Shadow chancellor John McDonnell has offered to work with his political opponents on 10-year agreements to support “all major infrastructure projects” to prevent them being derailed by a change of government.
Speaking to Construction News, Mr McDonnell said the invitation he made to George Osborne in December to sign up to a bipartisan long-term funding plan for flood defences was “on offer” on all major infrastructure projects.
The government did not take up Labour’s offer to agree a flood defence spending plan “over two parliaments at least”, which was made as floods wreaked havoc across the UK in December.
Asked what message he wanted to send to contractors, Mr McDonnell said a Labour government would provide greater long-term certainty on infrastructure investment.
He confirmed he supported High Speed 2, High Speed 3 and Crossrail 2.
“The whole point about the relationship with contractors is to make sure that there is a long-term, patient investment strategy from the government so they can have consistency from the government, rather than the stop-start that we have seen for the last six or seven years.”
He said that was why Labour’s fiscal credibility rule, which Mr McDonnell revealed earlier this month, excluded public sector investment.
“We deliberately did not follow George Osborne’s rule which controls public sector investment. We excluded it from our fiscal credibility rule so that we could allow government to borrow to invest in infrastructure.”
He credited the term “patient investment” to the economist Mariana Mazzacuto, a professor at the University of Sussex and a member of Labour’s economic advisory committee.
A “key element” of his long-term plans would be greater investment in housing, Mr McDonnell told Construction News.
Under a Labour government there would be council housebuilding “on a large scale”, as well as new homes built by housing associations, co-operatives and self-builders.
He said he also wanted to work with private developers to bring forward sites for mixed-use and homeownership.
Speaking at an event held by developer U+I as part of its ‘Think’ series of talks, Mr McDonnell said he wanted to hear from developers with “ideas” for new policies that would help bring forward development.
In particular, he said he was keen to discuss options for a land value tax, although he recognised that might not be popular with developers.
“I think there are ideas like that that we have to look at seriously, but we would not move in that direction unless we were able to take people with us.”
Mr McDonnell extended a direct invitation to developers to join a working group to help develop Labour’s site development policies. “We are desperate for ideas,” he said.
He stressed that new homes must be built on mixed-use developments so that there were employment opportunities for residents too.