How will Boris Johnson’s government affect you?

The would-be “world king” Boris Johnson hasn’t disappointed fans of political drama in his first few days as UK prime minister. After this week’s ministerial massacre – the biggest cabinet cull in nearly 60 years – the construction, housebuilding and infrastructure sectors are having to get used to the fact that not a single incumbent cabinet minister from a big spending or policy department remains in post. 

So where will Johnson and these new faces take the construction industry?

Johnson himself has already spoken of investing in infrastructure and giving people the chance to own their own homes, words that will be welcome to many in the industry. 

And for some, Johnson’s broad-based pitch that the UK can recover its optimistic “can-do” spirit and tackle Brexit – alongside every other challenge it faces – is a welcome tonic. 

Mark Robinson, chief executive of procurement body Scape Group, says: “He’s got a very positive track record and a can-do character, which could cut through the paralysis of decision-making we see in the public sector. 

“He’s a clever guy and I think we’ve got to give him an opportunity to show what he can do.”

Likewise, Mark Sitch, senior partner at planning consultant Barton Willmore, says: “As London mayor he was pragmatic in negotiations and pro-development, which is what the country needs, whether in terms of housing, economic growth or delivery of infrastructure.”

Others are less convinced that a Johnson premiership augurs good times ahead. Steve Norris, a former Conservative candidate for London mayor and Transport for London board member, describes the reshuffle as “all about seeing off the wimpy remainers and absolute loyalty to the proposition of leaving with no deal”. 

That criteria, he says, has been “far more important than whether they are likely to be any good at their job”.

Johnson’s appointments include making former housing minister Grant Shapps – forced to resign in 2015 after allegations of bullying – transport secretary, and appointing controversial former pensions secretary Esther McVey as minister of state for housing. 

Norris says: “These are all people who would never have been on any serious punter’s list – they’ve either been fired previously or aren’t known.”

For the sector, the outcome of Brexit negotiations is likely to be more significant than any policy-specific interventions that individual departments can make, with the Office for Budgetary Responsibility predicting  in July that a no-deal exit would spark a recession. 

Martin Curtis, associate director of public affairs firm Curtin & Co, and a former Conservative leader of Cambridgeshire County Council and party member, says: “To have a Conservative leader with a forward-looking policy [no-deal Brexit] of which the likely outcome will be a recession, I find frankly astonishing – and that’s why I didn’t vote for Boris.”

Chair of developing housing association Peabody, Lord Bob Kerslake, says: “If Brexit goes badly then the damage that does will override anything else the government could do for the sector.”

Ion Fletcher, director of policy (finance) at the British Property Federation, says his members were concerned about the growing likelihood of a no-deal exit, given Johnson’s promise to ensure the UK leaves the EU on 31 October, “do or die”. 

He says: “Commercial property investment has fallen by 30%-40% this year. While some would say that clarity will at least allow investors to make up their minds, I think a lot are not investing because they are worried about ‘no deal’.”

In the meantime, all the new ministers appointed by Johnson will have to be working quickly to get on top of their briefs. Richard Twinn, senior policy adviser at the UK Green Building Council (UKGBC), says: “Such a radical refresh of the government means there will be virtually no-one in government with any history of the policies that are in train. There are going to be some very steep learning curves.”

But beneath the overall direction, what will the new government mean for the industry’s key policy areas?

Housing

Johnson has already made clear his commitment to expanding homeownership, both in his leadership acceptance speech and first prime-ministerial speech on the steps of Downing Street. He brings experience of housing from his time as mayor of London – where he had direct control of housing policy – as well as close advisers with detailed knowledge of the issue.

Homes England chair Sir Edward Lister, who has been managing Johnson’s leadership campaign, is reported to have been appointed Johnson’s chief of staff, while Johnson’s deputy chief of staff – thought to be Liam Booth-Smith – was housing policy adviser to former communities secretary James Brokenshire.

Also positive for the housing industry is the appointment of Sajid Javid, another former communities secretary, as chancellor, given that he publicly called in 2017 to borrow £50bn to invest in new homes. 

Simon Rawlinson, head of strategic research at consultant Arcadis, says it is even possible that the government’s £12bn Help to Buy programme – due to close in 2023 - “might be open to a reprieve”. Last week, the FTSE 100 remained flat but listed housebuilder share prices commonly rose by more than 5%.

These firms may also have been buoyed by the new government’s likely focus on homeownership, in contrast to Theresa May’s focus on boosting all tenures of housing. 

New communities secretary Jenrick wrote a column for The Times in 2017, calling for immediate action to increase rates of home ownership, explicitly linking this effort with the idea of instilling traditional conservative values in young people. 

Johnson’s Downing Street speech talked of “giving millions of young people the chance to own their own homes”.

Chris Rumfitt, founder of public affairs firm Field Consulting, says: “There is a widely shared analysis among Conservatives that poor housing outcomes have been damaging support for the party and it needs to be tackled.

“The debate is whether only homeownership gives people the financial stake in society that turns you in to a Conservative supporter. Jenrick and McVey are much more traditional true-blue Tories.”

The extent to which this could be bad news for those offering affordable homes, particularly for rent, is not yet clear. Johnson’s record in London certainly suggests a willingness to sacrifice affordable housing numbers to make private developments more viable. 

Crossbench peer Kerslake says a return to a homeownership-only approach would make it impossible for the government to meet its housing targets. 

“Conservatives see homeownership as synonymous with Conservative voters but, to her credit, May adopted a more balanced approach,” he says.

“Esther McVey is a pretty hardcore right-winger. It’ll be a tragedy if we have to go back and have all those same arguments again.”

There is also disappointment at the lack of ministerial continuity, given that post-Grenfell reforms, social housing green paper proposals and Letwin Review-inspired planning changes all remain incomplete. 

