Day three at the Tory conference: Rees-Mogg tinkers while business despairs

The government seems to be imploding before our eyes, but some ministers are ploughing on regardless. The business secretary Jacob Rees-Mogg has promised another clear-out of “EU regulation”, the only noticeable impact of which is to create huge uncertainty for business.

Yesterday at a meeting I attended in Birmingham, he offered up some tinkering over the way in which mobile phone masts are inspected as an example of the supposedly deeply onerous regulations that he would be sweeping away.

Like Kwarteng’s unwanted 45p tax cut, this is just pointless fiddling that nobody has asked for and won’t make the slightest difference to UK competitiveness. Such  detachment from the real economic crisis bearing in on business seems to pervade the party.

>> Also read: Day two at the Tory conference: U-turns and Brexit cast shadow over growth agenda

>> Also read: Day one at the Tory conference: Is levelling up dead in the water?

Underlying it all is the fundamental change wrought on the party by Brexit. From being the party of economic orthodoxy, the Conservatives have metamorphosed into a mystical cult. At the core of their new philosophy is a belief that miracles can happen, but only if you ignore the experts.

It was during the 2016 EU referendum campaign that Michael Gove famously said: “The people of this country have had enough of experts.” Now we are seeing the results. 

Everywhere you turn at the Conservative Party conference housing and construction industry leaders are asking for clarity on policy and regulation. Meanwhile the Tories seem to be in a parallel economic universe, where regulatory uncertainty is what business is crying out for.

The sheer quantity of squandered knowledge and expertise is staggering. The referendum may have been six years ago, but it ushered in a protracted period of uncertainty and missed opportunity, now hugely exacerbated by a pandemic and energy crisis.

Ronald Reagon once said that the “nine most terrifying words in the English language are, ‘I’m from the government, and I’m here to help’.” It is perhaps ironic that many in business now clearly feel the same way about this administration, run by the self-proclaimed “party of low taxation and small government”.

The Conservatives have overseen the erection of huge barriers to trade, alongside an explosion in spending and borrowing, while tax has reached record highs. If this is the best this government can do, business’s best hope for the near future may simply be that the Conservatives stop trying to help.

Retrofitting and skills

Retrofitting and insulating British homes should be a win-win for everyone. Contractors and suppliers get a steady stream of work, while consumers get warmer homes and lower energy bills. And yet this government has singularly failed to rise to the challenge.

There are many Conservatives at this conference, including ministers, who share industry’s frustration, but few seem to have any clear strategy for getting things moving.

Defending the government’s performance on net zero in housing – and when asked why we are still allowing houses to be built that will need retrofitting – Paul Scully said the government was “not trying to get to net zero tomorrow. We’re trying to get there by 2050.”

Brian Berry of the Federation of Master Builders said: “I agree this is a nonsense, to still build homes that need to be retrofitted, and it doesn’t make sense. We need to look at other European countries that are ahead of us on retrofit.”

He then went on to say, “We need a green revolution, [and retrofitting] 29 million homes should be treated as a major infrastructure project,” before adding, “retrofit would reduce emissions, improve lives and create much-needed jobs”.

There’s a huge need for clarity… We need consistency. If this is going to work, this needs consistency

Sandi Rhys Jones, Chartered Institute of Building

Sandi Rhys Jones, vice-president of the Chartered Institute of Building, spoke of her frustration at the lack of progress. “I find it breathtaking. It’s 50 years since we started talking about loft insulation. We should be better than this!”

She said the workforce needed to be urgently up-skilled and government needed to help create a stable market for retrofit. “There’s a huge need for clarity”, she said.

“We need consistency. If this is going to work, this needs consistency.” She pointed to the Irish “one-stop shop” model, where citizens can get advice on retrofit and get a list of accredited suppliers.

There was collective agreement that more, quality apprenticeships were needed to address the perennial issue of getting young people into construction. “Apprenticeships are a massive tool to get young people into good jobs – you don’t have to go to university to get a great career,” said Scully.

