Construction and the constitution?

Ciaran Molloy

CIC Policy and Public Affairs Executive

Up to now, most people would have gone along with the Bill Clinton maxim “It’s the economy, stupid”. So why were constitutional issues discussed so widely at the recent party conferences? Why too, would the “West Lothian question” (i.e the right of Scottish MPs to vote on purely English matters) have any relevance for construction?

If you couch the issue, purely in terms of “English votes for English laws”, then there may be no great impact on construction. However, seen in terms of a wider devolution debate, there are very significant ramifications. The day after the Scottish referendum vote, David Cameron not only said that the constitutional status of England must be resolved but he also talked of the need to “empower our great cities”. In the context of an industry which relies on high levels of public spending, which acts as a significant tool in any regeneration initiative and which requires a steady flow of work to run efficiently, any devolution of power “downwards” could have very significant benefits.

As presently governed, there is a high degree of central control in the UK. The creation of a Scottish Parliament and assemblies in Wales and Northern Ireland, which control matters such as transport, point to intriguing possibilities. Add to that the promises made in the run up to the Scottish vote for the devolution of tax-raising powers and it can be seen that change is inevitable if the semblance of equality within the UK is to be maintained.

Many think that the creation of any sort of a federal system for the UK is doomed to fail due to the fact that England has 85% of the population of the country, a problem that does not exist in countries such as the USA, Canada or Australia which all have more evenly balanced populations. The establishment either of an English Parliament or even identifying legislation which only affects England and allowing only English votes on this, creates difficulty in that there will be indirect effects on the other nations in the union. One also has to note that the other obvious solution - devolving power on a regional basis within England - was rejected by the voters in 2004, when 78% of voters in the North East vetoed the idea of a regional assembly.

Nonetheless, the centralized nature of current system has been under challenge for some time. While the Regional Development Agencies were abolished by the coalition Government, “localism” has been one of the hottest topics over the last five years. As we are all aware, the flaw in this system is that the duty of Local Authorities to co-operate under the Localism Act does not mean a duty to agree. The creation of Local Enterprise Partnerships and the five Combined Authorities set up as a consequence of the Local Democracy, Economic Development and Construction Act 2009 recognise the need for local input and co-operation. Indeed the combined authorities may offer the best building blocks for creating a structure which will “empower our great cities”.

Recently the RICS as part of their “Property in Politics” initiative conducted a survey which showed that the biggest area of concern among a range of property professionals was the issue of “ larger than local”. This is not surprising. Urban regeneration, major transport development, the need to build new power generating facilities not to mention the acute need for large scale new housing are all examples of construction activities that need to be discussed and agreed at a regional and sub-regional level. Surely the best way to develop new “garden cities” would be on a regional basis?

Real power has to be backed by stable funding. The pledge to allow fiscal devolution to Scotland gives added impetus to the call for London and the others within the Core Cities Group (Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield) to be able to generate stable sources of funding from local property taxes. This would involve not just council tax but also other property taxes such as stamp duty land tax, business rates, and capital gains property development tax. Such a base would allow the development of the long-term projects which can drive the regions forward.

More than anything else the construction industry strives for long term planning, continuity in funding and co-ordination in developing the communities and the infrastructure we all need. Fundamental reform of our constitution system with power and resources devolved downwards may be way to achieve this.

Contributor: Ciaran Molloy is the Public Affairs Officer of the Construction Industry Council. With degrees in Law and Town Planning, he looks after the Public Affairs Committee, the Health and Safety committee and the Liability Committee.

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