New prime minister: how the industry reacted

Liz Truss has succeeded Boris Johnson as the UK’s prime minister, beating rival Rishi Sunak in the race to become leader of the Conservative Party. Truss gained 81,326 votes compared with Sunak’s 60,399, following an 82.6% turnout. Industry figures have urged Truss to turn her attention to establishing a strong vision, supporting levelling up and addressing the cost-of-living crisis, among many issues. Melanie Leech, chief executive at the British Property Federation, said: “We urgently need strong government leadership after a period of drift. The new prime minister must address the immediate cost pressures facing businesses and families, but in parallel there must a clear focus on the longer-term objectives to tackle inequalities across the UK and transition to a greener, high-productivity economy. “We look forward to working with Ms Truss to harness the power and potential of the property sector to deliver the homes, work and leisure spaces that will revitalise our town and city centres and underpin our future prosperity as a nation.” Scott Parsons, chief operating officer at URW UK, said: “Rising energy prices are hurting retailers, and with almost nine in 10 consumers planning to cut back on spending during the next 12 months, our high streets will once again be in deep crisis mode.” Parsons highlighted the need for “meaningful reform” to the business rates system. He said:  “I sincerely hope that at long last we will have a prime minster who is bold enough to reduce rates by at least 30% and smart enough to level the playing field with e-commerce, in order to protect the future of our high streets and give businesses of all sizes a fighting chance. “The prime minister has also spoken about ‘unleashing investment’ into the UK, but with retailers in the UK paying up to 10 times more property-related taxes than in the rest of Europe, our retail environment is woefully unable to compete with the other great global shopping cities as a place for businesses to invest.” Simon Peacock, head of UK regions at JLL, said Truss’s government needed to prioritise devolution, infrastructure spending and the net zero agenda to boost levelling up. “More so than for any other prime minister in living memory, there is no time to waste for Liz Truss,” said Peacock. “Businesses across all of the UK’s regions are keen to see meaningful progress made on this government’s levelling up and net zero commitments, especially with a potential recession looming. “Devolution, spending on infrastructure and creating clusters of businesses with specialisms in green industries are all high up the wish list for businesses, but they also want to see more engagement with local leaders to ensure their voices are being heard. A new government means a fresh start, but action is needed sooner rather than later.” Jamie Holmes, chief executive at Vu.City, said: “Levelling up featured in neither candidates’ campaigns and reneging on promises to ‘level up’ left-behind towns and cities, coupled with a spate of political scandals, is the perfect recipe for distrust and disillusionment. Creating a disconnect between politicians and voters could make the Conservatives fundamentally unelectable, marking the end of their 12-year reign. “The Conservative Party must heal the rifts created by the leadership battle – Truss and Sunak tore each other apart like children in the playground – but now must have an eye on the bigger picture. The government needs to sharply refocus on levelling up or risk breaking the trust of the nation for good.” Business rates The retail and hospitality sectors have placed business rates reform at the top of the wishlist for Truss’s agenda. According to a survey by Landsec, 72% of senior decision-makers across the sectors thought the incoming prime minister should commit to rates reform. Meanwhile, 36% highlighted corporation tax reductions as an immediate priority that can ease pressure on the industry. Bruce Findlay, managing director of retail at Landsec, said: “Business rates continue to pose an issue – and we would welcome action from the new government here. We believe a significant overhaul of how these are levelled – particularly at high street retailers and SMEs – would be beneficial, to stop the stifling impact on day-to-day operations. “There are also calls for a look at taxation – including the prospect of one on online sales. Here, caution should be exercised. If introduced, close collaboration with industry will be key. This will help to ensure that its design does not create unreasonable complexity, or hinder investment and innovation.” Truss reportedly wants to raise the threshold for business rates relief to £25,000 for properties with a rateable value of up to £15,000. However, this proposal has been criticised for falling “well short” of the help businesses need in the face of energy bill hikes. Parsons said that simply raising the threshold is “not nearly enough” for “millions of businesses whose rateable values far exceed these levels”. Jerry Schurder, business rates policy lead at Gerald Eve, recently said the proposal would benefit fewer properties than suggested. Schurder said: “What is needed is what has been consistently promised by the government but which the Johnson administration failed to deliver: a fundamental review of the business rates system that reduces the burden. “The proposals being attributed to Liz Truss would simply be more fiddling around the edges, falling well short of alleviating the scale of the crisis facing small businesses up and down the land.” Planning and development Truss has also pledged changes in planning and development policy, vowing to scrap housebuilding targets and “rip up the red tape that is holding back housebuilding and give more power to local communities”. On the campaign trail, Truss said her administration would remove planning restrictions and give councils more power to choose the amount of homes their communities require. Some industry observers outlined their hopes that the incoming PM will work with the residential sector to provide more support on planning and address the housing shortage. James Blakey, planning director at Moda Living, said that “the spotlight on the shortage of rental homes in particular is evidence that the government has been too preoccupied with home ownership and must more enthusiastically embrace professionally managed, institutionally funded rental living products such as build-to-rent or single family housing”. “With more support on planning, land and delivery, it can relieve the existing pressure on the UK rental market,”  said Blakey. However, others have greeted Truss’s statements with scepticism. Grant Leggett, director and head of Boyer’s London office, said: “‘Rip up red tape that is holding back housebuilding and give more power to local communities’ – that’s about as big an oxymoron as you’ll read anywhere. 10/10 political-speak. Up there with literally ripping up policy by introducing a NPPF in 2012 but at the same time creating multiple new strictures through localism. This is soundbite-ism and nothing new. Indeed, this sort of rhetoric and the great planning white paper of 2020 sought to do just this, but was arguably the beginning of the previous PM’s downfall.”   To send feedback, e-mail pui-guan.man@eg.co.uk or tweet @PuiGuanM or @EGPropertyNews Photo by James Veysey/Shutterstock