities, and the Housing Minister, Grant Shapps, again led on this in Opposition which should stand him in good stead in the months to come.

But, of course, the key issue facing the Government and the country is how to reduce the public sector deficit. My former colleagues in the civil service will doubtless be fearing where the axe may fall, as will my many friends in local government – although the Government’s commitment to devolving more to local communities may help here. Traditionally Governments facing the need to cut public expenditure have said that they want to reduce current rather than capital, while often they have ended up doing the opposite. The last thing the construction industry needs at this moment is a significant reduction in public funding – and already there are worrying signs.

Although there seems to be a continuing commitment to Crossrail there is to be no more central government money for the Olympics, no third runway at Heathrow and will the building of new nuclear power stations go ahead? During the run up to the General Election no new contracts were let for the school building programme, and this moratorium appears to be continuing for the moment. The building of new schools and hospitals has lessened the impact on the construction industry at a time when the private housing sector has been in desperate straits, and although this sector is now showing signs of recovery it would be sad indeed if the public sector tap was now turned off.

I wish you and your businesses well as we wait to see how the rest of the year unfolds.