But while there isn’t much in the statement for investors to get their teeth into, there were a few clues as to where we should be looking, and some reassurance in the robust defence of free market enterprise the chancellor presented. Indeed, several readers have written to me to express concern at the prospects for utilities in the event of a Jeremy Corbyn government, a slippery topic we are working hard to understand. But the chancellor’s speech makes that a more unlikely prospect – his robust support of small business, the beating heart of the UK economy, will resonate with voters who may in turn be growing increasingly concerned at the 'fiscal fantasy' – to paraphrase Mr Hammond – of Labour’s economic plans. Sensible economic management will help the Conservatives claw back lost ground.
It is also apparent, however, that Mr Hammond recognises that electoral success will also depend on making progress on some of the big issues, and few issues come bigger than the chronic shortage of housing in Britain. Barely a week goes by without another speech on housing in Parliament, and Mr Hammond continued the trend – and importantly the tone appears to have shifted from one of veiled threats to implied support. Indeed, despite continuing benign conditions in the housebuilding industry, shares in the sector have done very poorly of late, partly over fears that the malaise we are seeing in the London market – embodied in the continuing struggles of Foxtons – could spread countrywide (pun fully intended – see page 71) and hit housebuilding margins, but also because of fears that the government was set to make life tougher on the housebuilders that many believe are manipulating the market to their own advantage.
It is certainly true that housebuilding is currently very profitable, and that this is manifesting itself in the controversially large pay packets being awarded to some housebuilding executives at a time when their customers are becoming ever more stretched – although this is mainly a matter for shareholders. That it is also the recipient of a subsidy in the form of the Help to Buy scheme and stamp duty cuts makes it an even more likely target for meddling. I think punitive intervention is increasingly unlikely, though. With the eight major listed builders controlling around two-fifths of housing output, the government cannot afford to bite the hand that feeds its housing needs – not just in terms of sheer output, but also the huge investment the major builders make into training. Investors are underestimating the strength of this hand in a tight market primed for major investment.
