The first 100 days
So now we know. Against all the predictions it is to be five years of a Conservative government, elected with a mandate to rule, without needing the help or co-operation of others having gained a decisive majority.
Upon the announcement of the victory sterling jumped upwards, bank shares rose and all non-doms breathed a sigh of relief, not that I suspect many were that concerned in the first place.
For construction, I fear, things may not be so simple. It is good to have a clear outright winner that cannot be disputed – months of wrangling would have been disruptive. However, one of the strong aspects of the coalition was the fact that for each proposition put forward by one side there was often an equal and opposite view articulated by the other. In other words a kind of fail-safe brake. This, it is argued, was instrumental in the speedy introduction of government stimulus to the housing market, enhanced spending promised for infrastructure and money for apprentice schemes. Also possibly an acceptance, perhaps for the first time, by a secretary of state for business, that the built environment plays a vital part in the economy. Will our industry have the same seat at the table of the new possibly more self-assured government going forward? This remains to be seen.
Let us not forget how relevant all this is to us working in the built environment. The new government is still arguably our industry’s most significant and important single client in the real sense. Also they control the levers by which there is the confidence to either buy, build or put the brake on house building. Things are still fragile and according to the latest Office for National Statistics (ONS) forecast UK economic growth slowed to 0.3% in the first quarter of 2015, with a fall in construction output partly blamed for the slowdown. A more detailed analysis of the data may, however, have contained better news for construction. The ONS said the sector grew by 5.3% month-on-month in March – its first estimate of output growth for the month – suggesting construction output may be on the rebound after declines of 0.9% in February and 2.5% in January. However, it also inserted its own caveat emptor spin on the figures, saying that the data was preliminary and “subject to revision”.
So what this tells us is that we are still in the fragile phase of a recovery that is just beginning to spread out from London and the South-east to other parts of the country. The RICS adds weight to this premise, encouragingly reporting that demand for commercial property is growing at its fastest pace since 1998, triggering a surge in investment in new projects.
So, we now need to see the new government acting in its first 100 days to appear decisive and focused, displaying a manner that can nurture this growing business confidence. We need a prime minister and chancellor looking outward. It is a concern that with the prime minister in effect having announced his resignation prior to the election by saying he will only serve one more term, plus the likely internal rifts over Europe, then once the euphoria of having pulled a decisive win out of the bag has subsided we could be back to a government more intent on introspection than managing the ship. We saw it before in 1992 with the surprise John Major win and a distracted government is never good news for business.
“The economy, stupid” is the phrase James Carville coined as a campaign strategist of Bill Clinton’s successful 1992 presidential campaign. It is as appropriate today, one week after the most dramatic election result in several generations, as was then. We in Construction have given the 2015-2020 government a shopping list in the industry-backed Agenda 15 manifesto. They cannot hide behind ignorance or say they do not know what is needed by this large and powerful industry. Refreshingly, construction has been front and centre of all the parties’ campaigns. Hard hats have to be remembered as the headwear du jour for all the leaders during the 2015 election, as they ran from one housebuilding site to another in a bid to show their commitment to first time buyers.
Now words need to be turned into action. The first 100 days are vital: the CBI, RICS, RIBA have all articulated their shopping list and the appointment of an infrastructure tsar is common to all. The other key issues affecting the industry, like housing, energy efficiency and supply and skills, are there to be tackled. You only get one chance to make a first impression. We will all be watching.
Richard Steer is Chairman of Gleeds Worldwide.
Opinion piece first published in Building on the 12th of May 2015