Is construction a better place since New Labour came to power? Will it deliver on its promises in its seemingly inevitable second term? Marcus Fairs asks industry leaders how they'd grade the government's performance …
On 20 March this year, the Construction Industry Council organised a briefing session for Labour MPs. About 30 leading figures from the industry went to rub shoulders with the 30 politicians that had promised to attend. In the event, only three turned up. "That was really disappointing," says CIC chief executive Graham Watts. "I think there's a degree of complacency among Labour MPs."

As well there might be. With the government steaming towards a second term, Labour backbenchers may well feel there is little electoral capital to be gained from hobnobbing with construction bosses. The industry, too, has pretty much written off the Tories as no-hopers. "In terms of construction, it's been very difficult to find out where they're coming from," says Rudi Klein, chief executive of the Specialist Engineering Contractors Group. "I don't think the industry really has been talking to the Tories that much, so we don't know what their feeling is."

Nor do the Tories appear to be courting the industry. A CIC briefing for the opposition was slightly better attended than the Labour bash, (13 Tories turned up out of an expected 27), although the CIC admits that the event was something of a sideshow.

The contrast with the 1997 general election could not be greater. With everything to play for, Labour MPs and parliamentary candidates went out of their way to win over an industry that had traditionally and instinctively backed the Tories, but that had grown disillusioned with John Major's regime. The then-shadow construction minister, Nick Raynsford, particularly impressed with his enthusiasm for his brief.

After Raynsford got his chance to play the part for real, he was widely regarded as the best construction minister in living memory. "The industry has shot up the political agenda," says Klein. "I can't remember a time when we had someone of that ministerial level who understood and supported the industry."

Raynsford will be sorely missed if, as predicted, he is promoted after the election. Sir Michael Latham speaks for many when he says: "I think Nick Raynsford has been absolutely excellent, and I'm sorry we might lose him."

Raynsford's busy four years would be a hard act to follow, and there are concerns that a possible successor to him might be less enthusiastic in pursuit of the construction brief.

"None of the 1997 Labour MPs are interested anymore," says the CIC's Watts. "There aren't any rising stars in terms of construction in any of the parties. It's not seen as a terribly sexy way into politics."

So the industry might find it has to shout louder to get the government's attention, but then again, this may be less important than it was. Raynsford has set in train enough new initiatives to keep the DETR busy with implementation for a second term. These initiatives are, to say the least, ambitious. There is the continuing development of the Egan gospel, the recipe for an urban renaissance set out in the urban white paper, the high-risk campaign against cowboy builders and the struggle to turn myriad public sector bodies into best-practice clients. As Latham puts it: "I don't think we need any particular new initiatives in construction, just continuation of the existing ones."

The likely result is that the evangelical tone the DETR has adopted so far will be replaced by a quiet determination to deliver tangible results in time for the election after next. The likely danger is that, with Raynsford gone and no dramatic new policies to keep civil servants on their toes, progress will slow to a snail's pace. If the initiatives are not firmly established, they could be overturned by a future administration.

There are also persistent rumours – vigorously denied by government insiders – that the DETR may be dismembered, and responsibility for construction shifted to the Department of Trade and Industry. "I'm worried about the structure of government after the election," says Watts. "At the moment it's very holistic – all within the DETR. It's easy to talk to civil servants."

But if Labour's interest in construction is waning, what does the industry think of the government? The signs are that enthusiasm for Blair & Co has cooled somewhat but most are still prepared to give them the benefit of the doubt, with many leading figures giving the government high marks for its performance (Report, right). The main reason for this is the continuing strength of the economy.

The view of Tony Pidgley, chief executive of Berkeley Group, is typical: "As a businessman I don't mind who's in power as long as the economy's doing well. I'll give Gordon Brown eight out of 10 for that."

There is broad support for much of what Labour has tried to do, with Egan-related initiatives scoring particularly high marks. The £72bn coming out of last July's Comprehensive Spending Review promises to keep order books healthy even if there is a downturn in the economy. Elsewhere, though, the message from the industry is that the government had better start delivering on its promises in the next term.

Patience is running out with programmes such as Constructionline, the approved list of contractors and consultants that has failed to attract a critical mass of clients, and the quality mark, the vetting scheme designed to make life difficult for cowboy builders. There is also growing concern over the yawning gap between Labour's rhetoric on infrastructure and the built environment, and the parlous state of the transport network and the public realm.

I don’t mind who’s in power as long as the economy’s doing well. I’ll give Labour eight out of 10 for that

Tony Pidgley, Berkeley

There is also one issue that seems to unite many of the disparate corners of the industry: VAT and the black economy. This is set to be one of the key campaigning issues in the run-up to the election, with lobbying groups furiously pushing to lower or eliminate VAT for domestic maintenance and repairs on the grounds that this will remove householders' incentive to pay cash in hand to cowboy builders.

"As far as the election is concerned, we've got a single-issue campaign," says Stephen Ratcliffe, chief executive of the Construction Confederation, which is just one of the bodies taking up the issue. "The construction black economy is worth £4.5bn. What are they going to do about it?"

Overall, Gordon Brown's stewardship of the economy might be winning Labour the construction vote right now, but with a recession on the horizon and no movement on the VAT issue, the government could be in for a very different ride in the next parliament.

  • Marks out of 10 for New Labour

    Sir Michael Latham:
    7/10, but 2/10 for transport

    Their setting up and support for Egan has been very good. I support their new safety campaign. The way they have improved the stock of social housing and schools has been extremely good.

    The downside has been their performance on transport. The way they've handled Railtrack has been lamentable and the Tube is absolutely disgraceful. I want to see an ongoing commitment to a realistic roads programme and more commitment to, and flexibility in, PFI procurement. I also want to see improved investment in public sector stock, including hospitals.

