The Budget was never going to deliver what the industry wanted – or needed

No one in the built environment industry expected much from the Spring Budget, but neither did anyone anticipate quite so little.

In the run up, there were calls from business leaders for the ‘tourist tax’ to be removed, the planned business rates hike to be cancelled and the introduction of a clearer policy framework and tax incentives to support decarbonisation. There were also hopes, if not expectations, that housing, planning reform and climate change would feature prominently.

It turns out the industry had set the bar low but not low enough. Aside from some measures to boost sectors such as life sciences, manufacturing and the creative industries, there was nothing – or nothing positive, anyway – in relation to real estate. None of the industry calls for action heeded and there were no big announcements on issues that early last year appeared to be relatively high on the political agenda.

But that was then. There were ominous signs of what was to come at last year’s party conferences, when the Tories and Labour began to backpedal furiously or go very quiet on numerous commitments on housing and climate change. Now, with general election campaigning in full swing, property has plummeted down the list of political priorities to its lowest point ever – if it is on the list at all.

In hindsight, calls for anything real estate-related were always going to fall on deaf ears. Jeremy Hunt had very little wiggle room and property is seen not as a battleground where the war for votes will be won but one where it could all too easily be lost – not that a 2p cut in National Insurance, freeze in fuel duty and abolition of non-dom status will be enough to win the election.

That said, there could have been a couple of token nods to real estate and the wider business community. Instead, Hunt didn’t just stick two fingers in his ears, he stuck two fingers up at them. Business rates are not only not going to be reduced, they are  going to be increased (and in line with September’s 6.7% rate of inflation rather than the current 4%). To add insult to injury, the reset period for empty property relief is being extended from six to 13 weeks, there will be no extension of retail, hospitality and leisure relief for small companies and the widely derided ‘tourist tax’ remains.

All of this puts the UK at an even greater disadvantage to the rest of Europe, as many industry leaders rightly pointed out in responses to the Budget describing it as “massively disappointing”, “incredibly frustrating” and “yet another missed opportunity”. Some went further, using words such as “astonishing” and “outrageous” to describe the absence of ‘carrots’ to support housing delivery or small businesses and introduction instead of more ‘sticks’, such as the abolition of SDLT multiple dwellings relief.

So what now? Will the change in political priorities prove permanent? Have relations between the property industry and politicians deteriorated beyond repair? Is it now a case of everyone for themselves?

Maybe. Maybe not. Either way, we cannot afford to let disappointment over the Budget turn into despair. All bets (and gloves) are off in a general election year, and as former chair of the Climate Change Committee, Lord Deben, argued at our event last week exploring ‘How to navigate the EPC minefield’ (thank you by the way to sponsors Maples Teesdale and MEES Solutions and host ING Media), the industry would be foolish to think climate change won’t rise back up the political agenda once the election is over.

Even if it doesn’t and the proposed targets are watered down or the deadlines moved back, there is arguably already sufficient momentum to ensure commercial real estate continues to target a minimum EPC C rating by 2027 and B by 2030.

Other issues not deemed campaign worthy should also return to the political fore post-election, ongoing public sector funding and resourcing constraints notwithstanding. How could the housing crisis not?

Unfortunately, we may have to wait a good while yet before they do. Until then, for many businesses, it won’t be a case of ‘do more in ‘24’ but ‘don’t fall through the floor in ’24’ – and sadly, following the Budget, there is a strong chance that fewer will ‘survive ‘til ’25’?