Following the announcement that the Conservatives have won the election and are forming the next government, having taken a majority with 331 seats, the reaction from the industry has been mixed.
Commenting before the announcement, Glenigan economics director, Allan Wilén, said: “Recent months have seen a cooling in construction activity. Indeed the latest Glenigan Index recorded a marked drop in project starts, as private sector developers postponed decisions in the run up to the general election and government-funded projects were caught up in the traditional pre-election hiatus.
“However, over the next Parliament, the UK faces five years of constitutional change with a promised referendum on the UK’s EU membership by 2017, the prospect of further Scottish devolution and potentially a fresh vote on Scottish independence.
“The economic uncertainty posed by the European Referendum, in particular, is a potential threat to private sector investment over the next two years.
“Public sector capital expenditure programmes are likely to be squeezed hard as the new government strives to deliver its planned reduction in the Budget deficit. While Conservative plans for large-scale investment into the strategic road network bode well for construction, the sharpest increase in capital funding is not planned until after the next general election.
“Moreover, with a wafer thin majority, the Conservative leadership will not be able to push through Bills against the will of rebel backbench MPs. It will be vital that the government builds cross-party support to ensure that important long-term decisions, such as HS2 and additional airport capacity in the south east, are not stymied by local Conservative backbenchers.
“Housing emerged as an important political issue during the election campaign, with need to increase housing supply an area of clear political common ground. Planning reforms made by the Coalition government have enabled more housing permissions to be brought forward, while the Help to Buy scheme has provided much needed support for the housing market.
“However, it is essential that the Conservative administration now builds on these reforms. Their stated aim to provide ‘200,000’ Starter Homes by 2020 would ease some strain on first time buyers, but this will need to be part of a wider strategy to solve the severe shortfall in homes.”
Paul Hardy, managing director of UK boiler manufacturer Baxi, said: “Baxi hopes that the new Conservative government will provide clear policy direction to address energy efficiency of buildings and support for micro-generation technologies to help meet carbon reduction targets.
“We would like to see continued support for affordable warmth to combat fuel poverty. We are particularly interested to see their plans for ECO after 2017.
“Finally, we hope we can rely on the government to continue to support UK manufactures in the drive to maintain the economic upturn.”
Phil Hurley, managing director at NIBE, said: “Now that we know the result of the election – and the make-up of the UK’s political landscape for the next five years – it’s time for the industry to pull together and look to the future. After a coalition government, the move to a single party majority is likely to streamline the policy development process – and from installers and specifiers right through to manufacturers and merchants, we will all have an important role to play in helping to shape this as we move forward.
“The next year in particular will be a crucial one for the RHI. In the short term, the priority should be putting a firm budget in place to extend the scheme past April 2016 (and to address other immediate issues, such as third-party financing). Whilst the outcome of this consultation is yet to be announced, as further developments are made, it’s vital that the renewable heating sector continues to make itself heard. The same is true for the long term, as the focus moves to establishing a clear regulatory plan to take the RHI through to 2020 and beyond.
“Here at NIBE, we also welcome the appointment of Amber Rudd as Energy & Climate Change Secretary. With her experience and understanding of the area, she is well placed to work together with industry to build a cohesive and effective renewable heat strategy – helping the UK meet its ambitious 2020 targets, while realising its potential as an international leader in the field.”
Celia Francis, CEO of Rated People, said: “The three million new apprenticeships promised in the Conservative manifesto would create great opportunities for the next generation and be welcome recognition of the role trades play in our society.
“But, they won’t come from nowhere. The government needs to take action to ensure that hiring an apprentice makes good business sense for the firms and sole traders who take them on.
“The National Insurance breaks George Osborne announced in 2014 were a good first step, but these should be made permanent and extended to cover all apprentices. In addition, existing incentive schemes should be extended to provide financial support for small businesses looking to hire more than one apprentice.
“Finally, we’d like to see support given directly to sole traders who are looking to make the first step in extending their business. It’s too confusing right now to navigate employment and tax law, meaning many tradespeople are dissuaded from bringing on an apprentice.”
Fuel Card Services has advised fleet managers not to expect too much from the newly elected Conservative government. They should not anticipate any reduction in either fuel duty or road tax.
Group marketing manager, Steve Clarke, said: “David Cameron’s outright majority in the Commons means relatively stable government for at least the first couple of years, but the EU referendum is going to be a major distraction from everyday business. Meanwhile, the deficit still has to be tackled and George Osborne will have little room for manoeuvre, especially given all the pre-poll tax and spending commitments. Much as the economy would certainly benefit from financial help for commercial road users, expecting anything significant would represent unrealistic optimism.”
“The election took place in an environment that was equally unhelpful for fleet managers, whether they were running HGVs, PCVs, cars or anything else. On polling day itself, oil prices were showing a 50% price increase since the beginning of the year.
“Fleets of all sizes and types can expect tough times for the foreseeable future, so we all have to hope that the promised light at the end of the tunnel does not turn out to be an oncoming train.”