Regardless of any individual political persuasions, the general election has delivered a level of clarity. We know what sort of Government we can and expect and we know that we will leave the EU on 31 of January with a ‘deal’.
It’s why the pound has rallied against the dollar and the euro. We have a sense of direction and the uncertainty which has led to a freeze on investment and growth, is perhaps at last behind us. Where we go now is very much down to the new administration. In the hiatus of the general election campaign it made a series of pledges on which it now must deliver.
Housing was a key battleground. The Conservative Party – and by default our new Government – has pledged to deliver 300,000 new homes a year and more than one million by its end of term. Given this, and the crisis in supply of affordable homes, this is a key priority.
The Conservative Manifesto makes a commitment to renewal of the Affordable Homes Programme, “in order to support the delivery of hundreds of thousands of affordable homes”. They have reaffirmed their support for Right to Buy.
While a commitment to build new affordable homes will be welcome, ‘squaring the circle’ and balancing it with Right to Buy and the sell-off of homes in public ownership will require careful balance. For the window industry specifically, increased home ownership is a positive and may deliver growth in the home improvement sector.
The Conservative Party’s commitments on sustainability are less clear. It pledges to “support the creation of new kinds of homes that have low energy bills and which support our environmental targets”. It does, however, include the creation of a £6.3bn fund to deliver energy efficiency upgrades to “disadvantaged homes”.
This falls short of a commitment to Zero carbon homes made by Labour but sustainability, given wider public sentiment, must be key. With a new generation of energy efficient products launched into the market, we are in a unique position to be part of the solution – critically this must include retro-fit and home improvement.
The Conservative Party has also committed to spend an additional £3billion a year on a National Skills Fund. The shape of this is still unclear but given the challenges of recruitment in our own industry is welcome.
This has driven our own programme of investment in automation, reducing our reliance on labour to control overheads and maintain, as far as possible price-point to our customers. We are also investing in homegrown talent and our apprenticeships scheme.
Clearly, however, there is more to be done to address the skills gap and to ensure that manufacturing and construction are seen as attractive career options.
These pledges aside, the Government must now kick start the housing market, which flatlined throughout 2019 because of the political uncertainty that was created by the general election and Brexit. Reducing stamp duty for a period of time could accelerate recovery in housing transactions, something which is clearly critical to the performance of our own sectors.
Again, outside the Conservative Manifesto, we would urge the Government to consider a cut on VAT on building products to 5% to trigger growth in the home improvement market. This would clearly deliver a direct benefit to the window and door industry but in driving growth in retro-fit, generate opportunities to improve the energy efficiency of UK homes.
This might go some way to filling the gap created with the scrapping of the Green Deal in 2015. Its delivery may have been flawed but the thinking which underpinned it – the positive cycle of home energy improvement and economic opportunity – remains sound and an area of opportunity for government.
Ryan Johnson, Managing Director, Emplas