The lack of a unified system of certification for retrofit and competency was highlighted as an issue. And there was support from Berry for targets on retrofitting. He argued that they were the best way to measure progress, before adding that retrofit passports would enable owner-occupiers and renters to “log what work has been done”.

If past performance is the best indicator of future results, we may all be waiting some time before we see a fully coordinated national effort on this front.

Energy security

With Vladimir Putin waging an energy war on the West, net zero has taken on an additional security dimension – and the potential to gain new traction among elements of the Conservative Party traditionally hostile to energy efficiency.

Perhaps venting frustration at some of the environmental foot-draggers in his own party (who seem to be in the ascendant), Bim Afolami, Liz Truss’s former PPS, said that “these people who think this green stuff is all mumbo jumbo [need to understand] it’s not even primarily an environmental argument, but about security of energy supply”.

Climate minister Graham Stuart said, “Our energy security is pretty good”, perhaps not entirely convincingly. “Looking at all scenarios coming into the winter, we are reasonably secure, but there are always risks,” he added.

Talking about the need for a long-term plan for constructing nuclear power stations, Graham said the UK and its energy allies needed “a regular drumbeat of construction” that would deliver a “pipeline for business to invest”.

Dhara Vyas, director of Energy UK, said “demand reduction is now more important than ever”. She also argued that “warmer, safer, more comfortable homes” would have huge knock-on physical and mental-health benefits, saving the NHS money in the long term.

Afolami said that he believed the public was by and large behind net zero. “I’ve never met anyone who said, ‘I’m going to vote for you to get more growth’,” he observed, before noting that voters were open to a message about net zero homes “because your bill will be lower, your house will be warmer, your life is going to be better”.

How to get Britain building

I have got used to the newly appointed housing minister Lee Rowley’s daily admissions of ignorance at this conference. Tuesday did not disappoint, with Rowley getting his excuses in early during a Spectator event sponsored by the Earls Court Development Company.

“By the way, I’m on day 27,” he said, “so this is emerging thinking. You might have to come back to me in a few months.”

The emerging thinking was around what he describes as the “broad levers” that government can use to improve levels of home ownership. Rowley identified these as improving supply in order to remove barriers to entry, and providing support to young buyers so that their ongoing costs could be covered.

Elsewhere at the conference there have been suggestions that this might involve longer, fixed-term mortgage deals, although Rowley offered no such details yesterday.

Muniya Barua, managing director of Business LDN (previously London First) said that the cost of London’s housing and the issue it created over staff retention, was a longstanding concern of her organisaiton’s members. 

With reference to planning, she said: “Let’s not rip up the system – there’s something to be said for just letting a system bed in.”

As with almost every business representative at the conference, she also asked for certainty, pointing to the concerns raised due to “lots of rumours about the fate of the Levelling up and Regeneration Bill”.

Barua said that “where the government could be really bold is on the green belt”, arguing that much of it was “wasteland” and “scrub”. She also called for more funding for planning services, saying “it would be worrying if planning departments saw further cuts”.

Nicholas Boys Smith, director of Create Streets, said “housing is an existential crisis for the UK and the Conservative Party” and made the case for what he is calling “beautiful, gentle density”.

Acknowledging that many people “have lost faith as a society in planning, and developers’ ability to develop housing we like”, Boys Smith made the case for clearer design guidance, by which he means design codes.

He called for traditional town centres to be reinvigorated as essential civic hubs, describing this as being about “intensification, not necessarily densification”.

Arguing that “people felt development was something done to them”, Boys Smith made the case for a more direct contribution from developers towards local amenity. He suggested scrapping Section 106 agreements and replacing them with a “betterment tax”.

Rowley then indicated that “street votes” (another idea advocated by Create Streets) would likely form part of an upcoming planning statement. These would allow residents to vote for the urban densification of their residential neighbourhood, also directly benefiting from any associated uplift in the value of their property.

