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Analysis | Should industry be concerned about the next prime minister?

May and cameron

As Theresa May takes the helm as the UK’s next prime minister, it’s clear that her views will impact the UK’s key infrastructure projects.

So at a time when many in the industry – from unions, to civil engineering firms, to ICE president Sir John Armitt – are calling for swift decisions on big infrastructure projects, what do we know about May’s views?

Well, it’s good news for HS2. Unlike former rival Andrea Leadsom who said she would carry out a financial review of the project and rethink it if necessary, May is a supporter and thinks it’s good for the economy. But Leadsom isn’t the only one with concerns about the cost – fellow Tory MPs Bill Cash and Cheryl Gillian have both called for May to scrap the scheme. A National Audit Office report has outlined the project’s mounting cost and schedule problems – though the Department for Transport says it will be on time and on budget. Whatever May’s personal views, HS2 is no easy-win in terms of popularity.

It seems the decision on airport capacity is still there for the taking. May has not explicitly come out in favour or against a third runway, unlike outgoing prime minister David Cameron who was faced with a momentous U-turn after famously saying in 2009: “The third runway at Heathrow is not going ahead, no ifs, no buts.”

May’s constituency of Maidenhead is on the doorstep of Heathrow and for all the constituents who are concerned about the expansion, there are others for whom the airport is a vital source of employment.

In terms of Heathrow, May is seen as having some reservations but has still not given a preference. Indeed, the airport is keen to show the new prime minister what a unifying decision for the Conservative Party the go-ahead could be. A recent YouGov poll found that 74% of Tory party members support an expansion of Heathrow. Heathrow’s chief executive John Holland Kaye said: “The next Conservative prime minster will have a mandate from the party membership to make the right choice for jobs and security, in the national interest and expand Heathrow.”

The results of the YouGov poll are supported by the eight Tory MPs who make up the Gatwick Coordination Group. Led by MP Crispin Blunt, the group wrote to both May and then Tory leadership hopeful Andrea Leadsom on Friday calling for a swift decision. The letter said: “We are writing to urge you to confirm that, if successful in your bid to become leader of the Conservative Party, you will implement the Airports Commission’s recommendation for a third runway at Heathrow Airport.”

However, it remains to be seen who will be in May’s Cabinet and how that will influence the decision on expanding capacity at Heathrow. Boris Johnson and Justine Greening are well-known opponents.

Away from specific comments on infrastructure projects, what will May deliver in terms of the UK’s trade with the rest of the EU? This issue was one of the key reasons why many civil engineering bosses supported the Remain camp.

May has said she won’t invoke Article 50 before the end of the year, in order to get the exit negotiation strategy clear. In her leadership speech she said: “I want to be clear that as we conduct our negotiations, it must be a priority to allow British companies to trade with the single market in goods and services – but also to regain more control of the numbers of people who come here from Europe. Any attempt to wriggle out of that – especially from leadership candidates who campaigned to leave the EU by focusing on immigration – will be unacceptable to the public.”

She’s also introduced the idea of Treasury-backed infrastructure bonds for new projects and giving workers a place on a company’s board.

In terms of the status of the EU nationals that currently live and work in the UK – many in the infrastructure sector – May has said this will be part of the Brexit negotiation process. Although London’s Mayor Sadiq Khan has warned May against this, stating: “You cannot play politics with people’s lives.” A statement from the Cabinet Office has said that when the UK does leave the EU, it fully expects that the legal status of EU nationals living in the UK, and that of UK nationals in EU member states, to be properly protected.

But whatever May’s views, and importantly the ministerial cabinet she builds, most in the industry would like to see less of the Tory party politics in infrastructure.

ICE director general Nick Baveystock says it’s vital that the National Infrastructure Commission’s (NIC) guidance on decisions is placed above the opinions of individual politicians.

“Now more than ever the Government – and incoming Government under new leadership – must show its commitment to infrastructure and build certainty for the industry and investment community. Major projects and programmes underway should progress as planned, and bold strategic decisions on issues affecting the UK’s competitiveness must be taken,” he says.

“Politicians will always have differing views on infrastructure projects. This is why the work of the NIC – in providing unbiased analysis on the UK’s long term needs which can stand above political fault lines – is so important. We look forward to working with the incoming prime minister and her team.”

It seems that at a political level too there are concerns that the work of the NIC is not undermined by the new prime minister. Going back to the Gatwick Coordination Group’s letter about Heathrow expansion, it said: “We were elected to build world-class infrastructure. The Airports Commission was clear that expansion should take place at Heathrow and that expansion at Gatwick was a ‘distant third place’. The NIC, which is based on the model of the Airports Commission, would be immediately undermined if its recommendation as to what was in the national interest was rejected in favour of what is within short term political interests of a handful of MPs.”

It’s also a view that’s endorsed by those who represent infrastructure companies in their relationships with stakeholders too. Copper Consultancy is an infrastructure communications company and its chairman Claire Gordon says that the vision and the benefits of the National Infrastructure Plan need to be clearly explained to the public at a time when the UK needs a consistent message and direction for infrastructure. She said: “It is vital our next prime minister creates confidence among investors in infrastructure because it is a crucial part of making our society work, creating jobs and delivering economic growth.”

So as May takes office as the new prime minister, if there is any conflict between her personal views and those of the NIC and the industry, it’s clear much more is at stake than the just projects alone.

 

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