The ‘Build Back Better’ Construction Dilemma

The ‘Build Back Better’ Construction Dilemma

The Build Up

There has been growing concern about the crisis building in construction. This crisis is bearing down on two fronts and could easily become a barrier to Government hitting their ambitious 300,000 new homes per year target. The first issue is supply of materials, the second the availability of skilled workers.

The government’s plan is to ‘build back better’ from the pandemic. That’s taken literally on the housing front. However, alongside demand for materials increasing, from homeowners extending and renovating during the pandemic and new housing projects being driven forward, supply of materials has fallen, and prices have driven up. The pandemic and Brexit are clearly the key factors in this predicament.

The same issues also causing a headache on the availability of a skilled workforce too. A lack of skilled tradespeople in the construction sector is nothing new. But the impacts of Covid-19, especially the first lockdown and the hard stop that had on construction, have caused this issue to become much more acute. EU nationals have headed for home nations and an ageing workforce has seen many hang up their hard hats as they retire.

Remediation Options

Government could implement a raft of interventions to help remediate the growing issues in a key sector that will drive economic post-pandemic recovery. There’s a need to look at working hours in the construction sector and to ensure the sector is given as close to the same rights to flexible working as other sector workers will get as possible.

However, Government also need the sector to appeal to a younger, more digitally savvy demographic. The newly announced apps from MHCLG for permitted rights development on the homeowner and local authority sides are encouraging. But the sector needs to implement more tech-driven ways of working into their day-to-day processes. The need for technology within the sector will also be driven and focussed by the Government’s Net Zero targets, the MMC and the retrofit agendas but digital ways of working will also help to attract a younger set of applicants. Stability in pay and working hours will help with recruitment in the sector as well, not only in the younger demographic but across the board. Too many roles are currently zero-hour contracts and a better rate of pay across the industry alongside reliable hours seems like a simple fix but a crucial one for a skilled workforce.

Solving the problem of materials, demand and price is more complex. The Construction Leadership Council recently noted cement, timber, steel and other materials were in short supply in the UK and that high demand was due to continue. A key factor in this shortage of supply is a lack of hauliers. Again, this is mainly due to Brexit and the pandemic. The FT recently reported that a severe delay in new hauliers being able to take tests due to Covid-19, an ending of EU national recruitment and self-employment tax reform causing EU drivers leaving. Again, the government will need to work quickly to rectify these challenges to ensure this issue doesn’t intensify and become a national source of pain for the sector and the government in the recovery from Covid-19.

Surveying The Issue In The Round

Covid-19 policy interventions aside, this government is wedded to delivering the 2019 election manifesto, treating their pledges made in the election as a governmental to-do list. Despite the upheaval and scarring impacts of Coronavirus, there’s been no stopping the government ticking off their manifesto commitments pledge by pledge. Social Housing White Paper; brought forward, planning reforms; controversially in progress, First Homes; now on the market, but the availability of both materials and skilled workers has the ability to stop government in their tracks and hinder the economic and housing recovery from the pandemic. Strong policy interventions to improve the availability of materials and skilled people is key. But speed is also a vital factor on the government side as well, ensuring the ‘build back better’ mantra is followed as the public expect and the government want.

Cavendish Advocacy and BECG bring together national and local expertise to ensure those in the construction industry are communicating with the stakeholders that matter, from the parish council to No10. We can help keep you updated with crucial government policy as we move through the latter part of 2021 through events and research throughout the year. For further information and advice, please contact alex.challoner@cavendishadvocacy.com.

Planning for the future or gluttons for punishment?

Planning for the future or gluttons for punishment?

 

When the ‘Planning for the Future’ White Paper was published last August, the Housing Secretary labelled the reforms proposed as “radical and necessary”. The idea was to bring the planning system into the digital age, finally deliver on their long-term pledge of delivering 300,000 homes per year by the mid-2020s and support the levelling-up agenda across the country, especially in the Midlands and the North.

The response was near hysteria from across the political spectrum. The key concern was the ‘mutant planning algorithm’ which saw the Government criticised by its own backbenches and local councils, as well as generally supportive media like the Telegraph and Daily Mail.

Alongside this, former head of the civil service, Lord Kerslake bemoaning a “return to mono-tenure estates” while even Ministers and rising stars of the Conservative benches criticised the White Paper for bringing forward more development across the Tory shires. This was a Tory nightmare well and truly in the making.

