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Labour leader Ed Miliband tells Construction News UK investment threatened by skills shortage and EU debate

Labour leader Ed Miliband has told Construction News infrastructure and a skilled workforce are crucial to attract overseas investment at a time when the UK is “about to walk out of the European Union”.

Mr Miliband said “one of the biggest threats” facing investment was the UK’s potential exit from the EU, following prime minister David Cameron’s failed attempt to stop Jean-Claude Juncker becoming the next president of the European Commission.

The construction industry has benefited from massive foreign investment in recent years, from London office projects to schemes such as the £800m Manchester Airport City and new nuclear.

“What is one of the biggest threats for people investing in this country? It’s the idea that we are about to walk out of the EU”

Ed Miliband, Labour

Mr Miliband said: “A lot of the decisions companies [looking to invest in the UK] will be making will all be about skilled workforce, it will be about infrastructure [and whether] we are inside or outside the EU.

“What is one of the biggest threats for people investing in this country? It’s the idea that we are about to walk out of the EU.”

Mr Miliband was speaking at cooling manufacturer Airedale International’s Leeds headquarters on Tuesday where former transport secretary Lord Adonis launched his report – Adonis Review, Mending the Fractured Economy: Starter State, Better Jobs (see box).

The Labour leader said the UK was “far too centralised” and backed Lord Adonis’s plans to devolve £30bn-worth of funding to city and county regions across the UK.

He said the government had “talked a good game” but had “ignored” recommendations made by Lord Heseltine in his 2012 No Stone Unturned: In Pursuit of Growth report, which also focused on rebalancing central and regional power.

Mr Miliband rejected proposals made by the chancellor last month, who called for elected regional mayors across the UK.

“We [need] local people making local decisions with local businesses about how their area can grow”

Ed Miliband, Labour

The Labour leader said the announcement did not “make any sense” and the UK had “incredibly good local authorities”, with many people content with the local leadership in their area.

He added that local people should be at the heart of decision-making in their regions, working alongside local businesses and authorities. 

“We [need] local people making local decisions with local businesses about how their area can grow, prosper and create jobs of the future.”

The report was one of a string of policy announcements from Labour this week, including a pledge by shadow chancellor Ed Balls to cut and freeze business rates for more than 1.5m business properties. 

Publication of draft legislation on Sir John Armitt’s infrastructure review is expected on Thursday.

Mr Miliband said Mr Balls’ tax regime pledge would also help give investors the confidence needed to invest in the UK. Asked if Labour’s regional growth review would create “bureaucratic” systems, Mr Miliband disagreed and said it was not about creating a new “tier of politicians”.

He added there were two main issues hindering business growth today: skills shortages and a lack of targeted city-region investment in transport and housing.

Asked by Construction News if he would incentivise construction firms to retrain people from other industries, he said: “We should look at all these things to find out how we get the right incentives.

“We’ve got to build again in this country – I think there are real problems”

Ed Miliband, Labour

“What I would say about construction, and indeed every other industry, is let’s start to say what employers have been saying for a very long time, which is to give employers proper incentives and a proper say on how money is spent on training.”

Among the recommendations in Lord Adonis’s report is the establishment of at least 100 new university technical colleges and to oversee a threefold increase in apprenticeships for school-leavers in science, technology, engineering and maths.

Mr Miliband said that, unlike previous governments, his party would deliver on serious devolution, if it won the election in 2015. He said Labour would not “abolish” vehicles such as Local Enterprise Partnerships set up by the coalition in 2011, but would instead look to build on them.

Asked whether his party would look at creating an infrastructure secretary to sit at cabinet, Mr Miliband indicated he would consider the role, saying he would “look into all these issues”.

“What’s really important is we have a plan for infrastructure…  and Sir John Armitt has been doing very, very important work for us on how we actually have [that plan] and I think that’s what really matters.”

The Olympic Delivery Authority chairman was commissioned by the Labour Party to develop a review on delivering long-term infrastructure in the UK.

His proposals included the creation of an independent infrastructure commission, which has yet to be backed by the prime minister and chancellor, who both failed to support the plans when asked by Construction News in April.

The prime minister instead highlighted the coalition’s National Infrastructure Plan, which he said was delivering a long-term view for infrastructure in the UK. But Mr Miliband said Mr Cameron’s failure to support Sir John’s proposals was “why we need to get into government”.

On housing, the Labour leader stressed he was “determined” to meet his party’s housing target of 200,000 homes a year by 2020. 

When asked whether the target was achievable, the Labour leader insisted it was. “We’ve done it before and we can do it again. 

“I’m determined that we do it – I think it’s incredibly important to get to that number.”  

Mr Miliband added that the UK cannot “simply rely” on initiatives such as the government’s Help to Buy scheme to solve the UK’s housing crisis.

“We’ve got to build again in this country – I think there are real problems. We’ve got very low levels of housebuilding skills and if you look over the four years of this government [housebuilding has been at the] lowest levels since the 1920s.”

Adonis Review recommendations included:

  • The creation of more combined authorities, which would have more power over how additional revenue from business rates is spent
  • Businesses would have more say over how Local Enterprise Partnerships are run, backed by funding from the government
  • Devolving more than £30bn of funding to combined authorities, existing local authorities and LEPs over the course of a parliament, for housing, transport, business support, employment and skills
  • Setting a target for 25 per cent of all government procurement contracts to go to SMEs directly and through supply chains
  • Creating a Small Business Administration to back the 25 per cent target and provide support for SMEs across government
  • Establishing a regional network of Small Business Investment companies, linking to Labour’s policy on introducing regional banks

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