Political uncertainty has major ramifications for the industry. Here’s what you need to know from the Conservative Party conference:
1. Shout louder to get a positive result from Brexit
Skills minister Anne Milton told a private property dinner that the industry needs to get Daily Mail front pages for ministers to listen. The message from government is that sectors need to lobby hard for what they need if they want to get heard. Ministers and civil servants, who have been sidetracked by dealing with the divorce bill, citizens’ rights and the Ireland border, say they are now ready to engage more with business. Chancellor Philip Hammond said he wants to hear about specific deferred investments that will help “galvanise” his cabinet colleagues in recognising the urgency of making a transition agreement.
2. It’s getting urgent
The future of the 200,000 construction workers nationally and the 12% of the City of London’s workforce that come from the EU remains uncertain. Catherine McGuiness, policy chair of the City of London Corporation, which lobbies on behalf of the financial services sector around the UK said: “Unless we have clarity in the next couple of months over a transition to give us time to work towards the longer term future, institutions are going to move jobs elsewhere.”
3. Sharma is the “implementation housing minister”
New housing minister Alok Sharma sees his main role as following the agenda set out by his predecessor Gavin Barwell, who lost his seat at the June General Election. “My job is to deliver this,” Sharma said, waving a hard copy of the housing white paper published in February. Giving councils powers to boost planning fees, supporting build to rent and promoting SME housebuilders are among the policies that Sharma plans to implement.
4. Social housing is back on the agenda
Theresa May announced an extra £2bn for affordable and social housing. The money will go towards just 5,000 homes a year over a five-year period but it does represent a significant policy shift. Before the election May pledged to deliver a “new generation of social rented homes” but it later emerged “social rented homes” really meant affordable rent levels at up to 80% of market rent. This time, social housing really means social housing.
5. But home-ownership is not off the agenda….
A £10bn Help to Buy extension will benefit 135,000 households, which works out at £74,000 for each first-time buyer to get a mortgage with a deposit as low as 5%.
6. Political leadership is lacking in Westminster, but shining in the regions
The rumour mill at the Midland Hotel in Manchester was abuzz with talk about which ministers were preparing leadership bids in the hope that Theresa May steps down before the next election (foreign secretary Boris Johnson, international development secretary Priti Patel, Brexit secretary David Davis and chief whip Gavin Williamson are all tipped to run if they get the chance). In more positive news, both Labour and Conservative metro mayors were out in force pledging to get on with business while Westminster is blocked by political disputes. Tees Valley mayor Ben Houchen said he hoped to be the link between investors and development opportunities. West Midlands mayor Andy Street says he wants to share the “growing success story” of the region with other areas.
7. The door to wider devolution is open
Business, energy and industrial strategy secretary Greg Clark said the first devolution deals were just the start of a process to devolve “more and more power”. His tip to regions was to “make government an offer they can’t refuse”. He said: “What is being proposed needs to be so clearly in the national interest as well as in the local interest, demonstrated convincingly with the analysis that is available, that actually it would be crazy for the government to stand in your way.”
8. Anger about infrastructure investment in the North of England isn’t going away
The chancellor pledged an additional £400m for infrastructure investment in the North of England – £300m for the rail network, ensuring HS2 infrastructure “can link up with future Northern Powerhouse and Midlands Rail projects” and £100m for road improvements. However, he did not commit to a timeframe or cash for HS3, the proposed East-West rail link. Thinktank IPPR North called the £300m rail investment “a drop in the ocean compared to what was needed and nowhere near the £59bn catch-up cash necessary to narrow the spending gap with London”.
9. The November Budget could offer some breakthroughs
The conference was light on policy announcements, leading to speculation we could have a bumper Budget on 22 November. Adam Marshall, director general of the British Chamber of Commerce, called on the chancellor to reduce some of the “upfront costs” businesses are dealing with such as business rates. He said: “If we are worried that the tap is being turned off because of uncertainty, then the government should do everything it can to turn the tap back on.” However, Hammond has not offered many hints, only saying he thought “removing uncertainty” was the best way government could support business.
10. Property needs to improve at communicating its value
Major industry lobby groups have launched Brexit manifestos, but for government to react it is important to get the public onside. Phil Briscoe, managing director of Newington Communications, who spent the conference lobbying ministers in the Midland Hotel bar, said: “While Brexit secretary David Davis pushes on with the negotiations, there is an opportunity to engage with the Department for Exiting the European Union and put the property sector firmly at the heart of the UK position. But there is an opportunity to go beyond this and shape public opinion. This also means tapping into a public narrative that is often shaped around the future of financial services, defence or research, and adding real estate to that list.”