Fast forward to 11 May’s Queen’s Speech and the Conservative Party seemed to have forgotten the savaging it received for its White Paper. The scant detail provided in the explanatory notes suggest that, ‘mutant algorithm aside’, little has changed in the Government’s thinking for the forthcoming Planning Reform Bill, and it soon became clear that the Government Whips were about to experience déjà vu.

Queues of Conservative MPs took their turn to warn the Government to approach planning reform very carefully. The media picked up this scent and very quickly “southern discomfort” for the Conservative party became a theme for this Parliament, alongside a sense that northern colleagues were benefitting at the expense of the south – running contrary to the general narrative of more investment in the regions. This media narrative will no doubt continue to run through this Parliament, and will take the gloss off the stunning Conservative party performance at the local elections.

The key thing is what happens next. Parliamentary managers want the Bill to begin its progress after the summer recess, and hope it’ll be in law within the year. This will give the Bill’s numerous opponents plenty of time to get up to mischief – even with the Government’s majority the Whips are already aware that they cannot rest on their laurels. The new formula for housing uses house prices for housing need – i.e. where homes are more expensive, there should be more new homes. This method of calculating housing need is going to incendiary for some Conservative MPs as it could lead to more homes being built in the south and less homes being built in the new ‘blue wall seats’. The dynamic is already showing, with northern Conservative MP, Simon Clarke, recently writing that the Planning Reforms are important for the south and so he supports the new algorithm. Many of his colleagues will not see it the same way.

Whips and party managers will be using the summer to gauge how the Bill will be presented to Parliament when MPs return, but what no one can predict is what concessions they might need to make to get the Bill passed and what it will eventually look when it finally passes into law. Alongside this, the much-awaited clarity on what ‘levelling-up’ will actually look like could create additional tensions.

BECG and Cavendish Advocacy offer a seamless “parish pump to No10” approach to all your planning & development needs.  We will be keeping you abreast of the stages of the Planning Reform Bill in 2021 through a series of events and research throughout the year.  For further information & advice please contact alex.challoner@cavendishadvocacy.com

Is uncertainty the one thing we can be certain of over the coming months?

Is uncertainty the one thing we can be certain of over the coming months?

Hope is in the air. The sun is shining, the vaccination programme is progressing, and people can take advantage of non-essential shopping, sit in a beer garden, and see their friends and loved ones. After a hard and testing winter, it is only right that the country enjoys a return of those freedoms which we all took for granted pre-COVID-19 and have sorely missed over the past year and a half.

Of course, we are still some way off a complete return to normality, but the UK remains well on its way to that crucial date of 21 June, when (barring some disaster) the majority of restrictions will be lifted. If this date still seems a million miles away, it is worth reminding ourselves what we can look forward to between now and then.

From 17 May, indoor hospitality and entertainment venues will reopen. That means pubs, restaurants, and cinemas to name but a few. For those so minded, indoor adult group sports and exercise classes will also be permitted. In addition, performance and sporting events will return, although the exact number of spectators allowed will depend on whether the event takes place indoors or outside, and how large the venue is. Finally, up to 30 people will be able to attend weddings, receptions, funerals, and other life events. This will enable more of us to celebrate or mark those important moments which all mean so very much to us.

However, while these are important steps in the right direction, there remains huge uncertainty in a number of important areas.

The report published by the Global Travel Taskforce in April, provided a framework for restarting overseas travel on 17 May, but very little detail. Those who work in the aviation and travel industries will therefore be anxiously waiting for government to publish its Green List of countries, from where travellers can return to the UK with no requirement to quarantine.

Throughout the long process of lifting restrictions, the government has understandably been cautious. Failed attempts to reopen the economy in 2020 (we all remember the Christmas U-turn) provided a stark lesson in expectations management, and the government has repeatedly said that the pace of the lockdown will be dictated by data, not dates.

However, as more people are vaccinated, the Prime Minister could come under increased pressure from both the opposition and his own backbenchers to accelerate the pace of unlocking. The extent to which he will be inclined to listen will depend on how the Conservative Party performs in the local and mayoral elections on 6 May.

