Queen’s speech: Some positives for construction despite Brexit focus

After the campaign and the unexpected general election result, we now have the reality of a hung parliament, a minority government and Theresa May’s first Queen’s speech.

The monarch’s speech to parliament setting out the government’s legislative programme for the 2017-19 parliamentary session contained 21 government bills, eight of which are focused on Brexit, and three draft bills.

Brexit inevitably dominates the political landscape and this was reflected in the range of legislation tabled by the government aimed at paving the way for the UK’s exit from the European Union. This includes a Repeal Bill and other bills to address the areas of customs, trade, immigration, fisheries, agriculture, nuclear safeguards and international sanctions.

While the national media headlines will focus on those measures from the Tory manifesto not included in the Queen’s speech, with several manifesto commitments quietly ditched following the electorate’s less than enthusiastic reception during the general election campaign, there are a few  bills affecting the construction and infrastructure sector that should win parliamentary support notwithstanding the government’s lack of a majority.

The High Speed 2 Phase 2A Bill will accelerate the building of a connection from Birmingham to Crewe by enabling powers to compulsorily acquire the land needed for the railway, construct and operate it. The bill will also deem planning permission to deliver the scheme, with details of planning to be developed on a site-by-site basis in coordination with the local planning authority.

A Smart Meter Bill will ensure that smart meters will be offered to every household and business by the end of 2020 and an Automated and Electric Vehicles Bill is aimed at ensuring that the UK remains a world leader in new industries including electric cars.

Non-legislative measures announced which will be of interest to the construction sector include a public inquiry into the Grenfell tower fire and measures on schools and technical education, the National Living Wage and workers’ rights, tackling the gender pay gap and discrimination, critical national infrastructure, housing and consumer markets, including the energy market.

Commenting on the Queen’s speech, Patrick Flaherty, chief executive UK & Ireland, AECOM, said: “Given the difficult circumstances the government faces following the recent election, there was a lot to welcome in today’s speech. We were especially pleased that the new modern industrial strategy played such a prominent role and agree with the government about the vital importance of infrastructure investment to the future of the nation’s prosperity. 

“Commitments to HS2, electric cars and protecting critical infrastructure were all welcome. However, we would also like to have seen Crossrail 2 and the Heathrow expansion mentioned. 

“It was good to see the government’s reiterated commitment to the importance of technical education and fairer funding in schools. We also support the government’s reaffirmed commitment to important initiatives such as the 2% GDP pledge to NATO and standing by its obligations to the Paris Agreement.”

ACE chief executive Nelson Ogunshakin said: ““I said immediately after the general election that although the UK was facing an extended uncertain future, we have been here before and survived. Of course the industry would have preferred to see more detail, such as Heathrow runway expansion and Crossrail 2, in the Queen’s speech, but we need to keep a calm and cool head and refocus with even greater determination on the delivery of the current infrastructure investment pipeline. Especially at times of uncertainty, the role of membership associations is crucial in articulating and representing the views of companies and the wider industry to Government and ensure that the UK remains an attractive destination for foreign direct investors. 

“At ACE we will be looking at the measures contained in the Queen’s speech and in particular our sector groups will be reviewing the wider implications of the Automated and Electric Vehicles Bill, the HS2 Bill and the Smart Meter Bill  to produce a guidance note to inform members. Regardless of the current political uncertainty and the challenges of the parliamentary arithmetic, ACE will continue to champion our industry in the corridors of power.”

Darren Reed, head of rail at WSP, said: “The backing of the next phase of HS2 to provide much needed capacity for the UK rail network, alongside the Chancellor’s plans to expand financial support for infrastructure projects, is the reassurance the industry has been waiting for. As we enter Brexit talks, we need more than ever to invest in game-changing infrastructure and develop economic corridors that better connect cities and drive economic growth across the UK. HS2 will not only provide a source of employment for thousands of people, but will be a new platform of which the UK can be proud.”

Welcoming the HS2 announcement in the speech, Richard Threlfall, KPMG’s UK head of infrastructure, building and construction, said: “This is a critical investment that will enable Britain to build the infrastructure needed to rebalance our country’s economic wealth. Today’s announcement connects more of our major cities to a high speed rail network, and takes us a step closer to creating a Northern Powerhouse. 

“The commitment recognises the dismal state of links between the heart of the UK and its northern cities today. This should finally turn the tide and help the north regain its historic prominence in the UK economy. Government, local political and business leaders now need to come together and develop the connectivity that HS2 offers into an overall vision for the development of the north. The objective is clear - a vibrant, successful and integrated northern economy that our children will be proud to inherit. Today’s announcement brings us an important step closer to that.”  

Angus Walker, head of government and infrastructure at lawyers Bircham Dyson Bell, also welcomed the HS2 bill but said: “This is planned to open in 2027, but given that this Queen’s speech covers two years rather than one, there is less precision than usual about when the bill will actually be introduced in parliament.”

Stuart Minchin, director of buildings at engineering recruitment firm Matchtech, focused on the government’s push for affordable housing and the talent pool available to deliver it. “Affordable housing has long been on the government’s agenda and as investment in housing has risen, so has the demand for construction workers,” said Minchin. “Unfortunately, the demand has not been met and the sector continues to experience huge skills shortages with EngineeringUK forecasting that 265,000 skilled entrants will be required annually to meet the demand for engineering enterprises through to 2024,” he said.

Minchin was also concerned about the effects of Brexit. “A main concern from the unexpected result of the general election is how the sector will be able to hire overseas talent post-Brexit to supplement the skills we have in the UK. Currently, 8% of the construction workforce comes from the EU, so employers will want to know whether these jobs will be protected once the UK leaves the European Union,” he said.