Archie Norman: Why the Tories’ business plan will work

Archie Norman is worried. He has seen the new offices he will soon inhabit at Portcullis House and is unimpressed. “It’s a funny set-up,” he says. “The furnishings are expensive but the actual accommodation is very modest.

“There are a number of small offices with built-in walls at a time when businesses are looking for much more flexible space. People work in different ways; frontbench MPs have lots of meetings, others work individually. Ideally, you need a building with many different types of accommodation. This is very rigid.”

The comment is typical Norman. He is a pragmatic businessman first and politician second. It is well known that he finds the whole performance of parliamentary politics antiquated, much to the disdain of his colleagues, but as he constantly reminds you, 46-year-old Norman enjoyed a long and successful business career before entering parliament three years ago.

His appointment as shadow to John Prescott was intended to highlight the deputy prime minister’s lack of business, or “real world” experience. But isn’t a more serious problem than the accommodation at Portcullis House the fact that few in the traditionally Tory-loving construction industry care what his party has to say anymore?

Not unnaturally, Norman disagrees. “I think a lot of people had written us off but there’s been a total change in attitude to this government now. People think there is a very good chance we’ll be back in power. My business byword has always been to underpromise and overdeliver. This government does the opposite.”

Well, the opinion polls are one thing, but the fact remains that fewer and fewer contractors are making the pilgrimage to the Tory party conference, and the right-leaning Construction Confederation has become a fixture at Labour’s.

Norman is philosophical about the industry’s change of allegiance. “I’ve been a businessman, and business naturally wants to be close to government,” he explains. “A lot of chairmen and chief executives of companies did disappear, but a lot are now sheepishly reappearing with the possibility that we may be in government soon.”

Norman cites the recent Comprehensive Spending Review as typical of why people are disillusioned with New Labour. “After three years in which spending on transport and housing has been cut, it now looks like there will be some attempt to remedy the shortfall. But the lesson of this government is not to look at the headline and spin but to examine the fine print. For example, the government’s 25 tram schemes have turned out to be 25 tram lines. This government promises much but delivers little.”

As you may have gleaned from the above, Norman’s main area of expertise is transport, which the Tories (and the pollsters) see as Labour’s Achilles’ heel. But Norman is knowledgeable about how the construction industry operates, too. But the industry may not like what he has to say.

One of the depressing things in construction is its employment practices

His views on urban regeneration, for example, could have been written by Lord Rogers, and he makes no secret of his desire to see a more strident approach to greenfield protection than that outlined by the government in PPG3.

None of this will endear him housebuilders, the only part of the industry that has not fallen under the spell of New Labour, but Norman is unrepentant. “I see people in the housebuilding and construction industry every week and the one thing people should know is I’ve been a major customer of the industry and I do understand a bit about it.

“Not all housebuilders are pleased with me, but I’d like to see them prosper and thrive. Housebuilders act in their shareholders’ interests by building on less difficult greenfield sites and building lots of similar-looking executive homes. That has to change. It’s my business to marry their wishes with wider policies that help all.”

Respect for people

As a businessman, Norman also says he finds it hard to countenance the way in which the construction industry treats its workforce, which is still predominantly casually employed.

“One of the depressing things in construction is its employment practices,” he explains. “For me, a business needs to be made up of its employees and it should have a sense of their value and worth. At Asda, we tried to ensure that everyone was valued as a colleague, including suppliers.

“In contracting, where much of the work is skilled, there must be ways of making it more rewarding for everyone involved in the process. Contractors should be more aware that good employment practices generate competitiveness.”

Lest Norman be accused of being another industry knocker, he also has a plan to make things better for it. “At Asda,” he says, returning to the business theme, “I was one of the largest clients in Britain. I understand the concerns of contractors, and believe me, the next Conservative government will operate at a lower cost and reduce both the taxes the industry pays and the burden of paperwork. Construction is an entrepreneurial industry and overregulation doesn’t help.”

He adds that a Tory government will also spend more on urban regeneration: “People on good incomes want to move out to areas where there are better schools and facilities, and until we improve on those things, we won’t succeed. The fact is this government has spent less on urban regeneration than the Major government in its last three years.”

This government has spent less on urban regeneration than the Major government in its last three years

What’s the big idea?

Norman’s solution to the problem is to give local authorities more control over the planning process by abolishing the regional development agencies and ending the right of the secretary of state for the environment to call in schemes. But why does he want to do this?

He says: “We need a more bottom-up approach to cities. Yes, we would abolish the RDAs because they cost over £17m to run and are unaccountable. They have no democratic basis and most of them are packed with Tony’s cronies.

“We would also give developers a template to work with, based on a local plan that communities have bought into, one that gives them a bit more certainty if they put a scheme forward. To complement that, we intend to tighten up the planning system to give housebuilders a faster appeals process and better incentives to build on brownfield land.”

Of course, the devil is in the detail, and Norman is reluctant to elaborate on any of the ideas because he says they form part of a wider Tory policy blueprint that is still under wraps.

However, he does hint that the type of incentives on offer could include equalising and decreasing the VAT rates on refurbishment and new build. “Clearly it is an anomaly,” he says. “We do want to level the playing field there and equalisation would be one candidate.”

The plan could also involve merging the regeneration budgets of the DETR and the Department of Trade and Industry to better co-ordinate action on the inner cities.

As the interview draws to a close, Norman returns to subject number one: “When I first went to Asda I cancelled all construction projects. After 1995, we as a company moved from being novices in contracting to being industry leaders. We reduced the time to build a new store by a third and got better partnering arrangements.”

But for all the talk of a more businesslike approach to issues, Norman’s views on his opposite number are straight from central office.

“John Prescott is a series of embarrassments and failures. He’s a character, but he’s not an asset. He knows he’s in the last year of being in charge of a sizeable department.”