 

Outlining the political landscape

Up until now polls have consistently shown the Conservatives to have a robust lead over Labour. But the current fallout between No10 and the Prime Minister’s former Chief Advisor, Dominic Cummings, could cast a shadow over the Conservative Party’s lead so far. However, assuming this is short term political turbulence in the run up to the local elections, then any strong performance in these elections, alongside a win in the Hartlepool by-election, will likely be viewed as confirmation of the current approach.

It will also leave the Prime Minister in a strong position as he considers his next Cabinet reshuffle and returns focus to his domestic agenda. We will know more about what this will look like on 11 May, when HM The Queen opens Parliament and delivers her government’s legislative programme.

We can anticipate some bills to be rolled over from the previous term, such as the long-delayed Environment Bill, which is a key part of the government’s green agenda and will become increasingly important in the run up to COP26 in November. Other new legislation will address the building safety regulatory regime, reform the asylum system and repeal the Fixed-term Parliaments Act. We may also see a bill designed to finally reform Health and Social Care, based on the proposals set out in a DHSC White Paper in February.

These bills will inevitably be accompanied by other initiatives to promote the economic recovery and the levelling up agenda. This has been the cornerstone of this government’s purpose since 2019 and will be one of the defining yardsticks by which the government will be measured come the next General Election which, if the Fixed-term Parliaments Act is repealed, could arrive sooner than we think.

Further political analysis will be provided by Alex Challoner at the next CBI Government Affairs Network event on 10 June, register your free place below.

This article first appeared on CBI’s website. You can view it here.

What are we likely to expect from Tax Day following the Budget announcements?

What are we likely to expect from Tax Day following the Budget announcements?

Falling on the 15th March, the ‘Ides of March’ was traditionally a date in the Roman Calendar for the ‘settling of debts’ and of course the fateful assassination of Julius Caesar!

Not quite as eventful as the assassination of Caesar, but nevertheless a date worth watching this month is the 23rd March. This is because behind all the Chancellor’s political chutzpah of his Spring Budget which aimed to keep the economy on life support and plan some ways of clawing it back; the 23rd March is the day when we will get a real sense of what the Treasury is planning to hit us with next!

So what do we know already? Well the Chancellor’s plan to increase corporation tax from its current rate of 19% to 25% from 2023 onwards is well documented, as is the Chancellor’s plan to freeze tax thresholds and inheritance tax, in order to push more people into those higher tax brackets. This is remarkable in itself, making it the largest tax-raising budget since 1993 under Norman Lamont, involving £12bn increase in corporation tax and £9bn of personal tax rises.

What we don’t know yet however, is the full extent of the documents and consultations that would have been traditionally published on Budget day, but this year will be published on 23rd March dubbed as UK “tax day”.

This day long awaited by financial experts three weeks after the Budget will be a real indicator for the long-term changes in Government tax policy, including for example future changes to capital gains tax. Tax professionals say this break from tradition could also give the Chancellor an opportunity to signal his intent on further big tax changes to come – including potential tax rises in the future – outside the crowded time of Budget day.

The Chancellor will in effect on 23rd March set the agenda for the autumn; signalling what is going to come.

A lot of criticism was levelled at the Budget for not doing enough around green growth and taxation. The 23rd March could be the perfect time to announce consultations on how to tax carbon while creating incentives for green energy innovation. The UK will be hosting the UN Cop26 international climate talks in November, perfect for around the time of the Autumn Statement.

It’s worth noting that publishing tax consultations after the Budget would also buy the Government time to assess the public’s appetite for possible changes. The three-week window may allow the Government to gauge the public’s reaction to the high-level measures and potentially change the amount of those consultations. Experts predict that as many as 30 new revenue raising measures could be published by the Treasury.

Pending what is published, the general reaction to the Budget has been positive to the Government. Business has reacted pretty favourably so far and a You Gov poll published after the Budget gave the Conservatives a 13-point lead over Labour. The combination of the continued success of the vaccine programme; the well-received spending plans and the easing of lockdown restrictions is likely to lead to a ‘strong’ Conservative showing in the May local elections according to pollsters. This is not such good news for Labour leader Keir Starmer; with one senior policy member describing the outlook as “grim” and warning that matters are likely to worsen for the labour leadership over the summer. We will see.