As with Boy’s Smith’s proposed introduction of a betterment tax, the thinking is that incentivising communities is the best way to encourage new housing in a sustainable way that has long-term community support.

Regarding rumours that the government is due to backslide on housing targets, Boys Smith said, “In principle you wouldn’t have targets”, before acknowledging that it was “hard to see a route where [removing targets] wouldn’t reduce supply”.

Rowley said that the government would “come out with more policies in due course” before slipping out to his next event.

Robert Jenrick

The current minister of state for health (formerly secretary of state in charge of housing and levelling up) was in combative mood during a discussion on net zero and housing. Noting the current failure of the government to meet its housing targets, he asked, “why would young people vote Conservative?”

Jenrick claimed that housing completions had reached 240,000 a year while he was in charge, but that volumes had since fallen back due to a decision “to adopt an anti-housebuilding approach about 12 months ago”. He added: “I hope this will change.”

The targets were unpopular because they were successful. If we’re going to scrap them, we’re going to be starting from two steps back

Robert Jenrick

He said he was “suspicious of terms such as ‘building homes in the right places’ ” as they were “usually used by people who didn’t want them anywhere near them”. “Building homes in the right places” is a term that Lee Rowley has used repeatedly at events over the past three days.

Jenrick defended housing targets, saying: “The targets were unpopular because they were successful. If we’re going to scrap them, we’re going to be starting from two steps back.”

He also noted that “where you build homes is contentious everywhere”, before adding that “local communities need to evolve – you need homes for young people”.

Jenrick also criticised Manchester combined authority mayor Andy Burnham, arguing that he was unnecessarily pushing new housing towards the edge of the city. “Burnham needs to take a look at Richard Leese [the former Labour leader of Manchester City Council] and bring forward more housing on brownfield sites in central Manchester,” he said.

Jacob Rees-Mogg

The secretary of state for business made his commitment to housebuilding clear yesterday, telling a Centre for Policy Studies event: “We need to build more houses – we have needed to for a long time”.

When I asked Jacob Rees-Mogg about the government’s commitment to the 300,000 housing units per year target, he told me, “That target hasn’t been changed”, before adding that “it’s a matter for Simon Clark” and “we need regulation to allow that to happen”.

Regarding net zero and retrofitting he told me: “If you live in a listed building, it’s almost impossible to retrofit. I want intelligent net zero.”

He then referenced Kwasi Kwarteng’s announcement of £1bn for retrofitting of housing association housing stock, pointing out that this was a sensible place to start as the  associations were able to roll out such a programme most efficiently.

Rees-Mogg then launched into a familiar defence of low tax and deregulation. “I support all tax cuts at all times and everywhere,” he said in response to a question about whether he had supported Kwarteng’s 45p rate cut. “Low taxes are a good thing, but you can’t work against the political reality.”

Asked whether the Conservative Party was becoming ungovernable, he said: “I don’t think discipline is collapsing.”

Electric vehicle infrastructure

Huw Williams, chair of the transport select committee, spoke yesterday about the roll-out of electric vehicles (EVs) and their associated infrastructure. The Johnson government had set a target for phasing out petrol cars by 2030.

Williams defended the “big-bang Johnson way of doing things” against accusations that, before creating a cliff-edge, government should have first implemented the necessary charging infrastructure – something he disparaged as “the German approach”.

By way of justification, Williams said: “As a smaller nation, with lots of people, we needed to do something sharpish, and I think we have done.” 

He also highlighted conflicting estimates about the number of charging points that would be required nationally, with predictions ranging from “250,000 to nine million”,  according to Williams.

Although the government has allocated £1.6bn to roll out of charging infrastructure, Williams said: “I’m concerned there will be a raid on that budget.” He went on to argue that there was “no point government setting targets and not providing seed funding to create the market”.

He also expressed scepticism about the National Grid’s preparedness for mass charging of EVs, pointing to studies suggesting that, within some areas, having even one in five households charging their car in the evening could overload the system.