CPN collects reactions from across the industry to Chancellor Jeremy Hunt’s Autumn Statement on November 17th.
Click here for a brief summary of the statement by the BBC.
CPA Response to Chancellor’s Autumn Statement
Following Chancellor Jeremy Hunt’s Autumn Statement earlier today, Kevin Minton, Chief Executive of the Construction Plant-hire Association (CPA) said: “In what will be challenging economic times, it is welcome that the government has committed to Hinkley Point C, HS2, the East West rail link and Northern Powerhouse Rail.
“This echoes our call for the Autumn Statement to provide stability and confidence for the construction sector, utilising construction as a driver of economic growth. It follows the move to make the Annual Investment Allowance set permanently at £1m. The construction plant-hire industry has a critical role to play in these projects. Moving into 2023, the CPA will be working closely with our members to realise these ambitions.”
Commenting on Chancellor Jeremy Hunt’s Autumn Statement delivered today (17 November), Stephen Marcos Jones, CEO of the Association for Consultancy and Engineering (ACE), which represents the companies large and small who design, deliver and manage our national infrastructure and built environment, said:
“It will come as no surprise that the Chancellor presented a challenging macro-economic picture, and with tax increases previewed in the media over the last few weeks, today’s tax announcements have already had time to be digested by the business community.
“I wrote to the Chancellor this week outlining the importance of investment in infrastructure to deliver the jobs and growth that will help drive the economy through the challenging times ahead. With this in mind I was pleased to see the Government maintain the capital programme, which means the Northern Powerhouse Rail core, HS2, and the new hospitals programme can all progress. ACE also welcomes the commitment to new energy infrastructure in Sizewell C.
“As important was the news that devolution deals have been struck for Suffolk, Norfolk and Cornwall, as well as increased powers for the Combined Authorities in West Midlands and Greater Manchester. Increasing local decision-making is crucial if we are to make real progress on Levelling Up across the UK, but we would have liked to have seen the Government use this opportunity to consolidate and ringfence spending, rather than introduce another round of competitive funding.
“We were also pleased to see a new focus on innovation for investment zones. While it may impact Councils that initially expressed an interest, we look forward to seeing what can be made of these initiatives.”
“We were, however, surprised to see road duty on EV vehicles raised and it does raise broader questions around the long-term viability of the current system which relies on fuel duties to fund road investment. ACE has long argued for reform in this space, and we look forward to engaging with government departments on the issue.”
The Construction Leadership Council has welcomed news in today’s Autumn Statement by Chancellor Jeremy Hunt MP, signalling further support for the energy costs of businesses and vulnerable users, the Government’s commitment to maintain investment in infrastructure, including transport, renewable energy and broadband, protecting departmental capital budgets, as well as support for a national retrofit programme, one of the Council’s key strategic priorities.
NFB: A welcomed Autumn Statement retains flawed thinking on growth
The Chancellor’s 2022 Autumn Statement highlighted the impact of global events on inflation, which the OBR predicts to drop sharply in the middle of 2023, and set out the Government taxation and regulatory strategy to take the country out of recession. However, it was light on much needed supply reforms which has held the country back for more than two decades.
Richard Beresford, chief executive of the National Federation of Builders (NFB) said: “The Chancellor’s budget is a mixed bag for construction. Stamp duty cuts remain until 2025, red diesel access has not been reinstated but electric vehicles will lose zero rated road tax, energy independence has been made a priority, and investment zones may be watered down to focus on innovation, not placemaking.
However, two rabbits were pulled out of the hat, on which the NFB lobbied for. Capital and infrastructure budgets will be protected, and a new ‘Energy Efficiency Taskforce’ has been announced. These supply side strategies offer positive opportunities and work pipelines for construction, and we look forward to inputting into how an energy efficiency strategy can be sustained by business and consumers, rather than always requiring government funding.”
