In under three weeks’ time, the contest to become the next leader of the Conservative Party, and the country’s new Prime Minister, will conclude with either Rishi Sunak or Liz Truss taking up the role.
There will be a lot in their in-tray, and many organisations and causes competing for their attention. With cost of living pressures increasing, worries about energy, and the need to ensure the economy is firing on all cylinders right across the country, small, local building firms are perfectly positioned to deliver the answers needed. As long as the Government has their backs.
National Retrofit Strategy
The best way to save money on household energy bills is to use less of it. So, insulating our 29 million leaky and energy inefficient homes should be priority number one for the incoming government. The new Prime Minister must demonstrate their commitment to a long-term national retrofit strategy, like the blueprint developed by the Construction Leadership Council and backed by the FMB.
Before the rise in energy bills, we knew that insulating our homes would save an average £436 on bills each year per household. Given the recent price soar, that saving is likely to be even greater now. Retrofitting is a major infrastructure project that will be delivered locally, in every community. It will provide work and training opportunities for local builders; support local growth and help to ‘level-up’; contribute to net zero targets, and save us all cash. It’s a win-win, but it needs clear backing from the Government to give the market the confidence to develop. Read more about the FMB’s work on retrofit on our campaign pages.
Tax cuts to help all builders and consumers
Double-digit inflation, 24 months of building material price rises, and chronic labour shortages are combining to make it more expensive for builders and consumers to carry out projects. The long-running FMB State of Trade Survey tracks these trends, and in our most recent report, shows that small builders’ already tight profit margins are getting pinched.
To protect the industry from a crash and boost economic growth, the new Prime Minister should back a temporary VAT cut to 0% on all repair, maintenance and improvement work. This would enable builders to pass the saving on to customers. We know that 5.3 million UK homeowners pay cash for home improvements in order to avoid VAT and make them more affordable. Research from the FMB and RICS showed that a one year cut in VAT to 5% would generate a £9.5 billion stimulus and create 64,240 jobs. It would also make it more affordable for consumers to install energy efficiency measures as part of a wider build.
Building more good quality homes
We don’t have enough good quality, affordable homes, something that is also contributing to cost of living pressures. We won’t fix this if we don’t reverse the decades-long decline of SME house builders who, 40 years ago built 40% of all new homes, but today build just 12%. Whether it’s the 63% of FMB house builders who are held back by a lack of available and viable land, or the 61% constrained by the planning system, or struggles with access to finance, what small house builders need is a Government that will act to improve their lot. The new Prime Minister must support changes to planning that make it simpler and faster to build and support local authorities to nurture small, local developers. A healthier market for small builders will also enable them to better absorb the cost impacts associated with the Future Homes Standard, interim building regulation changes, biodiversity requirements and nutrient neutrality mitigation.
Training the next generation
According to data from the CITB, over the next 10-15 years, we expect 800,000 people to retire from the construction industry in the UK, around 33% of the current workforce. With just 10% of the industry aged under 24, more must be done to encourage more people into what are rewarding and highly relevant careers. SMEs train 71% of apprentices in construction, but are often held back by poor communication with colleges, and overly complicated funding schemes.
The FMB knows there’s a role for industry in overcoming some of this, and we set out recommendations in our Trading Up report. But the new Prime Minister also has the opportunity to be a champion for vocational skills; to help talk up a career in the trades, and to help overcome the massive green skills gulf we are facing by setting out long-term retrofit plans.
Licence UK construction
In the UK, any person or company is allowed to undertake building work without having to demonstrate a minimum level of competence. While some of the products and processes might be regulated, the people are not, leaving consumers vulnerable and allowing cowboy builders to repeat offend, with no consequences. This is clearly wrong. 86% of FMB members back a mandatory licensing system for UK construction firms, and 78% of consumers support this move.
We want to work with the new Prime Minister and their team to make licencing a reality, building on last year’s Private Members’ Bill that was debated in Parliament, and the industry-backed campaign.
Authors
Brian Berry
Brian Berry is the Chief Executive of the Federation of Master Builders. He is also a member of the Construction Leadership Council (CLC) and Chair of the CLC Domestic Repair Maintenance & Improvement Working Group. Prior to his current position Brian was Director of External Affairs at the FMB with responsibility for UK and EU policy, public affairs and media relations. Before the FMB, he worked at the Royal Institution of Chartered Surveyors (RICS), where he was Head of UK Public Policy. Brian regularly provides commentary on construction issues for television, national and trade press.
