Chancellor Jeremy Hunt MP announced the 2023 Spring Budget today (March 15th). CPN will collect reactions to the budget from across the industry. This article will be updated as more reactions come in.
Following Chancellor Jeremy Hunt’s Spring Budget earlier today, Kevin Minton, Chief Executive of the Construction Plant-hire Association (CPA) said: “Steps to boost business investment and maintain the freeze on fuel duty are welcome. However, we are seeking clarification from the Treasury on the details around the successor to the super-deduction allowance (SDA), and whether the plant-hire sector can qualify for this new scheme.
“Following the announcements on the delay to HS2 last week, a Budget for growth needs firm commitments from government on future infrastructure spending and projects. Proposals in the Budget to create Great British Nuclear, while welcome, do not provide immediate comfort to the construction sector, given these plans are medium to long-term goals. However, we hope plans to provide the Carbon Capture Usage and Storage scheme with its £20bn fund, could provide some level of confidence for infrastructure planning.
“The construction sector may welcome the Chancellor’s plans to attract over 50s to the workplace to help address the skills shortfall the industry is facing. However, this new scheme must complement existing initiatives already in place.”
Suneeta Johal, Construction Equipment Association Chief Executive:
Although there were no great surprises from Jeremy Hunt’s Spring Statement today – as many of the announcements were ‘leaked’ earlier this week, there were some positive announcements that will boost productivity within the construction sector.
Hunt claimed that this budget was for “long-term, sustainable, healthy growth” and said the Government would deliver 12 new investment zones, which he labelled “12 potential Canary Wharfs”.
The CEA welcomes this announcement and the £80 billion funding to support a range of interventions including skills, infrastructure, tax relief, and business rates retention, particularly after the delays to HS2 announced last week. Although investment funding is subject to application, where “an area must identify a location where it can offer a bold and imaginative partnership between local government and university or research institutes in a way that catalyses new innovation clusters”, it does offer an excellent opportunity for collaboration and innovation.
Another positive announcement was the new £9 billion policy of ‘full capital expensing’ for the next three years, which is to be saluted. Although currently a welcome short-term boost for business investment as we see the end of the super deduction this month, we hope to see Hunt follow through on his aim to make it permanent to encourage investment and provide stability in the long term. Hunt says the OBR believes this will boost business tax by 3% a year.
Hunt said, “I can announce we will introduce a new policy of full capital expensing for the next three years with an intention to make it permanent especially can responsibly do so that means that every single pound the company invests in IT equipment plant or machinery can be deducted.”
A new ‘enhanced credit’ for research-intensive businesses, worth £27 for every £100 it invests is a great incentive for start-up companies investing in R&D. A qualifying small or medium-sized business must spend 40% or more of their total expenditure on R&D.
The extension of the climate change agreement scheme for two years was another welcome move to allow eligible businesses £600 million of tax relief for energy efficiency measures, particularly important as we head down the road to net zero.
The fuel duty freeze is also well received and will be of great benefit to the construction and infrastructure sectors. Hunt said: “For a further 12 months I’m going to maintain the 5p cut and I’m going to freeze fuel duty too.”
The business tax hike was confirmed, with Hunt keeping the planned increase in corporation tax from 19 percent to 25 percent in April – despite opposition from some Tory MPs. The Chancellor’s predecessor Kwasi Kwarteng had attempted to scrap the hike at the disastrous mini-Budget in 2022 – but there was a U-turn after financial turmoil.
The Chancellor set out the four pillars of our industrial strategy – Enterprise, Employment, Education and Everywhere – Hunt said that he had already allocated nearly £4 billion in over 200 projects across the country through the first two rounds of the Levelling Up Fund and a third round will follow, another welcome announcement.
Whilst the CEA welcomes the announcement of more places on ‘skills boot camps’ to encourage over-50s who have left their jobs to return to the workplace – it is not the silver bullet we were hoping to fill the chronic skills gap in our sector – we need more tangible solutions and partnerships to tackle the shortfall.