Arcadis’s Rawlinson says: “There is a lot of work being done in areas like Grenfell that are complex, where retaining continuity is really important. I’d be keen to see these areas maintained and accelerated.”

Infrastructure and capital spend

Johnson has already spoken numerous times about his desire to use infrastructure funding to boost the economy and “level up” the most deprived regions of the UK – also George Osborne’s aim in creating the Northern Powerhouse. 

Johnson’s Downing Street speech identified spending in the UK’s “left-behind towns”, designed to “physically and literally” renew the country, with “fantastic new road and rail infrastructure and full fibre broadband”.

In chancellor Javid, he has picked a politician who supports the idea of borrowing £100bn to invest in infrastructure. Commentators are using the term “right-wing Keynesianism” to sum up the willingness to spend. 

The BPF’s Ion Fletcher says: “Johnson is already talking about loosening the fiscal taps. There’ll be more money for housing and infrastructure.” 

As mayor of London, Johnson supported the Garden Bridge project and presided over the construction of the Orbit tower in the Olympic Park and the Docklands cable car – all derided by critics as vanity projects – but which demonstrate his desire to leave his personal legacy in buildings and structures. 

Scape’s Robinson says: “The fact he’s very personally ambitious is in line with boosting regeneration and infrastructure, and is good news.”

However, big questions remain about his approach to the two biggest infrastructure projects on the stocks: Heathrow airport’s expansion and HS2. 

With growing criticism of the £30bn increase in HS2’s budget, Johnson has promised a review of the scheme by former HS2 chairman Doug Oakervee, to report by the end of the year. 

Field Consulting’s Rumfitt says that naming industry insider Oakervee to oversee the review has reassured the sector the scheme is likely to ultimately get the green light. Javid and his deputy Sunak are also supporters. 

“While there’s been rhetoric, my suspicion is that after some scepticism it’ll be approved,” says Rumfitt. 

Over the weekend, Johnson said he wanted to accelerate plans for a high-speed line between Leeds and Manchester as part of the HS3 initiative. He said full details of the proposals, expected to cost close to £40bn, would be published after Oakervee’s review of HS2 has been carried out.

On the Heathrow expansion, which Johnson promised as mayor to lie down in front of bulldozers to prevent but has now been approved by Parliament, he has said only that he will watch ongoing Judicial Review proceedings “with lively interest”. 

Rumfitt says: “He’s gone suspiciously quiet, which I suspect is a precursor to allowing it to go ahead.” 

However, Johnson will need to have an eye to his Hillingdon constituency, which Labour is already targeting and where voters are strongly opposed to the project. Former Conservative mayoral candidate Norris says: “It’ll be another bomb going off under him – he could lose his seat at an early election.” 

The new government is likely to be unambiguously positive for infrastructure spending in the north. “This is good news for Northern Powerhouse Rail,” says Rumfitt. “The Conservatives want to get back to winning seats in the North of England.”

However, it is not clear what Johnson’s view of investing in social infrastructure – schools and hospitals – will be. Key to determining this will be Javid’s upcoming spending review, earmarked for the autumn. 

The UKGBC’s Twinn says: “Given when the spending review is meant to be – just after 31 October – the question will be whether it is just subsumed by no-deal measures.”

Sector deal and skills

The industrial strategy devised by former business secretary Greg Clark – a die-hard remain supporter – was the centrepiece of May’s attempts to boost the productivity of UK business. 

It resulted in a £420m construction “sector deal” designed to boost construction innovation and research and development, alongside the creation of the Construction Innovation Hub. 

However, Johnson’s and new business secretary Leadsom’s views on the policy are unknown, though insiders suspect they will be keen to distance themselves from Clark’s strategy. 

Rumfitt says: “All the biggest backers of the industrial strategy have gone and been replaced by more true-blue Tories who tend to favour a more hands-off role for government.

“The first question for Leadsom should be whether her department is still the Industrial Strategy department.” 

An industry source close to government says: “The overall industrial strategy framework is likely to survive – the real question will be about the sector deal.”

Meanwhile, Johnson’s early statement that he will consult to move the UK towards an Australian-style points-based immigration system has been welcomed, given the sector’s despair at the post-Brexit system proposed under May, which would have barred most foreign workers earning less than £30,000 a year from working in the UK. 

However, the system will only improve the skills shortage if it identifies construction skills as sufficiently in demand to benefit from preferential treatment. 

Brian Berry, chief executive of the Federation of Master Builders, says: “It very much depends upon the list of skills that are allowed – but anything has to be better than what the Migration Advisory Committee came up with – which was a disaster.”

Sustainability

The overall thrust of government policy around sustainability is unlikely to change radically, with Johnson committing himself to the “net-zero carbon” target announced by May in June. In the Commons, Johnson this week pledged to tackle climate change “not with the hair shirt-ism of the Greens but with wonderful new technology made in this country”. 

However, some have questioned the enthusiasm of key appointments to the green agenda – the UKGBC’s Twinn says of new environment secretary Villiers: “She’s hardly been on our hit list of Conservative MPs sympathetic to our agenda.”

The most immediate priority for construction will be the direction of travel for the Future Homes Standard announced by former chancellor Philip Hammond earlier this year, on which a consultation was expected this autumn. 

“The new housing secretary has to make a decision about how much to pin his colours to mast on this issue,” says Twinn. “If the consultation doesn’t say a lot, then the industry will have no certainty whatsoever about the direction of travel.”

Twinn says the sector is also waiting on government for an energy and heat strategy, an energy efficiency action plan and for recognition that government is treating energy efficiency retrofitting as a national infrastructure priority. 

“New ministers could delay these things even further,” he says. “Who knows when they will now emerge?”