New PM: We’re all on Boris Island now
So, Boris Johnson has been confirmed as the country’s new PM, having won 66% of the vote by Conservative Party members. Although this outcome seemed increasingly inevitable with each passing day of the leadership contest, it still feels quite extraordinary that a journalist-turned-politician with the ability to play the fool and get away with it is now in charge of the country. But then there’s nothing normal about the times we are living through.
So what will a Johnson premiership mean for construction? Not surprisingly Johnson’s victory speech – delivered with the expected rhetorical flourishes – did not give much away in terms of policy details that could affect the sector. Brexit understandably was the dominant theme as he briefly set out his vision to “energise the country” and create a “new spirit of can do”. This very much fits with Johnson’s view that the key to the Brexit negotiations is self-belief. After all, that’s also how he got to where he is now.
The industry does not operate in a bubble, so Johnson’s hard-line approach to Brexit if he cannot renegotiate a withdrawal deal and the impact this could have on the wider economy is understandably a concern for business. We all know that it is Brexit that has brought the former leader of the Leave campaign to power and Johnson has repeatedly stated that come 31 October he wants us out of the EU “do or die”, meaning this week we are one step closer to leaving without a deal.
This prospect clearly frightens some construction bosses, one of whom said the consequences of no deal would be devastating for the industry. Another said he was in a meeting when Johnson’s victory was announced and there were universal groans around the table. Business has been saying for a long time now that while it accepts some form of Brexit is inevitable, no-deal is the worst of all worlds and that the economy is in for some bumpy times ahead.
It’s not only big business that’s worried. Even before Johnson’s victory was announced, the chancellor Philip Hammond and several other members of the Cabinet announced their intention to resign. Johnson’s threat of proroguing parliament rather than postponing Brexit to get a deal was just too much to stomach.
Still, many in business would also probably agree with Hammond that aside from Brexit they do not have much argument with Johnson. In general terms – and in spite of his infamous expletive suggesting otherwise – Johnson is seen as pro-business in his philosophy, which, as one construction boss said, has to be “a good thing”. Many will welcome the new sense of optimism when he called for “better education, better infrastructure, more police, fantastic full-fibre broadband sprouting in every household”.
When it comes to infrastructure we all know he has been a fierce opponent of Heathrow’s expansion in the past – Boris Island being a less than serious alternative – but recently he has indicated that parliament has made its decision and it will not be his role as prime minister to go back over old ground. As for HS2, Johnson has reportedly lined up former chair Douglas Oakervee to review the business case for the project. If the review goes ahead, it is bound to create uncertainty around a major infrastructure project the industry is relying on.
Trying to glean much more from Johnson’s spending pledges during the campaign is not easy. The Institute of Fiscal Studies slammed both him and his rival Jeremy Hunt for unfunded spending plans and tax cuts. And if you look at specific policy areas such as education – which Johnson referenced fleetingly in his speech – it’s hard to get a clear picture of what he might do. His pledge to give £5k per secondary pupil has been picked apart as being relatively meaningless – but he is known to be supportive of free schools so you can probably expect those building projects to continue as planned, though that pipeline is not huge in any case.
However, when it comes to housing we may have more clues as to his direction of travel. As mayor of London housing was one of the
only real areas where he had control, and his efforts were focused on boosting affordable home ownership rather than affordable homes for rent. He also relaxed planning obligations, making it easier for developers to build more. Home ownership is a big issue for him, as he wrote in his Telegraph column: “This is meant to be Britain, the great homeowning democracy, but we now have lower rates of owner-occupation, for the under-forties, than France and Germany. That is a disgrace.” So developer friendly, but the word is that he will return to pushing home ownership over other tenures – perhaps not to the extent of the Cameron/Obsorne era but certainly more than under Theresa May.
And does the Johnson premiership have any implications for the sector deal? It would be very uncharacteristic of him to have expounded at all on such a detailed policy area, and he has not, but some of his close advisers are said not to be that keen. They supposedly want more money to come from the private sector, which could mean government investment under any future sector deals would be reined back.
Next there will be a period of adjustment as the industry tries to get a handle on the new PM. The bluff and bluster of the campaigning is over, and now, in Johnson’s own words “the work begins”.
Article & Image Source: Building