Perspectives

The Prime Minister's first days in office

Theresa May is now over half way through her first 100 days as Prime Minister.

This is the period that political analysts judge to be crucial to a government’s ability to create a positive public perception of its agenda. Fail to capitalise in this honeymoon period, and a new PM has a hard task ahead. So, how is the new PM doing and what should our industry expect from her government over the months ahead?

Theresa May’s top priorities, I am told by those close to politics, centre broadly around capturing what she sees as a vacated political centre ground, where swing voters traditionally prone to lean towards Labour are up for grabs.

This is part of the reason for early speeches about reaching out to people from all backgrounds and all parts of Britain. As part of this, May is keen to embrace the regional agenda and to continue the ‘northern powerhouse’ work George Osborne started, but also to give prominence to other regions, including the midlands and south west.

This is a big reason for expecting that Mrs May’s new policy programme will be very important to our sector. Government is limited in what it can do within a parliamentary term to drive regional growth and create jobs, but construction projects, including housing and infrastructure, are seen as an area where policymakers can get a win within the political timescales they operate in.

Regional spending declined markedly in the last Parliament, limiting Government’s ability to help kick start growth outside the south east. Now, however, the lock on that spending has been removed after plans to achieve a budget surplus by 2020 were dropped. If Philip Hammond does give the economy a stimulus, as many expect, I believe it will be in areas which deliver a tangible return on investment, to satisfy his fiscally prudent nature, and infrastructure has to be the top priority.

Our research shows, for example, that modest improvements to transport connections between northern cities that shave just 60 seconds off average journey times would add nearly £5 billion to the regional economy.

It’s not all about money though. Political will is just as important and we must as a country overcome the stifling nymbyism that holds back positive developments like Heathrow expansion and new nuclear.

The evidence suggests that giving city regions more power to drive these forward would help overcome local opposition, as would direct payment incentives. Research Mace has done in this space shows small payments of up to £5,000 to local residents in close proximity to a new development such as an energy plant or new housing development can improve local acceptance quite dramatically.

As well as new policy thinking, what we really need from Theresa May is political vision. On the back of a referendum to exit the EU and with growth having already slowed markedly in the last year, we need to see from our Prime Minister more confidence-boosting signals of intent to drive forward construction on major public works.

She has had a bumpy start on this so far. Suddenly putting the brakes on the Hinkley Point decision and allowing speculation to swirl that it had been ditched, only to then give the go-ahead, confused and disappointed many in our industry. As did the further delay on an airport expansion decision. There are many other less high-profile decisions needed for investors to go ahead with plans to extend clean energy projects, for example, that have also been delayed and it now looks likely to delay until next year the fifth carbon budget.

All this has a deeply unsettling impact on investment confidence, and thereby puts jobs and growth at risk. Theresa May and Philip Hammond could be forgiven for wanting to go through the finances of pipeline projects they have inherited from their political predecessors, but it is critical that wild speculation over decisions is much better-controlled.

In all, May's first 100 days will likely be defined fairly well. She seems head and shoulders above the other party leaders and has certainly had a honeymoon period as far as the press is concerned. This will not last long, however. Our industry stands ready to help her build the opportunity and jobs she wants spread in every region of the UK, but what we need in return are stronger signals of commitment to get Britain building.

 

 

 

 

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