Fears and confusion as political chaos leaves industry in limbo

Uncertainty over the UK’s political direction following the resignation of Boris Johnson last week is making construction firms nervous and could impact the sector for months – or potentially years – to come, according to industry leaders.

Fears that a new leader could focus on short-term fixes to ease the cost-of-living crisis by cutting taxes, reducing infrastructure spending and abandoning net zero targets all mean construction faces a nervous wait for a new prime minister to be appointed. The  leadership election is under way and Johnson has appointed an interim cabinet, but he has told its members that he will not implement any new policies during his remaining time in office.

Rider Levett Bucknall chief executive Andy Reynolds said the interim government risked being “logjammed” on key policies including levelling up funding.

“We’ve had the first round of levelling up funding allocated, but  when that actually goes through to schemes, planning will go into a bit of a hiatus, waiting for policy decisions on local plans and on how the levelling up bill might be implemented.”

He said key decisions on infrastructure, including the government’s hospital building programme, could also be delayed, at least until the new government is in place.

The leadership election will also amplify voices within the Conservative party who want to row back on net zero commitments. Leadership candidate Suella Braverman, the attorney general, has said the government should “suspend the all-consuming desire to achieve net zero by 2050”. She said the policy would result in “net zero growth”.

Braverman has the support of backbench MP Steve Baker, who has said he wants Johnson’s net zero policies to be dismantled. Baker is a member of the Net Zero Scrutiny Group, a group of Conservative MPs who oppose the government’s policy agenda on the climate.

Only a handful of leadership hopefuls have explicitly committed to the net zero timeline, including Sajid Javid and Jeremy Hunt. International environment minister Zac Goldsmith and former science minister Chris Skidmore warned in the Sunday Telegraph that many contenders were maintaining an “ominous silence” on the issue.

Louise Hutchins, head of policy and public affairs at the UK Green Building Council, said abandoning climate targets would be “very short-sighted”. She added: “Any new PM needs to win the support of the country, not just a minority of backbenchers, and there’s clear, consistent support for climate action across the country, across all sections of society.”

Hutchins said green policies were the answer to the economic and social crises facing the country. “From an industry point of view, clearly we need to see the political and policy signals to give business confidence to invest, and we need its investments to grow the economy to help bring us out of this economic crisis,” she said.

Alasdair Reisner, chief executive of the Civil Engineering Contractors Association, feared the potential impact on the industry of there being a “government without a government” for the next few weeks. “Inevitably, there’s going to be the distraction of a leadership election, so ministers will have more of an eye on that than what’s going on in their department. I do worry that we might see a slowdown in activity,” he said.

Bam Construct executive director James Wimpenny said “the only thing that is currently certain is ambiguity”.

The huge wave of ministerial resignations that precipitated Johnson’s decision to stand down have only added to confusion over what the government can achieve in the weeks ahead. A new chancellor,  housing minister and secretary of state for levelling up, housing and communities are in place but, as Building went to press, there was no confirmation of which minister was responsible for the construction industry. Lee Rowley resigned as construction minister last week.

In addition, Stephen Greenhalgh, the building safety minister, stepped down on Friday, 24 hours after Johnson resigned. A central figure in the implementation of the Building Safety Act, he said he had been “saddened at the turn of events” that had led to Johnson’s decision and he was following suit “now that the die has been cast”.

Stephen Marcos Jones, CEO of the Association for Consultancy and Engineering, said: “Now is not a good time for yet more political uncertainty in Westminster. The conflict in Ukraine, spiralling inflation, as well as the erosion of political commitment with a raft of ministers no longer in role – including the construction minister – has the potential to impact on business confidence and investment decisions, and delay our post-pandemic recovery.”