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Gove’s transformation leaves Tory’s relationship with the UK developers in disarray

Michael Gove’s demand last week for British retailers to raise $ 4bn to help address the crisis was the second time in his short span of time as a house secretary to provoke a section strongly linked to the ruling Conservative party.

“For many people who live in areas where your companies have built in recent years, their home has become a source of grief,” he wrote in an open letter to the industry.

Gove had just worked for four months when he he tore being a bully, threatening to take action if they do not help instead of dangerous clothing on a massive climb – a security issue that has affected millions as a result of the deadly Grenfell Tower fire in 2017.

He had previously angered the business a few days after taking a housing contract in September – announcing his intentions. major changes in planning designed to reduce development in some areas.

According to a dozen developers and politicians who spoke to the Financial Times, Gove’s actions have left the government’s relationship with the industry in shambles.

The builder looks after the linens in the Royal Artillery Quays dormitories in London © Hollie Adams / Bloomberg

“I’ve been in these companies for over 40 years, I’ve never seen or heard the vitriol I’m hearing right now,” said Steve Morgan, a former builder who founded Redrow.

Leaders are expected to collaborate in a meeting with Gove this week. If not, the crisis threatens to undermine the sleep policy, which has been in place for the decade since the Tories’ rule.

This close relationship has helped builders to reap the benefits of building more homes in order to cope with the housing crisis in England.

Indices line chart showing UK builders in the UK over the last decade

It started when the David Cameron government launched a controversial Help to Buy Equity loan program in 2013, followed by 1m of new homes by 2020. That target increased in 2017 after Theresa May took over 300,000 new homes annually by 2025.

“There is no doubt that there was a general consensus that if we reach 300,000 a year a house builder then builders will have to be more supportive and in need of assistance,” said a former home affairs minister in Tory.

“The industry has really helped to provide some value,” said one construction official.

The Net line chart for real estate developers in England rose sharply after the Help to Buy was established but remained below the 300,000 annual target.

The plans were well-known throughout the world but when they were translated into major housing developments it showed a difference from what led to the people coming. This was emphasized in the sudden defeat of the Tories in Chesham and Amersham by-elections last June – results that forced the government to reconsider their reforms.

Gove wanted to bridge the gap between his department and the sector, in contrast to his predecessor Robert Jenrick, who was criticized for colluding with developers.

The project, which cost billions of dollars on construction costs, shocked the sector and led many officials to say that the government had decided to disrupt it.

“We are known as Victorians with mice. . . the public opinion tribunal has been placed at the forefront of meaningful negotiations, “said Graham Prothero, chief operating officer at the Vistry Group, a London-based architect.

“I have no problem with dirty pay. . . Koma [the building safety crisis] and the results of a large group of people – designers, architects, designers, contractors and builders, “he added.

But Gove’s hand was pressured by the Treasury on the issue of coverage, the former prime minister said. “There was a clear need for politics [stop leaseholders paying]. But the Treasury, in a high-profile Treasury position, refused to take the share, which is why Gove was forced to offer the responsibility to pay for this to companies.

Developers fear that it could lead to financial ruin, although Gove has indicated he will be responsible for other parts of the industry, such as panel makers.

“We are easy to follow. Our members are from the UK, they pay taxes in the UK and employ people in this country. Some groups that are hard to find, earn a lot of money but are not always available, “said David O’Leary, program manager at Home Builders Federation.

In addition to the harassment, the builders complain that they have been detained by Gove. “He has not negotiated with companies,” Morgan said.

But the leading Conservatives offer a brief overview of such criticism. “You may be arguing over time but I hope this will change drastically to ensure that the development business is treated as any other business,” said Damian Green, deputy prime minister.

A housing minister said it was “disgusting” that architects thought they relied on tax collectors “based on what they had built. Their rivers were too thick.”

Help to Buy Increases Cost, Construction and Profitability of Builders © Chris Ratcliffe / Bloomberg

Such an argument between builders and Conservative politicians is new. All blanch on the idea of ​​cosiness, but the relationship has been mutually beneficial.

The Help to Buy scheme – recently revised Report of the House of Lords such as the failure to provide a fair value for money – it has increased the demand, construction and value of the builders.

The FT revealed Last July, two years after Boris Johnson became prime minister, a quarter of all donations to the Tory party came from the real estate sector – a source of money that could be threatened by Gove’s expansion. “After all, why give money to someone who’s pushing you?” Asked the other supplier.

The collapse of the trust and the sector could also have a profound effect on the government’s idea of ​​promoting housing, including achieving its development goals and seasonal goals.

O’Leary said builders want to continue building, but getting 250,000 new homes a year in the most difficult areas is impossible. “Once you take money from our businesses, then the money we build for the house,” Prothero said.

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