9 Jul 2020
Policy area: Budget
50% off restaurant meals between Monday and Wednesday is something we’re more used to seeing from Groupon or vouchercodes.co.uk than from a national government, but then we’re in unusual times. In a Summer Statement whose measures had been mostly trailed ahead of the event, “eat out to help out” definitely came as a bit of a (welcome!) surprise.
Other incentives to venture out of our homes included a significant cut in VAT for food and non-alcoholic drinks (that’s 45p off my flat white) and a similar one for accommodation and attractions. Time will tell whether now – when public health advice on how much people should be out and about is still a bit confused – was the right time to announce this measure, but it’s clear that government sees the best way to support the sectors most affected by lockdown as being getting back to “normal” as soon as possible.
More generally, in a short statement that was focused very much on job creation and retention, the Chancellor made it very clear that the post-Covid economy will in some ways look quite different to what was there before. People’s preferences are likely to have permanently changed and some jobs will no longer be there. Hence the inclusion of proposals supporting traineeships and those aimed at ensuring the construction sector doesn’t suffer its age-old problem of losing talent during economic downturns.
It was pleasing to hear the government reaffirm its commitment to decarbonising the UK’s economy and provide funding for improving the energy efficiency of people’s homes. But what we would really like to see – and perhaps it’s one for the Autumn Statement – is a holistic long-term road map that provides certainty to the property industry on how the government will invest in decarbonising heat, deliver energy infrastructure upgrades and install electric vehicle charging networks over the next two decades. This would help everyone working in the built environment ensure that the right infrastructure, skills, policies and technologies are in place to support a transformation in the ways we live and do business.
We also welcome the temporary SDLT cut, which will no doubt help those unsure about whether to buy a house right now overcome any nervousness. But it’s not just owner-occupiers that would benefit from SDLT support. To drive the delivery of new, high-quality rental homes, the Chancellor missed a trick today by not giving investors in the build-to-rent sector an exemption from the SDLT 3% surcharge.
While this had already been announced a week previously, it was good to see the government accelerate its capital spending programme to support jobs and infrastructure improvements (“Project Speed”). Ditto the reconfirmation/extension of various housing funds and programmes, although even with what was announced today it seems very unlikely that the government’s target of 300,000 new homes a year will be met any time soon. More needs to be done to build more affordable, quality homes and we’d like to see government more explicitly support modern methods of construction (MMC) as a way to achieve this.
The statement also pointed to new planning rules to be brought in over the summer, which will make it easier to convert buildings for different uses without having to seek planning consent. There may be some controversy around this, as permitted development rights (PDRs) have been blamed for the development of cramped, sub-standard housing. We are also expecting later in the month a paper setting out plans for “comprehensive reforms” of England’s planning system, which we hope will consider the increasing burdens and requirements being placed on a system whose capacity has been slashed over the last decade.
In summary then, a fairly benign and supportive Summer Statement. But at the same time a clear indication that the really interesting and difficult stuff will be wheeled out at the Autumn Statement and Spending Review later in the year. Levelling up, Brexit and net zero have not gone away as huge issues that the government will want to deal with and while there is opportunity in all of them, there will also be costs and challenges. It will be fascinating to see how these will fall across different sectors of the economy and society, including the property industry.
Now, I wonder whether “eat out to help out” stacks with two-for-one at my local Pizza Express…