What lessons can we learn from China?

31 Jul 2018

Published in Estates Gazette this week, our Chief Executive Melanie Leech reflects on the Government’s Brexit White Paper and its implications for the property industry.

The Chinese curse ‘may you live in interesting times’ is well known, and very few people would disagree with the statement that the Prime Minister, and indeed all of us, are currently living in ‘interesting times’. The Conservative government continues to play out its divisions in the media and the Labour party struggles to persuade that it has an alternative blueprint for Brexit. And, of course the Brexit negotiations should not be taking place within the UK at all – but across the Channel with the other EU members.

Possibly less well known is that this is the first of a group of three curses. The second of these runs as follows: ‘may you be recognised by people in high places’ – often translated as ‘may you attract the attention of the government’. The recent Brexit White Paper was intended to give us the Government’s roadmap for negotiations with the EU, and it offers good evidence that the voice of business has been heard. It provides greater clarity in some areas such as the proposed free trade area for goods, of particular interest to the industrial sector, and also in ensuring construction supply chains remain unbroken. We need now urgently to understand how this will work in practice.

In other key areas, however, the White Paper fell short – there is limited detail on trade in service sectors and there is no indication of how blended trade between goods and services (such as is necessary for maintenance contracts and guarantees) will work.

The final Chinese curse is: ‘may you find what you are looking for’. In general our sector needs stability if not certainty in order to thrive, and to create the places of the future – the homes, offices, hospitals and schools and so much more, that will serve the next generations. We are a long way from certainty in terms of Brexit. The clock is ticking down as October approaches, and with it the deadline set by Michel Barnier to agree a withdrawal arrangement, including important decisions over ongoing rights of citizens. With less than a year until we are due to leave the European Union under Article 50 – we still have little idea of what a post-Brexit Britain will look like.

Closer to home, however, we can perhaps be more sanguine. The policy environment from MHCLG we have existed in for the last few years has been relatively consistent and focused. The Government has put housing at the top of the domestic agenda and as Secretary of State, Sajid Javid was an excellent helmsman and put the groundwork in place to start to tackle the nation’s acute housing shortage. His successor James Brokenshire appears to be embracing his new role with energy and commitment, and his recent letter to London Mayor Sadiq Khan suggests he is prepared to use the powers available to him to drive progress.

The recently published revised NPPF had much within it to welcome – the housing measures in it confirm the Government’s support for build-to-rent and demonstrate that it has understood the different characteristics of the sector. There is however still work to be done to make sure that the importance of the industrial sector gets the same level of recognition, and we are still a long way from a coherent and workable vision and policy for the future of our town centres.

Even the revolving door that the post of Housing and Planning Minister has become is not dampening spirits too much. Although, if the Government were to give a minister enough time to truly get on top of their brief, it would undoubtedly be to everyone’s benefit. We wish Kit Malthouse the best of luck, and selfishly hope we have time to build a long-term working relationship with him.

I also hope that another Chinese proverb may prove prescient for us all moving through the Brexit process – ‘all things are difficult before they are easy’.