Keir Starmer steps in to No10 with much to do and the economy in a perilous state. He would be wise to engage with the built environment sector more successfully than his predecessors, says Richard Steer.
They say that the first 100 days of any new government is totemic in politics. So, now that the inevitable has occurred and we have a Labour administration with a landslide majority in charge, what can we expect?
Let’s be honest, I can see very little happening in the early days that will shock or stun the electorate that put Keir Starmer and Rachel Reeves at the helm of the ship. The initial period will be filled with much hand-wringing and feigned astonishment about the state of the situation inherited from the last Conservative government.
I don’t expect any outgoing Tory ministers will be silly enough to leave notes saying that “there is no money left” – as has happened in the past – but let’s face facts: our perilous economic state will not change just because there is a new name on the door at the Treasury.
Starmer’s manifesto stated that “Labour’s first mission is to kickstart economic growth” and sets an ambitious target of securing the highest sustained growth in the G7 group of major Western economies. This would involve raising the UK growth rate from an average of 1.3%, which was seen between 2010 and 2019, to around 2.0%.
The last time the UK posted sustained growth in excess of 2.0% was before the financial crisis, in the period 2003–07.
It would be naive to think that any government could counter the effects of the pandemic and the energy crisis in its initial term of office. Public debt currently stands at the highest level in 60 years and taxes at the highest level in over 70 years.
We have not just maxed out the credit card, we have eviscerated, burnt and buried it. UK general government gross debt was £2,721bn at the end of Q4 (October to December 2023), equivalent to 101.3% of gross domestic product (GDP).
While welcomed by many at the time, historians may well view furlough, government lending schemes and the “eat out to help out” initiative as catastrophic errors in years to come, something we could simply not afford post-austerity.
This disastrous financial state of affairs will allow Labour some flexibility in terms of justifying future cuts and tax hikes. The “things are much worse than we could have possibly imagined, so cut us some slack” scenario. Also, a huge majority means that Labour have a blank cheque…
In terms of personality, steady Starmer is no bloviating Boris or terrible Truss – both now consigned to history, thank goodness. So I don’t imagine we will see the knee-jerk approach to policy reform exhibited by previous Tory PMs.
If they want to fulfil their manifesto pledge of providing 1.5 million more homes and growing the economy, we will need fundamental change to the way the government has historically viewed and engaged with those operating in the built environment.
Indeed, the £18bn of Conservative cuts planned over the next five years to the public sector purse were already baked into this new government’s plans – or at least never denied by Labour, so they are going to happen regardless.
Housing and planning however are two areas of change that, as key priorities, are uncontested in terms of popularity and so have no political price tag. Expect to see the national planning framework ripped up and central government incentives for local authorities to build.
That will be no bad thing, but I would not expect to see announcements of large infra projects, new hospitals, or expensive schools. Certainly not in the early days. This is a Labour Party that has been out of power for a long time and, with this majority, barring a catastrophe, they are looking at a decade of government.
First published on Building.co.uk on 5 July 2024