Despite highlighting that ‘infrastructure allows wealth and opportunity to spread across the nation’, committing to Sizewell C nuclear power thus giving investors certainty, citing a necessity for competition to break up monopolies, and championing a desire for skilled workers to mirror the achievements in Japan, Germany and Switzerland, the Chancellor did not focus on the need for wholesale planning reform as the underpinning factor for any economic and social recovery.
Rico Wojtulewicz, head of housing and planning for the NFB, said: “The planning process sustains our housing monopoly and strangles growth, which is why in places such as Japan and Germany, land use, regional planning, and permission certainty is a primary function of enabling opportunity. As well as ensuring businesses know there are commercial spaces, work pipelines, and regional strategies for them to invest in, their focus on planning certainty ensures places grow sustainably, housing supply keeps up with local demand and levelling up is a natural process, not reliant on taxpayer funding.
The Government needs to practice what it preaches because it has spent the last twelve years avoiding coherent planning reform and therefore missing out on sustained growth. Revering Singapore, Germany and Japan is no good if you aren’t willing to risk some political capital by enabling their core supply side mechanisms.”
CITB’s Chief Executive, Tim Balcon said: “Construction employers are facing rising energy bills and materials costs and they need confidence in the future pipeline of work and support to train through challenging market conditions.
“We will do everything we can to support the construction industry so companies can continue to have the confidence to invest in skills.
“CITB has simplified the process for SMEs and sole traders to take on an apprentice and our New Entrant Employer Support team has placed 200 apprentices in the north of England alone since September. This scheme is being rolled out nationwide from January to provide employers the training support they need in this tough environment.
“We also look forward to working with the newly appointed Adviser on Skills Reform, Sir Michael Barber in his review to improve prospects for school leavers.”
The chancellor says the Government will focus on economic growth, despite having to find budget savings. A silver lining for our sector was the announcement that energy, infrastructure, and innovation are high on the Government’s priorities.
We welcome the Government’s decision to proceed with a new nuclear power plant at Sizewell C, which will help to provide reliable low-carbon power. This new power plant will create 10,000 skilled jobs, however, there was no mention of the chronic skills shortage we are already facing. The sector is struggling to recruit people – due to competition but also a lack of awareness and perceptions among younger generations. There is significant work to be done on this and the CEA continues to feed back to Government through its position on the National Manufacturing Skills Taskforce.
The go-ahead for Sizewell C is on the proviso that the plans receive final government approvals, which we expect to be signed by relevant parties in the coming weeks.
Hunt confirmed that as part of the Government’s commitment to growth and infrastructure – they will deliver the core Northern Powerhouse Rail, HS2 to Manchester, East-West rail, the new hospitals’ programme and gigabit-broadband roll-out. These will be funded with over £600bn of investment in the next five years, which Hunt said: “will connect our country and grow our economy.” The CEA welcomes the Chancellor’s continuing commitment to major investment in infrastructure.
By 2030, the Government wants to reduce energy consumption from buildings and industry by 15% – and from 2025, there will be a further £6bn in funding to deliver the UK’s new energy efficiency ambition. Let’s just hope that whoever is in power at that time commits to fulfilling this funding.
The Energy Price Guarantee (EPG) will be maintained through the winter, limiting typical energy bills to £2,500 per year. Disappointingly, from April 2023 the EPG will rise to £3,000 with prices forecast to remain elevated throughout next year. In addition, there was no further mention of support for business and the CEA calls for the Energy Bills Relief Scheme for non-domestic users to be extended beyond six months.
The employers’ national insurance contributions threshold is frozen until April 2028 and the employment allowance will be retained at its new, higher level of £5,000 until March 2026 which is good news for small businesses.
A positive announcement was the plan to help make Britain the “new Silicon valley” which will see public funding for R&D increased to £20bn by 2024-25. This is crucial for future growth.
However, the challenges manufacturers face in the years ahead remain substantial and opportunities were missed to support manufacturers through this extremely turbulent time. Therefore, it’s up to us as a sector to lobby Government for the support we so greatly need. This includes a coherent and long-term international trade strategy to stimulate economic growth. This is especially important in our sector where an average of 65% of output is exported yet support for trade associations and our members is minimal.
