Will the new and weakened Tory government do more to promote construction? With a new set of challenges, and time ticking for the Brexit negotiations, recognising the industry’s potential is more important than ever
Ever get that feeling of deja vu? The “groundhog day” election, as I like to call this 2017 poll, was called a relatively short time after the last one, held on 7 May 2015. As a result of last week’s inconclusive result I think it likely there will be another one before the end of the year. Not something anyone expected or welcomes.
Looking back at my shopping list for the new Conservative administration in 2015, I suggested they might look at housing as a priority, ramp up energy efficiency initiatives, and prioritise skills training. To help them oversee these initiatives I wanted the appointment of a new Construction Tsar as a champion for the industry.
What we actually saw over the intervening two years or so was a diminution of energy efficiency initiatives, a re-statement of missed housing targets and some attention to the skills shortage, widely accepted as lacklustre. The new Tsar? Not needed apparently.
So now here we are again with a new Conservative government, except this time without a majority. This wounded administration will apparently, according to commentators, only have one item of any substance on its agenda and that is the disentanglement of the UK from the EU. All other things, including prevention of terrorism, flow from that premise it is argued.
Will we, working in the built environment, notice any change in attitude towards us and our needs? The last government, under prime minister Theresa May, neither understood or appreciated our industry. An unfair statement, you may argue, given her commitment to Hinkley, HS2, and housing targets. However, it was notable that during the recent campaign only the Labour Party and Liberal Democrats were prepared to submit their manifesto for the construction sector to Building in the form of an open letter.
The Conservative Party either did not feel they needed to participate in articulating its aims for an industry that is worth 10% of GDP and employs 2.1 million people, or they didn’t see the built environment having any discernible role in influencing “strong and stable” government.
I am not confident that the newly appointed minority administration, with limited ability to pass legislation, will be any more sensitive to our needs. They do not seem to appreciate that without our industry functioning at full potential, tax take is much less for the exchequer and Gross Domestic Product (GDP) drops.
The latest GDP figures for the UK showed growth at 0.3%; it was 0.7% for the same period in the previous year. Construction output fell over the last month by 0.7% and, according to Barbour ABI, the number of construction projects in April 2017 was 27.3% lower than the same month in 2016.
There is still growth, with the number of new construction projects up by 25.7% in March, In other words things are slowing as prices are rising. The instability in the markets brought about by the latest inconclusive election result is bound to impact costs even further, which could well delay or stifle demand to build.
Petty political squabbling should be consigned to the past. We need stability and a clear direction of travel that allows us the freedom to prosper
This time, I have not got a wish list for the new government; it seems pointless when they have so many other things to consider. However, I do have some observations. It needs to appreciate that the UK construction industry is a high priority when it comes to the Brexit negotiations in whatever shape they take. It is bigger than aerospace and the automotive industry combined and this reality needs to be recognised.
The rights and freedom of movement, for skilled and professionally qualified workers who contribute to the maintenance and construction of the built environment, should be guaranteed before we lose even larger numbers to other countries. It’s quite simple – we still need people to build. We have more and more technology impacting upon our sector, but it is primarily about men and women working to create the built environment and we are facing a shortage of skilled workers. It may be that to negotiate an exit from the EU, without a majority, the new administration will need to back away from the hard inflexible approach to Brexit it paraded before the election. This I would welcome.
In the face of potentially rising costs we need stability to give investors a comfort factor. One way to achieve this would be to give an immediate commitment to the funding of infrastructure projects like housing, schools, prisons and hospitals that will give the sector a clear pipeline and allows it to train and recruit to attract more quality workers. Surely this would be accepted by all parties and would be an easy win for a government that may be short on finding consensus in a new parliament.
The country is at a crossroads. The election was called for reasons of political expediency that backfired. While we have been distracted, the EU has established a clear, unified and purposeful path forward. We are already running to catch up. I am not sure that any new government would be wise making the mistake of taking for granted those at home who create the structures in which we live, work and invest, and embarking on an ill-conceived negotiation that we will all live to regret.
Now is a time for vision and statesmanship. Petty political squabbling should be consigned to the past. We need stability and a clear direction of travel that allows us the freedom to prosper. As an industry we are still the envy of most countries in the world; the new government must now work with others to ensure this is maintained.
Richard Steer is chairman of Gleeds Worldwide