2 min read
It may be less glamorous that it’s behemoth global kin in Cannes, but Mipim UK last week offered enough to intrigue, excite and exhaust.
Brexit - whose pump will be primed?
Brexit was everywhere. Smiles by those seeking buyers for property - the devaluation of Sterling leading a sharp rise in enquiries for space in Milton Keynes. A follow-on question gave added insight - these were not just inquiries for speculative asset acquisition, but companies seeking to locate workplaces to the UK.
There were fewer smiles when Brexit pressures on the construction sector were discussed. One company had a whiteboard inviting people to respond to Brexit - a welcome change to chatting over canapes! Rising costs and labour shortages are key concerns, with the potential to derail the effectiveness of government pump-priming by investing in housing. There was less talk - at least in public - about whether the housing built will be of good standards, or affordable, or whether the mechanisms to make appropriate housing available outside the owner-occupier market were still functional. In private, I spoke with one elected member who was at pains to remind me that the government's policies may aim to increase supply but - he argued - are also severely restricting access and narrowing choices for people in public rented homes. The Prime Minister’s commitment to an economy that works for everyone may clash with the instinct for a “property-owning democracy”.
Fundamental economics
Productivity in the construction industry is a thorny subject. Here too there is a Brexit effect. Future immigration controls and defining “essential workers” may grab headlines, but Sterling's devaluation is having an immediate impact. Hundreds of thousands of foreign workers in the UK - whether EU nationals or not - send remittances home to relatives in low-income countries. The value of these payments has just dropped by about 15%. For many there may be an imperative to recover this loss by moving without waiting for clarity on the restrictions to free movement.
Faced with labour shortages, the construction industry could be convulsed into a leap in productivity. Or would be, if Economics 101 were true in the real world. However, given the resistance to industrialised construction of homes in the UK, I’d bet against a leap in productivity happening in the short-term. But the short-term is exactly when the new housing is needed. The Government has just published the Farmer Review on the industry (which I’ve yet to read as I was at MIPIM when it came out!) - headlines suggest that the Review calls for technological disruption. I will read it hoping that Farmer has a forula for accelerating disruption.
Investment or Regeneration?
Perhaps not surprising in a property conference, most local authority presence was about attracting business. Only three London authorities were present (GLA/Mayor; Westminster and the City) - make of that what you will - but loads of presence from regions and nations of the UK. A lot of implicit trickle-down - as with housing there are twin challenges of attracting investment in the first place and then spreading the benefits across communities. In one session I went to, just one speaker mentioned existing residents as being a key driver for activities - perhaps being from Scotland means the policy paradigm has diverged on this as in other areas.
And Commonplace?
The more complex things get, the harder the pressure is on the credibility of decision-making. For me, the binary nature of the EU referendum highlighted a simple truth. Good politics is very seldom binary, or focused on a single decision. Especially locally, politics are about prioritising and managing expectations, as prioritisation always leaves someone lower down the receiving order. Having clear, inclusive and transparent consultation processes will only become more essential and crucial to our communities and bodies politic.