We urgently need a government that can stoke industry optimism

To survive for long in politics, you need the oratory skills of Winston Churchill, the cunning of Harold Wilson and the luck of a EuroMillions lottery winner. Sadly, Sir Kier Starmer has none of these attributes.

What he does have is a golden opportunity to play a bridgehead role between the United States and European Union and restore some confidence in the UK as a safe haven for investors, developers and financiers. That is potentially good news for those operating in the built environment.

This was all brought into sharp focus by last week’s meeting in Washington with President Trump. The key agenda was about Ukraine and plans for NATO, huge geo-global challenges worthy of focus. I do not belittle the challenge facing our prime minister in trying to simultaneously fan the president’s fragile ego while fighting for the UK’s interests. But there was much to play for in terms of using the meeting to instil business confidence in UK plc.

At times the White House resembles an asylum rather than the headquarters of defenders of the free world

Let’s not delude ourselves. At times the White House resembles an asylum rather than the headquarters of defenders of the free world. It is however important for all of us working in property and construction that Starmer and Trump reach a rapprochement over trade.

The US is still the largest economy and, as ever, when it sneezes, we all catch a cold. I am still not sure that much tangible output emerged regarding either post-Brexit trade deals, or a free pass on tariffs for the UK compared to our European allies. Lots of warm words maybe, not yet matched by cold reality.

It is a shame as it was important for Starmer to use the meeting to deliver clarity. The watchword for his government, as far as business is concerned, has been “growth”. However, for those working in the built environment “growth” has not been the guiding star by which we have seen it steer the ship of state. “Survival” would be a better description of what many contractors and architects have been targeting under Labour.

By way of evidence, the bellwether S&P global UK construction purchasing managers’ index (PMI) fell to 48.1 in January from 53.3 in December. It was the first time the index registered below the 50.0 no-change threshold since February 2024. We see contractors blaming the fall on delayed decision-making by clients on major projects and general economic uncertainty weighing down business activity at the start of 2025.

The counterproductive hikes in national insurance, penal VAT, as well as a series of new employment laws that disincentivise hiring, are not going to help deliver confidence

S&P says output fell across all sectors, with residential hardest hit. The house building index stood at 44.9 – a decrease for the fourth successive month and the steepest drop since January 2024. This in spite of the chancellor Rachel Reeves meeting with housebuilders and Anglea Rayner, her deputy PM colleague, saying that “build, baby build” was to be the new government mantra.

The counterproductive hikes in national insurance, penal VAT, as well as a series of new employment laws that disincentivise hiring, are not going to help deliver confidence. Not my words, but those of the CBI and the majority of UK business people with whom I speak.

The latest survey of 2,000 employers speaks of mass redundancy programmes before the April tax rises, the largest in a decade say the Chartered Institute of Personnel and development, barring the Covid period.

The new government promised a fresh start and, initially, the jury was out. Now it has returned its verdict and things are not looking good. Further tax hikes feel inevitable and,  with government borrowing costs heightened, eating into the £9bn fiscal headroom upon which the Treasury was relying, optimism is lacking.

In reality, a Labour government has historically been relatively good for our sector – so why so jaundiced? There is promised infrastructure spending, over 1.5 million houses in the next five years, new runways planned for Gatwick and Heathrow, streamlining of the planning system and investment in renewables heralding a new green deal. But this is all jam tomorrow – and we need an injection of confidence now.

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Ironically, the uncertainty provoked by the Trump presidency has gifted the UK a golden opportunity. France, Germany and Italy all have political and economic problems. Even the new chancellor in Berlin has not got as resounding a mandate as Labour.

The UK meanwhile is settled, with a stable government, able to harness a big majority to effect positive change. This should tick all the boxes for investors if they could just sense more optimism and less hand wringing.

So come on, let’s see more Churchillian rhetoric from our leaders and less Uriah Heep, more political stealth and less fence-sitting. Perhaps then, those of us who want to support the growth agenda will feel more like lottery winners rather than discarded scratch cards.

Richard Steer is chair of Gleeds Worldwide and a Building The Future Think Tank commissioner