Things can only get wetter

Did my ears deceive me? “Money is no object,” Prime Minister David Cameron pronounced yesterday as he took the reins of the flood relief effort. “Whatever money is needed, we will spend it.”

Fiscal largesse has not been a notable feature of the current administration, but with waters rising along the Thames, rather than in the distant Somerset Levels, a rare Met Office “Red Warning” having just been posted and a general election looming ever closer, political nous suggests money will be spent and more of it on flood defences. The questions are: when, where, how and how much?

Before the industry starts to form an orderly queue – or, rather, flotilla – to share in hundreds of millions of long term investment, it should be stressed that Cameron was, no doubt quite consciously, referring to flood “relief” rather than “defence”. Along with the physical rescue effort, the PM concentrated on efforts to make insurance claims pay out quicker and the provision of grants for home owners to repair and defend their properties better.

It’s a fair bet to assume carpenters, plasterers, electricians and painters will be in short supply in the next six months or so. If there were a quoted manufacturer of dehumidifiers in the UK (I don’t think there is), I’d be tempted to buy shares in it. As a next best bet, tool hire companies will undoubtedly be doing brisk business in these, pumps and the like.

It’s not just the rain; the wind’s been a problem. Stewart Towers is missing a couple of roof tiles; roofers could also be in demand.

Keeping tabs on these efforts, building surveyors are also likely to be in demand during the relief phase.

However, this could put more stress on southern housebuilders, already encountering cost inflation and recruitment challenges. A few weeks ago they were complaining about finding bricks and brickies; looking ahead, it could be finding most other trades.

The government will no doubt announce at some point ‘twixt now and the election a headline grabbing increase in capital funding, which will be hard for even a changed government to wriggle out of.

On the subject of housebuilders, expect somewhat more detailed scrutiny throughout the planning stage of whether proposed sites are at risk of flooding or, indeed, could contribute to it. John Stewart, chief economist at the Home Builders Federation, yesterday made a spirited defence against the widespread perception that many or most new homes are at risk on Radio 4’s Today programme (when he got past James Naughtie’s interminable questions). Nevertheless, councils getting criticism from all directions may well require even more box ticking.

The civil engineering industry will benefit short-term from patch-up jobs (not least to the rail infrastructure in the South-west) but probably have to wait longer for any new big ticket items. But expect a few high profile announcements to whet the appetite, even if they aren’t accompanied by hard cash.

But it will probably come; Big Politics is at play. Cameron’s cancelling of a visit to Israel to take personal control, amid ministerial back-biting and blame games, while Ed Miliband and Nigel Farage donned their wellies for semi-aquatic photo opportunities, all underlined the sensitivities of the crisis. (The building industry is now at the centre of two of the three big political issues: immigration/EU, housing and now flooding.)

Having said “money is no object” – even for relief rather than defence – the government will find it hard to insist on lengthy Treasury “value of money” exercises and will no doubt announce at some point ‘twixt now and the election a headline grabbing increase in capital funding, which will be hard for even a changed government to wriggle out of. Strengthening of coastal flood barriers, improvements to train lines in at-risk areas, river defences and that political beachball, dredging, are all obvious candidates for increased investment over the remainder of this parliament and the next.

But a more fundamental re-appraisal of flooding, climate fluctuations and where we situate and protect property could rumble on for years. Tree planting up river; flood protecting retrofits for new and existing homes; rethinks on zoning are examples of issues that could come to the fore the more we continue to get drenched.

This could provide a useful vein of work for multi-disciplinary consultancies, some of which are probably forming their own flooding advisory teams as we speak.

The issue won’t go away, especially as water levels creep up at points further and further down the Thames. Today it emerged that the capital’s flood barrier has been closed 28 times since 6 December. That’s almost a fifth of all closures since it was erected in 1982.

There’s nothing like a spot of water in MP’s (at least London) backyards to concentrate the mind.

Alastair Stewart is Building Analyst at Progressive Research. Follow him at www.BuildInsight.co.uk and on Twitter @BuildInsight