    Martin Donohue, chief executive of Westbury:

    From a housebuilding standpoint, you'd have to be churlish to give them a bad mark. You can't fault them too much on fiscal policy; they've provided consistent growth and low inflation. But they've been smart at giving with one hand and taking with the other.

    I'm concerned about their pronouncements on infrastructure spending: We haven't got anybody to do it. We haven't got the resources. And I'm not very impressed with the initiatives coming out of the DETR. I think they've been more about appearance than substance. I don't think the DETR has worked; it's such a massive department. There's a question whether construction should be the province of the Department of Trade and Industry.

    If they want to make serious changes they have to change the tax regime. I see no reason why they shouldn't eliminate VAT on repair and maintenance – it's an additional tax on householders.

    Stephen Ratcliffe, chief executive of the Construction Confederation:

    The positive thing has been the sustained economic growth. We haven't had the boom and bust of the past.

    The PFI initiative is very much a plus. It was in the doldrums when the Tories left. It's by no means perfect but it's coming on.

    But they've failed miserably to do anything about the construction black economy. We told them at the outset that quality mark wouldn't work. Unless you erode the competitive edge of cowboy builders through tax, it just won't work. They just haven't listened.

    There's been an increase in bureaucracy. It does seem that the government is using businesses as an administrator and tax collector. The Construction Industry Tax Scheme is still a bureaucratic nightmare.

    Michael Ankers, chief executive of the Construction Products Association: 5 or 6/10 My gut reaction is that they've done one thing of good value: they've managed to macroeconomy very well. They've had a lot of good fortune but they've demonstrated responsibility. We are encouraged by the increasing switch to best value procurement.

    On the downside, they haven't spent at all. They haven't, as far as our industry is concerned, delivered anything they promised at all. I'm desperately disappointed they haven't done anything to improve the built environment. Infrastructure fell apart at the end of last year in the wake of the Hatfield crash.

    The way they’ve handled Railtrack has been lamentable and the Tube is absolutely disgraceful

    Sir Michael Latham

    The big downside is the environment: they've used environmental concerns – aggregates tax, the climate change levy – to raise money. It's quite cynical and they've harmed our international competitiveness.

    Alan Crane, chairman, Movement for Innovation:

    Right from the outset they've listened to and engaged with the industry – including the Treasury. Before this lot, you couldn't get anywhere near the Treasury.

    They've given us what we want in terms of economic stability. On top of that, with Mr Brown's policy of borrowing for capital investment with his long-term investment programme, people can plan long-term workload and put in place training schemes. OK, they've still got to deliver on their plans.

    On the negative side, there is the failure to recognise that they need to do something about VAT on repair and maintenance. That's fundamental to eliminating cowboys.

    The other one is this stupid construction industry tax scheme. That's just a farce, government blindness. It doesn't recognise the logistics of the industry.

    Graham Watts, chief executive of the Construction Industry Council: 6/10 It's a mixed bag. The emphasis on design, urban regeneration, best value and whole-life costing I would give them good marks for. Egan, the Movement for Innovation and the Construction Act have been positive.

    Having said that, there's quite a lot of things they haven't done very well. On sustainability they promised quite a lot and haven't done much. Constructionline and the quality mark scheme have been a bit of a let-down. Raynsford has been a very good minister, although lots of the things he promised haven't really developed.

    I'm very disappointed in the transport situation. A lot was promised but it has taken a long time to deliver.

    Dermot Gleeson, chairman, Gleeson:

    The most important achievement – and they were building on foundations laid by their Tory predecessors – has been the creation of a stable macroeconomic climate. As a contractor, life is hugely more agreeable, but Labour doesn't deserve all the credit for that.

    What's both a source of dismay and encouragement is the government's attitude to procurement. Its response to the Egan report has been terribly encouraging and we've seen a vast range of procurement initiatives. The disappointment is that it's not clear if there are going to be real partnering contracts or if individual departments are taking on board the new thinking. They need to revisit procurement policy.

    We've been pleased by the way PFI and PPP has developed, although clearly they've got to sort out the London Underground PPP. One disappointment has been the failure to get to grips with the deficiencies of the planning regime, not least lack of resources.

    Roger Humber, former chief executive of the House Builders Federation:
    8/10 for builders but 1/10 for people who need housing

    The DETR has become a promotional department for environmental and minority causes. It has become peripheral. Planning has not been modernised; it has actually become less efficient.

    We are seeing housing output falling to the lowest levels since the 1920s. Housing shortages are going to become an economic issue; the key issue for the second term is going to be to address housing supply.

    … and how about the Tories?

    Sir Michael Latham
    Their policies haven’t caught my eye. They’re not going to win anyway. Tony Pidgley
    How on earth can you be impressed? The Tories are in disarray. To allow the race row to erupt is just unacceptable. It’s offensive. The British people know there is just no choice. Martin Donohue
    I’m not certain the Tories have got any policies at the moment. No houses, no roads, no development … of course we’d have lower taxes, though. Dermot Gleeson
    I hear the Tories are proposing to deny the right to appeal to the secretary of state when developments are rejected by local planners. That is ludicrous and shows the extent to which the party is being run by people behaving like naive undergraduates rather than statesmen. The poverty of their thinking does seem extraordinary. Roger Humber
    They’re not worth listening to because they’re talking nonsense. Archie Norman has been an absolute disgrace. The way he’s leaped on the anti-development bandwagon is inexplicable for a Tory. I keep pointing out to him that the government has already shot his fox. He’s still trying to portray Labour as destroyers of the green belt, and he’s failing. He understands nothing; he’s learned nothing.