Construction Industry’s Reaction to Labour’s Victory

The construction industry has responded with a mix of optimism and caution following the Labour Party’s sweeping landslide victory in the recent general election. As Keir Starmer assumes power amid a backdrop of rising prices, increasing interest rates, and geopolitical instability, more than half (52 percent) of construction professionals polled by NBS and Glenigan anticipate […]

Jul 5, 2024

The construction industry has responded with a mix of optimism and caution following the Labour Party’s sweeping landslide victory in the recent general election.

As Keir Starmer assumes power amid a backdrop of rising prices, increasing interest rates, and geopolitical instability, more than half (52 percent) of construction professionals polled by NBS and Glenigan anticipate an uptick in work post-election.

However, the rapid changes in ministerial roles over the past few years have left many in the industry somewhat hesitant. Eddie Tuttle, Director of Policy, Research, and Public Affairs at the Chartered Institute of Building, has urged Starmer to ensure stability by retaining the new housing minister in the role long-term and considering elevating the position to a cabinet level. “The construction sector is reliant on stability, and we urge the Labour Government to ensure consistency and longevity with policymaking and its communications with industry,” he said.

Rico Wojtulewicz, Head of Policy and Market Insight at the National Federation of Builders, expressed concerns about the lack of detailed plans regarding Labour’s manifesto pledges on promoting biodiversity and tackling pollution. “What the construction industry now needs as we transition to a Labour Government is clarity, detailed policy plans, and realistic timelines on the outcome of these proposed reforms,” he stated.

Peter Hogg, UK Cities Director at consultancy Arcadis, advised Starmer to resist the urge to push through radical changes using his large majority. “What the business and investor community want from government is certainty,” he added.

Chris Cassley, Policy Manager at the Construction Plant-hire Association, emphasized the need for a “long-term vision” to address decarbonisation, productivity, housebuilding, and infrastructure. He noted, “Providing the stability and economic foundations needed for lasting economic growth comes only from engagement with industry in understanding the challenges companies face – and how they can be overcome.”

John Newcomb, Chief Executive of the Builders Merchants Federation, commented that Labour had a “clear idea of what it wants to do” and looked forward to hearing the new ministers’ plans for housing recovery.

House Building

Labour has pledged to “get Britain building again,” aiming to create jobs across England by constructing 1.5 million new homes over the next parliament. They have committed to supporting local authorities by funding additional planning officers and strengthening planning obligations to ensure new developments provide more affordable homes. This initiative also includes supporting councils and housing associations.

Charlotte Nixon, mortgage expert at Quilter, highlighted the challenges of meeting such ambitious targets. “It is crucial to recognize that such ambitious targets have historically been challenging to meet. The success of this initiative will depend on unwavering commitment, significant resources, and effective execution. Building 1.5 million homes within five years is a monumental task that requires not only political will but also the cooperation of local authorities, private developers, and communities,” she said.

William Beardmore-Gray, Senior Partner and Group Chair at estate agent Knight Frank, expressed hope that the election result would end the long period of political uncertainty that has negatively impacted the real estate sector.

Kris Collett, Managing Director of Windsor-based property developers Castlemere Developments, commented on the potential for significant change with Labour’s victory. “Big change is now on the horizon with this landslide Labour victory. The housebuilding industry has struggled under 14 years of Conservative government, and we are optimistic about the change a new government will provide. With a large parliamentary majority, Labour is in a position to bring forward much-needed planning reforms required to bolster the housing sector and get the country moving. I believe the whole industry is now a little more optimistic about the future,” he said.

Matthew Robertson, Co-Founder and CFO of Valouran, remarked on the planning resource challenges. “A lack of planning resource has held the property industry back ever since the austerity measures were introduced post the great financial crisis. It is encouraging to read of Labour’s planned recruitment drive for an additional 300 planning officers, but with the mandate they have received from the electorate, I would encourage them to be more bold and ambitious, and to push through their plans to release lower quality green belt land. Only by doing so will they have a chance of making good on their target of building 1.5m homes over the course of this parliament.”

Net Zero and Green Agenda

Gillian Charlesworth, Chief Executive of the Building Research Establishment, expressed enthusiasm for the implementation of Labour’s ambitious manifesto pledges to decarbonise the UK economy and drive the energy transition forward. However, David Harris, Chief Executive at contractor Premier Modular Group, questioned how Starmer would balance accelerating net zero goals with delivering a 10-year infrastructure strategy involving carbon-intensive projects.

