With the polls and political commentators suggesting that the best the Tories could have hoped for was a second coalition with the Liberal Democrats, their majority was certainly unexpected. Now that the dust has settled on the election result, we round up the reaction from the UK industry. Leaders from across the sector have reacted to the formation of the new government. Read on to see what they think – and the implications they anticipate for relevant companies.
Regardless of their political viewpoint, many commentators agree that stability and consistency provided by a majority government is good news for the industry. Richard Beresford, chief executive for the National Federation of Builders, commented: “Business dislikes uncertainty. My hope is that with a majority government, the lack of confidence that affected pre-election output will dissipate.” Similarly, the Builders Merchants Federation (BMF) welcomed the result. Managing director John Newcomb toldBuilders’ Merchants News: “At a time when it is essential to keep Britain building, the BMF welcomes the country’s quick and decisive delivery of a stable majority government.” Construction News spoke to a number of contractors and consultants who echoed this view.
The result means that controversial large scale infrastructure projects that are already in the pipeline are more likely to go ahead – we’re particularly talking about HS2. However, given the very slim majority that Prime Minister David Cameron commands, the future of HS2 is far from resolved, as Glenigan’s economics director Allan Wilén explained to Construction News: “it will be vital that the government builds cross-party support to ensure that important long-term decisions, such as HS2 and additional airport capacity in the South-east, are not stymied by […] backbenchers.”
Clearly housing was one of the biggest issues of the election, and leaders were quick to comment on the need for the new government to tackle this problem following its formation. The Home Builders Federation took to Twitter to make a statement on the election result, with executive chairman Stewart Baseley stating that the new government had “a strong mandate to implement policies required to boost [housing] supply.” Baseley also welcomed the government’s ambitions to tackle the long term housing crisis. John Newcomb of the BMF said that the government would have to take the supply-side seriously to meet voters’ expectations, including reducing the time it takes for housebuilders to get started on-site, and increase the number of completed homes.
Perhaps the major worry construction leaders have about a Conservative government is their promise of a referendum on the UK’s EU membership by 2017. Leaving the EU would have direct and indirect impacts on UK business that would be keenly felt by the construction industry, particularly companies serving the commercial sector. For example, one consultant speaking to CN said that the promise of an EU referendum is “a very big cloud on the horizon.” Stephen Ratcliffe of the UK Contractors Group said that the policy was “the one part of the Tory armoury that causes disquiet.”
Overall, the industry seem satisfied with the stability that a majority Tory government should bring. However, the slim majority means that the party will still have to pay close attention to disgruntled backbenchers to keep them on side.
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