With the recent appointment of Liz Truss to replace Boris Johnson as the UK Prime Minister, many experts are predicting how the change will impact different industries. At a time when many industries are recovering from the impact of the COVID-19 pandemic and are facing other challenges, there is great hope that Truss will introduce some positive actions to support UK businesses.

With a potential recession lying ahead, Truss is tasked with making some big decisions that could have an enormous impact on the future of the UK. One of the most pressing issues she has inherited is how to approach the energy crisis.

On 21 September, it was announced that wholesale energy costs for businesses would be reduced by up to a half of their expected price, which has been welcomed by businesses across the UK.

How will the construction industry be affected by the new PM announcement?

The construction industry has experienced more challenges than most industries, with recruitment issues due to new Brexit rules for EU workers, as well as increasing materials costs and supply chain issues.

Another challenge that construction firms are facing is reducing their carbon emissions and complying with green policies. Meeting carbon net zero targets will put extra financial pressure on many businesses, in addition to the current financial challenges with the cost of living and fuel prices.

Truss has already pledged to help people to insulate their homes to accelerate the net zero actions, but the construction industry is waiting to hear more about plans for decarbonising the UK’s building stock.

Energy efficient solutions will be vital to driving down emissions for the construction industry, but firms want more support from the government to improve efficiency ratings of homes.

There are also calls for Truss to cut construction business taxes and a VAT cut on green retrofitting to improve the energy efficiency of existing properties. Brian Berry, the chief executive of FMB (Federation of Master Builders) outlined his hopes:

“This dire and unsustainable situation requires an immediate commitment to a long-term national retrofit plan to insulate our 29m homes to cut energy consumption and reduce bills.”

CEO of BRE (Building Research Establishment) Gillian Charlesworth also revealed what she would like to see Truss tackle:

“We are urging our new prime minister to publish a credible and effective plan to decarbonise our existing homes and buildings. At its core, this would set out a fully funded national retrofit strategy defining energy efficiency measures, such as insulation, for all UK households. This would help to address fuel poverty for thousands of households head-on, significantly lower energy bills, and ensure our buildings are fit for the future.”

Infrastructure investment

Industry professionals are hoping that Truss will prioritise investing in the infrastructure of the construction industry to help combat some of the supply chain issues that have recently been experienced.

There has been a 10% drop in new construction projects in the Q2 of 2022 compared to Q1, and planning a strong housing retrofit strategy would help to create more work and give smaller construction companies more opportunities to compete for work.

Liz Truss certainly has some major challenges to deal with and has already made some headway with recent announcements, but it will be some time before we see the full picture of how she will reshape and support the construction industry.