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Industry reacts to outcome of general election

Industry reactions to the 2015 general election results address how the building services industry will be affected.

Glenigan economics director Allan Wilén said recent months had seen a cooling in construction activity. He called attention to the latest Glenigan Index, which recorded a marked drop in project starts as private-sector developers postphoned decisions in the run-up to the election and government-funded projects were caught up in the traditional pre-election hiatus.

Mr Wilén said: “With the votes now cast and the Conservatives set to form the next government with a small majority, the short-term political uncertainties have eased.

“However, over the next Parliament the UK faces five years of constitutional change with a promised referendum on the its EU membership by 2017, the prospect of further Scottish devolution and potentially a fresh vote on Scottish independence.”

He said the economic uncertainty posed by the European Referendum, in particular, is a potential threat to private-sector investment over the next two years.

“Public-sector capital expenditure programmes are likely to be squeezed hard as the new government strives to deliver its planned reduction in the Budget deficit,” he added. “While Conservative plans for large-scale investment into the strategic road network bode well for construction, the sharpest increase in capital funding is not planned until after the next general election.”

With a small majority, Mr Wilén was concerned that the Conservative leadership will not be able to push through Bills against the will of rebel backbench MPs. He said it was vital the government built 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 local Conservative backbenchers.

Housing shortage

Housing emerged as an important issue during the campaign, with need to increase housing supply an area of clear political common ground.

Mr Wilén highlighted that planning reforms made by the coalition government had enabled more housing permissions to be brought forward, while the Help to Buy scheme had provided much-needed support for the market.

Baxi managing director Paul Hardy said his company hoped the new Conservative government would provide clear policy direction to address energy efficiency of buildings and support for micro-generation technologies to help meet carbon reduction targets.

“We would like to see continued support for affordable warmth to combat fuel poverty.  We are particularly interested to see their plans for ECO after 2017,” Mr Hardy said.

“We hope we can rely on the government to continue to support UK manufactures in the drive to maintain the economic upturn.”

British Property Federation chief executive Melanie Leech said: “We worked successfully with the Conservatives as part of the coalition and look forward to continuing that relationship to tackle the key issues impacting on our sector.

“We would like to see the government prioritise a coherent plan to deliver increased housing supply; to follow through on the commitment to fundamentally review business rates; and take action to put in place the right infrastructure – including real estate – that will allow our country to thrive.

“The prospect of an EU Referendum will inject uncertainty into the equation, and it is important to have clarity about its parameters and timetable as soon as possible.”

He added: “Our industry has the potential to significantly increase the amount of housing in the UK, regenerate our towns and cities and contribute significantly to the economy if it is provided with the right legislative framework, and we look forward to working with the next government to achieve this.”

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