27/06/2019

The Conservative leadership challenge

What does this mean for Brexit, budgets and the built environment?

10 Conservative MPs threw their hat into the ring following Theresa May’s announcement that she was stepping down as prime minister. Since then, five rounds of voting have taken place amongst Conservative MPs, with the latest round securing a head to head between current foreign secretary, Jeremy Hunt, and former foreign secretary, Boris Johnson.

No deal Brexit is on the table

Boris Johnson has refused to rule out leaving the EU without a deal, but has also made clear that he won’t be calling a General Election until Brexit is resolved. Crashing out on the 31st October could have devastating consequences for our local and national economy. The country needs greater transparency on our future position with the rest of the world in order to increase certainty and business optimism. Jeremy Hunt has stated that he would rather leave the EU without a deal then remain, but that if a short extension would be required to get a deal over the line, he wouldn’t rule it out. The next prime minister needs to use the following four months wisely and assemble a team that has the expertise and knowledge to secure a deal that will provide us with a defined transition period in which we have the ability to trade in line with our current agreement. Right now, neither candidate is presenting a clear resolution to the stalemate in Westminster, making a no deal scenario or further extension increasingly likely.

Budget priorities

The candidates have started publicising details of their key policy pledges, and it is welcome news that both are looking to roll out super-fast fibre broadband by 2025, eight years ahead of its planned introduction. Digital connectivity is key to supporting thriving communities, especially those in rural areas, and Small-Medium Enterprises (SMEs) believe that reliable digital connectivity is fundamental to their operation and growth. Boris Johnson has promised to guarantee secondary school funding at £5,000 a year per pupil and to increase police presence on our streets. Meanwhile, Jeremy Hunt has pledged to continue making sure debt falls as a proportion of GDP and will manage public services with an “iron discipline”. Our local authorities need to be given greater assurance that they will have the necessary government funding to continue delivering essential public services. Since 2010, councils have been battling against budget cuts and austerity – delivering more for less, especially with adult social care and education, where they are contending with widespread population booms. Concerningly, neither candidate has spoken about housing, beyond Boris Johnson’s vague references to cutting stamp duty. A lack of high quality, affordable housing is one of the biggest issues of the day. Our next prime minister needs to acknowledge this and start talking about their approach to addressing the issue.

Housing has slipped down the political agenda in the wake of Brexit, and we cannot afford for this to continue happening.

Mark Robinson, Scape Group chief executive

Infrastructure investment

We know from Boris Johnson’s time as mayor of London, that he is predisposed to projects that will create a legacy. Even since becoming an MP, he has suggested the construction of two bridges, one spanning the Irish Sea and one across the English Channel, to boost trade and help mitigate the impact of Brexit on the UK. Our research, Digging Deep for Growth, found that less than a quarter of British adults think the economy would benefit from spending £140bn on the two bridges and two-thirds think they are ‘vanity projects’. However, Boris Johnson wants to put infrastructure at the heart of his domestic agenda, and has described himself as a ‘passionate believer’ of transport infrastructure. HS2 is one major project that could fall whim to Boris Johnson, and rightly, council leaders are requesting a commitment to the project alongside certainty over future government funding for phase two and for Northern Powerhouse Rail. Jeremy Hunt has already signalled his commitment to HS2 and how he would also deliver the Northern Powerhouse Rail. Funding for crucial transport projects needs to be ring-fenced, as it is essential that we don’t lose sight of the importance of delivering key projects in the north of England. Strategic transport improvements support local economic growth, create more jobs, connect businesses to a larger talent pool and consequently enable towns and cities to make a greater contribution to the UK economy.

The Conservative membership will decide for the country

Our next prime minister needs to steer a path through Brexit that delivers the best possible outcome for the country. The construction industry urgently needs clarity on freedom of movement and the implication of no-deal tariffs on material importing costs. Our local authorities also need a commitment to funding that will enable the continued delivery of vital, front-line public services. As hustings take place across the country over the next month, the fate of the country lies in the hands of 160,000 Conservative party members.

Businesses, local authorities and the public continue to have questions about the huge unknown that is Brexit, and crucially we need a leader that is willing to answer them. Even though the conservative party members will decide who our next prime minister is, this falls massively short of a mandate to deliver Brexit and beyond. So I would expect a general election within the next 12 months and perhaps even a second referendum on Brexit.

Written by:

Mark Robinson

Group Chief Executive

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