What we do know is that the Chancellor is politically playing a game of two halves. Despite the early warnings to “level with the people” and embark on a programme of tax rises to repair the public finances. This was expectation management. The Budget on the 3rd March was laced with sugar. The nastier stuff has been pushed back by at least two years.

However, we won’t know until 23rd March how much nastier it will be, so “Beware the Ides of March”.

Further political analysis post-Budget will be provided by Alex Challoner, Managing Director, on 18th March with CBI panel as Cavendish Advocacy becomes a sponsor, along with YouGov, of the Government Affairs Network of the CBI. Find out more here.

Note to Prime Minister: from his “virtual” Parliamentary Private Secretary (PPS)

Note to Prime Minister: from his “virtual” Parliamentary Private Secretary (PPS)

Indulge me for a few moments but let us imagine that I am the Prime Minister’s Parliamentary Private Secretary (PPS). What would my candid advice be to Boris Johnson as Parliament return? Here is what I would say:

Dear Prime Minister,

You appointed me to be your eyes and ears in Parliament to help keep you abreast of developments before they engulf us.  So, here are my top 5 observations as we enter the autumn session:

1. Colleagues – and by that, I mean old and new intake – have come back in the foulest of moods from their summer holidays. In fact, I have never known a time quite like it.  In the space of a few days I have been told everything from the “party is in a bad way and new MPs are very depressed” to “there is a lot of unhappiness amongst colleagues about the current situation”. These are some of the milder comments. Amongst old and new MPs there is a general sense the Government is drifting off course and if nothing is done about it then it could cause longer term damage. The chorus of MPs expressing disapproval about the Government’s general handling is growing louder by the day and it is imperative that the Government is seen to get back on the front foot after the summer debacle. I know that is not easy in the middle of a pandemic and a severe economic downturn, but colleagues are sick and tired of being caught off guard by Government announcements which can change by the minute. There is a lot of grumbling about the whipping situation and it might be a good idea to put a member of the new intake into the Whip’s office as a morale booster for the new intake?

2. Members are getting a very rough ride when they return to their constituencies and are faced by disgruntled councillors, many of whom could be out of a job soon. Our local government base is up in arms about our proposed changes for reorganisation and many feel they will be side-lined when the Government publishes its plans for more Metro Mayors and Unitary Authorities. This is on top of planning reform White Paper which, depending which area of the country you live in, could see a significant rise in housing numbers. A combination of these two so quickly could inflame already hot tempers. Could there be a way of delaying the plans for further devolution until the New Year at least?

3. Some colleagues are getting jumpy by the prospect of a collapse in trade talks with the EU, and I am not talking about the usual suspects! The proposal to rewrite parts of the Withdrawal Agreement as part of the Internal Market Bill; some believe this leaves us exposed to running roughshod over international treaty obligations. If we can suddenly re-write clauses of an agreed treaty, how we can be judged seriously if say we are telling China to respect its international treaty obligations to Hong Kong? For some colleagues this does not bode well. On top of this, an imminent collapse of talks would be a gift for the SNP ahead of Holyrood Elections next year. How can we dial down the rhetoric between ourselves and the EU on this matter?

4. Several colleagues have questioned the need for a No10 press conference from October onwards to take the place of lobby briefings. Aside from finding the right person to head up these daily briefings, some MPs are concerned we are spending too much time focusing on the delivery of our message at the expense of the substance of our message. Would it not be a better use of time and resources to find someone within No10 to help shape the over-arching message for the Government as it begins to articulate a vision for the UK as we emerge out of the pandemic?

5. Back again on the trade deal, between ourselves and the EU are we creating a rod for our own backs with any new occupant of the White House? Colleagues have been struck by the willingness of senior Congressmen to come forward to denounce any proposals which might lead to a harder border between Northern Ireland and the Republic of Ireland. This would pose a real obstacle to any future trade deal between the UK and the US – we cannot risk that, surely?

I appreciate all above points are part of a bigger, fast-moving picture and chain of events within the Government but thought as your “Virtual PPS” that I should bring to this your attention.

Yours sincerely,

While the observations are mine the quotes are real and if left ignored could pose real problems for the Government longer-term. Between now & Christmas, Covid aside, the Government needs a stronger centre to deliver a narrative that instils confidence in MPs across its backbenches & to demonstrate that it has a plan and a vision for the country.