The Electrical Contractors’ Association highlighted a potential bottleneck in Labour’s environmental goals due to a shortage of skilled electricians. A spokesperson stated, “The current state of the electrical skills system demands early attention. It takes four years to develop the core competencies needed for electrical work and installation.” The organization also urged the new government to introduce laws to fix poor payment practices, advocating for protective legislation to stop the abuse of retentions and improve payment performance.

Infrastructure

Marie-Claude Hemming, Director of Operations at the Civil Engineering Contractors Association, conveyed readiness from member organizations to work with the new government to “drive growth in the economy, boost connectivity, and create well-paid, highly skilled jobs.” She emphasized that a booming infrastructure sector is the backbone of any successful economy and welcomed Labour’s recognition of the civil engineering industry as a cornerstone for delivering growth.

Michael Riordan, UK Managing Director at consultancy Linesight, praised Labour’s plan to class data centres as Nationally Significant Infrastructure Projects, enabling them to bypass normal local planning requirements. He suggested prioritizing the building of data centres in urban areas to ensure optimal performance.

Colin Wood, Chief Executive, Europe and India at AECOM, congratulated Sir Keir Starmer on the election result and emphasized the need for cooperation between the government and the private sector. “Delivering Labour’s ambitious infrastructure pledges will require a new level of cooperation from day one. We at AECOM and our peers across the sector are ready to help deliver the Labour Party’s pledge to implement a 10-year infrastructure strategy and establish the National Infrastructure & Service Transformation Authority (NISTA). Both initiatives have the potential to provide the long-term stability, governance, and confidence needed to attract private capital vital for financing these projects.”

Wood added, “The knock-on effects of such investment are many, including improved productivity, economic growth, societal benefits, adoption of new technologies, and investment in critical skills and green jobs. Our sector is well-placed to assist the government in modernizing vital public services in health and national security, securing better value for money, and leveraging data and AI for greater community impact. Planning reform will be central to unlocking the backlog in housing development and other vital infrastructure projects.”

Paul Inions, Managing Director of McPhillips (Wellington) Ltd, emphasized the need for long-term investment in UK infrastructure. “Being in business for 60 years, we’ve seen general elections and Prime Ministers come and go. A change in government sparks confidence and brings more certainty, which is crucial for our sector. We need Sir Keir Starmer and his new Labour Government to commit to a strategic long-term investment program in the nation’s infrastructure.”

Inions continued, “Immediate actions to reform the planning regime to increase housebuilding targets are welcome, but we also need supporting infrastructure such as hospitals and schools. Investing in training young people for the skills required in construction is vital, and government support is necessary. We urge new MPs to work collectively on these challenges and look forward to welcoming local MPs to our projects soon.”

Devolved Regions and Energy

Colin Wood also highlighted the importance of collaboration in devolved regions. “Deeper collaboration between the private and public sectors will be crucial, especially with metro mayors and combined authorities expected to gain greater powers. Bold delivery models will allow projects to tap into private sector expertise and financial resources.”

Regarding energy, Wood noted, “Labour’s manifesto includes a radical overhaul of the energy sector, focusing on renewable energy, state involvement, substantial investment, and rigorous regulation. Companies like AECOM are ready to support these goals, aligning with our strategic emphasis on renewable energy, grid modernization, and community-based energy solutions.”

Housing and Skills

Alex O’dell, Co-Chair, Corporate Leaders Group UK, and Vice President, GB&I at VELUX, congratulated Labour and welcomed their plans for 1.5 million high-quality, sustainable, and affordable homes. “As VELUX celebrates its 70th year in the UK, we urge the next housing secretary to devise a strategy that delivers on wider socio-economic factors and ambitious retrofitting schemes. A strong focus on low-carbon building materials and processes should underpin these initiatives.”

Greg Reed, CEO of Places for People, emphasized the need for immediate action. “The new Government must now deliver the transformative change promised during the campaign. Labour’s pledge to turbocharge housebuilding and invest in healthy communities is welcome. We are ready to work alongside the Government to reinvigorate lives and communities across the country.”

Justin Young, Chief Executive of the Royal Institution of Chartered Surveyors, called on Labour to address the skills shortage by creating a built environment taskforce to map future labour needs and improve early years engagement. Paul Dodsworth, Managing Director of Caddick Construction Group, emphasized the need for government engagement to grow the construction workforce, warning that a lack of investment and the impact of Brexit could lead to a dwindling number of skilled workers.

Trevor Wilkins, Managing Director at SME contractor PAH Building & Construction, urged Labour to act on its manifesto pledge to overhaul the apprenticeship levy, advocating for easier access to apprenticeship funds and incentives to recruit and retain talent in the industry. The construction industry’s reaction to Labour’s victory underscores the need for stability, clear policy direction, and long-term planning to address the pressing challenges.

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