CPN collects reactions from across the construction industry to today’s highly-anticipated budget announcement by Chancellor Rishi Sunak.
This post may be updated as more reactions come in. Click here to read the full budget. A summary of the key features of the budget by the BBC can be read here.
Nathan Priestley, chief executive officer of Priestley Homes, comments on today’s Budget announcement:
“The extension of the stamp duty holiday in England will keep the property market buoyant and ease financial pressure on buyers who faced the March cliff edge.
“House prices remain high, which is excellent news for the sector. The new government guarantee scheme for 95% mortgages will be extremely attractive for first-time buyers. It’s a welcome move, making the property ladder much more accessible for many people.
“We are all navigating our way along the government’s roadmap for easing the national coronavirus measures. Forward-thinking stimuli for housing – which was one of the key drivers of our economy in 2020 – sets the market on an even stronger path.”
Following Rishi Sunak’s budget today, Rob Oliver CEO, CEA (Construction Equipment Association) has made further comments:
“Whilst the necessary extension of the furlough scheme and additional support for covid-19 challenged business was welcome and expected, there were also some interesting initiatives that may be of direct benefit to the construction sector.
The announcement of a “Super Deduction” for capital investment should stimulate decisions from companies currently undecided about their expenditure plans. For every £100 they spend they will receive a tax credit of £130. The ability to carry back company losses for three years against earlier profits will also help the cash flow of many companies.
“I believe that the “super deduction” is based on a scheme successfully introduced in Slovakia. We look forward to reviewing the details, but on the face of it, it looks like it will be a great time to renew the machine fleets of plant hirers and contractors. These tax concessions are clearly a quid pro quo for swallowing a corporation tax hike in the future”.
The Chancellor has announced the formation of a UK Infrastructure Bank with an initial capitalisation of £12 billion, which he hopes will stimulate investment of £40 billion. The CEA welcomes this as a way of leveraging additional investment in “green” construction projects.
Grants for taking on new apprentices are to be doubled to £3,000 and a “Help to Grow” initiative will offer 90% grants for a new executive development programme. This provides additional incentives for companies to restart their hiring plans and to upskill their existing work force.
Moustafa Ali, Economist at GlobalData, a leading data and analytics company, offers his view:
“The UK’s Budget 2020 plans are expected to provide a significant boost for the construction industry following a difficult year in 2020. The plans include the creation of a new infrastructure bank, whose remit will be to finance and identify projects that will help the UK in reaching its net-zero emissions target. GlobalData expects the UK construction industry to grow by 8% 2021, supported by the government’s infrastructure investment plans.
“In total, the infrastructure bank will have £12bn (US$16.8bn) at its disposal. The creation of the bank will support growth in the infrastructure and energy and utilities construction sectors over the long run.
“The Chancellor has also announced the creation of eight new freeports in the UK, which will provide a further boost, particularly for the infrastructure construction sector. Alongside the free ports, the government has pledged to develop an offshore wind port hub at the Humberside free port, which is expected to create 3,000 jobs in the region.
“The Budget 2021 announcement will provide critical support to the construction industry, which was severely affected by the economic slowdown and the virus outbreak in 2020.”
2021 Budget response from Joseph O’Grady, CASE Business Director – North of Europe
“In his 2021 Budget, The UK Chancellor Rishi Sunak has created a range of policies and incentives to keep UK business, including the construction, quarrying and waste sectors, supported as we emerge from the pandemic. This raft of measures spans two years and includes the 130% tax allowances on plant and equipment investment, providing support for struggling businesses and the self-employed. We welcome these measures and combined with the right finance options and aftermarket solutions such as those provided by CASE and its parent organisation CNH Industrial will really help the industry to make the most of the super charge deduction and British businesses to build back better.”
Glen Hampson, Construction Division Manager at Kubota UK
“This week’s Budget announcement from the Chancellor Rishi Sunak was one of the most keenly anticipated in living memory. After nearly a year of restrictions to limit the spread of the Coronavirus, business and industry were keen to see signs of recovery and investment.
“For the construction industry, the Spring Budget should be the cause of some cautious optimism. Much of what Sunak outlined suggests the government sees the construction industry as being at the very heart of the country’s post-COVID recovery plans.
“The introduction of a capital allowance of 100% for companies investing in plant and machinery for use in freeport tax sites – of which an additional eight were confirmed in the Budget – is welcome news indeed, and a sign that the government is committed to regenerating investment, trade and job opportunities in areas including the East Midlands, South West and North East.
“Indeed, job creation formed a central part of the Spring Budget, and it was particularly gratifying to see additional incentives encouraging employers to take on apprentices. Our sector is facing up to a widening skills gap, with 22% of the workforce set to retire in the coming decade. Schemes, such as the Apprenticeship Levy, which encourage the talent of tomorrow to join the construction industry are much welcomed and I hope businesses across the supply chain take advantage of the incentives outlined by the government.”
